“..personally, I’m not all that worried about inflation”
No matter how much you might want to believe that inflation isn’t something you need to think about, there’s not much you can do about all the evidence pointing towards the contrary.
In the last year alone, food prices have risen significantly in many parts of the world and now it looks like this might only be the start. Despite the hints about cutting back on the incessant money printing, even just a little bit, Bernanke has confirmed that there will be nothing of the sort. So commodities head higher and stocks go on a tear. It’s great news if you work in the financial industry. But not so great for everyone else. Even in Chile where inflation has been relatively tame, we’re beginning to see an uptick. Deutsche Bank just upgraded the performance outlook for Banco de Chile and Banco Santander because they believe inflation will be picking up later in the year and then accelerating in 2014. It’s definitely bothersome to watch the mismanagement of the money supply up north affecting millions, even billions of people around the world. But personally, I’m not all that worried, at least not for myself or my family. Several years ago I started taking steps, small steps at first, but steps nevertheless, to take back my freedom and beat the inflation that I knew was coming. In 2010, after doing about 3 months of full time research and market analysis on central Chile’s real estate market, I decided that there was no better way in the world for me to beat inflation than by buying strategically located rural properties in Chile. At the time, just about everyone I talked to about this thought I was absolutely nuts. Quit my “secure” job back in the states and go on a several month property scouting trip. To where? Chile? People told me it was a pretty bold move. To me, it was one of the most prudent things I’ve ever done. Things have come quite a way since then, and prices have definitely risen from where they used to be, but they’re nowhere near the top. How do I know that? It’s simple. Supply. And Demand. Think about it this way, how many countries are there in the world right now with a debt to GDP ratio below 15%? What about an unemployment rate below 7%? (not the “official” one, I’m taking about the actual numbers) How many governments in the world let just about anyone who can find a job or show that they can support themselves immigrate to the country, almost free of charge? Allow foreigners to purchase property outright in their own name? Have a carrying capacity that far exceeds the country’s current population? And it doesn't stop there. The list goes on, and on, and on. One day, the Chileans are going to catch on to just how attractive their country is on a global scale. When that happens, prices all across the board are going to start moving a lot higher and prime properties will draw much bigger premiums. That's why for the time being, my associates and I are scooping up as much property as we can down here. We spend hundreds, even thousands of dollars every month doing due diligence. It’s frustrating but at the end of the day, I know it’s well worth it. First off, it puts me WAY ahead of inflation. And secondly, having control over your own source of water and food, as well as the peace of mind that comes along with it, is absolutely priceless. Until soon, Darren Kaiser |
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