Speed of the economic collapse should it happen

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etsan's picture
etsan
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Speed of the economic collapse should it happen

Hello,

Has anyone here personally been in an economic collapse? I wonder how it happens. In particular, I was wondering if anyone knows the speed at which it occurs. Do you wake one day and suddenly the government declares that the dollar is no longer used and you suddenly can't buy stuff or is it more of a gradual thing that takes a few weeks or months to develop? I'm wondering because I want to know if the moment I see things not looking right, will I be able to fly my family out of the country. We have a place in a different country where we can locate in case TSHTF here.

Thanks.

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Re: Speed of the economic collapse should it happen

I believe that things will seemingly grind along for a good while longer than we might expect on a gut level.  And then suddenly things will flip and we'll be In It Fer Reals....Unless I'm vastly underestimating my Hyper-Savvy All-Penetrating Intellect in which case I'll see it coming *months* before.  

As Hemingway said when somebody asked him how he went broke:  "Gradually, and then all at once."

As Dr. Chris says:  "I'd rather be a year early than a day late."  

Methinks this applies triple if you're genuinely concerned about getting your whole family to another country entirely before SHTF.  If things do suddenly flip, you'll be lucky to get to the next county, much less country.  Seriously.  I work 60 miles from home 4 days a week, and I get the (vague background) jitters when I ask myself the question "What happens if the SHTF while I'm (3 counties away from home) at work?"

I could be wrong, but I don't imagine that there will be three-four-five weeks of gradually more ominous signs pointing out to us that the Eschaton is about to Immanentize.  

So why not relocate now, etsan?

Viva -- Sager

NB:  edited for clarity

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etsan
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Re: Speed of the economic collapse should it happen
SagerXX wrote:

I believe that things will seemingly grind along for a good while longer than we might expect on a gut level.  And then suddenly things will flip and we'll be In It Fer Reals....Unless I'm vastly underestimating my Hyper-Savvy All-Penetrating Intellect in which case I'll see it coming *months* before.  

As Hemingway said when somebody asked him how he went broke:  "Gradually, and then all at once."

As Dr. Chris says:  "I'd rather be a year early than a day late."  

Methinks this applies triple if you're genuinely concerned about getting your whole family to another country entirely before SHTF.  If things do suddenly flip, you'll be lucky to get to the next county, much less country.  Seriously.  I work 60 miles from home 4 days a week, and I get the (vague background) jitters when I ask myself the question "What happens if the SHTF while I'm (3 counties away from home) at work?"

I could be wrong, but I don't imagine that there will be three-four-five weeks of gradually more ominous signs pointing out to us that the Eschaton is about to Immanentize.  

So why not relocate now, etsan?

Viva -- Sager

NB:  edited for clarity

Hi Sager,

Thanks for the reply. Its interesting how you asked why I have not relocated because just a few weeks ago I was set to move my wife, daughter, and myself back to my wife's home country. However, one of the main reason why I stayed is because currently with my job, I believe I make decent money as compared to the amount I'll make relocating. Since I'm the only one financially supporting us, the money issue is a big deal. Secondly, I'm just not sure that its gonna get that bad. If I knew for sure, then of course I would be long gone. Which brings the point, if you guys are so set on that this country is going down, why are you guys not planning yourself to move out of here yourself?  There are other reasons why I have not left, but I won't bore you guys with them. My plan is this:

1. I'm going to sell my house. With the money I get from that, I will downsize and buy another place to live where this new property will be pretty much paid off (no outstanding loans..etc, just property tax).

2. Stock up and prepare like everyone else just in case. Continue to invest carefully with the money I make from work.

I currrently live in southern California and things are so abundant here which makes it hard for me to imagine that things will get so bad here. Yes, I know a lot of people are having it rough out here right now, with California being bankrupt, great deal of job loss, etc. However, looking at my situation I'm pretty much well off. So this is another reason why I have not left.

If a collapse can just suddenly happen like overnight, then that is a scary thought. Especially if its hard to buy stuff or get on flights all of a sudden. But if its a gradual thing, then I'll have time to prepare to fly my family out of here. We already have a place we can stay at in my wife's home country. As far as my house here, I'll evaluate the situation and either sell or keep the property as I see fit. I still have a hard time understanding why Dr. Martenson is just renting a place right now.

