June 8, 2009

Are you prepared for hyperinflation and dollar destruction?


If so, how?

If not, why not?

43 comments:

Andrew from Russia said...

No, but I believe I'm well prepared for YAHIS (Yet Another Hyperinflation Scare). The second I feel the atmosphere is ripe, I'll rush out to buy dollars.

Anonymous said...

have done a little, but not enough.

Randy said...

My plan is to begin printing my own.

Say an FBer puts his property up for sale for $10 trillion dollars (in todays money = $100k)

I print up a truck load of 100 dollar bills, back up to the seller’s garage and unload several shrink wrapped pallets.

No one will be checking for authenticity if 100 dollars only buys a newspaper.

I’ll print my way to success just like the big guys.



That said, I do beleive Andrew from Russia is correct, and not Peter Schiff.

Anonymous said...

it's all bs. not gonna happen tools.

Anonymous said...

That little girl is Nancy Pelosi playing with Tiny Tim and Helicopter Ben as Bo's great great grandfather sniff's their asses.

Great find Kieth!

RayNLA

Anonymous said...

Hyperinflation might happen. I don't fully understand the process that leads to hyperinflation I must admit. If it were simply a massive increase in money supply that spurred hyperinflation we already be there.

What we should be aware of is that hyperinflation or no hyperinflation we are being royally screwed by all of this MASSIVE government intervention.

Bernanke's massive quantitative easing (inflation) and all of the pre-Obama and post-Obama government programs have the most pernicious and difficult to measure effects on society. The only thing you can be certain of is that us and our children will end up much poorer as a result of it all.

But f*ck it. Nobody really seems to care. We've got Al Qaedas to worry about.

Is Idol on tonight?

-Gonzo

Anonymous said...

Nobody can be prepared for this. But, I've put in a vegetable garden, and am planning to pickle and preserve all excess this fall. I have physical silver. I have no debt. I have a year's supply of Ezekiel Mix for all members of my family living close by. I do have a few months worth of canned goods, but given the state of the church food pantry, I have had to give most of that away already. The Ezekiel Mix is a more cost effective solution. I have converted my library and sewing room into extra bedrooms in case I have to host members of my extended family. I am raising fish in barrels on my back porch to fill my freezer come fall. I have ordered a winter's worth of firewood to be delivered in July. I am thinking about buying a farm, but fear confiscatory taxes and forced selling at below cost to the government, as ration cards make their appearance. I think we'll see high inflation; but I'm not sure about hyperinflation, because there is no currency which I would consider a stable source of value.

Amtex said...

Nope, because in the end the US debt will always find buyers.....even this epic amount of debt. We still are, by far, the hardest working and most productive and biggest spending drones on the planet. They hate us, but they need us.

vanilla ice said...

Hyperinflation means getting one's self into as much debt as possible. Everyone should go out and buy houses and construction equipment and whatever else durable they can get their hands on.

"it's all bs. not gonna happen tools."

Probably correct. I predict we'll have very bad price inflation though, probably twice as bad as the worst of the 70's.

barney frankmee said...

I don't think it's going to happen; giant ag controls prices so it can fix prices. if we still depended on a million small farms and the fears of each farmer, I'd expect problems.

IMO, the big inflation will be health care costs (assisted care) /for the elderly.... but maybe that industry will be consolidated and the big players will create an affordable Wal-Mart alternative for the masses.

Anonymous said...

Riots, Death and Destruction anybody?

Is anybody really alive out there?

PUNISH THE GUILTY.

Begin with all friends of angelo like hypocrite Dodd.

First Glass Broken Syndrome...

wallstreetvet said...

A few ideas to throw out there:

1. Buy Sothebys (BID) As rich buy physical objects to beat inflation

2. Buy Commodities only on a pullback, its in process now

3. Inflation doesnt have to happen, just the perception of it. Think of the banking recovery

4. Inflation in things you buy, Deflation in the things you own

5. Anything with borrowed money, Deflation

Buy: TBT, BID, GLD, DBC, DBA, DJP, SLV

Crashproofed said...

Vanilla Ice Nailed it. Kieth, again we just had major inflation! Money needs to get thru the system via debt, wages, lending, expansion. Bizness, and consumer is dead. Only purchasing things of need. Stock market and real estate is another mini-bubble...albeit FAKE and FANTASY. Much of it driven by math and chasing risk based scenario models, NOT sound business practice.
Investors are not looking TOO the market, they are FOLLOWING the market. Which drains the economy of value and JOBS!

