How to invest for hyper inflation?

[OC Burns]

Most people assume we will either experience inflation or deflation. And without getting into an economic debate about the definitions of each, it seems like the common usage of these terms is based on viewing the economy in the aggregate. That’s not what it looks like to me.

FWIW, I believe we are headed into a biflationary period. Biflation is when the prices of commodities (think energy and food) increase, while the prices of useless crap decrease. So Joe Average spends more of his check just gettin’ by.

If this is the case, it seems like a strategy geared towards commodities would be more appropriate.

I’m just Joe Average Dude, so I may be missing a HUGE piece of the puzzle here. If so, I’d appreciate hearing different views. Being anonymous, I’m more concerned with “getting it right” than with “being right.”

Great thread topic, BTW.

[gold_dredger_phd]

If it really is hyperinflation, then you should buy stuff that you will need in the future like canned goods and food that will store for a long time. These items may not even be available at any price.

Loose silver coins of the 1964 and earlier dates are the best to have. They come in a variety of denominations and it is easy to break up a $500 face value bag. Dimes, quarters and half-dollars are easily recognizable by people and you can easily compute the value by just using a factor over face value.

Gold is easy to store as it is less heavy per value and you can easily store it in a safety deposit box.

Stay away from US paper assets.

However, you should be hedged which means that you should be prepared for inflation, stagflation, hyperinflation and deflation. Good luck.

[gold_dredger_phd]

If it really is hyperinflation, then you should buy stuff that you will need in the future like canned goods and food that will store for a long time. These items may not even be available at any price.

Loose silver coins of the 1964 and earlier dates are the best to have. They come in a variety of denominations and it is easy to break up a $500 face value bag. Dimes, quarters and half-dollars are easily recognizable by people and you can easily compute the value by just using a factor over face value.

Gold is easy to store as it is less heavy per value and you can easily store it in a safety deposit box.

Stay away from US paper assets.

However, you should be hedged which means that you should be prepared for inflation, stagflation, hyperinflation and deflation. Good luck.

[gold_dredger_phd]

If it really is hyperinflation, then you should buy stuff that you will need in the future like canned goods and food that will store for a long time. These items may not even be available at any price.

Loose silver coins of the 1964 and earlier dates are the best to have. They come in a variety of denominations and it is easy to break up a $500 face value bag. Dimes, quarters and half-dollars are easily recognizable by people and you can easily compute the value by just using a factor over face value.

Gold is easy to store as it is less heavy per value and you can easily store it in a safety deposit box.

Stay away from US paper assets.

However, you should be hedged which means that you should be prepared for inflation, stagflation, hyperinflation and deflation. Good luck.

[gold_dredger_phd]

If it really is hyperinflation, then you should buy stuff that you will need in the future like canned goods and food that will store for a long time. These items may not even be available at any price.

Loose silver coins of the 1964 and earlier dates are the best to have. They come in a variety of denominations and it is easy to break up a $500 face value bag. Dimes, quarters and half-dollars are easily recognizable by people and you can easily compute the value by just using a factor over face value.

Gold is easy to store as it is less heavy per value and you can easily store it in a safety deposit box.

Stay away from US paper assets.

However, you should be hedged which means that you should be prepared for inflation, stagflation, hyperinflation and deflation. Good luck.

[gold_dredger_phd]

If it really is hyperinflation, then you should buy stuff that you will need in the future like canned goods and food that will store for a long time. These items may not even be available at any price.

Loose silver coins of the 1964 and earlier dates are the best to have. They come in a variety of denominations and it is easy to break up a $500 face value bag. Dimes, quarters and half-dollars are easily recognizable by people and you can easily compute the value by just using a factor over face value.

Gold is easy to store as it is less heavy per value and you can easily store it in a safety deposit box.

Stay away from US paper assets.

However, you should be hedged which means that you should be prepared for inflation, stagflation, hyperinflation and deflation. Good luck.

[bubba99]

I am reminded of a term from my economics class, cateras parabas – all other things being equal. Today we have two different actions causing economic term oil. The FED printing money at hyper speed which should cause hyper-inflation, but the cateras parabas condition does not hold true.

