[shortonoil]

bodigami said:

$this->bbcode_second_pass_quote('', 'w')hat do you consider a monetary system failure? why in that specific date?

[patience]

shortonoil,

Thanks for explaining. Since I have no economics background, I'm just trying to put together the info from the most credible people I read here and elsewhere to get a picture formed. That made it clear, and your timeline looks realistic to me. So, we have maybe a few months, maybe a year and a half.

Many here value your posts, as I do. I wonder if you would care to post a short list of your ideas for coping with the crash you see coming?

My own list includes:
No debt, live and trade in a farming community, stored food, food production, water collection, stored fuels, small savings (in cash and junk silver), alternative energy (solar PV and wood heat) for ourselves, and stored supplies of consumables for home and repair shop business. We could get by for a year without going to town, but some things would run thin at that point, which I am addressing as best I can.

[mattduke]

The rate of monetary exchange is inversely proportional to the demand to own the money in question. The current example of fiat monetary failure is Zimbabwe. In the inevitable end of any particular fiat currency, the desire to own the currency approaches zero. In such circumstances, anyone owning the fiat money tries to immediately trade it away for something else. So the feature of a failed fiat monetary system is not "flows" halting, but rather "flows" increasing dramatically as everyone becomes desperate to buy something, anything. The flip side of the same coin is that prices increase dramatically.

[patience]

mattduke,

Exactly. I'm looking for ways to escape the classic dillemna of fixed income and savings eroding in the face of gross inflation. All ideas are welcome.

[SchroedingersCat]

Buy stuff. Stockpile it. Later, open a general store (or barter post) and become an essential piece of your now much more localized community. The best way to hold value of your current wealth. IMO.

[shortonoil]

mattduke said:

$this->bbcode_second_pass_quote('', 'T')he rate of monetary exchange is inversely proportional to the demand to own the money in question. The current example of fiat monetary failure is Zimbabwe. In the inevitable end of any particular fiat currency, the desire to own the currency approaches zero. In such circumstances, anyone owning the fiat money tries to immediately trade it away for something else. So the feature of a failed fiat monetary system is not "flows" halting, but rather "flows" increasing dramatically as everyone becomes desperate to buy something, anything. The flip side of the same coin is that prices increase dramatically.

[Jotapay]

Thanks for the post, Short.

[Gerben]

How to prepare depends on what you expect will happen. The doomers will stock up on weapons, food and bartering goods. I'm not a doomer, but some preparation is always important. Something else might happen, like an earthquake or a virus, turning your preparation into a life-saver.
For the non-doomers there is the debate about deflation vs inflation. I believe inflation will hit with a vengeance. Stocking up on money is not of much use then. The Fed will just print money with more zeros, making your stocked up money worthless. If you want to keep some cash, it's better to keep it as coins than as paper. Coins have some intrinsic value and there have been cases of governments stripping zeros of their paper money(e.g. 'that old US$100 bill is now worth only $1 new US$'), while leaving the coins untouched.

[pogoliamo]

$this->bbcode_second_pass_quote('shortonoil', '[')b]bodigami said:

$this->bbcode_second_pass_quote('', 'w')hat do you consider a monetary system failure? why in that specific date?

[patience]

Thanks short, and everyone,

Looks like we are well on the way down now. As AirlinePilot posted at the top of Economics, GM common stock is going to get totally wiped out in the "restructuring". See the TickerForum (Ticker) on this. That means all the "senior debt" in TARP program are in danger of the same at the govt whim. At this point, I wouldn't own stocks, or bonds, if you gave them to me for toilet paper. When the market figures that out, look out below.

One more spur to get my preps in order.

[vision-master]

$this->bbcode_second_pass_quote('', 'F')or those of you still living in the mega-cities - it been nice knowing yea! I guess rat stew is edible, but it doesn’t sound that appetizing. Especially if you are going to have to fight someone to keep the rat!

[sameu]

my strategy: just like in investements, diversify
stock up on 'stuff': food, tools, safetytools, a bike, personal hygene stuff etc
invest in food production, energy production (wood, pv,..)
own physial gold
have a bunch of cash


fast crash, slow crash, inflation, deflation, either scenario, with these preps I believe you'll have a major advance in contrast to those betting on a particular outcome or to those who aren't preparing at all

[Sixstrings]

Summary:

Basically he says that an insider who he can't name told him that a catastrophic event, which could be anything from failure to raise the debt limit to China not buying US bonds (though I thought they already stopped and are net seller now) would trigger a US bond crisis. This would send yields through the roof, but Europe and the rest of the world would respond by raising their bond rates and so within 13 days the whole world would have a catastrophic meltdown.

