Picture du Jour: Prepare for higher inflation
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November 2nd, 2009 by Prieur du Plessis, Investment Postcards from Cape Town
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The graph below shows the historical relationship between the annual change in the oil price and the year-on-year change in the US Consumer Price Index. Should the oil price remain around current levels, the CPI is bound to rise markedly. It comes as no surprise that gold bullion and Treasury Inflation-Protected Securities, or TIPS, have been relatively solid performers over the past few months.
Source: Plexus Asset Management (based on data from I-Net Bridge)
Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.
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