Hyperinflation: Protecting Yourself and Your Family

Preppers are correct and honorable for working so hard to protect their families and the people they care about from all of the many dangers and disasters lurking out in the world.

Roll of american dollars tightened with red band

It seems there is never any shortage of pain and suffering that can be brought on by natural disasters, man-created catastrophes, and good old-fashioned misadventure and accidents.

But if peppers have a blind spot, it is dangers of a more esoteric nature, things that won’t necessarily blow your house down, or punch holes in you.

Economic calamity is one such threat, and among the various economic risks to your well-being, you could have the misfortune to endure hyperinflation is, without question, one of the most severe.

In the span of a day, hyperinflation can drain your savings and make what cash and other resources you have on hand nearly worthless.

It can push the price of everyday commodities like food, water, gas, and electricity out of your financial reach, dooming you and your family to poverty and squalor in a shockingly short period of time.

This is something just as dangerous and just as deadly as any natural disaster, and you’ll need to know what you are doing if you have any hope of countering its effects. We will give you the straight story on hyperinflation as well as ways to combat it in this article.

Hyperinflation Explained in One Minute

Hyperinflation Defined

Hyperinflation is exactly what it sounds like, nothing more than extreme inflation. If inflation is simply the rising cost of goods and services over time, hyperinflation is the extraordinarily fast and dramatic increase in the cost of goods and services in a short period of time.

Hyperinflation is often so severe that the cost of goods can increase radically day by day, sometimes multiple times a day, and consequently the purchasing power or value of a given currency goes lower and lower in accord.

Hyperinflation causes a multitude of secondary and tertiary economic effects in addition to its primary symptom of rendering standard currency essentially worthless.

Hyperinflation is the cause of all those old-timey newsreels that show people wheeling wheelbarrows full of cash or coin into a bakery to buy bread, or even resorting to burning it because it is worth less than firewood.

Hyperinflation is not some pie-in-the-sky economic theory. It has happened before and will happen again, including to prosperous, First World nations.

Since the beginning of the 20th century alone there have been dozens of instances of hyperinflation seizing nations in its strangling grip, and the consequences have much of the time been extremely ugly, both for governments and citizens.

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What Causes Hyperinflation?

Hyperinflation is itself the cause of the attendant economic collapse, much of the time, but even this harbinger of hard times has its own prerequisites, though they are not always easy to spot.

That being said, multiple studies conducted by venerated economic theorists and financial experts have shown that there are several typical triggers or conditions that make hyperinflation likely, or at least possible. They are listed below.

Use of Paper Currency is a Prerequisite

It seems that the use of paper currency, or any fiat currency, is a prerequisite for hyperinflation to occur.

Studies have shown that no genuine onset of hyperinflation occurred in societies where currency was issued in valuable commodities or had itself some intrinsic value as material.

The nuts and bolts of why this is so is beyond this humble writer, but suffice it to say that it is true.

This, however, is a particular problem for us in the 21st century because no modern nation issues anything except the paper currency and comparatively worthless coinage.

This alone means the stage is set for hyperinflation by virtue of the type of currency issued, and nothing more. All that is required to see hyperinflation take hold are other events or ideal conditions.

Commercial or Industrial Sector Problems

Anytime critical or flagship industrial or commercial concerns that are important to a nation’s economy, or just to a crucial sector of its economy experienced a massive downturn resulting from damage, embargo, product loss, loss of access to needed resources, manpower, and so forth it can set off a domino effect of economic stresses that may eventually result in hyperinflation.

This is particularly likely when commercial or industrial stoppages or shortages result from destructive events like war, catastrophe, sabotage and so forth.

What’s worse is that these events dovetail with any other economic stresses already underway, often leading to a basically unstoppable downward spiral that will inevitably result in hyperinflation.

Widespread Civic Uncertainty

There is always a risk of hyperinflation whenever civic uncertainty takes hold in the collective consciousness of a nation.

Anytime most people lose faith in their government, in their markets, or in their nation’s future outlook it can lead to a major chilling effect on economic activity.

This chilled economic forecast leads to reactions like panic buying, selling of stocks and bonds, and other, typical panicky behavior which will turn into sort of a self-fulfilling prophecy and lead to-you guessed it- hyperinflation.

