I hope you like the site and find it helpful/informative.

Mr Offit was referring to the necessity for people to have their securities held in separate accounts rather than held in the bank or brokerage name. If people with Madoff were aware of this issue they would have avoided that nightmare. Madoff held all the assets at his firm.

You want to make sure there is a separate “custodial” account holding your assets so you are not a creditor of the bank or broker, meaning if they go down, then you go down with them.

Great question!!

Welcome!! On one hand, if your expenses are in dollars and assets are in dollars you do not have what is known as “basis” risk.

I hope my comments to the readers above address your concerns. If not, please let me know.

Welcome to Sense on Cents. Please see my comment to Matt (above) about inflation “creeping” into our economy to the point where we begin to expect it.

How does one combat inflation? TIPS (Treasury Inflation Protected Securities), hard assets (metals, oils, commodities), real estate.

Do not panic and think this will happen immediately but it is a VERY REAL concern and as such the biggest adjustment can be merely being aware of it so you can plan accordingly.

The first and most important component in trading and investing is not to get overly emotional (panic).

No, I do not think you need to “immediately” move your assets into other currencies or gold/silver. I do think that people would be wise to gradually increase the percentage of your holdings/portfolio to well managed funds that have exposures in those areas.

In regards to inflation. In my opinion, we will experience an inching higher in prices. We will then begin to expect higher prices. The “expectation” of inflation is one of the biggest factors in overall inflation.

Thanks for the plug!!

Have you ever read David Goldman’s blog on Asia Times called Inner Workings? If you haven’t, I’m just passing this on to you.

Also, I just finished listening to your conversation with Mike Offet(sp?). He said something that I’m still unclear about. He said something to the effect that if we have assets with a brokerage and a margin account, we don’t own the assets — we just have an IOU. I assumed he meant that if we borrow to purchase securities, we don’t own them. That I understand. However, did he mean something else? If I bought securities without borrowing, are my securities
“safe”, or are brokerages lending them out like repos or doing other things with them that put them at risk?

Do we need to start moving our cash immediately into other currencies and/or Gold & Silver? Am I panicking too much in thinking that? Is that too drastic or risky a move right now? I know these are very difficult questions to answer. What is your best estimate on how far we are (timeline) from mass inflation? Your analysis and blog is just fantastic Larry – keep up the good work.

Matt