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Don't want to get into the politics... not trying to offend anyone, or support any cause with this post. Just wanted to know... let's say I believe we are looking at hyper-inflation in the next year or so... what can I do to protect myself?
- I have two homes, do I keep them, or do I sell them? Will they simply increase in equity... e.g. because the price goes up since the value of the dollar is less?
- I have a lot of my money in the stock market. How does the stock market react in hyper-inflation... does it go up with inflation? Or does it go down in value?
- I have $75k in cash. I assume this will immediately lose value in hyper-inflation. What should I be doing with it?
- I have some assets, e.g. tangible items that have value which I can turn around and sell a few years from now (vintage Swiss watches that I bought cheap and restored, etc.)
GOLD and CRYPTO: No thanks on gold, and I do already have some crypto in BTC and own Miami Coin and Bitcoin ... and not planning on buying anymore.
Thank you for any responses / advice. Would be interested in knowing what you guys are doing to hedge against this as well?
THANK YOU!!!
Your title is incorrect - we are no where close to hyperinflation. Technically, hyperinflation is defined as monthly inflation rate exceeds 50% (this is equivalent to a yearly rate of 12974.63%). It typically occurs only under very specific circumstances, such as after a war or when a currency breaks up.
Even a more liberal definition of hyperinflation such as used by International Accounting Standards requires inflation at such a rate that people take action to cover for rise in prices in all actions - such as
- General population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Prices may be quoted in that currency;
- Interest rates, wages, and prices are linked to a price index; and
- The cumulative inflation rate approaches, or exceeds, 100%.
As far as actions
- In general, gold (and maybe crypto) are classic hedges to inflation
- Assets such as homes will increase in price but likely at a lower level than inflation as cost to finance increases - in general should be ok to keep and should maintain value once prices stabilize.
Priority #1 is a defensible, autonomous, disaster resistant domicile. Without that, all your goods and your survival are at risk.
Priority #2 is a supply of necessities, accessible whether or not the delivery system is functioning.
Priority #3 is a 24 month stock of food, consisting of a mix of long term storage items, and moderate amount of independent food production (ex: seed sprouts, hydroponics, aquaponics, aquaculture, permaculture (edible landscaping), chickens, etc).
. . . .
Though a fortress of solitude is one way for solo survival, I suspect that for long term prosperity and security, one will have to join up with others to form a cooperative for mutual defense. Otherwise, you're going to be an easy target for the roaming predators, who will be seeking to live good off of the supplies of others.
One effective tactic is to build a fortified walled village. A good example is the Chinese Hakka Tulou, a circular fortification that has a 1000 year track record. Modernize that design into a dual ring village, with two circular buildings / walls, a circular street between, and a central park. Add a roof top garden, and continuous balcony on each level, and you have the best of all worlds - urban, suburban and rural amenities. Family friendly, with the access controlled central park just a short walk away (no snatch and grab).
A four to five story dual ring village, sized for 300-400 "Ringers" would deter most opportunistic marauders, as well as be disaster resistant to wind, water, earthquake, mudslide, storm surge, wild fire, vermin, and repel 2 and 4 legged predators. And the circular design is energy and resource efficient, minimizing exposed surfaces, reducing the cost to maintain comfort.
When the eCONomy tanks it won't matter to you and your friends.
I'd defeat your ringed village with trebuchets slinging variously burning pitch, snakes/scorpions/spiders, wormy human waste.
Seriously, tho. your point about protecting various assets would be critical.
It is a fact that walled cities are no match for artillery. However, I recall reading about some Asian fortresses that relied on rammed earth (2m and more) that took hits from catapults.
Also, there are documented cases where Hakka Tulou endured earthquakes with a few cracks and nothing more. Ditto, for repelling Japanese pirate raids.
Robust rammed earth barrier walls can do so much more - provide thermal mass to moderate temperature swings - block gamma rays (skyshine) - resist side forces from mudslides, storm surge, flash floods, earthquakes, exploding meteors, and so on.
FWIW - I don't advocate a single enclosure, but a cluster of small dual ring villages. Any invading force would have to knock out each and every one, while not getting knocked down by defenders. Redundancy is security.
It's a great time to re-fi the 2 homes with long-ass 30 year FIXED rate mortgages. And do not pay them off early. Put the cash out proceeds into a low cost index fund to (hopefully) outgain the rate of inflation.
Cash and dead real estate equity will lose value with inflation faster than anything. Let the bank hold that 3.5% mortgage against 5%+ inflation.
It's the fate of all fiat currencies to be destroyed in either a hyperinflation or a massive loss of confidence- the almighty US dollar will be no different.
The way to protect yourself? Real assets. I believe silver will be the best, most liquid financial asset to hold, even more so than gold.
Had to look this one up, as I assumed you owned a coin store in Miami; and therefore owned pounds in gold and silver.
But I see now you own zero gold, what's your aversion?.
Though a fortress of solitude is one way for solo survival, I suspect that for long term prosperity and security, one will have to join up with others to form a cooperative for mutual defense. Otherwise, you're going to be an easy target for the roaming predators, who will be seeking to live good off of the supplies of others.
Yes, I agree with this. Get to know like minded people. Many people in urban areas will either be clueless/oblivious if/when it happens. And even those who aren't may not be in a position to do much about it.
I suspect there some people in rural areas who see the signs and are preparing, but they're not advertising themselves on the internet. We'll have to get out there and meet real people and talk to people.
This thread belongs in "Self-Sufficiency and Preparedness" not Economics.
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