How will you prepare for the upcoming Hyper-inflation?
renman95
Posts: 7,037 ✭✭✭✭✭
jmho of course.
But what can one do other than have food storage, PM coins for barter, a wheel barrel for cash, own your assets, guns and ammo, family plan of action, pray, etc.
Meanwhile we wait for the government to figure out a way to restore confidence...
1. by issuing a new currency at a million to one(?)
2. do nothing and let the country fall apart(?)
3. require all to hand over assets for redistribution(?)
4. by issuing tin foil berets.
Ren
*edited for info addition 10-25-11
But what can one do other than have food storage, PM coins for barter, a wheel barrel for cash, own your assets, guns and ammo, family plan of action, pray, etc.
Meanwhile we wait for the government to figure out a way to restore confidence...
1. by issuing a new currency at a million to one(?)
2. do nothing and let the country fall apart(?)
3. require all to hand over assets for redistribution(?)
4. by issuing tin foil berets.
Ren
*edited for info addition 10-25-11
0
Comments
2) i suppose that would mean a fixed rate mortgage or something like that leveraged to the hilt via a HELOC (if you can get one) and sink all the proceeds into gold????
3)then sit back and switch channels between CNBC and TVLand and
i will be doing at least #3
I would also recommend if you have a cheap credit line maxing it out using the live.com cash back buying bullion for as much as you can of your credit limit.
Foil hats have always worked for me.
Camelot
<< <i>You forgot #5: Stop reading Sinclair's blog >>
Reading Sinclair has been one of the best financial things that has ever happened to me. Been in gold and silver since 2002. The best part is that the PM rise is still in its infancy.
roadrunner
I sure would like to see 30 year and 15 year morts to come down...like a lot. Looks like a lot of skimming going on.
Meanwhile, back at the $XAU. It looks like a breakout since December 8. Maybe in some anticipation of the flood of dollars next year. When specifically?
Ren
For instance, when they bailed out Bear Stearns, I cashed in my traditional IRA, paid the penalty & taxes, and bought gold and platinum.
When I didn't like what I thought that I saw Comex doing, I sold everything that I had in stocks or mutual funds (especially SLV) and went liquid in all of my accounts.
When Lehman went under, I sold my other retirement accounts out totally, paid the penalty, paid the taxes and bought silver.
When the $700 billion bailout was being formulated, I bought more gold.
When Obama was elected, I was already out of money, but when I had some more income coming in, I bought more gold.
To the uninitiated, this might seem a bit rash. To me, it seems quite sane, and I'm more comfortable with it all the time. Each time around, I set aside a little cash as a buffer. What the heck, it's not like I'm losing any interest by having it liquid.
I'm expecting more income in a bit. Until they make another dolt-headed move, the money will be in cash. When they announce more astoundingly stupid, ill-conceived, piggish, slovenly, confiscatory, socialistic, or fascist governmental or monetary policies, I will buy more pms.
I don't know if I'll pay off my mortgage if metals go high. Accelerating a loan payoff might not be the best move, although that's what the conventional wisdom would say to do during an inflationary spiral. I think that maybe this time is a little different, so it might be better to be "flexible". Besides, who wants to give any more money to a bank these days? They get bailout money for being horrible money managers. argh.
I knew it would happen.
Renski
Successful BST transactions with WTCG, NH48400, evil empire,
meltdown, timrutnat, bumanchu, 2ndCharter, rpw, AgBlox, indiananationals, yellowkid, RGJohn, fishteeth, rkfish, Ponyexpress8, kalshacon, Tdec1000, Coinlieutenant, SamByrd, Coppercolor
Of course they can. They can ask all of the bankers who drew up Credit Default Swaps and Credit Default Obligations at 40:1 and then had their counterparty "disappear" to just go ahead and pay a few hundred $ Billion back. No problem. Well, maybe one small problem - the bankers and lawyers who drew up the deal won't really want to pony up their cut and give it back. And besides, the money doesn't exist anymore. But don't worry, Paulson and Bernake can create more out of thin air.
And when the auto unions, er, when the car companies get "bailed out" then all of the retirees and bosses can give back their cuts, too.
Let's not forget, the principal is long gone - vaporized - and the only traces left are the $200 Million Golden Parachutes for the likes of Merrill Lynch and Lehman Bro CEOs, and maybe a few of their lieutenants.
Yeah, the Fed can sop up all of the liquidity if need be. As long as they don't care whether or not the interbank lending rate goes to 25% and 75% of the industrialized world can't buy raw materials because they are bled dry and insolvent. No worries.