Once again, this uncertainty can be the cause of other problems that lead to hyperinflation or can result from other problems that contribute to hyperinflation.

You might think of hyperinflation as the inevitable light at the end of the economic tunnel; we all get to it eventually, but the bad part is the light is actually an oncoming train ready to flatten us!

Military Conflict: War, Police Action, etc.

Mass and prolonged deployments of military forces, especially in open conflict of any kind, are inevitably a major drain on the piggy bank of any nation, even the richest.

The warhawks and the sycophants who make the military industrial complex what it is will tout the economic stimulation created by all those defense sector jobs, but the bottom line is that war will only ever push a nation into economic stress.

Not for nothing, returning militaries no longer bring with them massive baggage trains of plunder or binding resolutions that assure them preferential access to the defeated enemy’s resources.

The result is nervous civilians spending more frugally on luxuries while hoarding basic commodities, and if this behavior is not arrested it will lead inexorably to hyperinflation.

Of course, it should go without saying that any nation that is actively touched by ongoing war will typically experience severe hyperinflation.

Reckless Printing of Money Against Gov’t Budget Deficits

And we come to it at last, the perennial and typical fountain from which all economic woes flow inevitably downhill to soak the cold and shivering civilian masses below: Financial impropriety on behalf of the government!

More than any other cause, the reckless printing of fiat currency against government debt is the number one cause of hyperinflation.

In the vast majority of recorded instances in the 20th century, this has been the central factor in something like 70% of cases.

Yikes. No matter who you are, no matter where you live, frankly there is nothing you can do, practically, to stop this.

The time to have voted these people out and get honest, financially prudent, and committed leaders into office was 20 years ago, no matter what year it is currently!

Through trickery, clever accounting, and sleight of hand they can keep the economic “reaper” at the end of the driveway for a time, but invariably the butcher’s bill must be paid and financial calamity in the form of hyperinflation will be the inevitable result of such malfeasance.

What happens to a country when hyperinflation hits?

What Does Hyperinflation Cause?

Hyperinflation results in many subsequent effects, effects that will be felt by virtually every citizen in the land, with scarce few exceptions. All you need to know is that none of these effects are good.

Sharp, Sustained Increases in Price of Goods/Services

The most iconic effect of hyperinflation, if you want to call it that, is a severe, sudden and sustained increase on the price of goods and services, felt most keenly concerning the purchase of everyday commodities like food, electricity, water, fuel, and building materials.

Short-term increases of 10 times the otherwise typical price are common, with increases of 20, 30 or even 40 times the normal price entirely on the table.

Imagine how devastating this would be to your personal finances if now only the most rudimentary of groceries in sparing quantities took up your entire food budget for weeks or months at a time.

How would you procure food? How hard could you work just to supply your family with a pauper’s meal?

Panic Buying and Hoarding of Goods by Civilians

Right before hyperinflation properly takes hold, or immediately after it sets in, panicked throngs of people will start snapping up basic comestibles and everyday commodities, from coast to coast.

This crushing demand resulting from panic buying will snap the already frayed threads on the supply side of the equation, resulting in massive shortages that may very well never be replenished under the circumstances.

Basic goods like grains, beans, fuel, bottled water, toilet paper and other essentials that we perpetually take for granted will become incredibly precious.

The meat will become a luxury. This will in turn only fuel additional fear and unrest and further perpetuate the downward spiral of hyperinflation.

Mass Unemployment and Foreclosure

When people are forced to choose between putting a meager meal on the dinner table or paying on their mortgage or monthly rent the food will almost always win out after a few meals are missed in the beginning.

Despite the dire circumstances, you need not think for a moment that Banks and landlords will show mortgages and tenants any mercy.

Now, as in times past, foreclosures and evictions will sweep the nation, dispossessing and making homeless countless millions of people.

Worse, the economic turmoil and societal upheaval that invariably follows in the wake of hyperinflation- like a school of sharks following a ship at sea- will see many employees get the boot, or lose their jobs because their employers are forced to shut down or radically downsize.

The loss of income, nearly worthless though it may be, will further perpetuate the pain and loss being experienced by the average citizen.

