The Best Hedge Against Inflation

Hedging against inflation can be tricky sometimes. You want 100% protection against inflation but you don't want to put yourself at risk. I don't think anybody wants to be put at risk when they are trying to hedge against inflation. They gain nothing else besides the hedge protection. I think the ultimate hedge has very little risks (if any at all), but offers at least 98% protection.

When I want to hedge against inflation, I buy better date 1/10 Gold Eagles in MS70/PR70 grades. The best better dates to buy are the ones with the lowest MS70/PR70 populations. If you look carefully, you will notice that a lot of them have the same book values, but they all have different populations. I would just go for the ones with the lowest populations. I don't want to buy common dates because those are only worth the value of gold. So if gold goes down, so does the value of the coin. The rarer Gold Eagles don't give any protection against inflation because they do not follow the value of gold. Their market values depend on their scarcity. So if gold goes up, these coins don't necessarily go up in value.

Normally, I would buy 10 to 50 of these if I perceive that inflation is about to hit. Once inflation hits, I pay close attention to current gold values. This is where I make my money. When I feel that gold isn't going to go up anymore, I quickly sell my stash. I don't need gold to go sky high to make a killing. These better dates usually appreciate in value faster then gold. What this means is if gold goes up $50 dollars per ounce, these Gold Eagles might go up $75 dollars per ounce. So not only do I get protection from inflation, but I also get an opportunity to make money while I'm at it.

The key is knowing when inflation is about to go up. Gold is actually a very good indicator of inflation. Once inflation hits, gold always goes up. But if you don't have the time to keep checking the price of gold, you can still buy these coins while they're still cheap. Once inflation hits, just cash in before it's too late. Even if you cash in too early, you shouldn't feel robbed. You still make more money then the rate of inflation.

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