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Elon Musk's advice when it comes to high inflation: own 'physical things'

Kitco News

(Kitco News) Tesla and SpaceX CEO Elon Musk asked Twitter where inflation will be in a few years and advised how to invest when inflation is red-hot. Here's his take.

"What are your thoughts about probable inflation rate over next few years?" Musk asked the Twitterverse on Sunday.

A very timely question, considering that inflation in the U.S. soared to new 40-year highs in February, with the annual CPI number running at 7.9%.

The main takeaway from the Twitter thread, according to Musk, is to own physical assets over cash.

"As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high," Musk said.

However, even considering his own advice, Musk admitted that he won't be selling the cryptocurrencies that he owns, including Bitcoin, Ethereum and Doge. "I still own & won't sell my Bitcoin, Ethereum or Doge fwiw," he added.

Musk also pointed out that his companies — Tesla and SpaceX — are seeing "significant" inflation pressures when it comes to raw material and logistics. And they are not the only ones.

MicroStrategy CEO Michael Saylor also weighed in on Musk's question, stating that he sees inflation remaining elevated, warning that weaker fiat currencies could collapse.

"USD consumer inflation will continue near all time highs, and asset inflation will run at double the rate of consumer inflation. Weaker currencies will collapse, and the flight of capital from cash, debt, & value stocks to scarce property like #bitcoin will intensify," he said.

Saylor also agreed with the principle that scarce assets are the way to go when inflation is so high.

"Better to own scarce, desirable assets than currency derivatives in times of inflation. We agree on the general principle. The challenge lies in sorting out which things (including physical property, digital property, & corporate equity) are most scarce & desirable over time," he clarified.

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