Hyperinflation Hits Argentina – Which Country Could be Next?

As governments worldwide grapple with ballooning budgets, the ripple effects on fiat currencies are undeniable.

Nowhere is this more apparent than in Argentina, where the country has crossed the Rubicon from inflation to hyperinflation. Today, we’ll examine the staggering reality of Argentina's economic spiral and imagine its impact if these same inflation rates were to come to the U.S.

But there's more: don't miss our much-anticipated 2024 Gold Predictions feature! Drawing insights from leading financial experts, we'll explore the potential trajectory of gold in the coming year and beyond.

But first, let's delve into the latest news that's shaping the world of gold and finance.

In the Past Two Years, Americans’ Credit Card Balances Are Up 40%
Recent data from the Federal Reserve Bank of New York reveals a startling trend: a staggering 56 million American cardholders have been grappling with credit card debt for over a year. In an environment of soaring interest rates, coupled with the resumption of student loan repayments, the financial situation for many Americans has become dire.

World Bank Forecasts Bleak Economic Outlook: Worst Growth in 30 Years
The World Banks’s recent report paints a grim picture for the global economy, predicting the poorest half-decade growth in 30 years. Global growth is expected to slow down further in 2024 to 2.4%, marking the third consecutive year of deceleration. The World Bank warns of a "decade of wasted opportunity" without significant policy changes.

Neutron Star Collisions Create Gold and Silver
Neutron stars are incredibly dense remnants of massive stars that have exploded as supernovae. When they collide, the intense heat and pressure, along with a rich neutron environment, allow for the rapid neutron capture process (r-process). This process is responsible for creating approximately half of the elements heavier than iron, including significant amounts of gold and silver.

The California Gold Rush (1848–1855) began when gold was found at Sutter’s Mill in Coloma, California. The news of gold brought approximately 300,000 people to California from the rest of the United States and abroad. Who originally discovered the gold at Sutter’s Mill?

A. Samuel J. Brannan
B. Arthur S. Miller
C. James W. Marshall
D. Ronald M. Sutter

Scroll to the bottom of this email for the answer...

Gold 2024 Forecast and Predictions Article

Accurately predicting the price of gold can be incredibly tricky. There are so many factors, so many ever-changing variables, that even the experts usually miss the mark.

Yet, exploring these forecasts has its merits. It can help solidify why one has invested, point to factors that may have been overlooked, or compel one to revise one's expectations.

So, while we take predictions with a grain of salt, let’s look at what might be ahead for gold in 2024 and beyond (you can look up the gold price here).

I've compiled a collection of 2024 gold price forecasts from prominent financial institutions and analysts. You can look at the article using the link below.

Gold 2024 Forecast and Predictions Article

The Real Shocker at the National Championship Game?

Image source – SportsCenter Instagram (via @danielgoterasports)

On Monday, January 8th, the Michigan Wolverines clinched their first national college football championship since 1997, rounding off a flawless 15-0 season with a decisive 34-13 victory over the Washington Huskies.

But one photo from the game is going viral – and it has nothing to do with the gameplay on the gridiron.

A photo from the event, now going viral, highlights the staggering cost of refreshments – $33.55 for a single alcoholic beverage at the concession stands. This means shelling out a little over $100 for just three drinks!

While we constantly see reports of easing inflation, this exorbitant pricing serves as a jarring reminder of how much prices have soared in just a few years.

And speaking of soaring inflation...

Hyperinflation Hits Argentina: Inflation Soars to 3,678% Annually

Imagine your grocery bill tripling within a month. This is the harsh reality in Argentina, where the economy has gone from bad to worse, officially entering hyperinflation in 2024.

But what exactly is hyperinflation? How bad is it really?

Definitions vary, but the most commonly accepted is when consumer prices spike rapidly, rising at least 50% per month.

Last month, Argentina’s Presidential Spokesman Manuel Adorni, confirmed that Argentina’s daily inflation rate is equivalent to an annual rate of 3,678%.
“Talking about 15,000% inflation is frightening for everyone and that is what we are working on. It is good to understand that today inflation is running at around 3,678% per year; this 1% of daily inflation leaves us immersed in a hyperinflation that we are trying to avoid and we are making an effort so that the catastrophe does not end up happening,” Adorni told reporters during a press conference in December.

