Preparing for Hyper-Inflation

First, let me say that this is a dry and boring topic and even worse it is confusing and complicated. If you aren’t interested in it I will totally understand if you skip reading it. However, I’m hoping you will at least skim through it and take a look at the graphs.

Today we are continuing our series on Preparing for Survival as vandwellers. What am I preparing for? I consider high inflation rates in the next few decades as inevitable for two reasons:1) The Aging Baby Boomer population that is retiring and signing up for Social Security and Medicare 2) Peak Debt and the Federal Governments need to get out from under it. In future posts I’m going to make suggestions on things I’m doing (and you can as well) to get ready for hyper-inflation. I’m prepping for hyper-inflation (10% or more per year).

Baby Boomers Signing up for Social Security & Medicare

After World War II the United States experienced an unprecedented population explosion as our soldiers returned from war and started to make babies (the baby boomer generation is generally considered to be those born between 1946 and 1964). Eventually their children grew up and entered the work force. I’m one of them (I was born in 1958 and got my first job in 1974) and chances are that most of the readers of my blog are as well.

When we entered the work force the great majority of us started paying Social Security and Medicare taxes. While we call them taxes, most of us think of them as payments on a pension plan and health insurance policy for our old age (the Supreme Court has ruled that’s not true, the government is not obligated to pay us). In four years when I turn 62 I’m going to start doing Social Security which should be about $1400 for the rest of my life. If I live till I’m 82 that means the government owes me $17,700 a year for 20 years or a total of about $354,000 dollars. I consider that to be a real debt that the government owes me because we had a contract that I agreed to pay monthly payments with every paycheck and they would give me a pension.

In the exact same way those monthly payments were to buy me health insurance benefits that are administered by Medicare. So when I turn 65 the government becomes responsible for much of my health care costs. Those costs make my pension look like nothing in comparison! If I live long enough the odds are extremely high that I will have a heart attack, broken bones, and eventually prostate cancer. The government’s share of my health care costs could easily run into the millions of dollars because they cover hospital stays and skilled nursing facilities which will be the majority of the costs of each event.

The number of Americans on Social Security is going to skyrocket in the next few decades. The total number of us will double and the number of us over 85 will quadruple.

The number of Americans on SS/Medicare is going to skyrocket in the next few decades. The total number of us will double and the number of us over 85 will quadruple. The cost of our pensions and health care will devastate the economy.

Now, multiply that by the millions of baby boomers who are going to be signing up for Medicare in the next 20 years and the debt becomes literally staggering. By 2035 the number of SS/Medicare Recipients will double. But not only will there be more of us, we will live longer. The number of us who are over 85 will quadruple by 2040. People of that age are much more expensive to take care of. Let’s look at the statistics. I’m taking this directly from the website of the Department of Health and Human Resources: http://aoa.gov/AoAroot/Press_Room/Social_Media/Widget/Statistical_Profile/2010/3.aspx

Population Over 65:

  • In 2000—35 million
  • In 2010—40 million
  • In 2020—55 million
  • In 2030—72 million (roughly 20 percent of the U.S. population)

Of course the government doesn’t produce anything so that means the taxpayers are responsible for paying us. The bigger problem is that the ratio of working taxpayers to retirees is declining and by 2030 the projection is that there will be 2 taxpayers supporting every one retiree. That is not a good ratio!!

The number of workers who are paying for each person on Social Security has been steadily dropping over the decades. Soon it will be two workers for every retirree.

The number of workers who are paying for each person on Social Security has been steadily dropping over the decades. Soon it will be two workers for every retiree.

As we Baby Boomers retire and enroll in Social Security and Medicare the government has a huge debt hanging over its head that is going to become an insurmountable problem.

Peak Debt

We are all well aware of the huge debt the Federal Government has run up in the last 10 years. When the housing bubble burst in 2008 the US (and the whole world) slipped into a deep recession that has devastated the economy. Trying to stimulate the economy we’ve been spending money that we don’t have at a phenomenal rate racking up an incomprehensible debt. When the government spends money it doesn’t have, it has to borrow it from someone else. The majority of it is borrowed from the American public but an alarming amount is from foreign governments like China and Japan. The current government debt is 17.4 Trillion dollars. In 2013 we paid $415 Billion dollars in interest to service the debt and the only reason it was that low was because we were paying an average of 2.4% interest rate. Inevitably the interest rates are going to go up so the amount of our interest payments will also skyrocket.

