This is what Hyper-Inflation looks like.

Discussion in 'Preparedness' started by LostViking, Aug 17, 2018.

  1. LostViking

    LostViking Supporter Supporter

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    I see this as valuable knowledge for prepping.
    If/when the economy tanks. Large stockpiles of cash may become virtually useless.

    This isn't pie in the sky fantasy. It is real world, real time.
    https://www.wral.com/swamped-in-inflation-venezuela-will-cut-five-zeros-from-currency/17774600/

    Excerpt;
    The tactics have left Venezuelans like Yosmar Nowak, the owner of a coffee shop in Caracas, convinced that there is no solution in sight and that the government cannot even bring down the price of a cup of coffee, an eye-watering 2 million bolivars.

    Just food for thought.

    It may pay to think about bartering. Consumables like coffee, candles, food, will all retain value, even if currency does not.

    I don't see this in our short term future. But I have been studying Venezuela for about five years now. It was a slow slide to get where they are now.

    It will be an ever slower path to recovery.
     
    Last edited: Aug 17, 2018
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  2. LostViking

    LostViking Supporter Supporter

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    What I do see is inflation being buried and camouflaged everywhere here in the United States,

    A jar of red sauce shrank from 32oz. to 24oz. But the price remained the same.

    A 6-pack of IBC Root Beer became a 4-pack. But the price remained the same.

    A roll of paper towels is about 2/3s the size it was. Same price.

    A box of 1 quart ziploc bags is scraping on $9.00. Nine dollars for a box of plastic bags.

    These are just some immediate examples that are fresh in my mind. But everything is creeping up in price.

    My wife came home with groceries last night. $190.00. I carried them in. I can tell you plainly, there was not $190.00 worth of groceries in those bags.

    We do not live high on the hog.
    There were no Delmonicos, or Sirloin Tips.

    We have folks coming this weekend to camp. So this bill was a little out of the ordinary. But there was nothing extravagant!
    Meat purchases consisted of;
    A pound and a half of Peppercorn Bacon @ a whopping $6.49/Pound. $9.74 for bacon!
    A pound of Deli Sliced turkey was $6.99/pound.
    And 6 sweet italian sausages for sausage and peppers tomorrow night. I have no idea what their cost was.

    This wasn't Boar's Head either. It was store brand stuff that she only buys when it's on sale. Store brand American cheese is $5.99/pound and that's on sale.

    If knives aren't involved. I'm stupid cheap with our money. We bake our own bread, make our own pizzas, grow, pick, and can, fruits and veggies.

    We buy whole chickens, I process them into meals. Chicken and potatoes, chicken and biscuits, chicken sandwiches, chicken soup, and chicken hash.

    We cook and slice our own corned beef. Same with pork roasts, and beef roasts.
    So the deli counter prices always shock me.

    But it's not just that, even Evaporated Milk is through the roof. Even stupid prepper favorites like Spam, Canned Ham, and Corned Beef Hash are through the roof crazy expensive.

    We don't eat out, perhaps breakfast once a month. Ironically it's usually when we go grocery shopping. So I don't have a solid fix on these costs. But even breakfast with tip usually runs anywhere from $17.00 to $25.00 depending on where we eat.

    We are seeing inflation here. It is just hidden well.
     
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  3. DirtmanDave

    DirtmanDave Supporter Supporter

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    :2: My wife who does the same grocery shopping, looking for sales and bargains has said the same thing. Suger down from 5 pounds to 4 but the price is the same. We see it all the time with things we buy. The money just doesn't go/buy what it used to.
     
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  4. DarrylM

    DarrylM Supporter Supporter

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    Venezuela is so poor now, even the bank notes are imported.
     
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  5. Haggis

    Haggis Guide

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    Coffee at our two local “big” grocery stores,,, (same company, one on each end of the small town),,, can be $9 or $10 in the “new” smaller can, it was introduced a couple of years ago to replace the larger can that sold for $7 or $8,,,

    We can sometimes get the same coffee at Target for $6 a can,,, when it’s on sale at Target, I buy all they have. It’ll keep, and we’ll drink it.

    Pinto beans and oatmeal are staples here, on Wolf Cairn Moor. We also eat a lot of venison (wild game), wild rice, and fish,,, these last I can harvest myself. Wild rice is an amazing food, add to anything and it’s right at home, and it’ll keep for just about ever, if stored in a dry place.

