After mixing myself a nice drink, I am prepared to pontificate about lessons of the crazy ten-thousand-percent hyperinflation bout in post-Soviet Ukraine.
First, if you are convinced that it’s about to happen in the USA, you need to get out of the city, get out of the suburbia, and get into an area where you can have easy fresh water, farmland, and just a few people per square mile. After securing meager rations of bread, grains, sugar, and soap from the government trucks, we found some land and started farming. We grew tomatoes, potatoes, and squash/zucchini. Remember that not everyone thinks the US economy is about to implode. But if you do, I think you have no choice but to get rural.
Second, hyper-inflation doesn’t just end by itself. It has to be stopped. Either governments stop creating money and deal with political and social consequences of gaping deficits, or social order as we know it collapses. I remember crazy-sounding statistics of every third male between ages of 18 and 30 “sitting on a needle”, which meant injecting home-cooked, low-grade smack intravenously. ”Narcomany” (Rus. “Drug addicts”) were combing our grandmas’ backyards for anything that wasn’t nailed down, although even if it was, it would still be stolen. My grandma’s delicious, soft homemade bread rolls made with poppy seeds and a nice helping of sugar and butter went the way of the ruble because ALL opiates became outlawed.
Ukrainian hyperinflation ended when the currency was anchored to something perceived as stable, which at the time was the US Dollar. Even after that auspicious event, inflation tore into out paychecks at the rate of anything between 20 and 50 percent a year, but it was a far cry from a 10,000% rate of 1993.
Third, there’s no reason for you to not buy laundry detergent, socks, toilet paper, grains, razors, light bulbs, canned goods IN BULK. Next time you get a little extra money, invest it into one or all of the aforementioned goods. You’re going to need them anyway. It’s an investment, not an expense. When was the last time you walked into a store and went, “huh, that’s weird, that canister of Tide just keeps getting cheaper!” The answer is “never”, that’s when. Because no consumer good is getting cheaper — we knew that in post-Soviet Ukraine, and it’s just as true in modern-day America. As a matter of fact, if you invested into coffee, peanut butter, and a new wardrobe, you’d enjoy something like a 20% return on your money — the only alternative to that kind of a growth would be gold or Apple stock.
Finally, anyone who learned the biggest lesson of the hyper-inflationary collapse in Ukraine understood how to live flexibly. Darwin often gets misquoted with this one, but it’s one of my favorites – “It’s not the strongest or the smartest who survives. It’s the one who’s most adaptable to change“. This means – expect anything. Expect the dollar collapse, but also expect that it may not happen for 50 years. Expect the police to show up when you call them, but get a gun. Expect your kid to never go to college, but start saving anyway. Expect to sell your silver some day. Expect to invest in real estate again. Have a support structure of friends and family, but don’t be afraid to up and move.
At the end of the day, those events taught me how to live a better, happier life. So, in a way, were they really that bad?