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13 Ways to Prepare for Hyperinflation

October 22, 2010 by The Survival Mom 37 Comments

A mom could get whiplash trying to keep track of the widely differing opinions of financial experts.  Many claim that America is headed toward deflation, others claim a deflationary depression is on its’ way, and yet many voices are crying, “Get ready for hyperinflation!”  Hyperinflation is particularly dangerous for families because the prices of necessary goods (think fuel, energy, and food) will skyrocket, leaving little money, if any, for anything else.

image by Andrew Turner

Most experts go into great detail explaining why hyperinflation may be on its way, and there is plenty of blame to spread around, but as a mom, my primary concern is how to prepare for this nightmare if, indeed, it becomes a reality.  Here are some common sense steps that will help you and your family be in a more stable position

1. Pay off any debt that has an adjustable interest rate as quickly and as soon as possible.  Unsecured credit card debt, in particular, is vulnerable to increased interest rates that would demand more and more of a family’s income, already strapped to cover the most basic necessities.
2. While interest rates are at historic lows, investigate the possibility of refinancing your mortgage.  If your mortgage rate is already low, and fixed, focus debt repayment on anything that has an adjustable rate.
3. Consider ways to decrease your transportation expenses.  Should gasoline prices soar out of control, you may be very happy for a job that is within walking or biking distance.  Can you sell that second or third vehicle and pocket the savings in gas, upkeep and insurance?  Be strategic and purposeful in deciding which vehicles to keep, sell, and/or purchase.
4. Never buy new if you can help it.  Craigslist, eBay, Freecycle, resale shops, and garage sales offer nearly everything you’ll ever need.  Refuse to pay retail and use the savings elsewhere.
5. Have a back-up plan for every major appliance in your home.  If electricity prices become outrageous, do you have everything necessary for drying clothes on a clothesline, washing clothes by hand, and an old fashioned dish-drainer or two?
6. Visit local coin shops and become educated about purchasing gold and silver.  It’s easy to make poor decisions in a panic, and this is no time to lose money making investments in the unknown.  As the dollar loses its value, precious metals increase in value.  Ferfal of Surviving Argentina says, “Not a day goes by when Argentinians who had money in the bank before the collapse don’t wish they had bought gold.”
7. Continue stocking up on food and household supplies.  When prices increase, this will give you a much-needed cushion of time.  The price of food always increases during hyperinflation.
8. If restaurant meals are part of your routine, cutting back is one of the easiest steps you can take to save money and learn how to make more meals from scratch.  That will be especially important if you ever need to rely on your stored food.
   

   image by One-Fat-Man

9. Have a passport for every member of your family, just in case.  This isn’t paranoia, just a precaution if you ever need to leave the country.  Hyperinflation will affect government operations, and this is one document you can’t easily get from a local source.
10. Discover new ways for your family to earn money.  I’ve written about this before here, here, and here, but every member of the family should have a way of earning a little extra money.  A side business that involves everyone is even better.
11. Consider how you might establish sustainable sources of food and water.  This will involve gardening, planting fruit-bearing trees, and perhaps even purchasing land with a natural source of water.  There is no survival without food and water, so these should be a top priority.
12. Beef up your home’s security and your own personal security.  Empty store shelves, scarce resources, and overwhelmed law enforcement are common in countries where hyperinflation is a fact of life.  Proactive steps in this area just make sense.
13. Stay positive.  The future is unknown, but what is known is the importance of family, friends, and a positive mental attitude.  Survival experts say this is the key to surviving difficult circumstances.  You might as well start practicing now!

    I can remember like it was yesterday.

    Eight years ago, my wife and I survived a direct hit from Hurricane Isabelle — a Category 5 hurricane that was the costliest in Virginia’s history. It sustained winds of 165 mph and left 1.8 million people without power. We didn’t know if our house was going to survive the night, nor did we know if our nerves were going to survive the howling winds and rattling windows.

    Just when I thought it couldn’t get worse, the next morning I found myself at a gas station in a long line waiting to buy ice. People were running around grabbing anything and everything they could get their hands on. It was complete chaos. We needed ice to keep our food in our fridge from thawing because that’s all we had. The thought of running out of food, fighting the mobs to survive, no electricity, no transportation and no water stabbed me in the heart.

    We were not prepared. I promised myself that I would never be caught unprepared again.

    We knew the hurricane was coming. The signs were obvious, but we were caught unprepared and suffered the consequences. The U.S. is now in the path of an even more destructive force than a hurricane — hyperinflation. The signs are everywhere and the effects are even more deadly than a Category 5 hurricane.

    Hyperinflation happens when prices shoot through the roof. It’s like squeezing the last 80-year period of 3 percent annual inflation into just a few months. Prices skyrocket and uncertainty in the future worth of the currency causes people to panic, leaving in its wake a collapsed currency, bankruptcy for almost everyone, a lifetime of savings wiped out.

    So what are the causes of hyperinflation, can it really happen, and how can you prepare your family?

