In the last several years, we've seen budget deficits and spending like we've never known and many are beginning to think that the Fed's efforts can only result in one thing, runaway inflation. We've read how Japanese citizens deal with deflation, let's take a few moments and review what regular folks do in inflation ravaged countries like Venezuela.
Please read the reuters story below;
The graphic pasted here from the article demonstrates just how bad the inflation rate in the country has been.
- Because gas is heavily subsidized and is almost free - Venezuelans buy cars. Instead of depreciating, their value increases as the car gets older!
- Essentially people borrow and buy appreciating goods like gold or cars
- They take extra jobs - I guess fat and lazy Amerikans won't do so well to keep up with inflation.
Am I sold that this is our future? No, I still believe that despite all of his work, Bernanke will fall seriously short and learn that his hubris has done nothing but create a more serious collapse. However, one of us will be correct and it is important to understand the strategies for dealing with both outcomes.