Article – What Venezuelan savers can teach everyone else

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ASK the chief investment officer of a fund-management firm how to spread your investments and you will be told to put so much in stocks, so much in bonds and something in hedge funds or private equity. Chances are that white-elephant buildings, eggs and long-life milk will not feature. But in Venezuela, where the inflation rate is in the tens of thousands, things that people elsewhere would shun for fear they will lose value have become stores of real wealth.

The old standard for guarding against hyperinflation has always been gold and, to a lesser degree, silver. But, as seen in many wartime economies, certain goods hold their value across board… most notably cigarettes, booze, and …ahem…’personal services’. There’s a handful of occupations that are, basically, recession- and depression-proof: food, medical, weapons, entertainment, and sex. Doesn’t matter if it’s a war or a depression – everyone wants to eat, everyone wants to live, everyone wants to protect themselves, everyone wants to forget, and everyone wants to get some action.

Of course it’s kinda hard to transport some of those goods in a convenient manner which is why we have a medium of exchange – gold.

About this point in the conversation the shortsighted jump in and say that if you can’t eat it or shoot it, it’s worthless. After all, they argue, if you were dropped in the middle of the Andes with a suitcase full of gold you’d starve/freeze/etc.

This is, of course, quite true. But it fails to take into account that economic disasters rarely happen overnight. They are usually a gradual-but-increasingly-steep slope. The gold gets you the things you need to survive that drop into the Andes. Somewhere between “normal” and “Mad Max” is where the gold come into play. When the local backpacking supply shop won’t accept currency, the gas stations won’t take plastic, and the gun stores won’t take a check….that’s where the metals come in handy.

But…thats my opinion. I hedge my bets….metals, ammo, fuel, food, etc.

11 thoughts on “Article – What Venezuelan savers can teach everyone else”

  2. Depressing. Are we supposed to feel bad for them or think, ‘what a bunch of idiots’. I’m heading to Costco, again.

  3. There are SOME comparisons.
    Do you feel America would/could put up with this?
    The Venezuelan people are largely religious, as are many Americans.
    Would Americans have quietly put up with conditions like this, or have rioted first…
    Whether or not it helped…

    Answers please!

  4. Don’t feel bad for them, or they won’t learn their lesson. The current inflation rate is 29.500%. PER MONTH. So yep, about a million by years end. It boggles the mind that Mexico elected a man that wants the same thing for Mexico. We are really gonna need that wall sooner than later. And perhaps another around a certain district in NYFCNY.

  5. You feel for the poor common sap who, admittedly short sighted as it was, put faith in the Uber socialist .gov types and then all fell apart at the seams as it is wont to due in the spend what we don’t have socialist minds. Bad scene for the little guy. I’m quite sure the fat cats are sitting pretty and well fed.

  6. The P Nut butter that comes premixed with honey keeps at least 7 years beyond the freshness date and the other starts to get stale about 5 years after the freshness date FYI.

  7. Buy a little silver each month, sock-it-away & forget about it. It’s financial insurance, and the monthly silver bill is simply your ‘premium’. But this ‘premium’ doesn’t go to an insurance agency – it goes to YOU.

    And if the world doesn’t ‘end’ on your watch, you get to pass it all on to your kids & grand kids. “Wasn’t Grandpa awesome? He did all this for us, without being asked.”

  8. IMO PM’s are PART of an overall strategy. Without balance, you will have too much of one thing, not enough of another.

    When you start, you already have something. Start with that then fill out a plan for 3 months. Then increase your time frame as you can. AVOID DEBT!

    Over the years I have listened to the advise of others, most of whom are either not in my economic situation and/or physical location. I have found that educating myself on MY needs, works best. Preps for the SE US only have limited benefit for those of us in the Mountain West. But balance is always necessary.

    I do what I can, as I can; realizing I will never “arrive”.

  9. Don’t forget tools and the ability to use them. Can you do carpentry/mechanics(not just change parts but fix things/make parts)/weld/machine/cast steel/aluminum/plastic/brass
    You may find yourself almost as valuable as a Dr.,the herbalist will have more business and getting paid in chickens sounds pretty good in these circumstances.

  10. All excellent advice. unfortunately, I am not in a position to buy a bunch of gold. However, I have a THEORY, and correct me if I am wrong- but in an emergency, such as a war or financial collapse, wouldn’t the price of FOOD and other necessities rise dramatically also ? Maybe not as much as gold or silver, but much much higher too ? So I don’t feel too bad having my savings account in the form of canned food, rice, beans, and SPAM.
    I am not saying that stored food is an investment, but it is insurance against not only starvation, but a hedge against (hyper)inflation too.

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