Title. If I believed my country was about to experience large increases in inflation, similar to Turkey how can I best position myself for the future and what should I take care of now, before it happens?
Would it make sense to only make minimum payments against debt? Should I spend money instead of saving it? If I don’t need to make a large purchase now but will in the future, should I go ahead and do it?
edit: I’m talking about 30%-80%+ inflation folks, not the kind of inflation most developed countries have exprienced in recent memory. If someone had enough money to invest in things which could survive that then they wouldn’t have to worry about debt payments and making big purchases. I am asking for practical advice for the average person, not a way to invest.
Inflation means cash is losing value, so prices will rise. You don’t want to have a pile of cash sitting in your bank. Here are some possible options. (I am not a professional, do your own research, etc. What works in one situation may not work in another.)
Convert your cash into more stable stores of value. Buy physical property (homes and land), invest in gold or other precious metals, invest in agricultural commodities, etc. People always need places to live, food to eat, wood to build, clothing to wear. These sorts of things tend to stay in demand.
Convert your cash to a more stable currency. You could buy a foreign country’s sovereign bonds, or exchange some of your cash for Euros or whatever. Over the past 80 years US dollars and US government bonds have been popular for this, but those feel a bit risky at the moment.
Spend your cash now on quality, durable goods that will last a long time. The new roof you need on your house will only be more expensive after inflation has eroded your purchasing power.
Buy investments that (hopefully) return an interest rate greater than the inflation rate. Stock funds can sometimes do this, but not always.
If you have stable income and are confident that it will remain stable, you can gamble with debt. For example, borrow money today at X% interest, and if future inflation is >X% then you benefit by repaying the debt with cheaper future money.
The last only works if the loan is fixed rate - those are not always available so check terms closely. There is also the possibility that a lon could be called - you are rquired to pay it now, which drops back to the first: a new loan at the new rates.
finally beware that banks may have political power and so the laws may change and what you thought was a airtight terms is now against you.
Figure out what your risk tollerance is. I’m not sure how likely any of the above is.