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Page added on September 22, 2015
Fate of Countries in Collapse – Results: Currency Collapse
One of the longest running arguments on the Diner is how various different countries will fare as collapse progresses forward.
Most often, this pits the FSoA against China, and the Diner has some China Bulls and some China Bears. I am a notorious China Bear gong back to my days on the Peak Oil Forum, where at the time because China was such a hot investment opportunity with double-digit growth rates it was common wisdom the Chinese would out-compete the FSoA Empire to lead the world in the second half of the 21st Century. It was there I first added my Tag Line to analysis posts on China, “The Chinese are TOAST”.
Now in reality here, as time goes by EVERY industrialized nation is toast, in the sense every one is dependent on the systems that are driven by copious quantities of fossil fuel energy. Once that energy can no longer be accessed or afforded, life as we know it now wll come to a halt.
However, this is unlikely to happen all at once, and it is unlikely to play itself out exactly the same way in different countries, different regions and even from town to town.
In this survey we look at the large nation states individually and regionally for the smaller ones, to find out the opinions of the Kollapsniks TM on which ones are the best positioned as collapse gathers speed, and which ones will fare the worst.
Besides China and the FSoA, the other one of the “Big Three” countries often discussed in comparing on this topic is Russia. Russia is often cited as more resilient by virtue of the fact they already went through one collapse when the USSR collapsed, plus the fact they have a decent amount of fossil fuel energy still left in the ground. However, they have numerous problems as well, wars ongoing to their south, the Ukrainian situation and enormous financial and currency turbulence.
Take the survey, and let us know who you think will do best and which ones worst as collapse gets fully underway.
TAKE THE FATE OF COUNTRIES SURVEY HERE
Results: Currency Collapse & Debt Implosion Survey
OK, now onto the results from last week’s Collapse Survey TM, Currency Collapse & Debt Implosion.
First question to look at is which of the current major currencies is likely to collapse first, and which has the potential to hold up the longest.
This is obviously important if you want to try to “preserve wealth”, you certainly don’t want to be holding the currency that collapses first! Duh.
On the other hand, you have the problem of the utility of a currency in your neighborhood.
For instance, say the Norwegian Krone holds its value while the FSoA Dollar crashes. Even if you have some Krone stashed in a Norwegian or Swiss Bank account, or even actually have some of their Notes in your basement safe along with your stash of Gold Coins, is Walmart going to take your Krone for a purchase of a bag of rice in Peoria, IL? Not very likely. You might stand a better chance in Europe, particularly Scandinavian countries if you have Krone, but here in the FSoA they are unlikely to do you a whole lot of good. Only if you want to do currency trading during the spin down is this worthwhile to consider, and first off you need to be pretty flush to do that kind of trading, and second it’s a fool’s game these days with manipulated markets. Even back in the day when I messed with currency trading it was nuts. You have to leverage to beat the band to make any money this way. You can get SWAMPED in a big move overnight. Then the margin calls hit, and your next trip is out the window of the 49th floor.
Leaving aside the question of whether holding foreign currencies might benefit you personally, on the nation state level it’s important to consider because he whose Currency crashes first, Collapses first. So who is it gonna be?