At the same time we have an economic recession caused by hyper inflated assets like housing and credit card debt which are causing rapid deflation in both real and financial assets. This mechanism is causing losses in income, jobs and demand for services. All additional deflationary impacts.

It could be that stagflation is the more likely outcome. Less costly goods (cost less in real terms because of lower effective demand) being paid for in inflated dollars. Will the dollar deflate in value faster than the value of assets deflate due to bubble bursting and economic slow down? And even more important is “Is it too late to invest in currency independent assets like gold that are already at historic highs?”

Even the new exchange traded funds in currency like FXE dollar vs the euro are only hedges against the losses in the dollar, you can’t actually make more than you lose in dollar value. In the short term, all of those new dollars being printed by the FED need to go somewhere. The stock market seems to be the only place that can absorb enough of it to have an impact – until the next bubble becomes visible.

And I can believe I am saying this, effective stock selection may be the best hedge against stagflation – stocks that do well when the economy tanks like COSTCO, Trader Joes, Liquor sales, etc. Low overheads, high consumer demand. But definitely hedge them with a short hedge like SDS which can make money as the rest of the stock market deflates. (SDS is an inverse hedge fund that goes up 2% for each 1% the S&P falls)

[bubba99]

I am reminded of a term from my economics class, cateras parabas – all other things being equal. Today we have two different actions causing economic term oil. The FED printing money at hyper speed which should cause hyper-inflation, but the cateras parabas condition does not hold true.

At the same time we have an economic recession caused by hyper inflated assets like housing and credit card debt which are causing rapid deflation in both real and financial assets. This mechanism is causing losses in income, jobs and demand for services. All additional deflationary impacts.

It could be that stagflation is the more likely outcome. Less costly goods (cost less in real terms because of lower effective demand) being paid for in inflated dollars. Will the dollar deflate in value faster than the value of assets deflate due to bubble bursting and economic slow down? And even more important is “Is it too late to invest in currency independent assets like gold that are already at historic highs?”

Even the new exchange traded funds in currency like FXE dollar vs the euro are only hedges against the losses in the dollar, you can’t actually make more than you lose in dollar value. In the short term, all of those new dollars being printed by the FED need to go somewhere. The stock market seems to be the only place that can absorb enough of it to have an impact – until the next bubble becomes visible.

And I can believe I am saying this, effective stock selection may be the best hedge against stagflation – stocks that do well when the economy tanks like COSTCO, Trader Joes, Liquor sales, etc. Low overheads, high consumer demand. But definitely hedge them with a short hedge like SDS which can make money as the rest of the stock market deflates. (SDS is an inverse hedge fund that goes up 2% for each 1% the S&P falls)

[bubba99]

I am reminded of a term from my economics class, cateras parabas – all other things being equal. Today we have two different actions causing economic term oil. The FED printing money at hyper speed which should cause hyper-inflation, but the cateras parabas condition does not hold true.

At the same time we have an economic recession caused by hyper inflated assets like housing and credit card debt which are causing rapid deflation in both real and financial assets. This mechanism is causing losses in income, jobs and demand for services. All additional deflationary impacts.

It could be that stagflation is the more likely outcome. Less costly goods (cost less in real terms because of lower effective demand) being paid for in inflated dollars. Will the dollar deflate in value faster than the value of assets deflate due to bubble bursting and economic slow down? And even more important is “Is it too late to invest in currency independent assets like gold that are already at historic highs?”

Even the new exchange traded funds in currency like FXE dollar vs the euro are only hedges against the losses in the dollar, you can’t actually make more than you lose in dollar value. In the short term, all of those new dollars being printed by the FED need to go somewhere. The stock market seems to be the only place that can absorb enough of it to have an impact – until the next bubble becomes visible.