    One of the root causes of hyperinflation is the rapid expansion of the money supply. The government doubled the money supply overnight by simply printing money out of thin air, taking us from $800 billion in mid-2008 to $1.7 trillion by December 2008. And now in 2011 we’re at $2.5 trillion. Inflation usually lags monetary increases by about two to three years. We are sitting right at 2.5 years from the doubling of the money supply.

    There have been 30 cases of hyperinflation in the last 100 years — In Germany’s Weimar Republic in the early 1920s and most recently in the Zimbabwe in 2008. A lifetime of saving was wiped out overnight. That’s why it’s so important to have food storage.

    Many economists predict hyperinflation by 2015, and some say as early as 2012. It’s unpredictable, but everyone agrees it’s inevitable. Increased inflation is already showing its ugly head in commodity prices with a 46-percent increase in the average commodity price in 2010.

    Just as there are five stages to a hurricane, there are five stages that a country goes through before hitting hyperinflation.

    1. The Gold Standard

    The government starts out using fiat money (paper money) that is backed by gold.

    2. Social programs increase; military spending soars

    As a country develops economically and socially, it begins to take on more and more economic burdens adding layer upon layer of public works projects and social programs, like food stamps. Currently in the United States, 44 million people are on food stamps. When Medicare was created, the projected annual cost was only $40 billion a year; now it costs more than $400 billion a year.

    The military starts to expand and exercise its influence in the world. Then spending dramatically increases to fund wars (WWI, WWII, Cold War, Korean, Vietnam, Desert Storm, war on terrorism). The U.S. spends twice as much on military than every other country combined.

    3. Gold Standard abolished

    In order to fund military spending and social programs, President Nixon took the U.S. off the Gold Standard in 1971 so the government could print money.

    4. Steady inflation

    This has occurred since the creation of the Federal Reserve in 1913. However, the expansion of the currency supply by the printing of money to fund military, social programs and deficit spending starts to be felt by the population as severe consumer price inflation triggering a loss of faith in the currency.

    5. Hyperinflation

    The final stage is a massive movement out of the currency into precious metals and commodities and other tangible assets and the currency collapses.

    The U.S. is sitting right between stages four and five, but there are sign everywhere that we are approaching stage five quickly. What are those signs? Consider the following:

    Government printing money — In 2008 and 2009 the money supply doubled because the government printed $1.6 trillion (and we pay 6 percent interest to the Federal Reserve on all printed money). In June 2009, The Wall Street Journal reported, Get ready for inflation and higher interest rates. The unprecedented expansion of the money supply could make the '70s look benign.

    The '70s saw 14 percent inflation and 20 percent interest rates.

    Deficit spending — The U.S. currently holds more than $14 trillion in debt and an annual $4.3 trillion budget deficit. Combine this with the unfunded liabilities of Medicare, Social Security and Medicaid, total U.S. debt obligations total $76 trillion, which is five times greater than Gross Domestic Product. In February, the U.S. had a $228 billion budget deficit, which was more in that one month than the entire budget deficit of 2007.

    Reaching the tipping point — Every paper currency in the world has collapsed when government spending reaches the tipping point. Thats when the government borrows 40 percent to fund spending. The U.S. is now at 41 percent.

    Major suppliers announce price increases — Colgate-Palmolive, Proctor & Gamble, General Mills, Kellogg, and Supervalu say they're feeling the crunch of higher ingredient costs and are raising prices in 2011 to cope — upwards of 15 percent.

    Wal-Mart announced in March they would increase prices to cope with higher costs. Major providers of food storage commodities have already increased prices by an average 25 percent.

    China — In March China announced that by the end of 2011 it will no longer transaction international trade in U.S. dollars, thereby competing against the dollar as the worlds reserve currency. This drives down the value of the dollar.

    The U.S. passed peak consumer spending in 2010 — In 1990, Japans deflationary lost decade was caused by Japan passing peak consumer spending. Age 48 is the year in which consumers peak in spending and the last baby boomer just turned 48 in 2010. The U.S. government is printing money (called Quantitative Easing) to prevent another 1930s Great Depression and to avoid a prolonged deflationary period like Japan, but printing money has severe hyperinflationary effects.

    How can hyperinflation affect your family?

    Food could be so expensive that you cant buy it or have to sacrifice other things to afford it (it will be too late to build up food storage).

    Everything could become expensive, especially the price of anything made outside the U.S.

    More businesses could fail. Surviving stores would likely sell fewer items, a smaller selection, and only the cheapest quality.

    Riots could occur over food prices, energy shortages and unemployment.

    Interest rates could skyrocket.

    Cash savings could lose all of its value.

    What do you need to do now to prepare?

    First and foremost, obtain a three-month supply of food you eat regularly. Whenever a disaster hits you go through added stress and shock. The last thing you want to do is eat what you wouldnt normally eat because it shocks your body.

    Store two weeks of drinking water for each family member. A 55-gallon barrel of water is about the minimum for 2 people.

