Holistic Survival
Welcome! If this is your first time visiting Jason Hartman's website, please read this page to learn more about what we do here. You may also be interested in receiving updates from our podcast via RSS or via email if you prefer. If you have any questions about financial survival feel free to contact us anytime! Thanks!

What side will you be on when hyperinflation approaches?

Bookmark and Share

Stores will raise prices on all goods that we need.In recent months, many economists have spoken about the risk of hyperinflation due to the ‘quantitative easing’ the Fed has been engaging in as of late. What’s shocking is that for the typical consumer of everyday necessities, this can be detrimental to the standard of living. On the other side of the spectrum, however, is the active income property investor who is able to use inflation to his or her advantage.

We offer a simple example of how inflation affects each side when inflation is present:

Typical Consumer
Because a high-level of fiat currency is added to the monetary base, more dollars are chasing fewer goods,  and therefore we can expect price increases on everything we need. Although, the CPI index reports minimal inflation, look at the everyday things we need and it’s blatantly obvious that these goods, such as food, shelter, oil and education are rising year over year. And as the funny-money continues to make it’s way into the monetary system, who knows, maybe we will see hyperinflation in the future which makes this scenario much more frightening.

It’s safe to say that as long as one’s income doesn’t continue to rise with the cost of these essential goods, the ‘saver’ will get the raw end of the deal as their dollars are inflated away and essentially become worthless.

Astute investor
Investors who are holding income-producing property, or “packaged commodities” as Jason Hartman likes to say, have a hedge on inflation.  Because they are holding property that is rented out to a tenant, they are able to raise rents due to the rise in energy, taxes, insurance, etc. all while their loan remains at a fixed-rate (assuming the investor has a fixed-rate mortgage). This is a perfect example of how the effects of inflation are passed down to the consumer and the investor reaps all of the benefits.

For the large percentage of Americans, many of them are helpless when it comes to inflation. We believe it’s safe to say that the government will not take care of us during high levels of inflation, which forces us to take action now, for ourselves and for the people we care about.



Tags: , , ,