I knew it would happen.
how would the fed drain it interest rates and what would that do
just a question looking to learn here
thanks
I'm moving to Macau, China
Elasticity of demand, or Inelasticity of demand - that is the question.
There is no demand for credit due to counterparty risk, so.........
They cut rates to 0 or .25% (mighty generous, I must say).
So this massive interest rate cut causes a huge increase in demand?
Not!
I knew it would happen.
<< <i>ebaytrader
how would the fed drain it interest rates and what would that do
just a question looking to learn here
thanks >>
The simple explanation: The Fed adds liquidity to the system by buying securities (Until very recently, all they bought were treasuries) and paying cash. That's how cash on hand grows. They drain liquidity by selling (yes, by charter, the money center banks MUST buy) for cash thus taking it out of the mix. The Fed does both as a normal course of business. Nothing unusual about it at all.
Because inflation is a monetary phenomena and not credit driven, the Fed can control inflation that way. Unfortunately, they rarely have a good grip on the money supply and always acquiesce to the demands of the banking system.
ok i'm missing that
until very recently
part
how does the fed do it now in rel time
In all seriousness, ebaytrader, how is the Fed going to drain liquidity in the future with the Federal government planning on running trillion-dollar deficits are far as the eye can see? Assuming the economy does pick up in a couple of years, that will be about the time that the Medicare bomb really starts to explode and, of course, Social Security starts running a deficit a few years later. Not that I want to see this happen, but things look like they could get really ugly.
Just curious....
Member ANA, SPMC, SCNA, FUN, CONECA
They basically stated they will do whatever to fight deflation.....with tons of cash (my words.) What will they do on the other end when inflation spirals out of control? And this will be a global inflation 'cause our dollars are everywhere.
Ren
<< <i>ebay
ok i'm missing that
until very recently
part
how does the fed do it now in rel time >>
They Fed window is now open to buying securities other than treasury issues like Fannie & Freddie paper.
<< <i>In all seriousness, ebaytrader, how is the Fed going to drain liquidity in the future with the Federal government planning on running trillion-dollar deficits are far as the eye can see? Assuming the economy does pick up in a couple of years, that will be about the time that the Medicare bomb really starts to explode and, of course, Social Security starts running a deficit a few years later. Not that I want to see this happen, but things look like they could get really ugly.
Just curious.... >>
The SS / Medicare time-bomb is a fiscal problem and, not yet, a monetary problem. It's not fait de complis at this point in time.
<< <i>Does anyone see that today's action by the Fed as the pivotal moment towards hyper-inflation, albeit a year or two or whatever? >>
No.
I am more concerned about the next six months.
If you can't survive the next six months, what does it matter what will happen three years in the future?
Right now business sucks. My business, which is linked to advertising, is down a minimum of 30% from last year.
Hyperinflation three to five years from now is the LAST thing I am concerned with.
What concerns me now is getting business back up and running TOMORROW, or many of my clients will not be in business in six months, or even three months.
I say, go Fed go! Keep pumping. We need it NOW.
I'll worry about the hyperinflation of 2012 or 2013 later.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>
I am more concerned about the next six months.
If you can't survive the next six months, what does it matter what will happen three years in the future? >>
I am 100% in agreement with this, my personal situation and the industry I am in is getting killed. So far I have been able to dodge and weave and stay in the game, but it is getting harder to sleep.
ha! ton is only 2,000 lbs. i raise your tons of cash and i say will be "bunker-busters" full of cash - is 5,000 lbs. maybe tote bins of cash?
Hyperinflation three to five years from now is the LAST thing I am concerned with.
What concerns me now is getting business back up and running TOMORROW, or many of my clients will not be in business in six months, or even three months.
I say, go Fed go! Keep pumping. We need it NOW.
Don't look now, but California probably is next on the bailout agenda. The issue is employment, according to CNBC, since California is the "8th largest economy in the world", etc.
What if there's nobody to bail out the US? Oh, that's right - there isn't. Why not cut back a few entitlement programs and stop hiring illegals? Knock off the free tuition crap for illegals?
Maybe ask pelosi and boxer to "redistribute" some of their family fortunes directly to the poor? It might build some character. God knows, they need some.
I'll worry about the hyperinflation of 2012 or 2013 later.
Does anyone besides me think that herein lies the problem? Let's just pump money now, and worry about it later! I see that gold is UP today.
When will people see that there is a LINK between government policies, the economy and the price of gold? Sooner or later, the fundamental economics kick in, and fundamental values absolutely must return. Credit is ok for awhile and for some purposes, but as a way of life it's idiotic.
I knew it would happen.