    Have emergency money. Have some of your savings in the form of precious metals and tangible assets, not entirely in U.S. dollars.

    Store one year's worth of long-term food (i.e. grains, legumes).

    Be self-reliant in every way possible and be prepared to live simply.

    Grow your own garden.

    Get out of debt, especially consumer debt, as soon as possible.

    Be ready to barter using canned food and other necessities as currency.

    Rely on what you already have stored and what we can grow.

    Be prepared to stay at home and protect yourself.

    Hyperinflation is a super fast rise in the price of everything. One of the main causes is government spending, heavily funded by printing money and borrowing, which essentially causes the currency to collapse. Hyperinflation is also caused by a dramatic decrease in international demand for that currency, such as from Chinas announcement that by the end of this year, it will no longer trade internationally using the U.S. dollar.

    But will it really happen? Its not a matter of if; its a matter of when.

    Alan Greenspan, former Fed chairman, said that by 2012 inflation will become our next greatest challenge. Many foreign investors believe that the value of the U.S. dollar will dramatically fall in the next one to five years, causing prices to rise. Weve already seen an average 46 percent increase in commodity prices in 2010 alone. We are already experiencing the beginning of hyperinflation.

    In his book Priceless, author Dave Ramsey said, An ounce of preparation outweighs a pound of regret.

    Aaren Humpherys graduated from Brigham Young University in 2001, is a CPA, emergency preparedness expert and father of three. Contact him at alhumpherys@gmail.com or visit www.colonypointe.org

How to Prepare for Hyperinflation

If you understand hyperinflation and think your country is at risk, how should you prepare?

Bug-Out

If it is just the country you are in,  leaving that country and going somewhere else is a reasonable strategy.   However, I think that we could see all the reserve currencies get hyperinflation, the Yen, Euro, Pound, and the Dollar.  Since the reserve currencies are the backing for the other currencies, if they go, then all paper money is in trouble.  If a government had a balanced budget, the currency could just go down till it gets to where the total value of the currency is equal to the total value of the gold a central bank has.   However, since governments run deficits, we should expect continued money printing and continued deval‎uation.   There may not be anyplace that is immune from hyperinflation this time.  In past hyperinflations, Bug-Out was a reasonable strategy, but it may not work this time.

Security

Hyperinflation is not usually a Mad Max situation, but there usually is some increase in crime. So guns and general home security are more important.   There are books and websites on this topic. There are many things you can do to improve home security.  Good fences and gates, dogs, solid doors and windows, window bars, cameras, lights, alarms, etc.   If hyperinflation becomes world wide, the security problem could be much worse than in a normal hyperinflation.

Supplies of Food etc.

Governments usually put on price controls and make shortages of all sorts of things.  It is simple micro-economics.  If you have an artificial government legislated price, the supply does not equal demand.  Because of this, having some stuff stored up ahead of time can make a huge different.  Food and water are good things to have.   Life is better with toilette paper, laundry soap, etc.  Today you can probably afford to buy a "one year supply of food" and, if there is hyperinflation, it could be a lifesaver.   It is easy now to buy a big tank, fill it with water, and put in a bit of bleach so it can last a long time.  In the future, just getting water could be hard.

If your currency is dropping fast, then you are better off buying extra canned goods than holding the currency.  Eventually you will eat the food and by that time it would cost far more.    After years of hyperinflation in Argentina, people built far larger pantries.  It is good to be able to store a bunch of canned goods at home during hyperinflation.  It is better than money in the bank.

Farming

Under government price controls, farmers can often not sell their food for enough to buy supplies for the next crop.   It is often better for them and their family to just keep what food they grow, or only do direct trades for other food, labor, needed equipment, fuel,  gold, etc.   However, when the farmers don't bring their food to town to sell at artificially low prices, often the government, or the public and some police, will come and take the food.   The real problem is the worthless money and price controls, but the government can easily redirect public anger toward the farmers.   After the government passes a new law against "hording", it is easy to get people angry that while there is a shortage of food a farmer is "illegally hording food".  Note that there are no laws against hording before price controls mess things up.

Gold and Silver

Over time a hyperinflating currency is accepted less and less.  Gold and silver hold their value and are accepted more and more over time.   There is probably someone who would trade them for the local currency if you need local currency.   If there is hyperinflation, by the time you trade in your gold you will get far more local currency than if you had just saved some currency instead of gold.

Some people think things will be so bad that nobody would give up their food for gold that you can't eat.  This is not correct.  Trade still goes on, even if it has to be black market.  In a French hyperinflation people kept trading for gold even when the penalty was losing your head.  There will always be people who have more than enough of one thing and not enough of something else.  Imagine one person grows potatoes and someone else who raises chickens, they both could be interested in trading.  They may trade directly with each other or for gold and use gold to buy the other.

