Yahoo! Finance has the article Mohamed El-Erian says a ‘trifecta’ of dangers will haunt the US economy in 2022 — here’s how to protect your portfolio.

Inflation erodes our purchasing power. If you’re holding cash, you won’t be able to purchase the same amount of goods and services as before.

Someone made the sarcastic remark that he was told that inflation was transitory. I felt compelled to respond to that comment.

Inflation may be transitory if the Government does the right thing to combat it. Unfortunately, the Fed is not the part of the government that has the tools for fighting inflation. Raising the interest rates will only make prices go higher. Breaking up monopolies may be the best tool for fighting inflation. Another tool is to shift business “investment” out of raising stock prices, and using that money to invest in productive growth of the economy which includes infrastructure improvement. I said infrastructure improvement is part of the solution, but it isn’t the whole solution.

To El-Erian, i will agree that holding cash might erode your purchasing power as the purchasing power of cash in constant dollars erodes. However, holding cash won’t be as bad as holding “investments” that lose in face-value, too. Crypto-currencies may be what people are using as a store of value instead of gold, but crypto-currencies’ dollar value is dropping like a rock. I don’t see how that will end up being a store of value. I’ll stick to a little bit of gold as a hedge against inflation.