    Funny what people will spend a lot of money on and not complain, then spend a little money on something else only to howl like banshees,,,
     
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  6. LostViking

    LostViking Supporter Supporter

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    Haggis,

    Being the barer of Scottich blood myself. Oatmeal is a staple here as well.
    My favorite being John McCann's Steel Cut Irish Oatmeal.

    I find it to be about the best I've had. Plus, it's prepper ready. Comes in a nice tin can with a top like a piaint can. No mouses geting in this one.

    And when It's gone the tin gets repurposed. Very cool stuff.

    We typically buy coffee beans in bulk from Sam's Club, and grind as necessary. Cheaper and good.

    I totally agree on wild rice. Great stuff. So different from the white processed stuff.

    Sourcing critters helps cut the grocery bill here too. Plus it's hard to beat a good backstrap and some onions.
     
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  7. NattyBo

    NattyBo Supporter Supporter

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    Post World War I Germany had roughly a 3.2 million % inflation rate every month. The mark went from 4.2 to the dollar to 4,200,000,000,000 to the dollar in 1923. They dropped 12 zeroes from the currency and established basically a trillion mark note (Rentenmark).
    There's a classic tale of a man taking millions of marks in a wheelbarrow to get bread, he gets distracted, eventually comes back to the bread line. His stacks of money are there, but someone stole the wheelbarrow.
     
  8. HeadyBrew

    HeadyBrew Supporter Supporter Bushcraft Friend

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    Nothing cut me to the core quite as much as when they dropped the standard ice cream containers from one gallon to 1.75 quart for the same price. Bastards.
     
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  9. atlastrekker

    atlastrekker Supporter Supporter Bushclass III Bushclass I Bushclass II

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    Inflation is tax. The FED is eating your savings one purchase at a time.

    Venezuela is still on the down hill slide, who knows if or when it will ever get better there.
     
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  10. Calicoast

    Calicoast Supporter Supporter

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    My wife always tells me I add more than we need when I go shopping. Last time I went shopping, the bill was $290.00. I put everything away, and my wife usually rearranges her way hours later. She always says my bills are $100 or so higher, and not much to show for it. I let her handle all the shoping now. I admit, I do stop by the bacon and sausage section when she will just stroll right past. I really don't need some of what I add.
    C
     
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  11. Gary V

    Gary V Scout

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    I went to Mexico in 1994, one year after they released the new peso. They had moved the decimal place of their currency 3 places - 1,000 pesos became 1 new peso. The result was a inexpensive vacation for me.

    One of the biggest reasons that the US currency is so stable is that it's in demand worldwide for investment and for global trade (or reserve currency). Inflation however is constantly eating away at the dollar and it has lost 97% in value since the year 1774. Most of us common folk don't have enough money to make investing worth the risk. If you want to break even against inflation consider US TIPS (Treasury Inflation Protected Securities). Gold? It has a poor return compared to even common stocks at about 20 - 50% less return depending on what the interest rates are doing. TIPS are backed by the US Treasury while gold is subject to that familiar phrase: "past performance is not necessarily indicative of future results".
     
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  12. tomcfitz

    tomcfitz Supporter Supporter

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    @Gary V

    Based on my research, precious metals rarely "make" any money. What they are good for though is a hedge against inflation. A big mac will cost the same amount of "gold" today as in 30 years. In theory at least.
     
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  13. MAD Punty

    MAD Punty Supporter Supporter

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    This is a post I made a couple of years ago on another forum in response to questions about Bitcoin (The New Hotness, at the time), "money",and such...it was popular, so I saved it, and I think it is related to the topic in this thread, I hope folks find it interesting and informative.

    I think it's a good primer on understanding the concept and purpose of money, and what is sound money, and what is not sound money.

    PROPERTIES OF MONEY

    Aristotle laid out a series of properties that make some commodities better "money" than other commodities.

    The important thing to grasp about "money", is that it really is nothing more than a commodity of universal exchange, a common denominator by which profits and losses can be calculated.

