By Jim Long | PreppingandSurviving.Blogspot.Com | January 17, 2015
I was asked by a reader in an e-mail what exactly hyperinflation is. I am not going the conventional way on this question. I am going to explain it the way I understand it.
Inflation is an unseen tax. This tax is created every time congress approves bonds to bail out banks, to do quantitative easing etc. A bond is just what it says; It ties the taxpayer to paying for money printed now with future taxes. Bond is the root word of bondage. With more and more federal reserve notes chasing less and less product prices go up. Thus you are being taxed in this way.
I watch the USDX, http://quotes.ino.com/chart/?s=nybot_dx , It is a fast view of what, the markets, gold, oil and the dollar are doing. Although some of these can be artificially manipulated, I watch the value of the dollar closely.
At the point of this writing, the dollar is at 81.943 which is a pretty strong showing. The reason for this is that the Eurozone has been having the problems with Greece, Italy and Spain’s economies. France is struggling also. If you have two piles of garbage, you will be more attracted to the one that doesn’t smell as bad.
I would watch the value of the dollar closely. Since Greece voted to stay with the Euro, we will start seeing the Euro get stronger. Also, the dollar is being dropped in a lot of markets as the intermediary currency of exchange. In other words, they are trading directly using their own currency rather than in US dollars as has been done in the past. If the dollar drops below .72 we will see the hyperinflation.
Examples of hyperinflation can be taken from Argentina, where middle class families, with sizeable bank accounts, were forced to go through garbage cans for food due to bank holidays and closures. In Zimbabwe a bottle of beer cost 100 billion dollars at 5:00 PM in an hour and a half it cost 150 billion dollars. I can hear the groans and statements now; “That will never happen here, this is America !! ” Well folks, these two country’s currency systems were based on no reserve banking JUST LIKE OURS !! We have already taken a huge hit. When the bubble burst in 2008 the value of the dollar plummeted from 120 to about 73. We have only been able to regain back to 81.
If the dollar ceases to exist as the reserve currency, prices will at least double. I want you to think about that for a minute. At this writing diesel fuel is $3.73 a gallon US. ( yes, I do have a lot of readers in other countries ). Overnight I could be paying $7.46 a gallon.
In closing, I would advise you to keep expendable cash at home, in a well hidden place. Keep in the bank ONLY what you need to pay bills and keep your account open. When, not If, you see the dollar drop to 74, I would start putting my cash into usable tangibles. If it happens to go below 72, diversify all Federal Reserve Notes into the 5 “B”‘s and junk silver coins.
One word of thought…….You cannot eat silver.
“500000 Mark Altenburg 1923 front” by Altenburg – scanned NobbiP. Licensed under Public Domain via Wikimedia Commons –