When there’s serious economic turmoil, you could find yourself in a SHTF event as a result of hyperinflation.
This is when there’s a fast and excessive price increase in the economy, and even basic items such as fuel and food can become scarce as a result of the dramatic increase.
Does hyperinflation render cash useless?
Another scary thing about sharp increases in prices is that cash and savings deposited in the bank can lose their value because money won’t have much purchasing power.
With that in mind, let’s explore some important things that you need to know about hyperinflation. We’ll look at how you can prepare for it and ensure the safety of your family.
How You Can Prep For Hyperinflation
When prices rise to over 50 percent in one month, this is a clear sign that you’re in a state of hyperinflation.
What should you do? There are some important things you should do before the crisis strikes so that you minimize its damage.
Stock up on essential items
It’s always in a prepper’s best interest to start stocking up on important and essential items, such as food, hygiene items, and household supplies. If hyperinflation becomes really bad, you could find that the shelves in stores are empty, so it helps to have your own stock at home.
When it comes to food and water, make sure you have a three-month supply. If you’re on chronic medication, it’s always wise to try to stock up on a bit more than what you currently need.
Become more sustainable
If you have some space on your land, now’s the time to start planting fruit trees and vegetables. This will help you to nourish your family during a SHTF event because fresh produce would be hard to come by.
Make the right investments
During hyperinflation, governments usually increase interest rates to reduce the pressure but if the hyperinflation is very serious this will decrease the value of your savings. Bonds are some of the worst capital assets to own because of this, and hyperinflation also decreases the diversification benefits of having a bond.
However, it’s still a good idea to diversify across various investments, like stocks. You should also consider investing in real estate and precious metals to vary your finances as much as you can. Never have all your eggs in one basket!
It’s said that popular inflation hedges like gold or collectibles could do well during high inflation but there is not enough evidence concerning their performance. Still, it doesn’t hurt to have some of these items in your possession, especially when it comes to bartering (which we’ll get to later).
Settle your debts
Having lots of debt is never good, and it becomes even worse during hyperinflation.
You’ll be in a position where you have no choice but to pay debts and interest on them, and if you can’t manage this because of the economic situation you could end up losing your house, cars, or other belongings. That’s the last thing you want to deal with in such an uncertain time.
Find other income sources
You never know when you’ll lose your job, but even if your job is relatively secure you will need to ensure you have more money so you can cover your debts and have some money stashed away for a rainy day.
Ensure that some money that you earn goes towards preparing for possible hyperinflation, such as by stockpiling goods in the home.
Make your home more secure
If you’re going to be stocking up on essentials to help your family during tough times, your home will have many treasures that will appeal to those who are hungry and haven’t prepared, especially because sometimes hyperinflation is tied to civil unrest.
Therefore, it’s a smart idea to jack up the security of your home to make it more difficult for people to break into it.
Have backup plans in place
Should an appliance in your home fail you, will you still be able to get by?
For example, if your washing machine packs up, will you be able to wash clothing by hand and hang it up on a washing line? If your dishwasher isn’t available, do you have a dish-rack so you can wash your dishes by hand?
These might seem like simple tips, but they allow you to prepare for the worst case scenarios so you can continue to live in a similar way as before.
Stock Up On Items With Which To Barter
When cash becomes meaningless during hyperinflation, people might resort to trading with items that they want but cannot buy.
These can include precious metals, common stocks, and a variety of physical objects. For example, 2018 reports from Venezuela’s hyperinflation revealed how workers were paid their bonuses in eggs because of how money became worthless.
But, which items should you barter? What would people find most valuable if cash were worthless?
Think about the goods that will be seen as valuable during economic collapse, but also think about how scarce an item is. When more people want it, this will increase its perceived value.
While it’s always a good idea to stock up on food items and household items that will become scarce during a financial crisis, bear in mind that people will also be missing the luxuries they used to enjoy, such as jewelry, alcohol, cigarettes, chocolate, tea, and coffee.
These items can help people cope with the stress of the current situation, so they’re useful to stock up on.
What are some countries that have experienced hyperinflation?
Countries that have experienced severe hyperinflation include Venezuela, Germany, and Zimbabwe.
How long does hyperinflation usually last?
The average hyperinflation cycle is around 16 years with an annual inflation of 893 percent.
Hyperinflation can be a scary time, but by ensuring you’ve prepped as much as you can for it you’ll be able to keep yourself and a family safe.