As terrible as that is there is no reason to believe we are going to stop increasing the debt and paying more and more interest on it. I strongly encourage you to go to this site to get a staggeringly bad overview of the current state of the US economy: http://www.usdebtclock.org/index.html. There are so many facts there it may overwhelm you so I strongly suggest you spend a few minutes and try to take in all the information it is giving you

But government debt is the least of our problems. Even worse is the incredible amount of private debt in this country. Private debt is any money that you and I as citizens or businesses such as small business or corporations owe to someone else. So it’s things like car loans, mortgage payments, small business loans or money corporations borrow. It is the total debt of everyone in the country and right now it is about 43 trillion dollars. So adding together government debt and public debt the combined debt of America right now is 60.9 trillion dollars.

Now I want to show you a graph that shows the history of the combined debt of the country as a percentage of Gross Domestic Product (GDP). But first, let me explain what GDP means.  Gross Domestic Product (GDP) is the total economic activity of a country for any given year. If a farmer raises a crop or a miner digs iron ore out of the ground that adds to the GDP. If Kellogg’s turns the wheat into Wheaties, that adds to the GDP. If Ford turns the iron ore into a car, that adds to the GDP. If I go to work and stock a box of Wheaties on the shelf, that adds to the GDP. If I go to McDonalds after work for a burger that adds to the GDP. The GDP is the total economic activity of a country in any given year.

Why would we care about the ratio of debt to Gross Domestic Product (GDP)? Because we have a historical record of what happens when the ratio get too high. When debt takes up too much of the economy it sucks the money that should go to growth and wealth-creation out of the economy and is devastating to it. Debt makes it impossible to borrow money to start new businesses or expand existing businesses. Consumers stop spending when they have too much debt because they are afraid they can’t keep making the payments. Eventually other countries will lose confidence in the US economy because of our high debt ratio and stop loaning us money.

You may be wondering why we don’t just use the total dollar amount as a comparison instead of using the GDP. Because the inevitable result of too much debt is a period of deflation (a depression where there is too little money) followed by inflation where there is too much money and so the value of each dollar declines. So a dollar in 1890 would buy 20 pounds of four; a dollar in 1940 would buy 10 pounds of flour; a dollar in 1980 would buy 5 pounds of flour and a dollar in 2014 will buy a 1 pound of flour. Inflation causes the purchasing power of a dollar to decline so we can’t use dollars to study the historic effect of debt on the economy. So we will use the Gross Domestic Product (GDP) instead because it is always adjusting for inflation. Here is a chart of the history of US Total Debt both Government and Private.

Looking at his chart it hard to miss that their have been two huge peaks in National debt, the first in 1933 with the Great Depression and the second in 2008 and it's global recession. You'd think we'd learn our lesson but instead we are still racking up a huge and unprecedented National Debt.

Looking at his chart it hard to miss that their have been two huge peaks in National debt, the first in 1933 with the Great Depression and the second in 2008 and it’s global recession. You’d think we’d learn our lesson but instead we are still racking up a huge and unprecedented National Debt.

Notice that the last time debt was more than 300% of Gross Domestic Product (GDP) was in 1933 at the start of the Great Depression. The period from 1928 to 1933 were the best of times in America with the economy booming and people were borrowing money like there was no tomorrow. But when the debt peaked in 1933 it all collapsed and we fell into the Great Depression. Since the 1990s we have been doing the exact same thing. We assumed the economic great times would never end and we spent and spent and borrowed and borrowed and BOOM! In 2008 it hit its peak and collapsed. But the government didn’t learn its lesson and kept spending and printing money like there was no limit. We’re all going to pay for that terrible mistake when inflation starts to go out of control.

Debt causes inflation!! Prices were very stable until we created the Federal Reserve and went off the gold standard. Without those it was very difficult to go into debt because we had enough gold to back every dollar spent. Without the gold dtandard the Federal Reserve could print an unlimited supply of paper money with nothing backing them up. Once that happened, inflation exploded!!!

Debt causes inflation!!A basket of food and services cost nearly the same amount in 1800 as it did in 1912.  Prices were very stable until we created the Federal Reserve and went off the gold standard. Without those it was very difficult to go into debt because we had enough gold to back every dollar spent. Without the gold standard the Federal Reserve could print an unlimited supply of paper money with nothing backing them up. Once that happened, inflation exploded!!! 