    For example...if you own a ranch, and you trade beef and milk for other products, at the end of the year, you could take inventory and add up all the stuff you got in return compared to what you traded in beef and milk, but how do you know whether you made a profit or loss if you traded, say "4000 pounds of beef" and "10,000 gallons of milk" for "1000 yards of cloth", "4 cords of firewood", "1 bedroom set", etc, etc. You have no idea whether your business is sustainable or not without some common denominator of exchange, by which you can place a value on all these things, and thus add it all up, and know whether you are getting richer or poorer. That is the purpose, and the origin, of money. If someone asks you how much a bushel of corn is, you can say "an ounce of silver", "a dollar", or whatever, instead of listing all the exchangables, "a bushel of corn for two dozen eggs, a pair of socks, 24 lollipops, 2 gallons of milk", etc, etc...without listing the exchange rate of a bushel of corn for every other item that might be exchanged for it. Instead...you just find a common denominator...let's say acorns...and that way you can say "a bushel of corn is X acorns", and every other item is priced in acorns as well, so you don't have to list the exchange value of an item compared to everything else, and you can calculate profit and loss by counting acorns....see?

    NOW...that doesn't really answer your question, but it is important to understand the "philosophy of money"...what it is...why we have it..why every civilization finds something to use as money...seashells, tobacco, salt...whatever.

    So...that defines the origin and purpose of money..why people "invent" money...it makes sense, right? That leads us to your question. When the folks in StoneAgeville start trying to figure out what to use for money...they just look around and pick that thing that is already the easiest thing to barter, to trade....something that everybody seems to want in exchange for most anything.

    THAT thing is almost always gold and silver where it is available...but not exclusively....many other things have been tried...such as salt, seashells, tobacco, bird feathers, and so on...and now bitcoin.

    Fortunately for us, Aristotle laid forth for us what makes some commodities "good as money",and some commodities "bad as money"....and here they are;

    1.) It must be durable. Money must stand the test of time and the elements. It must not fade, corrode, or change through time. Thus...iron is not very good money, nor are peaches or apples. Iron rusts, fruit rots. A dropped coin retains it's value...not so much salt. It kind of disappears into the dirt....but a coin can be picked up by someone years later and still be valuable.

    2.) It must be portable. Money must hold a high amount of 'worth' relative to its weight and size. Pig Iron is really useful...so is oil...but carrying around barrels of oil or truckloads of pig iron is not practical, so that is ruled out.

    3.) It must be divisible. Money should be relatively easy to separate and re-combine without affecting its fundamental characteristics. An extension of this idea is that the item should be 'fungible'. One unit of money must be basically the same as the next. A John Deer lawnmower certainly has value, but it is not easily divisible into equal parts or tradeable. An apple is easily divisible into equal parts, but has other problems. Salt is great as long as it isn't windy or raining...and you don't drop it.

    4.) It must have intrinsic value. This value of money should be independent of any other object and contained in the money itself. The money in question must be useful or desirable for some reason other than it being money....salt can be used to consume or preserve meat...gold can be used for jewelry, that kind of thing.

    Aristotle overlooked one property, however. He sort of took it for granted and didn't bother to write it down, I think.

    5) That property is "scarcity". The commodity picked must be of limited supply, and not easily gained. I mean...picking any common stone as money is not useful. Anyone can get that for free. There would have to be something special about the stone that makes it rare, and/or difficult to obtain to make it good money.

    So, these 5 properties make for "sound money". If the government of the USA was replaced tomorrow....money that meets the criteria above would retain value. It is not dependent on government for value. A Roman soldier from 2000 years ago could trade his gold coin today and get value....even if all the markings were worn off of it and it had no numismatic value.

    Now...Crypto-currencies have a lot of the features of "money" as required above...but it lacks "durability", in that it is technology dependent...and it has no inherent value....it isn't good for anything at all other than being money...you can't make socks or jewelry out of it, or eat it.
     
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  14. M.Hatfield

    M.Hatfield Midnight Joker Supporter

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    For all the wisdom posted here. I relate to this most. :D

    I could bring up all the woes of growing up as a "millennial' with living expenses differing from my parents. I have managed well enough though, no actual complaints from this millennial... :oops: :D
     
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  15. Pilot

    Pilot Tracker

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    I have been saying this to anyone who will listen for several years. The Feds change the "basket of goods" in the CPI calculation, as well as HOW they report it with variations of what is included. Housing, energy, food, etc. Anyone who shops for groceries, clothes, energy, etc can tell we have had high inflation over the last decade or so, when a paltry 3% or so is reported. It is criminal. Why is the Fed raising rates pretty consistently these day? Hmmmmm……….
     
