How to Beat Inflation

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The Federal Reserve’s own books, numerous status quo economists, and mainstream media publications claim inflation in the U.S. is at most a mere 2%.  The Fed advises that inflationary expectations are “well-anchored at 2%” for the immediate future.  Yet, the economy is still reeling from the events of the past year and the cost of everyday items continues to rise.  The government continues to try and pump money into the economy while borrowing and printing money against what appears to me an uncertain future.  We’re seeing inflation happening in real time right in front of our eyes.  You may have begun to see this in the stores, restaurants, even at the gas pump.  The price of gas has risen 30% in the last 60 days alone.  As gas prices increase, so do the cost of food and any other product distributed across our roads, airways, and waterways.  I recently released a blog on the foodflation crisis which I’ll link to in the cards above. You have probably seen for yourself how your grocery and dining costs have massively increased in recent months, just as portion and package sizes have become smaller.  Every time I do a video like this, the overwhelming response is, “I see it too, but what can I do?”  

This blog will focus on the practical things you need to do now to position yourself to weather the storm of the inflation of everything.  I will hit on some important things you can do to set yourself better and wrap up with some rapid points you should consider.  While I am not a financial consultant or advisor, I would encourage you to do your own research before allocating any of your precious resources, but also know that I want to educate you and provide some practical, actionable information for you to make the best decisions you can.

What can you do now to prepare for insane inflation, a dollar weakening further, an economy teetering on collapse, and a global resetting of the economy away from physical fiat currencies?  Let’s find out…

Tend to Your Own Home

Type the phrase “how to beat inflation” into any search engine. Most of the advice will be for investing and picking up assets that will outpace the dollar’s devaluation. For preppers, though, our concerns are different. They are rooted in the practical, physical world.  While I will address some aspects of investing near the end of this video, the first real practical solution to hedge against inflation is to tend to your own home.  This is a broad category, so I’ll address each part of what I mean by the term individually.

First, determine how long your stores of food, water, power, and other supplies really would sustain you if it were all you had to get by.  How many days, weeks, or months could you survive if the grid were to fail or the dollar would become worthless?  Take that amount of time and multiply it by one and a half to assume you are also rationing and forced onto a starvation-type diet.  How far into the future would that get you?  If it’s just 30 days, you need to prioritize long-term food storage, water filtration, and the acquiring of other natural resources you need to survive.  Whether that is learning to forage, garden, hunt, and fish, or knowing alternate sources of water and filtration techniques.  

You need to make sure the resources you need to survive are still available to your house.  Turn your attention to your pantry and prep some long-term food storage.  Set a target for doubling and then tripling your supplies.  Do the same with your overall water capacity.  Stored water assumes that the municipal water or well water supply is down or undrinkable.  Having a means to filter water or boil water increases your overall water capacity.  

Second, expand your concept of shelter.  If you are an apartment dweller, what’s your plan when you are evicted?  Where do you fall back to or move to?  If you have a mortgage and note that here I didn’t refer to you as a home “owner,” what are your financial plans to make sure the mortgage is paid even in an extended economic depression?  Watch for bailout programs in the future, but right now, focus on any opportunities to add efficiency values to your home or reduce your monthly expenditures.  Can you add solar?  Can you add a well?  Can you add a home wind turbine?  Any of those will help you to become less grid-dependent.  Is now the time to refinance the whole home and reduce your monthly costs?  I recently refinanced my home at 2.5% and the rates are still relatively low.

Third, reduce monthly expenditures.  If you have a second car that you needed when both you and your spouse commuted to your jobs, now is the time to consider getting rid of it.  Are your tiny subscription services adding up to a small fortune?  Are you using the three entertainment services, online and automatic subscriptions, or a gym membership?  Are you getting value from them?  Now is the time to take a critical look at every single expenditure you have.  Print and write them all out.  Modifying just a few will add up to a better financial situation for you when things go south.  Eliminating any credit debt through consolidation, interest payment reduction, and a better payment strategy will create a more stable financial footing for you.  Right now, many credit companies will offer a zero-interest card to consolidate credit debt.  When the economy tanks, that option will no longer exist.  However, applying that interest payment to principal could help get you closer to zero debt faster.  Look at every dollar into your house and sweat every penny out.  If you can refinance a house or car, consider doing that to attack other debt or invest in your home or supplies.  If you’re buying meals, snacks, or coffee out, it may add up to a significant chunk of change every month once you take the time to calculate it.  Take the time to calculate it.

