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If you are so scared of inflation (which is fair, so am I), just buy inflation indexed bonds. As for crypto, there is no fundamental mechanism that guarantees

• 300bps 4y ago
  just buy inflation indexed bonds It isn’t that simple. Inflation indexed bonds have a coupon and a factor. As inflation goes up, the factor goes up. Yay, keeping up with inflation! But as market interest rates go up, the price of your bond with the lower interest rate goes down. Boo, crippling losses! Now you can buy Series I Bonds to avoid this interest rate risk (i.e. duration) but you’re limited to $10,000 per year per social security number. If you’re worried about inflation the best thing to buy is a productive asset. Like stock in a profitable business. That is… until so many people do that it makes every company wildly overpriced. Wow this stuff is hard.
  • pid-1 4y ago
    > But as market interest rates go up, the price of your bond with the lower interest rate goes down. Boo, crippling losses! Not really if you hold them until maturity.
    • 300bps 4y ago
      Not really if you hold them until maturity. Respectfully, that is just not correct. Imagine you own $1,000 of a 30 year bond that pays 2% interest. Interest rates go up to 6%. You could sell your 2% bond and buy a 6% bond. But everyone else could too. So your 2% bond is worth less. And you’re going to hold it for 30 years, losing out on market interest. That is, you’re getting 2% when the rest of the market is getting 6%. The loss is there whether you sell or hold to maturity. Your only decision is do you want to take your loss now in one big sum or take it in small sums over the next 30 years.
• mrb 4y ago
  "inflation indexed bonds" Practically useless. The government only allows each person to buy $10k of I-bonds.
  • stouset 4y ago
    $15k per year if you include paper bonds from your tax return. And that is dramatically more than the median American saves every year.
  • jjav 4y ago
    > Practically useless. The government only allows each person to buy $10k of I-bonds. $10K is way more than what most people can save in a year, so it's effectively unlimited for more households.
    • mrb 4y ago
      Correct, but I-bonds cannot be cashed out in the first year, and households who can't afford to save more than $10k/year probably aren't interested in having their investment tied out for 1 year. Quite frankly, a S&P 500 index fund would serve them better than an I-bond, even during severe market drawdowns.
  • nuclearnice1 4y ago
    How about TIPS? > TIPS principal is adjusted by changes in the consumer price index, either up or down. The interest rate is determined at issue. https://www.thebalance.com/comparing-tips-to-i-bonds-2388668 https://www.thebalance.com/comparing-tips-to-i-bonds-2388668 Any good?
  • danaris 4y ago
    Tell me you don't care about people who aren't rich without saying you don't care about people who aren't rich.
• ekianjo 4y ago
  > just buy inflation indexed bonds. You do know that the official inflation numbers are much lower than actual inflation?
  • lottin 4y ago
    Feel free to show us the real inflation numbers.
    • ekianjo 4y ago
      You just need to be a regular consumer to notice that it does not align with the "basket" used by the authorities.
      • lottin 4y ago
        And...? The fact that your consumer habits are not reflected with 100% accuracy doesn't mean the basket is not representative of the average consumer. Again, feel free to come up with a better basket and explain why yours is better than the one used officially.