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  16. WILL

    WILL Guide

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    Last edited: Aug 17, 2018
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  17. Bitterroot Native

    Bitterroot Native Indigenous Skills Junkie

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    As woodsmen were in a unique position to provide for ourselves, something the vast majority of people can't and wont do. Self sufficiency goes a long way in combating inflation! Provide for yourself and save some cash :dblthumb:
     
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  18. MAD Punty

    MAD Punty Supporter Supporter

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    That depends on what you mean by "insolvent". Since we are a fiat currency, they can literally just print up whatever money is needed to pay off the debts and unfunded liabilities like SSI....so they can pay it.

    The problem is, you'll get your $1200 a month or whatever in SSI, but a loaf of bread will cost $50. Whatever money people save for retirement will still be there, it just won't buy very much, and much less than it would have bought when you put it into your savings.

    That's why governments love fiat money. They can just keep printing it and devaluing the currency, robbing savings and retirement accounts of purchasing power, and get away with it because very few people understand what's going on, they just know their taxes are not going up, but they don't understand where the inflation is coming from.
     
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  19. Keyser Söze

    Keyser Söze Usual Suspecto Lifetime Supporter

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    you can always buy 2 for less and save like a box of strawberries is $2.43 but then you can buy 2 for $5.00 and save !!!
     
  20. arleigh

    arleigh Guide

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    Knowing fake gold form real gold fake silver from real silver ,these are what we re going to have to discipline our selves to know in the future .
    IMO the only people that need to know this are those that don't need food and trade for gold to expand their wealth against others that too are expanding their wealth .
    But the common man will be more concerned with feeding his family .
    If you have no means of growing food ,you are dependent on them who do, accepting a means of exchange they will have use for, or be able to exchange for things they need from others .
    Bartering can become complicated and deals can fall apart . Different episodes of MASH portray this doing favors to get something ,money not being involved ,mostly because they didn't have any . Often times sacrifices had to be made , some more severe than others . parents sold their children into slavery for food and the needs for the rest of the family.
    Having something to barter and goods you set aside to trade for or skills that require raw materials al need to be strongly considered .
    So your carpenter, Where is your wood and fasteners ?
    I taught my son to save wood and nails as well tore buildings down, because these were all functional materials to be used again.
    If you haven't the patience to do this from the beginning ,impatience will certainly wipe you out.
    If I was scrapping out a car we removed all universally compatible components including all fasteners .
    Some things should be kept intact for the simple reason of positive identification . if you don't know what the component does or how it's made, you can't fix it.
     
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  21. WILL

    WILL Guide

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    I think we're on the same sheet of music. I'm not exactly sure how the end game is going to play out, be it hyper-inflation, a greater depression, currency replacement, etc,. I just understand we're headed that direction and I don't see a way out. I always hate talking about this stuff because it's such a Debbie downer.
     
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  22. seasonofthewoods

    seasonofthewoods Lost In the Woods Supporter

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    Yah. I truly beleive there will be a large correction in our economy .
    Alot of our wealth is electronic. Alot of people wealthy on paper.

    Personally I think we are headed down a slippery slope. Just depends how long that slope is, and where it ends up.
     
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  23. M.Hatfield

    M.Hatfield Midnight Joker Supporter

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    That's why I was focusing on the ice cream. Focusing on ice cream reminds me that none of us here can accurately predict the future. One thing is certain....

    Yep. this.
     
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  24. WILL

    WILL Guide

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    I don't pretend to understand all this stuff, but I believe our federal budget year starts on October 1st, and the federal government shut down 4 months later because it ran out of money. Had to raise the debt ceiling & borrow more to usher us through until Oct 2019.

    So our federal government is running on 2/3 borrowed money?

    https://www.nytimes.com/2018/02/08/us/politics/congress-budget-deal-vote.html
     
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  25. MAD Punty

    MAD Punty Supporter Supporter

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    Want to get even more depressed?

