In today’s post we’re going to discuss what a true economic collapse actually means, some of the effects an economic collapse could have on our society, and what you can do to prepare yourself and your community to deal with all the potential fallout that a true total economic collapse could bring.
The collapse won’t happen overnight, it’s already started
In order to prepare for a real collapse of our monetary system first we need to define what a total economic collapse means. Many of the doom and gloom SHTF preppers will tell you that overnight, the government will somehow lose control of the entire economy and that in short order your paper money is going to be worthless, riots will break out all across the country and the government fat-cats that caused this mess will be bugging out to more economically stable countries, laughing all the way to the bank for the mess they left us in.
The fact is that a true, national or global-wide economic collapse is a process that takes a long time to boil over. Unfortunately that process, at least in the U.S. was started a long time ago. The easiest way to describe the process of widespread economic collapse is to put it into the perspective of a common household.
Some people simply don’t know how, or refuse to responsibly handle their finances. They take on too much financial responsibility, fail to prepare for the loss of income or unexpected expenses and rely far too heavily on debt and credit to survive. They continue to rob Peter to pay Paul, making minimum payments with their Visa card to pay Discover or MasterCard, simply compounding the issues that caused them to be in debt in the first place. They spend irresponsibly, buying things that aren’t necessary. In a nutshell, they refuse the live the type of life they can afford and simply put the difference on credit.
Governments work the same way. Governments want to be involved in every area of your life as humanly possible, just as much as the irresponsible household wants to go on expensive vacations and buy expensive cars. The one crucial flaw they can’t seem to wrap their head around is that governments can only be as effective as the budgets they run on. Just like a normal household, it takes money to run programs, fight wars, feed the “needy” and literally millions of other issues they’ve weaseled their way into.
At some point, long long ago, the government stopped being able to cover what it was spending with the money it was taking in through taxes. Enter the Federal Reserve. The short version of this is that the with the help of the Federal Reserve, the government is able to tap into money and resources it doesn’t actually have. On top of that, any money they were responsible to keep safe for its people (hint hint Social Security) has also been completely tapped to continue to pay for things this country doesn’t need.
For our example irresponsible household, there comes a tipping point where they can no longer get financing for new things or existing debts, their income level can’t support any more responsibility and things quickly spiral out of control until eventually the absolute only option for them is bankruptcy. The exact same thing is happening in government. The difference is that government has the advantage of being able to essentially print money at will to kick the can and avoid “government bankruptcy”, but at some point (and this point is coming soon) you can’t devalue the money you already have any more to make room for new money. That just makes all the money worth less and less. The government has kicked this can for so long, and printed so much fake money, that we simply can’t do it much longer. Something will have to give, things will have to go unpaid, major cutbacks will have to be made, and serious economic reform will have to happen…and it won’t be pretty.
What kinds of things are likely to happen when .gov admits we’re broke?
No one can predict the future. Anyone that says “Oh when the SHTF this, this and this is going to happen” is full of it. No one KNOWS what’s going to happen. All we can do is make educated guesses. That being said, it would be pretty irresponsible to not think about the fallout of an economic collapse and to try to find ways that will not only mitigate those threats, but help us in our daily lives no matter what happens.
Here are just a few situations to be on the lookout for as we fall deeper into our own economic collapse.
- Corporate government subsidies run out – Everyone seems so concerned with .gov deciding to cut off food stamps, welfare and preparing for the eventual civil war in the streets this is going to cause. Although it is something that’s much more possible once the collapse REALLY gets bad, one of the first major things you’re going to see is government no longer subsidizing corporations and industries. .Gov isn’t stupid, they know what would happen if the TANF program went belly up, they’re going to try to avoid that at all cost, which is why they’ll take money from the industries that have it first before risking national rioting in the streets over food stamps from people with nothing left to lose.
- The US dollar is no longer used for international trade – Many people don’t know this but the dollar is the currency that nearly all global trade is conducted through. When more countries start mistrusting the dollar, things are going to get bad. Once you start seeing more and more countries trading between each other, and cutting the dollar out of the trade, brace yourself… the amount of time we can kick the inflation can is directly related to the how strong the dollar is in international trade. When the dollar gets pushed aside, inflation becomes hyperinflation very quickly.
- Individual government benefits can no longer be paid – It’s literally shocking how much money our country gives to its citizens as “benefits”. When the economic collapse gets to the point where these “benefits” can no longer be paid, that’s when I would consider the ”S” to have truly hit the fan. A huge percentage of the country relies on government assistance for food, housing, childcare utilities and income. There’s no telling what might happen when this happens, it will most likely be determined geographically. Either way, the idea of .gov telling millions of people that they will no longer be giving them money to eat literally terrifies me.
Well that’s just great… so basically we’re all screwed?
The idea of a total economic collapse is pretty daunting… and if you allow it to, it can cripple you with fear. However, when you take the emotional side out of the equation and start thinking “OK…this is scary stuff….but what can we ACTUALLY DO ABOUT IT?” you’ll start to realize that by continuing your path to self-sufficiency and preparedness, you’re already doing something about it.
Self-sufficiency is about dealing with life without a safety net. Our ancestors didn’t carve a path across this country with a government safety net. They had their rifle, their family, and whatever they could fit in a wagon or on their back. They carved the greatest country this planet has ever seen out of pure, untamed wilderness with nothing more than their skills and wits…not corporate bailouts or food stamps.
Once you start to realize what preparedness really means, how to break away from the safety net of convenience and “progress” of the last 100 years, you’ll start to see that these Hollywood disasters, whether it’s an economic collapse, pandemic, EMP or any other major scenario are simply reasons to keep doing what we’re doing. You don’t prepare for these disasters; that’s “reactive” thinking. As preppers, we want to be “proactive” thinkers. Being self-sufficient means that you take care of your own food supplies, you invest in skills and knowledge and being without convenience. To put is simply….you start taking care of YOURSELF.
Start learning the skills this nation has lost. Harvest your own foods; learn how to defend yourself, learn about alternative energy and how to untangle yourself from the power grid. Learn how to teach your children these skills and all the other skills we take for granted and have had others take over for us unnecessarily. Whether it’s an economic collapse or any other serious disaster, those skills might very well be the difference between being a victim and thriving during and after a major disaster.
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