I found the results of this particular question to be absolutely astounding. Here’s the results:
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | Standard Deviation | Responses | Weighted Average | |
| Chinese Renminby/Yuan | 10 (9.8%) |
23 (22.55%) |
8 (7.84%) |
17 (16.67%) |
10 (9.8%) |
8 (7.84%) |
8 (7.84%) |
1 (0.98%) |
5.92 | 102 | 4.81 / 12 |
| European Euro | 9 (8.82%) |
13 (12.75%) |
15 (14.71%) |
19 (18.63%) |
10 (9.8%) |
11 (10.78%) |
5 (4.9%) |
5 (4.9%) |
5.24 | 102 | 4.88 / 12 |
| Japanese Yen | 15 (14.71%) |
8 (7.84%) |
13 (12.75%) |
12 (11.76%) |
11 (10.78%) |
10 (9.8%) |
8 (7.84%) |
15 (14.71%) |
4.92 | 102 | 4.98 / 12 |
| Russian Ruble | 7 (6.86%) |
16 (15.69%) |
21 (20.59%) |
13 (12.75%) |
8 (7.84%) |
13 (12.75%) |
2 (1.96%) |
2 (1.96%) |
5.91 | 102 | 4.99 / 12 |
| Brasil Real | 29 (28.43%) |
14 (13.73%) |
6 (5.88%) |
3 (2.94%) |
7 (6.86%) |
5 (4.9%) |
3 (2.94%) |
4 (3.92%) |
7.53 | 102 | 5.29 / 12 |
| British Sterling/Pound | 0 (0%) |
3 (2.94%) |
7 (6.86%) |
10 (9.8%) |
21 (20.59%) |
6 (5.88%) |
11 (10.78%) |
16 (15.69%) |
5.74 | 102 | 6.78 / 12 |
| US Dollar | 27 (26.47%) |
7 (6.86%) |
5 (4.9%) |
1 (0.98%) |
1 (0.98%) |
3 (2.94%) |
1 (0.98%) |
2 (1.96%) |
10.02 | 102 | 7.1 / 12 |
| India Rupee | 3 (2.94%) |
13 (12.75%) |
10 (9.8%) |
4 (3.92%) |
6 (5.88%) |
8 (7.84%) |
7 (6.86%) |
6 (5.88%) |
4.59 | 102 | 7.29 / 12 |
| Canadian Loonie | 0 (0%) |
3 (2.94%) |
4 (3.92%) |
9 (8.82%) |
2 (1.96%) |
9 (8.82%) |
16 (15.69%) |
14 (13.73%) |
6.69 | 102 | 7.66 / 12 |
| Australian Dollar | 1 (0.98%) |
0 (0%) |
5 (4.9%) |
7 (6.86%) |
8 (7.84%) |
7 (6.86%) |
11 (10.78%) |
11 (10.78%) |
7.49 | 102 | 7.84 / 12 |
| Norwegian Krone | 0 (0%) |
2 (1.96%) |
6 (5.88%) |
2 (1.96%) |
8 (7.84%) |
5 (4.9%) |
22 (21.57%) |
17 (16.67%) |
6.17 | 102 | 7.93 / 12 |
| Swiss Franc | 1 (0.98%) |
0 (0%) |
2 (1.96%) |
5 (4.9%) |
10 (9.8%) |
17 (16.67%) |
8 (7.84%) |
9 (8.82%) |
6.63 | 102 | 8.43 / 12 |
IMHO, this ordering is INSANE. Apparently Kollapsniks TM think that the Chinese Renminby will collapse BEFORE the Euro and Yen! WTF? Not only that, the Indian Rupee will outlast the FSoA Dollar! hahahahahahahaha.
Which currency outlasts them ALL (according to Kollapsniks)? The Swissie! A currency issued by a tiny nation of 8M people with a GDP of $685B (2013 data) is going to outlast the Dollar and Renminby? WTF? There are more people living in NY Shity than all of Switzerland!
When the Euro goes down, the Swissie goes with it. The SNB has HUGE exposure to Euro denominated debt, they have been buying it up to keep the exchange rate from going through the roof. It’s simply nuts to think this currency can outlast those of the Big 3.
My order for currency collapse?
| Brasil Real |
| India Rupee |
| Russian Ruble |
| Japanese Yen |
| European Euro |
| British Sterling/Pound |
| Norwegian Krone |
| Swiss Franc |
| Australian Dollar |
| Canadian Loonie |
| Chinese Renminby/Yuan |
| US Dollar |
Brasil is already on the serious ropes, and so is India. Weak economies and too much poverty. Russia should be strong, but they are a target for the Western Illuminati Banksters, so they will be under constant currency attack. Yen & Euro go next, and then subsidiary currencies like Sterling, the Swissie and Krone go after them. The Oz Dollar and Hoser Loonie keep value because of how closely they are connected to the FSoA Dollar.
One caveat to this is that once the cascade begins, it may be impossible to tell which one collapsed first. Once a major like say the Japanese Yen collapses, this will cause so much havoc in the Interbank lending market that everything else will lock up in pico-seconds.
IMHO, the Final Battle for All the Currency Marbles is between the Chinese Renminby and the FSoA Dollar. I think the Dollar wins this battle, because so much debt is denominated in dollars. Too many .01%ers have their wealth wrapped up in Dollars or Dollar denominated assets to let that one collapse. We’ll see on that one.
OK, now onto Q2, which is whether Gold & Silver will replace Fiat Currencies once they collapse?
| Yes | No | Standard Deviation | Responses | |
|---|---|---|---|---|
| All Data | 34 (33.01%) |
69 (66.99%) |
17.5 | 103 |
Overwhelmingly by a 2/3rds majority, most Kollapsniks TM do not think Gold and Silver will replace Fiat once it crashes.
