Three Tips for Fighting Inflation


Here are three tips for fighting  inflation.

The first inflation fighting tip can be fun because Ecuador real estate is one way way to preserve purchasing power.

Inflation is hitting everyone hard.  We have to strike back, but the process can be fun because one of three inflation fighting tips is real estate on Ecuador’s coast.

Fortunately the process of fighting inflation can be fun…discovering bargains in the coastal areas of Ecuador we have been strongly recommending… north of Bahia.  The process of research can’t be such hard work when you find gems like this small hotel that…

ecuador-beach

Jean Marie Butterlin recommends.

ecuador-beach

Enjoy your own cabin with…

ecuador-beach

stunning ocean views and…

ecuador-beach

empty beaches for walking or to…

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just relax.

Jean Marie writes: A little magic paradise near Bahia : Punta Prieta

Once every few years, when you travel the world, you find a “magic” place where everything feels right and all you want to do is relax, meditate and recharge your batteries.   I found one of those paradises a few days ago just one hour north of Bahia.  Owner Alonso invited me along with a few friends to spend a time in his home, where his wife, Madeleina, cooked for us some exquisite food.  His home is in fact a lodge with 13 cabins nestled into a little volcanic  cliff overlooking some of the most beautiful beaches of Ecuador.

Alonso told us about all the artists and painters, who came to spend time in this place to get inspiration and work around this incredible place.  It is very difficult to describe in words how someone feels around magic.  I guess someone just has to experience it.

Living in Bahia enables one to experience these kind of places that you never forget.  Jean Marie.

Living in Ecuador fights inflation. You can still live well on $1,500 a month and very well if you have that much income and own your own real estate. Expat demand has driven real estate prices up in some places but other Ecuador areas, such as Ecuador beach property, north of Bahia, still offer incredible value.

Inflation Fighting Tip #2 & 3: Invest in copper and silver.

We have many readers ask about what will happen in Ecuador when the US dollar crashes.  The answer is the same as will happen in the USA. Prices will rise… just not as much as in the US.

One reader wrote: Gary, I am reading through your currency report and consider this very good value.  Very impressive research, all your writing is very analytical and well thought out, mayhaps you were an engineer at one time….  Maybe we shall meet in Ecuador in the future.  My only concern with the country is the monetary system is IMF, what do you think will happen in Ecuador when the dollar totally crashes?  Nice Job.

Another reader asked this: Hello Gary, I was fascinated by this article “Silver & Confessions of a Swiss Banker“.  Thank you. Do you see this 30% drop in silver as a good opportunity to buy silver?   I presently have no silver or gold.  Do you agree with Michael Checkan’s article in which he recommends 90% silver coins that were minted by  US Treasury prior to 1965…as the best way to hold silver?  Thank you,  Doug

First, the battle against a crashing US dollar is the same as fighting inflation and this must be fought wherever one lives. Silver, gold and commodities are one way to fight inflation and protect against the US dollar’s fall.

How and when you buy precious metals depends on your investing philosophy and how much you already hold in your portfolio.

I have not read Michael Checkan’s recommendation regarding the silver coins.  Michael  is the most experienced and trustworthy precious metals dealer I know so I suspect this information is sound. Holding the physical metal has risks and expenses but having a part of your protolio in physical metal makes sense.

You can get more details on holding silver from Michael’s company Asset Strategies at  the email address shown below.

For more than a year we have reviewed shares in Silver Wheaton (silver) and KGHM Polska (silver and copper). See more here.

Here is how these shares have fared in this year.

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Silver Wheaton from finance.yahoo.com

inflation-shares

KGHM Polska from Bloomberg.com

My philosophy is to normally have 5% to 10% of my portfolio in precious metals and precious metals shares.  If I were underweighted, I would certainly consider adding more precious metals and or related shares like these above during this dip.

I would also consider overweighting precious metals in my portfolio during this dip.

However, as mentioned  in last Saturday’s message, I also recall speculating on silver in the 1970s when it reached $48 an ounce.  When it dropped to $25 an ounce, I thought “What a bargain!”  Then silver’s price collapsed and it took over 30 years to recover to $25 an ounce.

Never ignore the most basic rule of portfolio management… there is always something we do not know!   What goes up, can come down and though the strong inflation suggests that silver and gold prices will rise more, never, ever  speculate more than you can afford to lose.

The current downturn in silver prices provides a better value opportunity  to invest in physical silver and metal related shares like those shown above, but always keep your positions diversified and in relation to your investing plan.

Gold & Silver in Ecuador

Many readers ask about bringing gold & silver to Ecuador. One reader wrote: I am enjoying your website, very informative. I will tour the country to find out where I want to be.  My trip to Ecuador will be one way as I have no desire to return to Canada, and definitely do not want to spend another winter here. Will be coming down on a shoestring so to speak. I sold my house and the $30K equity went straight to physical gold and silver 1oz coins. Now my question is how do I get these coins to Ecuador?
Sandra Baquero, a customs & transport advisor on our Ateam Ecuador asnwered this for us.

To bring silver and gold coins to Ecuador nowadays is so expensive, in customs they know the real value of the coins and they will charge you not on the face value but in the real value. One of my clients received two gold coins by Federal Express and customs wanted to charge him $1,800 for only two  gold coins.   I made Federal Express return the package and my customer anyway had to pay $380 to do it.   I do not recommend anybody to bring silver or gold coins. The tariff  for silver coins is aprox. 30% and gold coins aprox 45% … so it is not worth bringing them.

If you are moving to Ecuador and want to  hold physical gold and silver, ask Asset Strategies about ways to store them outside of Ecuador by writing Rich Checkan at rcheckan@assetstrategies.com .

Inflation is with us and will not go away soon.  Have a systematic way of investing to combat the deterioration of your purchasing that fits your lifestyle and that you can enjoy… like visiting Ecuador.

Gary

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Learn our most current Ecuador and multi currency investment ideas at our June 24-26 seminar in North Carolina.

Learn how to combat inflation with enjoyable Ecuador real estate.


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