Hyperinflation
Six Steps to Protect Yourself from Hyperinflation Hardship
In another recent article on this website entitled “What is Hyperinflation and Can it Happen in the US?” you read about the prospects of Hyperinflation affecting the United States in the near future.
If you recall the article, you will remember that hyperinflation has already happened in the United States on three different occasions.
These were back in the Revolutionary and Civil Wars, as well as in 1933 when President Franklin Roosevelt devalued the dollar severely against gold. If double digit inflation or worse breaks out in the American economy over an extended period of time, then you will be far better off if you have taken proactive steps to protect yourself from it.
The following paragraphs discuss these sensible and recommended things that you can do in case significant inflation proves to be in the national future.
Brief Review of Hyperinflation
For the benefit of you readers who did not read the first article on hyperinflation, a brief review is in order. Hyperinflation is inflation that gets out of control as the prices of all goods and services rise at a rapid pace.
This rate can range from double digit percentage increases to hundreds and even thousands of percentage increases per year. Examples of runaway hyperinflation include Germany following World War I, Hungary after World War II, and Yugoslavia in the 1990′s as the country was breaking up. Zimbabwe is presently in the grip of severe hyperinflation.
Some form of hyperinflation is practically assured in the United States as the result of the monetary activities practiced by the Bush and Obama administrations in response to the economic crisis, financial collapse, and Great Recession.
Enormous amounts of money were created from thin air and injected directly into the U.S economy in the final days of President Bush’s second term and the first months and year of President Obama’s administration. The money supply was increased by as much as three hundred percent in this time frame.
Supply and demand laws tell you that this enormously greater number of dollars chasing the relatively same number of goods and services will lead to massive price increases in the coming months and years. If this does happen, as an increasing number of economists are suggesting, there could be a great deal of poverty and social unrest. This would especially be the case for those living on fixed incomes, such as retirees.
Protecting Yourself from the Hyperinflation
Even in light of these economic revelations, there is no cause for despair. There are a number of proactive steps that you can take to prepare yourself and your family against hyperinflation, as well as to safeguard your wealth. These are detailed in the rest of the article below.
Step #1 – Become More Self Sufficient
If you own a home, then you should endeavor to make it more self sufficient. This can be done by planting some fruit trees in the backyard, and especially by putting in a good vegetable garden. In case the prices of food become too high to bear, at least your family will have a healthy base of food to work off of from your own fresh stock.
It is a good idea to start before the hyperinflation hits, since growing your own food can take some practice and experimentation for it to go as you plan. If they hyperinflation never hits, at least you will be spending more time outdoors enjoying the sunshine and fresh air while you maintain the garden, and you will have the freshest fruits and vegetables on your family table every day.
If starting the vegetable garden or miniature fruit orchard sounds like too much work and trouble, then you can at least prepare yourself against the need by purchasing packages of seeds and bags of soil. If you do this, make sure to buy seeds for plants that grow well in the part of the country in which you live. Then if hyperinflation hits and the inevitable run on gardens supplies happens, you will not be in the stores fighting for the limited packages of seeds.
Step #2 – Create An Emergency Food Supply and Kit
If hyperinflation did happen, then all food costs would increase dramatically. By purchasing a good supply of canned goods and similar non perishable foods, this is one thing that you would not have to worry about for a good amount of time. Having a first aid kit as a part of this is always sensible as well. Even if hyperinflation never materializes, it is always a good idea to have a supply of non perishable food and a first aid kit on hand to be prepared for any disaster or emergency.
Step #3 – Adjust Your Investment Portfolio Now
Once hyperinflation begins, it is already too late to think about your investments. To be prepared for its arrival, you should make some changes to your investments’ composition now. Your goal is to protect your investments from the declining purchasing power and value of the U.S. dollar.
One way to do this is to put some of your investment dollars into gold. Regardless of how low the dollar sinks, gold always performs well in such times. Even during the worst of the German hyperinflation, gold had great value and was used to protect many Germans’ money. Gold can be bought in coins or bars and conveniently stored in a safe deposit box at your bank, or in a safe at home.
Another way to prepare your portfolio is by purchasing Swiss Francs. Unknown to most people, Switzerland’s currency is the only one in the world still backed by gold, as mandated by their constitution. For many centuries, their banks have been safe places to keep money, regardless of the geopolitical situation in Europe and the world. Opening an Swiss Franc account at a Swiss bank is easier than ever, and can even be done over the Internet nowadays.
Step #4 – Reduce Your Debts
Eliminating or at least reducing your outstanding debts is also a good proactive approach to preparing for hyperinflation. The reason for this is that many people will lose their jobs in the economic turmoil that accompanies hyperinflation.
Paying bills would possibly require the little money that you still had coming in. You can start by paying more than the minimum amounts due on all bills. Finding ways to bring in extra money to pay towards the bills is also advisable. Even if hyperinflation does not happen, you will be better of for getting your finances in better shape.
Step #5 – Have Some Money on Hand Along with Your Critical Documents
You should get all of your critical documents together and have some money at home with them. If hyperinflation led to social unrest in your locale, then you would want to be capable of leaving to go stay with your relatives who live in a more remote area. People outside of the major cities would be likely to have fewer problems in such difficult times. Whether hyperinflation occurs or not, it is always wise to be well prepared for a quick departure in the event of some other emergency or disaster.
Step #6 – Research the Candidates to Vote for the Responsible Ones
One thing that you can still do to help head off hyperinflation lies in researching and voting for the political candidates who comprehend the problems of going down the hyper-inflationary path. It still might not be too late to work to prevent it, if responsible leaders quickly started tackling the runaway money supply increases. Politicians who are willing to stop printing money and repay part of the national debt are the best choices for this. Be sure to vote against politicians who think that creating money from thin air is perfectly acceptable.