US Economy Collapse,
What Would Happen and How to Prepare
If an economic collapse occurs,
it would happen quickly.
No one would predict it.
The surprise factor is,
itself,
one of the causes of a collapse.
The signs of imminent failure are difficult for most people to see.
Most recently,
the U.S. economy almost collapsed on September 17, 2008.
That’s the day the Reserve Primary Fund broke the buck.
Panicked investors withdrew a record $140 billion from money market accounts
where businesses keep cash to fund day-to-day operations.
If withdrawals had gone on for even a week,
the entire economy would have halted.
That meant trucks would stop rolling,
grocery stores would run out of food,
and businesses would shut down.
That’s how close the U.S. economy came to a real collapse,
and how vulnerable it is to another one.
Fortunately,
the Federal Reserve Chairman and U.S. Treasury
Secretary noticed the signal and knew what it meant.
Ben Bernanke was a Great Depression scholar.
Hank Paulson was a Wall Street veteran.
Their bailout plan supplied enough cash to prevent a total collapse.
The 2008 financial crisis did plenty of damage,
but it could have been much worse.
If you want to understand what life is like during a collapse,
talk to people who lived through the Great Depression.
The stock market collapsed on Black Thursday.
By the following Tuesday,
it was down 25 percent.
Many investors lost their life savings that weekend.
The Dow didn’t recover until 1954.
What Would Happen in an Economic Collapse
If the economy collapses,
you would lose access to credit.
Banks would close.
Demand would outstrip supply of food,
gas,
and other necessities.
If the collapse affected local governments and utilities,
then water and electricity would no longer be available.
As people panic,
they would revert to survival and self-defense modes.
The economy would return to a traditional economy,
where those who grow food barter for other services.
A U.S. economic collapse would create global panic.
Demand for the dollar and U.S. Treasurys would plummet.
Interest rates would skyrocket.
Investors would rush to other currencies,
such as the yuan,
euro,
or even gold.
It would create not just inflation,
but hyperinflation,
as the dollar became dirt cheap.
Will the U.S Economy Collapse?
The U.S. economy’s size makes it resilient.
It is highly unlikely that even these events could create a collapse.
When necessary,
the government can act quickly to avoid a total collapse.
The Federal Reserve can avoid a financial
collapse with a few phone calls.
For example,
it can use its contractionary monetary tools to tame hyperinflation.
The Federal Deposit Insurance Corporation insures banks.
There is little chance of a banking
collapse similar to that in the 1930s.
The president can release Strategic
Oil Reserves to offset an oil embargo.
Homeland Security can address a cyber threat.
The U.S. military can respond to a terrorist attack,
transportation stoppage,
or rioting.
In other words,
most federal government programs are designed
to prevent just such an economic collapse.
But these strategies won’t protect against the widespread and
pervasive crises caused by climate change.
Rising sea levels,
depletion of fish stocks,
and extreme weather are just some of the effects.
If nothing is done,
he World Bank warned that temperatures
will increase by 4 C if nothing is done.
That’s when all the ice sheets in Greenland and
West Antarctica would melt.
Sea levels would rise 33 feet,
flooding every major coastal city.
Once sea levels rise 10 feet,
it would flood 12.3 million people.
Seas would continue to rise by one foot per decade.
That’s too fast to allow humans to build anew.
The damage would exceed $600 trillion,
double the total wealth of everyone on the planet.
That would shrink the global economy by 20% from what it is today.
That’s worse than the worst year of the Great Depression.
How to Prepare for an Economic Collapse
Protecting yourself from a collapse is difficult.
A catastrophic failure can happen without warning.
In most crises,
people survive through their knowledge,
wits,
and by helping each other.
Here are six steps you can take now to prepare for a potential collapse.
Make sure you understand basic economic concepts
so you can see warning signs of instability.
One of the first signs is a stock market crash.
If it’s bad enough,
a market crash can cause a recession.
Keep as many assets as liquid as possible so
that you can withdraw them within a week.
As for cash,
it may not be useful in a total economic
collapse because its value might be decimated.
Stockpiles of gold bullion may not help because they
would be difficult to transport if you needed to move quickly.
In a severe collapse,
they may not be accepted as currency.
But it would be good to have a stash of $20 bills and gold coins,
just in case.
During many crisis situations,
these are commonly accepted as bribes.
In addition to your regular job,
make sure you have skills that you’d need in a traditional economy,
such as farming,
cooking,
or repair.
Make sure your passport is current in case you’d
need to leave the country on short notice.
Research target countries now and travel there on vacation,
so you are familiar with your destination.
Keep yourself in top physical shape.
Know basic survival skills,
such as self-defense,
foraging,
hunting,
and starting a fire.
Practice now with camping trips.
If you can,
move near a wildlife preserve in a temperate climate.
That way,
if a collapse occurs,
you can live off the land in a relatively unpopulated area.