Inflation Hedge Question - is there a way to "go long" the CPI?

Discussion in 'Economics' started by bettles, Apr 26, 2009.

  1. TraderD


    DBA, DBC , other commodity ETFs ETNs


    seems like they would do a job too
    #21     Apr 27, 2009
  2. #22     Apr 27, 2009
  3. sprstpd


    Keep on living in denial and watch your purchasing power get crushed - it's fine with me. The way BLS calculates CPI is a joke.
    #23     Apr 27, 2009
  4. I completely agree with sprst on shadowstats and govt numbers.

    My proposal:

    60% TIPS
    10% Gold GLD
    10% Silver SLV
    10% Oil USL
    10% Agriculture DBA

    By nature, really hedging against (High-/Hyper-)Inflation is next to impossible.

    It is bad for stocks and other factors, like social unrest, have to be considered.
    #24     Apr 27, 2009
  5. The best hedge against high or hyperinflation I can think of is a basket of 3-4 trendfollowing CTA funds with 10+ year trackrecords. They will benefit from high asset price volatility and give you leveraged exposure to currency/commodity/interest rate swings.

    If however the entire inflation scare is a headfake then these funds should preserve your nominal capital better than long only commodity/metal/TIP bond investments (see 2008 for a beautiful example).
    #25     Apr 27, 2009
  6. My big problem with the CPI is the OER component, which completely ignores the housing equity that can be monetized.

    Buy equities, buy commodities, buy TIPS... Have a portfolio of inflation-linked assets. That's my 2c
    #26     Apr 27, 2009
  7. after it happens it'll become completely logical

    if you don't know how it is in third world countries, just wait a few years and you'll see for yourself

    check out the change in M2 YoY, maybe you can guess M3
    #27     Apr 27, 2009
  8. Buy the Euro.

    Mr Trichet is as hard core hard currency as they come by.
    #28     Apr 27, 2009
  9. That's naive... In the end, Mr Trichet will bend over for Mr Sarkozy et al just as smoothly as any other central banker.
    #29     Apr 27, 2009
  10. Even if the EUR declines 30% the US CPI could well be positive over the next 10 years. One could even argue they're somewhat uncorrelated. How does that make the EUR a good hedge?
    #30     Apr 27, 2009