Damn't too many people are out of work. Too many incomes are dropping fast.
Too many people are hurting TODAY.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>
<< <i>Does anyone see that today's action by the Fed as the pivotal moment towards hyper-inflation, albeit a year or two or whatever? >>
No. >>
I agree. Bond rates, mortgage rates are near record lows. Who is lending money for 30 years if there is a chance at high inflation during that time period? Short all the bonds you can handle if you think hyperinflation is coming. You'll make huge money if you are right. Of course the market may not agree with you for a very long time, and you may lose your shirt.
Bonds are saying deflation is the much more likely scenario. Are home prices likely to continue to fall or inflate? Are stocks? How about oil? These are some of the big drivers. If those prices aren't moving up, it is unlikely that inflation will ignite. Too many seem focused on monetary policy or small areas of the market instead of the bigger picture.
Predictions are fun, where folks are moving real money is much more interesting. Those that believe hyperinflation is on the horizon probably thought the same thing 10 years ago, or 5 years ago, and already allocated their funds accordingly.
Let China bailout California.
Pelosi and Co. should urge full stop on all spending. Instant pain, yes. This nation needs to be saved at the cost of individuals' greed. How much stuff did we have to buy to be happy. This economy has been a ponzi scheme at best. Our standard of living was increased on the back of "fake" profits from our houses. Has it made everyone more happy. I don't think so. It made people more insecure because they didn't have enough house, enough car and enough TV. And now we are suffering for the wants of the greedy. I'm not saying that we need to gather everyone excess and distribute. That may come from BHO.
This "crisis" has accelerated so much that we are now willing to accept experimental tactics in saving our economy. Like GW said yesterday, he had to abandon free-market system to save the free-market system. This is crazy talk from the president! Wait til BHO gets in...his ideas will sound much worse. Much more radical because the "solutions" will be social (engineering.)
Just one or two of the major financial failures of the dozen or so to date would have made enough headlines for the year. I think we are suffering from crisis overload. There's not enough time between disasters to put into perspective. More keep coming and it's nerve wracking.
Ren
<< <i>
Don't look now, but California probably is next on the bailout agenda. The issue is employment, according to CNBC, since California is the "8th largest economy in the world", etc.
<< <i>
California - Calpers real estate you name it
Only 34 days till "obama nirvana day".
I knew it would happen.
" We Democrats are going to address this issue after we take control of the congress. We will return to the 60% to 80 % tax rates on the rich and we will be able to take at least 30% of all current lower Federal Income Tax taxpayers off the roles and increase government income substantially. We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest."
When asked how these new tax dollars would be spent, she replied " We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profit taxes could go a long ways to guarantee these people the standard of living the would like to have as Americans." Nancy Pelosi Oct. 22 2006
MY hyperinflation? I've paid my bills all of my life, and it's MY hyperinflation?? I'm not the one asking for another massive bailout.
I say, cut back YOUR spending like I've cut back mine, NOW.
I knew it would happen.
<< <i>More food for thought . Buy PM's now and avoid the rush.
" We Democrats are going to address this issue after we take control of the congress. We will return to the 60% to 80 % tax rates on the rich and we will be able to take at least 30% of all current lower Federal Income Tax taxpayers off the roles and increase government income substantially. We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest."
When asked how these new tax dollars would be spent, she replied " We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profit taxes could go a long ways to guarantee these people the standard of living the would like to have as Americans." Nancy Pelosi Oct. 22 2006 >>
Oh, really?
Because inflation is a monetary phenomena and not credit driven, the Fed can control inflation that way. Unfortunately, they rarely have a good grip on the money supply and always acquiesce to the demands of the banking system.
The methods in which the FED has injected money into the system over the past 5 years or so, has made it essentially impossible to undo the task. And as already stated, they never pull out even a fraction of the liquidity they pumped in. To the FED, reducing annual money supply growth from say 15% to 5% is their way of "contracting."
I don't know if hyperinflation is 3-5 years out, if at all. I think we'll see signs of good old "regular" inflation (5-15%) and rising prices in some areas by the 2nd half of 2009 to first half of 2010. We won't have to wait until 2012 to see inflation again.
roadrunner
5% would only double the existing inflation rate.
15% would certainly mean trouble.
care to be more specific with this prediction?
thanks
www.AlanBestBuys.com
www.VegasBestBuys.com
In contrast, I believe we must work off the last 80 years worth of INFLATION before we can even think about reinflation. That could be quite some time away, perhaps a generation away.
