Hyperinflation Survival

The last year, if nothing else has taught us that nothing about our economy should be taken at face value.    We have seen “unthinkable” after “unthinkable” take place.  One thing is certain – we are not out of the woods yet.  It seems we are balancing on a very thin line, with hyperinflation on one side and deflation on the other.  The Feds have shown us, time and time again through their actions, that they want to avoid deflation at all cost.  This means a very real possibility of hyperinflation.   As residents of the US, we all need to be aware of what hyper-inflation is and how we can survive it.

During Hyperinflation, the cost of goods goes up rapidly, as the value of the currency drops.  There are several examples of hyper inflationary periods, but sometimes a picture really is worth a thousand words.

Woman Buring Currency in Germany.

This woman is using her currency as fuel.   The cost of to purchase an equal amount of fuel would have been much higher than simply burning the money.

Strategies for Surviving Hyperinflation

• Food Storage and Production.   The bottom of the pyramid is survival; food and shelter.  Take care of your basics by providing them for yourself.   Store food and produce your own, where you can.
• Hard Metals and other commodities.   Traditionally,  as the value of a currency goes down, gold, silver and other commodities will go up.
• Foreign Currency. When we are looking at a potential dollar crisis, it makes sense to hold a different currency. The entire world is in a state of economic flux, so research thoroughly.

Business Strategies During a Hyper-inflation

• Borrow money at a fixed rate, or if you already have loans, be sure to lock them into a long term fixed rate now.  Rates are historically low.  If hyperinflation sets in, the Feds will start to raise rates.  You want your payments to stay fixed.  Remember, if hyperinflation sets in, you will be able to pay that debt off later with your “declining-in-value” money.
• Lend money at a variable rate.  During hyperinflation, interest rates are likely to go up.
• Control your own intake of money (don’t work for someone else) – this way, you can adjust your fees as necessary.  Do not get into any long term contracts with your customers.  You want the ability to raise rates to keep up with inflation
• Fix your contracts with your vendors and other expenses for as long of a period as possible.
• produce and sell goods or services that will be in demand in a difficult inflationary period.  People will be getting back to the basic survival needs.  Some entertainment and other inexpensive distractions may also do well.  People will need a break from the stress.

A hyper-inflation may not happen, but if it does, you don’t want to be caught with your pants down.  There is no harm in being prepared.