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Page added on January 22, 2014
After the Collapse: Six Likely Events That Will Follow an Economic Crash
It’s not too difficult to understand that we are well on our way to a paradigm shift in America; in fact we’re in the midst of it right now. The writing is on the wall and can no longer be ignored.
The US government has run up trillions of dollars in debt, and given the recent debates over the country’s debt ceiling, we can rest assured that neither Congress or the President will act to curtail spending and balance the budget. We will continue adding trillions of dollars to the national debt clock until such time that our creditors no longer lend us money.
From the monetary side, the Federal Reserve’s response to this unprecedented crisis has been to simply “print” more money as is necessary. On top of the trillions in dollars already printed thus far, the Fed continues quantitative easing to the tune of about $80 billion per month. It’s the only arrow left in the Fed’s quiver, because failing to inject these billions into stock markets and banks will lead to an almost instant collapse of the U.S. financial system. Unfortunately, the current strategy is chock full of its own pitfalls, the least of which being the real possibility of a hyperinflationary environment developing over coming months and years.
On Main Street, average Americans have seen their wealth decimated. They’ve lost millions of jobs and homes over the course of the last five years. And if recent reports are any indication, the destruction of the middle class will continue unabated for years to come. The resulting effect is a vicious negative feedback loop that continues to build upon itself. Americans no longer have money (or credit) to spend to prop up the economy, thus more jobs will be lost, leading to more people requiring government assistance for everything from food to shelter.
We are, on every level, facing a collapse of unprecedented scale.
As noted by International Man Jeff Thomas of Casey Research, it’s not that difficult of an exercise to predict what’s coming next:
The number of people whose eyes have been opened seems to be growing, and many of them are asking what the collapse will look like as it unfolds. What will the symptoms be?
Well, the primary events are fairly predictable: they would include major collapses in the bond and stock markets and possible sudden deflation (primarily of assets), followed by dramatic inflation, if not hyperinflation (primarily of commodities), followed by a crash of several major currencies, particularly the euro and the US dollar.
We know a collapse is coming… If you’re paying attention you probably have the distinct feeling that we are in the middle of it right now. And guess what? The government and military know it’s coming too, as evidenced by large-scale simulations of exactly such an event and its fallout.
But the collapse of our financial system, or hyperinflation of our currency, or a meltdown in US Treasuries is only the beginning. We know some or all of these events are all but a foregone conclusion.
What we don’t know is the timing of the trigger event that causes the global panic to ensue and what will happen after these primary events take hold.
According to Jeff Thomas, while we can’t know for sure, the following “secondary events” are the most likely outcomes when the system as we have come to know it destabilizes.
The secondary events will be less certain, but likely: increased unemployment, currency controls, protective tariffs, severe depression, etc.
But, along the way, there will be numerous surprises—actions taken by governments that may be as unprecedented as they would be unlawful. Why? Because, again, such actions are the norm when a government finds itself losing its grip over the people it perceives as its minions. Here are a few:
- Travel Restrictions. This will begin with restrictions on foreign travel, including suspension/removal of passports. (This has begun in a small way in both the EU and US.) Later, travel restrictions will be extended within the boundaries of countries (highway checkpoints, etc.)
- Confiscation of wealth. The EU has instituted the confiscation of bank accounts, which can be expected to become an international form of governmental theft. This does not automatically mean that other assets, such as precious metals and real estate will also be confiscated, but it does mean that the barrier for confiscation has been eliminated. There is therefore no reason to assume that any asset is safe from any government that approves theft through bail-ins.
- Food Shortages. The food industry operates on very small profit margins and survives only as a result of quick payment of invoices. With dramatic inflation, marginal businesses (suppliers, wholesalers, and retailers) will fall by the wayside. The percentage of failing businesses will be dependent upon the duration and severity of the inflationary trend.
- Squatters Rebellions. A dramatic increase in the number of home and business foreclosures will result in homelessness for anyone whose debt exceeds his ability to pay—even those who presently appear to be well-off. As numbers rise significantly, a new homeless class will be created amongst the former middle class. As they become more numerous, large scale ownership of property may give way to large scale “possession” of property.
