Who else wants to be wealthy and happy? Well, who doesn’t, right? Unless you’re a caveman, all of us have dreamt of riches and financial freedom at some point.
So, what do you do? You work hard. You live below your means. You save up some money. Eventually, you start to feel good about your net worth. Well done!
But then, in the blink of an eye, everything you’ve worked hard for is gone. Perhaps due to some Wall Street fiasco or an unforeseen event⸺ war, natural disaster, or pandemic even (sounds familiar?)⸺ the economy has collapsed drastically. Jobs go out the window, financial institutions go bankrupt, and businesses halt for good. For so long you’ve worked your butt off just to be brought back to earth just like that.
What a letdown, right?
I’m talking about hyperinflation ⸺ extreme inflation where price increases are rapid and out of control. It’s when the money you thought was lavish can barely buy you food to get by. And that million-dollar saving, which you thought could sustain you for the rest of your life, is depleted in a matter of years not decades. Yes, that quick. When hyperinflation takes center stage, your current financial goals and net worth could be rendered next to nothing.
Then just look at the hyperinflation in Germany from 1921-1923 when the general population endured abject misery. Or how about the Great Depression of 1929-1939? The Financial Crisis of 2007-2008? The point is that what’s possible doesn’t always seem probable. And for better or worse, history repeats itself. Not to mention all the chaos and market mishaps happening globally today that could expedite such economic downfall.
Feel free to not just take my word for it. However, here’s what credible sources have to say concerning the red flags of imminent inflation (hyperinflation if not mended):
Signs of inflation arrive as the Fed reiterates patience on easy policy
Market watchers are unsure about the component of inflation that may not be temporary: the rebound in spending and demand in the face of unprecedented stimulus from the government and the Fed.
Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, said that the “million dollar question” is parsing out the temporary price pressures from the drivers that are not.
“It’s more about the Fed and how the Fed is able to absorb potentially higher inflation that might not be transitory,” Subramanian told Yahoo Finance Friday. Source: Yahoo Finance
Are We Headed For A Hyperinflation?
One of the most striking examples of hyperinflation in history happened following World War I in the Weimar Republic of Germany. By attempting to pay war reparations and grow the economy at the same time, the German government printed so much money that a huge gap between supply and demand developed, resulting in an inflation rate of 322% per month or an annual rate of more than 3 billion percent by November 1923. Source: Investopedia
Not trying to sound doom and gloom here but it’s time we realize the reality of our economy’s fragility and our world’s unpredictability.
Sounds ominous and alarming? Not for the prepared.
That’s right. So, to help you prepare and survive the next hyperinflation, we’ll discuss your hedge against inflation, physical assets to invest in, and how to securely store them. By the end, you’ll learn some practical tips so you won’t be caught off guard when the financial storm strikes.
Sounds good? Let’s read on.
! Quick disclaimer:
The strategies and information provided herein shall not be construed as investment, financial, or legal advice and not be used without first assessing your personal and financial situation. Doing your own research and consulting a financial expert is highly advised.
Hedge before you fall over the financial edge
First off, before hyperinflation even wreaks havoc, take care of all your debts and liabilities. You might think you can escape from your financial responsibilities when the economy collapses but you might wanna think twice. Because if anything, the more aggressive banks and lenders will demand payment from their debtor since they are broke themselves. Thus, pay your dues while you can before things get ugly.
Now, I know how tempting that latest fashion wear or iPhone ad is but keep your lifestyle inflation under control. Don’t fall into the trap of consumerism because once prices go haywire, your craving could lead to you starving.
Another wise move to make is to be self-sufficient without relying on the government or society. Learn how to produce your own goods⸺ homestead gardening, poultry farming, renewable energy, etc. And to be one step ahead in surviving the next financial dread, never underestimate the power of having physical assets.
Right now you might be asking, “What physical assets should I get my hands on exactly?”
I knew you’d ask so let’s get that answered for you.
Hyperinflation resistant assets
When the economy as we know it falls apart, tangible assets are your best bet. Something you can hold securely in your hands. Something you can exchange/barter for other goods. Something with timeless and stable value regardless of the weather or economic status. Not just a bunch of cloud numbers on a screen that can be manipulated and hacked, or virtual repositories operated by some shady third-party company.
