Investing for high inflation

Discussion in 'Economics' started by misterkel, Mar 29, 2021.

  1. misterkel


    I'm looking to long-term hedge my dry powder against inflation, which appears to be happening in the USD and other currencies, too.
    Anybody else looking at this?
    What ideas do people have?

    I've looked at fractional art, wine, and collectibles, but don't want to get too heavy into those things for illiquidity reasons.
  2. Any "real" asset is a potential candidate. But if the Fed pursues the "inflation push" far enough, it won't matter. You could have a $Bizzilion... and it won't matter when the currency devaluation comes.... you will be bankrupt, too.

    Turveyd likes this.
  3. misterkel


    Why would that follow? If you're not in ca$h, then wouldn't real assets hold value relatively independent of cash? In typical hyperinflations like Weimar, holders of gold came out quite wealthy.
    murray t turtle likes this.
  4. Not really. Inflation hedges "may" hold their value... until you figure in capital gains tax. IOW... if "properly" hedged (whatever that turns out to be) you still lose... just less than others.

    And speaking of Weimar... do you know that at its worst, the exchange rate of the Deutsch Mark was 4.2,000,000,000,000 :$1? It LITERALLY took a wheelbarrow full of DMarks to buy a loaf of bread! The DMark was literally "not worth the paper/ink it was printed upon". When inflation and currency debasement gets "out of hand", it's a DISASTER/BANKRUPTCY FOR ALMOST EVERYBODY!!
  5. MarkBrown


    you can't beat ammunition for our current political climate.
    ET180 and murray t turtle like this.
  6. misterkel


    Forgot to post the thread rules: all jokes must be accompanied by a serious suggestion.
    DiceAreCast likes this.
  7. Inflation is the cover for government deficit spending... aka, "theft of citizens assets" in such a way that they don't recognize how they are being "frogged-in-a-pot". So, the government wants more of it at all times.

  8. MarkBrown


    9 cents to 2 dollars per rifle bullet just since biden has been in office is serious.

    50 cents to 5 dollars for shotgun each shotgun shell is even more serious.

    nothing has risen faster in price than ammunition and firearms since the communist party has taken control.
    cobco and murray t turtle like this.
  9. lindq


    Buy property.
    Arnie, ET180, Fintrader and 3 others like this.
  10. You will get killed due to wide spreads and illiquidity. How I do it is to be aligned with equity markets until the bubble bursts (today I am quite bearish short term but not yet invested for lower equity prices mid to long term). Once short rates increase I buy generally tbills and keep rolling them as rates increase. The disadvantage is that you do give up a little on the nominal vs real rate spread, especially when the Fed is too slow to adjust. But in the past this was not a huge deal (have done so for over 20 years now). The huge advantage is that you maintain max liquidity plus the icing on the cake is that you can use tbills as collateral in most broker accounts with minimal haircut. This is how it works for me. But then we have not dealt with stubborn inflation over the past 20 years either. But I strictly stay away from any depreciating assets and also from esoteric assets like art, something I don't appreciate at all anyway. I value liquidity and the ability to trade in and out of quickly. I never used properties as investment because I am a staunch believer that properties should be dwelling places, only. Hence I only buy what I live in, period. To each his own.

    #10     Mar 29, 2021
    murray t turtle likes this.