Amity Shlaes wrote a very interesting article in the Wall Street Journal on 6/5/08 exposing hidden dangers in investing in treasury inflation-protected securities and gold stocks. She explains how they may not keep up with the actual inflation rate and how our government has defaulted on these kinds of investments before.

This is a quote from her article, "People these days fear inflation. We also fear changing rates of inflation. And most of the tools we might use to protect ourselves, such as the Treasury Inflation-Protected Securities bond or gold stocks, are imperfect. TIPS are, after all, based on an inflation-measure whose accuracy is itself controversial - the Consumer Price Index.

So it's worth remembering that, 75 years ago today, President Franklin D. Roosevelt destroyed an inflation hedge that was literally as good as gold: the so-called "gold clause." This helped prolong the Depression and has been causing damage ever since." To read the entire article: http://www.aei.org/include/pub_print.asp?pubID=28094

Interesting enough, this topic was addressed again in the Wall Street Journal by Carmen Reinhart and Kenneth Rogoff in their article dated 6/24/08, "Watch Out for Sovereign Debt Risk." This article is geared to investors in emerging markets government issued debt instruments. A quote from this article is, "Fudging indexation clauses to effectively default on debt is an old game. ... In the Great Depression, the U.S. Government revalued gold to $35 per ounce from $20, effectively rewriting the contracts of foreign holders of U. S. debt." To see the complete article: http://online.wsj.com/article/SB121426585033198517.html?mod=opinion_main_commentaries

Now you know why we aren't on the gold standard any more. It didn't allow our government to spend more money than it had. It kept them honest. If you are interested in learning about diversifying your portfolio with precious metals call Tamara 303-771-5825 at Golden IRA's & Investments, Inc. No high pressure sales. I love to educate others about protecting their accumulated wealth. You may also visit www.goldeniras.com to learn more.