Economics Questions

Re: Dealing with hyperinflation

jmorris84 — Sun, 12 Jun 2011 07:21:56 GMT

Has anyone here ever lived through a hyper-inflationary period? I'd be surprised if any have, unless the person was from somewhere in South America or Africa. Even so, each case was unique in its own regard, so I'm not sure how much it would help you prepare; if that is what you are looking for.

Re: Dealing with hyperinflation

lrosias — Sun, 12 Jun 2011 05:06:59 GMT

To be honest I think America is going to be hit the worst by far out of all the developed nations. The other nations take the hit from any U.S. bonds they have any dollars they own and any money they lost from exports. That's natural. We will hurt a lot more because our entire currency will be thrown into shambles and we import so much. Other countries can at least maintain their currencies and the ones that will recover the fastest are those that produce the majority of their goods and don't import them. The countries that will be hit the hardest are those that import a lot of basic necessities. Japan will likely be hit hard and China will take a huge initial hit and will recover quickly as the Chinese products begin being primarily consumed by the Chinese instead of us Americans. In my opinion China will come out as the next world superpower economically simply because they actually produce things. USA will return because we have plenty of intelligent people and talented workers and entrepreneurs, but it's going to hurt. A lot. And it will take a lot of political upheaval and social unrest that I frankly don't want to stick around for but probably will simply because I love this country too much. What I'll be doing is definitely investing in foreign currencies especially the yuan as that's likely to be the most stable of currencies and should hold well when the dollar crashes. China worries me for other reasons since they are in a bit of a bubble themselves right now. Basic rule of thumb is invest in the crucial material goods already listed, see if you can invest in other currencies of high producing countries, and start picking up knowledge and ideas on how to deal with this crash. Honestly this is a huge opportunity for people to create wealth for themselves and their country again once it falls. The people who start bringing food back into shelves and get the people working again can be seen as profiteers or saviors. As for me I'd rather see America be fed so I'll be encouraging anyone trying to build wealth through this coming crisis.
My biggest sincere honest fear is a WWIII due to this crisis. America does have the largest military presence in the world and I'd be surprised if in its desperation if it didn't use it.

I still have fingers crossed that some miracle will save America, but honestly if you've read even a bit of history, you know that when a government has huge debt and no way to pay it, hyperinflation, default or war are the only options left. The only reason America hasn't defaulted already is because foreign countries continue to buy our currency, but I'm sure they will wise up when they realize we can't pay it and it would be much better to simply invest in their own currency. Elements of this have been seen in Germany in the 1920s but never before has a country with such a large influence on the world been in such a state, truly whatever happens will be historic. Saddle up boys, it's gonna be a bumpy ride.

Re: Dealing with hyperinflation

Shawn77 — Sat, 14 Mar 2009 16:20:16 GMT

I think Peter would say any nominal gains seen due to the rising demand for ink and paper would not outweigh the loss in purchasing power that will result from said printing. That being said Rudyard Kipling seems to be dead on.

Re: Dealing with hyperinflation

Joe Garceau — Fri, 13 Mar 2009 19:44:38 GMT

"A man can never have too much red wine, too many books, or too much ammunition" Rudyard Kipling.

That being said I however, am investing most of my money in ink and paper as there will be a huge demand for it with the Govt printing presses running round the clock.

Re: Dealing with hyperinflation

Shawn77 — Fri, 13 Mar 2009 03:52:57 GMT

Crash Proof by Peter Schiff is the book to read.

Re: Dealing with hyperinflation

Tim Gamble — Fri, 13 Mar 2009 02:21:37 GMT

nazgulnarsil:

the 100 items that disappear first are what would be used in a barter economy.

http://www.thepowerhour.com/news/items_disappearfirst.htm

Wow. Great list. Thanks for posting it!

Tim Gamble

Re: Dealing with hyperinflation

nazgulnarsil — Fri, 13 Mar 2009 00:30:28 GMT

the 100 items that disappear first are what would be used in a barter economy.

http://www.thepowerhour.com/news/items_disappearfirst.htm

Re: Dealing with hyperinflation

ProudCapitalist — Thu, 12 Mar 2009 23:53:07 GMT

Tim Gamble:
5) Consider having some means of barter stockpiled - canned food, seeds, ammo, cigarettes, whiskey, rum, vodka.

