“At this rate, you’ll never retire”
By Tammy de Leeuw
It’s safe to say that most adults in America know that something weird is happening in society and in the economy; something unlike anything most of us have previously experienced. Many market watchers and economists say that we are on the leading edge of what’s known as a “crack-up” boom.
New York Times bestselling author and investment expert Doug Casey (Strategic Investing, Crisis Investing) recently commented that a speculative mindset has now been fully adopted by American society. Writes Casey, “Everybody who is even remotely capable of opening a financial account now has one, in hopes of instant wealth….millions of people have been living way above their means. Those days are over.” Casey is one of many who believe we are entering a crack-up boom or “Greater Depression,” phase.
What happens in a crack-up boom?
Coined by the late Austrian economist Ludwig von Mises, the term “crack-up boom” describes a crushing event where inflation rises so much that it destroys entire economies quickly and mercilessly. Over the years, Mises and other economists warned that governments attempting to create artificial prosperity by injecting too much cash and credit into an economy would create e hyperinflation and cause financial misery for millions. Time and again, history has confirmed these experts’ worst fears.
In a crack-up boom, a country’s central bank loosens the money supply, fueling a wave of credit expansion. People buy homes or businesses and watch those assets’ values surge. These paper profits make them feel richer and increasingly willing to take on debt and risky investments. However, as demand increases, consumer prices begin rising at a torrid, unsustainable pace. Banks, attempt to avert the crisis by pulling back on access to credit. Such a sudden contraction of credit forces asset bubbles, which were driven by all the loose credit, to pop, tanking the economy.
At some point, even the least sophisticated consumers realize things are out of control and begin to reject fiat (unbacked paper) currency in favor of hard assets. Extreme examples of crack-up booms include the Weimar Republic in 1923 and Zimbabwe in 2008. Zimbabwe recorded the second highest hyperinflation event in history in November, 2008. Believe it or not, the country reported an inflation rate of 79,600,000,000%, which equals around 98% DAILY! One can only imagine the misery that these situations caused for millions of people unprepared for the meltdown who didn’t understand what was happening to their wealth.
What are the stages of a crack-up boom?
Stage One “Stimmy, stimmy go-go POP! Stimmy, stimmy POP!” 40% of all the fiat currency ever printed in the United States was printed in the last 12 months! To combat the after-effects of wrong-headed COVID policies, the Federal Reserve unleashed its’ 6 Trillion Dollar “Kash Kraken” stimulus measures. These emergency strategies poured more money into the economy than we spent fighting WWI, WWII, and the Vietnam conflict combined- in less than a year. Suddenly the nation and the world were awash in cash. People felt more prosperous, and as the most severe COVID measures ended, demand for hard goods spiked dramatically. The subsequent spending spree caused politicians and TV pundits to gush about our “amazing recovery.” Uh…no.
Stage Two: Main Street America wakes up and smells the meltdown stench. Stage two of a crack-up boom sees ordinary people grasping the fact that the pieces of paper they’re carrying in their wallets aren’t buying as much as they used to. Slowly at first, and then later at a hyper-sonic pace, people trade in their fiat currency for hard assets. Wisely, they decide they would rather have valuable and necessary items such as commodities, food, and used cars, because real things store value better than the IOUs we call dollars.
Stage3: Jack and the Magical Fiat Beanstalk: Jack was paying attention and doing the opposite of everything the news talking heads and politicians told him to do. At the end of Stage 2, he offloaded his “magic fiat bean” money in favor of real cash cows and a few chickens. The people who used to laugh at him for being a fearmongering hoarder or tinfoil conspiracy theorist were now coming to him for milk, eggs… and tinfoil. There is chaos and widespread panic as the economy falls down and goes BOOM! They say a picture is worth a thousand words. Well, in a crack-up boom, it’s worth ten MILLION. Above , you can see Jack, fooling around making fun of all the paper billionaires. Jack knows he did the right thing and PREPARED, so he isn’t SCARED.
How can you prepare for a crack-up boom?
There are hundreds of red flags indicating something potentially devastating is about to go down. At this time, none of us can say for sure if we are witnessing a crack-up boom, a recession or a depression. But we are most definitely NOT returning to the old normal. I mean think about it, since the pandemic began there have been 268 new BILLIONAIRES created. That’s a lot considering there were only a couple of thousand in the entire world before COVID. Call me suspicious, but I wonder how all that cash ended up in so few pockets.
