It Matters Not Whether Inflation or Deflation–You Need to Protect Yourself, by Gentleman Jim from Colorado

No matter who you are, where you live, or whatever your political proclivities, economic trends such as inflation/hyper-inflation/deflation simply don’t care which party you belong to, who you voted for, or whether you’re believe in Keynesian “prime the pump” spending by the government, or not. The laws of economics may be somewhat fungible and give us surprises from time to time, but overall:

* They don’t care whether you love the earth, hate the earth, drive electric tiny-cars or huge Hummers or travel by foot or horse.
* They don’t care whether you’re in a blue state or a red state or a purple state or a pink state.
* They don’t care whether you rent a tiny apartment in the city or own 10,000-acres of ranch land with a huge mansion thereon.

Let me say it one more time: inflation, hyper-inflation and/or deflation don’t care who you are! They’re like unwelcome guests who stop by uninvited and visit you and help themselves, no matter who you are or where you live or what you believe.

Did you know that in the modern history of our world, there are over 500 currencies (systems of money) that simply no longer exist? Yep, the only folks that even know about all those currencies are the coin collectors and a few historians.

* But almost universally, they all share one feature: they died due to hyper-inflation and subsequent devaluation.
* In nearly every one of those cases, the corresponding governments fell, and quite often the societies pretty well ceased to exist—they were subsumed by other nations with stronger currency.

Can’t happen here? Please, do some reading and allow yourself to be impartial.

* Check out the recent cases of [mass] inflation and hyperinflation in Zimbabwe and Argentina.
* Look back to Germany’s Weimar Republic in the 1920s—it is quite easy, via the Internet, to find pictures of everyday Germans taking a wheelbarrow full of money to the store to buy just a loaf of bread.
* Look back to the 1930s in the United States…when the devalued dollar led to such extreme measures that in 1933, FDR confiscated nearly all of the gold in the country—and reimbursed owners at a fraction of the value of their gold (absolutely true statement; I have a copy of the Executive Order, if you’d like to read it).
o Yes, households were allowed to keep a small fraction of their holdings, no more than $100 worth of gold, and also numismatic collector’s coins were exempted.
o Yes, industrial concerns and business were allowed to continue storing “appropriate” amounts of gold for things like making jewelry, etc.
o The point here is—the government literally came and took people’s gold from them…at bargain basement prices.
o Today…what might they take? Your 401(k)? Your military retirement pay? Your teacher’s retirement pay? Your extra cars–and the government gets to define what constitutes “extra”. After all, it isn’t fair for some to have, and others not, right?

· Scary? Over-wrought?

· Again, read the 1933 FDR gold confiscation order. It is real, it happened, and you can even look it up on the Internet or any encyclopedia.

Now then…if you’ve read this far…you’re probably asking yourself the question: “Okay, so what should I be doing about all this? What should other people be doing about it?”

First and foremost…try to staunch (or at least quell) the storm. Contact your city, county, state and federal officials, representatives, senators, presidents, etc.

· Ask them…beg them…demand of them…that spending be reigned in.

· That our governments at all levels live within their means.

· That taxes be kept at lower levels.

Because if we don’t get our spending under control, all of us will suffer. From the top to the bottom, east to west, north to south, rich to poor, old to young.

* Do something…now…before it is too late. Reign in our governments’ spending before it is too late!

Second: You need to start considering the possibility that the looming storm will break right down on top of you…me…us…our children…our grand-parents…everyone we know.

* So, yes, you need to prepare yourself against that day. You don’t have to believe Armageddon is here, to read a couple of history books and understand what happens in a classic deflation—inflation—hyperinflation—government collapse type of situation. And, fortunately, there are some common-sense things you can do to at least reduce the eventual impact on yourself and your loved ones.

For example, pay off all debt. Immediately! Okay, if not immediately, pretty darn fast. Remember that during the Great Depression, many a farm was foreclosed upon because there was a mortgage on it, but sometimes for only a few hundred dollars. It’s just that no one had even that few hundred dollars with which to redeem that mortgage, and thus family homesteads were lost forever.

Understand that one day your bank may close or be closed. Your bank accounts may not be accessible for days…weeks…or even months. It doesn’t really matter if those accounts are FDIC-insured for up to $200,000. If you can’t get it out for six months…and inflation is running at 20% per month…your money will be worthless by the time you can get it out. So, buy a safe and keep a few thousand or few hundred dollars stashed away, just for emergencies. How much do you need to stash away? That is up to you and your particular circumstances. But you should break up the currency into mostly tens, fives and ones…and probably 30% of it should be in coins (quarters, dimes, nickels—but don’t bother with pennies). (BTW, don’t let the neighbors know that you’re doing this!)

If you have the resources, it would be exceedingly wise to store some silver and gold coin, preferably in coin form. Since most of us can’t afford that buy-in prices of gold (now well over $900 per ounce), that means buying silver. Survivalblog has some excellent recommendations in this area, and you should check that source. However, for most of us, you can break it down into two easy-to-remember areas:

1) Pre-1965 U.S. “junk silver” coins (back when U.S. coins were still mostly silver-based, at about 90%). These include quarters, dimes, half-dollar and dollar coins of the era. But check the silver content of half-dollars—those made from 1965 to 1970 are only 40% silver. Look at places like SurvivalBlog and to understand why buying pre-1965 coinage is a good idea; for this article, suffice to say that these are a good idea. Your budget will of course determine how much of these you can buy. Potential sources include local coin dealers, local coin collectors (potentially the cheapest sources, if you can find an elderly couple who are liquidating their collections), eBay, and many others. You should be able to buy these junk silver coins for between 10 and 12 times the face value of the coins selected, depending on your source.