He goes on to tell his radio listeners to stockpile food, and that the one thing that's for certain is inflation in the things you need and deflation in the things you want. He points out that sugar alone has gone up 58% in the last three months (hasn't hit the consumer yet).

Then he goes into how after this meltdowm after 15 days the New World Order would come next. Here's the radio show clip link: http://www.youtube.com/watch?v=XzsJoVyidhU

Ok after writing this summary I feel like maybe I've jumped the Doom Shark. But let's consider the question.. what would happen in a US bond crisis? My assumption is that the Fed would keep doing what it's already doing -- buy the bonds itself (that's called monetization / "printing press"). From what I read on ZH, the Fed is ALREADY monetizing the entire federal budget deficit -- so is it even possible for us to have a bond crisis?

From the way I understand all this, INFLATION is the problem but we can't have a "bond crisis" because the Fed can use the printing press to buy an infinite number of bonds and therefore keep the rates low. Greece and Ireland are having a bond crisis because the ECB won't do the same for them.

Regarding Beck.. he might have some screws loose, and he might be a fear-profiteer, but he does have a lot of viewers. If he starts telling them to hoard food, that could be a self-fulfilling prophecy.

[vtsnowedin]

I saw part of the TV version of that show. I didn't watch the whole thing as a little of Beck goes a long way. Most of it is just a fear filled rant as usual but as always there is enough truth in his premise that you shouldn't totally discount him. The problem I see with QE2 or whatever you want to call the present fiscal insanity is that the value of the dollar will become so uncertain that foreign suppliers of oil and anything else we import will become reluctant to except dollars in payment for it and certainly not promissory notes payable in dollars. This would in effect put the USA on a COD basis or a barter basis. (Remember when the collapsed Russia had to resort to paying for stuff with boatloads of vodka?). Twenty million barrels a day of $125 plus oil adds up to a lot of F-22s and other stuff we really shouldn't be trading to people who don't like us. The Chinese can pay for their oil with all the things you buy in Walmart. What are we going to put on the boat to pay for our next supper tanker of oil?

[Cid_Yama]

And why would anyone give any credence to anything Glenn Beck might have to say?

[Roy]

$this->bbcode_second_pass_quote('', 'A')nd why would anyone give any credence to anything Glenn Beck might have to say?

[Umber]

$this->bbcode_second_pass_quote('Cid_Yama', 'A')nd why would anyone give any credence to anything Glenn Beck might have to say?

[Pops]

"Jump the Shark" is the right analogy, Beck's viewers are down 25% YOY. Gotta keep the Dog and Pony dancing...

http://tvbythenumbers.com/2010/11/02/gl ... ober/70550

[Cloud9]

If I called Americans to march on Washington, six people would show up. Glen Beck attracts enough listeners and viewers to make him a multi millionaire. He must be tapping into something within mainstream America. You can deride his listeners as being stupid or the great unwashed but that does not eliminate the fact that they vote. Evidence of that fact can be found in the recent election. Yes we still have Harry Reid, Barney Frank and Nancy Pelosi, but they are greatly diminished in power.

The Keynesian concept that wealth is created by debt seems counter intuitive to most Americans. The rise in commodity prices has started to get people’s attention. More and more people are starting to realize that a trillion dollars is a Wal-Mart parking lot full of hundred dollar bills stacked eight feet high. Some are starting to connect quantitative easing with prices in the grocery store. They are watching the closing strip malls and the foreclosure signs pop up every where and wonder how we are going to get out of this mess. The mood of the country is that something is wrong. Some are starting to realize that the Federal Reserve is private bank and that Federal Reserve Notes are nothing more than checks on that bank. A few are coming to realize that the Federal Reserve is buying up Treasury debt. To them, the whole process seems more and more like a Ponzie scheme.

Some have seen this video:
http://www.youtube.com/watch?v=E4ez21OItqQ

[deMolay]

Oh yes yes. Keep drinking the Obama Koolaid. Is America better off with 2 years of Obamanomics? Are you better off. Will printing money bring wealth and jobs to America. The whole rest of the world is very worried about the debt crisis in Obama's America. He is increasingly seen as a buffoon. All talk and no substance. Some are saying the real debt for his year 2009 is 4 Trillion. I think there will be a big new crisis for Obama and his policies. Now that the elections are over and he and the Democrats have been repudiated by the voters, the Chicago scandals will surface again along with all the rest of his misdeeds. He is a warmonger and people will begin to see he is worse than BUSH. As the bills pile on and he keeps printing like Robert Mugabe inflation will hit hard. Soon oil will break $100/barrel again and all things dependant on oil will soar through the roof. The Democrats and |Obama will offer you food stamps and lineups.