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Re: Speed of the economic collapse should it happen

Etsan,

I submit that if you are living in America at the moment, you are living in an economic collapse.  Does it seem fast or slow to you?

To me, sometimes it seems kind of fast (like last fall) and sometimes it seems kind of slow (like now).  But I think it's basically happening because the system is, as Chris says, simply unsustainable.  It cannot last.  Project it out.  It cannot last.

Overall, I think it's kind of medium-slow.

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Re: Speed of the economic collapse should it happen
Lemonyellowschwin wrote:

Etsan,

I submit that if you are living in America at the moment, you are living in an economic collapse.  Does it seem fast or slow to you?

To me, sometimes it seems kind of fast (like last fall) and sometimes it seems kind of slow (like now).  But I think it's basically happening because the system is, as Chris says, simply unsustainable.  It cannot last.  Project it out.  It cannot last.

Overall, I think it's kind of medium-slow.

Hi Lemon,

To me it seems slow. The only thing noticeable is unemployment being high. However, that will change whether for the better or worst we don't know. But the economic collapse I'm refering to is a collapse similar or worst than The Great Depression. Where I live, yes there are poor people and such, but that has always been the case for awhile, even back in the 80s. I'm talking about major collapse where middle class people suddenly turn poor and we have to line up for bread and water, long term power outage, civil unrest, martial law, a huge revolt, shelves empty at the supermarket. Right now none of these are happening, at least not where I'm at.

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Re: Speed of the economic collapse should it happen

Etsan writes:I'm talking about major collapse where middle class people suddenly turn poor and we have to line up for bread and water, long term power outage, civil unrest, martial law, a huge revolt, shelves empty at the supermarket. Right now none of these are happening, at least not where I'm at.

Hey Etsan, I saw those same things going on this afternoon on channel 7.  Poor people in bread lines, civil unrest, power outages, the whole enchalada.  I think they replay the movie tonight at 11pm.  Enjoy.

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Re: Speed of the economic collapse should it happen

I believe it is not a matter of IF TSHTF but WHEN TSHTF.   After plenty of ponderance,  I have come to agree with CM's assertion that there is a high probability of  "short, sharp shocks".  I take this to mean that a downfall will not be gradual decline nor a precipitous drop into oblivion.  It will be a series of steps down where complexities in our world will go away suddenly with assurances that they will come back to normal but never do.  I think this is happening with unemployment right now.

Right now, as I see it, we are dealing with a wealth distribution shock.  Big international wealth (central banks), the US and the BRIC knew /know what was/is coming down the road.   They are positioning themselves strategically.   Wealth was transferred from the US middle class in the form of fiat currency and bailouts.    Notice how the stimulus money, bailouts, etc are not coming back to improve the employment or productivity situation?  Notice retirement savings and insurance benefits going away while the wealthy go back to business as usual.. Notice how we are still at war and looking for more...   Short sharp shocks....

I believe the second big shock will be fuel prices.  When demand strips the oil in storage and we find out production will not keep up with demand because investment in production is down., the oil price shocks of 2006 thru 2008 (due to Katrina and futures traders) will make that storm feel like a gentle spring rain.   Fuel prices will be a death blow to the trucking industry.  Without the trucking industry based on my experience with recent blizzards in WY and MT,  food will be off the shelves within 3 days.  Other essentials such as propane, medical supplies, baby supplies and sewer/water treatment supplies will be interupted or just plain go away.   Farmers will not be able to cope with jacked up fuel prices with a tight -to-nonexistent credit market.   Food riots are a distinctly possibility in the scenerio. where adequate local food sources are not available.   Fuel prices to the mining industry will be transferred directly into industrial commodity and energy prices.  This will lead us to the next stair step...

Inflation.  Fuel prices will be transferred directly to the customer in food, transportation, electricity and supplies.   Employers who do not respond to cost of living increases may deal with labor shortages, strikes and walkouts.  Some employers may not be able to increase wages.  So, now you got inflationary depression.... mass movement of people, violence, manic crowds.... Like Celente says, "When people lose everything, then they really lose it.

