Personal Finance

What are the best investments for Hyperflation?

  • Last Updated:
  • Oct 9th, 2009 1:50 pm

Poll: What are the best investments during hyperflation?

  • Total votes: 91. You have voted on this poll.
Precious metals
 
27
30%
Industrial materials
 
1
1%
Energy
 
13
14%
Common stocks
 
9
10%
Preferred stocks
 
4
4%
Bonds
 
6
7%
Foods
 
10
11%
Guns
 
21
23%
[OP]
Member
Mar 24, 2007
430 posts
13 upvotes

What are the best investments for Hyperflation?

We will enter hyperinflation as soon as China start selling their US government bonds. If it happen during recession, what will be the best investments? Please rate the points from best to worst.

Some economists predicts the current recession will end with a world war (just like the great depression). In that case I think foods will be the clear winner, and you need guns to protect your foods.

I am not sure about gold. I don't see people trading gold in the Fallout universe. Physical gold may have some value, but paper gold will be worthless.
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Dec 11, 2006
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Vancouver
If you're expecting a world war, buy bullets and gun oil!
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Jul 28, 2005
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Elisa.woods wrote: We will enter hyperinflation as soon as China start selling their US government bonds.
The Chinese government is not stupid. If, as you claim, hyperinflation will definitely happen if China sells their US government bonds, then China will not sell the bonds.

So either your catalyst will never happen. Or your contention that hyperinflation is definite if the bonds are sold, is faulty.
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Aug 18, 2005
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Burlington-Hamilton
Real estate is an excellent hedge against inflation.

As for China, they would be biting the hand that feeds them if they sold their US bonds. Who would buy their cheap exports.
- casual gastronomist -
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Jul 31, 2007
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Earth
Elisa.woods wrote: We will enter hyperinflation as soon as China start selling their US government bonds.
(1) We are in Canada, not the US. (2) You don't know that China will rapidly sell their US bonds. That's just your hypothesis. And it wouldn't make sense for them to do that because then their exports would become expensive and their reserves would lose value. (3) Though China moving their investments out of the USD would be an inflationary pressure in the US, I cannot see it being enough to trigger hyperinflation. More likely, it would make the US move to a reasonable balance of payments.

If it happen during recession, what will be the best investments?
Common stock and real-return bonds (not to be confused with regular bonds).
Some economists predicts the current recession will end with a world war (just like the great depression).
I know of no respected economist that makes such an absurd claim. And this statement reveals a high level of ignorance of the complexities behind the start of WWII. Though the great depression was a factor, it is far from the sole cause of WWII.
I'm not overweight, I'm undertall.
Sr. Member
Oct 20, 2008
873 posts
1 upvote
GTA
Elisa.woods wrote: We will enter hyperinflation as soon as China start selling their US government bonds.
How do you know that "We will enter hyperinflation as soon as China start selling their US government bonds" is this your thinking alone or something you've read or heard recently? uh!

Suppose hyperinflation (whatever that means) never happens - then what, do we blame the US government or the chinese
If it happen during recession, what will be the best investments? Please rate the points from best to worst.
I dont see fake watches or toilet paper on your list ;)
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Feb 9, 2008
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Jucius Maximus wrote: As for China, they would be biting the hand that feeds them if they sold their US bonds. Who would buy their cheap exports.
Do you really think that all the Chinese aspire to is being producers of cheap crap for Americans?
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Aug 18, 2005
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movieman wrote: Do you really think that all the Chinese aspire to is being producers of cheap crap for Americans?
No, and I also did not say or imply that Chinese exports are "crap".

By 'cheap' I meant 'inexpensive'.
- casual gastronomist -
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Nov 2, 2007
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GVRD
Jucius Maximus wrote: Real estate is an excellent hedge against inflation.
Well the BOC would be forced to raise interest rates to offset the inflation and this would make the cost of borrowing very expensive, thus real estate prices would be under a lot of pressure to fall as new buyers would be pushed out and some people refinancing may default...like the 1980's. I think Real Estate would be a bad bet.
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Jul 31, 2007
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Earth
movieman wrote: Do you really think that all the Chinese aspire to is being producers of cheap crap for Americans?
How about inexpensive good quality products for the world? Yes, I think that in general the Chinese would like that.
I'm not overweight, I'm undertall.
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Jul 18, 2003
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Etobicoke
If you think China will sell US bonds, then what do you think will happen to the US currency?

