Costco in anticipation of hyperinflation

I went to Costco today—to stock up.

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It was mobbed but their checkout is very efficient.

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Any problems? Yes. I was buying barter items that we will use if somehow there is not hyperinflation or depression. One was I tried to buy four Calgon dishwasher detergent containers. They would only sell me one.

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That suggests that other people, who neither read nor wrote my hyperinflation book, are sensing impending financial chaos. Or maybe they regard covid 19 as that.

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I also bought a bunch of US Forever stamps. 400 for $219. That is a bit of a discount. I do not know what they sell for at the post office these days.

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I got paper products for personal hygiene and computer paper. I got Tide. Drug addicts shoplift that to barter or sell it to get drug money. Also toothpaste, shampoo, soap, razors, some honey (uniquely the only food that does not go bad over time).

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I did not get, for example, coffee. Lots of people like it, but it has no necessity value (zero nutrition, neither my wife nor I drink it. My two sons who live here do not drink it. The fact that others might want to buy it from us did not change my mind.

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By buying only barter items that you would use you eliminate the risk that there is no hyperinflation.

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Most people think gold is the one-stop solution to hedging against inflation. No. That is a big gamble. It is now almost at its all-time high in real terms. What’s worse is that hyperinflation always ends and it always ends overnight.

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What will it be like at Costco after hyperinflation starts? Initially, there will be a crazed mob. They will take no credit card payments but they will accept debit cards. People will not patiently stand in line waiting to get in because their dollars will be losing purchasing power as they stand there.

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You will not know the price of what you are buying until you get to the cash register because it will be rising in between when you put it into your cart and when you pay for it.

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The initial people will buy what they want. The later people will buy whatever’s left including all sorts of stuff they neither want nor need. Why? Because anything is better than a dollar that is falling in value as you are in line to pay. If you do not convert that dollar into something, anything before it goes to zero, it will be a total loss.

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In a week or two, all Costcos will have nothing to sell. The government will respond to the hyperinflation by imposing the Five Bad Laws:

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• capital controls (you may not own or use gold bullion or foreign currency)

• price controls (this will cause all sellers of everything to stop producing or shipping to stores)

• rationing

• anti-hoarding laws

• financial repression laws (those force you to keep your money in banks in low interest accounts)

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Unlike the recent toilet paper shortages which kept getting restocked in a day or two, the hyperinflation will not only empty EVERY shelf in all stores, they will stay empty until the price controls are ended.

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I have some readers here who have lived through foreign hyperinflation. I would appreciate comments from them buttressing what I am saying or correcting me if I am wrong.

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One manager in Germany in their great hyperinflation told the manager of a branch where they were taking in German marks from sales to go buy stuff with the money immediately. “What should I buy?” The guy asked. “Whatever you can get. I don’t care said the owner. “Just get out of the marks.”