Hey everyone. Before I get into Ecuador’s past hyperinflation, take a look at the video in this article about Zimbabwe’s hyperinflation.
Special Resource Update: Stock up on non hybrid seeds
When I was younger, I lived in Quito, Ecuador from 1995 – 1997. That country is a third-world country and struggles significantly. In fact, they’ve had to re-write their Constitution over 12 times so far. Sad!
Within 5 years, Ecuador’s currency value dropped more than 1,000 percent!
- In 1995… 2,300 Sucres = 1 US Dollar
- In 1997… 9,000 Sucres = 1 US Dollar
- In 2000… 25,000 Sucres = 1 US Dollar
Can you imagine if that type of value-drop happened in America?? The truth is, it can. And in my opinion, it will. We’ve slowly been building up to it, and the time will come when it will happen very quickly, just like Ecuador and Zimbabwe.
Do you know what aided Ecuador’s currency collapse? The former President, Abdala Bucaram. Guess who aided Zimbabwe’s currency collapse (at one point, it cost over a billion dollars just to buy 3 eggs)… the former President, Robert Mugabe. Who has been aiding our currency value-drop? Our President, Barack Obama, and many other past and present political figures.
You may not be feeling the value-drop just yet, but watch the news. Better yet, watch first-hand witnesses on youtube. Sure, you may be thinking, “Youtube? Come on. That’s not legit.” But guess what… mainstream media isn’t showing you all of the truth. Its holding back. Its biased.
You need hear how the cost of food is rising. You need to learn that the Obama Administration is spending Billions and Billions of dollars (that it doesn’t have). Healthcare costs are rising twice as fast as inflation… Etc etc etc. You need to hear these things, and educate yourself.
In February 2010, The Obama Administration set a national historical record by spending over $220 Billion in one single month.
The Secretary of Defense Donald Rumsfeld admitted in 2001, “According to some estimates we cannot track $2.3 trillion in transactions”. And Jim Minnery, Defense Finance and Accounting Service, said regarding a mere $300 Million, “We know it’s gone. But we don’t know what they spent it on”.
So we’ve got a President who is spending like crazy, and workers at the pentagon who can’t track over 2 Trillion dollars-worth of spending. WHO GETS TO PAY THAT DEBT? Certainly not President Obama. You do. I do. Every working, taxable American does.
The thing is, those trillions of dollars never existed in the first place! So where did it come from? The way the government gets money to spend is by printing more of it and borrowing from other countries like China. And that’s for “spending” money.
Now, how does the government get the money to pay the national 13 trillion dollar debt AND the annual interest that the debt accrues? Taxes, and printing more money and borrowing. Other large countries have stopped lending money to the United States because they can see what’s happening and how we’ll never be able to pay it back.
The more money the government prints and creates out of thin air, the less value each current piece of paper money and electronic number has. If you have 10 bucks, and billions of dollars get created out of thin air, the cost of living increases just to keep up with the fake value of the new money.
Say 1,000 people have $1, and each can buy a candy bar with that $1. If the government creates 1 billion dollars and sends it out to those 1,000 people, they each just became millionaires out of thin air. What will happen to the cost of that $1 candy bar? It will be sold for $1,000,000 because realistically it is still only worth $1.
The movie character called “Syndrome” from The Incredibles, put it best: “And when everyone is super, no one will be”. When those 1,000 people think they’re millionaires from that government handout, they’re not because they still only have $1-worth of money and can still only buy 1 candy bar.
That crazy shift in money’s value I just described is called Inflation. That scenario’s inflation rate was crunched into an instant inflation just to help you comprehend it more easily.
But how fast will our nation’s inflation rate hit us? Over the last 50 years, everything you can think of has increased in price. Will it take another 50 years to see current prices double? Well let me ask you this: What was the national debt 60 years ago? Less than 260 Billion dollars. Now? Just about 13 Trillion dollars. Most of that incredible increase happened in the last 20 years.
And with a national budget of more than 1 Trillion dollars in 2010, and another trillion dollars in 2011, the government can’t save us. This nation is a “dead man walking”. And each month that goes by, the government tries to do something and spend even MORE money just to keep us afloat a little longer.
