Hyperinflation in the U.S. - A Distant Threat or Imminent Reality?
When a currency loses more than 50% of its purchasing power in a month, it faces hyperinflation, an economic disaster that disrupts societal stability. Money's critical role in maintaining civil order becomes glaringly evident during such crises.
The collapse of a currency impacts every aspect of life, from skyrocketing prices for essentials to destabilizing institutions. In the worst scenarios, civil unrest and violence erupt as people struggle for basic survival. While the U.S. has endured severe inflation, it has never experienced hyperinflation. However, dismissing the possibility would be unwise, given the experiences of immigrants and expatriates who fled from countries where money lost all value.
Tony Yazbeck, a former entrepreneur in Lebanon, knows this first-hand. “I went from early retirement to having only $70 overnight. When currency fails, society crumbles,” he says. His story highlights the real-world impact of monetary collapse.
Global Examples of Hyperinflation
In the past five decades, hyperinflation has struck countries like Zimbabwe, Venezuela, and Lebanon. Many assume such crises only affect developing nations, but history shows no economy is invulnerable. Lebanon, once the “Switzerland of the Middle East,” demonstrates how quickly a seemingly stable economy can implode.
By 2020, the Lebanese pound lost over 80% of its value, driven by political instability, corruption, and reckless monetary policy. Inflation exceeded 85%, making everyday goods unaffordable.
“Watching people commit crimes just to feed their children is horrifying,” Yazbeck recalls. “The desperation is unimaginable.”
U.S. Parallels and Economic Risks
America’s fiscal trajectory shows concerning similarities. With a national debt exceeding $30 trillion in 2023 and a debt-to-GDP ratio surpassing 130%, the U.S. faces rising borrowing costs and potential investor mistrust.
Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon.” Expanding the money supply through bank lending or deficit spending drives inflation. The 1970s U.S. inflation resulted from bank lending and constrained oil supplies. Today’s concern is fiscal-driven inflation, where government debt issuance swells the money supply.
Persistent deficits erode trust in a country’s currency, causing investors to demand higher returns, which fuels inflation further. A breaking point could lead to rapid devaluation—a path Lebanon knows too well.
Safeguarding Wealth Amidst Inflation
How can individuals shield themselves from potential currency collapse? Historically, gold has preserved purchasing power. However, it is impractical in a digital, globalized world. Transporting or using gold across borders is nearly impossible.
Bitcoin, with its digital scarcity and ease of transfer, offers a modern alternative. “Bitcoin lets you take full ownership of your wealth,” Yazbeck explains. After rebuilding his life, he founded The Bitcoin Way to educate others on financial resilience.
Hyperinflation is not a distant risk but a looming threat for any country that debases its currency. Learning from history could be America’s best defense.
