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Page added on March 10, 2014
It Will Be Shocking for the Average American: “Your Cost of Living Will Quadruple”
It’s no secret that the U.S. government is in serious fiscal trouble. So much so that our Treasury Secretary recently noted that should the debt ceiling fail to be increased, the fall-out would be “catastrophic” and last for generations.
Given that sobering report, consider that everything in America, from food to fuel, is subsidized in one way or another. Those subsidies are being paid with ever-increasing debt. It is inevitable that at some point the world’s reserve currency, the US dollar, will be wiped out. The trigger for such an event is irrelevant. What is relevant, is how average Americans will be affected when that day comes.
In recent months working Americans have seen their health care costs triple. But this is just the beginning. When America’s debt problems come to a head the subsidies will be removed, and that will lead to cost of living increases that will leave those who never saw it coming in a state of confusion and bewilderment with no way out.
Marin Katusa of Casey Research, who has met with business and political leaders in over one hundred countries and is one of the most successful contrarian investment analysts out there, has some thoughts on the matter.
It will be shocking for the average American… if the petro dollar dies and the U.S. loses its reserve currency status in the world there will be no middle class.
The middle class and the low class… wow… what a game changer. Your cost of living will quadruple.
In the following must-watch interview with the Sound Money Campaign, Marin outlines the reasons for why our cost of living is going through the roof, the effects of geo-politics on our future, and ways to insulate yourself from what’s coming.
(Watch at Youtube)
Imagine this… take a country like Croatia… the average worker with a university degree makes about 1200 Euros a month. He spends a third of that, after tax, on keeping his house warm and filling up his gas tank to get to work and get back from work.
In North America, we don’t make $1200 a month, and we don’t spend a third of our paycheck on keeping our house warm and driving to work… so, the cost of living… food will triple… heat, electricity, everything subsidized by the government will triple overnight… and it will only get worse even if you can get the services.
For the average citizen, they should be thinking, ‘I should store some gold here and there as insurance for all of this.’
Now, I don’t know when it will happen. But it will happen, because it’s happened to all currencies.
I don’t think the people of Rome thought that Rome would ever fall as an empire… but it did.
So, you have to be prepared and protect your family. That’s why you want leverage to things that have major upside when the dollar does collapse. And the best insurance for that is gold.
As Marin notes, the assets you hold should be such that they maintain or increase their value as the Petrol dollar crashes and America’s debt bubble bursts.
For those with retirement investments like 401k’s, IRA’s or cash, Marin suggests you look to healthy gold companies as insurance. Back in the Great Depression of the 1930′s, as stocks crashed and then stagnated, those with investments in gold mining companies were able to not only preserve wealth, but grow it.
Those who prefer to keep their assets in physical holdings should look to gold and silver bullion, as well as those items that will become difficult to obtain when prices sky rocket. These core physical assets might mean long-term food stores, land with productive capacity, and personal energy production facilities that may include wind, solar or hydro.
If there is one trend that has taken hold over the last decade it’s continued price rises for the basic necessities of modern life. Given that we are now in more debt as a nation and individuals than ever before, it’s not hard to see where this is headed.
If you need a mainstream forecast to confirm what’s going to happen, then we point you to the words of President Barack Obama, who several years ago stated unequivocally that, “electricity rates will necessarily skyrocket.” He should know, because his policies are a significant contribution to what’s going to happen in the very near future.
Look out below.
29 Comments on "It Will Be Shocking for the Average American: “Your Cost of Living Will Quadruple”"
PapaSmurf on Mon, 10th Mar 2014 4:47 pm
Statements like this sort of destroy the entire credibility of the article…
“In recent months working Americans have seen their health care costs triple. ”
Now I think Obamacare is pretty bad, so I am not apologizing for it or anything. But health care costs have not tripled. Using that type of fake example, as a data point to support the rest of the premise, causes a loss of overall credibility.
And I write this criticism as someone who is invested in gold mining stocks, so overall I agree with the investment thesis. But the article itself is worthless.
Northwest Resident on Mon, 10th Mar 2014 5:05 pm
Every single article on SHTF dot com has a sales pitch for gold investment — and a conveniently located image to click on in order to buy or invest in that gold, of which, they get a little cut for every purchase that originates from their site.
