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Budget thread spinoff: What does "collapse" mean?

Discussion in 'The Okie Corral' started by Cooper, Apr 29, 2012.

  1. Cooper

    Cooper

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    After reading ALL of the How would you cut the budget? thread, I have some questions. Everyone seems to expect a collapse of some sort. There are all kinds of vague implications about "the end." So . . . exactly what form will this collapse take?

    I imagine that at some point in the near future we will fail to raise the debt ceiling in time to avoid default, and our credit rating will be downgraded again. Is this really a big deal? Will banks indeed stop lending us money?

    If they do, will that lead to collapse? And by that, do you expect "hard times," or TEOTWAWKI-style anarchy?

    Are there historical examples of such a collapse? Everyone points to the Weimar Republic, but there were other factors involved (WWI). Everyone points to Greece, but there's no fire and brimstone raining down on that country.

    Thanks in advance for an interesting discussion.
     

  2. Flying-Dutchman

    Flying-Dutchman

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    The collapse will undoubtedly come as hyperinflation. No politician has the guts to cut anything.

    This is an interesting link about inflation during the Weimar Republic.
    http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html

    Some highlights:

    Before hyperinflation, the Ben Bernank of Germany assured the public the money was sound.

    The savers and the pensioners were wiped out. The young partied and did not save as advised by their elders.

    Large corporations were unscathed by the crisis.

    Before the crisis people bought safe land in the countryside and gold.

    People avoided large urban areas.

    Hyperinflation was short lived.

    The physical wealth, factories, farms remained. They just pressed the reset button.

    In the US things may work out differently.

    We have a balkanized extremely diverse populous held only together by our prosperity.
     
  3. ChiefWPD

    ChiefWPD

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    “Collapse” is a tough topic to discuss because, much like opinions on calibers, a good deal of emotion seems to creep into the discussion. There is a significant number of folks who are predicting various types of calamitous events befalling our nation (and the world?). Some seem to have valid concerns, many others tend to run around with a sort of “chicken little” belief that the sky is falling.

    Not being clairvoyant, I have not a clue what the future holds. I am confident that we will see ups and downs in our economy and society as years go on. It would appear that, compared to most of Europe, we’re in reasonably decent financial and societal condition.

    A prudent response to these projections would likely be; keep out of debt, hold diverse assets, take prudent steps to ensure your (and your family’s) protection.

    If the sun blows up, if Muslim terrorists take over our government, if our money turns to sawdust, all bets are off. None the less, I wouldn’t go and dig a hole in the ground, fill it with MREs plus guns and ammo and wait for the apocalypse. You might have a long wait.

    Just saying.

    :wavey:
     
    Last edited: Apr 29, 2012
  4. Cooper

    Cooper

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    I guess what I should have stated was: Do you believe there will be a breakdown of our society? If so, can you chart a reasonable path from here to there?

    One example I have heard: We default, banks won't lend us money, entitlements grind to a halt, massive riots. At first that sounds like a valid concern, but then Greece is still standing. They are having "hard times," but there is no police state, militarism, starvation, etc.
     
  5. RonS

    RonS Millennium Member

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    Yeah, LA suffered a billion dollars in property damage and 50+ dead because a trial didn't come out the way some people wanted it to. What will happen when masses of those people can't buy a loaf of bread and jar of peanut butter? Do you think they might find someone to blame for that? I bet that there are some leaders in this country who would be happy to point some out to them, just as a public service in the interest of social justice.

    I don't think we will have classical hyperinflation myself, I think what will happen is that pensions and welfare will be cut to balance the state budgets. The old will quietly die and the welfare zombies will take to the streets demanding their handouts.

    I'm already seeing it in my area. Armed robberies are going up, burglaries are going up, random violence is increasing and the general tone varies between "Oh, my, whatever shall we do" to "Bring it, I got ammo to spare".

    But, I've been wrong before, and generally the problem you anticipate isn't the one that gets you.
     
  6. Flying-Dutchman

    Flying-Dutchman

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    The difference between past collapses and our impending collapse is the staggering number of our people dependent on government for everything; Weimar Germany and Argentina were not at our level.

    The wild card will be who is in the majority when the collapse happens.

    If the majority is dependent on government, they will vote in someone who will seize the assets of all citizens.

    If the majority still believes in our current system we could be back to normal quickly as we are a rich vigorous society.

    A short spurt of hyperinflation followed by a resetting of the currency is much better than enslaving our grandchildren with US debt.
     
  7. Cooper

    Cooper

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    Can you clarify what you mean by "quickly"? According to this, our future obligations amount to $211 TRILLION. If those obligations go unpaid, it seems like a lot of people will be hurting for a long time.
     