In no particular order, here are some of the best physical assets you can easily store at the comfort of your home to hedge against hyperinflation.
1. Physical Cash
“Cash is king.” It’s an adage everyone has heard one way or another. And although the origin isn’t clear, it was used in 1988, after the global stock market crash in 1987, by Pehr G. Gyllenhammar, who at the time was CEO of Swedish car group Volvo. And now it’s a phrase widely used in times of financial crises.
Are you getting the picture?
Cash is the most liquid asset you can own. Its value may diminish over time during inflation but it will still remain as the main means of exchange. It could even be the safest and surest way to go about your economic transactions⸺ spending it however and whenever you want.
Plus, with cash on hand, you can quickly invest in other products when the opportunity presents itself during a financial crisis.
Gold has served humanity for thousands of years. In fact, it’s regarded by many as the main hedge against inflation. That’s because, unlike dollars, gold can’t be inflated⸺not printable, no credit risk, and it’s a finite resource thus its value won’t diminish over time.
According to Oxford Gold Group, gold was priced at $1,065/oz in December 2016. Since then, the price has increased steadily. From the last quarter of 2020 to the beginning of 2021, the price was around $1,800 to $2,000/oz. Therefore, had you invested in gold in 2016, you would have gained nearly 90% return in four years.
Yeah, really! And remember, such price growth was even after the pandemic hit.
Owning a treasure chest full of gold? Yes, please!
Another precious metal worth investing in is silver. Just like gold, silver is a limited resource for we can only mine so much.
Silver has been among the most traded precious metals on the market not only at present but also for the past millennia. And since silver is an industrial metal used in various fields including medical and technological manufacturing, the demand is expected to rise. Silicon Valley isn’t going anywhere soon, I tell you.
Hence, investing in silver could generate massive returns as technology advances which in a sense is a very good hedge against inflation.
4. Other precious metals
Precious metals are considered safe-haven investments. And gold and silver are not the only stars in this realm. Copper, platinum, and palladium are some of your best bets if gold and silver are not your jam (or as supplements). Both platinum and palladium are popular in both the jewelry and automotive businesses and their demand is projected to increase by the years to come.
Sooo… are precious metals like palladium any good? How about the statistical fact that palladium’s price almost doubled in just after a year⸺ from $1,720/oz on March 23, 2020 to $3,011/oz as of May 6, 2021. Isn’t that something?
5. Cryptocurrency cold storage
Ever since Bitcoin’s launch in 2009, the world of cryptocurrencies has amassed global popularity in the investment community. And with such ubiquity comes increased uncertainty in security⸺ fraud, hacking, and other cyber villainy.
The solution? Go offline. And that’s where “cryptocurrency cold storage” comes in. Simply put, it’s keeping your beloved cryptocurrency on an offline device or hardware wallet (usually USB-based) to be accessed later. With this, you can say goodbye to hackers and internet hocus-pocus. Cool, eh?
Now all you need to do is store that hardware in a state-of-the-art safe/vault and you’re all set! (More on nifty storage later)
6. Survival essentials
Investing in survival essentials is crucial yet neglected by most people. You can invest in every stock, every metal, and every coin all you want but if you don’t even have your basic physiological needs met, it’s futile.
To further elaborate, let’s refer to Maslow’s Hierarchy of Needs. It states that humans must address their physiological needs first and foremost before anything else to survive. These include air, food, water, shelter, clothing, sex (very important), and other primal needs.
So, before all hell breaks loose and while supplies last (still at reasonable prices), stockpile food in your pantry, store water in your tanks, and acquire reserve houses and properties if you can as real estate investments or as refuge just in case.
The second level is about health and safety. In this stage, make sure to stash medications and first aid items. On top of that, stash ammunitions and other self-defense tools because it’s better to be safe than sorry. And speaking of security, light is your number one defense so ensure you have your power supply (solar, generators, batteries) taken care of.
Hyperinflation skyrockets the prices of products. So, while you have the financial capability, don’t neglect your survival essentials because surely, you don’t wanna be fighting over the last overpriced apple in the grocery later on, do you?
How to securely store your assets and valuables
Now that you know what to consider investing in, it’s time we talk about the next critical step⸺ storing.You see, owning everything is useless if you can’t even keep them in the long run. What good is saving up for the future when we’re easily robbed at present?
