what are some possible scenario's when the dollar crashes?

[97guns]

have any of you thought about what it could possibly be like post crash. will it be like most preppers think - trading junk silver for bread and gas? will a new currency emerge and will there be an exchange - old fiat for new fiat? im just wondering about a few things because im a landlord with 4 houses. what good will it be if im receiving old fiat for rents? theres alot of questions but cant think of them all right now.

[Book]

...trading junk silver for bread and gas?



http://dianasaurdishes.com/wp-content/uploads/2010/03/grocery-check-out.jpg

WTSHTF the grocery store clerk will not be reading the date on your "silver" dime nor giving you more then ten cents worth for it. Same thing at the gas station.

:oo-->

[Eyebone]

A landlord I know here in Seattle will accept PMs for rent right now.

As long as he does the proper paperwork its legal.

I don't think we can expect a drone in a chain store to know anything about real money so I would look for a private owner operator, now and when TSHTF.

[palani]

I met a lady in Detroit several years ago who only accepted PMs for rent for her rental units. She did not seem displeased with the exchange rate. Now whether her tenants were happy is more debatable.

[palani]

As long as he does the proper paperwork its legal.

Rather it depends on knowing who you are and knowing where you are that counts.

[Saul Mine]

Yeah, lots of people think it's going to be business as usual except you pay for your Starbucks with a gold coin or a chicken or something. In fact every collapse is unpredictable, even though they are similar in a general way.

[steyr_m]

I think immediately post-SHTF, barter & PM's will prevail. After (hopefully) TPTB are dead or irrelevant, PMs will be the currency of choice.

[Joe King]

Problem is, there isn't enough gold/silver in private hands to allow an economy of 300,000,000+ people to function properly.

If there's ever a true crash of the system, don't count on getting much of anything from any store after about the 2nd day.

[Apparition]

We'll probably see a rise in bartering and garage/yard sales.

[Silver Rocket Bitches!]

...trading junk silver for bread and gas?



http://dianasaurdishes.com/wp-content/uploads/2010/03/grocery-check-out.jpg

WTSHTF the grocery store clerk will not be reading the date on your "silver" dime nor giving you more then ten cents worth for it. Same thing at the gas station.

:oo-->




Maybe not the big chain stores but if the dollar is devaluing on a daily basis, you can expect the locally owned stores and shops to accept hard money.

In the 70s, some of the gas stations had huge queues lined up for people paying with paper money. Then they had a pump with no line for people paying with silver coinage.

That seems likely to repeat...

[wvojak]

Options:

1) Use PMs directly at a store to purchase items

2) Use PMs directly as a "barter" item with another person

3) Go to the local PM/Coin/Exchange dealer and get X% of spot for the current paper currency. then run out to the store and purchase goods

Most likely order of acceptance will be: #3, then #2 then #1, especially if you are talking about big chain stores. As Silver Rocket Bitches! stated, a smaller privately owned market will be far more likely to take PMs directly, than a Krogers. . .

But if I owned a big grocery chain, I'd set up a company owned assay booth in every store so the people could trade their metal for paper, and then turn around and buy stuff from my stores with the paper. That way I could increase my profits. Make ~10% on the metal exchange and another ~10% on the food selling. .

[JohnQPublic]

Problem is, there isn't enough gold/silver in private hands to allow an economy of 300,000,000+ people to function properly.

If there's ever a true crash of the system, don't count on getting much of anything from any store after about the 2nd day.



Are you Joeking? ;)

The production rate of gold and silver per capita has kept up since 1903. (http://www.gold-silver.us/what_silver_gold_buys.html)

[Joe King]

Problem is, there isn't enough gold/silver in private hands to allow an economy of 300,000,000+ people to function properly.

If there's ever a true crash of the system, don't count on getting much of anything from any store after about the 2nd day.



