4 ms·

Serious question: How to prepare for hyperinflation?

by yankeehue 5y ago

deleted 5y ago
[deleted]
fumar 5y ago
Second this question. I have yet to see any recommendations outside of real estate debt at low rates in growth areas.
- OldGoodNewBad 5y ago
  Silver, gold, and art are classic assets.
  - fumar 5y ago
    I didn't think of art before. I guess that shows my class status.
    - OldGoodNewBad 5y ago
      Your class is what you make of it. Rich people are often uncultured too.
01100011 5y ago
Own assets, especially cash producing assets with low capital overhead. You may already be too late for that party though.
fshbbdssbbgdd 5y ago
Take out a fixed-rate mortgage on your house. Your debt paying itself off would be a nice silver lining to inflation.
- triceratops 5y ago
  Only if your income increases to match inflation, right?
  - fshbbdssbbgdd 5y ago
    If housing costs increase as part of inflation, owning a home will leave you better off than renting (whether or not your income is keeping pace with inflation).
  - xyzzyz 5y ago
    Over 30 year term of mortgage, it eventually will, most likely sooner than later.
unlikelymordant 5y ago
Exchange the hyperinflating currency for a currency that is more stable. Any germans in the 1920s that held US dollars were completely immune to inflation of german currency.
prestigious 5y ago
Borrow lots of money at low interest rates?
vishnugupta 5y ago
I could think of two options based on what I’ve read 1. Hold a more stable currency, maybe GBP or JPY. It also means you need earn your salary in those same currencies. Move your other assets like equity etc to the same currency. I don’t think anything can be done about the pension account, unfortunately. 2. Switch to other forms to store value, preferably liquid, such as gold. Assume the hyperinflation will last for 2-3 years and calculate the gold you need to buy. Though the chances of USD hyper inflation in our lifetime (next 40-50 years) are vanishingly low based on what I have read. USD is still by far the most powerful currency, to an extent that last March there was a global flight to the refuge of USD triggering insane scenarios like negative oil prices and equities tanking. The next generation, however will have to be prepared for a bipolar currency, USD and CNY.
SaintGhurka 5y ago
There are some really easy ways to protect yourself. Most of these ideas are generally good for periods of high inflation. REAL hyperinflation is so disruptive that nothing is really safe. I-bonds for small-time investors in the US. They have some nice tax benefits for holders. TIPS for big-time investors. Global stock index funds. That saves you the trouble of buying and holding foreign currency and they pay dividends while you wait for the inflation apocalypse. Even domestic stocks have a good chance of coming out ahead. Others have mentioned gold and silver. Those can be bought like stocks with GLD and SLV. Likewise you can buy real estate investment trusts if you aren't in a position to buy actual real estate. Those usually pay nice dividends. If you're really worried about real hyperinflation, you should go find the best deal on bulk-purchases of every non-perishable thing you intend to use for the next year. You might be surprised at the investment return you get on buying a 5-year's supply of wine or t-shirts.

Serious question: How to prepare for hyperinflation?

deleted 5y ago

[deleted]

fumar 5y ago

Second this question. I have yet to see any recommendations outside of real estate debt at low rates in growth areas.

OldGoodNewBad 5y ago
Silver, gold, and art are classic assets.
- fumar 5y ago
  I didn't think of art before. I guess that shows my class status.
  - OldGoodNewBad 5y ago
    Your class is what you make of it. Rich people are often uncultured too.

01100011 5y ago

Own assets, especially cash producing assets with low capital overhead. You may already be too late for that party though.

fshbbdssbbgdd 5y ago

Take out a fixed-rate mortgage on your house. Your debt paying itself off would be a nice silver lining to inflation.

triceratops 5y ago
Only if your income increases to match inflation, right?
- fshbbdssbbgdd 5y ago
  If housing costs increase as part of inflation, owning a home will leave you better off than renting (whether or not your income is keeping pace with inflation).
- xyzzyz 5y ago
  Over 30 year term of mortgage, it eventually will, most likely sooner than later.

unlikelymordant 5y ago

Exchange the hyperinflating currency for a currency that is more stable. Any germans in the 1920s that held US dollars were completely immune to inflation of german currency.

prestigious 5y ago

Borrow lots of money at low interest rates?

vishnugupta 5y ago

I could think of two options based on what I’ve read 1. Hold a more stable currency, maybe GBP or JPY. It also means you need earn your salary in those same currencies. Move your other assets like equity etc to the same currency. I don’t think anything can be done about the pension account, unfortunately. 2. Switch to other forms to store value, preferably liquid, such as gold. Assume the hyperinflation will last for 2-3 years and calculate the gold you need to buy. Though the chances of USD hyper inflation in our lifetime (next 40-50 years) are vanishingly low based on what I have read. USD is still by far the most powerful currency, to an extent that last March there was a global flight to the refuge of USD triggering insane scenarios like negative oil prices and equities tanking. The next generation, however will have to be prepared for a bipolar currency, USD and CNY.

SaintGhurka 5y ago

There are some really easy ways to protect yourself. Most of these ideas are generally good for periods of high inflation. REAL hyperinflation is so disruptive that nothing is really safe. I-bonds for small-time investors in the US. They have some nice tax benefits for holders. TIPS for big-time investors. Global stock index funds. That saves you the trouble of buying and holding foreign currency and they pay dividends while you wait for the inflation apocalypse. Even domestic stocks have a good chance of coming out ahead. Others have mentioned gold and silver. Those can be bought like stocks with GLD and SLV. Likewise you can buy real estate investment trusts if you aren't in a position to buy actual real estate. Those usually pay nice dividends. If you're really worried about real hyperinflation, you should go find the best deal on bulk-purchases of every non-perishable thing you intend to use for the next year. You might be surprised at the investment return you get on buying a 5-year's supply of wine or t-shirts.