If the United States experiences a horrifying economic collapse (and it most definitely will), will that cause a complete and total collapse of society? Will we experience crime, violence, riots and social unrest on a scale that is unprecedented in U.S. history? Before you dismiss such notions as utter foolishness dreamed up by a few bloggers with too much time on their hands, perhaps you should consider what one of the biggest credit rating organizations in the world is saying. According to a report on sovereign debt by Moody’s, the world’s five biggest AAA-rated countries (including the United States) are all at risk of soaring debt costs and will have to implement austerity plans that threaten “social cohesion”. In case you are wondering what happens when “social cohesion” starts to break down due to economic factors, just check out the recent examples in Iceland and Greece. If even Moody’s is warning that there is a realistic possibility that “social cohesion” in the United States may break down due to economic factors, perhaps we should all start listening.
Or if you will not listen to Moody’s, then perhaps you will listen to the man who has been called the top trends researcher in the entire world. Gerald Celente is the CEO of Trends Research Institute, and he is convinced that we are heading into what he calls “The Greatest Depression”. The picture that he paints of the future of America is extremely alarming and extremely sobering. It would be easy to dismiss his forecasts as just the ramblings of another useless “talking head”, but unfortunately Celente has been dead-on accurate time after time after time in the past. Considering his exemplary track record, what Celente says is coming next for America is incredibly frightening….
This is a tough topic, because people either don’t won’t to believe it or are not capable because they lack the knowledge to comprehend what is being said. When you understand that our country can only operate based on debt/credit, not physical dollars, you finally see that the USA is a huge Ponzi scheme built on nothing more that our ability to borrow money. Our status as the world reserve currency has allowed us to borrow money that we do not have.
The government says that there are 10 trillion dollars sitting in the US Banking system that we can go and easily withdrawal. How can that be true when there only exists 1.4 trillion of real money in circulation (dollars and coins) and more than one half of that is outside the US. This doesn’t include the 10s of trillions more that we owe other countries that have purchased our debt. If our creditors were to all come and ask for their money at one time there would be less than $1 dollar for every $1000 dollars owed. The world economy collapses. All Great empires based on fiat currencies end in this way. People I talk to like my wife and friends have no clue what is coming.
Here is the scenario. “Government agencies are having difficulty making their payments. State governments are issuing vouchers to pay their bills. US Social Security is late in issuing its payments to retirees and the disabled. Many banks are issuing warnings about liquidity. The prices of food are escalating by the hour. Instead of talking about the latest inane reality TV show, everyone is talking about inflation, money, mass layoffs, etc. It is 5 days before the economic collapse.” So, what do you do?
Our current recession/depression is slow creeping at this point towards a bad outcome. Although I believe US and Canada are still 3 to 5 years away from an economic collapse, I woefully believe that the collapse is coming. Euro will collapse first. Greece, Venezuela and Spain have already collapsed. Italy and Portugal are soon to collapse next. Having this insight, I have been preparing vigorously for the past 2 years.
During these past 2 years, I have often thought about what the last 5 days would look like before a collapse. Because governments will do everything and anything to delay the onset of an economic collapse, as they should, I believe the problem will build to a dramatic point, where the economy will fall off a ledge very quickly. With the US Federal Government running $1 trillion dollar deficits for the past 3 years, how long can that continue? As some point in time, no foreign government or domestic entity will want to buy US Federal debt. Then the only option is for the US Federal Reserve to generate artificial money, not backed by tax revenues nor by any tangible assets, in order for the Fed to buy US Federal debt. At some point in time, the continual injection of fiat currencies will trigger a hyper-inflation period. At that point in time, the spiral towards economic collapse will accelerate.
What Will Happen If the US Economy Collapses?
If the U.S. economy collapses, you will not have access to credit.
Banks will close. That means demand will outstrip supply of food, gas and other necessities. If the collapse affects local governments and utilities, then water and electricity will no longer be available. As people panic, self-defense becomes more important. The economy reverts to a traditional economy, where those who grow food barter for other services.
A U.S. economic collapse would create global panic. Demand for the dollar and U.S. Treasurys would plummet. Interest rates would skyrocket. Investors would rush to other currencies, such as the yuan, euro or even gold. It would create not just inflation, but hyperinflation as the dollar became dirt cheap.
When Would the U.S. Economy Collapse?
Any of the following six scenarios could create an economic collapse.
If the U.S. dollar rapidly loses value, it would create hyperinflation.
