Get ready people, hard times are coming. We are about to become just another banana Republic; a second world nation.
If you have any money left at all, and while it still has value, I would invest it in these things, and in the order that I list them. You will need: guns, ammo, water, food, clothing, survival equipment, gin or whiskey (for medicinal purposes), bars of gold (if you lose your guns you can hit someone over the head, and take their guns), silver (same use as gold).
Collect as much junk as possible, you'll need it to make stuff for yourself, because there'll be no more imports from China; the world will be in chaos, you will have to fend for yourself.
jbranstetter04
What Effect Will Hyperinflation Have?
By: Avery Goodman September 22, 2008
Hyperinflation is a devastating phenomenon. It wipes out the middle class by destroying the value of cash, savings, bonds and other paper instruments. But, how does it affect stock markets? With the Federal government just having added $5.2 trillion in Fannie/Freddie liabilities of which about $600 billion will likely default, the Federal Reserve having now polluted its balance sheet by some $700 billion worth of toxic mortgage bonds with a 41.6% default rate ($291 billion in likely defaults), an $85 billion bailout for AIG, and, now, the Administration asking for some $700 billion more to bail out financial firms, it seems clear that the winds of hyperinflation are upon us. What will be the comparative effect of hyperinflation upon index funds, like DIA, QQQ, and SPY, versus bonds and cash?
Hyperinflation is not a particularly uncommon episode in human history. It has occurred in the following countries in the following countries, in the last 150 years. Weimar Republic of Germany 1920 23 (1/466 billionth of starting value), Zimbabwe 2003 - Now (6 quadrillionth of the starting value and continuing to fall), Former Soviet Union 1993 2002 (1/14th of starting value), Argentina 1975 1983 (1/1,000th of starting value), Austria 1921 23 (about ΒΌ of starting value), Bolivia 1984 - 86 (1/1,000 of starting value); Bosnia-Herzegovina 1992 93 (1/100,000th of starting value), Brazil 1960 94 (1 trillionth of starting value), Chile 1971 73 (1/3rd of starting value), China 1947 55 (1/10,000th of starting value), Greece 1943 53 (1/50 trillionth of starting value), Hungary 1945 46 (100 quintillionth of the starting value), Hungary 1922 23 (1/4 of starting value), Israel 1976 86 (1/16th of starting value), Japan 1934 51 (1/362nd of starting value), Poland 1990 94 (1/10,000th of starting value), U.S.A. (Confederate States of America) 1861 65 (1/90th of starting value, and then, by the end of the Civil War, the Confederate Dollar depreciated to zero). It also happened in the ancient Roman Empire, when the silver and gold coinage of that day was progressively debased with base metals, in order to fund wars, giveaways to the Plebeians, and various other adventures. There are many additional examples that I have not bothered to cover here.
The most studied hyperinflation episode was the early 1920s, in the Weimar Republic of Germany. At the end of the First World War, the mark to dollar ratio was trading at 9:1. By July 1921 the ratio had risen to 77:1, and prices more than doubled again by January 1922, as the ratio of marks to the dollar climbed to 192:1. By the time that the Weimar government introduced the Rentenmark in November 1923, which replaced the deflated mark, the exchange rate had risen to 4.2 trillion marks to the dollar.
Germanys economic situation in the early 1920s, except for being a defeated combatant in World War I, is frighteningly similar to our own economic situation, today. We can trace the road to hyperinflation, step by step, and compare Germanys path to the path that is now being travelled by the U.S. Germany abandoned the gold standard in 1914. America abandoned the gold standard, 60 years later, in 1974. Back in 1914, the German government did not expect World War I to last very long, and the war wasnt properly budgeted, and, instead, it was financed by deficit spending. Similarly, in 2003, the Iraq War was not expected to last very long, and was financed by deficit spending. However, in comparison to the size of the German economy in 1914 and the U.S. economy in 2003, the Iraq War is a somewhat cheaper war.
After WWI, Germany suffered a severe current account deficit, just like the current account deficit we now have in the USA. About 1/3rd of their deficit was generated by the need to pay gold to European allied governments as war reparations. But, the rest
Link to the rest of the article: http://seekingalpha.com/article/96723-what-effect-will-hyperinflation-have
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