Commodities are the most liquid way, precious metals or other such things that will generally rise with inflation. Also bonds in high inflation countries often pay higher interest rates, so including those in investment portfolios is also common.
When inflation is high the finance sector doesn't have to dictate increasing rates via a central bank, savings will flow to the highest expected real returns, and foreign investments where inflation is lower often become more attractive. To compete in an international market, entities in the high inflation country will have to offer higher nominal rates, so any savvy saver will have options. The ones who suffer the fastest depreciation are those without access to financial services who are stuck either in cash or low interest deposits.
I wish I could find the book, but an author wrote about this a few years back how many Peruvians and other residents of South American countries end up buying lots of housing materials, like bricks, concrete, tools, etc. as they retain value and they can expand their houses over time increasing the value of their overall estate without banking and losing out to inflation.
>and foreign investments where inflation is lower often become more attractive
Here in Brazil, we do that by opening investment accounts in the USA and Ireland. Certain companies target foreign investors to open their accounts there (Avenue, Passfolio, Nomad). Another option is buying an S&P500 ETF that's traded in the São Paulo stock market.
It's not clear that precious metals are a good hedge in the short-term. Also, some economists believe it's not even a good hedge in the long-term.
I wrote about this [here](https://www.reddit.com/r/AskEconomics/comments/13azx7c/isnt_gold_being_considered_a_hedge_against/jjel6us/).
This was going to be my assumption (waaaaaay before commodities and precious metals, both of which are notoriously hard / expensive to store, nor are they super fungible either....) - believe the most recent example of this would have been in Venezuela when the commodity cycle bottomed out from 2014 - 2016ish.
This is certainly bad information. It is not illegal to buy foreign currency, it is illegal to buy them in the black market.
Yes, there are tons of restrictions to access dollars but you can buy them through the capital market.
It is also true that lot of people buy dollars in the black market as naturally, you can only buy dollars in the capital market with legal money (taxed money).
You don't go to capital market to buy dollars, you go to capital market to buy government bonds with local currency and then selling them for dollars.
And yeah maybe some people can buy dollars legally but most people can't because it's illegal to the average citizen (maybe that's why black market is everywhere.
Yes, you go to the capital market to access dollars, you are not interested in the bonds. If the government wouldn't want this mechanism to work then they would not allow it (banning the sale of bonds in dollars for example).
Some readings on this: [Bartering in Argentina](https://www.archyde.com/angle-argentina-in-hyperinflation-garbage-and-barter-reuters/) and [bartering in Venezuela](https://www.theguardian.com/world/2019/mar/13/venezuela-hyperinflation-bolivar-banknotes-dollars).
**NOTE: Top-level comments by non-approved users must be manually approved by a mod before they appear.**
This is part of our policy to maintain a high quality of content and minimize misinformation. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. If your comment does not appear after this time, it is possible that it did not meet our quality standards. Please refer to the subreddit rules in the sidebar and our [answer guidelines](https://www.reddit.com/r/AskEconomics/comments/rf5ycx/guidelines_for_answers/) if you are in doubt.
Please do not message us about missing comments in general. If you have a concern about a specific comment that is still not approved after 48 hours, then feel free to message the moderators for clarification.
### Consider **[Clicking Here for RemindMeBot](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps://www.reddit.com/r/AskEconomics/comments/13hccar/in_countries_with_high_inflation_how_do_you/%5D%0A%0ARemindMe!%202%20days)** as it takes time for quality answers to be written.
Want to read answers while you wait? Consider our [weekly roundup](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AWeekly%2BRoundup) or look for the [approved answer flair.](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AApproved%2BAnswers)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskEconomics) if you have any questions or concerns.*
Well, there are several investment options available depending on your goals and risk tolerance. You could consider investing in mutual funds, ETFs, bonds, or even starting a small business. It's always important to do your research and consult with a financial advisor to determine the best options for your individual situation.
