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Hyperinflationary Crisis?
In the U.S.?   

Q. I heard that after deflation America may become hyperinflationary. What's the difference between inflation and hyperinflation? What should we do if it happens to us?


I have heard the same thing as you. Once we get past a depression-like deflation we will likely enter a hyperinflatioary depression. Neither is very desirable. But, God promises to take care of His own (see Philippians 4:19).

When inflation reaches double digits as it did in the 1980s it is considered "high inflation." This was during a time when bank CDs and money markets paid around 18% interest. However, we also paid high rates for home loans and credit cards. But, home prices were reasonable compared to today.

During the 1980s neither did Americans carry much credit card debt, so we were in better shape. We also went through an energy scare during the 1980s. Many of us waited in lines around the block to buy gasoline for our cars at a nearby gas station. It sometimes took 3-4 hours to fill up the gas tank.

1980s Superinflation

Extremely high inflation is called "Superinflation." It occurs when annual rates of inflation rise to between 50-200%. This has happened many times in Mexico, Latin America, Israel, Russia and other parts of the world.

Definition of Hyperinflation

There is no standard definition of hyperinflation. But, most feel hyperinflation is when rates rise between 15-30% per month. Hyperinflation has nothing to do with mega inflation. Rather, it is a loss of faith in the local currency.

This drastic increase often occurs when people are desperately trying to move their money out of the local currency because they are aware that it is unstable and losing value. Citizens know that they stand to lose almost everything in a hyperinflationary spiral. It is shocking and frightening to watch.

Argentina's Example

For example, this happened not too long ago in Argentina when residents tried to move their money from local banks to banks in neighboring countries like Brazil.

To stop the movement of money out of the country the government closed many Argentinean banks or placed daily or weekly limits on withdrawals to around $200 per person for several months. Many families were driven to desperation as they lost their homes and lifelong savings. The government's policies had failed.

Is This Our Future?

It's helpful to know what happens to regular citizens in a hyperinflationary crisis because, yes, it could happen to Americans in the not-too-distant future. We are seeing warning signs of it now.

Country after country is declaring that they are diversifying out of the dollar because they prefer being paid in euros or yen or other currencies rather than dollars. This is because the dollar is unstable for them. So let's take a look at what monetary "instability" does and what causes it.

Printing Money instead of Taxing Citizens

Many governments know that citizens won't accept higher taxes to fund a war, pay for defense equipment, or to help create higher salaries and benefits for government workers. So instead of raising taxes they print more money.

Raising the Debt Ceiling in Congress

The governments do this by creating more debt through computer-entries. This is why our U.S. administration constantly insists that Congress "raise the debt ceiling" on government spending. (This is true for Republicans and for Democrats, by the way - inflation is an equal opportunity employer).

Debt Entries are I.O.U.s

Now please listen carefully. If you understand this you will know far more than the average American. These computer-entries of debt are what form the United States "dollar" - which is really an I.O.U. Treasury bills and dollars are debt creations of the U.S.

Dilution of Money

Like diluting coffee with water, printing more money (creating more debt) dilutes the value of the dollar. Things become more expensive because it takes more dollars to pay for the same things. (It is not because companies just arbitrarily raise prices).

Utility companies raise our monthly rates to keep up with the falling dollar. Healthcare insurance premiums cost more and more. Food prices go up. Clothing and shoes become expensive even when we buy them from Wal-Mart. Gasoline keeps going up. States and cities keep tacking on fees. Postal stamps keep creeping up, and on and on.

That is the reason gold and silver prices zoom up. It simply takes more dollars to buy the same things.

A Hidden Tax to the Citizenry

All of this is a "hidden" tax. We have been experiencing this hidden tax in America for a long time, but it has been especially pernicious the past few years. It is beginning to raise "alarm bells" in seasoned financiers and economists.

False Weights&Measures a form of Robbery

For governments to dilute currency through the addition of debt and to take real metals out of coinage is a form of robbery according to the Bible. Proverbs 11:1 says,

"A false balance is an abomination to the Lord, but a just weight is his delight."