Anonymous said...

Hahahahahahahaha.

What a joke.

What currency will the dollar fall against Keith????

Which currency?????

Can you please tell us... Please please please please please please please.

How many times can I say please..

After you answer that, than I can continue my argument.

Dny
Dny

Out at the peak said...

I do have several tens of thousands of dollars in a spread of foreign currencies in case the dollar collapses in relative terms.

I also have a couple of tens of thousands invested in precious metal in case if dollar drops relative to "real money".

I have some long holdings in commodity stocks where they should scale with inflation.

I still feel like I'm not prepared. I feel poor now even though I still have the same amount of money that I looted at the peak of the housing bubble.

I believe we will not see intense inflation unless it is reflected in income. With high unemployment and companies halting raises, the consumer will not be able to afford higher prices.

If imports become more expensive, then there is a chance we can buy domestic made items.

This infusion of money so far has just replaced (not 100%) what the rich and companies lost at the peak. In a twisted way right now, we are just trying to sustain what life was like in 2005. Of course, it is not working, but I could imagine the world in a worse situation.

Anonymous said...

I'm suffering from paralysis by analysis. I don't have the balls to get rid of all my cash and buy real assets, so I'm ALL cash right now.

I listen to Schiff, and then I listen to Mish. Both seem to have valid points, but they are conflicting!

My best guess is that Mish is correctly calling for "no inflation" in the short term and that Schiff is also 100% correct about a future dollar collapse, but Schiff's armageddon will not occur for another 4+ years.

G Spot1 said...

I'm still trying to figure out how hyperinflation can happen when there is a massive amount of asset destruction still ongoing. Housing market has not bottomed yet and banks have hundreds of billions if not trillions in inflated assets on their balance sheets. To paraphrase Charlie Munger, neither the economists nor the market understand the economic consequences of bad accounting. At some point the losses will need to be realized, although I don't know when or how that will happen.

Public borrowing is up and fed is printing money but private borrowing is way down. Where is the increasing money supply coming from?

Frankly, I have no idea how this plays out but for all the strong arguments for hyperinflation, I see equally strong arguments for continued deflation. The fact that conventional wisdom is coming around to hyperinflation temps me to take the other side.

Anonymous said...

Here's what Denninger says:

10 Things You Must Do.

-Gonzo

Duarte said...

Explain to me how you believe the depression has been dodged if you also believe in pending hyperinflation. You don't measure the recession in stock market performance alone for specifically that reason. Is it because you believe people's debts will be monetized? I'm honestly curious here. The issue is the dollar versus various commodities and versus the currencies from other nations who are more production driven than the US. In my opinion, we should keep our eyes on Spain as a case in point.

Duarte said...

I don't know that America is going to just keep spending. HD resolution is high enough for me. 50 inch flat screens are big enough for me. I've seen the new iPhone 3Gs and i don't care. My 98 Corolla is still getting 28 mpg. My Quad Core PC is ripping fast. We cancelled our cable because we're just watching HULU and the kids are just watching dvds. I bought a nice, big swing set for the kids off of Craigslist for 50 bucks cash and carry. And i just renegotiated my rent down 10 percent on our 3000 square foot place. I'm going to spend very little this year. I'm not alone. (ps. i don't own a flat screen)

Sir Harold said...

I must say that this kind of talk has been happening all along

I had an old friend, he made 10MM a year, and he was a conspiracy expert and he was talking about this and that this and that, showed us black market video, dvd's with information on black helicopters, massive grave sites, underground prisons

then one day the FCC closed down his pager chain, put him on USA front cover story, he was never able to make money again, and that was 20 years ago ????

and guess what.........

WE ARE STILL HERE !!!!!!!

the dollar will continue to stay strong and as you talk and talk and talk the feds are finding out if you have anything of value and if you do and are in the top .1% of wealthy americans in the US the govt will ask themselves whY ? is this moron talking shit..........

and they will come down to your home and arrest you, put you in the papers, blogs, media in general....... and then at that point you will not have to worry about the state of the govt any more..........

Paul E. Math said...

I think we'll get high inflation but not sure it will actually be 'hyper'.

I don't think we can get hyperinflation without a dramatic increase in wealth and/or incomes.

We will be kept too poor for hyperinflation.

What we can get though is a devalued dollar as our trading partners become a little more self-sufficient and shut off our line of credit.