I am preparing for transitions periods and gradual long term deterioration of industrial, infrastructure, social and political systems with shocks of  a year duration. My own personal belief is to only invest in things that feed us, keep us warm, keep us hydrated, protect us, keep us safe, keep us healthy, preserve our wealth for retirement/emergencies//college, is a barter commodity or provides instant cash flow.  Simply, If I cant see it,  touch it and smell it, I dont want it.   I invest in food, tools, livestock, skills, garden, fruit trees, medicines, precious metals, liquor, ammo, hardware, stored fuel, high mpg vehicles, wood stoves and alternative energy systems.

I'm not sure if Im doing the right thing, but it feels good to do something.  Sometimes I wish I hadnt taken the red pill but once you take it there is no going back...

Great thread!  It helps me to feel Im not alone in this!

BTW I can't speak for Chris but living in a rental situaltion is a great strategy if you are know the housing prices are going to crash. ...

 

 

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Re: Speed of the economic collapse should it happen

Hi etsan:

You bring up a really good question regarding the speed of the collapse (assuming there is going to be one).  The problem is there is not an answer to your question.  I wish there was an answer.  Nobody knows what is going to happen, let alone the timing.  The world is a complex place with way too many variables for any forecasting model to work.  You are going to have to make your own decisions based on what you think may or may not happen.  Keep in mind that the grass is not always greener on the other side of the fence. 

Some of the things that give me peace of mind:

1.  Food and Water Storage--including other basic necessities

2. Following current events and economic trends

3. Live within means and keeping debt burden as low as possibe

4. Diversify assets (some precious metals, some cash, etc.)

5. Learn new skills/hobbies

6. Taking care of the body and the spirit. 

7. Remember to enjoy life.  We often cannot control what happens to us, but we can control how we react.

Having said all this, my opinion is that we are in for a rocky ride and we will probably "go broke slowly, and then all at once".

Best wishes in your journey ahead.

P.S.  If I'm not mistaken, Chris recently purchased the place he was renting. 

 

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Re: Speed of the economic collapse should it happen

Etsan,

".... even in the 80's.." you may want to go back a little farther, maybe the 60's or 70's, as the the "climate" started really deteriorating in the 80's.

Lots of "middle class" Americans have become less comfortable, and are teetering on becoming "poor".   If you aren't there yet, how lucky, and perhaps you can take advantage of your current good fortune by preparing.  There are middle class folk going to food banks.

Remember Enron?  I believe California had some unprecented power outages, as did the East Coast.  Don't be fooled into thinking all is well because you have not personally experienced it yet. 

There is a considerable amount of (muted) civil unrest - we don't see that on the news anymore - bad for morale and crowd control.  As for martial law - no; but consider that local law enforcement no longer cares to respond to home or car breakins, auto accidents, etc.    The down side of the flip side of martial law? 

I have noted thinly stocked shelves at the food stores on days before deliveries in several towns over the last year. 

".... at least not where I am at"   Perhaps an amble into areas outside your usual pattern would provide you with a broader view? And talking to people who seem to be "down on their luck" can be illuminatinig when you hear where they were 1, 2 or 5 years ago.  Buy a beggar lunch, unless of course you are in a state that has made it illegal to help the homeless or beggars.  What is that about? 

Read.  Discuss.  Prepare.  Breathe deep and have fun! 

Mallard

 

 

 

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Re: Speed of the economic collapse should it happen

Mooselick, great post.

That's how I see it coming down.  An inflationary depression that has its beginings in high fuel prices and one in which there is no way out because our true creditworthiness is pretty much stretched to the limit already and the only short term response to the burden of fuel inflation is going to be to print, and that just sets off a terrible vicious inflationary spiral.

But back to my oridinal point, Estan, all of this is all interconnected.  So, you can't really say that the economic collapse is going to be "slow" or "fast" unless you are choosing a very discrete period of time within that economic collapse.  Example:  There was a terrible bubble in housing that led to all sorts of excesses which, when the bubble popped, resulted in debts that could not be paid off, which resulted in massive deleveraging all across the board, which resulted in a near freeze-up of the world's credit markets, which resulted in massive stimulous and money printing activities which resulted in massive additonal debt, which means massive pressure on the dollar, which means we are now in a position where we have set the stage for a possible currency collapse and massive inflation . . . .