The new administration, under President Javier Milei, has been taking aggressive steps to stabilize the economy, including fiscal adjustments and proposals for economic deregulation. However, the path to recovery remains challenging, and the outcome is still uncertain.

Businesses have started giving employees raises three times a year – but even that isn’t enough. Stores are updating their prices multiple times per month. Currency black markets have even sprung up, where people trade the Argentina peso for the US dollar – a relative safe haven, as reported by Amanda Aronczyk of the Planet Money podcast.

The situation has destroyed the standard of living for many in Argentina.

And that’s the distinction between inflation and hyperinflation. Inflation is a monetary dilution that leads to higher consumer prices. Hyperinflation is a complete loss of faith in the currency. It’s psychological. It is a complete destroyer of economies.

Luckily, we haven’t seen hyperinflation in the United States. But if it were to play out like it has been in Argentina, what would that look like?

Hyperinflation Hits Argentina: Inflation Soars to 3,678% Annually

I surveyed the prices of some common items here in the U.S. and applied Argentina’s hyperinflation rate to them (3,678% rise in one year). I also looked at the loss of purchasing power in cash, as well as the gain in purchasing power of gold.

If this style of hyperinflation came to the U.S., how many items in the right column would you be able to afford?

Very few in America could afford over $100 for a gallon of gas, a $30,000 iPhone, or nearly $75,000 to keep a roof over your head for a single month. People would have to drain their life savings just to survive to next week.

And this type of thing is exactly what’s happening now in Argentina. People have completely lost faith in their currency and prices are spiraling completely out of control.

Is There Any Way to Protect Your Wealth During Hyperinflation?

Gold is often considered a reliable hedge against inflation and market volatility. But what about hyperinflation? Historically, gold has proven its worth even in these extreme conditions.

Take, for instance, the catastrophic German hyperinflation from January 1919 to November 1923. During this time, the average price level skyrocketed by 20 billion times. That inflation rate is almost unfathomable, especially when compared to the milder inflation experiences of the 20th-century U.S.

During the Weimar Republic hyperinflation, the value of gold responded dramatically. An ounce of gold, which was worth 170 marks at the beginning of the hyperinflation, soared to an unbelievable 87 trillion marks by November 1923.

Here’s what that looks like.

Even the wealthiest citizens were turned into poor ones literally overnight — except those that owned gold.

Over the course of this five-year hyperinflationary period, the price of gold in terms of the German Mark surged from 170 marks to 87 trillion marks, an increase of approximately 511 billion times. In comparison, the German Mark itself depreciated by 20 billion times during the same period. This implies that gold's value increased about 25.5 times more than the inflation rate (511 billion / 20 billion ≈ 25.5x).

Will we really see hyperinflation in the Western world? According to Hidden Secrets of Money Episode 7, renowned economists Jim Rickards and Mike Maloney both agree that if we continue on the current trajectory, we could someday see this in the United States.

History shows that the most effective way to protect yourself during times of high inflation is gold. Take control of your finances and build your gold portfolio today.

Buy Gold or Silver Today

That’s it for this week's GoldSilver Nuggets. We'll be back next week with more news, insights and updates!
Best,

Brandon S.  
GoldSilver

The California Gold Rush (1848–1855) began when gold was found at Sutter’s Mill in Coloma, California. The news of gold brought approximately 300,000 people to California from the rest of the United States and abroad. Who originally discovered the gold at Sutter’s Mill?

A. Samuel J. Brannan
B. Arthur S. Miller
C. James W. Marshall
D. Ronald M. Sutter

Answer – C. James W. Marshall

James Wilson Marshall, an American carpenter and sawmill operator, made a historic discovery on January 24, 1848, that changed the course of American history. While working in Coloma, California, approximately 36 miles northeast of Sacramento, Marshall found gold at a mill property owned by Johann Sutter. This discovery was the catalyst for the renowned California Gold Rush. Despite the massive influx of gold seekers, both Marshall and Sutter failed to reap financial benefits from this monumental find.