The other day, my poker friends and I had an online meeting to catch up. Somehow we started talking about the economic situation, the Federal Reserve, money printing, etc.
It was a real wake-up call on how little most people know about what is happening. I play poker with a very smart bunch of guys, but they didn’t know anything about how the Federal Reserve works, or what effects money printing on this scale might have.
This experience reminded me that most people still have little interest in economics, monetary policy or inflation (yet).
I believe this will change over the next few years. The U.S. has already announced a $6 trillion stimulus package ($2 trillion in aid and $4 trillion in lending power for the Fed). And I believe that’s just the appetizer. If I’m right, everyone is going to become intimately familiar with the effects of inflation in the near future.
Gold and bitcoin are my favorite ways to play the inflation angle. Gold is a safer bet. Bitcoin is riskier, but it has more upside. If you’re close to (or at) retirement, I would mostly stick to gold.
Eventually, high-quality stocks will be a decent place to hide out. But right now, I think there’s still a lot of downside left.
Unfortunately, I remain bearish on altcoins. I think most won’t perform well in this crazy environment (which could last a few years). If and when that changes, I’ll let you know.