What if the financial system collapsed?

[basilio]

Just a thought experiment. Let's see where it goes.

Imagine that sometime in the near future a run starts on the American dollar. There is simply too much debt and international creditors decide they can't accept the result of a default.

In a matter of days the dollar has collapsed. The loss of confidence starts a run on banks and most if not all of these have to close. Stock markets crash. In fact because the banks have crashed there are no facilities to actually trade on the markets.

With the closure of the banks business cannot pay wages or undertake transactions. With the collapse of banks it becomes almost impossible for governments to make pension payments or pay wages. And again with the bank collapse most savings are either locked up or have disappeared.

What do we do ? How do we survive ? What should we have done before the crash ? Is there a plan in place for 2010 and beyond in case the worst happens ?


_____________________________________________________
Bit of background. In Feb/March 1933 in the depths of the Depression the entire American banking system was closed for 10 days as runs started on the banks and the whole system had to shut down and be reorganised.

(http://www.americanrhetoric.com/speeches/fdrfirstfiresidechat.html)

http://www.chrismartenson.com/crashcourse/chapter-9-brief-history-us-money Useful to understand what has happened with US monetary policy - and where it is going.

 

[Garpal Gumnut]

Re: What if the finanacial system collapsed ?

There is no need to be concerned if you are in the US.

A plan is in place called Rex 84.

I believe that Australia and the Commonwealth countries who are not cricket cheats are inside the tent and will be supported via Rex 84.

gg

 

[-Bevo-]

Re: What if the finanacial system collapsed ?

Think it was Faber who said in a interview under similar situation that you talk about is have the following items- gold, farm land away from the big citys, a shotgun lol.

 

[wayneL]

Re: What if the finanacial system collapsed ?

From wikipedia

Rex 84, short for Readiness Exercise 1984, is a contingency plan developed by the United States federal government to suspend the United States Constitution, declare martial law, place military commanders in charge of state and local governments, and detain large numbers of American citizens who were deemed to be "national security threats", in the event that the President declared a "State of Domestic National Emergency".

The Fabians wet dream.

Here in NZ there is a well developed "civil defence" regime, in place for natural disasters such as earthquakes. I'm guessing that framework could be used in the event of a financial meltdown.

It would still be a helluva schmozzle.

 

[Smurf1976]

In a matter of days the dollar has collapsed.

Given the widespread use of automated trading systems, I'd expect the outright collapse phase to be over much more quickly than a few days. I'm thinking an hour at most - if we did end up with an actual collapse then by the time you hear about it on the news, it will be a done deal.

A bit like any disaster, if you're going to take any form of action to prepare then you need to do it before the disaster arrives. By the time you can smell smoke, it's way too late to be trying to buy pumps and hoses or take out insurance.

There is bottled water in the shops today. If the water supply fails, then only the lucky first few will be able to get bottled water. The shelves will be bare by the time most people make it to the store.

If the power fails in a big way, the stores would be shut anyway. But if they were open, supplies of batteries and candles would be long gone by the time 99% of people actually get to the store.

Same with any other system failure or emergency. You probably won't have time to make preparations once the disaster is actually unfolding, and even if you did have time then someone else will likely have purchased all available materials before you.

So if you're going to store gold somewhere etc then you need to do it before there's proof of a need to do so. Same with any other emergency preparation. It's too late by the time there is actual evidence of need.

 

[basilio]

So the thought questions still stand.

1) If these situations are quite conceivable what preparatory actions should governments and or businesses be doing to deal with such a scenario ?

2) What actions should we be taking to put ourselves in a survival position in these events?

3) Should we be discussing these possibilities on a community wide level with a view to

a) Attempting to preempt the possibility
b) Helping people make thoughtful , no regret plans to deal with the scenario.

After all we now have Fire plans, cyclone plans and flood plans drummed into us by relevant authorities. Why not this possibility ?

 

[jonojpsg]

So the thought questions still stand.

1) If these situations are quite conceivable what preparatory actions should governments and or businesses be doing to deal with such a scenario ?

2) What actions should we be taking to put ourselves in a survival position in these events?

3) Should we be discussing these possibilities on a community wide level with a view to

a) Attempting to preempt the possibility
b) Helping people make thoughtful , no regret plans to deal with the scenario.

After all we now have Fire plans, cyclone plans and flood plans drummed into us by relevant authorities. Why not this possibility ?

All very interesting bas! If the financial system collapsed completely, the first thing that would rule is cash. I know that sounds weird, but if the US dollar collapsed that would still play out in peoples minds as not the $A (maybe?) so businesses etc would still accept cash for purchases. Also it would take time (days/weeks?) before people actually realised what the ramifications of the collapse meant, eg the end of fiat currency? and the overwhelming pschological weight of habit in taking money for a purchase would take time to lift.

How that pans out for government/business who don't transact in cash, who knows? Assuming computer systems still run then theoretically transactions can still be made although if banks are gone then...what is life like without banks????

Personally I am marginally self sufficient, eg have a fruit/vegie garden, chooks, solar and live near good fishing spots. Water would be the biggie if town water supplies are cut as I don't have storage Assuming petrol supplies are interrupted as well, that could be a killer as we are a fair way from fresh water supplies, although could ride my bike to the mountain each day and cary back 10L pretty easily

Actually saying all that makes me feel just a little better Hope everyone else is preparing

 

[Garpal Gumnut]

All very interesting bas! If the financial system collapsed completely, the first thing that would rule is cash. I know that sounds weird, but if the US dollar collapsed that would still play out in peoples minds as not the $A (maybe?) so businesses etc would still accept cash for purchases. Also it would take time (days/weeks?) before people actually realised what the ramifications of the collapse meant, eg the end of fiat currency? and the overwhelming pschological weight of habit in taking money for a purchase would take time to lift.

