Deflation followed by hyperinflation?

[Wifezilla]

This is what some are predicting based on the fed printing money like it is going out of style.

"This is something that every American should be paying attention to and almost no one is. The printing presses at the treasury department, those are going 24/7. They are printing money at such a fast pace that they are literally running out of ink over there and this is the biggest infusion of money creation in the history of America, and I've got -- you know, my basic economic training tells me if you print that amount of money, it's got to cause inflation. And I don't know when that inflation is coming, whether it's going to be six months or a year or two, but, folks, it is coming."
http://www.glennbeck.com/content/articles/article/196/20467/

If this is correct (and I have reason to believe it is), it means that the time to stock up is NOW in preparation for eventual inflation.

Do you think this scenario is an eventuality? If so, what are you stocking up on?

 

[Wildsky]

I've been trying SO hard to stock up on food and such, but I never seem to get anywhere.
Or we'll have something else come up and end up eating all I've saved up.

 

[enjoy the ride]

Unlike the statement that the man makes, many people are concerned about it. The German situation after WWI is the scenario most mentioned- the stories about it taking a boat load of currency to by a loaf of bread. Mainly caused by the deliberate action of the German government to devalue their currency to pay off the enormous repairations that were imposed on them after they lost that war.

There are many diferences to that situation- people still trust the US enough to buy our currency, the purpose of printing more money by the US currently is to extend the full faith of the US government to cover the loses by the banks in otherword to uphold the money system, our infrastructure is not in bad shape as the post-war Germans was, we have a lot of assets yet to back the currancy.


It does seem to most people that you can't just make money without it devaluing the money so things end up costing more. But ever since the ending of the gold dtandard, that is what the government has been doing- they print what they want.

Who knows- it's a balancing act.

Just remember, that even the Germans did end up earning those boatloads of money- their pay went up as the value of the Mark decreased. Only people who relied on savings would be seriously depleted by inflations. So I can see savings being lost more than the downturn in the stock market but a house is worth a house whether that is $1 or $2 million. The relative value between work and what work buys does even out.

I am retired and would find that scenario really hard but people still working would be relatively OK. Which may not even happen. And it would make paying off that mortgage easier- that makes me think it really wouldn't go that way.

 

[VT-Chicklit]

Wifezilla, I believe you are correct. My grandmother talked about the Weimar Republic, and the hyperinflation there after WWI. We are of German decent, and she was only one generation from the "Old Country" She spoke about the wheel barrow of money needed to buy anything, even bread. My great grandmother, grandmother and great aunts would send things to the relatives there to try and help out, but things here were not so good for them so it was tough to do.

I pray that it doesnt get that bad here but I do believe that we are going to be in for some very bad times if our government does not stop spending like "drunken sailors." They are trying to pay for it with borrowed money or money that they are churning out faster than they spend it. They have no clue how to get the economy back on tract so in true Washington fashion they think dumping lots of taxpayer money at the problem will solve it.

These stimulous packages, bail outs and big new entitlement spending will compound the problem. Instead of letting small businesses create new jobs, they want to tax them more to pay for $500 checks for 95% of Americans. I dont know what others feel about this but I would rather not get a lousy $500 and have small businesses keep the money and create or maintain existing jobs. Jobs here are scarce and it would be nice if there were one available for me. I also dont think there should any more bail outs either. The 350 billion spent so far to bail out the banks has not solved the problem, nor has all the money given to big auto either. That money might as well have gone down the toilet. All these things will eventually help devalue the dollar.

Unfortunatly, Washington (read that as Republicans and Democrats in Congress)feel that we are their piggy bank and they dont seem to care if they brake that bank. My dad had a pithy saying and it goes something like this: "I hope you have a comfortable saddle because it is going to be a bumpy ride." The extra cushion that I am trying to pad my "saddle" with is food in the basement, a huge wood pile, bigger garden and clean credit cards. I wish we could have the house and truck paid off too but this inflation problem will hit before we can get those cleaned up.

