Most Helpful Customer Reviews
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111 of 121 people found the following review helpful:
5.0 out of 5 stars
How to Survive an Inflationary Crisis in the Twenty-First Century, July 29, 2005
~The Hyperinflation Survival Guide~ offers strategies for business managers to keep their enterprise afloat in the midst of runaway inflation. I've spent a great deal of time studying Austrian and Chicago school economists, and would say that economist Gerald Swanson has really done his homework with The Hyperinflation Survival Guide. Within this succinct little book are a plethora of sensible business strategies for American businesses. If businesses are to survive they must effectively counter and minimize the ill effects of rampant inflation and/or hyperinflation. The utmost prudence is required in managing accounts receivable, inventory, and production at such a time. A sudden inflationary economic downturn may very well bring a business to its knees leading to insolvency. So it is vitally requisite to be prepared to operate prudently and insulate a business from the ill effects of runaway inflation. You have to know the rules of the game and be prepared, and the rules are stacked against unprepared business managers. Swanson offers financial management and marketing strategies, and offers concise explanations of the inflationary phenomenon.
Today in the United States, there are a lot of dire economic indicators illustrative of a moribund dollar, which is precariously staged for a collapse. First, the U.S. government has spiraling half-trillion dollar budget deficits which are not projected to disappear, colossal government spending increases, and an exorbitant national debt. More and more federal tax expenditures are simply spent paying interest on the debt rather than provision of actual government services and subsidies. Secondly, the U.S. Dollar is unique in that more dollars in existence are in circulation outside of the United States than within it. Many countries use the dollar as a reserve currency or to settle their current account balances in foreign exchanges. An estimated sixty-five percent of U.S. dollars in existence circulate abroad, so in the midst of a dollar decline, a tidal wave of these dollars from overseas coming home could plunge our economy into hyperinflation. If the dollar declines rapidly, it should be taken for granted that foreign dollar-holders will unload their dollars. Thirdly, the amount of debt-public and private is astronomical-and a soft depression seems almost inevitable. The housing market is already undergoing steady inflation because the Fed has keeps interest rates precariously low. The demise of the dollar could very well become a reality-though it is not a certainty. Presently, the dollar has already suffered a devaluation vis-à-vis the Euro and the British Pound Sterling. If the United States does not experience hyperinflation it seems that we may very well revisit the stagflation phenomenon of the 1970s-with its characteristic high inflation coupled with economic stagnation, unemployment, or economic recession. The Federal Reserve has kept artificially-low interest rates far lower than the market would for many years-and it has set the stage for the on-going housing market inflation and an inevitable market correction with a future bust and collapse in the housing market. Many people will lose their homes, be forced to sell them or experience a crippling financial pinch with their lofty mortgages far exceeds their real estate value. Irresponsible inflationary monetary policy will led to a massive redistribution of real wealth and economic dislocations. While a hyperinflation crisis is not inevitable, every indicator points the way to a soft depression.
Thomas Jefferson once remarked, "The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals... it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted." This is as true in the eighteenth-century as in the twenty-first century. Nonetheless, the mentality of American exceptionalism compels many Americans to have the "it will never happen here" mentality as if we're exempt from fundamental economic laws. Our Treasury officials and central bankers that craft monetary policy suffer from this mentality as well. So, while the idea of Banana Republic-style inflation seems wholly untenable to our political leadership and populace, we should never rule it out. One South American bank director remarked, "I wonder how the United States holds together. Your investments in productive assets are down, growth in non-productive sectors is up, and you purchase more than you produce." Many economic indicators show that the U.S. Dollar is precariously staged for continual devaluation, and if it were to crescendo to the point where the government expands the monetary supply to pay its obligations than hyperinflation could result. A younger more sober-minded Alan Greenspan adequately surmised: "As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion." This sound economic logic has not changed, it's just the House Banking committee member Rep. Ron Paul emphasizes the logic now instead of the present-day Fed Chief who sold out for power. Greenspan further noted, "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation... ¶...Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
All things considered, Swanson has put together a helpful and astute little tract for business managers. While I won't summarize the strategies in detail, Swanson covers financial management, manufacturing decisions for producers and industrial relations with amazing clarity. Prudent business leaders should be prepared for economic calamity including the unthinkable hyperinflation phenomenon. Business leaders caught in the "it can't happen here" mindset could be in for a rude awakening. If in the midst of a hyperinflation crisis, a business leader would be sorely mistaken if they are to look to the government for a solution amenable to them. As Swanson surmises, "The name of the game in terms of planning during periods of high inflation, is guessing what ways the government is going to try and correct their bad choices." If you're an entrepreneur, business executive, economist or otherwise concenred citizen, you should consider reading Dr. Gerald Swanson's book and take the prudent and cautious approach... you won't regret it.
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15 of 15 people found the following review helpful:
4.0 out of 5 stars
Concise, informative piece of work, May 26, 2008
Clearly the authors did a lot of work putting this together, and although it packs a lot into a short space, it is nonetheless very understandable and easy to read. Although some of the content is perhaps obvious for the forward thinker, it also contains insights into hyperinflation that one might not think about. The only negative thing I could point out is that it is a little dated, for example suggesting that customer companies insist that their banks allow them access to "special services such as electronic access to their account balances" and the like. On the whole, a very informative and useful book for understanding basic hyperinflationary business strategies.
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3 of 3 people found the following review helpful:
5.0 out of 5 stars
Timely and Important Book, February 15, 2009
With the real possibility that the Fed will so destroy our Dollar that hyper inflation occurs, this is a timely and important book. The author has extensively invested business responses to hyperinflation in places such as Argentina and Brazil, and offers advice on how to survive in such a devestating environment. Businesspeople should read this book. Those who do will will discover ways to improve their current business, and prepare themselves for the inflation to come.
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