Knowledge is the enemy of fear
So what will cause inflation? The belief by foreign and domestic investors that the US is a risky place to invest. These investors will require a higher rate of return to buy US govt debt and thus raise inflation and lending rates. In my opinion, we have an unbelievable bubble in US treasuries right now. Seriously, who in their right mind would buy a 30 year bond paying 3.67%? Well, apparently an unbelievable amount of investors currently would.
The US govt is playing foreign investors for fools. Once they have helped Americans reset their debt load at historical low rates, they will take actions to stimulate inflation and thus having foreign investors pay for it.
CG
Businesses are created to fill a need, and businesses go bust. Declining business revenues shouldn't be propped up by a governmental bureaucracy - mainly because it's counterproductive to employ people as bureaucrats instead of workers, and it's even more important not to keep throwing resources down a rathole in an industry where demand isn't keeping sales intact. Buggy whips.
Personal expenditures should be adjusted to fit with personal income, instead of overspending, especially on worthless and dangerous imported crap that is only a conduit for profits by unscrupulous businesses who have no sense of local community or loyalty.
When the government gets into the middle of all this, it only mucks up the ability of the market to respond to the needs of people and other businesses. People need to get used to the idea that "making money" involves "work" rather than entitlement.
And folks who just can't fathom the idea of working - they shouldn't be accommodated. Our standards for disability are completely skewed. Our standards for ethics are completely backwards. Our standards for faith, hope, freedom and truth need to be invigorated.
We need to stop coddling criminals and put them out of their misery, quickly or at least get them the heck out of society permanently with no chance of re-entry, ever. We need to stop giving every degenerate thought process, practitioner and lifestyle the power to disrupt and destroy the values and rights that for most of us are STILL guaranteed by the Constitution.
At some point, the majority can't be considered to be wrong, wicked, stupid and a host animal for every parasite that attaches to society. At some point, the host has to defend itself or die.
I knew it would happen.
I think you are being too harsh. A lot of hard working, honest people, through no fault of their own are losing their jobs and their businesses and their wealth.
www.AlanBestBuys.com
www.VegasBestBuys.com
I think you are being too harsh. A lot of hard working, honest people, through no fault of their own are losing their jobs and their businesses and their wealth.
I was careful to state pretty much what I mean. If you read carefully, you'll note that I harbor no resentment towards hard working, honest people who are willing to work. Read what I said.
I have an abundance of empathy towards those who are having a hard time through no fault of their own. I'm regularly helping to support other 3 adults who are much less fortunate than I am, even as we speak. Two of them work, one cannot.
Incidently, none of the people I help support get any assistance from the government except for one (1) who gets a Social Security check. That might be a little bit of a factor that irks me about government programs - the whiners and gold-bricking criminals and cheats know exactly how to milk the system. The truly unfortunates can't even conceive of ripping off the system, nor would they even consider it. They don't even apply for all of the help that they qualify for - out of sheer obstinance.
Read what I said.
Added - Just out of curiosity, Alan - what exactly did I say that gives you a problem? I'd really like to know. It might help me understand "a different point of view" better. It probably won't, but it might.
I knew it would happen.
You didn't read it closely the first time. "Some prices" (ie meaning some asset prices) will see inflation in the 2nd half of the year, maybe sooner. It will selective. I would expect oil and gold to be at least within that +5% to +15% range. Actually I'd be surprised if oil isn't a lot higher than 15% from today's levels. It will also depend on the asset. The statement was meant to be broad. We're talking up to a year away, a huge number of different assets, and lots of things that BHO and the FED will be doing to the economy in the interim.
Considering that we've inflated the dollar away by a ratio of 20-1 over the past 95 years, then working off the last 80 yrs of inflation should require a reduction of all prices by a factor close to 20. At that rate we could even go back to a floating gold standard and do it right the 2nd time.
roadrunner
Ren
First, we're getting the 'deflation' hit. Whereby, our assets of stocks, homes, investments and commodities are getting blasted due to the unleveraging of everything. Everybody is losing a great deal of 'paper' money.
Next, due to the vast printing of money (which in essence IS the definition of Inflation) prices of things that we need to survive (such as Energy, Food, Health costs) will go through the roof.
The 'double whammy' of course is losing half our net worth in step 1 (deleveraging 'deflation' period).
Then the second part of the 'double whammy' is most likely losing another 'half' of our value due to the fact that prices will escalate (at least double). We won't be able to invest and take advantage of this 'doubling' of things because we lost so much money in the first phase.
Doesn't look that promising from where I'm sitting and I consider myself to be an optimist!!
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Let's see, a trill. plus over there and the 700 bill. stock market bailout. I think the captain of this ship might not have had the average American's interest in mind. So the new president basically inherits a disaster. I suppose he couldn't do worse so equal to or better than is what we are looking at.