The price of commodities will rise as the usd falls and this will raise the price of consumer goods. But this will not increase the incomes or wealth of the average person.

In order for a loaf of bread to be worth a wheelbarrow of cash, everyone has to have a wheelbarrow of cash to bid for the loaf.

With high unemployment, workers won't have the power to extract higher incomes even if prices of imports are rising.

Anonymous said...

All that is being destroyed is the illusion of wealth. If you have invested in yourself or in things that people need you will be fine. If you have been living a fantasy you will be disappointed.

What is happening is that the idea that anybody can buffer wealth is dilluded. It doesn't matter if you buy gold or dollars or any other currency or stock or house. You will live in the now because that is all that is available to you.

DMP

Anonymous said...

Keith,

Mortgage rates are up to almost 6% again. This is gonna kick any little possible recovery right in the ass. No more 4%, expected to be over 7% by years end.

Anonymous said...

hyperinflation? jim cramer didn't say there will be hyperinflation down the road. he says it is great time to buy a house or stocks..............

anonymous said...

Anon said
'Riots, Death and Destruction anybody?'

Move to Europe

Or go see a Doctor

Anonymous said...

wow, just read this on the net:

"Britain elected its first extreme-right politician to the European Parliament, with the British National Party winning a seat in northern England's Yorkshire and the Humber district.

The far-right party, which does not accept nonwhites as members, was expected to possibly win further seats as more results in Britain were announced."


there is a political party in england that only admits whites?

wow.

December 2008

Anonymous said...

I tend to agree with previous posters. No across-the-board hyperinflation. But maybe steep inflation in certain areas, like healthcare - btw, which has been going on for a decade at least.

Well said by another poster, even though we are in debt (the US) it's the best debt to invest in.

Have you heard of "better the devil you know". That's the US of A!

As far as gold, another bubble. Been around the block on gold before.

consultant said...

I need to get a wheel barrow.

Anonymous said...

No! You guys are missing the forest for the trees. The banking elite worked very hard to create the global fiat currency system that is run by each country's respective central bank.

The fiat currency is their strength the more they loan the more interest flows to them. If they destroy their currency they destroy themselves and the system they so "hard: worked to set-up.

Having said that here is what will happen in my opinion:

1. Massive destruction of debt
2. Lower interest rates for the short term
3. Huge uptrend for the dollar relative to other currencies-other currencies will be depreciating faster than the dollar.

If we accept as a premise that the global financial environment is fixed, then you can probably agree with me on #3. Foregners will only by the FED debt backed by US taxpayers, only if they can make money on the currency. If the dollar goes down foreign investors(middle class buyers from other countries) surely will not want to buy debt that will result in a loss due to currency conversion.

The FED will make out of this. The money will flow to the international bankers that own the FED not you or me.


PS. If you borrowed money from your wife would you pay interest? Why do we Americans pay interest to "ourselves" therefore compounding our woes?

The fiat currency is the biggest world scam.Fiat currency enslaves people of all races around the globe. There only one answer, what might that be?

Dr. Huxtable said...

The housing bottom is behind us:

http://www.marketwatch.com/story/were-overlooking-signs-of-housing-comeback?link=kiosk

ROM said...

I'm thinking of getting a mortgage.

Tyrone said...

Keith,
Perhaps you could ask Kendra Todd to help with those questions.
She has recently Found God!

Cheers!

Stuck in So Pa said...

You gotta have WAGE inflation in order to have hyperinflation. Generic can of corn going from 3/$1 to 2/$1 in a year's time "ain't gonna do it!"

Now, when the credit cards get cut off, and the sheeple can't buy as much groceries as they used to because now they have to use CASH, then that 2/$1 can of corn comes back down to 3/$1, or else it rots on the shelf.

Mentioned this in another post. EVERYONE that I know is getting reduced hours, benefits cut, non-payed forced "vacations," full time down to part time. Hell, I read recently that the county is even laying off government workers (Oh, The Humanity!) Of course those are the salaried workers, county doesn't have the balls to hit up the unions to suffer some, YET!

Sorry Keith, BAD inflation, worse than the 70's, definitely!

Hyperinflation. Not without a major, wierd, unheard of before change in the nature of such things.

keith said...

Ruh-Roh:

Senior Chinese leaders have privately voiced fear over the soaring US budget deficit and are increasingly looking to diversify from the dollar, a Republican congressman said.

"We heard across the board -- in private -- substantial, continuing and rising concern," Representative Mark Kirk said after a trip to China that included talks with government officials and central bank chief Zhou Xiaochuan.