A bank run could force banks to close or even go out of business, cutting off lending and even cash withdrawals.
The internet could become paralyzed with a super-virus, preventing emails and online transactions.
Terrorist attacks or a massive oil embargo could halt interstate trucking. Grocery stores would soon run out of food.
Widespread violence erupts across the nation. That could range from inner-city riots, a civil war or a foreign military attack. It’s possible that a combination of these events could overwhelm the government’s ability to prevent or respond to a collapse.
Some believe the Federal Reserve, the president or an international conspiracy are driving the United States toward economic ruin. If that’s the case, the economy could collapse in as little as a week. That’s because it’s run on confidence that debts will be repaid, food and gas will be available when you need it and that you’ll get paid for this week’s work. If a large enough piece of that stops for even several days, it creates a chain reaction that leads to a rapid collapse.
How to Prepare for a Collapse
It’s difficult to completely protect yourself from a U.S. economic collapse because it can happen without warning.
In most catastrophes, people survive through their knowledge, wits and by helping each other. Make sure you understand basic economic concepts so you can see warning signs of instability.
Second, keep as many assets as liquid as possible, so you can withdraw them within a week. In addition to your regular job, make sure you have skills that you’d need in a traditional economy, such as farming, cooking or repair.
Make sure your passport is current in case you’d need to leave the country on short notice. To be completely prepared, research target countries now and travel there on vacation so you are familiar with your destination.
Keep yourself in top physical shape. Know basic survival skills, such as self-defense, foraging, hunting and farming. Practice now with camping trips. If you can, move near a wildlife preserve in a temperate climate. That way, if a collapse occurs, you can live off the land in a relatively unpopulated area.
As for cash, it’s almost pointless to have it in a real economic collapse because its value might be decimated. Gold isn’t much help because it’s heavy to transport and useless in a real survival situation. But it would be good to have a stash of $20 bills and gold coins, just in case. During many crisis situations, these have been acceptable bribes.
So what will last five days look like before the full economic collapse. Here are some key indicators that we have entered that last 5 days.
- Gold and Silver prices will see severe price shifts. Silver will see price swings of $5 per day. Gold will see swings of $100 or more per day. Everyday mainstream people, including non-preppers, will start to pay attention to the price of gold and silver. Gold and silver will be daily news features in various media outlets.
- There is discussion in news media and within government sources about conducting a bank holiday, as bank are showing severe stress from bad loans and redemption of deposits.
- The price of ammunition will dramatically increase, as everyday people rush out to buy ammo.
- Guns stores will be swamped with people, looking to make last minute purchases.
- Can goods and other storeable foods will become in short supply, as people start hoarding food.
- People will stay home from their jobs, if they have a job, for fear of being away from their families. People will worry about a severe rise in crime, as more people become desperate.
- Homeless shelters and local food charities become overwhelmed with demand. News articles will show the lines of people waiting for a free bed or donated meal. Bread lines will arise, as governments start to hand out food to desperate people.
- Gather your families and survival group. Limit any travel to local areas.
- Get Cash !!! If you have any securities or investments remaining (likely to be worthless at this time), sell and receive cash for proceeds. Liquidate your bank accounts. Empty any security lock boxes as banks. Get to the banks, before banks close or go into a bank holiday. Get small bills, $1, $5, and $20. Coinage will also be valuable. When the banks close, credit cards are mass canceled, and ATM machine stop working, people will need to make their own change for purchases.
- If you have a bug-out residence, it is time to pack up and relocated to your survival homestead. If civil order is maintained, give yourself enough time to make multiple trips to relocate your supplies and gear to your retreat location.
- If grocery stores are still operating, buy as much canned and dried foods as you can get your hands on. Canned meat, canned vegetables, canned and dried beans, rice, and dry pasta should be a priority at this moment. If you are a survival prepper, you should already have 6 months to 2 years of stored food. Now is the time to top off your supplies of food, before the collapse. Once the collapse occurs, grocery stores will become battle grounds, and should be avoided. Here are some alternative places to purchase your last minute groceries:
- Gas Stations often carry lots of groceries, especially snack food. You find some canned and dried foods at gasoline stations.
- Drug Stores are often now mini-groceries stores.
- Vitamin Stores often have various food bars and nutrition drink mixes.
- Vending Machines as road stops, office buildings, and schools are sources of last minute food purchases. For this reason, you should include a roll of quarters (or two) in your vehicle.
- Restaurants that close will often have a store of bulk foods that did not sell. Any restaurant that just recently closed should be contacted to offer purchasing bulk canned food.
