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Sunday, January 29, 2012

Comment on the Coming European Collapse

Falcon15 sent a comment on the Europe Collapse is Imminent article: "The checks won't "bounce". The value of the dollar will be squat. As long as the Fed can print money, America will not default or run out of cash. What happens is an inflationary spiral, as the money supply increases, thereby decreasing the inherent "value" of each dollar. When the $250.00 welfare check will not buy a loaf of bread because bread is now $350.00, that is when we have problems. However, we will see an infrastructure collapse far before that, under this scenario, because when fuel prices get adjusted, but wages do not, truck drivers will not be able to afford the very fuel they need to move your food the average of 1500 miles from farm to store. A majority of finished and raw goods will stop moving. Those goods that do move and are available will be so expensive as to not be purchasable by the average American, due to pricing adjustments. Even if one could conceivably afford these goods in a massive inflationary market, will there be enough to go around? Got preps? Pray for the best, prepare for the worst."

UrbanMan's reply" Falcon15 you are essentially correct. It's not like the government won't send the checks, it's just that they'll be practically worthless. The "cost of living" raises will not begin to keep pace of the inflation. Some of us older people remember seeing pictures in the history books of people in pre-World War II Germany pushing wheel barrows of cash to the bakery only to find the shelves bare. But regardless of the checks either not coming or being worthless due to hyper inflation, the same basic problem is there. A very large percentage of the population being without any means to live and being really pissed and desperate about it. And I mean without anything.

You are exactly right about surmising that even if one could afford the massive hyper-inflation and reduced availability of goods, will there be any left?

Just imagine 40 million people who have to either rely on government camps or criminal acts to survive. How much different or worse would it be if that number is 80 million? 120 million? And while the majority of firearms in this country are own by people who are responsible, availability of weapons is substantial.  Many in the disenfranchised segment of the population will be armed.  

One of my acquaintances said, only partially tongue in cheek, that if you don't have a weapons, pre-collapse, then just wait as the government will either arm you, a la Fast and Furious, to sell you a gun as they empty out armory's to make money.   Of course, that is not going to happen.

There are not just "Survivalist's" predicting some sort of financial collapse.  Many political entities and financial planners are calling a complete economic financial breakdown being imminent.  This of course will lead to massive civil unrest.  Many think that if this happens prior to the 2012 Presidential election or the actual seating of a new President in January 2013 that the collapse would cause the current Administration to  either suspend 2012 election or the installation of a new administration. 


  1. I love the site and read your posts often, but a small detail I'm not sure if you've touched on yet is that the Fed doesn't print any money at all. Their real power is lending greater or lesser amounts of credit to banks, which banks can then lend out to us. If the Fed makes a lot of credit available to lend, interest rates stay low, and if they tighten it up, rates go up.

    But, as the bank of banks, it is where banks put most of any physical cash you deposit into your accounts. They also regulate the banks as to how much of that physical cash they need keep on hand for your withdrawals. But physical currency only accounts for about 3% of the 'money' in the economy.

    The end result is still exactly what you've explained in this post, except that the number of physical paper dollar bills doesn't change, and there simply aren't that many dollar bills to begin with.

  2. Okay so should the Fed start creating more bills now? The population's growing and surely the demands are as well

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