Saturday, August 03, 2013

Good Things Will Come From Hyperinflation

I've been gnashing my teeth for some time over the Fed's insane experiment in monetary stimulus.  It lays the groundwork for eventual hyperinflation when combined the federal government's unchecked appetite for spending on middle class entitlements.  I've had to adjust my portfolio and lifestyle from conventional solutions to extraordinary measures.  It's now time to look on the bright side.  Hyperinflation in the US will have multiple silver linings.

Hyperinflation will put a lot of useless charities and worthless private universities out of business.  This is a really good thing.  Their endowments are heavily invested in US dollar-denominated fixed income instruments that will be pulverized in hyperinflation.  Many non-profits are little more than perpetual motion machines that continue raising money but never solve social problems.  Most private universities teach little of value anyway, except the ones with large research facilities or hospitals.  The schools with good STEM and medical facilities can replace their government funding with private sponsorship once hyperinflation reduces the value of their government checks.  Other schools, particularly liberal arts campuses, will be gone.  Liberal arts schools churn out America's future dingbats anyway.  Those folks can save money on tuition if they start work as janitors straight out of high school.

Hyperinflation will eliminate household debts.  Homeowners can throw away their mortgages.  Former students can pay their entire law school loan balances with just a fraction of their hourly time sheet at the coffee shop.  They won't be able to start their debt binges over again because real interest rates will remain high even after hyperinflation ends.  This is another really good thing.  Consumer appetites will be suppressed for decades and the investors dumb enough to own securities derived from consumer debt will be wiped out.  Neither party will be able to continue their stupid ways.

Hyperinflation will provide me with enormous entertainment as I laugh at the unpreparedness of idiots around me.  I'll spend my days ridiculing the people waiting in line for hours just to buy rationed food and household staples.  I'll amuse myself when people dumb enough to set up black markets get caught, because there's nowhere to hide in a total surveillance society.  I'll laugh all the way to the bank buying auctioned-off assets from bankrupt people at fire sale prices.

Hyperinflation will be fun . . . for me anyway.