In a hyperinflation, holding cash is the most stupid action that you can take. Because inflation decreases the value of the currency day by day.
Here are some of the quotes said by world-famous investors about inflation.
“Now that the economy is rebounding inflation pressures are rebounding.”
Ray Dalio
“In the end, if you print too much money, you end up with something like Venezuela.”
Charlie Munger
“Hyperinflation can take virtually your entire life savings, without the government having to bother raising the official tax rate at all.”
Thomas Sowell
So, we need to know how to survive in hyperinflation. Otherwise, we have to lose our lifetime savings in one day.
Inflation is the rising of goods & services of daily or common use. When the government prints lots of money & injects it into the economy, people get a lot of in their hands. Then the demand for the day-to-day goods & services increases, but when that country is unable to supply the demand, then the prices of goods & services are going up like rockets.
4 Types of Assets Against Inflation
1. Real State
- With inflation prices of the properties go high. The rental fee is going high. If we are wise enough to buy such a property at the proper time, we will benefit from inflation.
2. Gold
- On the earth, there is limited gold. So no one can produce gold artificially. In inflation, the price of gold will increase definitely.
- In 1980 recession inflation was 12.5% & the gold price was at an all-time high of 2300 USD. History has proven gold is the one of best assets against inflation.
3. Stocks
- When choosing stocks we have to look at the ability of that business to generate rather than consumer cash, the ability of that business can increase prices easily, along with inflation.
4. Cryptocurrency
- Cryptocurrency is not proven yet it is the best anti-inflation asset. Bitcoin was invented in 2009. But the key reason for this is cryptocurrencies have limited supply. As an example, Bitcoin has only 21 billion coins. With the devaluation of cash, sometimes people have to move those options. We must remember that cryptocurrency is a social capital. The changing of the price of coins depends on social trust.
