vincecate wrote:If the price of cans of tuna is going up 5% each month and the interest rate on your savings account is less than 80% per year you are better off investing in cans of tuna.
Buying cans of tuna is not realistic because you have to sell them to get your money. Your personal savings and accumulation must be done on a disciplined business basis.
Let me recount a real life story of myself. I am not blowing my trumpet; I was very well advised by some caring and knowledgeable people.
I am not an American so some of this story may be culturally a bit different to your experience.
I finished all my studies in 1968 and secured employment with a successful British multinational group.
In 1971 the "big boss" said to me "Boy, do you own a house?"
I said "No, Sir"
He said "Well, I think inflation may increase and I am strongly advising you to buy a house. If you need to borrow money for the deposit then the comapny will help you"
"Thank you very much, Sir"
So I bought a middle class house on 1000 sq m of ground.
In 1973 the "big boss" said to me "Richard (I had graduated from boy to richard) I am very worried about inflation and I am organising for all management the opportunity to buy good quality antiques as an inflation hedge"
I bought the most magnificient 1695 long case clock (grandfather) It was a London maker and the case was exquisite. it was a business matter with business disciplines so when I sold it in 1987 for 12 times what I paid I told myself to be very grateful for the 14 years of wonderful stewardship.
In 1976 I sold my house for 2.4 times what I paid in 1971, and now with a wife and growing family bought a 450 sq m house on 4000 sq m of ground in a prime location.
In 1977 on advice from the "big boss" I bought 2 houses as an investment, on borrowed money. I bought them because of inflation as an inflation hedge.
By 1981 I was with a different employer. The chairman said to me "Richard, do you own shares in our company" I said "No, Sir, my investments are in property". He said "Property has had its day. I am strongly advising you to sell your property and buy shares in our company"
So in 1981 I sold my 2 investment houses at 2.6 times what i paid in 1977. The stock marlet im 1981 had a low PE ratio. I put 50% of my money into the company and the other 50% into other shares. By end 1984 my money had multiplied another 5 fold. I now had enough money to retire if I wanted.
In the 1990's I divided the property of my family home on 4000 sq m into 5 properties of 800 sq m, each with a luxury house, and by now was in the most desireable of locations, and made a lot of money.
I was now very busy with my career, having become CEO, and my funds were being handled by a finacial advisor. In 2006 I retired (for the first time) and took over my personal finacial management again, and in 2007 I sold all my stocks except for 5% which I put into gold and gold miners. That amount has done well and doubled.
So what i am trying to say is that it doesn't matter what the economic circumstances may be, you can flee what ever currency you want, put your money into hedges. commodities, property, whatever is the right decision for the circumstances.
But don't buy tins of tuna, or other theoretical stuff - you will need to sell them to get your money and you may not find buyers.
Best regards, Richard