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Investors Should Fear The Moment When A Loaf Of Bread Costs $3 Billion
TBI ^ | 10-18-2012 | David Zeiler, Associate Editor , Money Morning

Posted on 10/18/2012 5:56:02 AM PDT by blam

Investors Should Fear The Moment When A Loaf Of Bread Costs $3 Billion

David Zeiler, Associate Editor , Money Morning
October 17, 2012, 11:54 PM

Flickr / victoriachan

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Too few understand just how disruptive hyperinflation in America would be.

Truth is, it would be a nightmare.

In an episode of hyperinflation, money loses value so rapidly that people spend it as quickly as possible, which only feeds the cycle of pushing prices higher and higher at a faster and faster rate.

Imagine prices at the food store and gas pump not just going up a few cents at a time, but doubling in a matter of months, weeks, or even days.

And now some economists and market experts think many of the ingredients for hyperinflation are brewing in America.

That's because years of profligate U.S. government borrowing and spending have created trillions of dollars that lurk in the reserves of foreign countries and major financial institutions. The situation escalated after the 2008 financial crisis, with the U.S. Federal Reserve's policies of "quantitative easing" creating even more money.

"The U.S. government and the Federal Reserve have committed the system to its ultimate insolvency, through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency," said John Williams of Shadow Government Statistics in his annual report on hyperinflation.

Historically, governments that have suffered bouts of hyperinflation - most notoriously Weimar Germany from 1922-1923 - have set the table by printing too much money during a time of economic contraction.

The trouble is, once it starts

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: hyperinflation; inflation; investing; money
"Hyperinflation in America isn't here yet, but we're edging dangerously close to the point of no return."
1 posted on 10/18/2012 5:56:11 AM PDT by blam
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To: blam

A loaf of bread might cost at least 2 pre-1964 silver quarters, and a tank of gas might cost 3-4 silver dollars

Glad I have a stash of junk silver, I won’t need a wheelbarrow to carry my money


2 posted on 10/18/2012 6:00:39 AM PDT by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: silverleaf

Sounds prophetic.


3 posted on 10/18/2012 6:02:35 AM PDT by FES0844
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To: blam

... brought to you by that shining academic Ben Bernake!


4 posted on 10/18/2012 6:05:50 AM PDT by Ken522
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To: blam

So, my house gets paid off immediately. Perfect.


5 posted on 10/18/2012 6:05:58 AM PDT by CodeToad (Padme: "So this is how liberty dies... with thunderous applause.")
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To: blam
I have one of these. Wish it was still good. Photobucket
6 posted on 10/18/2012 6:09:39 AM PDT by Huskrrrr
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To: FES0844

All right, don’t laugh.. I recall a day when the 4 corners of Gas stations in my neighborhood had a GAS WAR.. The lowest price was 8 cents a gal.. However, I must add that the going rate was .25, you had to have a coupon.. But but but you also got a tea towel.. HA!


7 posted on 10/18/2012 6:10:30 AM PDT by carlo3b (Less Government, more Fiber..)
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To: blam

It’s not just that a loaf of bread costs $3 billion... I’d buy a baguette instead. It’s that EVERYBODY in society has $Trillions of dollars to spend, and very little to spend it on.


8 posted on 10/18/2012 6:10:45 AM PDT by C210N ("ask not what the candidate can do for you, ask what you can do for the candidate" (Breitbart, 2012))
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To: blam

The driver here is if we experience hyperinflation, the national debt, reckoned in inflated dollars could be paid off with a few ounces of gold. The bondholders, the Chinese, most European govt’s. and many American states and individuals would all be screwed.

At two billion a loaf, a trillion dollars in debt could be dispensed with 500 loaves of bread. Which might come in handy.


9 posted on 10/18/2012 6:13:47 AM PDT by muir_redwoods (Hopey changey low emission unicorns and a crap sandwich)
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To: CodeToad

Only if your boss gives you raises to match inflation, or you have hard assets to sell for hyper-inflated dollars. If your salary is stuck at $1000/week, you’re screwed.


10 posted on 10/18/2012 6:14:54 AM PDT by VanShuyten ("a shadow...draped nobly in the folds of a gorgeous eloquence.")
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To: blam

This is exactly the problem many are ignoring.

We need to re-Americanize industry now.

Not soon. Now.


