What should we do after fiat currency fails?

[bubbaearl]

if you do your farming at krogers your in trouble .

[Denny]

What we have to worry about are all those Government-funded Wal-Mart drones and anyone that refuses to become self-sufficient.

You'll be surprised at how the "average joe" will completely freak and fold once they are in an environment without a structured government (because that will be the first to go). Think of a guy that does everything right. He has a house (mortgage), two cars (and loans for them), wife and a couple of kids. OK, say he has never done anything but customer service or data entry. It doesn't make him rich, but gets the bills paid and a few bucks extra to go to a ball game or vacation once a year. He lives paycheck to paycheck (again, nothing wrong with that), but only makes money that gets spent almost immediately. Sure, his job gives him a 401K option that he takes advantage of, but as soon as there is a collapse, what is that 401K worth? His company folds due to no one showing up to work since payment in US Dollar is a waste of time. Funds and banks are frozen (Cue Patriot Act emergency measures) to keep people from making runs on their banks. The 401K will be frozen too, but the money in the bank and 401K are worthless anyway. Now what? He jumps in his car to get his ass to Wal-Mart to pick up as much food, water and supplies as he can, only to find that his car is on "E" and by the time he gets to Wal-Mart, the shelves are empty (mostly from looters). The pantry and fridge have about 3-4 days worth of food. The electricity and water shut off because the people that work those utilities are too busy trying to make ends meet for their families.

What does he have now? What the fuck is he going to do?!?!

A couple days go by and real panic starts setting in. The dollar is now recognized world-wide as completely worthless due to our unsustainability. Most families are bugging in and sticking together, trying to figure out options for electricity, gas, food and water. Some have already resorted to taking up arms against the obviously easy targets just to grab a little more of whatever they can. Just about every store/restaraunt has either been completely stripped of everything or now controlled by local gangs. No police and fire response to emergencies since they are all too busy taking care of their own families. No dispatchers and call-takers there either. It doesn't matter, no phone service anyway.

America just threw itself back 200 years within days of a devalued dollar. Doctors working with what they can for bartering items, farmers hiring guns/hands in return for food, make-shift lynching mobs created for vigilanty justice... the list goes on.

Ya, this sounds completely nuts and like a scare tactic, but can anyone else come up with a better idea? I'm all ears.

If I'm wrong and prepare for all of this, then I just end up with a bunch of cool shit that we can use anyway. If I'm right, then I just saved my family and did my best to set us up for success in a worst-case-scenario.

[Denny]

They are lying for political & profit reasons. Our credit rating will improve if we don't raise the debt limit. The law mandates that we pay the interest on the debt before we pay anything else and we have plenty (2 trillion dollars + per year) coming in to do that.

When the media says that the US will default on it's obligations what they mean is that we will no longer fund the public dole. They believe that the purpose of the government is to redistribute wealth and it not being able to do so threatens their power base and shakes up their world view.

What happens when your precious IRS can't bring in that $2T? Or when that $2T is worth only a fraction of what it once was (like it is already)?

If we don't have buyers for these bonds and treasureys (spelled it right), then how is the Fed going to print more without devaluing the dollar?

Raise it, it won't do anything but slow down the inevitable, but just a little.

[Denny]

if you do your farming at krogers your in trouble .

Roger that!!!

People that have never learned anything about being self-sufficient are going to be hit the worst and quickest. It'll turn honest, law-abiding citizens into mad mobs within days.

Even knowing how to make things that people will want (building houses, stoves, etc) will at least get you some bartering leverage.

[hotrod66stang]

I came across this video and was wondering if there's any real truth to it, as it basically says that the Patriot Act helped the demise of our economy and the dollar, along with everything currently being discussed. I'd really appreciate if someone way more savvy than I would watch a few minutes of it. The main meat and potatoes of it is 9:10-15:00. The previous 9:00 are about the economics of terrorism and how most people with terrorist ties are just "fund-raisers," if you will.

Ok, well after much trial and error, I had to just go to youtube. This video is from www.TED.com.

For the people who don't have time to watch the 6:00 of video:
1.) The U.S. does a Trillion dollars of money laundering in a year

2.) The U.S. is the only country in the world that is allowed to borrow against the TOTAL number of currency in circulation THROUGHOUT THE WORLD. Every other country must borrow against what is in circulation INSIDE THEIR BORDERS.

3.) The Patriot Act closes banks' access to offshore accounts dealing with the dollar (or something to that effect).

4.) The Patriot Act requires a record of ALL transactions made using the dollar all throughout the world. This scares off European banks and investors, along with money launderers.

5.) Europeans drop the dollar because of our weak economy, and the intrusion of their "financial privacy."

6.) Europe becomes the new financial center for money laundering.

I'm sure I missed some stuff, but that's pretty much the gist. Did the Patriot Act REALLY scare that many people off from the dollar?

[Denny]

Damn. I was just about to go to bed and you give me a homework assignment!


I accept. LOL BRB

[Denny]

1.) The U.S. does a Trillion dollars of money laundering in a year
I can believe that, but it would be hard to put a solid number on it. I consider a lot of money spent by the US government soley based off of special interest and not what's best for the country a form of laundering because it is just going back into the politicians' pockets and their buddies' pockets. Great examples would be out military industrial complex, environmental initiatives, war on drugs.