- Riots. These will likely happen spontaneously due to the above conditions, but if not, governments will create them to justify their desire for greater control of the masses.
- Martial Law. The US has already prepared for this, with the passing of the 2012 National Defense Authorization Act (NDAA), which many interpret as declaring the US to be a “battlefield.” The NDAA allows the suspension of habeas corpus, indefinite detention, and the assumption that any resident may be considered an enemy combatant. Similar legislation may be expected in other countries that perceive martial law as a solution to civil unrest.
The above list is purposely brief—a sampling of eventualities that, should they occur, will almost definitely come unannounced. As the decline unfolds, they will surely happen with greater frequency.
We could go point by point on this list and provide a plethora of evidence to validate Jeff’s claims, but that would take pages upon pages of references.
The fact is that the US government, for the last decade, has been moving increasingly closer to what can only be described as a police state. With watch lists, militarized police departments, legislative actions, and executive orders the government has already set the stage for these secondary events.
When the system itself is no longer able to support the tens of millions of Americans receiving monthly government assistance, one hiccup could set the whole thing ablaze.
While it can’t be avoided on a national scale, there are advance preparations that individuals and their families can make to, at the very least, insulate themselves from the secondary event triggers. This includes storing essential physical goods and keeping them in your possession. Things like long-term food supplies, barterable goods, monetary goods, self defense armaments and having a well thought out preparedness plan will, if nothing else, provide you with the means necessary to stay out of the way it all hits the fan.
16 Comments on "After the Collapse: Six Likely Events That Will Follow an Economic Crash"
Dave Thompson on Wed, 22nd Jan 2014 2:22 am
The most important “thing” to have? People. Be a part of your friends, family and neighbors lives. Start by showing kindness to one another. Then once you have established yourself to be a person of compassion and kindness, on the next day do it again.
DC on Wed, 22nd Jan 2014 5:23 am
As bad as un-sustainable levels of debt are, what way too many lose sight of, that at the end of things, its just paper. Sure, the end of particular economic agreement might hurt some people, or even a lot in the short term. Societies can adjust to currency meltdowns given right leadership and collective will. The fact is many economies and currencies that were once viewed as all-powerful, have collapsed and faded away. But humanity cruised along just fine.
What societies cant adjust to near as well, is expanding populations and declining resources. I worry less about debt, in fact, I am actually glad the debt mountain keeps piling up because its my feeling that a debt crash is the only way to reign in the excesses of the current system. Put another way, I would rather have a currency collapse than a resource collapse all things considered.
Even the amerikan war-criminal Donald Rumsfeld made the remark, “deficits dont matter”. And in his war-criminal way, he was right. What matters are resources and either controlling them, or denying access to them to potential rivals and competitors. Economies can be reset, even if its unpleasant for most of the people involved while its happening, but exhausted resources?, not so much.
PapaSmurf on Wed, 22nd Jan 2014 7:02 am
This article is beyond stupid. It is conspiracy theories like this, being posted on websites related to Peak Oil, which have made it so difficult for mainstream media to take Peak Oil seriously.
If you are going to associate with fringe nuts, then you are going to be automatically be categorized with that crowd.
Those involved in the topic of Peak Oil need to do a self evaluation about whether it helps or hurts the overall message when you are regularly descending into conspiracy theories about the black helicopters.
PapaSmurf on Wed, 22nd Jan 2014 7:17 am
Don’t you guys ever get tired of these “collapse” articles?
I have been reading them for the past decade. Collapse is always promised as just around the corner or already in progress.
After a while it just gets old and boring when none of it happens. Every few years I tune in to see what the crazies are writing about now and see which of the former merchants of doom have imploded due to loss of credibility.
You guys need to get a job or a girlfriend or something. Take a bath, shave, brush your teeth, put on a clean shirt, update your resume and go get a job at Starbucks or something.
Dave Thompson on Wed, 22nd Jan 2014 8:31 am
Papasmurf, no I am not tired of reading the articles on this site. I am tired of the term “conspiracy theorist” and it being applied to peak oil and the ramifications we as humanity face. This site is not about convincing you or the mainstream media anything. You are free to go now.