Bitcoin for Internet Purchases or Store of Value

Governments put on capital controls so money can no longer flow freely in and out of a country.   They also put on official government exchange rates, which you won't be able to get in the direction you want.   Because of this your credit card that used to be able to order anything on the Internet will no longer be able to buy things.  A nice way around this problem is to use Bitcoin.   You can use Bitcoin to buy things on the Internet even when their are capital controls stopping the normal methods for International payments.  You could have to pay substantial taxes to get your order through customs, but they seem to usually allow things in or nobody will be ordering anything.

As with gold and silver, where there is hyperinflation, there will probably be someone not too far away that is trading bitcoins to/from the local currency, even if it is against the law.  So getting some Bitcoin ahead of time, or during the hyperinflation, could work well both for Internet purchases and as a store of value that you can convert back to local currency as needed.

Investment Options

If hyperinflation comes, bonds are the worst thing to hold.  To get the present value of the bond, the future value is discounted by the projected inflation rate over the time till maturity.  If there is high inflation and many years, the bond can be discounted to almost nothing.  If in the first 6 months the currency is down 25%, a 20 year bond could be down by more than a factor of 1,000.

Cash is not good to hold as it is dropping, though not nearly as fast as long term bonds.  Governments may freeze bank accounts, so money in bank accounts could end up trapped for many months and worth far less by the time it can be taken out.

Stocks are not safe because governments usually make life very hard for companies, with price controls and other laws.  If all your costs are going up fast and the price you can sell at is fixed by law, your company will be in trouble.   Many companies will go under.

Rental properties are particularly bad during hyperinflation.  The government rent controls keep rents fixed.  At the same time the costs for running the property are going up fast.  People view the landlord as rich and so he gets little sympathy for his problem of costs going up faster than income.  It is not good to be a landlord during hyperinflation and rental properties can sell for crazy low real prices.

If it is just one country, then selling everything you own in that country and investing in another country is a good strategy, like leaving.  However, it may not be limited to one country this time.

If you can borrow at a really low fixed interest rate for a long period and buy some real estate, this could be a good move.  After hyperinflation destroys the value of money, you pay off the balance of the debt with worthless money.   You need to be sure you can keep the payments up till hyperinflation hits.    It does not seem possible to tell exactly when it will hit, so you need to be able to do this for some time.

Gold and silver have held their value for thousands of years and it is a safe bet they will continue to do so.

Backup Transportation

If there is hyperinflation and price controls, you may not be able to buy gas sometimes.   A sturdy bicycle with some big baskets could be very handy.

Solar Electricity

Utility electricity usually keeps working, most of the time.   This time may be worse.  Having solar to be able to run a fridge, lights, computers, or charge an electric scooter, electric car, or cellphone, could be very useful.  

Ocean Going Solar Home

If I had the money, I would make a solar/electric ocean safe house. With a  watermaker and food storage you could be fine for a long time no matter what happened anywhere

Getting Ready for Hyperinflation

by Survivalist Blog --> --> on April 26, 2013

What is Hyperinflation?

Historically, hyperinflation is often associated with wars, their aftermath, sociopolitical upheavals, or other crises that make it difficult for the government to tax and govern the population. But those are just the symptoms.

Hyperinflation is a man-made disaster arising out of the collapse of the currency, and preparing for it is no different than preparing for a hurricane or tsunami. You may get a little bit of a warning, but you need to act quickly. This article covers the financial preparations that, if made before the disaster strikes, will provide you with additional layers of protection. 

Leading up to the adjustments you need to make in your investment portfolio, there are a number of personal finance and resource allocation measures that should be considered as a way to “�œhunker down”� during the worst part of the storm. Some of these measures are just as appropriate for preparing for any natural disaster, so they will serve you well in any event.

Get Your House in Order

A hyper-inflationary environment will be chaotic at best and disastrous at worst. You can expect the walls of society and even the rule of law to come crumbling down. The good news is that, historically, hyper-inflationary episodes only last a few years and as society rebuilds and a new currency is introduced, a new, but more stable normal will emerge. The better prepared you are before the onset of hyperinflation, the better off you will be during and following the calamity. 

Simplify your finances: Coming off of the financial crisis and Great Recession, many people have already made severe adjustments to their lifestyle and their finances. In your preparation for hyperinflation, you may want to go more extreme by cutting your expenses to the bone by reducing your debt and lessening your reliance on utilities and fuel. Your objective is to use your excess cash flow to invest in hyper-inflationary hedges, such as gold and foreign currencies.

Eliminate adjustable rate debt: During hyperinflation, interest rates will skyrocket, and along with it the rates on any variable loans or credit cards. Get rid of it now.

Increase your self-sufficiency: You can expect severe food and energy shortages during hyperinflation, so now is the time to increase your self-sufficiency. Stock pile food, water, fuel, medical, and home supplies. Reduce your reliance on electricity by investing in solar powered appliances, manual washers, solar lighting and solar cookers. 

Fortify your defenses: With a house full of food and supplies, you will become a target for hungry crowds, maybe even your neighbors. If you plan on staying in place, you will need to batten down the hatches and arm yourselves. 

Map out an investment strategy now:�“ By the time the hyper-inflationary storm can be seen on the horizon, it may be too late to make some of the critical investment decisions needed to protect your wealth.

