Where is this economic collapse so many are saying will happen?

[eekitsagreek]

If you go to different websites or listen to certain radio hosts, there is a lot of discussion of "economic collapse", "dollar collapse" or "petrodollar collapse" and so forth. They make it sound like we will end up like the Weimar Republic with people carrying their worthless money in wheelbarrows.

I am not an economics expert (nor do I play one online), but are we really heading for collapse or is it all a bunch of talk? I know we have a huge debt problem, but we keep printing money. How long can this keep going? I am confused!

Any insights from those knowledgeable in economics or finance is appreciated.

[Drew68]

As you can see, you now need $23.27 to buy in 2012 what one dollar would buy in 1913.

How many hours did the average worker have to work to earn a dollar back in 1913? How many hours worked to earn $23.27 today?

This is the real measure.

[ConstantSkeptic]

Since Obama was elected the dollar has lost 28% of it’s value (circa 2008).

Just curious as to where the 28% figure comes from.

[Cen-Tejas]

......I read it on a Free Republic post about 3 weeks ago.

[Cen-Tejas]

.......you raise a valid point but the fact that successive governments have done horrendous damage to our economy is the over-arching point as reflected in the value of the dollar over 100 years, debt per capita and etc; etc;

Thanks for commenting on my post. It was a thoughtful one.

[Borderline]

What happens when the only arrow left in the quiver is to take Fed to Bank lending to MINUS interest rates? (meaning the Fed nows PAYS the banks to borrow money)

The only thing the Fed has been able to do, so far since 2008, is basically make borrowing money for banks free. At 1% or 1.25% this is less than the cost to service the loans. However that is where the Fed has been now for almost 6 years. And the banks are still sick - yes, they are still propped up. Even Bank of America can make money when they borrow a couple billion at 1%.

So what is next that the Fed can do? Pay the banks to take money? That’s it! So what happens - the Government dollar value erodes. Food prices go up since farmers can’t afford to give their product away.

What happens when an EBT card’s monthly balance can only buy a couple days worth of food? This will start in the cities - nothing to be bought with worthless EBT cards, Welfare checks not keeping up. WIC payments meaningless compared to grocery and heating bills.

The Fed has no more tools. And you can’t tell me America is now more productive. Not along with all the aid we give the rest of the world. It will end, and losing a few cities will be the first indicator that Rome is Falling.

[Rebelbase]

It’s already on its way with 12 oz. pounds of coffee and 1.5 quart half gallons of ice cream.

[dfwgator]

Yep. Our debt is like straws on a camel’s back. All it takes is one major event. Sooner or later, it will happen.

Or Mr. Creosote and a "Wafer-Thin" mint....

[krunkygirl]

Bkmk.

[21twelve]

My dad once told me he used to be able to build a home and from the profits by a new Cadillac (which he did back in the fifties). “But now, I’m luck if I can get the downpayment on a Chevy”. Of course - he told me that during the Jimmy Carter years and 22% mortgage rates.

[free_life]

I think you are right in we can be martyred or suffer persecution and that is in the perfect will of God, but God’s covering is and can be about more than our spiritual safety. Without God’s grace we would cease to take another breath.

[Arthur McGowan]

Absolutely. God keeps us in existence from one moment to the next.

I get annoyed when I tell people I think Obola wants to kill all of us, and people say, “Oh! Have faith!”

The faith tells me Jesus died, and rose from the dead, and will come again at the end of time. There’s nothing in the faith that says Obola can’t kill all of us.

[blam]

Leading Contrarian Economist: “We Are Coming In On The End Game Here” (John Williams)

[blam]

I bought a new house in 1980 with a 13% interest mortgage...many of my neighbors had 17-18% mortgages.

[kjam22]

What happens when the only arrow left in the quiver is to take Fed to Bank lending to MINUS interest rates? (meaning the Fed nows PAYS the banks to borrow money)

There are a few other arrows in the quiver. Nuclear arrows of sort. There's 1) begin nationalizing foreign held assets in this country. 2) begin defaulting on specific foreign debt.

[Borderline]

What happens when the only arrow left in the quiver is to take Fed to Bank lending to MINUS interest rates? (meaning the Fed nows PAYS the banks to borrow money)

"There are a few other arrows in the quiver. Nuclear arrows of sort. There's 1) begin nationalizing foreign held assets in this country. 2) begin defaulting on specific foreign debt."

Yup. There are a bunch of not so good options that they could apply since we are already past the point of no return. Wonder how they would publicize these type actions? ... silly me, they'd make it sound like a step in the right direction, or simpler, for a while, just keep it a secret.

thanks for the thoughtful response. going to be interesting if hazzardous times.

[kjam22]

I think it could be applied carefully. For instance..... we would like to have help eliminating ISIS. Target a few middle east countries that aren’t helping as much as we would like and explain that we have nationalized those country’s assets held in the United States. The proceeds will be used for yada yada yada.... Unfortunately the dems would use the proceeds to pay for more food stamps and obammycare.

[DuncanWaring]

45 years ago one hour at a minimum-wage job would buy 5-6 gallons of gasoline.

Today, one hour at a minumum-wage job will buy maybe two gallons of gasoline.

(No, this does not mean the minimum wage needs to be raised)

[infool7]

It happened already, they’re just waiting to tell our children.

[xeno]

I'm no economics expert either, but here is what I understand the situation to be.

Specifically what is coming is a default in government bonds. Nations, states, and local governments will not have enough funds to meet all their obligations and investors will not lend them money. The bad thing about a government in this situation is that those in power will do everything thing they can to keep things the way they are and will forcefully take the money through increased taxes and confiscation. This will put the economy into a nose dive because it will reduce the capital needed to grow the economy.

What makes this upcoming default so terrible is the high percentage of people that derive their income from government and believe big, centralized government will be there for them. The people of FreeRepublic don't believe it, but a near majority of Americans do believe it. Once the citizens lose faith in big, centralized government then reform and recovery can occur, but we will have to endure lots of economic pain before people are willing to let go of their Marxist beliefs.

The dollar will remain strong and will continue to appreciate against other currencies over the next year. Global capital flows to wherever it can get the best return on investment. Even though the US economy is growing slowly, its better than anywhere else in the world right now, so the capital is coming here and strengthening the US dollar.

There is no threat from a Weimar-type hyperinflation because government only hyperinflates the currency when no one will lend them money and when there are no more assets left for the government to tax or confiscate. The United States has lots of wealth so there is no need to hyperinflate since they can just take the wealth.

Things will keep going as they are until October 1, 2015, about a year from now. That date is the peak in a major global capital energy wave with a frequency of one cycle every 8.6 years. Like water ripples from a stone cast into a pond or a sound wave from energy moving through the air, global capital moves as an energy wave. Here are other major economic events that have occurred with the peak in the 8.6 year wave:

8.6 years (1 x 8.6 years) before Oct 1, 2015 is the housing market peak and mortgage-backed bonds default of 2007.

17.2 years (2 x 8.6 years) before Oct 1, 2015 is the Russian bond default of 1998.

25.8 years (3 x 8.6 years) before Oct 1, 2015 is the Japanese market peak of 1989.

The 8.6 year global capital energy wave is the Econonic Confidence Model of Martin Armstrong:
http://armstrongeconomics.com/armstrong_economics_blog/.