Monday, January 30, 2012

Financial Musings

  Financial Musings
 Sunday mornings provide a quiet time for prayer, study, musings, reading “web revolution”- independent media news and outside-the-box thinking. So my mind wanders…bouncing back and forth between my preconceptions and new perspectives.

My musings are anchored by forty years of business and financial thinking, and by a passion for economics and politics. Hopefully, these thoughts will be considered by the contrarian-expats and various escape oriented readers.

During my financial practice, I frequently encouraged clients and friends to insure their portfolio with 5-10% allocated to gold and silver. I even shared how to buy free of commissions. These weather-proof metals insured against inflation and deflation. Sadly, I can count on one hand those who took this advice.  Gold has increased 500%.  Real estate, our favorite investment, is down.

Now it looks like time to also diversify away from the US dollar, as our government constantly devalues it. All investing seniors are being robbed daily by the inflationary “printing press” and by price fixing of interest rates by the Federal Reserve. Jefferson and Hamilton argued vigorously about central banking. Frontier President Andrew Jackson abolished it.
Finally, we must recognize that the traditional media, Hollywood and the US two party political system all exist to promote themselves at our expense. The internet is an unedited collection of thoughts, but has remained mostly free of Orwellian control. Be careful what you eat, what your read and who leads your thinking!

How does that relate to relocating or living in Ecuador?   We must remain proactive for our financial health.
1.       Prepare for inflation in the coming years. Even hyperinflation is possible.
2.       Diversify away from traditional buy-and-hold investments.
3.       Diversify among countries for investment.
4.       Invest in natural resources to withstand inflation, especially gold, silver, timber,
petroleum, etc.
5.       Find unbiased internet sources for economic, financial, and political information.
6.       Banks have had sudden “holidays” in Ecuador (2000), USA (1933), Argentina, etc. Keep several months of living expense outside of banking channels.

              Don’t worry; be happy in planning wisely.