East Bay Business Daily

What are some great ways to shelter assets in the event of hyper inflation?

In thinking back to the days of the Weimar Republic, which investors hedged the best against the inflation of that era to best protect their assets and income?

Public Comments

1. gold and diamonds. maybe real estate.
2. Anything that isn't cash. I wouldn't advise real estate. While it would retain its value, home values don't tend to be very high when the economy goes down the tubes (Which hyperinflation would do). So, hold your money in commodities. Gold and diamonds qualify, but those aren't the only options.
3. Anything tangible, like precious metals or fine art. The downside to precious metals is that you have to have a lot of money to buy enough gold or silver to protect you from hyperinflation. And the more the dollar is devalued, the more money it'll take to buy an ounce of gold or silver. When "they" (whoever they are) say that gold could hit $3000 an ounce, it's not because gold's increasing in value; it means inflation's starting to hit. When I bought my precious metals, a gram of gold was around $44 (ounce/$935). An ounce of silver was sitting at $16. Buy silver first, and always take delivery. Don't let someone convince you to keep your gold in a safe deposit box in Austria somewhere. If the bottom drops out and your precious metals are in Europe, they won't do you any good.
4. However you calculate your strategy, factor in that you're going to get hosed by the capital gains tax. Say you buy a brick of gold for $1000. Over the next few years, the value of the dollar diminishes by 80%, rendering your gold brick "worth" $5,000. When you cash it in, you're going to pay capital gains tax on the $4,000 "gain" even though your gain is in purely nominal dollars.