Proverbs 20:10 continues:

"Unequal weights and unequal measures are both alike an abomination to the Lord."

That's pretty strong language against rulers who falsify the measurement of their "currency." Proverbs 20:23 warns,

"Unequal weights are an abomination to the Lord, and false scales are not good."

Unequal weights and unequal measures in the Bible refer to the loaded scales a dishonest merchant might use to cheat his customers. His scales may be rigged to measure more weight and higher costs to the customer.

Food manufacturers do something similar when they make smaller containers to hold the milk you buy, ice-cream, cereal boxes and so on.


Ezekiel tells the Israelites that they are like the "worthless slag that remains after silver is smelted. They are the dross that is left over - a useless mixture of copper, tin, iron, and lead" (Ezek. 22:17, NLT).

Removing Silver from Coinage

When a government removes real silver from its coinage such as our government did to our dimes, quarters and fifty-cent pieces in 1967, it has increased the "dross." This, too, is a form of robbery.

It causes our currency to become like "funny" money - or "fiat" paper - and like useless metals - or worthless money based upon nothing of value. In fact, Rome devalued the currency and many feel this contributed to the fall of the Roman Empire.

Removing Copper&Nickel from Coinage

It does not escape our notice that the copper in our pennies and the nickel in our nickels is worth more than the pennies and nickels themselves!

Recently, the government made a law that Americans may not melt down nickels or pennies to sell nickel or copper. Now do you understand why?

It stands to reason that the government will soon remove even copper and nickel from the coinage. This, too, is robbery - or false weights and measurements which is surely displeasing to the Lord. In modern terms we call this "debasing" our currency.

Irritating to Foreigners

This does not escape the notice of foreigners, either. As they accept U.S. dollars for their oil or manufactured goods, the dollars are losing value and not buying as many things as it once did.

As the euro rises against the dollar foreigners must use more and more of these dollars to buy European goods or other things.

Rebirth of the Roman Empire?

For example, when the euro first traded in the year 2000 the dollar was worth about $1.30 while the euro was worth around 80 cents. Americans could buy almost two euros for the price of $1.00.

Isn't that amazing?

Now the opposite is true. The dollar has fallen in value against the euro so that the dollar is now worth about 80 cents to the euros' $1.36 (the values are unstable and changing).

It affects Americans because now it costs almost twice as much to travel to Europe, to buy European cars or to purchase manufactured goods. It takes more dollars to buy European airline tickets, hotel bills, food, gas and other items.

Because of this we may be witnessing the rebirth of the Roman Empire prophesied in the book of Daniel. It may be that America must decline and lose some of its power in order for prophecy to begin to be fulfilled. At least, that's one way to look at it.

Eroding Account Values

For those foreigners who accept American dollars in payment for oil or goods, their bank accounts become less valuable. Because of the constantly eroding value of their dollars they don't want to accept dollars in payment anymore.

Can you blame them?

As foreigners try to divest themselves of dollars and refuse more dollar-denominated payments, the value of these accounts erode even more. It is a vicious cycle. We can't really blame them for feeling "cheated." We would feel that way, too.

Funny Money

Because fewer and fewer foreigners are buying our Treasury bills and notes, the government must print more and more "fake" money to pay the interest on these current debt instruments. Our government is diluting the coffee with water - printing money to pay for increasing debt - to pay for the interest due on T bills that foreigners don't want anymore.

Our government calls printing money to pay its own debt "monetizing the debt." If you or I do it it's called "fraud/forgery." At any rate everything costs more and more. In reality, it takes more dollars to buy the same things - but I'm sure you understand by now.

12 Marks per Coin in 1919 Germany

At some point governments lose control of their money-printing schemes as they engage in this kind of dishonesty.

For example, in Germany, 1919, it took 12 marks to buy a silver one-ounce coin. By September of 1922 it took 1,899 marks to buy that same coin. After raging hyperinflation in 1923 it took 543,750,000,000 marks to buy the same one-ounce silver coin.

Of course, this kind of hyperinflation led the German people to such desperation that they turned to the promises of new prosperity from Adolph Hitler. Hyperinflationary woes often lead to tyrants and the rule of dictators.


