We would probably hear from some people saying now and then that investments are like gambling (especially when people talk about speculations rather than investments, although I won’t elaborate what’s the difference between speculations and investments). But I have never heard the other way around: gambling is actually an investment. From this report from Washington Post, it was said that a Chinese gambler in Macau is “investing” his money in baccarat:
“I wanted to invest my earnings,” Yuan explained. Only “fools,” he said, put money in Chinese banks, which offer less interest than the rate of inflation.
So here we go, a Chinese man would rather put his money into a casino table rather than put them in a Chinese banks because deposit rates are lower than the rate of inflation, that is the real deposit rates are negative. I am not entirely sure if this should be a story to be read just for fun, or it is an indication of something more serious. This is, of course, a familiar reason for people who are worried about inflation to buy anything that are deemed to be an inflation hedge, from gold to real estate, but it is certainly the first time for me to hear someone saying that he gambles because he thinks it is an inflation hedge. So if the kind of things that can be said as an inflation hedge is now being extended to include gambling, that would be a rather worrying sign.
And of course, what’s happened next is this:
Out of cash after a streak of bad luck, he took a break to pawn his watch and mobile phone. Then he returned to the Golden Dragon and continued losing.
Unfortunately, he could not hedge inflation on the casino table.
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