“Invest in Inflation.”

A reader recently asked,

I just read an article at Investorplace.com in which the author spoke about  critical water shortages around the globe, concluding that “water is blue gold… the new oil.”  Do you think this is true or just hype?

I think it is absolutely true. Jim Puplava, on the Financial Sense Newshour, has been talking about the global fresh water shortage for a couple of years now. He has already made the case for every point covered in that article, including investment opportunities in water companies and in the infrastructure needed to deliver water. He has also, by the way, been talking for quite a while about how we have allowed our infrastructure to decline in this country (think about the recent collapse of an important bridge) and has mentioned investment opportunities in companies that will be involved in rebuilding our infrastructure. (The big question is, where is the government, which is already broke, going to get the money to rebuild our infrastructure? The answer is more money creation and hence inflation.)

On a related subject, in my ebook, The New Survivalist, I discussed how the peak oil crisis is going to effect food prices in a big way. Agriculture is highly energy intensive – not only does all the equiptment run on deisel fuel (oil), but we are highly dependent on fertilizers that are produced from natural gas, and of course it takes a huge amount of energy to ship and refrigerate food to get it to our stores. But another thing that will effect food prices will be fresh water shortages, because agriculture also depends on huge amounts of water. Water shortages are not just a foreign problem. There are many areas in this country where fresh water shortages are becoming critical.

All of these problems, of course, are leading to higher food prices – and even food shortages – at the same time that we are already heading into an era of hyperinflation, due to a collapsing dollar thanks to the irresponsible actions of the Fed and our politicians as they run the money printing presses at full speed to create the paper money needed to bail out their friends.

The hyperinflation problem that is rapidly approaching is going to be made all the more worse by peak oil and water shortages. So, as Will Rogers once said, “Invest in inflation. It is the only thing going up these days.”

How do you invest in inflation? The answer is precious metals.

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