3 ms·
Having hordes of actual cash won't protect you from inflation if it starts to become a problem. There's a reason gold is trading incredibly high right now.
by calvin 18y ago
Having hordes of actual cash won't protect you from inflation if it starts to become a problem. There's a reason gold is trading incredibly high right now.
- truebosko 18y agoOh I understand this, but for most people doing any kind of trading is just out of their league. I'm sure most people will be happy to know the $50k they have in their ING Account will be safe from most things while the economy levels back up again over the years.
- palish 18y agoI truly hope so. I have $15k to wade through this thing, so I doubt I can last very many years. Luckily I don't have to travel much, so the rising cost of fuel doesn't affect my burn rate terribly. Health insurance is a different story though.
- kingkongrevenge 18y agoIt's not exactly "trading" to keep something like 15% of your savings in physical gold, GLD ETF, or everbank CDs (gold backed interest earning certificates).
- jon_dahl 18y agoHow to protect against inflation: 1. Don't stick (too much) cash under a mattress. Avoid long-term bonds (which get killed by inflation). 2. Gold is a great inflation hedge, but is a terrible long-term investment. Other commodities are similar. 3. TIPS (e.g. VISPX) make excellent inflation hedges AND long-term investments. 4. Short-term investments, like money market funds, short-term bonds, and short-term CDs, also generally do well. If people expect 4% inflation, these investments need to pay more than 4% in order to get people's money. 5. Stocks and real estate protect against inflation over long time periods (5-10 years), but not over short periods.