Inflation is Inevitable and the Only Solution

Throughout history many countries have faced an economic crises just like the United States is facing and nearly all of them tried to do the same thing, spend their way out of it. But that doesn’t work, it only leads to hyper-inflation and eventually the total collapse of the economy. And we are going to do the same thing because inflation is the only thing that will save us in the short term. If we don’t make some very hard changes, the day will inevitably come when people lose their confidence in our ability pay back our loans or even keep up with the interest payments. When that happens the U.S. could actually default on its loans. And even if that doesn’t happen just making the payments and paying the interest on our loans is going to be such a burden on the economy we will be forced to do something and that something is for the Federal Reserve to create inflation. How does inflation solve our debt problem?

As inflation increases it is inevitably followed by wage inflation as well. Workers see their buying power being eaten up by inflation and the companies they work for making huge profits because of inflation and they demand pay increases, which they get. So as prices go up, wage go up also, though usually a little behind and a little lower than inflation. When wages go up taxes also go up. By creating inflation the Federal Government has more tax money every year without raising taxes. At the same time, most of their debt payments are not increasing so their loan payments are at the pre-inflation rate, but their income is at the full inflation rate. Inflation is the only way the government can keep operating. It also has the same effect for the average American taxpayer who is deeply in debt. Their wages will go up but their payments stay the same. That makes them more likely to spend money and cause growth in the economy.

Inflation is very good for debtors, but is very bad for savers. If you have money in the bank its buying power is going down constantly in inflationary times. For example, if your only income is $1000 a month from a pension then you’re buying power is going down constantly. Fortunately Social Security is somewhat inflation-proof so your payments will go up, but probably will lag behind actual inflation. Maybe you can live okay on $1000 a month now but because of inflation in 2 years you will be struggling and in 5 years the cost of living will have gone up so much you’re starving. Similarly, if you have a $3000 cash emergency fund today it might pay to get a new engine installed in your van but in in 5 years it might only pay for the engine but not for the labor to install it.

Conclusion

Because Baby Boomers are about to start drawing SS/Medicare and because of our huge National debt, hyper-inflation (10% or more per year) is coming. Then when you add in Peak Oil driving the price of all petroleum products to much higher prices and extreme weather events from Global Climate Change our economic future is very grim!! In future posts we will look at how to prepare for the very bad economic times that are coming.

Bob
About

I've been a full-time VanDweller for 12 years and I love it. I hope to never live in a house again!

59 comments on “Preparing for Hyper-Inflation
  1. Bill from NC says:

    Heh Bob, I like to watch CNBC in the morning with my coffee. Well before I took off in the pickup camper to Quartzsite. Anyway Ben Bernanke replied to a reporter duri.g his ladt week in office that the economy must experience a increase in inflation in order to continue to improve!!! So you nailed it brother! My grandfather always said that if a man had no debt and a little money when the great depression started that he could make some very good land and equipment purchases. Hey where there are losers in business there has to be winners too! Therefore Bob your preparation for inflation is preparing for success! Bill n Sadie
    Bill from NC recently posted…First full day at the Lapidary Club and Sunrise in Q!!!!My Profile

    • Bob Bob says:

      Thanks Bill! During a depression anyone with cash was king. Unfortunately the opposite is true during inflation. We’eve all heard the stories of people taking wheelbarrows full of cash to the store to buy a loaf of bread in pre-war Germany. I don’t think anything like that will happen here but I’m sure you remember the 70 and 80s when inflation just ate away at any money you had in the bank.
      Bob

  2. Sure wish I could disagree with you but your are spot on. It scares me but I’m not going to roll over and show them my belly. Having put a goodly amount of money in someone else’s hands, a reputable investment company and loosing 1/3 of it in 2008, I’m at a loss what to do with the meager bit I am now able to put away. You live out in the boonies. I still live in a big crime infested jobless town. It isn’t getting any better and will get much worse, to soon. Those who fail to plan, plan to fail.
    Diane Bentley recently posted…A little help from my friendsMy Profile

    • Bob Bob says:

      Diane, believe me I am no financial expert and in no position to offer any advice to you. Have you considered gold or silver? Those generally hold their value in inflationary times.

