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Inflation is higher than they would like you to believe. (monero.town)

submitted 5 months ago by shortwavesurfer@monero.town to c/personalfinance@lemmy.ml

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The US government is telling everybody that inflation is 3.4% per year. That is not correct. Try 14.2% and that's about right. Source : gold/usd 1 year simple moving average.

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[–] sugar_in_your_tea@sh.itjust.works 3 points 5 months ago (1 children)

Why do you think gold and inflation are related in any significant way? Nobody buys anything with gold, so I don't see how it's relevant.

[–] shortwavesurfer@monero.town 0 points 5 months ago (1 children)

Because gold is the traditional hedge against inflation. When inflation starts running rampant, people start taking their fiat currencies and trading them for hard assets such as gold.

[–] sugar_in_your_tea@sh.itjust.works 2 points 5 months ago* (last edited 5 months ago) (1 children)

It's not, bonds (i.e. TIPS) and real estate are. As inflation goes up, so do coupon rates to counter inflation. As inflation goes down, so do rates, meaning older individual bonds can be liquidated for more money to free up cash for other investments.

Gold is a hedge against stocks. People think gold has value, so they buy it if they think there will be a recession. Inflation often goes up when stocks go down because the Fed slashes rates to encourage spending, and more spending (demand) drives up prices. So gold may appear correlated to inflation, but it's really more inversely correlated to stocks.

So if you want to speculate on stocks going down, gold is a decent option. But if you think inflation will go up, bonds are the way to go.

[–] shortwavesurfer@monero.town 1 points 5 months ago

The best way to go is to ditch their system entirely and stop using money that they can just print out of thin air and tax you through inflation at all. You're right about the investment of bonds. When your bond has high rates and the rates go down, your bond can sell for more. But I don't want the US dollar at all. Actually. In fact, I don't want to buy a bond from any country, no matter where it's at, because all countries have fiat currencies.