More on Inflation, Deflation & Hyperinflation

Have other countries already started to figure out that buying our debt is a pyramid scheme?
Have other countries already started to figure out that buying our debt is a pyramid scheme?

We’ve been discussing inflation and deflation and today we’ll dig more into hyperinflation.  If the world has figured out that buying our debt is a pyramid scheme and that they will be left holding nothing, they will no longer finance our massive deficit each year.  This could happen in the blink of an eye and come like a thief in the night!

The best thing for the government to do in this scenario would be to allow rates to rise, slash spending and get the budget under control so that the world can once again trust us.  But this would surely lead to more difficult economic times and what group of politicians is going to head in that direction?  None.

So what they will do is print more money to buy the debt that they have decided we need to float the borrowing we need to do.  If you’re thinking that this will just cause hyperinflation to spin out of control, you are correct! This is the road that many countries have gone down before. The two most famous are probably Zimbabwe who went from a prosperous exporting nation to a dust bowl of a country whose currency bills were priced in the millions but still worthless.  Also, Wiemar Germany went through this between the two wars to the same effect.  Many other countries have done this.  Argentina and Russia come to mind.  They all survive, but it is incredibly difficult to live through.

All the money that you have quickly becomes worth very little.  No one will want to accept your money anymore.  All but the very richest people (who are properly diversified into things which don’t lose value) quickly become very poor.  One big difference between many of these countries and us is that we are a very urban society filled with people who long ago forgot how to grow its own food.  People will be hungry and desperate.  Please remember that the Lord is bringing about this new season for a reason and whether we see inflation, deflation, or hyperinflation, He is bringing about His purposes and for those who seek Him in this time, it will be wonderful indeed!

We have a free event here in Austin tonight where we’ll talk about which of these realities will manifest: inflation, deflation, or hyperinflation and what you can do to prepare, protect and even grow your assets.  Click here to learn more or sign up to come here.

This post is Part 4 in the series Inflation or Deflation. To read the rest of this series, please read Pt 1, Pt 2 and Pt 3.

Photo credit: cazimiro

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