This article also includes a standard SHTF dot com feature that appears in nearly all their articles — blaming Obama personally for economic problems. The article doesn’t try to qualify their statement that Obama’s “policies are a significant contribution” to rising electricity rates — they just state it as if it is the absolute truth, and their moronic audience sucks it up without question.
I get the feeling that not a lot of SHTF visitors are gainfully employed — except perhaps as self-employed job-creating Amway distributors. Otherwise they would know for a fact that a third regular feature of SHTF dot com — falsely claiming huge increases in health care costs — is a big fat lie. I’m employed, on group insurance, and my rates are only slightly higher than last year. My son’s individual policy is about the same as last year, but with much better coverage because I got it through the exchange. My wife’s individual policy is also less expensive and has better coverage through the exchange than she was able to find with private insurance companies.
SHTF dot com — all B.S., all fear, all conspiracy, all blame-Obama, all the time.
rollin on Mon, 10th Mar 2014 5:08 pm
Electricity rates will skyrocket? So invest in public utilities.
Cost of food will triple? Invest in food distribution companies.
Cost of living will quadruple? Invest in rental units.
SHFT.com is full of S.
Davy, Hermann, MO on Mon, 10th Mar 2014 6:00 pm
NR, agreed, another sales pitch. Papasmurf yea, BS, health care cost are steadily increasing but “TRIPPLE”.
I would mention I don’t think cost will quadruple just because, like oil, there is an economic goldilocks range that when exceeded, either way, the system shuts down. It will reboot but the question is how far down the ladder will it go? How much permanent damage will be done? My feelings are we have a Ponzi scheme debt bubble in the financial system ready to blow. When it does it will take the rest of the economy down. How far is the million dollar question. Either way deflation, hyperinflation, and or both our real spending power will decrease. This will be a global phenomenon because the global implications of trade disruption will cause a global loss of wealth. No region will be spared. Some regions will quickly become failed states because of the implications of the food variable. Egypt is a very good example.
andya on Mon, 10th Mar 2014 7:03 pm
Gold is probably the last thing you need. The ability to feed yourself, housing and clothing are a bit more critical. Gold is only worthwhile if you are planning on spending it, in which case it behaves like any other finite resource. Stored food is the same. Unless you have the ability to replace your stored food and Gold it’s only a temporary solution to a permanent problem. Pretty dumb if you ask me. Maybe you could keep some silver in your water tank to keep it fresh, like the Romans did.
Arthur on Mon, 10th Mar 2014 7:26 pm
Greece, with comparable debt levels as the US, lost ca. 33% wealth.
http://uk.reuters.com/article/2013/04/19/uk-greece-incomes-idUKBRE93I0HL20130419
That is a more likely figure than 75%.
andya on Mon, 10th Mar 2014 8:09 pm
Greece is far from fixed. A good starting point though. These things take time to unfold. The Roman Empire took 200-400 years to collapse depending on definitions. It was not a sudden event. However most of their wealth was in tangible goods with purpose and value. People with money invested in thin air shit could lose it a lot faster.
A closer to home example would be Detroit. Interesting fact that Ukraine is getting a bailout from Washington, Detroit not so much. I wunder why? Greece also had a US bailout via the IMF conduit.
I agree with the very general point of the article that living standards will decline. The mere fact of having the world reserve currency gives a huge subsidy to the issuer of said currency. The issuer exchanges thin air for real goods and services. Which is why the US can consume about 20% of the worlds resources. Well it’s not the only reason, but a contributing factor.
Northwest Resident on Mon, 10th Mar 2014 9:17 pm
“The Roman Empire took 200-400 years to collapse depending on definitions. It was not a sudden event. However most of their wealth was in tangible goods with purpose and value.”
andya, I want to take this opportunity to agree with you.
Quite a few people like to point to the period of time it took for the Roman Empire to collapse and hold that up as analogy for what we can expect for our own civilization. But there are significant differences between the Romans and us. Here are a few:
1) The Roman empire was build on the blood, sweat and toil of humans and the animals that humans bred. Before, during and after collapse, there was always the humans and the animals. Not so with us. Our civilization is built on oil — cheap oil mostly, and LOTS of it. When that oil goes, so does our civilization. And we won’t even have the advantage of strong, reasonably fit humans or animals bred for farm or other work. That’s why our collapse will be rapid, as compared to Roman collapse.
2) Like andya points out, Roman wealth was in gold, silver, goods and services of value. Our wealth is in paper, digital bytes on computers, and in infrastructure and machines which will crumble into piles of ruble without intensive servicing that can only be provided with the benefit of oil/fuel.