Hyperinflation can be isolated to the US (and it's dependant countries such as Japan, Israel, Canada, etc.). But EU, Asia (ex Japan) would remain relatively unscathed.

If that's the case, another good hedge would be to buy RMB. Because currency is always another variable in hedging.

Precious metals are only good hedge if you actually buy precious metals instead of certificates denominated in US currency.
Sr. Member
Oct 20, 2008
873 posts
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GTA
DanielCarrera wrote: How about inexpensive good quality products for the world? Yes, I think that in general the Chinese would like that.
As one example - the Ontario Government being one of the latest buying official provincial flags from where else but China - $5 cheaper

Imagine the money it saved, the jobs and taxes it lost doing this
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Mar 5, 2006
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Murica
zoober wrote: If you're expecting a world war, buy bullets and gun oil!
+1

if America invades us for our oil, are we going to let them pass thru like switzerland? Switzerland has bombs on their bridges. So if you're hostile, they will blow off their bridges to isolate. Not that the river is deep, these days military can make their own bridges.

We don't have rivers bordering our borders so we're screwed. Guns and ammo would be useful for protection in a depression, but we do not have laws like in the states where your civil right is you can arm yourself for protection.

gold, food, and oil is the way to go.

China will not sell off the T-bill, but are investing in gold, which is why its still near its highs. If you've checked the exchange rates after Sept08, CDN loonie has fallen below par, not appreciated 30% above the greenback, because everyone had to reduce interest rates with the US. The deleveraging around the world will take some time to finish, depends on how long. If all the exchange rates were above the US, you know the US will start a new war. The losing country will owe 100 yrs of debt to the US, usually paying off with its resources. cough cough like iraq. You'll also see a new major military base in that country.
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NUTS wrote: As one example - the Ontario Government being one of the latest buying official provincial flags from where else but China - $5 cheaper

Imagine the money it saved, the jobs and taxes it lost doing this
the gov't doesn't give a rats about the cdn people. cutting costs to run more efficient is their priority now.

Seems that until wages drop to competitive levels, like jobs in automotive industry down from $75 to $15, will the jobs come back to canada. These politicians think CDNs can do better, who cares about these mfr jobs. They want us to all work in some office, high skill. That's not a proper representation of what the population should be. They don't see the people behind Sears earning $25k per yr, which is too little to support their family. Fat chance politicians will take a pay cut once wages hit rock bottom.
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Jul 31, 2007
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maniacshopper wrote: the gov't doesn't give a rats about the cdn people. cutting costs to run more efficient is their priority now.
There's nothing wrong with using government money effectively. In general, the government should not subsidize an inefficient industry just because it's local. It makes more sense for Canadian workers to move toward the areas where they have a comparative advantage.
I'm not overweight, I'm undertall.
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Dec 19, 2001
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Fernando Poo
Jucius Maximus wrote: Real estate is an excellent hedge against inflation.

As for China, they would be biting the hand that feeds them if they sold their US bonds. Who would buy their cheap exports.
Hopefully, someone who could offer them something other than worthless US dollars.
Welcome to the Minitrue FDs, Ficdep
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Fernando Poo
BTW, the safest bet is food. You can at least eat if if you're wrong. Still trying to track down those mylar bags.
Welcome to the Minitrue FDs, Ficdep
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Oct 10, 2008
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Elisa.woods wrote: We will enter hyperinflation as soon as China start selling their US government bonds. If it happen during recession, what will be the best investments? Please rate the points from best to worst.

Some economists predicts the current recession will end with a world war (just like the great depression). In that case I think foods will be the clear winner, and you need guns to protect your foods.

I am not sure about gold. I don't see people trading gold in the Fallout universe. Physical gold may have some value, but paper gold will be worthless.
And you can club these robbers with gold bars, on the head.

Really....a world-war? :|
Newbie
Feb 4, 2006
81 posts
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The RMB is somewhat pegged to the USD. If the value of the USD goes down, so does the value of the RMB. As a result, Chinese goods would become even cheaper for most countries.
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Jul 1, 2007
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It's gonna be fun linking to these threads in a couple year's time.

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