When the cost of living increases…
When the cost of living increases but your paychecks don’t, the real value of your paycheck decreases. You find it harder to pay bills. You become tight with money. Not just you, but everyone else around you. So the government decides to send you a few hundred bucks in the mail to help you out a little (sometimes called an “economic stimulus package”) specifically so you will spend it so your local businesses feel a little better because hey, they’re prices have increased and sales have decreased.
When Americans get stimulus money from the government, its because the government is creating money out of thin air and wants to keep Americans floating just a little bit longer before the real financial tsunami hits and sinks the nation’s ship.
When inflation hits us hard instead of little by little like it has been for the last 50 years, will you be ready?
Say you have a savings of $500,000 and you have just retired and have no job. You decide to live on your $500,000. Right now in the year 2010, you’d be fine. But, in just a short while, the cost of living is going to skyrocket (due to government spending, creating money out of thin air and taxes, and other things) and what you normally could buy for cheap is going to cost a fortune.
Therefore, your hefty savings of $500,000 will not last very long because of how much you have to spend just to survive. Your $500,000 will no longer be worth $500,000. It will be worth much less.
The thing is, hardly anyone $500,000 saved up. So people have retirement plans and will use social security and medicare, right? Well guess what, there IS NO MONEY in the Federal Reserve anymore and about 70 million “baby-boomers” are about to retire. Whats going to happen to them when the government can’t payout as promised in their policies?
More money printed, more taxes, more debt. Costs of living increases, value of paychecks and money decrease… Inflation! Rapid, super inflation.
When all hell breaks loose and hits the fan…
What happens when you have a hard time paying your bills? Your spouse gets a job, right? Or you take on another job, you put the bills on your credit card, you ask your family to help, you appeal to your religious group, you “get laid off” from work and file for unemployment benefits… the list can go on and on.
What happens when you can’t pay your bills, not just find it difficult? I had my own financial dilemma a few years because I couldn’t pay some monthly payments towards my own debt. And let me tell you, that was the worst hell I’ve ever been in so far. Now that I’m almost out of debt, I can sleep at night – for now, at least.
If you feel the need to prepare for a rainy day and a broken nation, I want you to invest in a survival seed bank. Get one for yourself, and get one for your parents and siblings. Stop buying useless birthday presents and grab something really meaningful and practical. Thanks for reading.
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I lived in Ecuador between 1978 and 1981. During that time, the military government kept the sucre stable and it varied modestly, between 24 and 27 sucres to the dollar. Eventually, some of my Ecuadoran friends told me that the exchange rate went to 30,000 sucres to the dollar.
Socialist-style governments are usually the culprits. They promise higher wages, especially to union workers, and they print money without restraint to try to keep those campaign promises. Sound familiar? We’re doing the same thing in the United States today. The same thing happened in Chile, Argentina, Bolivia, Brazil, and is on the verge of occurring in Venezuela now. It has happened in many countries of the world, and the causes are always the same. Hyperinflation is always caused by government that overspends and then attempts to monetize its debts.
This experience living in Ecuador, Columbia, and other S American countries helped me realize how Americans have taken for granted their peace, freedom, and prosperity for so long that we have become apathetic to the risks. When that happens, fate tends to take those blessings away until the lessons are learned.
We can not defy the laws of sound economics forever. After all, as the TV ad 20 years ago used to say, “It’s not NICE to fool mother nature!” (sound of thunder and lightning). The day is coming when the piper must be paid, and when we can’t pay him, like his namesake in Hamblin 300 years ago, he will march our future into the abyss!
Thanks for practical ideas that help us prepare for that day! God bless!
You’re absolutely right – the American government is doing the same thing that caused hyperinflation in other countries. Its sad that they haven’t learned from the past and from other nations.
I’ve also lived in Taiwan, Philippines and Australia. Having done that, I as well can see how people in America are taking for granted the blessings of living in this country. What a waste! I’m glad you’re eyes are open and can see what’s going on.
The initial thought of hyperinflation is scary to me (because I’ve experienced it first-hand in Ecuador), but the more I prepare and get ready, the more I believe I can handle it. And I sure hope you’re prepping, too.
Good luck, God bless and thanks for commenting!