It's that time of year again. When hindsight is 20/20 and coulda/woulda/shoulda gives way to reality. With the US equity market barely able to keep its head above green water, a look around the world shows investors could have done a lot better (or not).
In fact, as Handelsblatt shows [5], the best investment in the world in 2015 would have been - drum roll please - Venezuelan stocks!
[6]
Note - these returns are from a EUR-denominated persepctive
So - that proves it - buying stocks during hyperinflation "works" and protects your purchasing power, right?
Not so fast! While Venezuela's official spot Bolivar rate has been flat at 6.2921 all year as Maduro dreaded the admission that his nation is in utter collapse, the "real" exchange rate - or 'Dolar Libre' Rate - has been crashing...
[7]
Which means, if you wanted to "invest" in Caracas Stocks last year (by moving your USD into Bolivars, buying stock, then moving your "gains" back into USDs to bring home and celebrate), things look a lot different.
[8]
From a 287% gain, you would have actually lost 22% of your initial USD stake!
So sorry, hyperinflation does not pay after all! Still, The Fed, ECB, BoJ, PBOC will keep playing the 'inflate' and debase game until they are all proven wrong.
