The importance of converting as much cash as possible into gold coins before hyperinflation strikes cannot be understated.

April 15, 2011 – The importance of converting as much cash as possible into gold coins before hyperinflation strikes cannot be understated. There have been scores of precedents to back that up.

In Yugoslavia it got to the point where prices doubled every day – that would turn $1 million into $1 in under three weeks! But a gold coin would buy just as much as it did before. It is impossible for wages to keep pace and everything the government did made matters only worse. There could be but one outcome – total collapse of social order.

Chances are the sheer mass of our economy – the world would hate to completely lose its biggest customer – will prevent hyperinflation on that scale, but it doesn’t have to be to send our standard of living back a couple of hundred years.

Inflation of just 1.5% per day reduces a dollar to a penny in under 10 months. What costs one dollar today will cost almost $1,400 a year later when the rate rises to 2%. At 4%, $1 million is reduced to one lousy buck in less than a year.

While Great Britain held on for two decades following the loss of the pound’s status as world reserve, thanks to massive aid from the US, eventually the government succumbed to the temptation of devaluing the pound in 1967 to get the economy going. Overnight British citizens saw 14% of their wealth go up in smoke and it took a decade of rampant inflation – reaching 27% in 1975 – and wage freezes before it cooled down. By then all but the very wealthy and those with the foresight to hoard gold coins had been virtually wiped out. Still, the country pulled through.

That’s the difference between inflation and hyperinflation. And between Britain’s situation then and ours today.

We don’t have a big brother to come and bail us out. Once the world has weaned itself from the dollar nobody will want the massive piles of cash we have pumped out and our staggering trade imbalance will leave us broke. The Fed will be left with just two options: default on our debt or keep printing money. Both will lead directly to hyperinflation.

In the worst case, your dollars won’t buy anything – not food, not fuel, not medicine. Only gold coins will. In the best case your dollars will lose at least 90% of their purchasing power, but gold coins won’t lose one bit of theirs. Even in the miracle case, an investment in gold coins today is all but assured to provide healthy growth while you ride out the storm.

Kevin Johnson

Senior Staff Writer –

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