What Are The Best Investments During Hyperinflation?


#1

The ECB and the Fed have carried out a project which was supposed to create inflation, but has done nothing…

The way I see it… there is an enormous chance that hyperinflation could creep up on us…

How can I protect myself?


#2

The traditional solution to hyperinflation is investing in hard assets (commodities, property, gold, raw materials of any kind)

The problem is that hard assets in a disruptive environment change. For example, railroads would have been a very safe asset to own for the last 100 years, but driverless trucks now threaten their existence…

Here are a few ideas based on risk appetite…

Safe
• Gold: invest in gold bullion buying the commodity in small increments over time (cost-dollar averaging)

• REIT: buy a global REIT invested in a global portfolio of commercial and residential assets.

Moderately Risky
• Gold mining companies: Invest in large cap gold mining companies with a sensible attitude to debt and a good reputation. Make sure these companies are not thinly traded and that you could exit your position as soon as you entered it. Barrick Gold Corporation, or Agnico Eagle Mines Limited (AEM) are good examples…

• Leveraged REIT: Find an REIT with a global portfolio of residential and commercial assets that is unreasonably leveraged. The hyperinflation will effectively cancel out the debt leaving you with a basket of assets when things have died down…

Very Risky
• Leveraged Gold Mining Companies: Leveraged gold mining companies are inherently risky. If you invest in these companies, you are betting that the debt will be cancelled out and that value of the company will rise.

Loading up on leveraged hard assts is a sure way to benefit from a hyper-inflationary scenario. The difficulty in timing things makes it incredibly hard for the average investor to do. The excessive debt could easily wipe you out before the panic hits. High leverage places burdens on an organisation. You could also find that your lender will try to reel you in when he/she realises what is happening. Proceed with caution.

That being said, if you execute you will be far ahead of everyone else. The greatest example of someone doing this would be industrialist Hugo Stinnes. Stinnes loaded up on debt during WW1, all of which was wiped off in the 1920s. His successes were so great… he was nicknamed “The Inflation King”…

Stocks have always been seen as a solution to hyper-inflation. This is obvious because the value of the market will increase as the currency rises in value.

This articles explains things well:

I think you can do very well with stocks, but it depends on which ones. Stocks with leveraged hard assets, REITs, Farmland REITs, Gold Mining Companies, Crypto-mining Companies will all do extremely well…