3) The Romans had their trades. They knew how to raise crops. Their land was pristine compared to today. They knew how to shoe horses, how to build things the old fashioned way, how to do so many things that our distant forefathers had to know in order to survive, but in our cushy world supported by energy we have forgotten all those trades. As a result, without oil and the machines that run on oil, we’ll be cast into a toxic rusting world without even the basic skills that our forefathers needed to survive. We’ll need to relearn fast, or perish, that’s my guess.
Roman decline and our upcoming decline — not similar, not at all.
DC on Mon, 10th Mar 2014 9:40 pm
That is indeed a good question andya, why an ‘loan’ for Ukraine, and not Detroit? Detroit has already been looted to the ground-its the end point of cannibal capitalism. There is hardly anything left in Detroit *worth* stealing.When the capitalist debt masters dont consider your city even worthy of sucked dry via their usual methods and move on to greener pastures-you know you’re pretty well screwed.
Ukraine, otoh, different story. Plenty to steal. Land, resources, skilled workers(but a fraction of the cost), an entire nation that can still be squeezed
dry under the usual terms of debt servitude for London, NY and Tel Aviv. Greece, well, the uS wanted the EU weakened and distracted, It wouldn’t do to have Greece come completely apart, that would have be going too far, even for 1%. No Greece was an experiment for the uS globalists, it needed to be beat down-but not completely destroyed. Mission accomplished there, as an (in)famous amerikan warlord was fond of saying. Clearly Greece still has something left to offer the IMF\WB\BIS Cabal,that, or they just wanted to avoid a complete meltdown. A Yugoslavia-type situation, except this time, it wouldn’t be one the uS created and managed.
Detroit, has zero, zip to offer the 1%, so its just left to rot. Consider its fate(if your North American), and your own city or region. Is it ‘too big to fail’?, or will its just be left to its own devices, as Detroit is, after the elites loot whatever valuables are left and use the wealth to set up shop somewhere else?
SHTF may only be ‘correct’ in the very broadest sense of the word. There is a storm coming, but they are mosting selling gold and prepper junk like NW says. That is about their only focus. The rest is mostly hyperbole. I mean I even agree with their basic premise, N.A life *IS* in fact heavily subsidized, and when the system finally snaps back to equlibirum, it truely is going to suck, but SHTF.com definately wont be of any help to anyone before or after that occurs-so who keeps posting their articles?
kervennic on Mon, 10th Mar 2014 10:18 pm
Look at the right picture ! Fuck hell, this guy is talking about investing in athbasca mining and all those nice things.
Same kind of asshole that would have invested in german economy during war time because of their efficient humann resource management.
If you want to buy gold, go to a small shop in town and buy some old coins that have face value the world over and are not produced any longer (krugerrand, Napoleon, Sovereign, Gulden etc…)
Paper gold is worth nothing, lingots are completely impracticle. You cannot resell half a lingot.
PrestonSturges on Mon, 10th Mar 2014 10:43 pm
“Paper gold” and “paper silver” is how a lot of people were wiped out in the Depression.
Newfie on Mon, 10th Mar 2014 10:43 pm
A case of canned beans will be worth more than a brick of gold when TSHTF.
Davy, Hermann, MO on Tue, 11th Mar 2014 12:31 am
Hey DC, Detroit-Windsor area has 5.7MIL people and a thriving economy. So what with the city of Detroit it will make good farm land once the houses are cleared. It is not significant when one considers the whole area. The remaining area is well located to prosper in a deindustrialized future with the lakes, rivers, and good farm land. Sorry, DC, strike out.
You’re off your rocker saying Ukraine has much of anything to offer the US. They ranked 70th in trade DC! Or $645MIL positive US trade surplus, Woopty-doo. It may benefit the Americans to help out with their Gas resources but that is it. We don’t need their agriculture, industry, and or services. The one thing in demand is Ukrainian girls for lonely US guys.
DC, Greece dug their own grave with corruption and poor management. The EU seal its death sentence with an unmanageable economic system for a country like Greece. Get your facts in order please.
GregT on Tue, 11th Mar 2014 1:32 am
“If you want to buy gold, go to a small shop in town and buy some old coins that have face value the world over and are not produced any longer”
Or you can always buy gold coins that are still being produced today, that have face value the world over, like Maples, Eagles, Buffalos, Kruggerands, Pandas, Kangaroos, Philharmonics, Libertads, Onzas, Pesos, Lunars, etc.