- Movie Theaters often have lots of snacks for sale.
- Neighbors that bug out might leave behind food that they could not transport. I am a firm believer in the rule of law and supporting local police in their crime prevention efforts. So, do not loot! Looting will increase the breakdown of society. Rather be prepared, so that you need not be put into a desperate situation. Rather, I would offer to watch over the homes of people to leave to relocate to their remote family members. If you are known and trusted by your neighbors, ask for a key so that you can check into their homes for water leaks or break-in’s. Politely ask your neighbor, “if you do not return by specific date, may I make use of any tools or supplies your have left in your home?” If civil order breaks down in your neighborhood, then move your neighbor’s supplies into your home for safe keeping, Once the neighbor returns, return their supplies. If they don’t return, then at least their supplies did not go to waste.
- Stock up on needed prescription drugs. Ask your doctor for a 3 month prescription. Most heath insurance will only pay for one month of drugs at a time. Tell the pharmacy that you will pay in cash for anything that does insurance company does not cover. Get printed copies of your
prescriptions, in case of power outages. Keep your original prescription bottles, in order to demonstrate that you are legitimate in obtaining refills. Form a relationship with your local pharmacy, so that they know your face and name.
- Stock up on fuels:
- Gasoline and diesel fuel, preferably in metal certified fuel cans
- Fuel preservatives to delay the decay of hydrocarbon fuels
- Propane tanks – small and large (fully filled propane tanks are excellent for long term storage, if kept dry and rust free)
- Butane for lighters
- Firewood for your fireplace
- Hay and other feed for your horses
- Now is the time to stock up on other supplies that you will need
- Baby formula and diapers, if you have or expecting a baby
- Feminine hygiene supplies
- Toilet paper, facial tissues, paper towels
- Batteries, as much as you can get your hands on
- Ammunition, as much as as you can get your hands on
- Pet food
The following are items that will become in short supply, once the economic collapse occurs. Depending on your unique situation, you might want to think about how much you should purchase and store for the future.
Foot wear and Shoes, especially hiking boots – People will be traveling more by feed and conducting more manual labor. Resultant, footwear will wear-out much more quickly. If you have growing children, their feet will continue to grow, regardless if you are able to buy new shoes or not. One of my first acts if known that an economic collapse was about to occur would be to buy a ladder of larger shoes for each of my children.
Camping and hiking equipment – Has folks worry about needed to retreat by feet or worry about being kicked out of their homes, camping gear will be in high demand. As a survival prepper, you should be already provisioned ahead of time with tents, backpacks, sleeping bags, camp cooking gear, etc.
Detergents and cleaners – Sanitation will be the difference between health or illness after the collapse. You will be working outside with your hands, and be dirtier after the collapse. You’ll need to be ready to hand wash and line dry any dirty clothing. As such, you’ll need to be stocked up with cleaning supplies and detergents.
Bleach – Bleach as a limited shelf life. It degrades within a year or two. Bleach is very valuable to maintain home sanitation, cleaning clothing, and water preservation.
The following are items you are likely to be unable to acquire during the last five days before the collapse.
- Gold and Silver – Few people are likely to offer their gold or silver for sale, unless they are desperate for food.
- Guns (rifles, carbines, pistols, revolvers, shotguns) – Guns will be in short supply, as there will be a rush to stock up before the collapse. As a survival prepper, you should already be prepared with your defensive weapons battery. You should already be trained on the usage, cleaning, maintenance and minor repairs of your guns. You should already be aware of proper safety practices and the gun laws of your location.
- Ammunition – Expect all ammo to be bought out. Some localities my freeze the sale of guns and ammo, ahead of or during civil breakdown.
- Power generators – Will be sold out quickly, but believe this might be a waste of money. As fuel will become difficult to acquire, most power generators will go quiet within a month. If you do buy a power generator, choose one that supports multiple fuels, such as also alcohol, propane, natural gas, and diesel fuel. If you are able to generate your own pure alcohol or bio-diesel, you will have a great advantage. The better setup is a wood burning fireplace and wood burning cook stove in the kitchen, along with a sturdy back and sharp axe.
- Solar panels (and related long-term batteries) – If you have your own solar panel setup, and able to run your homestead and recharge small batteries from solar power, you will have an advantage. If you desire such a setup, you will need to have this well ahead of a collapse. After a collapse, be watchful for theft of solar panels. Solar panels will make your homestead a target for bad people.