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Dear Captain, thank you for your article.
But how about the countries with very high inflation, wouldn't the gain be worthless because of it?
(sorry if my question is stupid, I'm not an expert).

Gypsy (not verified) | 8/08/2019

Hi Gypsy,

Your question is not stupid at all.

With higher inflation come higher interest rates for your savings. In fact, at the moment the return from your savings is pretty much eaten up by inflation. Meaning: You are currently not left with much after inflation given the current rates.

This was very different just a few years ago when saving rates were 5 and 6 percent, sometimes even higher.

So countries with high inflation can offer great returns. For those playing the currency game (putting their savings into accounts in countries with higher rates) but also those living in these countries.

There is one big BUT, however: The country in question needs to be stable for this to work in your favor. You are absolutely right that your gains become worthless if you are dealing with hyperinflation where the money you are holding in your hands loses most of its value from one minute to another. Just search for hyperinflation and you will find images of people with wheelbarrows of money.

But as long as you don't over-consume in an environment of normal inflation, the higher rates will work in your favor.


Your Captain.

Seraphine | 8/08/2019

In reply to by Gypsy (not verified)


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