I tend to agree with that one, the PMs are too centralized and too few people have access to them for them to be workable as a currency medium. There also is no clear idea on how these could be distributed out, or how letters of credit would be issued or anything else. They might function as a Barter item, but as a currency that many use, it seems unlikely.
If Gold & Silver are NOT likely, what is likely once this Currency Regime fails? That was the subject for Q3. Here’s the results for that one:
| 1 | 2 | 3 | 4 | 5 | Standard Deviation | Responses | Weighted Average | |
| TPTB will institute a New World Currency, the SDR or something similar | 37 (39.36%) |
11 (11.7%) |
19 (20.21%) |
13 (13.83%) |
14 (14.89%) |
9.47 | 94 | 2.53 / 5 |
| LETS (Local Exchange Trading System) Money will be issued in many locales | 23 (24.47%) |
21 (22.34%) |
19 (20.21%) |
26 (27.66%) |
5 (5.32%) |
7.28 | 94 | 2.67 / 5 |
| Paper Money will be issued based on Gold and Silver held in a Central Bank | 11 (11.7%) |
19 (20.21%) |
29 (30.85%) |
22 (23.4%) |
13 (13.83%) |
6.46 | 94 | 3.07 / 5 |
| Gold & Silver Coins will be used as Currency | 7 (7.45%) |
32 (34.04%) |
18 (19.15%) |
20 (21.28%) |
17 (18.09%) |
7.98 | 94 | 3.09 / 5 |
| No money will work and Trade will be all Barter | 16 (17.02%) |
11 (11.7%) |
9 (9.57%) |
13 (13.83%) |
45 (47.87%) |
13.3 | 94 | 3.64 / 5 |
A large plurality (almost 40%) of Kollapsniks TM think that TPTB will be able to institute a new centralized currency regime from the BIS (Bank for International Settlements, Basel, Switzerland, Central Bank of Central Banks, Home Base for the Illuminati). This is a particularly favored idea by Conspiracy Theorists, but it is not one I hold as most likely. The likely candidate are SDRs, aka Special Drawing Rights, a concoction the BIS already has in place for internal use based on some potpourri of currencies and commodities and who knows what else they threw in that basket..
I am not in that camp. Perhaps they will try this, but to get every country in the world to cede their monetary sovereignty over to the BIS would be near impossible IMHO. It’s like the Euro on Steroids. It really does nothing other than re-denominate debt, and it sure doesn’t put any new resource back in the ground. To me, this is a non-starter. Not to say it won’t be attempted though. It’s a last gasp effort for the Illuminati to maintain hegemony over the economic system.
LETS systems of Local Currencies come in at #2, and this I feel is most likely to occur. Regional breakup of the One to the Many TM will at least at the beginning require each region to develop their own local currency. Potlatch at this stage of the spin down seems unlikely.
Far as Centrally held Gold being a basis for a currency, to me this is also a non-starter. If you have a Central Bank holding gold in the Basement Safe, after a crisis of banking confidence like this, who would not go to the bank and DEMAND their “Gold Backed Note” to actually be redeemable in said Gold? Once the gold is redeemed, what does the Bank have as an Asset? At this point, the Gold you redeem for the note the Bank printed on it is just a barter item.
Will all trade eventually go all Barter? It’s already on its way there in some places, but that will take some time in the core countries I imagine. Cannot be sure on this though, a rapid collapse could make barter the only functioning economic system in your neighborhood for a while. Good idea to have barterable goods in your preps. Alcohol and Cigarettes are traditional barter items, I suggest also Tampons, Pampers, Condoms, Ammo, & Shoes as good choices of barter goods that last a long time. Shoes in particular, have you noticed how many of the pictures of refugees show them to be barefoot? Once trade with China halts, shoes are going to be hard to come by. Right now though, you can buy a nice pair of sneakers at Wally World for $15 on sale.
Finally in this survey, how long before the Dollar finally dies completely and you can’t use it to buy food at the major food retailers? This could be either because the Dollar has hyperinflated to worthlessness or the shelves are empty. Here’s the results for this one:
| 2016 | 2018 | 2020 | 2025 | 2030 | The Dollar will keep working for the forseeable future | Standard Deviation | Responses | |
|---|---|---|---|---|---|---|---|---|
| All Data | 10 (9.71%) |
16 (15.53%) |
16 (15.53%) |
22 (21.36%) |
14 (13.59%) |
25 (24.27%) |
4.98 | 103 |
You have a pretty nice Bell Curve here, except for the 25% or so of people who thnk the Dollar will keep working past 2030. The 2025 date seems about right to me, although again a major banking crisis and lockup could change that in an instant.
