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A passive way to protect yourself is to buy commodities like gold, silver and oil. Gold in particular is considered a great hedge against inflation. If JPY begi

A passive way to protect yourself is to buy commodities like gold, silver and oil. Gold in particular is considered a great hedge against inflation. If JPY begins to inflate, its exchange rate against other currencies will rise and gold prices (as measured in JPY) will increase. You will "profit" in the sense that you can sell your gold to repurchase yen after the inflation stops. FYI, investing the GLD ETF is the best practical way to buy gold: http://finance.yahoo.com/q?s=gld http://finance.yahoo.com/q?s=gld

djcapelis 17y ago
There is a gold bubble right now exactly because too many people are giving exactly this advice. Do you not recognize how often people used to say the same thing about US real estate before 2005? If you want to hedge against inflation then might I suggest US currency? It's remarkably stable and inflates by only a 3-6 points most years: http://www.inflationdata.com/inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm http://www.inflationdata.com/inflation/images/charts/Annual_...
- patrickgzill 17y ago
  By what mechanism or algorithm have you determined that gold is in bubble territory?
  - djcapelis 17y ago
    That problem is undecidable and bubble is not well defined[1], but you only have to look at the price of gold to see that there's evidence for a claim that gold is in a bubble. Certainly the idea that gold is immune to inflation, overvalue or a bubble is entirely absurd and outright dangerous to the people who might fall into the trap of believing it. [1] If someone had such an algorithm Wall Street financial firms would be making untold amounts of money off of it, most trading algorithms are just rough heuristics that happen to work, but rarely work for extensive periods of time or any specific claims.
- minsight 17y ago
  That's entertaining advice. The US dollar's value is dropping (and will continue to drop) sharply since they are printing them like mad. If the value of the dollar drops, the value of things relative to the dollar rises (like gold). There isn't a gold bubble, there's a dollar devaluation. The dollar may have been stable in the past, but those days are almost certainly over.
  - philwelch 17y ago
    There's been a gold bubble for centuries, actually. The damn stuff isn't nearly as useful as the price would imply.
    - djcapelis 17y ago
      I continue to jokingly suggest that people ought to buy pork belly futures if they really want to hedge against inflation. But of course people just love to think about owning gold and that's what's really driving this madness.
  - djcapelis 17y ago
    None of those claims are backed up by actual evidence. I pointed directly to a graph of the CPI which explicitly shows the dollar is only inflating by a few points each year and most recently (when the largest amount of noise was coming out of people's faces about gold) the dollar was actually in a deflation period and getting more valuable. There may be flaws with the CPI-U data, but I don't know of a better data source. Feel free to point one out. Until you do however, the data we've explored in this thread directly contradicts all of your assertions, despite their popularity among some.

djcapelis 17y ago

There is a gold bubble right now exactly because too many people are giving exactly this advice. Do you not recognize how often people used to say the same thing about US real estate before 2005? If you want to hedge against inflation then might I suggest US currency? It's remarkably stable and inflates by only a 3-6 points most years: http://www.inflationdata.com/inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm http://www.inflationdata.com/inflation/images/charts/Annual_...

patrickgzill 17y ago
By what mechanism or algorithm have you determined that gold is in bubble territory?
- djcapelis 17y ago
  That problem is undecidable and bubble is not well defined[1], but you only have to look at the price of gold to see that there's evidence for a claim that gold is in a bubble. Certainly the idea that gold is immune to inflation, overvalue or a bubble is entirely absurd and outright dangerous to the people who might fall into the trap of believing it. [1] If someone had such an algorithm Wall Street financial firms would be making untold amounts of money off of it, most trading algorithms are just rough heuristics that happen to work, but rarely work for extensive periods of time or any specific claims.
minsight 17y ago
That's entertaining advice. The US dollar's value is dropping (and will continue to drop) sharply since they are printing them like mad. If the value of the dollar drops, the value of things relative to the dollar rises (like gold). There isn't a gold bubble, there's a dollar devaluation. The dollar may have been stable in the past, but those days are almost certainly over.
- philwelch 17y ago
  There's been a gold bubble for centuries, actually. The damn stuff isn't nearly as useful as the price would imply.
  - djcapelis 17y ago
    I continue to jokingly suggest that people ought to buy pork belly futures if they really want to hedge against inflation. But of course people just love to think about owning gold and that's what's really driving this madness.
- djcapelis 17y ago
  None of those claims are backed up by actual evidence. I pointed directly to a graph of the CPI which explicitly shows the dollar is only inflating by a few points each year and most recently (when the largest amount of noise was coming out of people's faces about gold) the dollar was actually in a deflation period and getting more valuable. There may be flaws with the CPI-U data, but I don't know of a better data source. Feel free to point one out. Until you do however, the data we've explored in this thread directly contradicts all of your assertions, despite their popularity among some.