      Can you leave the city and live in a van or RV? At least then you know you will never be homeless!
      Bob

      • I did invest in gold and silver after my loss and have done okay selling a piece now and again, advice I would give to anyone.I’m about a year out from going on the road. Between my girlfriend and daughter, we have 3 off the beaten path properties, Fl, and 2 in NM and are setting up small bug out campers. Life is good but one shouldn’t just be a passenger.
        Diane Bentley recently posted…A little help from my friendsMy Profile

  3. Alison Nagle says:

    Mostly conjecture at this point. Someone is always talking about the sky falling…

    • Bob Bob says:

      Alison, you are completely right, it is totally conjecture! However I have done some reading and studying and at least it is slightly educated conjecture. And I’m not dreaming this stuff up myself, many economists think a period of inflation is inevitable. Just good old common sense tells you that being this deeply in debt is a bad thing. Any business that let it get in this situation would be long gone by now.
      Bob

    • JohnBoston says:

      Down load that debt clock. We are in trouble, this is not going to end well.

      • Bob Bob says:

        JohnBoston, you don’t need a college degree or study economics to see that you are right. Common sense tells you that going into debt so deeply that you can barely make the interest payment has to be a bad idea. But we can’t seem to figure it out.

        I agree, I think it will end badly as well.
        Bob

  4. jonthebru says:

    “You’d think we’d learn our lesson but instead we are still racking up a huge and unprecedented National Debt.” And of course a huge personal debt.
    A really good analysis.
    My understanding of the end of the “Gold Standard” is that the economists, wanting the economy to grow knew that if all wealth and debt were locked to a material mineral, wealth could not grow beyond a certain amount. (Supposedly all the gold in the world can fit into just over 3 olympic size swimming pools.) So by simply instigating a system not locked to a given physical mineral they created a growth economy. So everything is based only on some perceived value. Anything is only worth what someone will pay for it.
    Thanks for the stimulating posts.

  5. Mike Hargis says:

    The value of currency is an illusion that the vast majority of us buy into. The debt is illusion as well. It is not in the best interest of those who control these illusions to allow them to completely crumble. An economist from 50 years ago could scarcely conceive of the amount of debt that we have today, and surely would have concluded that our economy would have collapsed long before the debt reached its current level. The major adjustment to our economy that we now call The Great Depression was a learning experience for those pulling the strings behind the curtain. Subsequent adjustments haven’t been nearly as severe, like the one in 2008 for example. BTW, I really enjoy your blog.

  6. denoving says:

    Bob:

    As you know Inflation is too many dollars chasing too few goods. At the current time we have the opposite. We have too few dollars chasing too many goods. In the last two decades, we have overbuilt the number of houses needed creating too many houses. We have overbuilt too many businesses for the number of customers and customer dollars. Hence, at this point in time deflation is a greater risk than Inflation.

    With deflation, holding dollars or currency is actually the right place to be, because goods and services decrease in price, thereby increasing the value of cash.

    You are correct in that the spending is at too high of a level for the federal government. This we need to get under control. Unfortunately, the democrats [mainly] are using welfare as a carrot to get the poor to cross over votes to the democratic party with the idea that the government can pay out infinite welfare, and nobody needs to work or have a paycheck, because uncle Sam will pay all of everybody’s bills.

    But we know this is classic socialism, and we know that it hasn’t worked very well for any nation that has tried it. Europe has tried a very limited version, but the USA is paying for their defense, so they can spend money on their socialism. One of these days the USA is going to run out of money, and then Europe will have to pay for their own defense, and then the true cost of their socialism will bankrupt those nations when they are also actually paying for their own defense.

    As long as the unemployment stays incredibly high as it is today we will continue to have deflation rather than inflation. The government says it’s 7% unemployment or like that, but it’s really more than 20 percent because of the phony way that the government measures unemployment. They don’t count the people who give up looking for a job.

    As long as the economy has spread around so much misery, there isn’t enough excess money to drive up the cost of goods. We don’t have shortages of goods and services, on the contrary, we have too much or too many competing goods and services. So prices go down or stay the same as time progresses.

    But if the economy ever starts to actually heat up, and we employ anywhere near “full employment numbers” of people, then we do have a risk of inflation initially, and hyper-inflation eventually, for the reasons that you list.

    It would be really good if the economy would get better, to put money in the pockets of large numbers of people, but we will have to fight inflation if that ever happens. I think that as long as we have unqualified or amateur presidents and congresses who can’t agree on the right path, we’ll be powerless to fix problems.