  8. uhlawpup

    uhlawpup Gentle Soul

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    I've given a lot of thought to this, and come to a simple conclusion that works quite well for me.

    I can only prepare so much, and I cannot control how other people may react.

    Our country has a rich and diverse culture, and a strong sense of the value of the individual. It also has a strong sense of community. Here's what I think will happen.

    If worse comes to worse, there may be a short period where some folks use gold or silver or force of arms to gain an advantage. Some may even try to control others through a perverse sense of self importance. Once this starts to happen, though, the vast majority of Americans will band together, return the rule of law and right, and make sure that their fellow Americans are taken care of, as long as those do what they can to contribute to the common good. Criminals, hate mongers and opportunists will be dealt with harshly, but, in the end, we will come out of temporary troubles with our heads and flag high.

    We will once again have a vigorous economy based on honest work and value, and we will turn our backs on those self-appointed messiahs of doom who try to force us to their way of thinking.

    Beware those who tell you that you need to do something. What they're really saying is that THEY need you to do something to advance their own agendas, whatever they may be.

    Be alert. Be cautious. Most of all, think with your brain, not your adrenal glands.

    Just my fiftieth-part-of-a-dollar. Your mileage may vary.
     
    Last edited: Apr 29, 2012
  9. DanaT

    DanaT Pharaoh

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    I go the hyperinflation route. That is how most economies fail. Then people will start getting into riot mode when they can't eat. Soon after that, martial law to try and stabilize the place. Once that happens, it is truly over. The wealth will never return.

    Look at history and see what happens. It has happened many times.

    -Dana
     
  10. BudMan5

    BudMan5

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    I have the advantage on a lot of you, I am old. I have been drawing SSA for three years now and this year I qualify for Medicare.

    I have been a 'prepper' for about 25 years (when i first moved to a very rural ag-biz community of 800 population) and a very serious prepper probably for the last four years.

    I prep for every possible continmgency including the zombie apocalypse.

    But, I am flat out terriefied of an economic collapse and think that is the most probable of any scenario i may see in my remaining lifetime.

    In 1964, while a junior in high school, I could go down and buy three gallons of gas and a pack of cigarettes for four quarters. Today, I could still buy three gallons of gas (@$3.85 per gallon)and a pack of cigarettes (@$5.75 per pack) for those same four 1964 quarters which are now worth $5.66 each (April 27 spot)

    The difference of course is that a 1964 quarter was 90% silver.

    An economic collapse won't be overnight until the very end. Read about what happened to Argentina beginning in 2001 when their economy 'collapsed'. (and really is still on going)

    Our 'collapse' has been on going for quite a while. You coiuld probably trace it all the way back to 1965 and President Lyndon Johnson's "Great Society' kicked off and the modern welfare State was born.

    Things are starting to move now though. It's only a matter of time until hyperinflation starts. The collapse of one the
    "PIIGS" (Portugal, Italy, reland, Greece or Spain) in Europe could start the avalanche because our Fed Reserve has put untoild BILLIONS of dollars into European Banks trying to prop thgem up. We don't know how much because the Fed isn't require to tell anybody how much they are spending/printing/borrowing/loaning.

    This all really is a house of cards and it's teetering.

    I have paid off my mortgage, all my other debt with the exception of two cars and we are knocking them off as quickly as we can by doubling up on the payments.

    We're also conncentrating on the basics; food and water, shelter, sanitation and security.

    This is the first time in my life that I actually fear for the security and future of oiur country. There is just too many things happening that could all caue a collapse.
     
  11. Flying-Dutchman

    Flying-Dutchman

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    The $211 trillion owed to future retirees as SS and Medicare will never be paid. I have paid in SS 30 years and as a very tail end baby boomer I know I will be on my own just as people were before SS.

    There will not be a Mad Max scenario; The Government is broken but not its people. We are still the same energetic educated can-do people with a modern infrastructure in place.

    The Government has enough new weapons and surveillance technology to control its citizens and keep the peace.

    Referring to the Weimar Republic, hyperinflation was tamed within a 2 year period when they introduced the Rentenmark. One Rentenmark equaled 1 billion old Marks. The Germans accepted the new stabilized currency as legal tender and life went on.

    Of course the many Germans who were impoverished did not forget and when Hitler promised 100% compensation and vengeance on those who caused the hyperinflation…well the rest is history.

    Our situation may end differently. It has been proposed by some politicians of the liberal persuasion to take 401Ks ($18 trillion) to pay off our debt. 60 years ago, Communists like this would have been black listed and drummed out of the country.

    Today with many people 100% dependent on Government, they may vote to seize all the assets of the haves.
     
  12. BudMan5

    BudMan5

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    and thben the fight will be on