Tend to your own home.  Take a critical look at your finances and define a plan and an actual timeline.  Stick to the plan and secure your water and food capacities, your shelter, and work to bring your indebtedness of any form to zero.  This will position you solidly in a post-economic collapse world.  When inflation is driving prices up to the moon, your need to outlay any dollars that are decreasing in value will also be reduced.

At Ground Level

At the ground level, I am personally doing several things at the moment.  First, I am greatly expanding my garden.  Creating food security should be very important to you.  Even if you are an apartment dweller, you should be harvesting some food sources that you are growing– sprouts, herbs, mushrooms, or patio planters.  The key here is to learn.  I am also raising chickens to increase my food independence.  I am adding to my food reserves through long-term storage of a year’s supply of food and the use of a dehydrator and a freeze dryer.  You should make your food preps your number one priority as the cost of food is continuing to climb.  I have started a precipitation collection system, so any rainfall in southern California isn’t wasted.  I am investing in solar panels with backup batteries for my home to free myself a little more from the energy grid.  The price of electricity increases 8% annually where I live and my break even point for my solar system will be in 5 and ½ years.  I’m even going to be experimenting in a future video with Biogas to create a sustainable fuel supply.

Look at your preps from a ground level and work to improve what you see on the ground.  Anything you can implement now to contribute to your long-term survival will pay dividends in a disaster, and it will dramatically lessen inflationary effects.  The best way to weather a dramatic economic trough is to cultivate your resources.  When eggs are no longer being delivered to the store or the price has climbed to ten or more dollars a dozen, you won’t notice if you have chickens or spent the time dehydrating and preserving eggs in times of abundance.  When beer is a luxury that can no longer be afforded, but you have five gallons of homebrew, you just became the wealthiest person in your neighborhood.  If you can’t buy clothes anymore, but you were smart enough to prep sewing supplies, some fabric and learned that skill, you won’t suffer as much.  If you already have some food coming to your table from what you have grown, you won’t be starting from scratch but will merely be ramping up your efforts when an economic disaster occurs.  Look at your preps from a ground level and be honest with yourself about how prepared you actually are.

Change Your Priorities & Skills

So when we were all locked down, did you make any changes to your life, or did you just watch more television?  Perhaps, you found City Prepping and were introduced to the way, but have you implemented any of the strategies?  The fact is that governments can fail, economies can collapse, money can be reduced to less value than the paper it is written on and used as kindling.  One thing that can never be taken from you is your knowledge and skills.  And, those are two different things.

You may have learned how to fish and what equipment you need, but any angler will tell you that’s not enough.  You need practice and trial and error to develop the skills you need.  You may have learned how to build a shelter from the hundreds of hours of wilderness survival shows you watched, but I guarantee you it’s probably going to leak or collapse in on you if you’ve never actually built one.  If you don’t own a hatchet or machete or wood saw, you probably don’t have the equipment you need.  If you have never used these tools in an actual situation, your risk of personal injury is significantly increased in a time when you are under pressure to survive.  If you haven’t hunted in recent years, but you own a small personal weapons cache, they probably won’t net you any game for your table in an extended economic collapse.  Change your priorities to cultivate knowledge and apply that knowledge to gain the skills you need.

Some people may have gained more than 1.5 pounds on average per month during Covid-19 shelter-in-place orders last March and April.  Their goals may have been to stay fit and active, but their priorities weren’t aligned.  When inflation skyrockets, most will be forced to work harder and longer for the same or less compensation.  That can take a toll on our bodies.  If we are forced from our homes’ comfort and into the elements, let’s be perfectly honest, most would die.  If inflation leads to an economic collapse, leading to an entire grid-down situation, making your health and fitness a priority now will increase your odds of survival later.

Realign your goals and reestablish your priorities as if a collapse is probable.  Increase your knowledge, then turn that knowledge into real, practical skills.  Your personal, internal resources can never be taken from you, and while the cost of everything goes up, so does the value of your internal resources.  If you’ve learned to pull food from the wild by hunting, fishing, or foraging, you have created a valuable commodity in yourself that can be used later for acquiring other items you may need to survive or just to keep yourself alive.