How that pans out for government/business who don't transact in cash, who knows? Assuming computer systems still run then theoretically transactions can still be made although if banks are gone then...what is life like without banks????

Personally I am marginally self sufficient, eg have a fruit/vegie garden, chooks, solar and live near good fishing spots. Water would be the biggie if town water supplies are cut as I don't have storage Assuming petrol supplies are interrupted as well, that could be a killer as we are a fair way from fresh water supplies, although could ride my bike to the mountain each day and cary back 10L pretty easily

Actually saying all that makes me feel just a little better Hope everyone else is preparing

Good points.

Mine are:

Safety is paramount, aggregation with like minded people,

Weapons, for protection.

Access to water.

Access to food.

Communication with like minded people.

Formation of local networks, tribes, collectives, call em what you want.

Transport.

Choosing leadership of network.

Association with indigenous relatives or friends.

That's what I'd be looking at if the **** hit the fan.

gg

 

[nukz]

If the entire financial system collapsed paper money would be pointless i think, the only thing of value would be physical assets(eg. gold/silver ect) But if that happened i would be burying that gold in my back yard as gold in Australia can be confiscated by the government under our laws.

The next great war will be between the U.S and China i believe it may happen within the next 30 years even.

Australia has the following:

4 Large banks leveraged crazyily on our housing mega bubble

A currency that is not worth anything like what it should be(much less).

A entire economy based purely on mining almost.


America slowdown = China slowdown = Australia slowdown. Unless of course Chinese people start consuming there own goods.

 

[moXJO]

It's already happened before in other countries, so you can just get an idea of how things might unfold.


Lessons from Argentina's economic collapse
http://www.silverbearcafe.com/private/10.08/tshtf1.html

 

[basilio]

It's already happened before in other countries, so you can just get an idea of how things might unfold.


Lessons from Argentina's economic collapse
http://www.silverbearcafe.com/private/10.08/tshtf1.html

That is very sobering picture. Just plain ugly as people scramble to survive.

 

[basilio]

Followed up on the previous post and came up with some worthwhile info.

Turns out the writer is a family man from Argentina who has survived the collapse of the Argentine economy in 2001 (?), has written a book on his experiences and has an ongoing blog site .

I've pasted a review of one of his books on survival from Amazon

116 of 119 people found the following review helpful:
5.0 out of 5 stars Honest and brutal, if you don't think survival is brutal, you really need this book!, July 5, 2009
By REP - See all my reviews
This review is from: The Modern Survival Manual: Surviving the Economic Collapse (Paperback)
I have a background from one of the most famous military elite units in the world; I'm trained in many "black arts", have been to wars and revolutions and I'm getting paid mega bucks to look after people. I don't say this to brag, just to state that I'm not a daydreaming wannabe. I got a lot out of the book, can attest to that the tips actually are sound and that I learned something from the book, so will you.

The author bases his writing on his experience living with his family in Argentina the last few years. The book tells regular people how to live trough extraordinary times. There is much non nonsense information about, kit, tactics, food and how to cope as a family during a crisis or a breakdown of society.

If you have seen the news the last couple of years you realize it might soon affect YOU and your family. Connately to what many books and authors tell you: even after a major economic and political crises life goes on, it's just "different"...

Actually I read this book when it first arrived a few moths ago. Having dumped into "FerFal"'s homepage while researching Argentina as a country to relocate to. I found his homepage giving extremely good and sound advices, both about Argentina but also security in general.

A lot of books are written about survival. I first got interested in the subject in the late 70s, and the books from then are still around, some good, some dated. With the current state of the world we see an avalanche of new books joining the classics, and some old once that never was classics in the first place gaining new fame.

Most "survival" books are unrealistic and at times naive. For instance on fighting and weapons, either they have a fantasy aspect to what is required or they overlook it completely. There will be violence in these scenarios and the bad guys ALWAYS have weapons; this book actually takes this into consideration and has the most matter-of-fact outlook on it I have seen.

I think one of the highlights of the book is the parts about upgrading yourself. Survival is, funny enough about being fit. Being prepared sure is a good thing, but having all the food and guns in the world is of no good if you are not fit and willing to fight for it; you will not survive, period! I know a lot of people that are not prepped for anything more than the next bar fight, but they sure as hell would take all your stock when TSHTF if you are not fit and armed.

The examples the author uses about the misconceptions often held as dogma on survival is alone worth the price of the book. A lot of thing written other place might get you killed in real life

So his language is not correct, neither is mine, who cares? You are not getting a book about grammar but about staying alive in the real world gone mad, THAT'S where this book delivers.

Is it perfect? No, I don't mind the brutal langue or imperfect English, but I find some of the topics could have been edited better from the homepage to the book, a few photos added and so on. But all in all it is by far the best book on the subject I have read.

Get this book and start to prepare. The worst that can happen from being prepared is that you get peace of mind and a better quality of life. The best thing that can happen is that you actually might survive to enjoy it.

I predict this book will be a classic

http://www.amazon.com/dp/9870563457...iveASIN=9870563457&adid=0YS947GSKAMG2T1ARMC6&

 

[sinner]

http://ferfal.blogspot.com/

You can read that guys blog (who wrote the above linked book), it's pretty good.

 

[Smurf1976]

Just a thought experiment. Let's see where it goes.

Imagine that sometime in the near future a run starts on the American dollar. There is simply too much debt and international creditors decide they can't accept the result of a default.

Given the extent of debt and de-industrialisation over the past 40 years, I think it really comes down to a simple question.

Will the collapse be gradual and orderly or will it be sudden and chaotic?

That it will happen is almost certain IMO. The present situation is simply not sustainable.