All in all, this was one of our most interesting surveys to date.
64 Comments on "Fate of Countries in Collapse – Results: Currency Collapse"
Rodster on Wed, 23rd Sep 2015 11:38 am
I’d like to add that if others had not believed China’s made up GDP numbers, the global economy would have collapsed because China was keeping the hamster in the cage running faster. That hamster is winded and near, cardiac arrest.
Remember this ENTIRE global PONZI SCHEME along with all the FIAT currency is based on FAITH. Once that faith gets questioned, that’s when the fireworks go off, just like they did during the Lehman Bros crisis.
Lawfish1964 on Wed, 23rd Sep 2015 12:56 pm
“The deep south in particular seems primed for a Confederate Taliban.” Spoken like a true non-southerner. One of the things I like most about the south is that people who don’t want to live here don’t.
BC on Wed, 23rd Sep 2015 12:57 pm
Rodster is correct. China’s “miracle” was (1) “Made in the USA” from trillions of dollars of US FDI over 20-25 years in China via offshoring, tech transfer, trade credits, infrastructure, etc.; and (2) it has been an incessantly managed mirage since 2008-09.
In actual fact, China’s labor force has contracted for three years running, and productivity (if one backs into the figure using proxies such as investment, implied depreciation, wages, and money supply) is at no faster than ~1%. The aggregate of the growth of the labor force, productivity, and population implies a secular trend for potential real GDP per capita for China of near 0%, which is the post-2007 trend rate for the US, EZ, Japan, and most of the rest of the world.
The Philippines will eventually be affected by the regional deceleration of growth in China-Asia, especially in high-tech, with exports at ~30% of GDP. Loss of export growth will reduce GDP by ~1-1.25%, which in turn will reduce investment and production by 0.7-1%, reducing growth overall by 2-2.25% from the recent trend, putting real GDP growth at ~4% and 2.4% per capita.
No growth of global trade and Philippine exports contracting with remittances will prompt a significant peso devaluation in the months ahead.
MrNoItAll on Wed, 23rd Sep 2015 1:19 pm
BC — So, are you saying that the “China miracle” was an American-financed production? That the brilliant Chinese leadership didn’t one day decide to print up a few trillion Yuan and self-finance their soaring growth by buying factories (and stealing jobs) from America and other developed nations? I know at least one regular poster on this site who isn’t going to like looking at it from that angle.
I guess the Americans bought a little time by converting China into the world’s growth engine. Just like a shooting star — magnificent to behold, a dazzling flash of light in the cold night sky, but quickly fading into the darkness from which it came. Yeah, that sounds like the “Chinese miracle”.
BC on Wed, 23rd Sep 2015 1:27 pm
MrNo, that’s about right.
The headlines recently stating that “the Chinese are dumping US Treasuries” miss what’s really happening. The PBoC is effectively doing central bank custodial swaps of US-denominated reserve assets for US$’s, which is being prompted by US (and Japanese) supranational firms’ repatriating non-convertible Yuan deposits in China.
US and Japanese FDI peaked in 2011-13 and recently began contracting YoY.
China’s growth is over (“middle income trap” at Peak Oil and LTG), which will drag down the rest of Asia, including the Asian city-states and India.
Davy on Wed, 23rd Sep 2015 2:16 pm
It is good to have you on board BC. You have added valuable financial analysis to our forum.
makati1 on Wed, 23rd Sep 2015 8:53 pm
BC, have you gone over to the Anti-Asian team here? LOL I’m sure China encouraged the US corporations to relocate to China, but they didn’t need much urging, did they? And maybe it was part of the overall plan to take down the Us middle class which is succeeding fantastically. I would not count China out nor Russia. My bets are that the West will fall first and hardest.
Some here poopoo the US plan to conquer the world and install a one world government, but it is becoming more and more obvious as time goes by. If you cannot bribe, conquer, or overthrow a country, you create chaos there that prevents it from moving against your plans. Conspiracy? Yes, why not? Some deny the possibility. I don’t I see the plan unfolding as we type.
makati1 on Wed, 23rd Sep 2015 9:01 pm
BC, nice numbers play with Philippine stats. But the US would kill for a 4% annual growth when it is in the minus numbers for the last 7+ years. Funny that other sources like the IMF are saying that Ps growth will be 6% or more next year.
