Don’t Get Mad at Inflation – Here are 3 Ways to Invest and Get Even

The U.S. Labor Department recently released August inflation numbers , showing
that consumer prices rose 0.4% on the month. That's an annualized rate of 3.8%
and the ugliest pace since November 2008. Meanwhile, in the wake of the Fed's
FOMC meeting last week and "Operation Twist," some Federal Reserve officials
have gone on the record expressing concern over the idea that we can find growth
through policies that spark widespread inflation. But you don't have to look
far to find signs that inflation is on the march. Just go to the gas pump or
grocery store and you'll see it in action. Your receipt will tell you the
story just as well as these news items, as everything from gasoline to beef to
vegetables are pricier these days. Throw in the fact that wages are stagnant and
the market is just shy of flat year to date in 2011, and the never-ending price
creep is even more infuriating. But don't get mad at inflation. Get even. A
savvy investor can profit from the big inflationary trends right now and
hopefully offset the damage caused by price increases and then some. Here are
three moves to make now to profit from inflationary pressures. Buy Gold and/or
Silver You might think I'm about to say "gold is a terrific hedge against
inflation." Well, it's not. Consider that the inflation-adjusted price of
gold was about $1,850 in 1980 then fell to about $350 in 2001. Clearly much
more moves gold than inflation. Plainly put, gold is a crisis hedge. That's
the biggest reason for the move into the metal now, and a big reason for the
1980 gold bubble (many market historians have correlated the beginning of a 1979
run in gold to the Soviet invasion of Afghanistan and the resulting global shock
amid the Cold War). Inflation can be part of the economic mess at the time gold
goes on a run, but its not the sole driver. Silver has become gold's cousin
these days as a "safe haven." With CDs and T-Notes yielding next to nothing
and many folks scared of the stock market, these physical assets are in favor.
Investments to consider along these lines include the physical gold and silver
ETFs, the SPDR Gold Trust (NYSE: GLD ), the iShares Gold Trust (NYSE: IAU ) and
the iShares Silver Trust (NYSE: SLV ). Don't get into gold or silver because
you think they are pure inflation hedges, however. They are not. But they are
effective crisis hedges. Many folks think that no growth, stagnant wages and
growing consumer prices equals a crisis and rightly so.