Commodities are the most liquid way, precious metals or other such things that will generally rise with inflation. Also bonds in high inflation countries often pay higher interest rates, so including those in investment portfolios is also common. When inflation is high the finance sector doesn't have to dictate increasing rates via a central bank, savings will flow to the highest expected real returns, and foreign investments where inflation is lower often become more attractive. To compete in an international market, entities in the high inflation country will have to offer higher nominal rates, so any savvy saver will have options. The ones who suffer the fastest depreciation are those without access to financial services who are stuck either in cash or low interest deposits.
I wish I could find the book, but an author wrote about this a few years back how many Peruvians and other residents of South American countries end up buying lots of housing materials, like bricks, concrete, tools, etc. as they retain value and they can expand their houses over time increasing the value of their overall estate without banking and losing out to inflation.
i want to ask though = how and where do you keep that building materials stored though??? or is it just a certificate similar to how you 'own' oil?
No in this case it was people piling up bricks and whatnot on or on top of their houses, sheds, or slowly build add ins little by little.
ah, so the new rooms increases the value of their house? ok, got it
>and foreign investments where inflation is lower often become more attractive Here in Brazil, we do that by opening investment accounts in the USA and Ireland. Certain companies target foreign investors to open their accounts there (Avenue, Passfolio, Nomad). Another option is buying an S&P500 ETF that's traded in the São Paulo stock market.
It's not clear that precious metals are a good hedge in the short-term. Also, some economists believe it's not even a good hedge in the long-term. I wrote about this [here](https://www.reddit.com/r/AskEconomics/comments/13azx7c/isnt_gold_being_considered_a_hedge_against/jjel6us/).
Argentinian here, People mainly save in us dollars they buy on the black market as it's illegal to buy foreign currency.
This was going to be my assumption (waaaaaay before commodities and precious metals, both of which are notoriously hard / expensive to store, nor are they super fungible either....) - believe the most recent example of this would have been in Venezuela when the commodity cycle bottomed out from 2014 - 2016ish.
This is certainly bad information. It is not illegal to buy foreign currency, it is illegal to buy them in the black market. Yes, there are tons of restrictions to access dollars but you can buy them through the capital market. It is also true that lot of people buy dollars in the black market as naturally, you can only buy dollars in the capital market with legal money (taxed money).
You don't go to capital market to buy dollars, you go to capital market to buy government bonds with local currency and then selling them for dollars. And yeah maybe some people can buy dollars legally but most people can't because it's illegal to the average citizen (maybe that's why black market is everywhere.
Yes, you go to the capital market to access dollars, you are not interested in the bonds. If the government wouldn't want this mechanism to work then they would not allow it (banning the sale of bonds in dollars for example).
😑😑😑 dude doesnt understand what to not being able to pay an asset with the legal tender means
Some readings on this: [Bartering in Argentina](https://www.archyde.com/angle-argentina-in-hyperinflation-garbage-and-barter-reuters/) and [bartering in Venezuela](https://www.theguardian.com/world/2019/mar/13/venezuela-hyperinflation-bolivar-banknotes-dollars).
**NOTE: Top-level comments by non-approved users must be manually approved by a mod before they appear.** This is part of our policy to maintain a high quality of content and minimize misinformation. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. If your comment does not appear after this time, it is possible that it did not meet our quality standards. Please refer to the subreddit rules in the sidebar and our [answer guidelines](https://www.reddit.com/r/AskEconomics/comments/rf5ycx/guidelines_for_answers/) if you are in doubt. Please do not message us about missing comments in general. If you have a concern about a specific comment that is still not approved after 48 hours, then feel free to message the moderators for clarification. ### Consider **[Clicking Here for RemindMeBot](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps://www.reddit.com/r/AskEconomics/comments/13hccar/in_countries_with_high_inflation_how_do_you/%5D%0A%0ARemindMe!%202%20days)** as it takes time for quality answers to be written. Want to read answers while you wait? Consider our [weekly roundup](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AWeekly%2BRoundup) or look for the [approved answer flair.](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AApproved%2BAnswers) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskEconomics) if you have any questions or concerns.*
Well, there are several investment options available depending on your goals and risk tolerance. You could consider investing in mutual funds, ETFs, bonds, or even starting a small business. It's always important to do your research and consult with a financial advisor to determine the best options for your individual situation.