Oh yea, isn't what is "Good for GM good for America"? That was a crock from the start and spun out of the Eisenhower era military industrial complex mentality. Speaking of Eisenhower = Republican captained recession. Nixon = Republican captained recession. Reagan = deregulation and the devestation of the manufacturing base in this country with crushing inflation. Bush senior = Republican captained recession. Bush baby = Republican captained recession (or worse). Jeez, I sense a theme here...Maybe it's different if we go back in time; let's see the prior Republican was, uhhhhhh, Hoover. Boy was he a poster boy for disastrous Republican economic policy. Maybe Coolidge was better, after all that was the Roaring 20's? Oooops, there was the laisez faire treatment (or lack thereof) of big oil and, lookie, Teapot Dome & corruption of huge proportions. Don't think I can take any more examples.
Somehow this idea that Democrats are bad for the economy never seems to be borne out, so maybe some time for rethinking on that when one considers the alternatives. I think somewhat like some of the main posters on this thread that we should each begin by acting responsibly. Unfortunately that is only good morally, but I guess it is a start.Inflation is a danger, but we do have to start somewhere and it can be throttled down over time provided it does not get to high - we did survive the disaster of the early '80s. How to get there is the interesting part of the debate.
Well, just Love coins, period.
I understand. However there are 2 ways-IMHO-to work off excess. One is a dramatic reduction in a short time, the other is a slow reduction over a long time. I subscribe to the latter for this situation. Given the time value of money a 1% reduction over 20 years would acheive the same result as a 60% reduction over 2 years. The numbers may be off depending on a number of factors, but I think that illustrates my point.
Knowledge is the enemy of fear
<< <i>OK, this will get you guys steaming but the average American did BETTER during the Clinton years as it seems they left a few more crumbs on the table for the common man. Also, it seems being in Iraq has pretty much devestated the economy with no clear chance of doing anything there and very little has been done. I suspect the 10 bill./month figure is grossly low.
Let's see, a trill. plus over there and the 700 bill. stock market bailout. I think the captain of this ship might not have had the average American's interest in mind. So the new president basically inherits a disaster. I suppose he couldn't do worse so equal to or better than is what we are looking at.
Oh yea, isn't what is "Good for GM good for America"? That was a crock from the start and spun out of the Eisenhower era military industrial complex mentality. Speaking of Eisenhower = Republican captained recession. Nixon = Republican captained recession. Reagan = deregulation and the devestation of the manufacturing base in this country with crushing inflation. Bush senior = Republican captained recession. Bush baby = Republican captained recession (or worse). Jeez, I sense a theme here...Maybe it's different if we go back in time; let's see the prior Republican was, uhhhhhh, Hoover. Boy was he a poster boy for disastrous Republican economic policy. Maybe Coolidge was better, after all that was the Roaring 20's? Oooops, there was the laisez faire treatment (or lack thereof) of big oil and, lookie, Teapot Dome & corruption of huge proportions. Don't think I can take any more examples.
Somehow this idea that Democrats are bad for the economy never seems to be borne out, so maybe some time for rethinking on that when one considers the alternatives. I think somewhat like some of the main posters on this thread that we should each begin by acting responsibly. Unfortunately that is only good morally, but I guess it is a start.Inflation is a danger, but we do have to start somewhere and it can be throttled down over time provided it does not get to high - we did survive the disaster of the early '80s. How to get there is the interesting part of the debate. >>
for the sake of presidential succession you forgot to mention that it was James Earl Carter II, who was our president when we had to survive the disaster of the early 80's..if you pin that on Nixon, then I'm sure you will pin any problem in the next four years on GWB. Clinton signed revisons in the CRA which now, looked at with hindsight and Wall Street coruption is part to blame of the credit default. Wall Street has never really cared who is in the White House, it really doesn't matter, to "them"
I do however think that there is not a whale of a lot of difference when it comes down to it and that Obama will neither be the saint or the devil...
Well, just Love coins, period.
Originally written Sept 1999.
Knowledge is the enemy of fear
when I was at the dialysis center for those five months that I was on dialysis, I met a lot of people who used to have wonderful careers as technicians in the movie and TV industries, who were company executives, even a commodities trader -- and now they could not work because of how dialysis and kidney disease "wiped them out."
Myown sister, through no fault of her own, has had uncontrolled seizures since being a small child.
I'm also against the death penalty except in specific and limited cases.
I guess I was too harsh with my reaction to your post. Sorry.
www.AlanBestBuys.com
www.VegasBestBuys.com