Will This One Chart Show You Where To Investment?

Most people who invest tend to do what they are told by the media and their investment advisers (who are typically stock brokers). The problem is that the media too often toes the party line and says what the government wants them to say, and investment advisers often have a vested interest in you buying what they are recommending.

This is why you need to do your own homework, learn about different investment vehicles and the way the economy really works, and make your own investment choices.

One chart, from the Political Calculations blog, should help to open your eyes to what is really going on.

U.S. Annual GDP and National Debt 1791-2010

(hat tip to here for the source)

Take a close look at that chart, and you will see the ballooning debt in America in relation to the Gross Domestic Product (GDP). The amount of debt is increasing at an alarming rate. and the debt in relation to GDP should make it clear that what we are seeing is not so much reflecting growth but devaluation of the currency. In other words, what looks like growth is actually inflation mixed with the leveraging of debt to look like growth.

The smart investor will find stable, inflation-resistant ways, such as precious metals like gold or silver, to secure their funds against this inflation.