14 Questions, How To Prepare For The Collapse Of The Economy How To Prepare For The Collapse Of The Economy (converted, oil)

[Grandpa Pipes]

Lot's of people know they need to do something to protect themselves then when they ask they have to sort through all the answers to a topic the know nothing about.

This may help clear up some of the "what do I do now" questions..............

14 Questions People Ask About How To Prepare For The Collapse Of The Economy

THIS THREAD IS A DUPE. PLEASE DELETE!

[dcisive]

The link provided is just pure common sense and is a very intelligent approach to what we all know IS going to come ahead. It's just "when" not "If". If you can't grasp that you have NO foresight to see what's been developing for quite some time. Get over it and get prepared.

[terracore]

Funny that this thread resurfaced. Some people prepare for economic collapse like it is the event worth prepping for. Maybe it is, but economic collapse is also an unintended consequence of ANY bad event. Whether one believes in pole shifts, Cascadia thrust earthquakes, war, pandemics, famine, etc etc any of these are going to have a bad effect on the economy. Heck, bad mortgage underwriting nearly destroyed the economy in 2008. If paperwork can nearly bring the economy to it's knees, imagine what something "real" would do to it!

A Federal Reserve Note is exactly that, it's a piece of paper. But since most of the FRNs only exist "digitally", most dollas aren't even really a piece of paper. Spend them while you can and get real chit with them while you are able.

[artillery77]

The link is nothing worthwhile. While the end doesn't appear to be anytime soon, there are some interesting developments in Federal Reserve Notes, Dollars/Treasuries etc.

First off, the dollar is still really THE currency to be in. With Bretton Woods, the Federal (US) Reserve Note was tied to the world's gold supply and all major currencies then could tie themselves to the dollar. This made things much simpler for many reasons, however interest will always grow outstanding dollars, but rubbing gold coins together so far has failed to produce offspring. So Nixon took us off the gold standard. The link of not just US money, but all money and gold was severed in the early 70's.

What happened next? Exactly what one would expect. Massive stagflation. Now, it's easier to blame demand pull on Vietnam or actions by OPEC, but the reality is that we abandoned the value center that makes a dollar worth something and the entire world wasn't sure what to do. They eventually realized they had no solid alternative, and thus everyone agreed to pretend the dollar was still worth something. The status quo was preserved.

What does the status quo entail? Well, for one, lower interest rates for the US and higher purchasing power as US dollars are valued at a higher rate than they would be. As a currency, it is the most convertible one in the world. The things it could buy that other currencies could not were:
1. Oil - All OPEC sales were in USD. If you needed oil for your country, you needed to get US dollars.
2. International Trade - If Korea wants to buy something from Thailand, Korea needed to get dollars to send to Thailand.
3. Because of 1 and 2, then 3 was Central Banks. Central Banks will have to buy US dollar based Treasuries to ensure they have dollars to facilitate the trade needs of their countries.

So, as it stands, most of the US dollars are outside of the US. However, recently Qatar has said it will accept all currencies for oil. India, China and Russia have made tremendous strides in the past couple years to convert international trade for USD to local currencies and central banks around the world are holding a larger mix of currencies, with USD based asset falling from approximately 70% to 60%.

So long term, when a dollar alternative is found, it would be foolish to not expect a significant amount of inflation with no accompanying growth. I have a feeling it will be tough and lean times as opposed to SHTF, but it all depends on the timing and speed.

Keeping the pulse there is the Federal Reserve Bank, which had finally begun to reel in its printing from the earlier quantitative easings only to realize, it wasn't going to get too far with quantitative tightening before running into trouble. It has gone full bore in the reverse and begun buying assets, albeit it looks to be topped at this point. We really should be at max liquidity now. If that's the case, as these <90 day expirations securities are redeemed, we'll have quite a bit of market exits. If they decide they need to fire up the printing presses again, then gold will have her day in the sun.

There's plenty of other issues. VC Financing, Solar Loans, Government Debt....these could all be pops that implode if something forces it, but they are unlikely to be the first pop.

As for prepping, it's impossible to know in advance what will win out. Best to have enough Cash/Gold to get you and family to your safe place. Everything else is simply what you would do anyway. Drive a budget, invest well, maintain liquidity and just keep kicking.

[jamies]

Very old article, but still applicable. When the country is 23 TRILLION in debt and piling up another trillion a year, all it's going to take is a big spike in interest rates to run it out of control and unrecoverable which will result in collapse, probably followed by govt failure and regime change. The proverbial shtf moment.

An oil spike or grid issue could be triggers. Or some event like an extended trucker strike/blockade like they do in France. Except here when the food stops being delivered for any reason you have only days until things start unraveling.

[artillery77]

Originally Posted by jamies

Very old article, but still applicable. When the country is 23 TRILLION in debt and piling up another trillion a year, all it's going to take is a big spike in interest rates to run it out of control and unrecoverable which will result in collapse, probably followed by govt failure and regime change. The proverbial shtf moment.

An oil spike or grid issue could be triggers. Or some event like an extended trucker strike/blockade like they do in France. Except here when the food stops being delivered for any reason you have only days until things start unraveling.

Luckily, the way it is setup for the US, we wouldn't collapse. If we print too much money and the rest of the world stops wanting dollars, the world central banks will sell their treasuries. Holders of dollars will rush to get something else of value for them, whether that's other currencies or assets. What the US can ultimately do in terms of default is simply print national currency to eliminate the Federal Reserve notes...bankrupting the Federal Reserve system and leaving a markedly devalued national currency in its place. The effect would wipe out the banking system. If it happened too quickly, even debtors would not have a chance to benefit as marketplace can't work without banking institutions and the only customers who could pay with value would be exporters, of which there are not many.


So, entities with stores of value would have a cherry picking party as they could come in and pick up choice assets of the nation. Of course, most international companies are heavily reliant upon a solid US market. The world without their best customer might become a very tight place to live, and frankly most of the developed world is leveraged enough that it would also not be able to withstand such a marked drop in economic activity. Unrest around the globe would rise and credit would become scarce and likely extremely expensive as all central banks of note are heavily invested in the US dollar.



At that point gold would likely become a much more utilitarian asset. However, it's important to not see gold as something suddenly worth $20K an ounce. It likely has reduced value as the inflation of getting anything will rise significantly in a disrupted and inefficient supply chain. That's why specie gold is an insurance play. The golden coin you buy for $1600 today can get you some groceries in the time of $1600 being worthless.



I think the truest way to think about it is that gold remains constant. A currency is worth what it can be converted into readily and by most people. The ruble of Soviet times had buying power, but there was no supply. The Italian lira could be converted, but convertibility rate rapidly decreased each year as relative productivity decreased. Faster/cheaper/beating expectation supply chains help currencies and their relative value. That is why the dollar will remain strong for a very long time. There is nothing with the same mix. The downside of being the world's importer is that we are taking on debt every year and every domestic company must take on the world. The upside is that the dollar has the greatest selection to choose from.



I wouldn't worry about it though. First off, the entire world has a vested interest in the dollar being worth something for the foreseeable future. In that foreseeable future, slowly acquiring a stash of gold keeps you prepared for the economic worst case scenarios. Not enough to live off it forever or capitalize on pain, just enough that you could keep your family moving forward and pay your own bills until the next system of order comes into play, because one will. When Rome suffered perhaps the largest SHTF decline ever, wars, fires, plagues, treasury plundered and population that went from 1M to 20,000 it never went completely lawless.

[Laid-Back]

I've caught enough fish for all week this morning.

Can't wait until the Bat Soup Fever comes around. Hopefully I can get potatoes in the ground first.