Friday, September 24, 2010


Business insider has a fantastic article which you can read here explaining the effects of hyperinflation in the United States, the problems it presents as well as the opportunities. I heard about this on Glenn Beck's show today when he mentioned that a link to this story was posted on The

Look, I'm just a carpenter, not a finance guy. That being said, I've read a whole lot of history and there is so much today that is reminiscent of the run up to other financial disasters that I think it bears watching. I've been watching over the last 6 months or so as the prices of commodities such as groceries and building materials keep rising all while unemployment climbs and the dollar weakens. Hell, just go to a restaurant and look at the prices on the menu!

At the same time that basic commodities have increased in cost the value of our assets have declined. Look at house prices or the price of used cars and trucks. All have slowly dropped in value and continue on that same trajectory with no end in sight. The number of miles driven in America has tumbled yet the cost of oil remains abnormally high. The connection between supply and demand seems to have been destroyed.

The only thing standing between us and hyperinflation are U.S. Treasury Bonds. When, not if, they lose their value the run to gold will be on. And not just gold but any other non-perishable commodity will explode in value. And the cost of the necessities like food, fuel and water will go through the roof.

When you can't afford a loaf of bread to feed your kids and someone offers to trade you his bread for your house, will you do it to keep your kids alive? And at that point isn't the house you paid $400,000 for today worth exactly the same as a loaf of bread today, about $2.00?

So what's the lesson here? Become as self sufficient as possible and plan to find away to produce the basic essentials of life on your own. Few will have enough money to buy the essentials so you either grow it yourself, sell everything you have to try and get by just one more day or die. Society will devolve but probably not collapse. Try to stay out of the way. Develop networks in your community now that can work together to get through what's coming. You'll need each other to split the work and defend what you have. Think in terms not just of subsistence but also in terms of excess. Food and other commodities will replace the dollar as the means of exchange, at least for a while.

But enough of my rambling. like I say, I'm just a carpenter. Read the article at
Business Insider and think critically about how to plan for the world the author describes. I think that with a little forethought hyperinflation is completely survivable. Without planning though your chances will narrow considerably.

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