Sadly, American Christians are sometimes almost willfully ignorant about the actions of our own government toward its currency and its citizenry. This could lead to extremely difficult times for believers and their churches.

Church people tend to view those who teach the truth about economic history as unpatriotic or disloyal to our founding fathers' values and our country.

But, nevertheless we encourage our readers to become informed and engaged instead - "as wise as serpents and innocent as doves" (Matthew 10:16). Our loyalty must always be to God first.

Signs of Increasing Inflation

As Christians we need to understand what is happening and we must learn what to do when inflationary problems turn into a hyperinflationary crisis. Wouldn't it be better if believers could show themselves leaders instead of victims in such circumstances?

Signs of the End Times?

In one sense we are fortunate because we already know there will be terrible inflation worldwide due to a prophecy in Revelation 6:6: "A quart of wheat for a denarius…"

A denarius was equal to a day's pay. So this prophecy foretells that a worker will barely have enough to eat let alone pay for his family's needs, shelter, medical care, college tuition, or cable TV.

Velocity of Money Rising Among the Wealthy

One of the first signs of currency instability we will notice is that wealthy people begin to turn over their cash rapidly by buying and selling works of art, real estate, vintage cars, collectibles and rare coins.

By selling their collectibles they are trying to preserve the purchasing power of their savings by moving it into real goods and hard assets - even if they don't really understand why they are doing it. What they are doing is to raise the "velocity" of the money supply - the rate at which money exchanges hands.

Middle Class Velocity

Soon the middle-class finds itself doing similar things. They quickly find that ordinary bills begin to become unmanageable in the first stages of hyperinflation.

Utility bills triple, quadruple, and become totally unaffordable. Power companies turn off many families' electricity and water in these cases.

Credit Companies

Credit companies repossess cars and furniture in a ruthless manner. The variable rates on credit cards climb and climb until they are as high as 600% or more in a hyperinflationary crisis.

Please don't make the mistake of thinking this can't happen to us. For just one small delay in payment or one missed bill, rates have already risen to 32% for many Americans.

In Israel and Russia rates have climbed as high as 1600% during a crisis. Citizens just quit answering the phone to bill collectors, and lock their doors. They sit in the dark because their power has been turned off, and they hope for the best.

When hyperinflation begins variable interest rates become extremely unstable. For this reason we suggest that readers pay down credit card debt as much as possible.

Life Insurance&Medical Care

In hyperinflation insurance premiums skyrocket so that most people quickly drop their policies - whether life insurance, home insurance, or car insurance.

Medical care becomes unaffordable or unavailable. People drop their healthcare insurance. Ordinary drugs become so high priced that neighbors set up tables selling many common prescriptions on the black market.

Garage Sales&Flea Markets

Flea markets and garage sales become popular methods to buy clothing, furniture, coffee pots, toasters or books. Pawn shops flourish and many homes go up for auction.

Staples such as coffee, vegetables, fruits, bread, milk and meats sell for ridiculous prices. For instance, a whole chicken which sells for $5.00 in the morning sells for $60 by evening.

Churches Depleted

Churches suffer, too, in hyperinflationary crises. Heating and air-conditioning costs can sky rocket to the point where donations and tithes no longer cover the costs.

What will you do in such a case? Should you close the doors?

We suggest that pastors and elders, deacons and congregants be ready to work closely together to clearly state their problems and work out shared solutions in the event of a hyperinflationary spiral. Does the church attempt to maintain too many cars or buses? Can it streamline or ration the need for gasoline and transportation?

Can congregants volunteer to help maintain the facilities? Is it possible to let professional cleaners go while members clean restrooms, vacuum, and straighten Sunday school rooms?

Should plans for building new facilities be postponed for awhile until the crisis is over? Perhaps the funding of new Bibles, literature, and books should be postponed. Maybe there are writers and talented teachers who can print their own materials for Sunday schools and Bible studies. These are decisions that must be shared amongst church members.