Yet, in spite of what our eyes and brains are telling us, rejecting the official narrative about inflation (Russia did it, COVID did it, greedy people who like to vacation did it) can get you shamed, shunned, shadow-banned, or uninvited to media dinners. Many have compared these times to that old fable “The Emperor’s New Clothes,” and with good reason.” Still, no one wants to be the party pooper shouting “But our economy isn’t real!”
So, is there anything you can do before the $269 trillion US economy comes crashing down? What can YOU do right now to protect yourself, your finances, and loved ones? While some chaos and hard times are guaranteed for nearly all of us, you can take some actions to help you ride out the hurricane.
- Build and refine your network. You want to surround yourself with strong, resourceful, like-minded people who possess the skillsets and traits of survivors. You do not desire negative, critical, and needy people in your inner circle. In hard times, the strength of your network could make all the difference in beating back the Kraken.
- Rethink having a lot of cash in the bank. I am not a financial advisor and wouldn’t give anyone money advice, but I have a reasonably good grasp of history. Historically, banks have had “bail-outs,” “bail-ins, limits on withdrawals, reductions in ATM availability, branch closures, and even total failures in hard times. Most financial experts I have spoken to recommend keeping only around 10% of your cash in the bank for bill payments and other purposes. Credit unions and local community banks are somewhat safer, but there are no guarantees. Plus, a cyber-attack or grid issue will impact those institutions as well. Of course, how much you keep at home or in your safe will depend on your specific needs.
- Look into precious metals. Since nearly the beginning of human history, precious metals have been a reliable store of value. While it may be too expensive for you to buy a lot of gold right now, silver seems like a pretty sure bet. Silver has many industrial and scientific uses and is still relatively affordable, especially if you can locate a supply of “junk” silver. When everyone is turning their noses at that worthless green paper stuff, you may score an advantage by having precious metals to trade. Store non-perishable food and have plenty of water.
- Things can melt down very quickly in a crack-up boom, and items you never imagined will disappear off the shelves for months, even years. Monster inflation is on the way, along with wars, droughts, sky-high diesel prices, and fertilizer shortages. If you think the prices you’re seeing now are high- wait for a few months. If you can’t afford that expensive long-shelf-life food touted by experienced preppers, buy non-acidic canned foods, such as canned chicken breast, beans, and corn. “Appalachia’s Homestead with Patara” is an entertaining, purpose-driven site devoted to helping people prepare for disasters. Patara has a lot of information about storing and canning food, growing a garden, and other valuable tips. Goshen Prepping is another excellent site that will show you how to successfully prepare for all kinds of storms and disasters, artificial and otherwise.
- Buy a generator or backup power source if you can afford it. A lot of potentially disastrous situations are happening at the same time. One that isn’t getting nearly enough attention, in my opinion, is how vulnerable our power grid has become. The US power grid is not aging well, making it a prime target for hostile foreign and domestic entities. Unfortunately, energy experts agree that it wouldn’t take much to plunge us into total darkness. A gas or diesel generator with plenty of fuel, a wind turbine, or a solar generator will give lessen your anxiety and possibly keep you safer during a power blackout. Running an entire house off-grid is prohibitively expensive for most of us. However, if you have just one generator that can run essential appliances and a refrigerator, you will be ahead of the game.
- Plant a garden. It’s not too late to plant a small garden if you have some space and access to water. Choose nutrient-dense foods that you can enjoy raw, such as kale, Swiss chard, tomatoes, carrots, or cucumbers. If you don’t have much room, try an herb garden. Herbs can make even dried and canned food taste a lot better, improving your morale and state of mind during a crisis.
- Stock up on things you know you will need. Make a list of the top 20 items you use every day or think will make good barter items and get as much of them as you can afford. Buy any supplements in bulk and store them in a cool, dry place. If you rely on medications, ask your doctor if they can prescribe a two or three-month supply.
- Get your finances in order. Now’s a great time to meet with your financial advisor to see if there are things you can do to shield what’s left of your money. You might look at rebalancing your portfolio so that you don’t have so much money exposed to market risk or find alternative investments that make sense in these times. The Economic Ninja is an upbeat financial prepper site I enjoy. The Ninja has a lot of money tips and insider information that will help you gain clarity and stay calm when others panic. IAllegedly is another fantastic Youtube community devoted to telling the truth about what’s going on in the world.
These are just a few of the most essential things to do as we prepare to move into an era of uncertainty, economic turmoil, and social and political unrest. Avoid watching the nightly news and instead spend your time discovering everything you can do to have your best life possible, even when the world cracks up. Check out and SUBSCRIBE to the Safe Money Trends YT Channel for more insights.