N Rothschild
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we are in a deflationary period, which means holding cash is best as cash gains in value while assets fall in value.
It is an extreme example to get a point across, which appears to be lost on people here.
The USD has lost 30% of it's value against the Thai Baht in the time I've been living here.
How extreme does the move need to be before people realise that cash isn't a very efficient way to store value.
Are people OK with a 10% reduction in the value of their currency ?
Inflation erodes your currency holdings - how high does inflation have to be before people realise they are losing money.
In times of high inflation you are much better off to be in debt than to have savings. The value of your debts decreases in times of inflation as does the value of your savings.
The worlds economies are in debt up to their eyeballs - they all know they can inflate their way out of this debt and this is what central banks have done historically. Historically speaking we have levels of debt not seen in the west for a long time.
Germany between the wars is not a bad example. $250,000 for a loaf of bread is a possibility albeit remote.
The En Primeur for 2009 as Rath suggested is a good idea. I keep getting emails from Berry Bros on just how spankingly good it's supposed to be in relation to 2001 and 2005 so a case of a good Margaux or Pauillac might be worth a few bob in a while.
I saw a TV programme the other day [c4?], they bought an old mill in the middle of a forest next to a river. While they were fixing it up they stuck an Archimedes wheel downstream - they sell that power for £30,000 pa (I think it was 30k, might have been 60k) back to the grid. Not a bad investment compared to some other types of alternatives.
You might want to read up on pre-war Germany.
Let's say you had $250,000 right now and that in 2 years time, a loaf of bread would cost $250,000 - would you still say cash was king ?
keeping a bottle to show off to your mates is a bit gay