    You mention social security. It was set up as a welfare program back in the depression to keep old folks from starving, instead of being set up as a savings vehicle, where dollars stack up in an account, building wealth for individuals.

    Of course that was the right thing to do at that time, but now it doesn’t work. Government should have changed the program over to a private system that accumulated
    funds and builds capital.

    That is one of the roots of our problems. We need to take social security, and phase out the public funding, and phase in private funding, over the course of the next 100 years or so. This will enable the government to meet it’s obligations to people who’ve paid in for their whole adult lives, but yet not overwhelm the ability of the young generations ability to pay the costs of government.

    For those who cannot save steadily, there needs to be a “welfare” provision to deposit funds into those accounts so that the saving takes place. But most people will be able to save for themselves, assuming the economy continues and improves.

    The democratic party [predominantly] has created this mess, and continues to spread the money around with fewer “payers” and more “takers”. We need to get the leaders of the democratic party to face facts, and we need to get the republicans to play nice with the democrats to get the problems resolved, rather than letting problems fester,
    as they are now. We need to convert the social security system to a wealth building saving system, rather than the pyramid scheme that it is now.

    regards,
    Dan

    • Bob Bob says:

      Hi Dan, I don’t believe we will let things follow their natural course, we will decide to “fix” things and just make them worse. The feds will just keep printing money and passing it out and and industry will respond by ramping up and giving them the goods they want. The reason we aren’t spending and so industry isn’t producing is because we are afraid of debt. The solution to debt problem i inflation which wipe out the debt.

      The Federal Reserve will intentionally create inflation to save us all from our debt problem. Yes, inflation will create even more and bigger problems and may in fact kill the sick patient but if we don’t do something right now the patient will die anyway. We’re going to stagger from one unsolvable problem to the next and generally we are going to make the wrong decision and the few times we get it right we will quickly screw it up.
      Bob

  7. Dan from Alberta says:

    Regarding Diane’s post…I too had lost about a third of my wealth in the stock market in 2008. However, by continuing to minimize debt, pay myself first and invest every month automatically I not only gained what I lost but am up about 50% from 2008. I do invest heavily in Canada, and about 25% in the US and a little international. Gold and silver are worth keeping around in 5% of your net worth as inflation hedge, but I personally wouldnt go all in. I’m not a financial adviser (my dad is) and I still prepare for the little things with beans, bullets and band aids however. Good discussion all!

    • Bob Bob says:

      Thanks for the advice Dan!
      Bob

    • Lynn says:

      I agree completely with Dan as that has been my experience too. I am also in Alberta. But many different factors are at play. We didn’t experience the housing crisis as the US did because our banks are run by a bunch of cheap Scots and they won’t lend unless you can afford. Also we have government paid for healthcare so we aren’t experiencing the same issues arounds loss of health care. Aside from those points, I just think when the going gets tough, one should hunker down and stay put until they know which way the wind blows. I think it is very unfortunate that people had to get rids of their homes because values will increase again and all the equity will have been lost. The stock market right now is very healthy.

  8. Openspaceman says:

    Bob_

    Heavy stuff with my morning tea…unfortunately the spin doctors will never let us in…on what the real state of the world is until it’s to late. All I can do is circle my wagon/van and get rid of my personal debt…and live a simpler life.

    *Programming kids with false expectations of mansions and $50,000 cars is pretty sh*tty when they’ll be paying student loans for the first 10 yrs of working.

    **I’d much rather look at pictures of mountains and streams…ignorance is bliss they say at least until gas hits $7 a gallon like it’s always been in Europe. Good job once again. The historical data is pretty scary.

  9. Tom says:

    Bob I was born and started working the same year. I don’t think this stuff is dry or boring.

    The U.S. Government has been printing massive amounts of money to buy up bonds to stimulate the economy, along with near zero interest rates. If you look at history, inflation follows. More dollars in circulation, each dollar is worth less, eventually equals, it takes more dollars to buy the same amount of stuff. It hasn’t happened yet, but I believe it’s coming.

    I purchased a silver dollar back in the late 1980s for $7.95. Last year at this time it was worth $34.50. Today that has dropped off in value to $26.55. Having it is a bit like putting a freeze on inflation. People in our age group still remember the gold standard. Silver and gold really don’t go up or down in value, they pretty much have the same purchasing power through time.

