Thursday, December 27, 2007

Investing for Hyperinflation and Deflation

Now this is an interesting article on what you should do when there is hyperinflation and deflation scenarios. We may just end up with the second scenario in 2008.

Investment Themes For Hyperinflation
In hyperinflation the last place one wants to be is in cash.
Commodities in general are a standout.
Gold is a standout.
Precious metals are a standout.
Property is a winner.
Equities are a winner.
Treasuries are distinct losers if not outright shorts.
Foreign currencies
Energy

Investment Themes For Deflation
In deflation, debt is the enemy.
Risk is to be avoided.
Cash is raised.
Treasuries are sought out as a safe haven
CD ladders offer a good investment structure.
Gold, acting as money does well.
Select equity shorts or Puts are a standout.
Renting as opposed to owning a house should be considered.
Currency plays.

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