Are you Joeking? ;)

The production rate of gold and silver per capita has kept up since 1903. (http://www.gold-silver.us/what_silver_gold_buys.html)
Ok, fair enough. But who holds it all? Would all the gold held only by governments be sufficient for the job? If so, coin away! :)

[Sparky]

Just can't get my head around this notion of a dollar crash. What country is going to back their currency with hard assets so as to make it more attractive than the USD? What country has more resources than the U.S.?

We probably have the largest amount of stored gold, we have inground gold, we have inground oil and natural gas, we have inground minerals, we border the largest fresh water lakes in the world, our military exceeds the rest of the world's military combined, we have the most pervasive educational infrastructure with the highest literacy rate, and the world's best hospitals, medicine, and research.

This superpower status we enjoy is what will allow us to continue to gradually bleed the dollar for many years to come. I just don't see where anyone has presented a plausible crash scenario, including our massive future debt obligations. The largest estimate I've seen of our unfunded future liabilities of the next 75 years is $225T. Starting with a M3 money supply of $15T, complete monetization would result 94% inflation over 75 years, but that's what we've experienced over the last 75 years with no USD crash.

The plausible threats to U.S. world dominance is China, and they are generations away from pulling it all together. The only USD crash I could imagine would be an orchestrated sabotage by China and Russia working in cooperation with a few other resource-rich nations.

[Saul Mine]

You see what I mean? Everybody assumes nothing will change except you pay for stuff with gold coins or chickens or something. Yes, 94% of the value of the money has been stolen in the last 75 years, but that doesn't mean we can tolerate another 94% being stolen. For one thing, that theft required the tax rate to go from 8% to something over 50%, and another round of inflation would drive the tax rate over 100%, meaning if you earn a dollar you owe more than a dollar in taxes. Jvoking suggests that supermarket managers would buy PMs - Supermarkets would close because the trucks can't get gas to deliver the food and the food rots in the foreign countries where they grew. The managers may or may not know enough to deal in precious metals.

There is one thing about a collapse: it's a collapse!

[palani]

Just can't get my head around this notion of a dollar crash. What country is going to back their currency with hard assets so as to make it more attractive than the USD? What country has more resources than the U.S.?
The U.S. is a federation and not a country. No federation anywhere, at any time, ever has been or ever will be a sovereign country. That includes the U.K., Swiss Federation, Canada, Mexico, E.U., Russia.

As these federations are not sovereign then they have no need to act in a sovereign manner. A sovereign is responsible. A federation is not. Until there is some semblance of responsibility no federation is ever going to win at the money game.

Instead of money the script you are used to I call "corporate coupons", issued by corporations and for corporations. If in doubt check 12 USC 411 where only banks and agents of banks may possess federal reserve notes.

The dollar crash happened 80 years ago. Some people still deny it.

[Sparky]

...
Yes, 94% of the value of the money has been stolen in the last 75 years, but that doesn't mean we can tolerate another 94% being stolen. For one thing, that theft required the tax rate to go from 8% to something over 50%, and another round of inflation would drive the tax rate over 100%, meaning if you earn a dollar you owe more than a dollar in taxes.

I don't know; who would have thought we could ever lose 94% once? Look at it this way: The dollar has lost 50% of its value 4 times in the last 100 years: From 1910 to 1930, then from 1930-1970, then from 1970 to 1980, then from 1980 to 1995. In five more years it will have lost half its value for a fifth time. And this can happen without additional taxation (although that's coming too). My point is that I don't see any fundamentals pointing to an end to the inflation cycle that's we've been operating under for the last century.

Fiat's a human invention, like the wheel. Once you have invented it, it doesn't go away; it just gets re-made in different forms. We're not going back to a barter system, though I could see a distribution breakdown where some bartering might take place for days or weeks, which is why I don't think having extra "stuff" on hand is such a bad idea.



Jvoking suggests that supermarket managers would buy PMs - Supermarkets would close because the trucks can't get gas to deliver the food and the food rots in the foreign countries where they grew. The managers may or may not know enough to deal in precious metals.

