Be Prepared – Food Storage Economics Part 3

In PART 1 I talked about some good reasons to set aside a little extra food and water. Looking back on it I think I forgot one more good reason. I may have thought “No, this can’t happen here in the United States” so I didn’t consider it. But looking at the way the economy has failed in the last 8 weeks, and seeing our government’s solution to it, this could be a real possibility towards the end of next year.

Uncontrolled INFLATION! That’s right, the cost of goods could dramatically increase from DAY TO DAY. Meaning the cash you have becomes less and less valuable the longer you hold it.

The Fed’s usual supply of money in the market normally sits at around $800 billion but the government has been flooding the markets with cash over the last year. Some experts say it could be as much as 2 trillion at this point. History shows that the value of the dollar will drop dramatically as a result of too much money going after too few goods. If we increase the cash supply by 200% but goods and services only increase 10% then we have too much money competing for goods and prices will increase.

 

At first this increase in the cash will keep us spending in an attempt to fend off an economic depression but it will catch up to us in the end. That’s why I say look out for late next year. Buy some food, you can’t eat the $5000 you put under your bed.

When I lived in Argentina in the early 90’s this happened. Inflation was so bad that the people were being paid twice a day and the wives would like up at the fences of the factories, get the cash from their husbands, and run out and buy food because by the end of the day or in the morning the prices would have gone up so much that the cash became worthless. We would take bus rides to appointments in the morning and the return ride in the afternoon cost us more money because the prices had gone up during the hours we were gone. At the end of it the currency exchange was 10,000 to 1. I don’t think it could get that bad here, but we could EASILY see a double or triple increase in the cost of food in a very short time when inflation hits.

Yes, I’m being alarmist. Yes, I don’t have a complete grasp of the complexity of the markets. But I know history and I know that just because we have computers and modern medicine doesn’t mean we can’t be hit with some serious inflation in the next 12 months.

Do me a favor and set aside an extra $100 a month and buy canned goods, some dried pasta, some flour and rice, some cooking oil and some dried beans. Get a book and learn how to make a few things from them. Can you even bake a loaf of bread from scratch? Well get on it.