    The government not only borrows all that money, it borrows it because the interest is so low. That's why you don't make any interest in your bank account.

    The government makes minimum payments on that borrowed money, which amounts to several hundred billion dollars a year...I forget how much.

    What happens when the interest on that debt goes from 1% to, say, 5%? Or 7%? Answer: The same thing that happens to people who take out mortgages with teaser rates of 4% and then get hit with 7%.
     
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  26. LostViking

    LostViking Supporter Supporter

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    $4.86<$5.00.
    You work for the Government don't ya???

    I used to know a guy who owned a bar and did that.

    You could get a burger and fries regular price for $4.75.
    Once a week he would run a burger and fries special for $6.00.
     
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  27. LostViking

    LostViking Supporter Supporter

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    "Just as a cautionally tale"
    Let's keep this to pricing and inflation. And ways to mitigate it.

    Leave most of the government bashing and actual politics out of it.

    I feel this is a valuable topic to discuss and would hate to see it get shut down for political discussion.

    Thanks!!
     
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  28. Gary V

    Gary V Scout

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    We already had a huge market correction. In 2008 we lost 45% of the value of global equities. It didn't have a huge effect on day to day cost of living (in the USA) but people took big hits on investments and retirement accounts. If I recall correctly the average value of a 401K account dropped 40%. The unemployment rate reached 10% (2009) and a lot of people had to cash in their remaining investments to survive. The dollar however became stronger as result of the recession.
     
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  29. WILL

    WILL Guide

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    OK, directly on the topic of inflation, It could be 20 years before all this comes to a head in America, if it ever does. Who knows, maybe in 2045 minimum wage is $100 an hour, a loaf of bread is $60 and life goes on as normal. This is why I'll never pull out of the stock market. Unless the economy crashes, it's the only way I'll ever keep up with inflation.

    Just in case there is a significant disruption (hyper-inflation) to the economy, I think it's wise to have commodities & skills (other than cash) to get you through for a while. One thing is for sure, any chance of me retiring would evaporate with hyper-inflation. This sort of thinking used to be common sense, but is fringe anymore.
     
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  30. MAD Punty

    MAD Punty Supporter Supporter

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    It's hard to say, because ultimately, hyperinflation hurts workers, but it washes away debt. If you have fixed rate debt, you can just pay it off at a fraction of the original value of the loan.

    That will end up being the tug of war between the banks and the government. Since money is printed by the Fed, and not the Treasury, ultimately the Fed will tell the government they can't borrow any more money, or the banks will go bankrupt from inflationary debt erasing.

    If the government could print money, the banks would be in trouble, but since the banks print the money, the government will be in trouble. Whenever that comes about. Trying to predict when is a fool's game.
     
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  31. HeadyBrew

    HeadyBrew Supporter Supporter Bushcraft Friend

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    I’ve missed your pearls of wisdom Keyser. Glad to see you posting more frequently again.

    Always keep focused on the ice cream. Soon it’ll be 1.5 quarts. And that’s when the revolution will begin.
     
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  32. M.Hatfield

    M.Hatfield Midnight Joker Supporter

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    Agreed. I am lactose intolerant and STILL find ways to enjoy ice cream. Ice cream is one of the few things Amazon cannot ship to me in ONE day. I can get 5 pounds of Pop-Tarts (for $20 only, not kidding) from Amazon but no Ice Cream.

    Amazon.com does factor into quality of life when coping with inflation I think. For better or worse a company like that is trying to offer the most it can for the least amount of money. Never even have to leave your house.

    So as much as life stays the same, I think cost of living will change too going into the future. 50 years from now it could be rare to 'shop' at a grocery store or 'own' a car instead of rent or lease one. Bottom line, the future will offer different solutions and challenges to the constant problem of inflation/cost of living.
     
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  33. Gary V

    Gary V Scout

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    I think the only way to stop inflation is for the economy to be perfectly static. No one could get a raise, supply and demand for goods would have to be perfectly balanced, raw materials prices would have to be fixed, the Feds would have to release money at the precise rate that it is needed etc and etc.
     