Now is the time to map out your investment strategy that should include specific  hedges against hyperinflation, such as gold and silver accumulation, investments in agriculture such as farmland or agricultural companies, and reduce your exposure to US dollar denominated assets. The good news is that there isn’�™t any reason why these investments shouldn’�™t perform well leading up to a hyper-inflationary episode.

Know Your Objective

In normal, growing economies, most people invest for asset growth or income. As the economy ebbs and flows, investors will adjust their portfolios as necessary to counter the changing risks.

For instance, with the recent advance of inflation, the adjustments have included increasing weightings in hard assets and reducing them in bonds, but the investment strategy still remains linked to a long-term objective.

Based on previous episodes of hyperinflation, investors may have no choice but to switch their primary objective altogether to that of wealth preservation consisting of less conventional strategies and methods. Expectations for asset growth or investment income may be unrealistic in the face of a massive and volatile shift in asset values; at least until the hyperinflation cycle has run its course.

Stay Diversified To Avoid Hyperinflation

Diversification has always been the primary way to mitigate risk over a long-term time horizon. Achieving a proper balance of different asset classes prevents the risks associated with any one class from adversely impacting the overall portfolio.

Normally, various asset classes perform differently than one another during changes in the business cycle, so it is important to choose a variety of asset classes that don’�™t correlate with one another. For instance, when stocks increase in price, bonds tend to decrease. But because it’�™s nearly impossible to predict price movements, it is always advisable to have your money invested in both.

Although gold can be expected to perform well in inflationary cycles, it could become very volatile in a hyper-inflationary spiral, especially in the heat of speculation which will drive price movements for awhile. By diversifying into other commodities and foreign currencies, a portfolio could achieve a greater level of stability.

Continue Tutorial Below

1. Reduce your exposure to the affected nation's currency. During a period of hyperinflation in Hungary in the mid-1940s, the highest-denomination note went from 1,000 Pengo to 10 million in one year. Despite the immense increase in face value, the currency actually lost a corresponding amount of its value during that time frame. When a period of hyperinflation looms, savvy investors move their assets to a stable foreign currency before their own notes rapidly depreciate.
   
   
   

Buy precious metals. Hard assets provide safe havens against inflation and can soar in value during periods of hyperinflation. Gold, in particular, performed well during periods of high inflation in the United States. During the 5 years with the highest inflation rates since 1946, the average return on U.S. stocks dropped by more than 12 percent. Over those same 5 years, gold's return was more than 130 percent. During a period of hyperinflation, this disparity?-and the value of gold--can grow geometrically. Silver also has anti-hyperinflation strengths similar to gold's, but because it trades much lower than gold, it has a higher upside potential.

1. 

   Invest in other hard assets. Owning other items with intrinsic value, chiefly commodities like oil and natural gas, can help you prepare for hyperinflation. Generally, as stock markets in hyperinflation-affected nations fall, commodity prices go higher. Real estate also offers a defense against hyperinflation. If you hold a fixed-rate mortgage, you'll pay the same amount each month, whether it's the first year of your mortgage or the 25th. During a period of hyperinflation, it's conceivable that you could pay off the entire balance of your mortgage at once because the currency is over-inflated, but your balance remains constant.
   
   
   

Increase your debt exposure. This sounds counter-intuitive, but it is an extension of the real-estate hedge. As a currency depreciates under the weight of a hyperinflation scenario, assets and debts are affected equally. For example, if you start with $100,000 and hyperinflation sets in at an annual rate of 50 percent, you only have $50,000 worth of buying power a year later. If you also had $100,000 in fixed-interest credit-card debt during the same timeframe, the real value of that debt declines at the same rate. As a result, your net worth suffers no inflation-adjusted loss. Credit-card debt--long viewed as a financial negative-?can help shelter your wealth from the deleterious effects of hyperinflation.


== Tips ==

• Buy gold and silver in small, tradable denominations. They provide more flexibility when buying goods and services during hyperinflation.
  

Warren Buffett Is Preparing For Hyperinflation...Are YOU?

Published on 05/07/15

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You may not have noticed, but Warren Buffett is preparing for hyperinflation. You see, when it comes to these investment legends it's always best to watch what they do instead of just listening to what they say.

In fact, investor Dan Loeb recently said about Warren Buffet:

'I love reading Warren Buffett's letters. And I love contrasting his words with his actions. [..] I love how he criticizes hedge funds, yet he really had the first hedge fund. He criticizes activist investors, yet he was the first activist'

Loeb is right - forget what these billionaire investors say...focus on what they do...

And what has Buffett been doing the last couple of years?

Apparently, preparing for hyperinflation...

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This Is How Warren Buffett Is Preparing For Hyperinflation

As you know the best way to protect yourself against inflation is to invest in hard assets. We all know what to do under inflationary pressures. But for most people it's very hard to anticipate whether or not inflation or hyperinflation is even a possibility. 

