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Sell the USD. Buy liquid and non-liquid hard assets. NOW!

Posted by John T. Reed on

Lots of stock market analysts put out buy and sell signals. I very rarely do that.

I am doing it now. Sell the US dollar—on an emergency basis. Put it into hard assets a.k.a. non-dollar denominated assets, some of them liquid.

Do NOT put yourself into a position where if hyperinflation does NOT happen or does not happen SOON, that you will be in trouble.

In other words, DO NOT BET THE FARM on hyperinflation happening soon. Yes, that would give you the biggest benefit if it DID happen soon, but predicting such things is not precise enough for that. Also, this is good advice even if we have only late 1970s, double-digit levels of inflation.

And you must stay liquid enough to pay your routine bills. You cannot buy groceries with real estate.

Get a cash-out refi at a fixed rate of your home mortgage—the biggest that you can safely afford. You may want to considering do that via a lump sum RAM or HECM.

Buy real estate. Close ASAP. Not liquid though. So you cannot put ALL your money there.

Forever stamps may be good unless USPS reneges on them and are not overpriced. Generally, they did not renege on other things other than gold certificates during the Depression. And only some of my readers have stocked up on them so there would be no great benefit to reneging on them. More likely the USPS would stop selling them, but honor the existing ones. They are liquid.

Nickels and pennies are specie (worth their face value in metal) and not overpriced. They are liquid.

Convert all bonds, bond funds, CDs, excess savings accounts, money market funds, etc. to non-dollar-denominated assets.

Try to convert annuities (pensions and social security) to cash and put it into non-dollar-denominated assets. One way to do that is to use annuities to qualify for a larger fixed-rate mortgage cash-out mortgage and put the cash-out into non-dollar denominated assets.

Junk silver is now overpriced by historical standards, but if we flip over into hyperinflation, today’s silver prices will look like bargains. It is a liquid hard asset that comes in convenient denominations.

Gold needs to be held outside the US and it is also overpriced and it comes in INconvenient denominations. I am not buying any of it. Hell, I NEVER bought any of it. I inherited all that I have, and it is not in the US. It is a liquid hard asset. 

If you have a business that sells goods, buy more inventory. It is a relatively liquid hard asset.

Lawsuits in which you hope to be awarded money not getting hard assets, are essentially about to become worthless IOUs at best. If you can convert them to cash now, do it.

I am increasing my foreign currency accounts held abroad. They are liquid. The US government will confiscate foreign currency if you have it here. Same with foreign cash here if they find out about it. Same with gold here if the government finds out about it. It will be illegal for you to possess gold or foreign currency here. Executive order 6102. 

If you did not already open foreign bank accounts, it will be hard to do so in the current covid 19 pandemic. But don’t come running to me to complain about that. I have been telling you to do that since 2012.

Collect IOUs and convert them to non-dollar-denominated assets. . Cash in any savings bonds. I did that a year or two ago with a bunch that I found in our safe deposit box. Convert the proceeds to non-dollar-denominated assets.

Convert collectibles to non-dollar-denominated assets.

Within real estate, you want to occupy it and use it. Any rental property you own will be rent controlled.

Buy everything you need for the rest of your life now: food, fuel, medicine, paper and personal hygiene consumables. Is that impossible to totally do? Yeah. Get a bunch of it.

Read my Web article The Day the Dollar Dies, then go to the store and beat that rush. 

If you have a cash value life insurance policy, get the cash out and put it into non-dollar-denominated assets.

What about stocks? They have a mixed history in hyperinflation. Part of it is how the income and assets and liabilities of the corporation relate to hyperinflation. International trade is generally a good thing regarding hyperinflation in one country. Are stocks better than bonds? In hyperinflation, everything is better than bonds, but some stocks may do poorly. I cannot tell which.

Commodities are good, but I want you to take delivery, not screw around with futures contracts. For example, go to Home Depot and buy a lot of copper tubing and store it on your property secure from thieves (indoors). Those would be relatively liquid.

Make sure your passport does not expire in the next year. And if you do not have a passport, @#$%^&!! Get one immediately. You will probably need to leave the US if we get full blown hyperinflation. It causes starvation.

Can you make a real profit on hyperinflation? Yes, but be careful. You do that by borrowing the most you can safely pay back if hyperinflation does not happen or does not happen soon against your home at a fixed-rate. Hyperinflation will cause your home to keep its purchasing power and it will cause your mortgage to go to zero in real (adjusted for inflation) terms. The big winners in past hyperinflations were those who OWNED hard assets and OWED fixed-rate debt.

Some businesses are good to be in during hyperinflation, like exports.

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