simoan wrote:MrFoolish wrote:
I suppose it's semantics but I wouldn't call cash a "hedge" at the moment. I'd call it a way of losing around 8% purchasing power pa. But each to their own.
But that’s just not true. Why do people not understand inflation? All that matters to me with regard to my cash holdings is my own personal inflation rate, which is governed by which products I decide to buy and which services I choose to use.
A lot of that expenditure is discretionary. I’m sorry, but the idea that anyone’s expenditure exactly matches a random basket of 700 items selected by the ONS is a nonsense.
Isn't the bulk of current inflation coming from food and energy though Si?
You're not an eskimo by any chance are you? :O)
I take your point that a single inflationary figure will never 100% align with any one particular persons spending habits, but I don't think anyone's really claiming that to be the case, and where current inflationary pressures are primarily being driven by food and energy costs, how much 'discretion' does anyone
really have in avoiding, if not
all of the inflation that might be about at the current time, then at least a big ugly
chunk of it?
Isn't it sensible to broadly agree that almost everyone will see a level of inflationary pressure going forward, in at least the short to medium term, that we've not experienced for many, many years?
Yes, it might not be bang on 8% for someone, but it's not likely to be 1% or 2% in the current climate either, is it?
I should add that I myself usually do carry a level of cash that others here might think to be very over-cautious, and that I do agree with you that it's a mistake to consider the risk of inflationary loss on such cash as taking too high a priority over any potential reasoning for not doing so, and I agree that it does help to act as a dampener on volatility, and also sometimes acts as a fund to dip into when looking to take advantage of relatively dramatic market-movements, so I'm certainly not one to argue
against holding cash, but it just felt odd to see what looked like someone thinking they were perhaps immune to what are largely energy and food-led inflationary pressures, that's all...
Cheers,
Itsallaguess