What Can You Invest In During Inflation Times?

Malaysia's Consumer Price Index for June 2008 rose to 7.7%! Certainly it's not a rosy situation, is it?
Prices keep going up because of the recent fuel price increase. Internationally, oil price is measured based on US Dollars. When the US dollars become weakened due to their country's economy situation, oil producing countries begin to raise the oil price. They want to get back the same value for a barrel of oil.
Now you know why the price of oil go up even when we have enough supply.In this case, oil price went up. And since the modern economy mostly depended on oil to move and produce, it is natural for other goods prices to go up as well. The vicious cycle.
The domino cycle, whatever you call it.Thus, we have inflation. And in this inflation times, what can you do? Currencies will lose value as our currencies are all linked globally. When the US dollars drop in value and worth less, that means our Ringgit will be worth less too.Hey, you may argue that the Ringgit is strengthening against the US dollars. But is it?Let's look at it this way, Ringgit is strengthening. So are the rest of the currencies like Euro, Yen, Renminbi etc. Your German and Japanese cars are going to be more expensive. Your shirt and computer from China are going to cost more. You are not gaining anything.
The only thing you gain is your Ringgit can now buy more US dollars. But people are dumping US Dollars and moving to other currencies or other investment such as precious metals.Even governments around the world are going to move their trillions of dollars to gold and other investment around the world.With that large amount of money moving into precious metals such as gold, you will soon see a rise in the price of gold.
Gold has been a tool to hedge against inflation historically. Gold value goes up when US Dollars weakened and when oil price goes up.And, smart investors will now move their money out of the US stocks too into developing countries. We should now be investing our money in developing countries. You can buy the stocks from those countries or unit trust that invests in those countries. China is definitely one of these developing countries. That's why you see CIMB Wealth Advisors introducing some Emerging market lately.