“Long term obviously we are being inflated to deth. What we are in currently is a Biflationary “
This is the result of Bernanke’s free money policy. Decrease the interest rates so low that people can not afford to save money in the conventional way, the return is actually negative when inflation is factored in. Where else are you going to make even a semi decent return? The only place for the majority, is the stock market.
So you are forced to either lose money in bonds or CD’s, or take a big risk in an over bought market.
For savers, the Fed is stealing your money and giving it to crony bankers and institutions.
If we get a hyperinflation, and we could given the Fed’s current predicament, stocks will ultimately be a good investment because they will be selling their products at the inflated prices, paying their costs at those same inflated prices, and reporting profits in those inflated dollars.
If you multiply everything on the income statement and the asset side of the balance sheet by 100, the share price should go up 100 times once things settle back down. And if the company is currently a little debt heavy, that debt becomes easier and easier to pay off besides.
Granted, in the interim things can get a bit messy, but owning a piece of a mutual fund composed of solid companies is a good way to ensure that your investment portfolio participates in a hyperinflation. Owning bonds instead is a good way to ensure that you’re wiped out, by the way.