Do I need to point out that anyone following advice from an (anonymous?) internet poster deserves to go bankrupt and none of the following is any kind of financial advice? Well I did, sorry.
> how do you calculate debt or leverage at personal level?
Can you make the payments? Chances of not making them next year etc. So much personally specific stuff in that there can be no rule of thumb. Is your job secure? Will your wages go up? How is your risk appetite? Why do you want more money - what do you want to spend it on, when, etc.
> wouldn't the savings increase as well?
You have $100k, you buy US Govt. Bonds with a 10 year term and an expectation of low inflation. Inflation rips (surprise!), your 100k buys a lot less stuff in 10 years time. The 5% coupon doesn't cushion that blow much. If the inflation is anticipated then you would have a very high yield on 10 year us govt bonds and there is no redistribution of wealth between borrowers and lenders. You get back a sum of money that buys a similar amount of stuff.
I've just described the simplest case with fixed coupon long term bonds, you can make it more complex with variable interest rate accounts or whatever and you'll see unanticipated inflation always is a redistribution to borrowers from lenders. "Pay off your loan with worthless currency." "Remember when you could get a beer for under $100?" Sounds ridiculous now, right? $10 beers used to be equally ridiculous.
>Should you look to increase your leverage in times of high interest or a low one?
No easy answer. Depends on your circumstances and preferences. If you do increase your leverage, can make the payments and your investment is an inflation hedge, unanticipated inflation is a win for you if that's what you want. There is additional risk involved, obviously. Putting money in the bank is almost certainly a losing proposition. In addition to the redistribution to borrowers the increased interest payments are taxed so you're going backwards. think 2% real interest 10% inflation for a bank interest rate of 12%. Well you're taxed on all %12. So some part of that 10% to compensate for inflation goes to the taxman and you're losing purchasing power of your capital.
> And lastly, how do you find assets which aren't hit by inflation?
Most assets are some kind of hedge against inflation. NOT bonds, obviously. But equities will likely be so, gold, real estate, antiques & jewellery. Think of an asset's price as a percentage of the average annual salary. If inflation rips will that percentage of salary change? Much? Why? With bonds the answer is yes and the reasons are pretty straight forward. With housing, rent is likely to be a fairly fixed percentage of salary, salaries double in nominal terms, rent will likely do the same. (But do consider what else is going on in an economy when inflation takes off, will the plant shut down making that place a slum? Likely it's more subtle than that). Buying an equity of a company that has sales, will their sale prices keep pace with inflation? You'd imagine McDonalds would, for example. Will their sales qty drop in an economy with high inflation is also worth considering and is a trickier question to get right. I'm partial to S&P500 index tracking funds, they're popular nowadays too. Obviously equities can crash in value over the short to medium term.