Gold has always been a store of wealth after currency collapse. Will this time be different?
“A case of canned beans will be worth more than a brick of gold when TSHTF.”
Tell that to the people of Zimbabwe.
http://www.theguardian.com/world/video/2009/feb/11/zimbabwe-gold-panning-starvation-food
Makati1 on Tue, 11th Mar 2014 2:11 am
Only 4 times? I would think that Zimbabwe is a better example. Trillion Dollar bills that won’t even buy that moldy loaf of bread still on the shelf.
What happens when no country will take dollars in payment for their goods? When the payment up front is in gold or grain? When no imports are possible because the banking system has collapsed? When you cannot even get your money out of the bank because it is closed or all those digital numbers are not accessible/wiped out? At least the paper passbooks of old were visible … lol.
Nothing digital is visible without high tech access which may not be available. What you have in your hand is all that is real. Where is your wealth parked today? In your possession or in the computer system owned by someone else? Mine is in my physical possession.
A lot of unanswered questions that we may soon get to see the real answers of. I doubt that anyone is prepared for the real world to come. And it may come overnight, not in a few centuries like Rome.
PapaSmurf on Tue, 11th Mar 2014 2:41 am
There will always be currency regardless of any downturn from Peak Oil (or insert your flavor of the month collapse theory). Gold coins are certainly a likely future choice based on history.
Andya seems to think the future is a barter system of trading goods with no currency. History doesn’t tend to agree with that. Even in pre-industrial times currencies were used in the trade of goods and services. I would suspect that having a bunch of gold coins would be a valid post-collapse currency.
Most of the crazies thinking “fast crash” have given up on that and moved on. Those that still believe that some sort of crash is coming tend to lean towards “slow crash”. So if that is your flavor of collapse, then the stock market is a valid place to be for now. Investing in gold stocks or ETFs will be valid and should move up dramatically in the event of high inflation. In fact, historically gold stocks have moved more proportionally than the underlying commodity.
Hey, pick your theory and go with it. We are all likely wrong. Those predicting collapse have historically been wrong. Those predicting a wonderful utopia have also been wrong.
It is likely somewhere in the middle and we will just keep struggling along with less useful (less energy dense) forms of energy, but still getting the job done.
GregT on Tue, 11th Mar 2014 4:20 am
Papasmurf,
Welcome to the discussion.
“Andya seems to think the future is a barter system of trading goods with no currency. History doesn’t tend to agree with that.”
Hundreds of thousands of years of history support Andya’s proposal. Sorry, history does ‘tend to agree with that’.
“Most of the crazies thinking “fast crash” have given up on that and moved on.”
I read a lot of very highly regarded people in our scientific and educational communities, that would consider your view to be highly unrealistic. Complex systems do not tend to slowly unwind, they tend to accelerate until they reach tipping points, and then crash unexpectedly, rapidly, and catastrophically.
“Those that still believe that some sort of crash is coming tend to lean towards “slow crash”.”
You may believe this, but you are not representative of all ‘those that still believe that some sort of crash is coming’. You are welcome to your opinions, as we all are, but you are imposing your beliefs on everyone else. You will find varying opinions here, many of which do not prescribe to your point of view.
There are some very intelligent people on this ‘board’, that have given a great deal of thought as to where we are heading, when we are likely to get there, and why. If you believe that we are wrong, please explain why you believe so. Back up your statements with facts, or truths.
energyskeptic on Tue, 11th Mar 2014 5:15 am
Anyone who tries to exchange gold (platinum, or silver) for stuff after civilization collapses and before stability returns, will have their gold and whatever else they’re hoarding taken away from them by the local gangs, mafia, and roving militias.
In the past centuries when a currency collapsed, the new “currency” was cigarettes, alcohol, butter, flour, coffee, chocolate, gum, wood, oranges, bullets, razor blades, soap, over-the-counter & prescription drugs, razor blades, rechargeable batteries, shampoo, eggs, potatoes, energy or candy bars (at several Rainbow Festivals Snickers bars became the substitute for “money”)
GregT on Tue, 11th Mar 2014 5:30 am
energyskeptic is entirely correct. Barter has always been the ‘preferred’ method of trade during, and immediately after collapse. Once societies rebooted, gold and silver have been the currencies of choice for millennium.