Adjust Your Assets

I mentioned earlier I’m not a financial advisor.  Like you, I study to figure out how best to allocate my resources.  I do know that in an emergency, suddenly, some things of value become less valuable.  Items of little value can become incredibly valuable and in short supply.  If the just-in-time system fails, how much would the price of a pound of flour or sugar skyrocket when the existing shelf supply is gobbled up, hoarded, and not replenished?

In an actual economic disaster where inflation skyrockets and the dollar collapses, a large amount of cash in a bank is the equivalent of a singing fish for your wall or a Chia pet.  It might be good for a short laugh, but it has no real long-term value.  $10,000 in the bank with the buying power of $1,000 or less won’t get you through a great depression.  You need to adjust your assets as if fiat currency may be slow to recover or may be replaced or supplanted altogether.  Inflation forces a readjustment of resources.  Economic downturns typically have some recovery as well.  Depending upon how you have allocated your fiscal resources will determine how well and how expediently you can recover.

First, as I mentioned earlier, your personal prepping should be to eliminate any personal debt.  You want to bring yourself to zero indebtedness.  Only this will calm the waters of the economic storm around you.  For some, getting to zero isn’t possible in the short term, but you still need to try.

When I first got married, my wife and I used the Dave Ramsey Financial Peace plan and were able to aggressively pay off debt.  It was liberating to say the least.  

Every prepper has a hierarchy of assets.  Each asset helps you through a particular period of a specific type of disaster.  In any disaster of any duration, the first assets of beans, bullets, and band-aids are your most reliable.  If the disaster leads to a total collapse, other assets will be useless in comparison.  As I mentioned, currency is a good asset, so long as it retains any value as prices go up and its value decreases.  When asked if they plan for emergencies, most Americans point to a savings account where they have some money set aside.  Currency is worthless in an extended grid-down situation.  Many turn to precious metals, as precious metals offer a means of transaction when fiat currencies fail.  Precious metals also can expedite a personal recovery.  Stocks and bonds are suitable for fiscal stability and recession-proofing your life, but these are worthless in a grid-down situation or a global economic collapse.  Cryptocurrency allows you to retain some value by moving assets across borders anywhere in the world and bringing it back into your fiat currency when the time is right; however, you cannot spend cryptocurrency on a loaf of bread or a can of beans, pay for services, or even access it in a grid-down situation.

When you adjust your assets, I suggest you diversify at all the asset levels.  First, make sure that your prepping supplies are in order–the beans, bullets, and band-aids.  Yes, have some of it tucked away in savings for the more minor emergencies that befall you.  You can sometimes leave a temporary natural disaster zone by packing up your vehicle and bugging out to a secure location or another town with just a few emergency dollars in your pocket and some basic supplies.  You can then return during the recovery phase.  Precious metals are suitable through an extended down period and in the recovery phase, so long as they are in small, tradeable amounts and their constant value is agreed upon between the trading parties.  Some precious metals also have utility for water purification and electroconductivity, so if things get genuinely dystopian, they will have other value for you.  

And finally, I think it makes good sense to be prepping by putting even a little each paycheck into cryptocurrency.

While in most emergencies, cryptocurrency will be of no value, if you have to flee your country’s borders, need to send your assets out of the country to a more stable economy, or are actively recovering from a prolonged economic downturn, you will be glad you have some cryptocurrency.  The fact is that several countries are experimenting or planning to launch a cryptocurrency.  If no disaster befalls you, your early entry of even a hundred dollars a month into cryptocurrency may be one of the best preps you ever make.

I know that I spread my assets out at all levels, and I encourage others to do the same.

Conclusion

It would be nice if inflation never rose above 2% this year or in the coming years, but I don’t think that’s a reasonable expectation.  There are just too many warning signs and the fact that the Fed keeps printing cash, it’s an inevitability at this point.  If we can say anything with absolute certainty, it is that inflation occurs, and economies do slide into recessions, depressions, even collapse from their greatness altogether.  As a prepper, you should be hard focused on tending to your home, setting reasonable goals and priorities, adjusting every type of asset you have, and taking an honest look at your ground-level preps. 

What do you think? What’s your crucial prep to insulate yourself from skyrocketing inflation? 

As always, please stay safe out there.

 

 

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