When, not if, the dollar burns up and the us bond bubble pops, there might be what you call a sudden "collapse."  But we have been in the process of setting the stage for that final burn-out for a while now.  That's why I say we are in a collapse.  Because it's inevitable really.

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Re: Speed of the economic collapse should it happen

I have never lived in an economic collapse, although I can imagine what would happen in one.

Firstly, it would be like falling down a set of uneven stairs. Sometimes you'd just kind of roll along OK, but then you'd crash down a few feet, or maybe a meter or two. Kind of like the stock markets go down in fits and starts, perhaps with one or two hard falls, an economic collapse takes your standard of living from one level, down to a lower level. The few harder falls will be the most memorable.

In these harder falls, you will see stopages in services and chaos as mentioned above:

- Food & Water shortages - they are always temporary in nature. Due to the basic facts of agricultural production, one season's food shortages are replaced when the farmers account for market factors and make corrections for the next crop. Depending on how out of sync hte market is with reality, food shortages could last several days, to a week or two. Food shortages could also happen persistently every crop cycle. It comes down to, again, how out of sync the market is with reality - which basically is how much the government has intervened to skew the system.

- Political instability - Revolution, anarchy, and other chaos could ensue based on how angry people are, how hungry people are, how much force the government is willing to use to keep order, and how well the government can quell the people by other means (propaganda or war). If the government resorts to war, then the population is inevitably destracted, but may also be suspect to invasion.

- Recovery - The Capitalists and people who have adequately prepared for the crises take this time to improve their skills and build upon what they already know, as well as prepare for the future. People who are involved in the political instability and emerge alive are also in a situation to profit, oftentimes because they own the firearms that will enable them to get what they want, also because they have experience in terms of survival and leadership.

- Alternative economies - While major markets may close down because major supply chains are disrupted, farmers still produce crops and have to sell them somewhere, industrialists still produce goods and have to sell them somewhere, people still want to trade economic goods that they have assembled in order to get other things. Those who predict the crises and have hoarded capital will need to distribute this capital to find what they need in order to survive. Capital hoarding is never perfect in that you hoard everything you need. You hoard what you can get with the expectation that later you can trade it for what you need. This leads to informal markets that spring up everywhere in urban areas, or in more populated or easily accessible rural areas. Within these markets, there may exist individual currencies, depending on the sophistication of local individuals and the local community. There may emerge local currencies or barter systems. Local economies also strengthen as national corporations and national economies play a lesser part in local life.

- Imported goods - They will be scarce. It will be more difficult to find foreign goods, if not impossible, except in special situations - a friend makes a trip to a foreign country to secure goods, or a company dumps a holding of foreign goods onto a local market. Foreign goods may not even be necessary. Many foreign goods are bought today because they exist in place of local goods. In the case of clothing - foreign manufactured clothing may disappear from the market once stocks in stores are bought up or stolen, but local economies are capable of producing clothing once lines of production are recreated. At first, maybe this will simply be knitting basic clothing. Perhaps a local entrepreneurial capitalist will have the capacity necessary to construct a plant and manufacture clothing. Eventually, the local economy can produce what is necessary.

Meanwhile, for those who do not work or endeavor to manage their lives, there will be starvation, desperate action, and the other aspects of poverty.

If you are well-prepared, endeavor to establish a strong local community, and keep your eyes open, then you can emerge on the otherside of an economic collapse strongly.

 

Again, I have never been in an economic collapse, so this is all speculative and based on what I've read and heard.

 

Cheers.

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Re: Speed of the economic collapse should it happen
etsan wrote:

Has anyone here personally been in an economic collapse? I wonder how it happens. In particular, I was wondering if anyone knows the speed at which it occurs. Do you wake one day and suddenly the government declares that the dollar is no longer used and you suddenly can't buy stuff or is it more of a gradual thing that takes a few weeks or months to develop? I'm wondering because I want to know if the moment I see things not looking right, will I be able to fly my family out of the country. We have a place in a different country where we can locate in case TSHTF here.

My wife lived through an economic collapse in the 90's.  Her experience was that it was largely without warning and happened practically overnight.  The circumstances were different than the US though, as she was living in a Soviet-style economy where everything was state-run.  In this case the devaluation was forced by the government and prices doubled overnight.  Her family was well-educated and a little better off than average for that country (still poor by western standards), and even they were caught off-guard with no advance warning.  The effects of this devaluation was that the stores were cleaned out in a matter of three days, and from that point on food and other necessities could only be officially purchased in one place and those supplies were strictly rationed.  By my wife's account the grey/black markets ran a very brisk trade and were a popular alternative, with most people relying on it to one degree or another.