Further Devaluation of Currency

As the prices of goods and services rise and rise and rise the buying power, and ergo the value, of the currency in the affected nation will continue to sink and sink and sink.

This is, once again, a synergistic factor that seemingly has no end until rock bottom is finally, painfully, plumbed.

Domestic and international markets will respond and confidence in the affected currency will likewise plummet.

Domestic investors and citizens alike may very well attempt to cash out early and invest in foreign currencies instead to protect themselves, and this will only serve to further weaken the ailing domestic currency.

With several revolutions of this, the affected nation’s currency will be suitable only for kindling or toilet paper, if it is even worth that.

Devaluation or Loss of Paper Assets and Savings Funds

The meteoric descent of paper money will affect all other intangible assets and investments, and in historic instances of hyperinflation, people have seen various assets and lifelong savings essentially evaporate into meaninglessness under the weight of various economic factors.

This means that whatever you have accumulated, invested and saved will not be safe from the ravages of hyperinflation.

Certain investments, hard commodities and perennially valuable genuine assets will keep their value or at least be relatively unaffected, but most traditional stock and bond portfolios and savings accounts will be decimated.

Increase in Societal Unrest and Crime

You cannot subject an entire society to the ravages of hyperinflation and all of the attendant pain, loss, and degradation without turning them half-mad with grief.

People will be rendered inconsolable in the face of what is happening, and with rumbling tummies and no end in sight plenty will turn to crime, petty or grand, in order to survive or to take revenge on the people they perceive as part of the problem.

Anything that you have might be worth an attempt by someone who does not have it, and some will even be willing to take your life in the bargain.

On top of everything else, people will be forced to keep their backs to the wall and keep an eye on their fellow man for the duration and for some time after.

Hyperinflation is here to destroy your cash (maybe)

Preps to Protect Yourself and Family from Hyperinflation

I hope that by now you have a firm understanding of how serious a threat to your well-being and the well-being of your family hyperinflation is.

It is no joke and not just the provincial buzzword of economic nerds in tacky suits and dorky glasses.

Your entire world will change when hyperinflation strikes and you very well may no longer be able to recognize life as you knew it in your own country.

Effectively preparing yourself and your family to endure and persevere in the face of hyperinflation generally involves a two-pronged approach:

  • Material preparation. Acquiring the goods and capabilities that will allow you to sustain life more or less as you have known it for the duration
  • Financial (or asset) preparation. Take steps ahead of time to improve your financial position so you will not fall prey to the severe devaluation of currency inherent to hyperinflation.

Read through the preparatory steps below.

Material Preparation

Stock Up on Food, Water, and Necessities

As mentioned throughout this article, hyperinflation is going to drive the costs of typical, every day supplies so astronomically high that you will quite literally go bankrupt trying to buy milk and eggs.

The obvious solution is to stock up now while those supplies are plentiful and cheap.

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Stockpiling supplies in your home and regularly rotating them ensures that you and your family will be able to eat, bathe and maintain your household more or less as you always have.

You should be gunning for a 6-month supply of everything you use on a regular basis, minimum.

Be Ready to Defend Yourself and Your Possessions

One of the dark side tales that rarely gets mentioned in the same breath as historical instances of hyperinflation is the predation that will be inflicted on people in the “haves” category by those in the “have-nots” category.

The old expression that society is only three missed meals away from anarchy is entirely, grimly true.

You’ll need to be ready to protect yourself, your family, your possessions, and your holdings from people who would take them from you out of malice or desperation. It is an ugly thing to consider, but you’ll need to get guns and plenty of ammunition alongside other tools like large canisters of pepper spray so you’ll have options for every possible, ah, people problem.

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Prepare to Self-Supply Utilities

One of the first economic casualties after the onset of hyperinflation will be utilities like electricity, water, natural gas, and so on.

If you have access to water sources suitable for drinking and washing that is one overpriced commodity you won’t have to buy.

Likewise, if you can create your own electricity by any means, be it solar, windmill, gas generator or some other device you won’t be paying the power company through the nose just to turn on a single floor fan.

There is no reason the average citizen who is dedicated to the task cannot make themselves fully capable of living off-grid in times of trouble.