And gin! Don't forget the gin. It's strategic.

Re: Dealing with hyperinflation

hayekianxyz — Thu, 12 Mar 2009 22:16:51 GMT

liege:
I was curious as to what the thoughts of the forum-goers here are on how best to weather a hyper-inflationary period.

Buy guns.

Re: Dealing with hyperinflation

Tim Gamble — Thu, 12 Mar 2009 22:09:23 GMT

Getting out of the country sounds great until you ask the question "where to?". The places I most often hear suggested aren't really any better off than the USA, and often times are actually worse when you really dig into the situation. I honestly don't know of a single Western country likely to weather the coming storms significantly better than the USA (a scary thought actually since I think the USA is in for some really difficult times). Maybe some of the Asian countries will?

I would consider moving out of the USA if I could find the right place. So far I haven't.

Tim Gamble

Re: Dealing with hyperinflation

Tim Gamble — Thu, 12 Mar 2009 21:47:07 GMT

My suggestions: 1) Get your financial house in order before hyperinflation hits - get on a budget, pay down debt, build savings, live within your means, etc. The healthier you are financially when it hits, the better off you will be. 2) Go ahead an implement your "crisis" budget now. Refigure your budget as if you are already unemployed or as if hyperinflation is already here. 3) Use a portion of your savings to stock up on things that you will need and that will keep for several years - food, clothing, shoes, tires, soap, shampoo, razors... If you are on medication, talk to the doctor about how long a shelf life it has and consider stocking up on it, if possible. 4) Take up gardening so that you can raise a portion of your own food, instead of being entirely dependent on the markets. 5) Consider having some means of barter stockpiled - canned food, seeds, ammo, cigarettes, whiskey, rum, vodka. Having some junk silver coins on hand might be helpful, too. 6) Learn some useful skills. Those who can grow, make or repair things will have a less difficult time than those who only know how to shuffle paper. 7) For your investments, I agree with what Jim Rogers is saying - commodities, especially agriculture, is where it is going to be at for the next 20 - 30 years.

Based on what I am seeing right now in how the politicans are responding to the financial situation, I unfortunately think a period of really high inflation in the USA is pretty much guaranteed in the not tro distant future. And as Rogers is also saying, we are seeing a shift in the world's center from the USA and the West to China and the East, in terms of finance, commerce, production, culture, education, science, technology and just about every other way imaginable.

Tim Gamble - Sustainable Future

Re: Dealing with hyperinflation

nirgrahamUK — Fri, 06 Feb 2009 23:56:30 GMT

i remember reading an article about a prison in which cans of tuna formed a currency. so im gonna go with cans of tuna.

Re: Dealing with hyperinflation

Ancien Regime — Fri, 06 Feb 2009 21:14:53 GMT

Don't most people own jewelry?

Cigs could work though, yeah.

Guns and ammo is another obvious one too.

Machinery, machine products, etc.

Also, it's quite likely that someone with a hoard of precious metals could open up a bank, issue paper notes based on their reserves, and create a working currency again.

Re: Dealing with hyperinflation

liege — Fri, 06 Feb 2009 18:00:49 GMT

I was trying to figure out which commodity would replace paper money in this sort of economy. Something with some intrinsic worth would be absolutely necessary, but as awesome as precious metals are for this, who owns them? Me? Sure. You? Probably. The ten thousand other people within a five mile radius? Hell no.

It would probably take awhile for a precious metal currency to take hold--much longer than the state to issue the new currency. Whatever becomes "money" would have to arise spontaneously from a good that is already prevalent. Maybe packs of cigarettes, like in Germany? Just about everybody smokes, and they have instrinsic value and are easily divisble.

Re: Dealing with hyperinflation

Ancien Regime — Fri, 06 Feb 2009 17:42:43 GMT

Well, it depends. Extreme hyperinflation, you can't do much about once it gets underway. But if you have a good deal of commodities (whether it's a more stable currency, gold and silver, or can produce useful products like food and clothing, you'll be in a better positiion).

I'd also want to get the hell out of the country, as the social situation would deteriorate *rapidly*.