Greg at Holy Cause has actually lived through the infamous Zimbabwean Zaire’s hyperinflationary crisis in the 1990s, so his words carry their weight in…er..gold (dollar-holders, I know that stings).
“Most Americans have not lived in hyper-inflationary environments. I have, and assure you that your primary protection is to not hold cash. Treat it like a hot potato, let it rot in somebody else’s hands. This is repeated as Rule #1 below, but it bears saying several times. Never forget it, when you get cash, flee to something else as quickly as possible…..
Just don’t hold an inflating currency – pass it on to the next guy like a hot potato, let it rot in his hands rather than yours.
Rule #2 – Have some type of business, even a “black market” one. Businesses which survived the inflationary hurricane in Zaire included those which were involved in the supply chain of basic consumer goods….money changing was also a profitable business…..
Rule #3 – Own a house and enough land to farm to feed your family. Houses (a primary residence), well bought and paid in full, served as a good hard asset, and provided a roof over one’s head as well. Having a little land to garden or for raising small animals helped keep a family from starving….
Read the rest of this great post at Holy Cause.
Lila – actually my experience is in Zaire (not Zimbabwe), in the 90’s.
Thanks for sharing my article.
Sorry, yes. Correction made above.
Republic of Zimbabawe – former Rhodesia.
Zaire – now the Democratic Republic of Congo
In the 70s in the U.S. I lived by that rule. Prices went up so fast that weekly changes were typical. Each time I got money I would go to a store and spend it on something that I needed or would need in the foreseeable future.
I painted my house, put on a new roof, bought a chain saw, tools, and so on…
– NonE
I couldn’t post over at his site for some reason.
So, I’ll post here if you don’t mind. The questions may not be that well written, I didn’t get enough sleep last night.
Having a business, that sounds all good and everything, but there are a plethora of small convience stores here that supply and sell basic consumer goods, food, beer and smokes. I suspect many would go under. Reading of the history of the Great Depression, grocery stores wound up selling food at a loss because customers did not have the money to buy and they felt sorry for the customers they knew, eventually they closed. Were there a lot of store closings like that in Zaire? Or were they insulated, due to a lower concentration of stores?
A bought and paid for house is great, with the hyperinflation you paid them with piles of money, so the taxes did keep up with hyperinflation yet were easy to pay? I imagine if owing on a house making the payments would be easy to pay IF you had the income, unless interest rates went sky high with inflation, which I understand is likely to happen. I can’t get the thought out of my mind of those in the Dust Bowl of Oklahoma who lost their farms to the banks for failure to pay the taxes due to crop failure, if I recall correctly. Did this take place much in Zaire? It seems like it may be a good idea to contract agricultural land with leverage now, but the idea makes me feel ill.
I’m concerned the US gov’t is going to pass the law (up for, “debate” now) to over-regulate and add huge fees upon those who have gardens or farms. Did anything similar happen in Zaire?
What happened to the value of the coins in Zaire? Did the gov’t there stop producing the coins? I read that in Zim the gov’t stopped producing the coins and the value shot up as a result of this limitation on the number of coins in circulation.
Were there incredibly low priced parcels of land for sale during this time in Zaire? Or, did the land for sale rise along with hyperinflation?
Clark – Sorry my site didn’t work for you. What did it do / not do for you?
Your questions merit a little work. I will try to reply here or do another posting on my site this weekend. If I do it on my site, I will let you know here when it is done.
I clicked the link here, as the new page opens, the page shifts down to the comments, it stays there long enough for me to see, then – blank page – with small red button saying, Internet Explorer could not open the site. I clicked back and the page opened ok normal. I’m trying to recall the rest, I think, after I hit submit, the, “my comment area” just turned blank.
OK, Lila’s link is to the comments rather than the article. Try this one.
I have also changed the commenting to use a popup window instead of on the same page, as that was giving me problems previously.
Perhaps one or both of those will correct the problem you experienced.
hi Greg –
corrected it…
thanks
I’m doing this on the fly…so bear with me..
I emailed your piece to a couple of friends
wonder if you shouldn’t write a more detailed account for Lew Rockwell
L
Clark – I have responded to your comments and questions at my site.
Hi Greg, this is fascinating! For some reason I was unable to access your link (answers to Clark\’s questions)?