If it's any comfort, she says she has a hard time seeing it unfold exactly the same way now because of the differences between then and the current situation.  She figures with the greater size and influence of the US economy, it'll take longer to hit bottom.  And even in her home country's case the collapse didn't happen ALL at once and there were a few successive devaluations and/or economic shocks that followed, though that first one was the biggest.  On the flip side she said she could easily see similar food and supply shortages here.  Maybe even a little worse, since the state-run nature of her former country kept a bare minimum of supplies running.

My wife and I talked this out several times, and our rough consensus is that there will be some warning and time to react in most cases, at least for those paying attention.  And even afterward, it seems very likely that relocation outside the country will not be impossible, just more expensive.  What concerns us a little more is the possibility of a wild-card event such as terrorism, huge natural disaster, or war creating a much more sudden and severe economic collapse and a host of other nasty effects.  Evacuating my family overseas would be very tricky, as our Plan B would almost have to involve air travel.

- Nickbert

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Re: Speed of the economic collapse should it happen

Oh, rht1786 reminded me of something my wife had mentioned.  During the hard times she lived through, one way a LOT of people made ends meet was by travelling abroad by train and buying various goods to bring back to sell at home.  Most were obviously limited by how much merchandise they could physically carry, but there was no shortage of buyers at the markets.  Having connections in other countries was apparently a big plus.

- Nickbert

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Re: Speed of the economic collapse should it happen
etsan wrote:

Hello,

Has anyone here personally been in an economic collapse? I wonder how it happens. In particular, I was wondering if anyone knows the speed at which it occurs. Do you wake one day and suddenly the government declares that the dollar is no longer used and you suddenly can't buy stuff or is it more of a gradual thing that takes a few weeks or months to develop? I'm wondering because I want to know if the moment I see things not looking right, will I be able to fly my family out of the country. We have a place in a different country where we can locate in case TSHTF here.

Thanks.

My colleague Diego at work is Argentinian. He's freaked out by the "de je vu" that he sees here in the US. 

I had several long talks with Diego. And the subject of "how did it come on"  came up more than once. He told me that the political and economic unrest basically "ramped up", but in a way where the public knew that things were getting worse, but were totally unprepared for what was to come. The tension increased with a drumbeat until a shift, or dislocation like an earthquake fault happened due to the critical mass of the political scene being reached. And then "bam", the speed of the unrest, economic disruption, and loss of services and normal supply chains happened so fast that most didn't know what hit them. People were still expecting "help to arrive" in terms of a sense of return to essentials but after a week or so realized that they were on there own. At that point all holy hell broke loose. 

He sees things as potentially much worse in the US. He likens us to a "bunch of adolescents in adult bodies" that will likely have a riotous temper tantrum as soon as we figure out that Big Daddy government isn't going to put bread on the table tomorrow. Or as he put it.. "Somethings just transcend cultures". 

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Re: Speed of the economic collapse should it happen

Well I haven't been through a collapse myself, but from what I've read I think the answer depends on how aware and prepared you are. Things fall apart slowly and great efforts are made to patch the problems. At some point the dam breaks. Most are shocked and surprised at what is happening. But others, who saw the water seeping out and saw the trucks dumping dirt at night, have already moved to higher ground.  These two grousp will see the speed of collapse quite differently, but these things have a habit speeding up quickly. Look at the stock market from 2007 through 2008. The fall started slowly and then quickly gained speed. Did the value of all those companies change that quickly in September 2008, or did mass fear finally take hold?

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10 years+

In the book The Fourth Turning, the authors postulate, based on historical cycles, that the final crisis should occur in the 2020s (based on 2008 being the start of the transition). They don't specify the nature of the crisis, but based on previous cycles, total war is nearly certain at the apex of the crisis. The outlier of the historical data set is the civil war however, which if I remember correctly, occurred shortly after the 4th turning of that era,

Unlike many here, I don't worry about inflationary/hyper-inflationary crisis, I worry about a decade long deflationary grind, spiked occasionally with an inflationary scare to facilitate the flow of capital and assets to the bankers. From a generational perspective, a major deflationary event is due. 