J-Gav on Wed, 22nd Jan 2014 9:51 am
These all sound like things that could happen … whether or not all of them do, whe and in wha&
J-Gav on Wed, 22nd Jan 2014 9:52 am
when and in what order, is another matter.
peakyeast on Wed, 22nd Jan 2014 10:47 am
I dont know how it is in the US, but where i live most people that get murdered – get murdered by people they know well – i.e. family and friends.
I wonder if this changes when TSHTF and if other people actually will be an assert or a risk.
Davy, Hermann, MO on Wed, 22nd Jan 2014 12:03 pm
PapaSmurf on Wed, 22nd Jan 2014 7:17 am
Well you think you may be a little cocky or just SH*t disturbing:)
Pops, I follow this like an intellectual who studies system dynamics. I find it interesting. It is also worth being aware of.
I agree collapse is always just around the corner. Just like the early Christians. Just read Kunstler’s weekly blog.
Yet, we are in uncharted waters and you are naive to think collapse is not possible. My opinion is 1%, gov/industry, and military will maintain status quo. It will only be when they lose confidence we may see a collapse. This thought near term with a longer term critical mass rebelling when conditions are unbearable. A collapse to what? is a big unknown. There is no way to know how the first step down will be. I think it is realistic to assume we live in a finite world and systems cycle. I see every indication we are peak everything now. We are on a plateau. This cycle has been 2 centuries long and we are looking at a new paradigm of contraction not growth. Contraction dynamics are far different then growth dynamics. We are talking the variable destruction not increasing organized construction. It will be a strange change never seen before because it is global and a dramatic alteration.
Northwest Resident on Wed, 22nd Jan 2014 4:26 pm
PapaSmurf is an excellent representative of the fact-denying, delusional part of humanity that believes we have enough oil and resources to support exponentially expanding population while “growing” the economy and keeping BAU buzzing along forever. PapaSmurf obviously thinks of himself as intelligent and somehow “above it all”, but he fails to perceive the reality that is breathing right down his (and everybody’s neck).
Case in point: PapaSmurf thinks that commenters the likes of which post on this site “have made it so difficult for mainstream media to take Peak Oil seriously.” But what PapaSmurf isn’t smart or aware enough to understand is that the MSM is Owned and Operated by the Corporations which are fully invested in BAU, and which have a top priority of keeping the ignorant and fact-denying masses (of which, PapaSmurf is one) pacified and calm. PapaSmurf is stupid/ignorant enough to *think* that the MSM would take Peak Oil seriously, when in fact one of the primary objectives of the MSM is to totally deny and refute the concept of Peak Oil. PapaSmurf no doubt believes articles printed regularly on Motley Fool dot com, Bloomberg and Forbes — the MSM that keeps PapaSmurf and the unaware lemmings like him in total, abject denial of reality.
PapaSmurf, you wouldn’t be here on this site injecting your blathering observations and accusations unless you were, sub-consciously, making a desperate effort to recognize the horrible truth that the world as you and I and everyone has know it is standing on the brink of collapse. Embrace the horror, PapaSmurf. Accept the reality. You’ll feel better once you do.
Northwest Resident on Wed, 22nd Jan 2014 4:38 pm
PapaSmurf says: “You guys need to get a job or a girlfriend or something. Take a bath, shave, brush your teeth, put on a clean shirt, update your resume and go get a job at Starbucks or something.”
That’s pretty insulting stuff, PapaSmurf. For a guy who is married, has a couple of degrees, a high-paying high-tech job, excellent hygiene and a resume that kills (talking about myself), I have to assume that PapaSmurf is looking in the mirror or subconsciously looking inward as he writes these pathetic words.
Davy — WHAT IF “collapse” ends up being a constant slow “squeezing” of people into ever increasing levels of poverty and despair, leaving only the “upper crust” and the service industry workers who service them and their industries? Global consumption of resources diminishes rapidly over time as more people are pushed into absolute poverty. NSA monitors everybody everywhere to insure that no “leaders” rise up to organize and instigate rebellions. With oil and other natural resource consumption significantly reduced, a much-reduced version of BAU creeps along and into the future. Any chance of that happening, in your opinion?
ghung on Wed, 22nd Jan 2014 9:33 pm
There’s nothing outrageous in this list. One need only to look at nations and economies from recent history that have collapsed to see that all of these things have occurred. What most folks can’t deal with is the idea that it can happen to them, especially in the US.