Since we’re talking about security, we might as well talk about how to not lose your hard-earned assets and valuables. Crime is inevitable but choosing not to be a victim is an option.
Are you with me? Here are some nifty ways to go about it.
1. Covert storage
This method is the oldest and by far the cheapest way and should suffice for those who own a small quantity. Just find a secure hiding place either in your house or on your property. That could be under the sink, in the toilet tank, or your backyard. Hmm… sounds cliché though (seen in movies repeatedly).
Wanna take it to the next level? How about inside fake pipes or vents, feminine hygiene boxes, old paint can… and the rest is up to your creative imagination.
Just don’t forget to remember such sneaky hiding spots. Also, it would be wise not to store everything at home due to unpredictable disasters (massive tornado or earthquake can easily ravage your house along with your treasures).
And while such a method may be free, it can increase the risk of damage due to humidity and other harsh elements, and it’s only as effective as your silence. Hush!
Now let’s say you have a fortified home that can weather even the worst of storms. Then, safes are your go-to. They provide additional layers of security from their built-like-a-tank framework to their cutting-edge locking system.
What to look for in a safe:
- Fire, water, and impact-resistant. If anything is worse than getting robbed, that’s getting your house burned to the ground (knock on wood). And you don’t want your valuables to get charred as well.
- Expertly tested burglary protection. Having a high-security burglar safe cannot be overemphasized. Thus, go for a UL (Underwriters Laboratories) rated safe of at least UL-15 or TL-15 (tool resistant). Make burglars regret their foolish attempt.
- Top-notch locking system. This is somewhat subjective depending on your personal preference. Biometrics are common but not advisable though since fingerprints can be fabricated nowadays (watch some operative or CIA movies and you’ll see). Instead, opt for better options like PINs or a dual lock system which requires a physical key on top of the combination code.
- Size and storage capacity. As much as possible, choose bigger and heavier safes to deter burglars from simply taking them away. And as for the capacity, just how many gold bars do you have?
- Safes are already secure by themselves. But if you conceal them in a sneaky hidden spot, cheers to the burglar’s wasted time and effort.
- Fix it to a sturdy part of the house. Even if it’s big and heavy, it can still be taken (with time and advanced physics) unless it’s securely mounted to the wall or column, or bolted to the concrete ground.
- Sensitive media or devices (cryptocurrency cold storage, USB, hard disk, photos) should be stored separately in a data/media safe. Unlike regular safes (even fireproof ones), these safes can maintain an internal temperature below 135° and humidity below 85%⸺ go higher and media devices will be damaged and their data corrupted.
- In addition to the previous point, make sure to use safes/vaults created specifically for the valuables you want to store. For instance, use gun safes for your guns and ammo. You might just benefit from an insurance discount (check with your insurance agent) and tax deduction (states like CT, MA, WA, and others) by doing so.
- “Loose lips sink ships.” Secrecy is key. Unless it’s for insurance or legal purposes, tell no one you own a safe.
3. Home security
According to the FBI, a property crime happens every 3.8 seconds. To put that in perspective, that’s around 22,736 cases every day. Whoa!
If you’re planning to store your physical assets and valuables in your home sweet home, then better guarantee it’s a fortress you can trust. There’s no sense in having an indestructible safe/vault if perps can easily infiltrate your premises and work their magic on your possessions.
Start with your surrounding perimeter.
Keep it well-lit⸺ darkness attracts dark-minded people. Install surveillance cameras and alarms because homes without any security system in place are 300% more likely to be broken into. Have a watchdog (or tiger) visible to scare off intruders. And don’t show off your shiny treasures because perps like to window shop as much as you do.
Do these and you’ll discourage burglars from even stepping foot into your property in the first place.
Take action against hyperinflation
There you have it. You’re now one step closer to surviving the next hyperinflation. You now know some of the best hedges to consider and how to store them for the dark times and for generations to come.
Whether you’re in the upper class or not-so-rich class, retired or still coming home tired, yacht owner or humble commuter⸺ hyperinflation is an ever-present threat for all of us. But with the right preparation and mindset, we can weather the storm and come out of the other side victorious.
So, what’s next?
Time to take action. The best hedge against hyperinflation is not just thought out but carried out. Just like Nike said, “Just do it.”
After hyperinflation settles, will you be found LOSER or WINNER? Your call.
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