(And What YOU can do to stop it)

By Eric Roseman

There’s a war going on outside.

You won’t see it on TV. You’re not going to hear about it in the news. And most people won’t even know they’re fighting in it until it’s entirely too late.

But in the fight against deflation and crisis, the world’s central banks are waging war against responsible investors everywhere…threatening the world’s life savings with inflation-stoking policies and trillions in bailout money.

This isn’t a dream, or some kind of nightmare. It’s something that’s growing more and more apparent every day…just look at the news…

Bernanke Printing Dollars to Buy Treasuries

It’s official.

After months of talking about it, Bernanke finally committed to buying 300 Billion dollars in long-dated Treasury Securities.

What does that bit of obscure information mean for you?

Well…it means that your gold and stock holdings saw a nice jump in price yesterday afternoon, as you can see below.

But before you start counting those profits, there’s something you must understand…

Like a beaten-down boxer landing a punch…or a vastly oversold market hitting a “dead cat bounce,” these short-term profits are the anomaly. And they point out a growing threat to your wealth and well-being…

Namely, inflation…at the hands of central banks like the Fed. Here’s the how and why…

The overwhelming force of credit destruction and asset price deflation in today’s markets is putting very real pressure on the masters of the world’s currencies…and central banks are responding.

Their only option is inflation.

It’s got serious implications for the world’s diligent savers…but they could be facing worse if they simply do nothing. “Inflate or die” is the new mantra.

Their “big guns” when it comes to stoking inflation are the interest rates. And with five of the seven of the world’s major currencies already at or near an effective rate of zero, they’re out of ammo. Where do they turn from here?

Quantitative Easing, of course…like Bernanke’s announcement yesterday.

You see, the market was beginning to sober up from its paradoxical “flight to safety.”

After we got news of countless trillions to be spent on budget, stimulus and bailouts, the market started to get a little antsy…and the price on Treasuries dropped, driving up yields.

But Bernanke’s interest rates are key to the unwinding housing situation, so he gives us yesterday’s announcement…

And yields are smashed. Down .5% in the minutes following the announcement.

Remember…when yields go down, it means that prices have gone up.

And by putting a price floor on long-term Treasuries, he’s driving up an asset that’s already vastly overinflated from the “flight to safety”. So instead of selling fewer Treasuries – which is what the market is saying he should do to bring in his target price – he’s going to print money to drive up prices on the huge amounts of securities that they’re going to sell.

But I think the backlash from all of this is going to be massive and hard-hitting inflation. When the market remembers its appetite for risk, you’ll likely see a rapid change in the balance of investments. And it could be a rude awakening for investors and retirement savers everywhere.

When Will Inflation Arrive?

Many refer to the next few generations…our children and grandchildren …when it comes to the fallout from the trillions spent on bailouts and fiscal stimulus. “…and sticking the next generation with the bill,” is how the saying goes, isn’t it?

Well their timing is way off.

Instead of ten or twenty years as they suggest, we could be seeing a serious wave of inflation as soon as 2-5 years from now…which could leave some of us re-planning retirement.

I don’t think it will be very long between the end of our current crisis and the onset of devastating levels of inflation. A violent blow-off in Treasury buying could set the stage for something worse than the late 1970s, and it would likely arrive fast.

Not that it matters for the individual investor.

On the one hand, you’re looking at paltry Treasury yields in today’s markets. And on the other you have higher yields in the coming years, but they probably wouldn’t exceed inflation by much if any. Treasury investing is too risky to be a real ‘safe haven’ these days.

The Best Solution? Be your own “Central Banker”

You’re going to need meaty returns, higher yields than you’ll find on Treasuries…just to preserve your wealth from oncoming inflation. But you’re not going to find any safety in the stock markets…so where do you turn?

Well I’ve found a way you can lock in yields that are at least 5-10x higher than Treasuries…and they’re guaranteed by contract.

Using funding tools and investments that were limited to the “single-malt scotch crowd” up until just a few years ago, I’ve started to build a portfolio of well-priced, high return investments geared to accelerate your income.

It’s all about cash flow these days, and that’s exactly what I’m going for. And this strategy fits the bill. It’s the perfect way to get paid to wait out this bear market, ward off oncoming inflation, and make some nice gains.

Picking up some of the pieces left behind by the Credit Crunch – just the best pieces – can be an incredible recipe for success in the downturn. Just ask Warren Buffet or a number of other billionaires who’ve made a killing with similar strategies in the past.

If you’re jaded with the stock market but you don’t just want to sit in cash…if you’re worried about future inflation or your Treasuries…if you’re forward-looking and you want to hear about a good method for retiring early…or if you just want to see some guaranteed 10-20%+ returns on money that’s arguably safer than it would be in a bank account these days, tune in to my webinar this Friday.

Don’t worry, it’s free, you’ve just got to register here and tune in around noon on Friday (EST) to see it live. This won’t be one of those “watch-while-you-eat” affairs though. I don’t get too many chances to do this, so I like to be pretty comprehensive. No “heavy lifting” but make sure you’ve got a pen and a piece of paper handy. Hope to see you there.

Sincerely,
Eric Roseman
Investment Director, The Sovereign Society