For the first time in 40 years, we may now have to face up to the corrosive power of inflation. The numbers attached to coronavirus bailouts are clearly astronomical. Attempting to protect portfolios could mean buying not-so-liquid inflation-linked securities and floating-rate bonds; and pursuing value and momentum strategies in equities; and purchasing gold.

It’s a good idea to have your inflation-hedging positions ready for what is likely to come in the next few years. Annual budget deficits have become so enormous that the only way to finance them is for the Federal Reserve Bank to increase the money supply. The downside? We will all pay the price in the form of massive and sustained inflation.

When investors get scared, they rush for safe-haven assets like the 10-year Treasury Note. The problem is that an imminent surge in inflation will drive bond yields higher and so push the price of securities down. Rising expectations of inflation will lead bond investors to demand higher yields to tempt them into buying the fixed-income securities.

The UK issued its first bond with a negative yield as investors prepared for the possibility that Britain joins other European countries in having negative interest rates. Comments from UK central bank officials fuelled speculation among investors that the country may set benchmark interest rate below zero to support the economy during the coronavirus pandemic.

The asset manager Schroders is growing a new European fund focused on sustainable debt. Bonds earmarked for sustainable purposes had been expected to be more resilient in a downturn. However, the swift March slump followed unprecedented economic lockdowns and an oil collapse, leaving portfolio managers scrambling for liquidity.

A giant bond-buying program launched five years ago by the European Central Bank was conditionally approved by Germany’s highest court, but it demanded more information about its economic justification, in a move that could set limits on the ECB’s firepower and invite fresh lawsuits. The judgement was tougher than many analysts had expected.

Turkish lira slid towards an all-time low against USD as authorities’ efforts to tighten their grip appeared to backfire. Turkey’s banking regulator moved to curb currency speculation by making it harder for foreign investors to obtain lira. Countries such as Turkey have large foreign financing needs and are seen as vulnerable to a squeeze on funding.

From a family office perspective, you don’t want to take on too much risk, but you still want to deploy capital. We have seen a lot of clients saying, “Where should I invest if I want to be in the debt market.” Central banks are keeping economies afloat with cheap-money policies, making assets that used to preserve and grow family fortunes less effective.

Investors fled mutual funds in Europe at the fastest rate on record in March when they redeemed €246bn. Bond funds across Europe were hit with redemptions of €140bn. Long-term index funds shed €28bn. On top of the investor outflows, Europe’s fund industry was hammered by falling markets that led to a nearly €1tn drop for long-term funds.

German government bonds have fallen for 7 consecutive days, taking their yield more than 60 basis points higher from a record low of -0.91%. It’s their longest run of losses in 2.5 years. “A move in 10-year bund yields back above zero is not sustainable but it is a very real possibility over the next week,” said Richard Kelly of Toronto-Dominion Bank.

Gold futures ended sharply lower for a fourth straight session on Friday, with a loss of more than 9% for the week. It seems that investors have been selling gold in order to cover losses elsewhere. Some investors who were reluctant to part with their equities at depressed prices were able to sell gold in order to meet the margin calls.

Bitcoin was down 48% from 24 hour. Over the past few years, bitcoin has been likened to “digital gold” and has been seen by some as a safe haven asset to park money when markets are facing turmoil. But bitcoin, which has now erased all of its gains for the year and is in negative territory, is behaving more like a risk asset such as an equity.