Preview Mode Links will not work in preview mode

Jul 6, 2010

After a few years of consuming and digesting massive amounts of information pertaining to our current financial/energy crisis I find it rare that I consume a 'game-changer'. So it was exciting to have an MP3 forwarded to me that provided me with that game-changing moment.

Now, when I say game-changer, I'm not talking about What will happen, but rather How it will happen.  The How is focused on the debate about whether deflation or inflation will win the day. Because to get from where we are, (a debt-saturated global economy) to there, (historically normal debt ratios), we have to go down either one of two paths; inflation or deflation. For the most part I really don't care, the outcome of both still means that I need to move up the learning curve on my gardening skills, start building a local community, and continue to keep educating myself on all matters that pertain to self-sufficiency.

Where inflation vs. deflation matters to me is how should I react with my investing strategy. This is why the debate has importance to me and probably you. In this interview Nicole Foss of Automatic Earth makes a compelling case for deflation, probably the best I've heard as of yet.

The title of this episode comes from the fact that Nicole is criss-crossing the globe in an effort to prepare those that are ready to hear her message that something life-altering is coming. Just as Paul Revere rode through Lexington to warn the patriots of sudden attack, Nicole is globe-trotting to warn the patriots of sudden collapse.

Automatic Earth

Ron Rancourt
twelve and a half years ago

Loved the interview, thanks for posting. I am a big fan of Nicole\'s work.

twelve and a half years ago

Good interview, and, her transition town talk ( was outstanding.

I think this demonstrates how thoughtful reasonable minds (i.e., Foss and Martenson), aware of the same data, can disagree on deflation versus inflation—or at least their order of appearance. Foss and Martenson both have some common preparation themes (e.g., increase basic self-reliance and resilience), but there are also some stark differences (e.g., cash vs gold; stocks vs bonds).

The bottom line is that we just don\'t know whether we are in for deflation or inflation, and therefore, it is prudent to prepare for both. The question is how to do that?

That brings me to Harry Browns\' Permanent Portfolio; a very simple investment concept to prepare for both inflation and deflation, as well as recession and prosperity. It involves dividing your investment allocation to 1/4s of stock, long term bonds, gold, and cash.

Harry Brown died on Mar 1, 2006 (from ALS) and his last radio show was Nov 13, 2005. His general advice and observations are timeless however. His Radio show archive is still online: (I could not download shows from here, but you can use this mirror site instead

The first three episodes of the show pretty well cover the Permanent Portfolio concept. The Permanent Portfolio seems to have done fairly well over the years:

\"In fact, over the 30+ year history of this portfolio strategy the worst loss it ever had was about 4-6% in 1981 with an annual growth of 9-10% since 1972. The portfolio has prospered and protected its money through bear and bull markets alike.\"

There is an individual, \"craigr,\" who continues to track a version of the Permanent Portfolio and writes about it here: .

o2B, I think that \"craigr\" would make for an interesting interview guest on your show.