Thought-experiment: Preparing for Hyper-inflation

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posted on Sep, 25 2013 @ 10:44 PM
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I did a search of ATS, and cannot find any threads on this topic in the survival board. If any of you can, please link 'em, because I'd like the background.


In the meantime, imagine this scenario:

Interest rates rise above 6%. This causes the Federal Budget to cave in, because 85% of Federal Revenues are needed just to make the interest payments on government debt. So the Federal Government slashes all disbursements except for "essential services" (read, military & collections enforcement). In response, the Dept. of Treasury fires up the printing press.

Which causes an inflation episode analogous to the end of the Weimar Republic. For the sake of this thought experiment, you can:

-assume the value of the dollar declines by 50% each month. In other words, a candy bar that costs $1.19 now will cost

$2.38 at the end of month 1
$4.76 in month 2
$9.52 in month 3
$19.04 in month 4
$38.08 in month 5
$76.16 by month 6

-assume the US government cancels more and more services (expenses) each month, for the sake of continuing to make at least the nominal payment on its bond commitments.

So then, How would you deal with all this? In addition to your current preps, how would you try to adjust to this situation?

If you live outside the USA, how do you think the dollar's woes would affect your life, if at all?




posted on Sep, 25 2013 @ 11:29 PM
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Here you go:

Wiki How: How to Prepare for HyperInflation


Reduce your exposure to the affected nation's currency. During a period of hyperinflation in Hungary in the mid-1940s, the highest-denomination note went from 1,000 Pengo to 10 million in one year. Despite the immense increase in face value, the currency actually lost a corresponding amount of its value during that timeframe. When a period of hyperinflation looms, savvy investors move their assets to a stable foreign currency before their own notes rapidly depreciate.


Well, I never thought of that - I wonder if it would work if the U.S. Dollar went into hyper inflation? You know, Bitcoins though - that could be something to get. They are independent of the U.S. Dollar, I believe?


Invest in other hard assets. Owning other items with intrinsic value, chiefly commodities like oil and natural gas, can help you prepare for hyperinflation. Generally, as stock markets in hyperinflation-affected nations fall, commodity prices go higher. Real estate also offers a defense against hyperinflation. If you hold a fixed-rate mortgage, you'll pay the same amount each month, whether it's the first year of your mortgage or the 25th. During a period of hyperinflation, it's conceivable that you could pay off the entire balance of your mortgage at once because the currency is over-inflated, but your balance remains constant.


Well, this is just great. I don't have money to invest in that kind of stuff - in general though, you can invest in things like can openers, pocketknives, first aid kits, seeds, networking with friends and including all kinds of skill sets in your network.

I have actually been doing the above things, as well as repairing all of my electronics to be in top condition, stocking up on canned food and powdered drinks, and books. I am big proponent of books, especially ones that have some utility -

An encyclopedia set, a medical guide, college textbooks, etc.

In addition - for free internet access, there is an older Kindle that gets 3G access for free without payment - there are also solar panels that have USB outlets. That means it could charge your Kindle and your cell phone -

Let's see... toilet paper. Right?
edit on 25-9-2013 by darkbake because: (no reason given)



posted on Sep, 26 2013 @ 01:11 AM
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the people who are prepared for hyper inflation are the same ones that are prepared for zombies , fema , planet x etc etc . while a lot of people prepared for digging in and shooting whoever they deem a threat , the majority of preppers have thought and prepared for bartering , it is the first form of trade that existed and will ultimately make another apperance i believe . i still am amazed at the power these little pieces of paper with artificial values placed on them , have over the world .



posted on Sep, 26 2013 @ 02:18 AM
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I don't think you'd ever see that in the US. They can print money so they're fine.



posted on Sep, 26 2013 @ 04:12 AM
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reply to post by tovenar
 


hemp. a constantly renewable source of matter everything from cellophane to dynamite. prevent hyper inflation with hemp



posted on Sep, 26 2013 @ 06:49 AM
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spartacus699
I don't think you'd ever see that in the US. They can print money so they're fine.


Do you know what the cause to inflation is? More money without backing. Print 10 billion bucks whily the country produces worth of about 9 billion bucks, and you will find that the buck is worth less than before.

Which is only one of many mechanisms to produce inflation, but a very easily to be used one.

Take a look at this one: Equation of exchange



posted on Sep, 26 2013 @ 11:27 PM
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Some people would find themselves in an advantageous situation, because they are paying "old rates" with devaluing money. People in the following categories would benefit:

-People with longer term leases
-people with fixed-rate mortgages
-people with large student loans
-people paying alimony or child support
-people paying off a legal settlement
-shareholders (the prices of shares change each day, and keep up with inflation on an ongoing basis).

Other people would be screwed by costs constantly increasing, faster than their benefit does Such people would be:

-people on fixed income: pensioners and retirees
-people dependent on a disability or unemployment check
-bondholders (bonds usually pay at a fixed rate of interest, say 5 or 7%; versus 400% inflation
-people with adjustable rate mortgages
-folks with ongoing expenses, particularly gasoline. So cab drivers and workers at transportation companies generally, would be in serious trouble
-people buying groceries!



posted on Sep, 27 2013 @ 12:07 AM
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reply to post by tovenar
 


And you know it's coming. It will be the end of the US. No one is going to pay their "bills". No one's going to show up to "work". Makes you wonder where that 430 billion cigarettes are that went "missing" at the ATF.





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