Hmm, can you explain?
I would think leveraged hard assets (land, buildings, mortgages, gold) are the ideal investments during hyperinflation. Pay off that land with waste paper.
schu
Here is a good article on the German hyperinflation.
Land and gold did less well than necessities like fabric and storable food.
Quote from the article:
Under the forced draft of inflation, business was now operating at feverish speed and unemployment had disappeared. However, the real wages of workers dropped badly. Unions obtained frequent increases, but these could not keep pace. Workers --domestics, farm workers and various white collar groups-- fared especially badly. They had no unions to fight for pay boosts for them, and often they were reduced to hunger. Many people showed visible signs of malnutrition. Skilled workers, writers, artisans and professionals found their wages lagging until they reached the unskilled worker level, which often meant the bare minimum needed to support life.
Businessmen began to abandon their legitimate occupations to speculate in stocks and in goods. Thousands of small businessmen tried to eke out a living by speculating in fabrics, shoes, meat, soap, clothing--in any produce they could obtain. Each fall in the mark brought a rush to the shops. People bought dozens of hats or sweaters.
By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.
In the early stages of a hyperinflationary crack-up, businesses do very well, but then the economy starts to collapse. A nimble investor should be long commodity-based equities in the early part of a hyperinflation.
Quote:
Investors in German real estate and the German stock market had varied results depending on how they were positioned. Real estate investors who could not quickly increase the rentals received from tenants were bankrupted by higher interest rates and rising property taxes. Others who managed to eliminate their mortgages and had sufficient rental income to meet outgoings survived with anything up to 70% of their real wealth intact.
The situation was similar for stock market investors. Depending on which companies they were invested in, some lost everything and while others managed to retain a modicum or even quite a large proportion of their real wealth. While the stock market indices rose to new peaks denominated in Marks, these indices failed to do so in real terms.
Also, consider the case of Zimbabwe (article)
The benchmark Industrial Index soared 257 percent on Tuesday up from a previous one day record of 241 percent on Monday with some companies seeing share prices increase by up to 3,500 percent.
The government there recently put trading controls in place, which killed the stock market there. But until then it was the best performing market in the world in 2008, even in real terms.
Well, Zimbabwee has hyperinflation created by reckless and massive printing of paper Zimbabwee dollars (sound familiar?). So in flight out of the hyperinflating Zimbabwee dollar, people buy stocks which have been soaring along with commodities as people want to spend their Z.dollars asap due to their hyperfast devaluating.
Who would have thought the “conservative Republican” Administration would have so turned its back on allowing the free market to cleanse the system with a short, ugly recession? Instead, like a drunk with a bad hangover, the solution from our Govt is to borrow money to buy more booze for the drunk.
What a smart solution!