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  34. grey mouse

    grey mouse Scout

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    I started watching Venezuela awhile back too. That's when I decided to plant my orange, lemon, and apple trees. Lemons are soooo expensive here. I also made sure that I have enough chickens to produce two eggs per family member per day. I buy whole chickens (mine are pets) at around .97/lb and my turkeys at .75/lb when I can. I also buy whole pork loins to cut my own pork chops and save per pound. I also garden to supplement my cash for food. The average family requires a minimum of five acres of produce to sustain themselves at a minimum level and in a crisis that will be hard to protect. I agree with many of the above opinions regarding smaller portions and higher prices, inflation, etc. Canning also helps take three pounds of beans, peas, etc. and stretch them a long ways while storing them for hard times. It allows for them to be cooked and ready at a fraction of the store bought high salt versions. A bushel of excellent corn (67 ears) goes for $19 here while walmart sells lesser quality ones for over a dollar a piece (frozen) or over fifty cents each fresh.

    The younger generation in general doesn't know where the food comes from or how to grow or raise their own food. I know of a child that refused to eat chicken wings because they "looked like they were animal parts" but wanted McDonalds chicken nuggets instead because that were real chickens come from. Sad days I tell you....
     
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  35. slysir

    slysir Guide

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    I purchase gift cards. So when I get to the register with my purchases I use the gift card...everything is FREE!!

    Bernie Sanders taught me this!! :confused::rolleyes:

    -John
     
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  36. GoKartz

    GoKartz Sharpaholic

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    Really interesting post, thanks for writing that. People "back then" sure were smart. Its interesting, but I think a lot of people think as you go further back in time people were less intelligent. Not really on topic, but your post made me think of that.

    Woah woah woah - I thought TWO things were certain!?

    @LostViking - I generally avoid the Preparedness section, for multiple reasons. (Reason One? Y'all a bunch of wackadoodles! ;)) I find what's happening in Venezuela very sad, but it reminds me of what happened in Argentina in 2001. Interestingly, it is a very different TEOTWAWKI event than a lot of preppers *I'VE* talked with prepare for. As far as inflation here today... I've noticed it most when it comes to living expenses - the cost of groceries, vehicles, land, and housing is incredible! It makes it very hard to "get ahead" in life. Fortunately for me my wife is great at budgeting, shopping deals from circulars, etc. and we do well enough - she normally can keep groceries under $100 for a family of three, and often under $80. We rarely buy non-chicken meat (I think you can get bone-out thighs for under $0.99/lb most weeks), and even something like sausage or ground beef often has to be only for a special event. But often our dream of "X acres and a farm" seems more like a 40 year plan than it does anything reasonably possible in the near future. Maybe it has been that way for longer than I'd like to think though. Anyways, thanks for a thought-provoking post.
     
  37. Gary V

    Gary V Scout

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    That's a whole topic in itself isn't it? I often wonder what is the point in trying to get ahead? Life is short and I never planned to work hard and save so I can pass it on to my kids. They're healthy and educated so they can support themselves. Of course I saved enough to retire on for myself. The real trick is to get a job that provides you with a steady income for many years and a retirement plan. After retirement, why not live better and leave some debt when you die? If a bank will give me a 30 year loan on a house when I'm over 65 years old, hell yes, I'll refinance and put the cash under my proverbial mattress. If you or your spouse is put in to long term health care the buzzards will swoop in and take possession of your assets anyway. So if you're an average wage earner trying to "get ahead" when the deck is stacked against you, maybe a better plan is to "game the system" by not leaving the creditors anything to take.
     
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  38. Vanitas

    Vanitas Supporter Supporter

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    You realize that a basic 3% inflation is always assumed in most financial calculations and that unlike Venezuela who used their oil money for things like healthcare and not stabilizing their economy by investing and upgrading other resources the country had the US is prosperous because of it's wealth of diverse resources which are readily exploited (not to mention military power to "free up" other resources). I don't know how many of you like super hero movies, but it's why Wakanda could not actually exist. A country can't build up wealth and technological innovation when A) it isnt selling said resource B) it has no other real built up resources. Now if it was selling it's one chief resource it's economy would have drastic up and down swings based on the price of said resource... ahem Venezuela. Now the real problem with Venezuela is unlike Wakanda it isnt the only country with said resource so Venezuela doesnt get to set the global price. In fact, the US basically purposefully crashed the Venezuelan economy. So we had our "market correction" which wiped out a lot of what my old econ prof called fake wealth. Well our states and federal gov tried everything they could to make life easier on people. From effectively freezing utility rates for 4 years to lobbying OPEC to produce more oil to keep prices down, to producing more oil here at home to drop oil prices. What was the entire economy of Venezuela based upon, oil and it's price. Unlike the countries of the middle east who have OPEC, Venezuela was on it's own. So no, the US cant go the way of Venezuela in nearly any way as easily as people think. But there sure are some large bumps in the road ahead that needed fixing like 3 decades ago.
     
