High Savings Interest Is High Risk in Today’s Inflationary Financial Climate

Best Interest Rates

Seeking high savings interest rates has been a goal for most investors. The question is – Is that philosophy wise in today’s economic climate.

We all get a financial education to some degree or another. Most of us probably start out with a simple bank savings account. Then many will listen to the self-serving advice from the financial industry and governments. We get involved with retirement savings plans and mutual funds. Many will go on to invest in stocks and bonds directly. But you may not realize that 80% of the population right now will not be able to afford to retire and will be forced to keep on working; if they had only taken an investing for beginners course years ago.

The 80/20 rule seems to hold true in the investment arena at every step of the way. Only 20% of the people upon hearing of other ways to invest will get educated in how to actually do it. And 20% of those will have the commitment, the tenacity to achieve real success.

So what’s the next step up the financial ladder? Some will get serious about stocks, some will find the real estate housing sector, some will get serious about commercial real estate and a few may even become developers. There are higher risk areas, such as commodities or Forex trading and a small percentage of people make a fortune in those areas.

There are others who step back and look at a bigger picture. I have mentioned several areas to invest in: cash (savings accounts), mutual funds, stocks, bonds, commodities, real estate etc. All these investment areas go up and down in cycles – from being overvalued to undervalued, relative to each other. A cycle investor continually monitors these cycles and switches from the overvalued areas to the undervalued areas – thus avoiding the inevitable crashes that happen in any given area. Imagine what your net worth would be if you missed all the down turns and only surfed the up waves.

We all find ourselves today in a very strange cycle. We have to take a further step back and look at the cycles involved with countries, empires and world economics. Economies crash: a walk through thousands of years of history shows this to be true. The really big crashes are so widely spaced in history that few actually get to live though one. I believe we are at just such a point in time!

Empires go through stages in their lives. First a country starts with good money usually backed by gold and silver. Second they institute social programs for the good of the people and taxes start to rise. Third their political influence grows and the fund a massive military. Fourth the military is used and expenses explode. Fifth fiat currencies are introduced to fund the wars and social programs. Sixth consumer price inflation starts to run rampant and the citizens lose faith in the currency. And seventh the currency collapses; wealth is transferred to gold, silver and other assets and major changes have to take place. Today there are several major world powers about to hit step seven at the same time. This has never happened before; usually it is just one country involved. This is the big one.

Of course I’m talking about the US currency, the American dollar. For the first time in history a single nation’s currency is having a worldwide effect since it is the currency of international trade. There are also many other nations with huge debts as well, and they are following the US lead and inflating their economies by printing currency. Many other nations see commodity prices going up, up and up due to the connection to the dollar.

Back to your investments – many people in the world are thinking in terms of the smaller picture. They won’t get it until after it has happened. Those that understand the big picture know this is the granddaddy of all cycles and are scared. A massive wealth transfer is taking place at this moment and will continue for a couple of years. Most middle class families are about to see their wealth wiped out. Those who position themselves in the right asset classes will become wealthy. Many investors are buying silver coins, gold coins, gold bars and silver bars. If you have a mortgage make sure you lock it in at a fixed rate because governments usually raise interest rates when they get serious about fighting inflation.

The time for action is now. Learn what’s happening around you. Take action. The rewards are big for those that do. The risks are huge for anyone doing nothing or following the old fashioned advice of the financial institutions. This situation is unique in history and will not repeat in our lifetimes. Action is required.

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