Err, no, not really

But the newspapers are only voicing a deep-rooted obsession with inflation that dates back 100 years to the Weimar Republic and post-war hyper-inflation, which wreaked most havoc on the asset-owning middle classes devastated by soaring prices.

Germany, famously, is a country where the bourgeoisie tended not to own assets. Rental was normal, cash savings and bonds have long been a preference over equities.

It’s precisely that the middle classes didn’t own assets, rather fixed return claims upon them, that made inflation such a killer for those middle classes.

4 thoughts on “Err, no, not really”

  1. I suspect that the owners of govt bonds would be surprised to learn they’re not assets. But I see your point. The only govt paper we own is stuff issued by ns&i: in order of defaulting, stuff owned directly by UK voters is probably safer than Gilts. I hope.

    Should we buy an ETF of US TIPS? I imagine the US will approach defaulting by starting with foreigners. Perhaps an ETF would be lower on the default list?

    Buy gold sovereigns and store them in the vault at the Royal Mint? Too easily stolen by a socialist government? (Whether a Conservative or a Labour socialist government.)

  2. Dearieme, that would depend on whether the ETF actually held Tips or some derivative. Maybe you should look at shares in a shipping company such as SHIP (not advice)

  3. A lot of the middle class in Aust and Germany lost heavily when their war bonds became worthless at the end of the Great War. Hyperinflation wiped out their savings and then the Boersen crashes and banking crises wiped them out again ( partially their own investments but also via insurance firms). Things only really normalised after the currency reforms and when USA and UK wrote off Germany’s debts after the Second War

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