I've personally read or have heard many economists debate the issue. You may agree or disagree with them more or less passionately, but what you cannot afford to ignore is what smart investors such as Warren Buffett are doing.

Here's what Buffett's been doing - evidence he's getting ready for high rates of inflation. Let me go through the evidence first:

Exhibit #1: Buffett bought major transportation assets in 2009 - the Burlington Northern Santa Fe railroad. It consists of hard assets in the form of rights of way, adjacent mining rights, rail and rolling stock. It makes money by moving hard assets such as ore and grains.  

Exhibit #2: Then, Buffett purchased huge oil and natural gas assets in Canada - Suncor. In February, the investor sold positions in Exxon Mobile to up his stake in Suncor. Buffett has no issues with oil per se - he's just allocating his assets more effectively. 

Exhibit #3: Then, Buffett purchased large offshore assets in China and other places to produce non-dollar profits that can be retained offshore tax-free.

Exhibit #4: He also owns financial stocks, particularly in banks and insurance companies. These companies are highly leveraged borrowers. These debts will be wiped out by inflation in due time.

We've seen the evidence. Now let's connect the dots:

Buffett can now move his Suncor oil in his Burlington Northern Railroad, while generating non-U.S. dollar denominated profits and keeping them abroad tax free at the same time that his Financial investments see their debts disappear thanks to high rates of inflation.

After everything is said and done, Buffett will be in a wonderful position to buy out bankrupt competitors while his assets explode in value and his debts are eliminated.

His is a hyperinflation-proof portfolio. If it works for Warren, it'll work for you too.

Invest in hard assets - precious metals, rental real estate, collectibles, etc - and keep some of your money abroad. Warren Buffet is preparing for hyperinflation and you should too

Global Catastrophe Imminent: “Asteroids, Robots and Engineered Viruses Will Kill Millions”

Mac Slavo May 13th, 2016 SHTFplan.com Comments (58) Read by 7,466 people

102   24   157

There is yet more confirmation that near-certain doom is headed for planet earth, and could kill or disrupt the lives of everyone on the planet.

And there’s reason to think it could be in our lifetimes.

A study commissioned by Oxford University identified possibly-imminent catastrophe from asteroids, AI, volcanoes, nukes/EMP or manufactured/weaponized disease sweeping the planet.

And yet we’re the conspiracy theorists…

According to the Daily Mail/Press Association:

In the next five years asteroids, super volcanic eruptions and unknown risks are ranked as the biggest threat to humanity.[…]

It may sound like the stuff of sci-fi films, but experts said these apocalyptic threats are more likely than many realise…

[…]

In the longer term, the rise of artificial intelligence (AI) has been listed alongside catastrophic climate change, nuclear war and pandemics as a threat to humanity.

The biggest long term threat to civilization is natural and engineered pandemics and nuclear war […] the rise of synthetic biology could open the door to the creation of “off the shelf” deadly viruses.

The report, which focuses on global approaches to address these looming dangers, and a worldwide integration of efforts, reminds us that we are all too mortal, and that devastating pandemics have indeed occurred throughout history:

It warns that while most generations never experience a catastrophe, they are far from fanciful, as the bouts of plague and the 1918 Spanish flu that wiped out millions illustrated.

There is no way of knowing what kind disaster could befall the planet, but it is important to prepare for the worst at a personal and local level. Chances are, you’ll be far more effective that way.

Despite the focus on global talk, there is little chance that a bigger and bigger governing structure could protect us all, or come to the rescue when you need it most.

When seconds count, police are minutes away, and the federal/international authorities are days or weeks away. They are only there to clean up the mess when it’s over and seize power.

Indeed, it seems that civilization is all-too-vulnerable, and millions of lives hang in the balance. Don’t be complacent, don’t rely on big cities and trust only those who you know and can rely upon.

Read more:

The Prepper’s Blueprint: Your Step-by-Step Guide to Prepare for Any Disaster

The Shaking Continues: “There is Great Reason For Concern” Over Recent Earthquakes and Volcanic Eruptions

“Looming Catastrophe from Diseased Rates”: Billionaire Icahn Warns of Danger Ahead

Surviving The Unthinkable – Being Prepared For What Is Coming Will Be The Difference Between Living And Dying

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By Eric Panneflek

Dear PGM Capital Blog readers,

In this weekend blog article we want to discuss with you the investment strategies of some world class investment gurus that might indicate that they are preparing themselves for a coming hyperinflation cycle.

DEFINITION INVESTMENT GURU:
An Investing Guru is someone who is considered an experts in their professional field of trade and Investing.

Only a handful of people in this world can qualify as investment Gurus. We have carefully identified a number of investment Gurus based on their long-term track record.

To qualify for our Guru Hall of Fame, an investor needs to meet at least three criteria:

1. Long-term outstanding performance;
2. More than US$1 billion under management;
3. Low portfolio turnover.

Some of world's well known investment gurus are: George Soros, Carl Icahn, John Paulson, Marc Faber, Jim Rodgers and the legendary Warren Buffett.

