Today on MoneyLife

Today's MoneyLife program focuses on hyperinflation. Host Chuck Bentley tells listeners we’re not experiencing hyperinflation now, and we may actually be entering a time of deflation.

Chuck says he's been reviewing Larry Burkett’s book The Coming Economic Earthquake. Larry wrote a chapter on deflation and inflation.

Larry pointed out that when the an economy enter a deflationary period, those with cash who are debt-free are in the best position.

An inflationary economy benefits borrowers and promotes greater indebtedness. Larry wrote that after the deflationary period some massive event would cause consumers to severely cut spending. That event could be a stock market crash, oil embargo, collapse of mega banks, insurance companies, or large corporations.

No one knows the future, but there is an economic cycle (recession, inflation, recession). Larry wrote a government facing a depression usually will do whatever it takes to avoid it including monetizing its debts (printing new money).

The amount of money printed at first would be just enough to cover the deficits that can’t be covered through increased taxes or new loans. However, as the need grows, so will the printing of money until one day the economy will move into hyperinflation.

Chuck says he doesn’t think the U.S. is headed into hyperinflation, but he wants you to know how to be prepared for it.

After the break, Chuck welcomes Dr. Andres Panasiuk, Sr. VP of Latin American Outreach for Crown Financial Ministries. Andres grew up in Argentina, which went through a complete economic collapse and hyperinflation.

Andres shares his background and describes the economic volatility he experienced while living in Argentina, brought on by socialism. Andres says that what’s happening in the U.S. today reminds him of Argentina in the 1970s.

Andres says the U.S. was a free nation, but now it is looking to the International Monetary Fund for help. We will become a slave to it and it will have an impact on Americans. Rules will be set for us that we have to follow. Argentina had 1,000% inflation in back-to-back years in the mid 1980s.

After the break, Chuck and Andres talk about the effects of hyperinflation. Once the government starts printing money that isn’t backed by gold, people lose confidence in the money. Andres says that during Argentina's time of hyperinflation, prices used to change twice a day.

The Bible's principles for managing money are true even in a time of hyperinflation. Budgeting is an application of the Biblical principle of planning. You need a financial plan during hyperinflation for the dollar losing value.

Everything will become more expensive, but incomes won’t increase as rapidly as prices.
In hyperinflation, you save by spending because prices are rising so rapidly. Once you receive your paycheck, you immediately buy the things you need for the next few weeks or months because the longer you wait the more things will cost.

You have to really plan ahead and be able to store things at home until they’re needed. Andres says his father had a business and would invest any money he made back into goods for the business.

If the value of the dollar is going down, consider buying a currency that is going up. Argentina eventually outlawed buying foreign currency to prevent money from flowing out of the country.

If you have a fixed-rate mortgage during hyperinflation, only pay the minimum payment each month and stop paying ahead because the longer it takes you to pay the mortgage, the less it will cost you.

After the last break, Chuck says hyperinflation is possible but it’s also possible that people and the government will start making the right decisions and turn the economy around.

Andres says it will take a long time for the U.S. economy to be destroyed because it is so big. There is time to turn to the Lord for provision, time to start paying our national debt, and time for businesses and families to stop relying on credit and living in debt.

If you have a job, do it well and use the money wisely. America was a free nation and it is choosing to be a slave to others because of its inability to have self-control. Need to go back to trusting God and surrender to His guidance.

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