And I can believe I am saying this, effective stock selection may be the best hedge against stagflation – stocks that do well when the economy tanks like COSTCO, Trader Joes, Liquor sales, etc. Low overheads, high consumer demand. But definitely hedge them with a short hedge like SDS which can make money as the rest of the stock market deflates. (SDS is an inverse hedge fund that goes up 2% for each 1% the S&P falls)

[bubba99]

I am reminded of a term from my economics class, cateras parabas – all other things being equal. Today we have two different actions causing economic term oil. The FED printing money at hyper speed which should cause hyper-inflation, but the cateras parabas condition does not hold true.

At the same time we have an economic recession caused by hyper inflated assets like housing and credit card debt which are causing rapid deflation in both real and financial assets. This mechanism is causing losses in income, jobs and demand for services. All additional deflationary impacts.

It could be that stagflation is the more likely outcome. Less costly goods (cost less in real terms because of lower effective demand) being paid for in inflated dollars. Will the dollar deflate in value faster than the value of assets deflate due to bubble bursting and economic slow down? And even more important is “Is it too late to invest in currency independent assets like gold that are already at historic highs?”

Even the new exchange traded funds in currency like FXE dollar vs the euro are only hedges against the losses in the dollar, you can’t actually make more than you lose in dollar value. In the short term, all of those new dollars being printed by the FED need to go somewhere. The stock market seems to be the only place that can absorb enough of it to have an impact – until the next bubble becomes visible.

And I can believe I am saying this, effective stock selection may be the best hedge against stagflation – stocks that do well when the economy tanks like COSTCO, Trader Joes, Liquor sales, etc. Low overheads, high consumer demand. But definitely hedge them with a short hedge like SDS which can make money as the rest of the stock market deflates. (SDS is an inverse hedge fund that goes up 2% for each 1% the S&P falls)

[bubba99]

I am reminded of a term from my economics class, cateras parabas – all other things being equal. Today we have two different actions causing economic term oil. The FED printing money at hyper speed which should cause hyper-inflation, but the cateras parabas condition does not hold true.

At the same time we have an economic recession caused by hyper inflated assets like housing and credit card debt which are causing rapid deflation in both real and financial assets. This mechanism is causing losses in income, jobs and demand for services. All additional deflationary impacts.

It could be that stagflation is the more likely outcome. Less costly goods (cost less in real terms because of lower effective demand) being paid for in inflated dollars. Will the dollar deflate in value faster than the value of assets deflate due to bubble bursting and economic slow down? And even more important is “Is it too late to invest in currency independent assets like gold that are already at historic highs?”

Even the new exchange traded funds in currency like FXE dollar vs the euro are only hedges against the losses in the dollar, you can’t actually make more than you lose in dollar value. In the short term, all of those new dollars being printed by the FED need to go somewhere. The stock market seems to be the only place that can absorb enough of it to have an impact – until the next bubble becomes visible.

And I can believe I am saying this, effective stock selection may be the best hedge against stagflation – stocks that do well when the economy tanks like COSTCO, Trader Joes, Liquor sales, etc. Low overheads, high consumer demand. But definitely hedge them with a short hedge like SDS which can make money as the rest of the stock market deflates. (SDS is an inverse hedge fund that goes up 2% for each 1% the S&P falls)

[Anonymous]

Unfortunately, if you are wrong and we are in a disinflationary or deflationary environment you would be hosed.

Very true, but you would be heralded as a financial genius if there was a hyperinflation and you had you had gotten millions of dollars in loans and bought gold.

[Anonymous]

Unfortunately, if you are wrong and we are in a disinflationary or deflationary environment you would be hosed.

Very true, but you would be heralded as a financial genius if there was a hyperinflation and you had you had gotten millions of dollars in loans and bought gold.

[Anonymous]

Unfortunately, if you are wrong and we are in a disinflationary or deflationary environment you would be hosed.

Very true, but you would be heralded as a financial genius if there was a hyperinflation and you had you had gotten millions of dollars in loans and bought gold.

[Anonymous]

Unfortunately, if you are wrong and we are in a disinflationary or deflationary environment you would be hosed.

Very true, but you would be heralded as a financial genius if there was a hyperinflation and you had you had gotten millions of dollars in loans and bought gold.

[Author]

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