2) U.S. Silver Eagle coins. Now, many smart folks like Jim Rawles of Survivalblog are not fans of the Silver Eagle series of coins—check his web site for those opinions. On the other hand, I am personally of the opinion that Silver eagles represent a very strong option. They are obviously more valuable than the pre-1965 junk silver coins, and thus you can get a great store of value into fewer coins. After all, the space considerations of storing a zillion dimes and quarters is pretty significant. Plus, they get very heavy very fast. Silver Eagle coins, on the down side, may represent too large a store of value in one coin….you don’t want to be buying a loaf of bread with a U.S. Silver Eagle, when a 90%-silver Mercury Dime will do the job.

1. On the other hand, I can’t see anyone carrying thirty pounds of silver through what could be very dangerous streets, on their way to try to bribe some embassy official to provide a visa to a more stable country. Heck, even the Silver Eagles might be too big and heavy for that purpose, so you probably will need to have some gold coins, as well.

2. Don’t laugh too hard at that concept. Remember, gold & silver were how many Jews and other ethnic minorities bought their way out of Nazi Germany and occupied Europe, at least in the early years of the Hitler era. Today, a few of the minority farmers in the Zimbabwean countryside are using gold & silver to buy passage to safety, once they have been driven off their farms by the mobs.

If you can afford to buy some gold, as well as silver, be sure to include a lot of the smaller [fractional] gold coins. You don’t want to be getting out a hammer and chisel, trying to cut a gold coin in half, in the middle of a long immigration line. But never forget that U.S. government has confiscated gold once before (1933), and could well do so again. You might want to be discreet in how you purchase, store and transport your gold.

Finally, remember that such silver and gold purchases are not investments. They are insurance! Just as you pay “XXX “dollars a month for your auto, home or life insurance, yet count yourself lucky if you never have to make a claim for your policies’ benefits…you should look at Gold and Silver the same way. Try to buy consistently over time, and try to buy a little more whenever the prices drop some.

* But recognize that you are buying insurance against the partial or total devaluation of our nation’s currency. Don’t expect to make any money off of these purchases in an investment sense—but I’ll bet you sleep better at night, once you have stored a small amount of silver & gold in your home safe.

Third, you need to invest in commodities and hard assets—“things.” The good news is that you can do this without owning 50 guns or living on the Canadian border.

* If you think inflation/hyper-inflation is coming….having a few months of food in the pantry is a sure money-maker.
* If you believe deflation is coming…having some food on-hand is even more important—because in a deflationary environment, many farms will be going out of business and cease production…meaning that no more how little it might cost or how much money you might have…if the corn is never grown in the first place, it can’t find it’s way to your dinner table.

If you find the pantry & storage room getting cluttered with canned goods and boxes, invest in some shelving units. I recommend specialized food storage shelving units such as those sold at Rocky Mountain Home Solutions (Disclosure: my wife owns and operates this company.) Or, check out the various advertisers on SurvivalBlog

* Think about buying a four-wheel drive SUV or truck. If not, at least make sure your vehicles are in good repair, with excellent tires and brakes, recently tuned-up, and with new air filters.
* Buy some new/extra camping supplies…and then use them to take the kids camping this summer. You’ll save money over hitting places like Disney World or Six Flags, probably have more fun, get closer to your kids, create some lifelong memories, and then still have the camping equipment that could be used “just in case.”
* Think about a means of self-defense, keeping in mind local, state and federal laws.

1. How, How Much and What Kind are completely up to you, within the bounds of your budget and your good conscience.

2. One good rule of thumb is that for any means of self-defense to be useful, you must also invest in initial and ongoing training.

3. So, if you want to use judo or karate as your self-defense means, then you need to stay in shape and practice on a regular basis.

4. If you want some knives—you need to take a couple of courses on how to effectively defend yourself without risking harm to yourself or innocent bystanders.

5. And if you buy a firearm of some type, then you really need to know what you’re doing. Don’t put yourself in a bad situation by not knowing how to handle your weapons. This is not meant to discourage you from owning firearms—we own several—but to emphasize that they require an investment of your time and attention, as well as money. [JWR Adds: Get training from well-qualified instructors. Start with an NRA firearms safety class. Then take advantage of the inexpensive training offered by the RWVA (the Appleseed folks) and WRSA. Then move on to advanced training offered by schools like Gunsite and Thunder Ranch. As time and budget allow, move on to advanced force -on-force training.]

6. And of course, firearms require an investment in ammunition—or you risk having only large clubs to defend yourself with.

After taking these initial steps toward preparing for an uncertain future, consider other resources for further information and “next steps. Obviously, SurvivalBlog is an excellent source—very even-handed and stays on topic. We’ve also found the Mountain Steps Blog to be a great source of straightforward, honest advice—perfect for the beginning or “early” preparer. Stay away from any radical blogs that focus on conspiracy theories and potential violence—they simply spend too much time focusing on “why” things are happening, and you probably don’t have the time for that. Instead, focus on preparing for a broad spectrum of potential scenarios that will give you the widest scope of options in any real-world emergency.

Well, that’s probably enough advice for now. I hope some of you have found it useful, and perhaps even inspiring. As my old basketball coach used to say: “Don’t be caught watching the paint dry!!” Do something, because anything is going to be better than nothing.