“One of Warren Buffett many hidden quotes that stand out is:
“Rule Number One: Never lose money. Rule Number Two: Never. Forget Rule Number One.”
Though one must not take Buffett literally, in this case, we’re are seeing something interesting happening now.
More than half of the world’s wealth is about to lose 90% of its value.
Here’s what I mean.
Out of $400 trillion of total global financial assets, $200 trillion is invested in debt-denominated instruments or bonds. If we assume a 10–15% real inflation rate going forward, half of the world’s wealth will evaporate within the next ten years.
For better or worse, bonds used to offer 5–6% return. If you assumed inflation was 1%, it’s understandable that you’d want to buy them. But that’s no longer the case.”