    Although silver is a bit bulky, silver and gold prices are quite good right now,,, but if you look at the last year, they’re beginning to creep up in price.

  10. Sameer says:

    I think this is very interesting, but what is the answer? I am a Baby Boomer and just turned 65 in February. Had to come to Boise to figure it all out as the Feds took $104.80 out of my SS check. That is a lot of money to me. Idaho will pick up ‘that’ tab and the Feds will pay for my Part D. But it is not only the Feds spending that will cause chaos but Medicare. Used it for the first time and it is a racket. Doctor referred me to three other Doctors of which I only kept one appointment, which was a colon check. He wanted me to go to a dermatologist to see that the recent skin treatment was OK. Didn’t go. The treatment with the medicine from Mexico was a complete success. ($48 bucks a tube in Mexico and $189 here. I don’t get it) I don’t need to go to a Doctor to tell me that. Wanted me to go to an Eye Doctor who’s cataract surgery cost average was $4600 when the average price in Phoenix is $3000. Sorry to ramble! What is the answer? The only one I see is to deconstruct EVERYTHING! Government spending is killing us and our future..! And yet it has to pay SS and Medicare. I need answers! My little $3300 of emergency money HAS to fix my engine or transmission at some point. I have no choice. What is the answer?
    Sameer recently posted…Preparing for Hyper-Inflation My Profile

    • Bob Bob says:

      Sameer, there are no good answers, little guys like us are at the mercy of all the giants around us and all we can hope for is to try to keep them from crushing us.

      I’m stocking up on as much extra food as I can carry and buying silver and gold. I’ll tell you all about it in future posts.
      Bob

  11. Sameer says:

    OFF SUBJECT!
    Leaving
    Wednesday the 12th to return to the desert. Weather sucks in Idaho! Hahaha!
    Sameer recently posted…Preparing for Hyper-Inflation My Profile

  12. Dave says:

    Inflation doesn’t matter. Defecits don’t matter. What matters to the macroeconomy is: UNEMPLOYMENT. And no one is doing a damn thing about that. Paul Krugman, who writes for the Times and is a Nobel Laureate in Economics, expalins it better than I.

    http://www.nytimes.com/2014/03/03/opinion/krugman-the-inflation-obsession.html?_r=0

    Before anyone screams: Pinko, Liberal Commie economist…the facts have born him out. Where is the inflation since 2008? Nowhere to be seen. Where is the Unemployment? Everywhere.

    Also, one can read Mr. Money Mustaches thoughts on why we are not all doomed:

    http://www.mrmoneymustache.com/2014/03/03/why-we-are-not-really-all-doomed/

    Just thoughts. None of this really matters, cause as John Maynard Keyenes once noted, we all end up dead anyway.

    • Bob Bob says:

      Dave, you’re right, we each do our best and then we die. Our goal should just be to live the best we can for as long as we can.
      Bob

  13. Peggy says:

    Not at all boring to me, Bob. You have a way of digesting information and disseminating it in a very clear and understandable manner. Have you ever seen a documentary called The Money Masters by Bill Still? It’s over three hours long and was done back in ’96…it’s a real eye-opener.

    I’m about the same age as you and it’s pretty scary to think that as we head into old age, things may come apart at the seams. I’m in Canada but it seems like whatever happens in the States, we’re not far behind. Although I’m terrible at planning and pretty much take things as they come, you’ve at least got me thinking about forcing myself to make a plan just in case.

    Thanks again for another thoughtful post.
    Peggy recently posted…Snow-Capped MountainsMy Profile

    • Bob Bob says:

      Thanks Peggy, most of this really is out of our control and we can’t do much about it. But maybe we can do the few things that are in our control. I’ll try to share my thoughts as we go along.
      Bob

  14. gadgetMe says:

    Hi Bob,

    I agree that hyper-inflation is coming, just maybe, not in the form that you describe, But, in all things are subjective who knows.

    A couple of links to some interesting takes to the on-going events that could unfold soon.

    Enjoy
    Golden Jackass (love that name)
    http://usawatchdog.com/80-decline-in-value-of-u-s-dollar-in-three-years-dr-jim-willie/

    Karen Hudes
    http://www.youtube.com/watch?v=JcwnbQzNz9Q

    Both are youtube videos, but worth watching

    K
    gadgetMe recently posted…Conn. Police Officers Refuse to ConfiscateMy Profile

    • Bob Bob says:

      gagetMe, all this is way over my head! It’s such a huge topic one really can take it all in. Common sense should tell everyone that we are not on a solid or wise course and that bad things could easily come from it.