11 posted on 10/18/2012 6:19:24 AM PDT by Cringing Negativism Network (America doesn't need any new laws. America needs freedom!)
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To: blam

Let ‘em eat cake! < /sarc >


12 posted on 10/18/2012 6:21:58 AM PDT by JimRed (Excise the cancer before it kills us; feed &water the Tree of Liberty! TERM LIMITS, NOW & FOREVER!)
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To: carlo3b
"All right, don’t laugh.. I recall a day when the 4 corners of Gas stations in my neighborhood had a GAS WAR.. The lowest price was 8 cents a gal.. However, I must add that the going rate was .25, you had to have a coupon.. But but but you also got a tea towel.. HA!"

I remember a gas war in my town and the low was $0.19 and the highest was $0.23...and, you got S&H Green Stamps to boot.

PIMCO: 'THE US WILL GET DOWNGRADED'

13 posted on 10/18/2012 6:22:39 AM PDT by blam
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To: carlo3b

When I started driving gas was .25! Those were the days!


14 posted on 10/18/2012 6:24:36 AM PDT by FES0844
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To: VanShuyten

Not really. Other things rise with inflation such as gold and silver. I suspect if we have hyperinflation we ain’t going to be going to jobs.


15 posted on 10/18/2012 6:24:41 AM PDT by CodeToad (Padme: "So this is how liberty dies... with thunderous applause.")
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To: blam
Good thing I make all my own bread and never have less than 100lbs of flour in the house. ;)

/johnny

16 posted on 10/18/2012 6:26:20 AM PDT by JRandomFreeper (Gone Galt)
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To: silverleaf

Problem is, if the financial SHTF, then production and transportation shuts down.

So, grasshopper, how many silver dollars does it take to buy a loaf of bread when the shelves are empty?


17 posted on 10/18/2012 6:31:31 AM PDT by djf (Political Science: Conservatives = govern-ment. Liberals = givin-me-it.)
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To: djf

another beauty of junk silver - portability to go where folks still have supplies to survive on and barter - or where there is water and garden space

So scout, how many wandering hungry people are you going to shoot before you run out of bullets?


18 posted on 10/18/2012 6:36:47 AM PDT by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: C210N
It’s that EVERYBODY in society has $Trillions of dollars to spend, and very little to spend it on.

Rudyard Kipling, nearly a century ago:

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

19 posted on 10/18/2012 6:39:21 AM PDT by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: blam

Learn how to make your own bread..It is very easy..I think it taste much better than store bought bread...


20 posted on 10/18/2012 6:43:51 AM PDT by PLD
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To: blam
I don't buy the hyperinflation argument, high inflation 30% interest rates on a home mortgage? sure, hyper inflation? not until after a WMD or prolonged cyber-attack.

These arguments are pushed by folks peddling precious metals, in my view there are far better things to buy/do now than wasting money on the precious metal bubble. I think more folks are realizing this and the peddlers are reacting by making ever more dire predictions to protect their bottom line..

21 posted on 10/18/2012 6:49:19 AM PDT by montanajoe (Blamed Flamed Shamed didn't vote for R/R or O/B)
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To: silverleaf
So scout, how many wandering hungry people are you going to shoot before you run out of bullets?

I find the .223 to be quite miserly.

22 posted on 10/18/2012 6:50:09 AM PDT by 03A3
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To: silverleaf

Don’t take what I said wrong.

All I’m saying is if nothing is available, the price is infinite.

With that said, I will say this. BEFORE nothing is available, the prices will skyrocket. But the value of PM’s, etc. will skyrocket much, much faster for exactly the same reason you describe. People will see it as a safe haven.

Now I try to save supplies and recently put up 20 lbs of oatmeal and 12 lbs of egg noodles, stuff like that.

If SHTF and somebody knocks on my door (instead of just shooting me), and asks for soup, I won’t ask them if they have silver.

I’ll ask them if they can use a spade or know how to chop wood or can haul water...


23 posted on 10/18/2012 6:51:36 AM PDT by djf (Political Science: Conservatives = govern-ment. Liberals = givin-me-it.)
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To: PLD
"Learn how to make your own bread..It is very easy..I think it taste much better than store bought bread..."

I have more stock/supplies than I'll need just so that I can share with someone who will cook for me for a share of the food.

24 posted on 10/18/2012 6:54:20 AM PDT by blam
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To: montanajoe
The hyperinflation of 1930s Germany and more recently in Zimbabwe weren't caused by WMD or cyber attacks.

/johnny

25 posted on 10/18/2012 6:54:55 AM PDT by JRandomFreeper (Gone Galt)
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To: djf
"I’ll ask them if they can use a spade or know how to chop wood or can haul water..."

Yup.

I even have all the tools and other supplies to keep them real busy growing more food.

