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 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?
The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression.Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.
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.
Looking at each of Mr. William’s points from a worst case scenario perspective, here are some things one can expect.
Collapse of Purchasing Power
Imagine stock markets initially rising to new highs. While many in the public will truly believe we are in a new boom time, the reality will be that prices on everyday goods will be increasing at a rapid rate. Hyperinflation will not be recognized right away, but eventually the public will catch on. Howard Katz has written that we can expect price increases of 70% within a year or two. Imagine gas at $7 – $8 a gallon, a can of tuna for $3 and your favorite flavored latte for $10. This will be the opening act and primary indicator that the system is getting to a breaking point.
Collapse in the normal stream of U.S. commercial and economic activity
As the purchasing power of the dollar diminishes, foreign creditors and suppliers will become concerned. Even short-term credit extensions for essential goods like food and oil will collapse. If you’ve read about what happened in Iceland in 2008, you’ll have a pretty good idea, except the population needing essential goods is about 1000 times the size of Iceland’s (pop. 300,000). When Iceland’s currency collapsed, the government was unable to purvey basic food goods from international sources because their currency was no longer trusted. Expect to see store inventories slowly (or perhaps quickly) lower, from basic foods to apparel. If the dollar were to go Zimbabwe, then it would be nearly impossible for merchants and suppliers to accurately price goods, leading to daily, perhaps hourly price changes. The effects of this type of currency collapse will infect every aspect of the economy, leading to mass layoffs and a sudden stop in transportation via trucks, rail and dryships. Trade goods will cease to move across the nation.
Collapse in the U.S. financial system
If you haven’t read James Rawles’ book Patriots, do so. The opening two chapters deal with exactly the scenario forecasted by John Williams. As mentioned, we will see stock prices and stock markets probably go through the roof initially, in nominal dollar terms. But, once it is realized that the dollar has been destroyed, along with all US denominated paper assets, we may see a shut-down of US Stock markets. While there may certainly be other signals, a freeze in the trading of stocks as a result of hyperinflationary pressure on the US Dollar should be a warning alarm to all of those with a bug-out location. Complete system collapse will not be far behind- — and we could literally be talking days, not weeks or months.
Realignment of the U.S. political environment
It may be hard to believe, but it is certainly not outside the realm of possibility. The political system as we know it, like voting for representatives, may deteriorate quickly, meaning that martial law may need to be implemented. It is no secret that President will have 1 million US military soldiers on the ready by the end of January to deal with just such a scenario. Local law enforcement and emergency services will break down, as responders will opt to protect their own families. This will force the hand of the Federal Government, as there will be no police to deal with looting, violent crime, and civil unrest resulting from a collapse in trade and essential supplies.
If Mr. Williams’ forecast plays out as described, then preparation will be a key to survival. As Mr. Williams points out, and many observers feel deep down, the problems that have been pushed into the future have now come home to roost:
Indeed, pushing the big problems into the future appears to have been the working strategy for both the Fed and recent Administrations. Yet, the U.S. dollar and the budget deficit do matter, and the future is at hand. The day of ultimate financial reckoning has arrived, and it is playing out.
Dust Bowl and Great Depression
There is a global crisis for fresh water. The results of this crisis will affect everyone around the world. Where fresh water is available, food can be grown and life flourishes. In developed countries, the price of food will skyrocket. In less developed countries, the result will be starvation and misery.
Another symptom have the water crisis is Gulf of Mexico ‘dead zone’ is the size of Connecticut
By year 2030, there will be dramatic geopolitical changes around the world regarding fresh water and food availability. The have’s and the have-nots’ will be separated by having enough to eat. The wealthy will be identified by having 3 full meals per day. The middle class will have 2 meals per day. And the poor will sadly have but one full meal per day. This is a reality that is becoming real already.
There are several things you can do to prepare for the global water crisis.
Throughout history, droughts have been paired with a Great Depression. The Dust Bowl of the 1930 added greatly to the misery of the Great Depression. A drought can often push a fragile economy into an economic depression. Given the severe droughts in California and the Midwest United States, I am very concerned that a long drought cycle has taken root in the United States. And concerned that the cost of food increase and agricultural job loses will negatively impact the economy. This is a situation that I recommend that you watch closely.
If you live in a severe drought area, I would consider moving while the real estate market is relatively stable. As the drought persists over time, the value of real estate in the severe drought regions will go down. During the 1930′s Dust Bowl, there was a mass migration of people from the Midwest to California. Since now California is experiencing a severe drought, where can people go? To Detroit?
Too many people. Climate change. Lessening arable land. Lessening fresh water availability. Depletion of fish in the ocean. These growing trends do not arrive in a good place.
How to be prepared for a food crisis?
Food Crisis queuing case of a food shortage you should be aware that grocery stores only have about 3 days of food in stock. People will rush and buy as much as they can so probably the food will vanish in less than a day or hours. So if anything was to disrupt the food supply chain for an extended period of time, there would be chaos in most communities. It’s very important to start preparing NOW. There are several ways to start. The choice you make should depend on the event you are preparing for. Of course the best way is to prepare for all scenarios including long periods.
There are 5 key foods that should be part of every long-term food storage plan.
#Wheat — Properly stored, wheat has the best long-term storage potential for common foods. Hard Red Wheat berries have a 30+ storage life. Be store to store the pre-ground wheat, which are called wheat berries. Once ground into flour, it last only about one year. Soft red wheat berries stores up to 20 years.
The white soft and hard wheat berries stores for 10 or less years. For your critical long-term preps, stick with hard red wheat. Be sure to have a wheat grind on hand, so that may flour from the stored wheat berries. If you allergic to wheat, consider oats or quinoa instead.
#Salt — This is not so much a food, but rather an essential mineral needed by your body. If kept dry and sealed, salt has an endless storage life. I store two types of salt. Pure salt, or often called canning salt, has no iodine. I reserve the canning salt for food preservation. Before refrigeration, meat, fish and cheese were storable due to salt preservation. And I store several pounds of salt with iodine added for cooking and table usage. Salt is an item that is often overlooked in food storage. Yet is has so many usage and is vital to good health. Both too much and too little salt is bad for your health.
#Sugar (or honey) — Pure white sugar and honey, if properly stored, never expires. Keep sugar in a sealed container, and it never goes bad. For more preps, I storeDomino’s sugar that is already pre-sealed in 4 pound plastic canisters.
#Honey is best stored in glass jars in a cool, dark place. If honey crystallizes over time, just warm it a bit to become fluid again. Honey has a lot of micro-nutrients, and is my preferred way to store sugar for the long-term. Occasionally, my local drug store, CVS, has the Dominos 4 pound canisters on sale or I might buy with CVS extra-bucks.
#Rice — White rice, if sealed in cans with oxygen absorbers, can have a 20 year storage life. Brown rice has a storage life of around 5 years. White rice is simply brown rice with the husk removed. Brown rice has more flavor and more nutrition. But white rice stores longer, since the husk of brown rice has small amounts of oil within that go bad much quicker.
What I like about storing rice is the amount of dense calories it provides. #Rice is easier to prepare versus grinding wheat berries. A cups of white rice plus of vegetables from your garden makes a filling meal. Many people don’t realize the rice has some protein. Rice combined with beans provides all the protein your body needs.
#Powdered milk — If you have children, this is a key food to store. Regular powdered milk has a shelf life of 2 years. If packed in meal cans by a reliable vendor, powdered milk can be stored for 5 or more years. Fat free powdered milk stores a bit long. Most baking recipes call for milk, of which powdered milk is an adequate.
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