But inflation or deflation doesn't really matter, as the end game for both situations is the elimination of "effective" money (or purchasing power) for all but the elite. 

To survive, we must learn to "make a living" without much money. Personally, I can't imagine a more liberating and rewarding path to take, whether or not an economic collapse comes to fruition.

(edit:sp)

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Re: Speed of the economic collapse should it happen

Mooselick7 writes:

I invest in food, tools, livestock, skills, garden, fruit trees, medicines, precious metals, liquor, ammo, hardware, stored fuel, high mpg vehicles, wood stoves and alternative energy systems.

+1 

Got to be the best investments I've ever made.

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Re: Speed of the economic collapse should it happen

 

Questions on foreclosures and mortgages in a crash:

How will those with a mortgage fare in a collapse? Will foreclosure be enforcable? How? TPTB can't keep up with foreclosures now at less than 10%, how could they at 20%? And why would they, if people are standing in bread lines en masse already, are they then going to be thrown out of their house just so their house can become derelict? Or will hyperinflation cause dollars to be so worthless that they are abundant because of massive overproduction, thus enabling mortgage payments to be made easily? What about Conspiracy Theorists who suggest that this is a plan to effectively seize control through the foreclosure process (loan money, crash the economy, cause massive unemployment and thus defaults, then foreclose). Any thoughts?

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Re: 10 years+
JAG wrote:

...total war is nearly certain at the apex of the crisis. The outlier of the historical data set is the civil war however, which if I remember correctly, occurred shortly after the 4th turning of that era,

...scare to facilitate the flow of capital and assets to the bankers. From a generational perspective, a major deflationary event is due. 

... elimination of "effective" money (or purchasing power) for all but the elite. 

JAG, have you considered how much your post speaks to the inevitability (maybe a bit strong) of American Revolution #2? It sounds so familiar to the British taxation of the colonies in the 1700s. Perhaps another outlier that really messes with your timeframe is on the horizon.

I think the possibility exists that the next war will be the global revolution between the peasants and the moneychangers. I think history supports this conclusion. There is only so far you can push a people before they respond. Let us hope it is done without violence, as they are so few and we are so many, it hardly seems necessary.

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Re: 10 years+

Ready,

Revolutionary war does seem likely, but I still think its a decade off. If I had to guess, this battle will be fought in the markets for several more years before a "real world" conflict materializes. I think a complete looting of the American people is a prerequisite for revolution.

However, I doubt it would be us against the bankers, it would more likely be "us" against "us" with the bankers funding both sides of the conflict. Call me cynical, but nothing seems to happen in this country unless a banker somewhere can profit from it. 

Sorry for the negativity, I'm hoping to leave it in 2009.

Hope you have a great New Year buddy!

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Re: Speed of the economic collapse should it happen

Ready:

I agree.  Gerald Celente predicts the rise of a third political party probably Liberaterian.  Since the Liberaterians follow the ideals and beliefs of our founding fathers, a movement back to these ideals would be an "American Revolution #2". 

After 50 years of central banking, fiat currency and fractional reserve banking, the public needs to be re-educated on the history of  monetary failure in these systems.  Books on these subjects are in demand and getting harder to buy.  People are starting to listen to Peter Schiff, Ron Paul and others when before they were considered radical kooks.  We are heading toward that "critical mass" or that fabled 100th monkey effect...

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Re: Speed of the economic collapse should it happen

So what would a war between "us" and "them" look like?

I hope:

End the Fed

End Debt based Money

End the monitary control over governments, return to the republic  we once had

Massive reduction in complexity, especially in the banking sector

Pay as you go, massive reduction in personal credit

Smaller government without the special interests and handouts

 

This would require massive defaults on paper assets. Bankers would loose. We could pay our taxes with "sticks" as you have posted before, and the moneychangers could be thwarted. Perhaps Ron Paul and others could become our new Jefferson, Washington, Franklin, and Adams.

And my glasses will cease to be rose colored, and nothing but blue skies after that.

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Re: 10 years+
JAG wrote:

Ready,

Revolutionary war does seem likely, but I still think its a decade off. If I had to guess, this battle will be fought in the markets for several more years before a "real world" conflict materializes. I think a complete looting of the American people is a prerequisite for revolution.