26 posted on 10/18/2012 6:56:35 AM PDT by blam
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To: blam
I actually did that last year. Had a neighbor that couldn't cook, so she bought the food, I made the meals. It worked out well.

/johnny

27 posted on 10/18/2012 6:59:13 AM PDT by JRandomFreeper (Gone Galt)
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To: blam

I have a big stock of food too,but it will be shared with family members..and none of them cook..not bread anyway..I will share as much as I can with others but people need to wake up..We bought most of our stuff before the latest food increase..Ordered more the other day..


28 posted on 10/18/2012 7:05:15 AM PDT by PLD
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To: blam; PLD

I asked on another thread about the feasibility of basically re-grinding pasta back into flour, mixing in yeast, and baking bread.

Does that sound possible?

The reason is seems to me pasta has many advantages, stores easily, little prep needed, cooks quick, pretty dense nutrition-wise.

I’d much rather store 300 lbs of pre-made pasta than 300 lbs of whole grains along with all the bugs and mites and grinding that go along with it...


29 posted on 10/18/2012 7:08:41 AM PDT by djf (Political Science: Conservatives = govern-ment. Liberals = givin-me-it.)
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To: PLD

And what will the ingredients for homemade bread cost?


30 posted on 10/18/2012 7:10:11 AM PDT by RipSawyer (Free healthcare is worth FAR LESS than it costs.)
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To: RipSawyer
Today, the ingredients are dirt cheap. It costs me about $0.10US to make a loaf of bread. The ingredients also store long term.

/johnny

31 posted on 10/18/2012 7:23:21 AM PDT by JRandomFreeper (Gone Galt)
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To: djf
Sounds like that could work..After all pasta is mainly flour and eggs..The thing is I always freeze my flour and cornmeal to kill the larva from bugs..I bought flour with my supply of veggies and meat..it will last 10 yrs..
32 posted on 10/18/2012 7:36:35 AM PDT by PLD
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To: RipSawyer
Well probably a lot but you can buy canned flour,yeast,eggs and milk which we have..If you bought it now it would last for en years as far as freshness goes..Be prepared..Also bartering will be good..
33 posted on 10/18/2012 7:42:01 AM PDT by PLD
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To: PLD

Are eggs an ingredient for all pasta?
The reason I ask is that eggs have a high sulfur content, and because of that, degrade quickly if exposed to air.
I have about ten lbs of powdered eggs in storage (canned) but they all have O2 absorbers, so I’m not worried about the shelf life, which is probably longer than MY SHELF LIFE...

;-)


34 posted on 10/18/2012 7:45:44 AM PDT by djf (Political Science: Conservatives = govern-ment. Liberals = givin-me-it.)
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To: djf
I am not an expert on Pasta but from what I have seen when it is made yes they are..I do not make pasta..On my freeze dried eggs it says do not open until ready to use..With my family member that won't be a problem..

We buy "Honeyville"!!! you can go to their web site and it will tell you most of what you want to know..

35 posted on 10/18/2012 7:59:37 AM PDT by PLD
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To: PLD

Home-made pasta I think you can use egg whites as a binder.

Store bought, I think it’s carageenan or some type of gum extract. Sumthin like that!


36 posted on 10/18/2012 8:10:09 AM PDT by djf (Political Science: Conservatives = govern-ment. Liberals = givin-me-it.)
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To: djf

i didn’t know that thanks..


37 posted on 10/18/2012 8:17:37 AM PDT by PLD
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To: djf
"Does that sound possible?"

I don't know. Doesn't noodles have eggs and oils in them?

38 posted on 10/18/2012 8:42:08 AM PDT by blam
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To: djf
"Does that sound possible?"

I don't know. Doesn't noodles have eggs and oils in them?

39 posted on 10/18/2012 8:42:25 AM PDT by blam
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To: blam

I should have read further before making the last post about eggs in the noodles, etc.


40 posted on 10/18/2012 8:47:18 AM PDT by blam
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To: JRandomFreeper
The hyperinflation was caused by the defeat of Germany in WWI and civil war in Zimbabwe which resulted in the destruction of the production capacity in both cases. There is always a precipitating event that causes hyperinflation..its not high inflation spiraling out of control.
41 posted on 10/18/2012 5:07:34 PM PDT by montanajoe (Blamed Flamed Shamed didn't vote for R/R or O/B)
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To: montanajoe
WWI didn't cause nearly as much damage to production as WWII did for Germany. Reparations are more likely a cause. The government had to spend too much to pay those off.

/johnny

42 posted on 10/18/2012 5:27:44 PM PDT by JRandomFreeper (Gone Galt)
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