HYPERINFLATION:
In economics, hyperinflation occurs when a country experiences very high and usually accelerating rates of inflation, rapidly eroding the real value of the local currency, and causing the population to minimize their holdings of the local money.

There are a number of theories on the causes of high and/or hyper inflation. But nearly all hyperinflations have been caused by government budget deficits financed by money creation. After an analysis of 29 hyperinflations (following Cagan's definition) Bernholz concludes that at least 25 of them have been caused in this way.

A sharp decrease in real tax revenue coupled with a strong need to maintain the status quo, together with an inability or unwillingness to borrow, can lead a country into hyperinflation.

Hyperinflation effectively wipes out the purchasing power of private and public savings, distorts the economy in favor of the hoarding of real assets, causes the monetary base, whether specie or hard currency, to flee the country, and makes the afflicted area anathema to investment. But one of the most important characteristics of hyperinflation is the accelerating substitution of the inflating money by stable money, gold and silver.

BEST KNOWN EXAMPLE OF HYPERINFLATION:
The hyperinflation in the Weimar Republic, which is one of world's best known hyperinflation, was a three-year period of hyperinflation in the Weimar Republic (modern-day Germany) between June 1921 and January 1924.

In this period the value of the 'Reichs-Mark" depreciated from 90 Reichs-Mark in 1921, to 210,500,000,000 Reichs-Marks, by the end of November 1923.

In the same period the price of gold measured in Reichs-Mark appreciated from approx. 10 Reichs-Mark per Troy ounce to 1 Trillion Reichs-Mark by the end of 1923, as can be seen from below chart.

PGM CAPITAL COMMENTS:
In order to understand inflation we must think of the way ripples spread out when you drop a pebble in a pond. Inflation, moves in concentric circles from a small core of people to an ever widening group of affected individuals. The rich and powerful are in the inner circle and see the inflation first. This gives them time to prepare.

Inflation moves in concentric circles

The working and middle class are in the outer circles and see the inflation last.
They are the victims of lost purchasing power.

Due to the above it is important for us to analyse and understand the investment strategies of the rich and investment gurus.

Warren Buffett:
Here's what Buffett's been doing, which can be a sign that he's getting ready for high rates of inflation:

• He bought the Burlington Northern Santa Fe railroad in 2009. It consists of hard assets in the form of rights of way and it makes money by moving hard assets such as ore and grains.
  
• He purchased large offshore assets in China and other places to produce non-dollar profits that can be retained offshore tax-free
• He have add 4 million shares of Canada Oil and Natural gas producer, Suncor (TSX: SU) to his portfolio in February of this year.
  
• He also owns financial stocks, particularly in banks and insurance companies. These companies are highly leveraged borrowers. These debts will be wiped out by inflation in due time.

Warren Buffett can now move his Suncor oil in his Burlington Northern Railroad, while generating non-U.S. dollar denominated profits and keeping them abroad tax free at the same time that his Financial investments see their debts disappear thanks to high rates of inflation.

George Soros:

Soros has been silently building positions in mining companies rather than the underlying commodity itself. Presumably, this is because mining firms stand to benefit even more if metal prices rally because of the inherent leverage in the business.

Carl Icahn:

Carl Icahn, the billionaire investor whose investment portfolio got stung by the drop in crude oil prices, has added 6.6 million shares of Chesapeake stock (NYSE: CHK) to his portfolio.

Besides Chesapeake Energy, he is also a major share holder in energy stocks like Transocean (NYSE: RIG) and CVR Energy (NYSE: CVI).

John Paulson:

John Paulson is the President and Portfolio Manager of Paulson & Co. The guru became a guru by short-selling subprime mortgages in 2007, but is most known for his stance on gold.

He currently holds 10,234,854 shares of Spider Gold Trust (NYSE:GLD), which makes him the biggest holder in this ETF.

SPDR Gold Trust, which holds 1,239 tonnes of Gold, is one of the top ten largest holders of gold in the world.

Conclusion:
The conclusion we can draw from the above is that these investment gurus took their time to build hyperinflation-proof portfolio.

So, when the push comes to shove their assets will explode in value and their debts are eliminated.

If this strategy works for these investment gurus, it'll work for you too.

Invest in hard assets - precious metals, rental real estate, collectibles, etc - and keep some of your money abroad.

These gurus are preparing for hyperinflation and you should too.

Last but not least, before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Commodities, Precious metals as well as the stocks of their producers can be very volatile and that sharp corrections may happen in the short term.

Until next week.

Yours sincerely,

Eric Panneflek

10 Critical Ways To Prepare Your Family Financially For The Economic Collapse

Aug 18, 2012 by Survivor Mike

We’ve all heard about the coming economic collapse.  But what have you done to prepare you and your family for it?

When most folks talk about prepping, they think of storing food, water and other staples.  However, prepping your finances is key to long term survival.  In the below, we cover the 10 Ways To Prepare Your Family Financially For The Economic Collapse.

