Hyperinflation Effects

Posted by Becoming Your Own Bank Advisor – Nick Drzayich

According to Investopedia the term Hyperinflation means: “Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is meaningless.”  There have been some rumblings within the financial world of hyperinflation being a real threat to our country and something that would eventually lead to the collapse of the Dollar.  I want to talk about what we know and don’t know about hyperinflation and the potential collapse of America’s currency.

First, it should be noted that the collapse of the Dollar would have catastrophic effects around the world.   Unlike in previous empires and kingdoms where we have seen the currency collapse,  the Dollar is the world measurement for  all major commodities such as oil, gold, silver, etc.  Also, many other countries’ currencies are pegged to the dollar, meaning when the dollar goes up many other currencies go up as well and vise versa.  So it is important to understand that the collapse of the dollar would have a huge impact on the worldwide economy, not just America’s. Here is what Economist Carlos Lara had to say about inflation.

I have been asked multiple times what will happen if the Dollar does collapse and we move to a world currency and America no longer uses the Dollar.  My answer is short and simple, I don’t know.  I don’t know how anybody can claim to know the outcome of something as drastic as that because it has never happened.  So what do you do to make sure you are covered either way?

Many people are cashing in their money for gold and silver, banking on the fact that when the dollar collapses they will still have something valuable to trade.  Buying commodities such as gold, silver, real estate, etc. is a great idea and a great hedge against inflation.  However going to the extreme and cashing in all your chips for these commodities may not be your best bet.

When push comes to shove it makes sense to try and cover all your bases the best you can.  Without having any way of knowing exactly what the outcome will be regarding hyperinflation and the collapse of the Dollar all you can do is prepare to the best of your ability and don’t jump to any extremes.  Infinite Banking is, in itself, an incredible hedge against inflation and when coupled with the purchasing of commodities like gold and silver if can help prepare for a future that is uncertain.

About The Author

Nick D.

By Nick | Follow Nick on Twitter