[unkus]

ping

[pabianice]

I give this a C -. Not one word on what to do when the collapse comes. And not a word of credit to the sci fi stories and films that already spell this scenario out.

[yefragetuwrabrumuy]

He is right in some things, and wrong in others.

Even the word “collapse” has serious problems, because it implies an acute event. Instead, think of an extended recession, even a depression, as a whole collection of economic pluses and minuses, that “trend” in one direction or another. Nothing too dramatic, or very fast.

However, it is punctuated by lesser acute events that push the trend in one direction or another.

Yet the other axis of this is time. An actor once said the stock market is like Nielsen ratings of a TV show. Big jumps one way or another don’t matter. What matters is a slow decline, which means your show is dying, and you’d better do something or you are going to fail. But the slower the decline, the more time you have to do something.

What most people fear are “bursting bubbles”, such as Barney Frank’s subprime housing crisis. Yet if you think about it, most of the people who got burned only did so for one reason: they thought they could get something for nothing.

Still, many of them are sympathetic. So compare them to a far less sympathetic group, who *also* try to get something for nothing.

Derivative traders, many of whom are playing games, essentially gambling, with multiple billion of dollars. In a market that *theoretically* deals in more money that exists in the world. Yet they are playing “heads I win, tails you lose”, thinking any losses they experience will be payed by government taken taxpayer money, not them.

Guess again. The US and EU governments could just up and say that derivative trading is no longer lawful, and all derivative trades, current and past, are null and void.

Imagine the tears of blood shed by multi-billionaires, that their trillions of dollars of winnings at the poker game have been confiscated by the police.

Does anyone else care if such people crash and burn for their arrogance?

And yet, doing this to the derivatives market would be a huge acute event, rattling other markets, many of whom are just as guilty. The overall effect to the man on the street, however, is a big “meh”.

[marron]

We are heading for a complete and total unemployment nightmare in the United States. Unemployment is eventually going to soar well up into the double digits.

When that happens, the unofficial economy becomes the primary one. Actually, the crash comes when the official economy and the real one get out of synch. The official one crashes, and the real one re-asserts itself.

People will have to be much more entrepreneurial than maybe they have ever been. Prepare, sure, have some food and cash stored so you can make the transition. But the crash isn't over in a month or a year, it is generational.

So as important as it is to have food and silver coins stashed, while people have to be prepared to defend themselves in the absence of an effective police department, they also have to understand that the way back is to rebuild the real economy. That means taking resposibility for your family, but it also means building relationships, networking, all the usual entrepreneurial skills. To feed your family you'll have to build a business from what you see around you. You'll trade your skills for a living just like you do now.

If you've seen how honorable people survive in a third world country, thats what a crashed US looks like and thats how you survive it. And its over when the numbers of honorable people reach critical mass again. Because the kind of economic rot we see is reflective of a deeper moral rot and the cure is obvious when you understand it for what it is.

[no-to-illegals]

The game was likened to a game of chess. Perhaps when the shooting starts it maybe will be a game of chess. Am likening the situation to a game of poker. The bluffers are folding and many countries are eyeing the pile of money in the present. Many (at the table) are continuing to bluff, and the country holding all the aces is bluffing also or has on a poker face. The end game will be when the cheaters are exposed (if that happens), and then the weapons will be drawn as the players prepare to shoot at one then another. Who wins? It may not be the one who takes money, instead it maybe will be the robber with the government badge.

(imho)

nti

[BipolarBob]

'But the financial crisis of 2008 did not completely destroy us. Neither will the next crisis. '

Who says? The ones leading up to this could be the mild tremors and the next could be a supervolcano.

[jjsheridan5]

There are way too many variables for people to make definitive predictions like this author has. This collapse could play out over the course of years. It could also happen very quickly. No-one knows. Trigger events can occur anywhere, and are by their nature, unpredictable. A widespread bank run in Europe could occur without warning, and could cause European banks to fall in short order. By contrast, we may just as easily see a slow migration of money out of Europe, into Japan and the US, that drags on for years. Similarly, we may be looking at negative yields on the 10 year in the next year or so. But there are also circumstances that could leave us with a currency that nobody wants any part of.

This is an unpredictable situation. There are too many big forces pulling things in opposite directions. (Is China the next superpower, or a hopelessly flawed economy that will fall under its own weight? Is the US dollar a bastion of strength, or will it lose its place as the world’s premier currency? Will printing be able to overcome the strong deflationary forces (here, and elsewhere)? Will Japan be able to continue with astronomical debt, even while their population ages, and export markets dry up?)

History is a fairly good guide that, under these circumstances, events become unpredictable. The scenario he lays out is certainly possible. But by no means is it the only possible outcome.

Honestly, this article could IMO be paraphrased as “I am predicting doom and gloom, but I don’t want to be seen as a doom-and-gloomer, therefore I am going to definitively state that certain things won’t happen.”

[Errant]

His belief that a collapse will take time to occur, could prove fatal for some. He may be right, but I suggest getting your preparations finalized now, while there is time and the things you need are still available and somewhat affordable.

[momincombatboots]

The September 2007 bank run was a singular event. Of course, it has all but been deleted from history.

[LTC.Ret]

The most important line in this article:

“Make the decision right now to be a light during the times ahead.”

[DaxtonBrown]

Part of the problem is that Keynesian theory is embedded in the way we look at economic statistics. The GDP, for example includes government boondoggle spending, creating a feedback loop. People still talk in terms of stagflation - which is unexpected high unemployment with high inflation. What we are really in is a long term biflationary depression caused by both M and V being out of whack in the GDP=M*V equation
http://www.futurnamics.com/biflation.php

[mjp]

The coming economic collapse is going to play out over a number of years and it is going to be absolutely horrible.

Large increases in the money supply are not sustainable if one wishes to avoid hyperinflation. When the growth in the money supply slows down, or fails to accelerate sufficiently, or actually begins to decrease there will be a contraction phase. When interest rates begin to rise and when credit tightens, money becomes tight, and there will be a contraction phase. When the contraction phase results in increased bankruptcies and failures of a few large banks, there will be a domino effect of more and more bank failures which results in deflation and more and more bank failures.

Deflation of the money supply leads to decrease in demand which leads to decrease in demand for labor which leads to lower average wage rates and increased unemployment.

Over the past few months, money supply growth has stopped accelerating. Under these conditions, Europe could easily be the catalyst that starts a chain reaction in the US.

US M2 Money Supply Growth data by YCharts

[blam]

Prepper Ping.

[Kartographer]

Prepper PING!

[firebrand]

The "financial crisis of 2008" was caused by one entity removing a crucial card from the house of cards. It was a withdrawal of half a trillion dollars on September 15, 2008, in an extremely short time, from money markets. If the Fed had not stopped the trading, it is estimated that the amount withdrawn would have been 6 or 7 trillion.

Of course the house of cards shouldn't have been constructed in the first place. It was Keynesian policies magnified by "tulip mania" practices.

And we still don't know who did it.

The book The Secret Weapon calls it financial terrorism and speculates that it was one of our current enemies.

The fact that it was an election-time surprise supports this.

Too bad we couldn't have solved these problems gradually and prevented a lot of the suffering that is now going on.

[Shadowstrike]

oh how I miss Ronald Reagan right now.

[papertyger]

Nonsense!

It’s gonna be Zombie apocalypse, with a Mad Max economy.

Personally, I intend to be my own Jabba the Hutt warlord, with my very own swirly boobed dancing princess on a leash.

I’ve been studying end of the world scenarios (videoly) for years, so I feel confident when the SHTF (wouldn’t you like to know what that means) I’ll be ready for it.