In some respects, those manic crowds reminded me of newsreels I had seen of 1930’s Germany during the hyperinflation of the Weimar Republic. People were frantically buying anything they could with their paper money because the money was becoming increasingly worthless by the minute. The difference between the German people then and the folks crowding the malls last week was that at least the Germans were spending their money on things that mattered.
As hyperinflation took off in Germany, men working in factories demanded their wages be paid every hour, then they would rush to the factory gates to hand that money to their waiting wives outside who, in turn, would run with that money to the market to buy the food that was increasing in price literally by the minute. For the hapless populace, it was a race to unload their inflated money on goods before those goods were priced out of reach.
In no time, the German mark was worth nothing, even though many people soon owned millions of them. By the time things had all come crashing down, people were using marks as fuel to heat their homes, since paper money had become so plentiful and much cheaper than the firewood that money could no longer buy. But before things got that bad, people were trying to get whatever they could of substance in exchange for that increasingly worthless paper.
I read of one woman who bought dozens of steel bedpans, not because she needed them, but because anything a person could get for their deutschmarks was better than holding onto them and ending up with nothing. Eventually she was able to trade those bedpans for items she did need.
The inevitable hyperinflation that will eventually hit us here is likely to come without warning, and could spin out of control in a matter of days. No one knows how soon it will hit, but the clear devaluation of the dollar makes its eventual arrival as sure as the sunrise. When it happens, those who have prepared for the worst will be able to eat. Those who did nothing will have nothing.
Those Americans spending their money like crazy during events such as Black Friday would do well to have spent what little they had on necessities rather than the video games and gew-gaws most of them were pathetically hustling after.
The really sad reality is that most of those shoppers weren’t even unloading their own extra money but were instead going further into debt, despite the lessons they should have learned from the past four years. As Stephen Colbert put it, “We’re spending money we don’t have, to buy things we don’t need, to give to people we don’t like.”
It’s a good bet that few of those shoppers have made any preparations for the famine that awaits. I suppose last Friday’s stampede will be good practice for that future day when they are again crowding elbow to elbow trying to unload thousands of worthless dollars in exchange for something –anything– else.
The prudent person understands that these are not times to be going into debt or wasting precious money on playthings. If you do happen to be sitting on a pile of cash, or you have a decent nestegg in a savings account, I’d say it’s time to notice the signs of the times. We are not yet in a hyper-inflationary spiral, but dollar inflation has begun. Our dollars are worth less every day. Banks are no place to be parking money that is depreciating by the week. After putting aside a sufficient store of food and other necessities, you should be taking what’s left of your savings and converting it into gold or silver. Owning hard money is better than having no money, and paper money is no money at all.
So, by all means, go shopping. Spend that money. But make dead certain you spend it on items of substance, items you’re really going to need.
When things really start to get nasty in America, it will be like the Weimar Republic all over again. In that day, those owning extra food or silver -or even bedpans- won’t be likely to trade any of those things in exchange for your paper dollar bills.