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  39. Naturalist

    Naturalist Guide

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    Many years back when the economy of Argentina had collapsed a fellow going by the screen name FerFal wrote a very educational blog on events that were happening and how life had changed. (You can still find it on the net and it is a good educational eye-opener) Once the bread basket of South America exporting beef and wheat and having a government similar to ours, it was fearful to read how things quickly and drastically changed in Argentina. People were starving. I recall reading about a truckload of a few cattle turning over on a road and masses of desperate people literally ripped the cows up while they were still alive and stole whatever meat they could. Famin will drive desperate people to desperate actions.

    I lived in Caracas, Venezuela from 1972-1975 and, at the time, it was a fantastic place. A wonderful country to live in no matter where one ventured. The capital city was much like NYC, always bright and things seemed to be always open and, while American made products were desired and more expensive, there were quality South American and European products to be had as well and it was during this time that Americans were parked in long lines waiting for overpriced gasoline (shortage), Venezuelans were pumping gas at about .25 cents a gallon.

    It is scary think how fast things can go to hell when an ignorant population elects radicals into office promising the world on a golden platter. Sad to look at the country I was once a guest in and see how far it has declined. Just realize that the USA is not immune from something like this.

    What some had mentioned here is what FerFal had mentioned. Specifically, that the economy of Argentina (and other nations that fall) does not suddenly happen overnight. Prices gradually increase as portions decrease the buying power of the consumer becomes less and less as it takes more $$ to sustain a middle-class lifestyle. Eventually, as things continue to slide downhill, the vast middle class shrinks to the point where people are bartering and scrounging for deals and trades.

    As someone has already mentioned here, savings only may not protect you as it will quickly disappear with escalating costs. So like a well rounded portfolio, one must also consider precious metals and non-perishable items for trade as well as possessing certain skills that can be bartered for. Obvious "computer repair" would not be as needed in desperate times as someone skilled as a physician, mechanic or other essentials.

    A survivor of the recent Serbian war had a great post on the internet, too. He listed "100 things to disappear first" and what one needed to do to increase their odds of survival. I cannot recall if it was the gentleman from Argentina or Serbia that mentioned having personal items for bartering that was considered a luxury item at the time and people were willing to trade a lot for them. Perfume, antiperspirant, lipstick, toilet paper & toothpaste. Little things like this today, was like being rich in an economically collapsed region and people would trade a lot for the opportunity to feel "civilized" again.

    People need to take these lessons to heart and plan accordingly as we are not immune from such a disaster.
     
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  40. bosque bob

    bosque bob Scout

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    Please do not take offense but it seems to me that one of the most fundamental misunderstandings about finance is contained in the above quote. There was no "correction" per se. There was however, more than enough Fraud, Theft and "Justus" style Justice to go around. "Market Correction" is like calling Stealing "selective reallocation". The assumption that Markets operate on some immutable set of Laws is well, a mistake at best. Nothing was "corrected" and regular folks will be paying in one way or another for a long while yet. Most folks equate purchasing power with strength but we live in a 2018 world with 1972 wages. Income disparity, absurd levels of debt, wage structures, productivity increases are NOT acts of nature but the direct result of Policy. The real question, as always, is Who Benefits?

    It is necessarily wise, I think, to recognize inherent instability and plan accordingly. we may not agree on the causes of instability but is increasingly harder to ignore what we live with every day.
     
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  41. GoKartz

    GoKartz Sharpaholic

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    I suppose when I say get ahead I mean breaking out of apartment living in a way we can afford, and without accumulating a debt load we can’t manage. I’m not sure I’m comfortable with trying to game the system with debt... I don’t think I’m smart enough to pull it off.
     