However, I doubt it would be us against the bankers, it would more likely be "us" against "us" with the bankers funding both sides of the conflict. Call me cynical, but nothing seems to happen in this country unless a banker somewhere can profit from it. 

Sorry for the negativity, I'm hoping to leave it in 2009.

Hope you have a great New Year buddy!

JAG - you are absolutely right about the bankers profitting in war on both sides. This has been done countless times in the past wars where both sides were being funded.

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Re: Speed of the economic collapse should it happen

That's some really awesome insight Morpheus.  Tx.

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
Re: Speed of the economic collapse should it happen

This is a snippet from www.shadowstats.com in which John Williams wrote an update concerning the coming Hyperinflation coming to the US.  It's a membership site so I'm not going to post the whole article but Mr. Williams has come to the conclusion that a Hyper Inflationary Depression is inevitable.  I personally agree.

Also, I suggest everyone spend a few bucks and become a member of his site.  His info is as invaluable as CM's IMO.  I would imagine CM is a member as well...don't know this to be true but I can't imagine him not being.

 

Snippet:

Hyperinflation Nears. Before the systemic solvency crisis began to unfold in 2007, the U.S. government already had condemned the U.S. dollar to a hyperinflationary grave by taking on debt and obligations that never could be covered through raising taxes and/or by severely slashing government spending that had become politically untouchable. The U.S. economy also already had entered a severe structural downturn, which helped to trigger the systemic solvency crisis. 

The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.  

Numerous foreign governments have offered unusually blunt criticism of U.S. fiscal and Federal Reserve policies in the last year. Both private and official demand for U.S. Treasuries increasingly is unenthusiastic. Looming with uncertain timing is a panicked dollar dumping and dumping of dollar-denominated paper assets. Such is the most likely event to trigger the onset of hyperinflation in the year ahead. 

The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat dollars (not backed by gold or silver) will come the eventual destruction of the value of the U.S. dollar and related dollar-denominated paper assets.

What lies ahead will be extremely difficult, painful and unhappy times for many in the United States. The functioning and adaptation of the U.S. economy and financial markets to a hyperinflation likely would be particularly disruptive. Trouble could range from turmoil in the food distribution chain to electronic cash and credit systems unable to handle rapidly changing circumstances. The situation quickly would devolve from a deepening depression, to an intensifying hyperinflationary great depression.

On Our Own's picture
On Our Own
Status: Bronze Member (Offline)
Joined: Dec 28 2009
Posts: 72
Re: Speed of the economic collapse should it happen

I have had the good fortune to have long conversations with people both from Argentina and Iceland.  I spoke to my friend in Iceland on an almost daily basis during their crisis and came to two conclusions in the end.

           The crisis unfolds slowly until it hits a tipping point which takes many completely by surprise.  Those unprepared suffer.  Unfortunately those who are most prepared are also frequently the ones who caused the problem and then profit from it.

          But, secondly, while many do suffer tremendously and there were/are food shortages and a lowering of overall standard of living,  total chaos did not occur for very long.  While chaos broke out and there were riots etc,  the society as a whole established a new equilibrium "relatively" quickly.  Essential services were re-established either legally or via  a black market and neither society devolved into a Somalia style anarchy.

I agree that the US is headed toward a significant economic crisis that will effect our lives for years,  but SHTF is a ways off.   I prepare for it as a short term crisis and the need to establish alternatives means of survival for a short term.    I keep my overall investments in things aimed at a long term shift,  but my "survival" prep is short term.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: 10 years+
JAG wrote:

To survive, we must learn to "make a living" without much money. Personally, I can't imagine a more liberating and rewarding path to take, whether or not an economic collapse comes to fruition.

JAG and I occasionally cross swords here, but this time......  I'm 100% with you buddy!

If you've "got money" right now, spend it all, and spend it wisely!

Have a preposterous New Year guys.....  I don't think it'll be all that happy, it's up to you to make the most of it really.