There is one thing about a collapse: it's a collapse!


I could see a temporary distribution collapse, but not a dollar collapse. Just a dollar erosion. I don't see supermarkets dealing with PM in lieu of currency. I've tried to envision how that scenario would be plausible, but now that fiat is digital and the government is willing to step in and back it regardless of its long-term inflationary impact, I just can't see it. At least not until there is some other sovereignty that can step in and offer a more sound fiat option.

As for gas stations accepting PM in the 1970's, they continued to take cash, and I'm sure they were only taking PM at an exchange that was very profitable to them. I'm sure you could get a store owner to take silver right now at $10/ounce.

[Sparky]

Just can't get my head around this notion of a dollar crash. What country is going to back their currency with hard assets so as to make it more attractive than the USD? What country has more resources than the U.S.?
The U.S. is a federation and not a country. No federation anywhere, at any time, ever has been or ever will be a sovereign country. That includes the U.K., Swiss Federation, Canada, Mexico, E.U., Russia.

As these federations are not sovereign then they have no need to act in a sovereign manner. A sovereign is responsible. A federation is not. Until there is some semblance of responsibility no federation is ever going to win at the money game.

Instead of money the script you are used to I call "corporate coupons", issued by corporations and for corporations. If in doubt check 12 USC 411 where only banks and agents of banks may possess federal reserve notes.

The dollar crash happened 80 years ago. Some people still deny it.


Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.

[Heimdhal]

preps and barter are for during SHTF

PMs are for AFTER SHTF when things begin to normalize, so you have a vehicle to transfer your pre-SHTF wealth into the new system.


I dont know why people think theres going to be this mass junk silver trading going on. How many people in your daily life do you know that even has a clue as to what a silver merc is or what its worth today? What makes you think they are going to have any after SHTF to give you to buy some beans off of you? Are you going to sell your last pound of rice for 5 mercs and a 1/10 panda?

Common goods will be traded for common goods. You've got and excess of rice, I've got an excess of flour, we swap. This is assuming a total collapse of any currency trading. Maybe youll get some jewlery if you're lucky.


Eventualy a new currency system, whether fiat or not, will ineveitably take over. This is what your PM's are for.

[Joe King]

You see what I mean? Everybody assumes nothing will change except you pay for stuff with gold coins or chickens or something. Yes, 94% of the value of the money has been stolen in the last 75 years, but that doesn't mean we can tolerate another 94% being stolen. For one thing, that theft required the tax rate to go from 8% to something over 50%, and another round of inflation would drive the tax rate over 100%, meaning if you earn a dollar you owe more than a dollar in taxes. Jvoking suggests that supermarket managers would buy PMs - Supermarkets would close because the trucks can't get gas to deliver the food and the food rots in the foreign countries where they grew. The managers may or may not know enough to deal in precious metals.

There is one thing about a collapse: it's a collapse!
What you're saying is that we're simply reaching the point of diminishing returns.
i.e. if the first 94% took 75 years, the next 94% will take just a few.

[Book]

We'll probably see a rise in bartering and garage/yard sales.


http://www.topnews.in/files/bank-robbery..jpg

http://media.wsbt.com/images/Elkhart+Chase+Bank+Robbery+3.JPG

:D

[palani]

Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.


My entire argument is based upon communism. Turns out you have been acting as an agent for the federal reserve all your life and from a private property perspective you own nothing (fulfilling the requirements of the first plank of the communist manifesto).

My observation is not politically correct because most people just think communism morphed into environmental whack-ism and forget that a forest starts with a single tree.

[007]

...trading junk silver for bread and gas?



http://dianasaurdishes.com/wp-content/uploads/2010/03/grocery-check-out.jpg

WTSHTF the grocery store clerk will not be reading the date on your "silver" dime nor giving you more then ten cents worth for it. Same thing at the gas station.

