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Category Archives: Economy

So Just How Will This Unravel?

So Just How Will This Unravel?

inflation official 300x180 So Just How Will This Unravel?A number of folks have asked me how I think that things might unravel when we hit the economic wall.

Honestly, the question about how things will go down is the million dollar question.

The short answer is that nobody knows, but we do know it won’t be good.

And if anyone tells you they know exactly how it will implode, well, I would take that with a whole bag full of salt, let alone a grain.

Here’s a few ideas for your inspiration, so to speak.

Flash Crash

Some Black Swan trigger event hits and causes a massive sell off, affecting both the stock and bond markets.  Considering the global nature of the finance situation, my guess is that it wouldn’t be limited to New York.

Automated trading platforms would pick up on the initial signals and take things for a ride straight down.  Automated crash controls would kick in to shut down markets.

The next day the markets open and those automated trading platforms probably tank the market down to the crash control stop points within an hour or two.  Repeat this for a couple days until they decide to keep the markets closed for good.

At some point panic sets in and people go and get cash out of the banks.  Banks run out of available cash, resulting in runs on other banks and bank holidays.

Within a week or two, pure chaos sets in.  Think “Patriots, The Coming Collapse” by Rawles.  That sort of thing.

European Implosion

This is similar to the first one.  The Euro bombs, and the impact is global.  All the big boys are highly leveraged with derivatives and credit default swaps, which will completely flatten them in the case of a major currency default like that.

Money will flood into the US as quickly as possible.  Rapid movement of money forces inflation through the roof.  None of that helps the big banks resulting in a domino style impact to the rest of the country and the world.

Results?  Probably similar to above

The Slow Burn

This is the painful one.  National debt continues to roll up.  Unemployment increases and businesses shut down.  Government tries to step in, but they have to pay for it somehow.  Cue printing presses.

Interest rates start moving up as bond rating agencies continue to tank the national credit rating.  Things become more and more expensive.  People put up with it as best they can but the impact hits close to home.  Food becomes harder to find.  Gas is expensive with all of the resulting trickle down effects.

Crime continues to move upwards, and even nice suburbs are no longer as safe as they were.  Inner urban areas?  Not a great plan.  Police budgets are axed as cities struggle to pay for anything at all, which means that the cops aren’t coming for most crimes.  And the criminals know that.

Things continue to unravel slowly but surely.  People make do the best they can.  Think the Great Depression for some hints.

Massive Hyperinflation

This begins similar to the slow burn, but ends up rolling out of control much faster.  Essentially the ramp is steeper.

Pretty soon paper money isn’t worth much, and the value drops weekly, then daily, then eventually hourly.

People try to convert that money into goods as soon as possible before the value goes down even farther.  Employees begin insisting on more frequent pay cycles to help cope with the ever changing prices.

Eventually paper money isn’t worth anything and people use barter, metals, and other currencies.

Things unravel at a faster pace every day.  This is Weimar Germany in modern times.

What’s My Prediction?

I don’t have one.  I think some scenarios are more viable or likely than others, but I’m not going to try to guess what’s going to happen.  The fundamental preparations for these things are pretty much the same in my mind, it’s just a question of how much time between the ‘signal’ and the ‘impact’ if you will.

I do believe that the farther the can gets kicked the worse the pain and impact will be.  I also believe that the banks and other folks in upper echelons of world economics and politics are doing their best to get themselves positioned for a massive reset.

I wouldn’t be surprised if they caused it intentionally once they’ve decided they’ve stolen as much value from us as they possibly can.  Besides, the sooner they crash the system, the faster they can start building it back up to do this all over again.

If we let them.

Will The Debt Bomb Be The Big Trigger?

Will The Debt Bomb Be The Big Trigger?

Yesterday we talked about the players and the reason why the math dictates massive economic impact. I alluded to a potential major triggering event … the debt bomb. Let’s discuss it today. Background We all understand debt.  First, we spend more money than we have. In order for people to loan us that money, weContinue Reading

Why Running Off The Economic Cliff is Inevitable

Why Running Off The Economic Cliff is Inevitable

Today, a bit of a heavy topic.  Economics! There’s quite a few people out there that are all worried about the fiscal cliff or whatever they’re calling the latest debt limit charade. I don’t really want to talk about it.  In the end, they’ll raise the limit, just like they always do.  Both sides willContinue Reading

Potential Ramifications of War in the Middle East

Potential Ramifications of War in the Middle East

Unless you live under a rock, you know that there’s a war brewing in the Middle East. Rockets are going back and forth, people are dying, and reports are that troops are moving for borders.   I read somewhere last night that Egypt is looking like it might get involved too. All in all, notContinue Reading

Let the Printing Presses Roll!

Let the Printing Presses Roll!

Well, apparently yesterday I was feeling a little sage like, because today good ‘ol Ben told everyone that QE3 was officially starting. Our dear friend plans to buy $40 Billion worth of securities a month until they decide that conditions have improved, which is basically a blank check.  But not treasuries, they’re buying mortgage backed securities inContinue Reading

Precious Metals and Stocks Diverge – What Does It Mean?

Precious Metals and Stocks Diverge – What Does It Mean?

Today was pretty chaotic for reasons that will become clear later this week. Suffice it to say that I was pretty busy all day. But not busy enough to miss a rather interesting move in the metals markets. For several months silver has been trading in the same range, generally between $27 and $29. OnContinue Reading

The Crazy Train Rolls On

The Crazy Train Rolls On

Well, as I sit down tonight to write the news is talking all bout how Romney is moving forward thanks to wins in the Michigan and Arizona primaries. At this point, unless something crazy happens, he’ll be the nominee going up against Obama this fall. Sorry, Ron Paul guys … aint happening this year. ButContinue Reading

Three Things You Must Consider For Your Preps

Three Things You Must Consider For Your Preps

We all know that the economic climate around the world is pretty awful. The job situation still sucks, stock markets world wide are collapsing, and the outlook isn’t getting better. In fact, it’s getting worse. Right now it looks like we may be on the edge of another major credit crunch. Financial companies are droppingContinue Reading

The Inevitable Debt Bomb

The Inevitable Debt Bomb

Full disclosure time. I’ve been in a pretty big funk lately. There’s a number of reasons, and probably quite a few that I don’t know about. All in all, I haven’t felt the writing muse for a while. It’s tough to write about preparedness related stuff while keeping a positive tilt on things, and latelyContinue Reading

The Entitlement Trap Closes

The Entitlement Trap Closes

(Warning: A bit of language slipped into this one … I got a little excited. I left it in because it’s how I genuinely feel, but if you don’t like a few choice words, you may want to skip a few parts…) Despite the focus of most of the world and the press being solidlyContinue Reading

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