      Being prepared with extra food and staples just seems like a common sense solution so that is what I am going to recommend. I’m stocking up on food and buying gold and silver and everyone of us can that to some degree.

      If all you do is buy an extra can of food every week you will start building up a food storage plan.
      Bob

  15. larry says:

    Bob I saw a documentary on how the gov borrows the money. Their is a office in dc with 500 workers and their job is to borrow ennugh money day by day to keep the gov runing for a day at a time. The day other countrys say no we are in truble.

    • Bob Bob says:

      Larry it’s nearly impossible to imagine that foreign governments aren’t going to decide we are a bad investment and stop buying out bonds.

      What’s worse is if they decide one day not to use the dollar to trade oil. We’re done if that happens.
      Bob

  16. Wayne says:

    Very interesting and timely article. People need to stop watching the faux/cnn etc infotainment channels and look into websites such as blacklistednews.com prisonplant.com and even survivalblog.com I hope it is ok to mention sites here. Thanks for the informative post Bob

  17. Vickie (VanFan) says:

    Bob and Friends: I have thought of you more than once as I’ve read the book Sacred Economics, and this seems like a good time to share links to it.

    There is no charge for the .pdf.

    sacred-economics.com/wp-content/…/01/sacred-economics-book-text.pdf

    Kindle or print versions are available here:

    http://www.amazon.com/Sacred-Economics-Money-Society-Transition/dp/1583943978

    I am near the end, and still not sure what I think about many of the ideas presented–which is a good thing, really. I would be most interested in knowing your thoughts if you choose to read it.

    Vickie

  18. Cmipilot says:

    What happened to the prohibition on political posts?

    • Bob Bob says:

      Cmipilot, politics aren’t allowed on the forum, but this is the blog. It is allowed in small doses in comment to my posts as long is it is not a problem.
      Bob

  19. margo miller says:

    I HATE politics BUT one must be prepared and while i’d prefer to go on living with my head under ground it’s good to hear what other people think and what your doing Bob is very valuable. Margo

  20. CAE says:

    A world leading economy will probably not have hyperinflation. Default on obligations are much more common in economic history.

    I think govt corruption is our real problem. I just look at local politics and can’t believe the things they get away with, or try to get away with~ All the while hiring their friends for outrageous compensation packages that include incredible pension pay-outs. It’s starting to resemble a third world design. Govt takes care of their own and give great contracts to organizations that keep them in power.

    • Bob Bob says:

      CAE, it’s a big issue with many facets. Remember I define hyper-inflation as 10% a year or more per year and the U.S. not only can easily have that it is a historical fact. We had that all though the 70’s and 80’s.
      Bob

  21. Patrick says:

    Hi Bob,
    I bought Roadpro Portable Stove and AT 205 reseal through your store.

    • Bob Bob says:

      Patrick, thank you so much! It cost you nothing and made me a little money. I hope you enjoy the Roadpro as much as I have!
      Bob

  22. ron says:

    First, I’m sorry this is long but subjects like this are not for people looking for one liner conversations and I know you dont want political talk on the forum.

    A very good book to read is “The Creature From Jekyll Island” by G Edward Griffin. It will give you a full understanding of what our money has become.
    A few additional thoughts:
    The president is not running things.
    It matters not which party is in power.
    The money people of the world run the world.
    The corporations and money powers control our political system.
    The printing of money with no base system of measurement or value lets them tax you without you directly seeing it.
    Have you noticed that they dont really push for tax increases? They are doing it by printing money.

    Hyper inflation doesn’t need to happen as inflation is happening right now. More is achieved by a slower more gradual inflation process. If you add a small tax to a person over a longer period of time rather than a large tax all at one time they dont rebel.

    Look at the price increases of all the items you buy. The increases dont stop but your pay doesn’t go up. Its a hidden tax that is added as they dilute the money by printing more money.

    They dont include groceries and energy in the inflation calculations. Why?

    They can claim inflation is very low but what do you experience at the store?

    Gold and silver are of the same value and weight that they have always been, it just takes more dollars to get the gold because there are more dollars being printed.

    Inflation wouldn’t matter if your income went up at the same rate but its not.

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