Davy, Hermann, MO on Thu, 23rd Jan 2014 12:36 am
Northwest Resident on Wed, 22nd Jan 2014 4:38 pm
I think that is where we are now NR. We are in a squeeze for sure for the 90%. The squeeze is most felt of course by the lowest of the 90%. When the financial crisis picks up speed the resource consumption will diminish rapidly. Not sure what to think of the NSA. Kunstler may be right when he says anything organized on a big scale will become dysfunctional and incapable. I still think the NSA will remain potent for some time in any case. I think the upper crust will meet its match when the 10% start feeling the pinch. The 10% far outnumber the 1% and have a much greater diversity of skills and means to affect change. Then we will see a fight!! The poor will be irrelevant. They have been dumbed down with things like poor diet, drugs, tv, and violence. They are unorganized and lack the education to manage a transition beneficial to them. I am not being condescending. They were not given a chance what can you expect them to do or be! Yet, this slow creeping collapse is hard to judge due to the fact that the ride down the contraction curve will be anything but uniform and rational. We are talking about a big dose of chaos. Many things will occur that have no rational reasons. Growth on the other hand is much easier to predict and model.
JB on Thu, 23rd Jan 2014 12:49 am
I don’t know what to say to an article like this in a few short sentences. I am a doomer myself, but not a fast collapse doomer. My view is that collapse will be slow, and best seen in the rear view mirror.
Unless you have just lost your job and have no prospects for another one. Then you are in the middle of a sudden collapse.
As for defensive weapons, if you have weapons for that purpose, providence places you in a special category with all other gun owners – and birds of a feather… Also, having a gun is just a short step away from using it to get what you think you need when the worst happens.
Makati1 on Thu, 23rd Jan 2014 1:26 am
I hope all of you ‘slow collapse’ supporters are correct, but I see too many black swans tiring and wavering in flight. There are too many flash points in the world to evade war for much longer. I color a large wall map in red for countries where there are some serious shit going on and it is getting pretty red all over. The number of countries NOT in some serious trouble are only a small percentage of the total. And population wise, those living a normal, peaceful life are less than a billion.
Resource wars are going to become shooting wars and shooting wars means that eventually the nukes come out. Can you see China or Russia losing to the US? How about Israel? Or North Korea to South Korea? ALL of them are nuclear armed.
The only thing that can stop it is a financial crash first that destroys the West and ends globalization. And no, the 1% cannot prevent it, even though they are trying despiratly. If we get to 2020 without a world war, I will be pleasantly surprised.
Northwest Resident on Thu, 23rd Jan 2014 2:29 am
Davy, I think we have a fairly close view of how things are and will go down. Without a doubt, the current strategy of TPTB is to gradually squeeze Americans out of their jobs and out of their savings and out of government guaranteed support programs. Its like a meat grinder, with masses of humanity being squeezed through that grinder and into oblivion, slowly but surely. The “advantage” is that it greatly reduces demand on energy and results in significantly lower consumption. But, it is just a short term strategy — one that buys time. In the end, I think that’s what TPTB are doing, just buying time. QE, financial bubbles, everything going on — none of it is sustainable. Just buying time, but for what? Like Makati1, I do not believe in a slow downward trend toward “collapse”, except for that trend we now find ourselves in. We reach a point eventually where the MSM lies and the political reassurances no longer calm the herd. PANIC eventually sets in, whether due to a world event or due to a collective realization that the end is near. Once Panic sets in, its game over. Crash! Instantly. I personally believe based on no direct evidence whatsoever that the “plan” of TPTB is to soon set off an event that will cascade into a situation of total panic and ultimate collapse. That’s why they are buying time, using this time right now to move their chess pieces around the board, get set up and ready. When? I’m guessing that when the Afghanistan combat troops return to America with their equipment later this year and integrate into the many local police forces, then the stage will be set. Just a guess. But who knows? I guess until it actually goes down, all we can do is what TPTB are doing — using this time to prepare to the best of our abilities. When chaos strikes, you do NOT want to be one of those people raiding the supermarkets for food or joining the riots out on the streets.