What to Own in Hyperinflation

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Hyperinflation

A hyperinflation will essentially mean your domestic currency is going to trash.

The best solution is Diversify. Not only is asset type diversify, it can also diversify geographically in today's globalization. Diversification works because these assets react differently to the same economic event.

From a historical perspective, the most valuable thing under super inflation is commodities (copper, steel, crude oil, iron, grain, etc.) plus gold and silver. Today will add Bitcoin. But the chance of ordinary people directly owning these is relatively small (except for gold, silver, and Bitcoin). The futures market is a very dangerous place for ordinary people and it is not easy to participate. Then there are only companies that produce commodities such as FCX and other mining companies, energy companies, Fertilizer companies, etc. The other is to have companies that can increase the prices of their products, such as SUBX, MCD, PEP, etc. Inflation protected bonds (TIPS) are also worth considering.

What about gold? As it concerns the U.S. dollar, the FED will fully protect the U.S. dollar and regularly suppress gold. We can't bet that the FED will collapse, so gold is something that can completely preserve its value but can't expect a super surge. For this reason, Bitcoin's rise will exceed your imagination.

As for the real estate, the house can maintain its value. But because of the sharp rise in interest rates, people's affordability will drop sharply. Under the super-inflation in Germany that year, many middle class members lost their houses. So if your debt and leverage are too high, your problem will be bigger. But if you don’t own a house yet, then try your best to buy a set now.

As for the region, you can now invest globally, and you can choose places where inflation is not high, such as Japan (Warren Buffett’s investment in Japanese companies is a sign).

As for the future, no one can say bad. Only by following the diagram, diversifying assets, lowering leverage, and reducing debt can we survive super inflation.

Winner and Loser under hyper inflation

 

The winners are those with gold, foreign currency, land and other hard assets. The losers are those with fixed income claims such as savings, pensions, insurance policies and annuities.

 

"Hyperinflation doesn’t emerge instantaneously. It begins slowly with normal inflation and then accelerates violently at an increasing rate until it becomes hyperinflation. This is critical for investors to understand because much of the damage to your wealth actually occurs at the inflationary stage, not the hyperinflationary stage. The hyperinflation of Weimar Germany is a good example of this." Please read more on: https://www.zerohedge.com/markets/hyperinflation-can-happen-much-faster…

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