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News & ResearchInflated ... Then Deflated!

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Imagine my excitement at seeing "Fight Inflation: Ways to get the most out of your savings" as the headline of the Money Section of The Sunday Times ... 'Here we go,' thought I, 'we'll be needing that new phone line put in tomrrow morning to cope with the barrage of calls.'

Mervyn King has got the press reporting on the inflation / stagflation* topic after ceding that the UK economy, "faces the unappealing combination of subdued recovery with inflation remaining above target." 

Turning hastily to the two-page special today, I was bouyed further by the heavy, bold headline "How to protect your cash from inflation" ... I mean, I could barely wait to read the article at this point!

So imagine, then, my disappointment at the reluctance to mention precious metals as having a fairly well-proven track record at being an asset class fit for the purpose at hand. I couldn't understand. We had every kind of way to squeeze an extra pip from the bank, but not a word on gold. 

I say not a word ... as it happens, it was left to an unlikley white knight, in the sub-section of income stocks of all places, Daniel Adams, investment analyst at Psigma (who run an equity income fund, by the way) to come to the rescue:

"The greatest beneficiary to stagflation is likely to be commodities, in particular, precious metals."



Inflation -rises


* stagflation is a situation in which the  inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high.

Sunday November 18, 2012 by Robin Newbould