Do you remember 1992? Were you in business then? Are you ready to cope with increased inflation rates, high cost of credit and diminished sales revenues? Probably not. Should you be afraid? Indeed you should.

With the price of gold swinging $70 in a week, the dollar falling to all-time lows against the yen, the Canadian Dollar, British Pound and the Euro, and the market taking steep dives, it's critical that restaurants pay attention to the fact that this economy is on a significant edge. Many restaurateurs have taken extremely high debt to equity positions and have variable rate lines of credit and loans. This will hurt them deeply if the inflation rate outpaces income (the scenario in the late '70's and 1991/93).

The full version of this article is now available on Restaurant Report's membership site RunningRestaurants.com.

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