2.) The U.S. is the only country in the world that is allowed to borrow against the TOTAL number of currency in circulation THROUGHOUT THE WORLD. Every other country must borrow against what is in circulation INSIDE THEIR BORDERS.
Eh... I guess since we're the world's reserve, and control the printing of the dollar, yes. Each dollar is a notice of debt. We have to borrow agaist it when we print the crap out of it since it is not backed by anything. This is why China and Japan are holding so much of our debt. If we just printed it without any "investor" backing it, the value of the dollar would drop faster than it is now. As a wolrd reserve, the world is the currency's area of operation, so it only makes sense to borrow against the amount circulating in the area of operation. It is really nothing shady, but it allows the dollar to hold more value in other parts of the world.

3.) The Patriot Act closes banks' access to offshore accounts dealing with the dollar (or something to that effect).
Never heard about anything like that. I don't see the Patriot Act holding any weight outside the US... especially a private foreign sector.

4.) The Patriot Act requires a record of ALL transactions made using the dollar all throughout the world. This scares off European banks and investors, along with money launderers.
Not quite. All global transactions that can be linked to a US account or the account of a US citizen.

5.) Europeans drop the dollar because of our weak economy, and the intrusion of their "financial privacy."
Because of our weak economy and our lack of correctly dealing with our economic issues. The dollar index will never go to 100 again, let alone have any decent climb from here on out. The dollar's sole source of strength is because it is the world reserve currency. When other countries enter agreements with one another to conduct international trades in their own respective currencies, the dollar will be done. It is actually starting to happen. Financial privacy is not the issue.

6.) Europe becomes the new financial center for money laundering.
Every currency is used for laundering to some extent, but you can look for the next big one to come from a global currency that takes the dollar's place. I doubt if it will be based from another nation's currency, in order not to have this biased abuse like you see with today's dollar. Look for something from a "nation-neutral" entity, like the IMF or World Bank (even though it is a sham since they are being driven by the same people that drive our FED). Also, look for it to be almost completely electronic, which makes laundering easier. You wouldn't believe the ratio in today's currency from electronic to paper. It's even more ridiculous than paper to precious metals.

Don't take my word for any of this, this is just what I have concluded from what I have researched... or at least the best talking out of my ass that I can do.

[hotrod66stang]

No, that's awesome. Thanks.

I'm sure I paraphrased some of it that wasn't correct, but it was a little hard to understand her Italian accent, and I'm a newb to this forum. Just trying to learn a little bit, stay up-to-date, and learn from other people's mistakes.

[Denny]

No, that's awesome. Thanks.

I'm sure I paraphrased some of it that wasn't correct, but it was a little hard to understand her Italian accent, and I'm a newb to this forum. Just trying to learn a little bit, stay up-to-date, and learn from other people's mistakes.

I hearya, bro. I had to go back a few times to some of her points. Usually, I put up with chicks that have crappy accents, but their rack makes up for it. Not the case here.

[YALE]

I'd still like to talk about what you guys think will happen to the dominant system of economics in the long term future, after this system fails or fades. That's kind of been weighing on me. Sort of a, "what would work better than this?"

[Denny]

I'd still like to talk about what you guys think will happen to the dominant system of economics in the long term future, after this system fails or fades. That's kind of been weighing on me. Sort of a, "what would work better than this?"

I think most commerce on our level, will be very localized and more barter-specific as I posted above, but once the dust settles, there will be more meetings similar to the G20 summit and Bretton Woods to come up with a new global currency (most likely gold/silver backed). Now this currency would be used for international trade, but each sovereign nation would have to come up with their own currency that is validated through this neutral party to rate its value.

So basically, each country will have its own currency for intranational trade, but if they want to be a part of the global scene, then they would have to go through an audit by the bank that handles the new global reserve currency and rate the currency against it. OR goods trades vs. goods from other countries.

This is honestly the only fair way I can see any of this progressing. It sounds like a lot, but for the sake of maintaining the global markets, it can happen very quickly if they want. I'm sure there are already many contingency plans made. Most are probably still heavily favoring the elite, though.

[YALE]

I think most commerce on our level, will be very localized and more barter-specific as I posted above, but once the dust settles, there will be more meetings similar to the G20 summit and Bretton Woods to come up with a new global currency (most likely gold/silver backed). Now this currency would be used for international trade, but each sovereign nation would have to come up with their own currency that is validated through this neutral party to rate its value.

So basically, each country will have its own currency for intranational trade, but if they want to be a part of the global scene, then they would have to go through an audit by the bank that handles the new global reserve currency and rate the currency against it. OR goods trades vs. goods from other countries.

This is honestly the only fair way I can see any of this progressing. It sounds like a lot, but for the sake of maintaining the global markets, it can happen very quickly if they want. I'm sure there are already many contingency plans made. Most are probably still heavily favoring the elite, though.

That sounds pretty honest, actually. As long as the average person could still trade on the commodities markets, I don't see that model getting too top-heavy on its own. I'm probably wrong, though.

[Denny]

That sounds pretty honest, actually. As long as the average person could still trade on the commodities markets, I don't see that model getting too top-heavy on its own. I'm probably wrong, though.

If regulators can keep the derivates in somewhat of a check, then everything SHOULD be hunkie dorie. This stupid over-leveraging shit going on is manipulating prices per the biggest buyers' liking.

[jw33]

Spacebucks

[Forever_frost]

Regarding the OP, if one currency collapses, they'll create another out of thin air, like they did with the Euro.