The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

Phase III Retirement Investing

Whatever is left of the baby boom generation’s retirement is about to get wiped out. It’s the third and final step in the systematic destruction of a whole generation’s wealth. Okay, bold statement . . . we agree. But hear us out.

The first step came with the dot-com crash. Retirement accounts stuffed with tech stocks pumped by CNBC—or funds that bought tech stocks pumped by CNBC—were vaporized. Our intrepid Boomers picked themselves up, dusted themselves off, and a few years later they figured they were riding high again.

Yes, their retirement accounts were a shadow of their former selves, but their homes were rising in value 10 percent a year, every year.

Then Phase II hit. The Federal Reserve encouraged folks to load up on ARMs. The Fed Chairman assured us there’d never been a sustained nationwide drop in home prices. We know how this one ended, too. In their effort to chase yield, bankers on Wall Street created the Frankenstein known as mortgage-backed securities (MBS) and went on to insure them with the abominable credit default swap (CDS). That derivative stew poisoned the entire global financial system. Now comes Phase III. Baby Boomers are approaching retirement age.

What are you supposed to do with whatever wealth you have remaining? Why, unless you’re a speculator in stocks and commodities and willing to bet on monetary policy outcomes, you’re supposed to play it safe with fixed income, of course. What is first and foremost? U.S. Treasuries. ...