Depleted Savings

There are many citizens in hyperinflationary crises who run through their entire life savings in just a few weeks trying to pay for ordinary services. This can happen before people have time to think through what is occurring.

Oftentimes panic sets in as shoppers rush through a store trying to grab things before they become unaffordable. Perhaps churches and their communities could work together to find solutions to these problems.

Guarding against Panic&Fear

Panic and greed and fear are things we must guard against. At such a time we would be wise to remain calm, sit still, and to think through our priorities.

Enlisting the aid and advice of other Christians could be helpful. For instance, reliance upon prayer and God, and a focus on maintaining life-saving prescriptions, clean water, and food staples should be the first concern for most of us.

We must remember that "God has not given us a spirit of fear, but of power and of love and of a sound mind" (2 Tim. 1:7, NKJV).

Could Hyperinflation Hit America?

Once we understand that there is no way to pay off America's debt, then the reality of possible hyperinflation becomes feasible. Our unfunded liabilities such as Medicare and Social Security raise the nation's debt to 100 trillion! Even if Congress seized all of our retirement funds, instituted 95% taxes and took other unpopular measures we still could not pay off our astronomical debt.

So our government has a choice: We can renege on our national debt. (That's what "banana republics" do). Or we can dilute the value of our money supply by printing more money. Can you imagine how far the government must "dilute" the money to make 100 trillion "cheap" debt? That's hyperinflation!

What to Do to Prepare?

A hyperinflationary crisis is a chaotic time which ruins the hard work and savings of a country's citizens. If you feel that America could succumb to such a scenario it would be wise to pray and ask God what He wants you to do to prepare.

- For example, some have put 5% or more of their assets in precious metals as a hedge against currency devaluation.
- Others keep a portion of their savings in foreign currencies.
- Some purchase long lasting canned and dried foods.
- Others keep a well-stocked "Joseph's Closet" filled with foodstuffs and clothing at church and home.
- Some plant their own vegetable gardens and fruit trees to supplement store bought goods.

Proverbs 21:20 advises:

"There is precious treasure and oil in the dwelling of the wise, but a foolish man swallows it up."

This suggests that a wise person lay aside some of his wealth for the future and for unexpected times of need. It could include following the guidelines of the Red Cross and Homeland Security to have provisions and vital medications in a safe place in the event of a disaster.

In any event, a very wise man once said that everyone should prudently diversify his assets:
"Give a portion to seven or even to eight, for you
don't know what disaster may happen on earth."
King Solomon, Ecclesiastes 11:2, HCSB

"Give a portion to seven or even to eight" means that we should diversify our assets in several ways - not putting all of our funds in a bank or a brokerage firm, for example. If we listen intently, God will lead us and guide us through troubled waters.


Kotlikoff, Laurence. 2004. The coming generational storm. Cambridge, MA: MIT Press.

McAlvany, Don. 2005. Pondering the unthinkable: An American hyperinflation. McAlvany Intelligence Advisor. September issue. Available from: www.mcalvany.com.

Panzner, Michael. 2007. Financial armageddon. N.Y.: Kaplan.

Swanson, Gerald. 1989. The hyperinflation survival guide: Strategies for American businesses. Sponsored by Figgie Intl. Published by Eric Englund. 5042-A Foothills Rd., Lake Oswego, OR 97034. ISBN: 0-9741180-0-1.

Wiedemer, David and Robert, Cindy Spitzer. 2010. Aftershock.New Jersey: John Wiley&Sons.

Williams, John. 2010 update. Hyperinflation special report (update 2010). Shadow Government Statistics. Available from: www.shadowstats.com.


And it is this Good News that saves you if you firmly believe it…that Christ died for our sins, just as the Scriptures said. He was buried, and He was raised from the dead on the third day as the Scriptures said (1 Corinthians 15:1-4, NLT).

In the end, this is all that truly matters.

Authors: Valorie Mays Emilio holds an M.A. in history from UCLA and a Certificate in Persecuted Church Ministries from Oklahoma Wesleyan University. Kenneth received his M.A. in Biblical Studies from Louisiana Baptist University and a B.S. in Business Administration from CSULB.

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