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Vintage Guitars, a Good Hedge against inflation in 2022 ?

by vaughn skow July 06, 2022 5 min read

413 - Vintage Guitars a Good Hedge aginst inflation in 2022?

So, wow!  I mean, wow.  2022 is shaping up to be quite interesting and we are seeing not just the United States, but really the entire Western World, change more dramatically than a human population this large has EVER encountered.  First I MUST say that this blog is the opinion of ME and only me personally, not the opinion of Warehouse Guitar Speakers, Vaughn Skow Pickups, All-Pedal or any other entity that aint ME!  Okay, with that outta the way, I gotta be honest with y'all, I really can't figure out just exactly WHERE this is all headed, but one thing I am sure of, and all the appropriate experts seem to agree: We are entering a period of hyper-inflation that may dwarf any other in history (outside of countries ran by some form of dictatorship ... think Venezuela or Zimbabwe).  The term I keep hearing is "cash is trash".  Our money is literally loosing between 10% and 16% of it's buying power this year (depending on if you believe our governments fairy-tale figures or reality) ... and inflation is accelerating.  That's bad, really bad.  And that's the GOOD news!

Spoiler Alert: financial safe-haven's are almost nonexistent for the typical bloke living in the western world.

The bad news is that it's almost impossible to find any "safe-haven" assets to trade our devaluing fiat (fake) currency for.  The stock market is down by about 50% year-to-date as of this writing (June, 2022), some say that makes many stocks and equities on SALE right now, and suggest buying, but many more financial experts suggest years of chaos in the markets with no clear outcome on the other end ... or if there even WILL be an end, the worlds most rich, powerful and influential institutions, and individuals are rapidly deploying a socialist agenda for the ENTIRE western world at breakneck speed, and more and more business owners and wealthy individuals are leaving the US forever to relocate to a place that looks like a free-market will survive for many years to come. Over the last couple decades the powerful international overloads have sucked the majority of skilled or manufacturing jobs out of America and moved them abroad, and now we are seeing a mass exodus of the very people that keep the US  still financially solvent(ish).

My Soapbox is out again!

I could go on, but all of you reading this know what's going on, unless the big corporate and institutional media and social media have successfully removed your ability to think, reason, and live in reality.  If you are already living on other peoples as wards of the federal government (the welfare state), things probably are not changing for you at all.  But that's not the readership of THIS blog for sure!  So, let's say you still have a little cushion in the bank for emergencies, or maybe even a good sized cushion, the last year has been a "come to Jesus" moment (as they say in the south).  Yep, you earn way less than 1%  interest on any money you have, while inflation eats away at it at a rate of 16% and rising.  The handwriting is on the wall, your money will be practical, or entirely, worthless in a few years.  I can talk about the now popular ":i-bonds" that are guaranteed by the Fed to raise in value at the same level as inflation but they have a BUNCH of "gotchas" and are backed by the very people who WANT you to have nothing.  Gold?  maybe.  Silver?  Maybe.  Real Estate?  Maybe ... if ya can sit on it for years as it looses value, since real-estate values have NEVER been as artificially inflated as right now.  Decentralized Crypto?  Well, my Crypto wallet has lost about 70% of it's value in the past 6-months, so wow, volatility is way to passive a word to describe the risk of buying crypto. 

Vintage guitars hedge aginst inflation 2022 2023 2024

Stick with what you already know best.

Over the decades this is what the wise old men and women always have always suggested to someone looking to start a business, make an investment, choose a career, write a book, etc.  And, shoot, these awesome people from an awesome generation of splendid Americans seriously know what they are talking about, as always!  And so, for me, that has ALWAYS meant that I invest in vintage guitars and amps, some rare and desirable vintage effect pedals qualify too!  I wish I could invest in fine art or watches, THOSE are supposed to be among the most inflation-proof assets, and even somewhat depression/recession proof.  But I just don't know enough about these assets, or many others that some consider to be safe bets. so....

Let's talk Vintage Guitars.

I didn't start out "investing" in vintage guitars, I just bought the best sounding guitars I could at the best prices I could.  I began life's journey VERY poor, and so most of my guitars came from pawn shops, yard sales, FleeBay, and the like.  But something interesting happened over the years that turned into decades, the value of many of my guitars really increased.  And so I started paying attention and seeking out good deals on investment grade guitars.  and ...

Here is my take on Guitars as an investment in 2022.

If ya really UNDERSTAND the vintage guitar market, yes, by all means it's a great place to park your cash.  I mean there is NEVER going to be another 1960 Les Paul or 1962 Stratocaster made ... EVER!   And that makes them something that ALL great investments must possess: they are RARE and the supply can not grow ... not even by ONE GUITAR!

Now there is a second criteria that must be met for an asset to be considered a real "Trophy Asset" the best stuff in the world to own.  It must be desirable!  For instance, Gold is considered to be a good place to park money that has generally kept up with or even surpassed inflation over not just over years or decades, but over many, many centuries!  Gold has always been desirable, and that has only increased in modern days as it has properties that make it invaluable in certain high-tech applications, and while it is not capped in amount, it is VERY slow to increase in amount over the centuries because 1) it's VERY hard to mine and purify, and 2) It's in high demand and keeps getting used up in technology!  But what about guitars?

Again, ya gotta KNOW what you're buying and it's value and future predictions.  We all know that over many decades American made guitars from the "Golden era" from the 1940s to 1960's have been safe bets, especially if they are desirable models.  That shows no sign of changing.  So BUY if you can!  Will they skyrocket in a few years, probably not; but they will not erode in value under the weight of "stagflation". 

What if you can't afford these elite instruments?  EDUCATE YOURSELF!  Certain Japanese and Italian made electric guitars from the 1960's and 1970's are looking like the next highly desirable guitars.  Those "almost" vintage USA made guitars from the late 1960's to late 1970's are also looking like a good place to park your fiat currency, as long as they are very desirable models.

The take-away:

Since, as the economists say, "cash is trash" these days.  When you trade your hyper-devaluing dollars for a solid guitar investment, your wife might just approve, certainly if she understands the implications of hyper inflation she will.  And unlike gold or silver, you can actually PLAY the guitars while they retain their value.  Cool, right?  As long as we don't all start calling each other "comrade" anytime soon; in that case the elites will just take everything we own, including our guitars.  So BEFORE you relocate to some country that's NOT in the IMF, UN, G6, Brandenburg, Rothschild, or WHO's sights, ship your guitars there if you can!

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