What is your panty dropping bet to score HUGE when inflation comes?

Saltynuts said:
...Let's say the fed increases the money supply by 30% over a period of time. Let's say the "fundamentals" for gold have not changed in the meantime. So gold increases by 30% in price (as it should to reflect the fact that there are 30% more dollars chasing the same amount of gold).

But in that case, if you sold you gold for $2,340 (30% gain on $1,800), you are literally NO BETTER OFF because your $2,340 is upon the sale worth only the $1,800 it was before the investment because each dollar is now worth 30% less! So have you really GAINED anything at all? Clearly you are better off than if you had just held the cash, but you are really no better off from where you were before, are you?
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This is why, unless the uses for gold increase and there is going to be a genuine shortage of gold to satisfy industrial demand, some, like myself, have never been attracted to gold as a long term investment -- I can understand the lure it manifests for traders where one tries to take advantage of human irrationality. But as a long term investment, unless one just gets lucky, the data shows gold more or less keeps you even with inflation. For inflation protection I have a preference for dividend paying equities. Particularly if you can buy after a steep market correction, roughly every twenty years or so. (Markets are nearly always wrong, and major corrections are in part recognition of that. :D) Real Estate bought right in the right place can offer good protection against inflation plus the chance for real gain. However caveat emptor. Owning investment real estate can require attention something like that required by acquiring a new puppy or a baby.
 
Pricechange said:
Richest man in the world has already answered this question. If you don't like bitcoin..just rename the thread to bitcoin inflation hedge alternatives
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Subaru::lesbians
Tesla::hodl’s

it’s good branding towards a target consumer who already over indexes on wanting a Tesla.
But yes, BTC>80k wouldn’t surprise me at all.
 
Talked to a buddy of mine the other day, pretty decent sized developer of residential and some light commercial; he told me prices are off the charts across the board. Land, material, labor, permitting, fuel. Everything. Smart cat this one, he's a good friend and I respect how valuable his time is so I never pick his brain as much as I'd like to, but he knows what's going on. IMO, probably better than the 'experts' at the St. Louis Fed.


Now I'm about a million miles from being considered well versed on anything macro-economic, so maybe I'm wrong here, but I like to think I have walking around sense.

A picture says a 1000 words, and maybe this one applies too broad of a brush-stroke, and maybe I am missing something in regards to the ivory-tower definition of inflation, but I always thought inflation is when prices go up.

upload_2021-2-14_14-4-6.jpeg


You don't need a weather-man to know which way the wind is blowing.

How to play it?

Bet against the companies with the weakest balance sheets and the greatest debt that are captive to consumer spending, commodity prices, and other legacy costs.

Ford comes to mind. Huge amounts of debt. If it gets anywhere near $13, or even a little over $12, I think its a good short. I loved it at $5. But it's heading back to $9 soon enough. At a minimum. From a safety standpoint, I don't think you'll ever see a short squeeze on Ford. Its too big and too liquid. If you own it, I'd get out pretty soon.

AT&T too. It's a dog and they are saddled with debt. I don't follow that one however, not sure what they've said about their dividend. There's a reason it's that high though.
 
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Vanzandt- I like your post, but I find your conclusion spurious. Your premise of inflation is in the numbers - just look at them- yup. But then you look for companies to short!?! Sure, you may be right on them, but that’s swimming a bit upstream, no? I get we all trade and view the world differently, but why wouldn’t you just go for the companies with hurricane force gusts at its back? Prices for everything everywhere are going up. See all stock indexes. Ford may be so ripe for the plucking, but can’t they also just raise prices in an inflationary world? Fading inflation seems really risky to me. Relative plays? That makes sense to me.

This is also why I don't place an macro econ bet. It all makes sense after things have played out, but before hand, no one knows what the hell they are doing. The mico-econ lego pieces that makes sense to everyone, combines to something more complex than quantum mechanics. Anyone who tells you what exactly is going to happen in macro, has a very healthy ego, and has been wrong on their macro calls in the past. I try to steer away from that.

I know what it all looks like right now. It all has to play out though. And
 
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