POSTED BY August 5, 2012 4:37 pm COMMENTS (9)ON
It is said that wanton money printing by governments is leading to devaluing of paper currency. To counter this effect many experts recommend to buy gold.
I agree that paper currency is under pressure. However, to counter it, getting into any non-paper-currency should help. Gold is definitely one such avenue. Other avenues can be buying rice, dal, silver, platinum, fish, meat, fruits, vegetables, shares/mutual-funds etc. All will achieve the same purpose of hedging paper currency risk.
Now buying and holding fish/meat/fruits/vegetables for hedging purpose is cumbersome. Holding mutual funds is easy. So why holding mutual funds is not considered a hedge against paper currency devaluation?
To summarize, I agree with the paper currency devaluation problem. However I believe holding mutual funds of companies is as good a hedge against the problem as gold is. This view is not shared by many experts.
Can you share your thoughts on the issue?