That does not necessarily mean that they will be again, but there are many good reasons why gold is recognized around the globe, as a store of ‘wealth’.
GregT on Tue, 11th Mar 2014 5:33 am
Oh, and if I might add, not paper silver or gold. Good only for firestarter, asswipe, and memories of the good old days.
DC on Tue, 11th Mar 2014 6:11 am
Gold has always been the currency of last resort, come good times or bad. That is just a fact, not an opinion. Its not my preference or ‘feeling’ on the matter. History itself bears this out. The only way gold would become as worthless as many of you contend it is\will, is if the what we loosely call ‘civilization’ reverts to utter barbarism. Where even complex entities like ‘families’ cease to have any sort of meaning. Or we humanity achieves a Crystal Spires and Toga civilization that has outgrown the need for money and decorative trinkets to display wealth and status.
Anything between those two extremes-gold remains valuable-Deal with it. Or dont, what does it matter? If the collapse does come and you have lots of goats and some land-some dude with lots of gold, but no land or goats will come along and pretty soon you will have no land, and no goats-and he’ll have all the gold(and your goats and land too) See how that works?
That said, SHTF is still mostly full of SHittingTF.
GregT on Tue, 11th Mar 2014 6:58 am
Damn,
It always seems to come back to goats. I gotta get me some.
simonr on Tue, 11th Mar 2014 9:29 am
Apart from Land and Skills, I am thinking silver eagles, as you can easily verify them, and new so you are not after numanistic value.
For me they have the advantage of coming in smaller units than 100’s of euros, so can be more readily changed.
No goats, but chickens are cool
forbin on Tue, 11th Mar 2014 9:44 am
guns , goats and chickens – and a large family behind you ( sons and gun totin’ daughters )
some how when america collapses I dont think those in the Andeas will care
Forbin
simonr on Tue, 11th Mar 2014 10:11 am
Please Tell me Daisy Duke is in this collapsed future
Davy, Hermann, MO on Tue, 11th Mar 2014 12:25 pm
I like 1/10 oz gold eagles for my locality of the Missouri Ozarks. The 1/10 oz currently are like $150 bills. They are small and you can easily carry many in case you become a refugee. Small gold denominations are more useful for trade and barter if a collapse or crisis occurs. If you have 1 OZ you will be hard pressed to use them in barter or trade except for large items. There will be a few large item trade or barter but the vast majority will be smaller for example a trip to get food items. The problem with 1/10 oz is you take a hit on the price per oz. I do not value my gold by dollars for net worth purposes. It is value in itself. It is also insurance. Since I am a mild doomer/collapsnik I am 100% 1/10 oz’s. The lost value in the smaller weight gold is made up for by versatility. I do have some silver but it is bulky in relation to value. It would be hard to carry as a refugee. I have my gold in a bank box “BUT” the first even slight whiff of trouble and it is out of the bank. A very real problem in the future will be confiscation. You can be sure bank boxes will be targeted at some point especially if there is a paper trail for the gold purchases. Some of my purchases have a paper trail but not all.
GregT on Tue, 11th Mar 2014 3:38 pm
“I do not value my gold by dollars for net worth purposes.”
Ya, I don’t look at gold priced in fiat currency either. Gold is gold. It is the fiat currency that fluctuates. In Roman times, an ounce of gold bought a man the clothes necessary to do business in, today it is still the same. A good quality suit, shirt, tie, and shoes, can still be bought with one ounce of gold, just as they could 2000 years ago. Try doing that with dollar bills.
Makati1 on Wed, 12th Mar 2014 1:25 am
In trade, what will a steel needle be worth? A spool of thread? The ability to use them?
Better yet, a suture needle and sutures? The ability to use them?
Peroxide & bandage materials? The ability to use them?
There are many things that will replace money when the SHTF. Do you have them?
andya on Wed, 12th Mar 2014 3:15 am
Andya seems to think the future is a barter system of trading goods with no currency. History doesn’t tend to agree with that. Even in pre-industrial times currencies were used in the trade of goods and services. I would suspect that having a bunch of gold coins would be a valid post-collapse currency.
Sure gold and silver are currency, and currency are used for trade. I’m just thinking a little bit deeper then that. Where is your gold and silver coming from? If you have some gold and I have a farm, I sell you the food, and you give me gold, I end up with gold and a farm. You end up with food and no gold. Who is winning?