1)      Cash On Hand

Obviously, you’ll need to have cash on hand when things get tough as access to that cash will become very difficult.  This just doesn’t mean keeping hundred dollar bills in the house.  You don’t know what denominations will necessary and practical when hyperinflation hits. Having fives, tens, and twenties on hand will certainly be key.  Remember, when the bank runs begin, people will not have change for what you can sell.

2)      Items For Barter

Having things to of value to barter with will also be a must have. It’s not only items like food, water and gasoline were talking about here, but items of use like bars of soap, bandages and batteries.  These items will become valuable when the SHTF.  If you have access to one in particular item that you can get your hands on in bulk, it would be wise to stock up on that item for bartering.

When the SHTF, it will be culture shock for a lot of people. Folks used to having everything instantly.  Things will become so difficult some people will not be able to adjust. Don’t be one of those people.

3)      Live on Less

Prepare your family by starting to live on less now.  Start with small things by cutting out extra items like going out to eat, ice cream runs, and other trivial things.  This is not to say don’t enjoy yourself, but rather space those enjoyments out. Remember, when things get tough these items will be hard to come by.

If your family is used to infrequent luxury items, when they completely disappear, it won’t be such a shock to them.  Psychology of your group will be important with each passing day.

4)      Coins

Related to the theme of keeping cash on hand, coins will be valuable as well.  Remember, there is intrinsic value in coins.  Some are made of nickel, copper, or silver.  These precious metals will increase in value as things get tough.  If you’re able to diversify to silver and gold coins now, that’s a wise choice as well.  Remember, a quarter is worth $0.25 today, but a quarter made before 1964 is actually worth about $7. The melt value alone of some of these coins are actually extremely valuable.

5)      Income Generation

In the day and age of direct deposit, folks rely on the fact that their money is put directly into their bank accounts.  When the SHTF, you may not have a job anymore.  Therefore, you’ll need to think now about how you’ll generate income for your family. Whether you have a particular skill that is valuable or you’re able to generate some type of passive income you can rely on. Start planning now for that.

Here are couple of ideas to consider.

• Offer to provide water gathering services
• Passive income from ads on websites (remember we may not see a global recession) – check out Bluehost for domain hosting (on the right —->)
• Selling of supplies you have in bulk or access to
• Services you can provide (medical, sewing, etc.)

6)      Foreign Investments

If you’re fortunate enough to have investments, it would be wise to have them with multiple institutions. Diversifying your investments will protect you in the event that one of those institutions go under. In fact, a foreign type investment house would be wise. Canada, Australia, and Switzerland are three very good options at this point. However, be sure that you can get access to those funds in the event of a crisis in those countries.

The bonus is you protect yourself against a falling dollar as these investments are usually held in the same currency as the country they reside.

7)      Back Run Readiness

When the bank runs begin, people will be scrambling to get their money out. Make sure you use every available resource possible to get cash in your hands.  The obvious choices are ATM cards and credit cards.  However, a home equity line of credit can be very valuable at this time.  Utilize it if you can. Be sure to you to utilize your routes to banks accordingly.  Send different members of your group to different locations to withdraw that money. Remember, everyone will have the same idea when it happens.

Plan on being able to protect yourself as some folks will become more than desperate. Imagine yourself being the person that just got the last $200 from the ATM machine. Protect yourself at all times.

8)      Debt Decisions

There are two schools of thought when it comes to debt. Many folks say try to eliminate as much of your debt as possible before the SHTF. However, for many people this is just not possible. Paying off a large mortgage may be difficult to do on short notice.  It’s true the banks will be coming for their money regardless of your income situation.  However, banks will often go two years without a payment before they begin foreclosure procedures.  I feel you should try to hang onto as much cash as you can to have some purchasing power (for essentials).  Remember when hyperinflation occurs, paying off your mortgage will become a lot easier as dollars will be worth less than they are today.   Therefore a $1500 a month mortgage today will be easier to pay once hyperinflation occurs.

9)      Foreign Currencies

If the US dollar takes a tumble the way many are predicting, having foreign currencies is a great way to protect your wealth. Canadian dollars, Aussie dollars, and Swiss francs are among the best as they have been the most stable over the years.

To illustrate this, today one dollar will buy you roughly one Canadian dollar. If the US dollar falls apart, one Canadian dollar could buy up to 15 or 20 US dollars. Don’t have all your money in the US dollar. Diversify your risk.

10)      Gold and Silver

Gold is king. You cannot have financial stability without gold and silver. These precious metals have always maintained their value and in times of economic crisis have increased. Rumors of the US going back to the gold standard are always out there. If this occurs the value of gold will skyrocket.

Prepping is often thought about in terms of preparing supplies to survive.  However, things can be made a bit easier with preparing your group financially.  In fact, some folks are better off financially and can truly use it to their advantage if they prepare correctly.

Remember, protecting wealth and having items of value is just as important as having food and water.  In fact, having the former can get you the latter during an economic collapse.

Let us know what you think in the comments below.

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