Mike

Gungnir's picture
Gungnir
Status: Platinum Member (Offline)
Joined: Mar 2 2009
Posts: 643
Re: Speed of the economic collapse should it happen
on our own wrote:

But, secondly, while many do suffer tremendously and there were/are food shortages and a lowering of overall standard of living,  total chaos did not occur for very long.  While chaos broke out and there were riots etc,  the society as a whole established a new equilibrium "relatively" quickly.  Essential services were re-established either legally or via  a black market and neither society devolved into a Somalia style anarchy.

I think there are very specific inherent differences between Iceland and the US, that will make the US collapse more concerning.

  1. Iceland does not have nuclear stockpiles. This is important, because it means that other countries would not see an economic collapse of Iceland as a means to go obtain said stockpiles, for themselves
  2. Iceland is far more self-sufficient than the US. Especially with geothermal power generation.
  3. Iceland is significantly smaller than the US and does not have as many major populations. Transportation for instance, if s ship landed with supplies in Reyjavik then you'd supply about 60% of the population. Whereas with the US if a ship landed in NY this would not be the same, even with supplies coming to both sea boards then there is still needed supplies in the hugely populated central states. Indeed the transportation grid of Iceland is likely significantly less than 5% of the US.
  4. Iceland has a distinctly different culture than the US.
  5. Iceland has a significantly lower population.
  6. Iceland did not have the same degrees of debt (Gross) as the US does.

All of these things are lead me to believe things will be much worse here than they were in Iceland. I also don't think that TSHTF is a long way off, I think the tree has been notched, and sawn through, and is beginning to fall. I'd say that there's a good chance that by the end of next year we'll see some serious impacts.

mooselick7's picture
mooselick7
Status: Silver Member (Offline)
Joined: Jan 22 2009
Posts: 192
Re: Speed of the economic collapse should it happen

Differences in culture, population density, weather and infrastructure are excellent items of discussion when comparing a US collapse with Argentina's, Russia's, Icelands, Weimar or Zimbabwe.  It seems that US suburbanization over the last 80 years is our achille's heel.   Without fuel to move around people, energy and food, the US is hosed.

Dmitry Orlov makes some insightful comparisons to Russia's collapse.  Fernando Aguirre makes comparisons to Argentina's collapse.

The Now and Futures website provides a time table comparison between both Argentina and Weimar:

http://www.nowandfutures.com/us_argentina.html

http://www.nowandfutures.com/us_weimar.html

Unfortunately, history is repeating itself.  

jpitre's picture
jpitre
Status: Gold Member (Offline)
Joined: Mar 3 2009
Posts: 366
Re: Speed of the economic collapse should it happen

I agree with Mooselick that it's not it the SHTF, but when. One of the biggest challenges to foreseeing how such a scenario may unfold is that while Iceland etc may give some hint as to what to expect, the US is a different story. When these countries collapsed (including the Soviets), the rest of the world was operating more or less as normal. When we collapse, I fear we will take a goodly portion of the economic world down with us. Besides, whenever there is a disaster of some kind in the world, we are there, however a disaster here will not generate a massive outpouring from the world to help us -- so unlike the other collapses we are discussing before, we are on our own with little in the way of outside resources.

In terms of timing, I subscribe to the multiple shock theory that will bring crisis after crisis as we bump on down the hill. I think the book "Long Descent" by Greer does a rational job of laying out where we are headed. We will grind along for periods of not much obviously happening punctuated by sudden "I wasn't expecting that" events that will leave most of us flat footed wishing we had prepared better. So, perhaps rather than one massive SHTF event, we will experience a series of unpleasant crashes over an extended period of time (decades?) with each plateau providing some breathing room to adjust to our new circumstances until we finally reach a point of equilibrium.

 

Jim

Mom-2-3-kids's picture
Mom-2-3-kids
Status: Member (Offline)
Joined: Dec 22 2009
Posts: 13
Re: Speed of the economic collapse should it happen

I believe  slow...then fast.

I see us in the "slow" mode now. 

Fast will kick in over night... when we wake up to China telling the U.S. that they will no longer fund our debt.

That is why no ones knows if it will be next week, next month or next year.

It's all up to China. 

Then my extended family that won't listen to my opinions and call me an "alarmist," will  wake up...but it will be too late for them.  

This is not a case where I want to say " I told you so."

Still wondering if I should really sit them down and MAKE them listen.  It's hard to break them, since they really see blue sky ahead. 

So darn frustrating!

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