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Bankruptcy of the federal government does not mean bankruptcy of all Americans, only the Americans who did not prepare

Posted by John T. Reed on

I want to be sure readers understand why I am careful to use the phrase “federal government” when I talk about the inevitable fiscal collapse caused by federal deficit spending.

The collapse will almost certainly take the form of hyperinflation—because that lets the politicians blame Wal-Mart and Amazon. The alternatives, higher taxes and/or more failed attempts to sell yet more U.S. bonds, cause the politicians to get blamed.

So they will “print” worthless money to pay social security, etc.

Will that also bankrupt the American people?

Cross off these items on your financial statements

Get out your balance sheet (assets and liabilities) and your income statement (income and expenses). Get a magic marker and draw a line through all assets that are U.S.-dollar-denominated (bonds, notes and mortgages you own, US cash, US bank accounts, certificates of deposit, etc.). Then draw a line through all dollar-denominated income like bond interest, return of bond principal, pensions, annuities, social security, etc.

Your insurance policies will all be worthless

Then understand that your insurance policies—life, health, homeowners, liability, etc that are US-dollar-denominated—in other words, all of them, will become worthless in the event of USD hyperinflation.

Now recalculate your net worth and income leaving out the crossed-out assets and income.

Are you bankrupt on your revised financial statements? Are you okay with that?

So change your assets and income sources

If not, CHANGE your balance sheet and income statement so that you move net worth and income out of the crossed-out categories.

What are the details of how to do that?…/how-to-protect-your-life-saving…

There will be winners and losers. Be one of the winners.

The Americans who have their assets and income in the winning or unaffected categories will not be directly affected by the hyperinflation. Those whose financial statements will be full of worthless assets and income will have become destitute overnight.

This also happens in depression which is also possible and also covered by my book. Each type of monetary instability crisis has its own list of winners and losers and its own list ways to protect yourself.

The proof you could ‘become destitute overnight’

And there are diaries you can read if you doubt the phrase “become destitute overnight.” Regarding hyperinflation, Anna Eisenmenger’s Blockade: Diary of a Middle-Class Austrian Woman (free download—…/Blockade-TheDiaryOfAnAustrianMiddle-c…). 

Regarding Depression,…/…/1586489011

The danger is real. The consequences are worse than you think, but also avoidable with relatively little cost, relatively little risk, and relatively little effort.

Am I trying sell books?

Not really. I will not notice the book profits because we are already affluent. What I want is the “thank you” you will send me if and when hyperinflation happens and you read my book and did what it said.

Actually, it won’t be a thank you. It will be a “Thank you, thank you, thank you” or a “thank God for your book.” If any Venezuelans had read my book and followed its advice five or ten years ago, they would be sending me those “Gracias, gracias, gracias” letters now. Apparently not a single Venezuelan read it. It ought to be a best seller in Latin America, but I guess there’s a reason they have chronic problem with inflation. 

Word to the wise.

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