what happens to: 1) Stocks? They should go way up, yes? 2) Your salary? Go up slightly, but not by much percentage wise, yes? 3) Interest rates? Way up, yes? 4) Dollar versus gold? Way down, yes? 5) Real estate? Way, way up, yes? 6) Treasury prices? Way up, yes? 7) Blood pressue? Way up. Of course.
There will be deflation before hyper inflation. Take one step at a time.
Dreary Wrote: ------------------------------------------------------- > what happens to: > 1) Stocks? They should go way up, yes? To 0 before hyperinflation > 2) Your salary? Go up slightly, but not by much > percentage wise, yes? Depends how much leverage you have > 3) Interest rates? Way up, yes? Way up > 4) Dollar versus gold? Way down, yes? Way down > 5) Real estate? Way, way up, yes? Way up > 6) Treasury prices? Way up, yes? Way down who wants a fixed $ investment inflated away? > 7) Blood pressue? Way up. Of course. Until you get killed by marauders then it goes down.
… then we will all be millionaries just like in Zimbabwe. Yes!!
> 6) Treasury prices? Way up, yes? Way down who wants a fixed $ investment inflated away? Correct, way down.
basically own another currency or asset. wow, my stock doubled… of course, inflation is running at 500%…
My understanding is that in inflationary environments, stocks will probably not go up, and in fact could go down. I think one of the reason is that inflation is like a boa constrictor on a company, and earnings will take a big hit. Also, less investment capital is attracted to inflationary markets. So in hyperinflation, don’t expect a stock price doubling, no matter how intuitive that may seem. Here’s an old example I just googled: http://rack1.ul.cs.cmu.edu/sinflat/
inflation up = PE compression. stocks goes down b/c cost of inputs go up. This is CAIA level 1 stuff, which I demolished : ) -
in hyperinflation, stock prices will go up, but there’s no guarantee that they will go up fast enough to keep up with inflation, and stock volatility due to the uncertainties of exact inflation rates will be much higher.
zimbabwean stocks have gone up by over 912% in its recent hyperinflated economy. But 912% in a 11.2 million % inflation? . not worth anything.