"It's clear that China would like to diversify from its dollar investments," the lawmaker said at the Center for Strategic and International Studies, a Washington think-tank.

http://tinyurl.com/lw4de8

eric in vegas said...

As others have said, no hyperinflation until the masses get their hands on the money. It WILL happen, the only question is how long will the government hold out before they get desperate enough to either nationalize banks and force lending or start sending monthly checks.

Paper currency will also be outlawed so we don't have pictures of people buying groceries with a trash bag full of money.

Dr. Huxtable said...

I remember just over a year ago when Keith and others predicted that Fannie and Freddie would collapse. This was debated by many. And now seems so clear in hindsight.

the other trader said...

Yes Keith,
This is the most important and pressing issue to the American people today. Get this one wrong, and preepare incorrectly, and a life long amount of work will be wiped out within months!!!!
While we honest, caring Americans have no real say in what monetary policies the Government takes, and they seem to be taking the easy, but totally wrong and most irresponsable road. Inflate, create, and confiscate!!!!

But Keith, it seems that your reader base here are pretty intelligent. It seems that most of them have a good hand on the probability of how this is going to play out.
We are seeing the deflationary aspects as Americans reign in their spending due to the credit squeeze. This will cause deflationary pressures, at first.
But....
As the money starts entering "the system", and it starts to trickle down to the people, we will see massive inflationary pressure, mostly on the things we really need, while the toys will lag in price appreciation compared to the staples we buy and need every day. Things like food and energy will start to explode, while prices for boats, jet skis and snowmabiles will fall off a cliff. But as the average American starts to realize that holding dollars is a folls play, they will drive the price of EVERYTHING up as they seek to buy ANYTHING instead of holding dollars.
Even if the FED can start to mop up excess money as it returns to this country, they will mess this up and inflation will rule the day.

Buy;
precious metals;
I-bonds;
TIPS;
Metal producer stocks;
and anything else you really want, just be sure you are getting it at a good price.

Happy shopping!!!

edd browne said...

Health care will become more expensive, and even
less available, as inflation and other crises emerge.
Some ways to be proactive:
-- Keep as much real health insurance as possibe.
-- Improve health (food; exercise; prevention; sleep)
(to be more insurable, job performance, learning
efficiency)
-- Get certified in fields that will be needed whatever.
(electrics/electronics; health/emt; info-tech; diesel repair; general repair; plumbing; physical/electronic security…)

Anonymous said...

What do you all think about buying TIPS through the ETF "TIPS?"

Worth it? Good idea?

the other trader said...

Anon asked about the ETF, "TIP", which is a tracking ETF.
Here is a link to a great ETF website.

http://tinyurl.com/2ksnra

Looks good as a fund, with an occasional distribution to boot!!!

Might be able to get in at a lower price within the next few months. Might be a good idea to buy some now, with a price target, or buy date, at a later time, if the lower price target is not met.

Good find there anon!!!

-the other trader

Paul E. Math said...

I think buying TIPS is the ultimate sucker's bet.

TIPS are based on the dishonest gauge of CPI which will understate real inflation.

So while you think you are safe from inflation with TIPS, you will never receive as much in return as real inflation - you are guaranteed to lose money in real terms.

If you believe in inflation and want to minimize your risk and don't want to research individual companies then buy DBA, GDX, DXO, PBW and other commodity based etfs.

Anonymous said...

Although debt is good in classic hyperinflation IF You get to keep your job, what I anticipate is hyperinflation/high inflation with respect to food and energy, deflation with respect to stuff, high taxation on fixed costs like food, property, water, etc, mandatory government rationing in order to keep a lid on the populace (which will destroy the farmers and health care system), and 25 percent unemployment. So my strategy is NO DEBT. I have a years supply of Ezekiel Mix. I have a job that is likely to stick around though nothing is certain. I have layers in the backyard, and a vegetable garden and plan to preserve this year. I plan to fill the freezer come fall. Mostly I am investing in my kids; I MAY buy homes for them to live in; I am THINKING about buying a farm, but the trouble is, I wouldn't have the time to farm it properly myself, and if I hired a farm couple to run it for me at the usual deal around here; a house and utilities plus $8.50 an hour, I couldn't do that AND pay government taxes for their healthcare and etc. So I'd have to have the kids do it; and right now one is way too young, and theother is definitely a city girl. A vegetable garden and layers in the back yard are about her max.