 

[MorelCabin]

I too beleive that inflation is going to be a huge problem shortly, and have been doing what I can to prepare for the times ahead. Money isn't going to mean much soon, so we better have what we need to get through a couple of years. I'm not at all sure that we can do this...storage is our main problem...we don't have any place to be able to put a couple of years worth of food away. Small houses are excellent for SS in many ways but the storage capacity sucks!

 

[Dace]

Yep, I believe this is what is coming and have for a long time. Unfortunately I am not nearly as stocked up as I would like to be...but brace yourselves folks, it is gonna hit us hard!

 

[Wifezilla]

I've been trying SO hard to stock up on food and such, but I never seem to get anywhere.

I am making progress now that my 20 year-old is off to the army and not eating me out of house and home. Still have the 19 year old though, the hubby, and 3 cats...2 of which are my oldest son's

I dont know what others feel about this but I would rather not get a lousy $500 and have small businesses keep the money and create or maintain existing jobs.

I have a small business. Yes, I would rather not be taxed to death, thank you very much! We used to have 2 employees but let them go last year. Half of our business disappeared because those customers were realtors and mortgage people.

Only people who relied on savings would be seriously depleted by inflations.

Yes, they will be hit the hardest. That is why I think it is best to turn cash in to tangible goods during a time of DEFLATION.

 

[Beekissed]

I think this is why I've felt the urgency to get established in a small livestock operation now, when I have the money to invest, so that it can provide a tax free income that is renewable.

The sheep, chickens, bees, vegetables, fruit....I see all of it as investments towards a precarious future. I can choose to sell the proceeds/produce in an inflated market or choose to preserve these food sources for myself, as I see fit. Either way, it seems more wise than banking the money, with the current interest rates, in order to have more money to buy the food at an inflated price. Does that make sense?

This is also the reason I am exploring alternative sources of feed besides grains for these animals~something that I can produce or improve upon without additional expense of equipment or more land~hence the interest in a grass-fed diet for livestock.

In my own very small way, I've been preparing myself to weather some tough financial times ahead....as we all have, I'm sure!

 

[DrakeMaiden]

We have been trying to prepare for hyperinflation for a while now . . . having read rumors of this years ago. Probably the best thing we have done is put most of our assets into a modest home, a little acreage, and our garden, orchard, and livestock. That is probably the safest investment we have made, and I don't regret it.

It seems like stocking up on food staples can be frustrating. Not only does it take up storage space, but it also seems like we go through it at such a rate that I can't imagine trying to stock for more than 6 months at a time.

I agree about investing in tangible assets, but to some degree it is also wise to have the liquidity of cash on hand. Should one's circumstances change, cash would be easiest to mobilize. I don't know what the perfect answer is, except maybe not to have all of one's eggs in one basket.

 

[enjoy the ride]

Actually if there is a bout of inflation, which is part of the normal thing that happens, it usually does not seriuosly effect people who are working for their income as much a people who rely on savings.
In the periods of inflation that I have lived through, things got more expensive, people got paid more, things got more expensive, etc until something happened to push it to stablization.

Just difficulties adjusting, never any serious catastrophes. You got you car repaired rather than a new one, you remodeled the house rather than bought a bigger one, people moved to where new jobs were created, some places suffered when people left them. Gardens and sewing increased in popularity. Etc Etc

Even now though, people who are retired and get social security, get regular cost of living increases which was not true in the last serious round of inflation.

Inflation is not a death sentence, deflation is not a death sentence- even civil unrest is not a death sentence. War is.

Preparing for what you think may happen- like buy a big ticket item you NEED now if you think inflation will hit is reasonable if you can or not buying it now if you think deflation will be a problem. Right now there are competing pressures as to what will happen. A good time to buy a house if you have the money, a bad time to sell one if you bought it at the peak.

SS people will keep going just like they are right now. Being careful, taking care of what they can themselves, planning for the future.

People who are planning to live on the savings for retirement might have some thinking to do.