This is something you should research and begin implementing now before the chips are down, and there is plenty of information on this website that can help you do just that.

Hyperinflation | Panic Buying Preparedness | Stockpile List

Stockpile Premium Bartering Fare

As previously mentioned, society as a whole is not going to take this whole hyperinflation thing well at all. Not well at all…

Despite the depravity and dispossession that will be commonplace people will still yearn for small comforts and luxury items, along with vices.

Things like candy, tobacco products, beer, wine and hard liquors, luxury cosmetics or personal hygiene items and so forth will vanish like smoke at the onset of hyperinflation and if you have a sizable stockpile of any or all of them you will be a broker of some importance to people willing to pay any price to get their fix or to enjoy a nicety from times gone by.

Make it a point to stock up on all these items even if you do not partake of or use them yourself.

Consider it a cheap investment that will serve as a sturdy barricade against the ravages of hyperinflation.

Someone who is desperate to get a little nip of nicotine might trade you food, tools or other genuine valuables for even a single pack of cigarettes. No reason you shouldn’t capitalize…

Financial / Asset Preparation

Improve Income “Antifragility”

One source of income is not going to be enough to weather the storm of hyperinflation, and it is barely enough to get through modern life right now in normal times.

You should focus on diversifying your income streams through any means. Learn another skill, and pick up a second job or part-time gig.

Moonlight as a service provider in any sector if you are proficient in any non-traditional skills that you could tutor or teach to other people.

Start a small family business and get your kids and spouse involved. Invest now while you can still recoup your initial investment and make use of your profits.

You want multiple “baskets” with multiple “eggs” in them. This is the only way you’ll stand half a chance of persisting through a period of hyperinflation with any income at all.

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Slash Optional and Elective Expenses

It is time to audit your personal expenditure spreadsheet with a big, fat, red marker.

Anything that you can cut now will mean more money that you’ll have on hand later or, if you are smart, more money you can invest in things that will not suffer from hyperinflation later, things like the stockpile of food and other goods I mentioned in the previous section.

Make it a point to replace expensive luxury choices with more economical and practical ones. Stop eating out so much.

Stop buying designer clothing and vehicles to impress people you don’t even like. Stop spending on stupid shit, in other words!

I’m not saying you need to live like a penny miser, and Lord knows I like certain expensive brands myself, but you should be living meaningfully and buying things that genuinely improve your quality of life, not trying to meet a standard set by people who are not your betters that will only result in financial ruin.

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Buy “Inflation-Resistant” Investments

Many traditional investments will not endure the acid test of hyperinflation, but some of them will.

Ones you are doubtless already familiar with include precious metals and other inherently valuable commodities.

Gold and silver have long been checks against inflation and they remain so, and if you have plenty of on-hand gold and silver you’ll be able to get anything you need while hyperinflation is ravaging the economy.

Also consider other traditional, perennially valuable investments like land, real estate, and livestock.

Here and gone again investments like collectibles are, as always, a bad choice and among the worst investments you could have during hyperinflation as people will be worried about survival and survival alone, not nostalgia.

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Reduce and Pay Off Debt Pronto

One of the single, best things you can do to set yourself up for success in times of hyperinflation is to eliminate debt now by any means necessary, and particularly you should work hard to eliminate any debt or loan with a variable rate.

If you can’t do that, refinance ASAP in order to lock in a fixed rate so you won’t get screwed later when the banks and credit card holders decide to cut your throat and shank your rate right to the moon. Eliminating debt eliminates vulnerabilities.

Anything you cannot pay on will be repossessed one way or the other, and don’t delude yourself into thinking your mortgages or anyone else who holds your debt is going to suddenly grow a conscience and forgive it under the circumstances: most didn’t in the past and they sure as hell won’t this time around.

Conclusion

Hyperinflation is a devastating economic condition that can ruin entire societies and completely topple the existing social order.

With common goods and provisions rendered completely unaffordable for most and tectonic waves of eviction, foreclosure and dispossession ripping communities apart, hyperinflation cannot be countered, it can only be endured.

But endure it you can if you take the right steps now to insulate yourself and your loved ones against the worst of its effects.

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