There are some stories that I really liked as a kid. One of them is the hen that laid golden eggs. Since the average IQ of the readers of this blog is high, and for brevity do not think there is any need to repeat the story.

Let us see what the government does when it needs money:

1. It levies taxes

2. It borrows money

3. It prints money

Currently all the countries in the world are busy doing (2) and (3). What will this mean for the common man?

Well it is difficult to say what will happen. However we can all guess. Remember the wheelbarrow story from Germany? OK this story is not so well known. The German Mark had lost all its value so a woman took Marks in a wheelbarrow to buy bread. She had gone in to buy bread, some thieves came and stole the wheelbarrow but they had left the currency notes…ha ha ha!

So savers will lose (if we are hit by a big inflation numbers – say 13%?), in an inflating economy shares cannot be doing well, so investors in equities will lose. In such a market very few people will have the guts to buy a house..so real estate will take a hit. A big hit.

Who will gain? Not very clear, but gold, silver, and some such commodities could gain in times of hyper inflation. So when your banker / financial adviser / father /…..tell you ‘Save’ and you will be safe, beware of the brainwashing. Your only protection is actually a well diversified portfolio in equities, debt, real estate and yes, metals.