And, don’t forget. There are about 3 million Filipinos in the US remitting money back to their families here. Not to mention 7 million scattered around the world sending back money from Europe, the ME, and Asia. About 10% of the GDP. As dollars get stronger, they buy more Pesos. So, it is all a wash. When your purchases are in the local currency, who gives a damn about dollars? I don’t. The higher the dollar goes, the more Pesos I have to spend. The monthly increase over the last few months has paid our farm caretaker’s salary.
apneaman on Wed, 23rd Sep 2015 9:26 pm
A rather lengthy list of US cities and counties in this article that are very near bankruptcy.
Waiting for Collapse: USA Debt Bombs Bursting
“It’s been so easy the past 15 years for local governments in the USA, state governments, government authorities, corporations, banks, hedge funds and the US Federal government to simply say how many millions, billions or trillions of dollars they wanted, pay some high priced call accountants to fill out some paperwork with fine print and voila, millions, billions and trillions of dollars in borrowed money simply appeared. It has been that easy!
Now, the government in the USA owes $46 trillion, US corporations owe $15 trillion, US individuals owe $13 trillion plus there are $315 trillion in outstanding Wall Street derivatives. (Few Americans know what a derivative is, but we as a nation are on the hook for up to $315 trillion in additional debt because of these derivatives.) These debt figures continue to escalate with each passing month.
Detroit and Puerto Rico have only just begun the debt bombs bursting in the USA, the USA’s slow motion economic collapse. Who’s next? I’m going to tell you about some US local and state governments that have too much debt and are ripe for debt collapse along with a few US government authorities and corporations that borrowed too much money and are also ripe for debt collapse.”
more
http://www.counterpunch.org/2015/09/23/waiting-for-collapse-usa-debt-bombs-bursting/
apneaman on Wed, 23rd Sep 2015 9:45 pm
Time for the Nuclear Option: Raining Money on Main Street
by Ellen Brown
http://www.commondreams.org/views/2015/09/23/time-nuclear-option-raining-money-main-street?utm_content=bufferd99dd&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
dooma on Thu, 24th Sep 2015 1:28 am
After the collapse, heart medication and drugs such as insulin and anti-biotic medication will be worth more than an ounce of gold. Easily.
makati1 on Thu, 24th Sep 2015 3:19 am
dooma, but they will be unavailable at any price. Of course you know that, don’t you? Why do you assume that big pharma will still exist? And all drugs have expiration dates. Some are very short, like insulin. They also signal the expiration date of these who require them to survive.
Davy on Thu, 24th Sep 2015 4:44 am
We just don’t know how the status quo will die. This is unclear currently. We may have a long emergency or a relatively quick drop to much lower economic levels. This coming descent will probably be something in between, at different stages, and variable per locals.
If it is a long emergency those drugs will continue to be produced if enough people find them vital. There are far too many non-essential medications, cosmetics, and snake oil meds that will be abandoned because of lack of vital needs.
A collapsed world and a collapsing world are different things. A collapsing world will still be a functioning world with desires and wants. Many drugs are not that difficult to make they are just difficult to make in large quantities like so many other goods. We have the knowledge and skills that will still be there for a time until entropic decay eventually erases man’s footprint on earth.
beammeup on Thu, 24th Sep 2015 11:13 am
Global systems have lots of inertia and humanity is more resilient than lots of folks here seem to believe. For those reasons, I favor the long emergency scenario, which I think is already in play and has been for some time now. It will manifest as a generally decreasing standard of living on a per capita basis, although there could still be growth in aggregate because of increasing population. I don’t think there will be a global “zombie apocalypse” moment, although there will be (and have been) some localized examples of that. If we hit a period where AGW suddenly displaces massive numbers of humanity over a very short time period, all bets are off.
For those doubting that Chinese #’s have been artificially hyped or that they are experiencing an ongoing environmental disaster, one visit there will dispel any doubt. My work has taken me there numerous times over the past 10 years, in some cases for extended periods. Ghost cities, over built downtown real estate, cronyism, unbreathable air, breathtaking pollution and environmental degradation, unimaginable over population, all of these are real phenomena that I have experienced firsthand, and they exist on a scale unlike anything in any other part of the world, and I’ve seem most of it. The Chinese are beautiful people with an admirable culture, but the place is a mess. I hope they can manage their way through it as the long emergency drags on for the next century or so.