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  42. Chris keating

    Chris keating Supporter Supporter

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    @HeadyBrew ice cream is 1.5 quarts now I bought some last night and sighed at the checkout
     
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  43. HeadyBrew

    HeadyBrew Supporter Supporter Bushcraft Friend

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    Son of a....
     
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  44. Gary V

    Gary V Scout

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    RE this article: https://en.wikipedia.org/wiki/United_States_housing_market_correction

    From above wiki article: Fed chairman Benjamin Bernanke said in October 2006 that there was currently a "substantial correction" going on in the housing market. It was primarily these corrections that led to the great recession. Perhaps I don't understand your point?

    *** edit
    and of course, no offence taken
     
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  45. bosque bob

    bosque bob Scout

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    Thanks, appreciate it. Keeping the topic within the area of preparedness (I think it fits pretty well) I can only offer that what something is called is not necessarily what it is. If folks are preparing for major shifts, if not catastrophic at least worrisome, in society then maybe we need to look behind the curtain once in a while. Natural disaster is far less likely, IMO, to present occasions where prepping pays off than failed social engineering programs. Of those the financial sector is a likely place to look.

    I'll leave it at that lest it becomes too political.
     
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  46. Gary V

    Gary V Scout

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    Buying your first home does seems like a nearly impossible hurdle. If your state offers first time buyer incentives it helps a lot. Good luck!
     
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  47. TAHAWK

    TAHAWK Guide

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    When I got my first job, it paid the price of four gallons of regular, leaded gasoline or 3.5 loaves of cheap white bread - $1.00. That's $10.76 around here now for the gasoline and less for the bread. Most of the inflation has been matched by market increases in pay. The mandated pay levels have zipped past inflation.
     
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  48. Gary V

    Gary V Scout

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    This is where the Consumer Price Index comes in. The CPI compares prices of tens of thousands of items from across the country to a previous period to give us an estimated average inflation rate for goods across 180 categories. That makes it an accurate inflation indicator and this is where the published inflation numbers come from. According to the Feds average real wages (wages adjusted against inflation) have been pretty much stagnant for the past 40 years. This is based on median wage or 50 percentile. It may feel different based on a few selected items in a specific community but the Feds numbers work well for the country as a whole.
     
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  49. TAHAWK

    TAHAWK Guide

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    Please note that I said, "Most of the inflation has been matched by market increases in pay. " You say "real wages" have been "stagnant." In fact, "most" in not "all" and the CPI was gamed under Obama to eliminate some things we buy to artificially lower "official" inflation, so it is worse than "stagnant."

    Wages are pretty low for wheelwrights and many fletchers these days.

    Employment (% of adults employed) is relatively much lower than "unemployment." Record low % of people neither working or seeking work.
     
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  50. MAD Punty

    MAD Punty Supporter Supporter

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    There are issues with the CPI, though. Rather than go in depth about it, I'll just point out a couple of them.

    One issue with CPI is that it does not accurately take into account changes in quality within basket of goods. For example, if the quality of goods declines to keep prices stable, the CPI may not scale for that. So...when the old Craftsman tools had a lifetime warranty, it was because they were made of hardened, tempered steel, but the newer ones are not, but kept the same lifetime warranty, because they would just replace it. CPI would not take account for that.

    Another issue with CPI is, for example, if you choose a vehicle model, and the price goes up one year to the next by 5%, the number magicians calculating it often discount the price increase by pointing out increases in the quality of the vehicle...they'll say it is safer, or gets better mileage, and so in this way, they easily manipulate the number rather than just plug it in.

    Another issue with CPI is that it does not really calculate money supply accurately, like everything else, prices are a product of supply and demand. When you expand the supply of money faster than growth in productivity, prices go up, because prices rise to meet the money supply. As an example...if we used gold and silver coins, and not paper, fractional reserve banking, and digital money, CPI would be negative more or less every year, because economic growth would outpace the growth in the supply of money.

    On top of all this, the whole purpose of calculating inflation, is to compare the rise in the cost of living to wages, as a barometer of how well or poorly the working people are doing. That means housing, fuel, and food costs....all of which are fraudulently disregarded in CPI. In fact, that is the very reason we abandoned "Inflation" and started using CPI, because inflation was showing that wages were not keeping up.
     
    Last edited: Aug 19, 2018
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