:oo-->



WTSHTF the grocery store clerk will not be reading the date on your "silver" dime because they'll be too busy trying to count the zeros on your bank note. ;D

[Sparky]

Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.


My entire argument is based upon communism. Turns out you have been acting as an agent for the federal reserve all your life and from a private property perspective you own nothing (fulfilling the requirements of the first plank of the communist manifesto).

My observation is not politically correct because most people just think communism morphed into environmental whack-ism and forget that a forest starts with a single tree.

If I've been an agent for the Federal Reserve all my life, but I have been comfortable, well-fed, lived, laughed, loved, learned, taught, sang, and danced, how has a dollar crash impacted my life? It's not really a crash until it has some impact on those essentials. Call it what you will.

[palani]

If I've been an agent for the Federal Reserve all my life, but I have been comfortable, well-fed, lived, laughed, loved, learned, taught, sang, and danced, how has a dollar crash impacted my life? It's not really a crash until it has some impact on those essentials. Call it what you will.

These are the skills you are going to pass along to your children to assure their survival?

[Joe King]

Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.


My entire argument is based upon communism. Turns out you have been acting as an agent for the federal reserve all your life and from a private property perspective you own nothing (fulfilling the requirements of the first plank of the communist manifesto).

My observation is not politically correct because most people just think communism morphed into environmental whack-ism and forget that a forest starts with a single tree.

If I've been an agent for the Federal Reserve all my life, but I have been comfortable, well-fed, lived, laughed, loved, learned, taught, sang, and danced, how has a dollar crash impacted my life? It's not really a crash until it has some impact on those essentials. Call it what you will.


The majority of people having taken that position is essentially why we are where we are.

[Sparky]

Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.


My entire argument is based upon communism. Turns out you have been acting as an agent for the federal reserve all your life and from a private property perspective you own nothing (fulfilling the requirements of the first plank of the communist manifesto).

My observation is not politically correct because most people just think communism morphed into environmental whack-ism and forget that a forest starts with a single tree.

If I've been an agent for the Federal Reserve all my life, but I have been comfortable, well-fed, lived, laughed, loved, learned, taught, sang, and danced, how has a dollar crash impacted my life? It's not really a crash until it has some impact on those essentials. Call it what you will.


The majority of people having taken that position is essentially why we are where we are.



You mean because they're happy? You can experience all of those things without being materialistic or in debt.

Look, this is a discussion about a USD crash. It's not about survival or preparation or sheep. I was simply making a counterpoint to the suggestion that the USD crashed 80 years ago. It didn't. Because if it did, it really wasn't so bad after all, and we should welcome another 80 years of crashing. Crash implies a severe and disruptive market dislocation. I've never had a retailer hesitate to accept my FRNs in exchange for goods. The day that they do, we can start to consider it a crash.

[Gknowmx]

For some reason, this thread makes me think of the genre of comedy called "redneck jokes". Except here I would like to substitute "redneck" with "FEDneck", as in:

If you plan to wait until your FRN is not accepted by a cashier before you worry about a dollar crash.... you might be a FEDneck....... here's your sign.... ;D

[Joe King]

Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.


My entire argument is based upon communism. Turns out you have been acting as an agent for the federal reserve all your life and from a private property perspective you own nothing (fulfilling the requirements of the first plank of the communist manifesto).

My observation is not politically correct because most people just think communism morphed into environmental whack-ism and forget that a forest starts with a single tree.

If I've been an agent for the Federal Reserve all my life, but I have been comfortable, well-fed, lived, laughed, loved, learned, taught, sang, and danced, how has a dollar crash impacted my life? It's not really a crash until it has some impact on those essentials. Call it what you will.


The majority of people having taken that position is essentially why we are where we are.



You mean because they're happy? You can experience all of those things without being materialistic or in debt.

Look, this is a discussion about a USD crash. It's not about survival or preparation or sheep. I was simply making a counterpoint to the suggestion that the USD crashed 80 years ago. It didn't. Because if it did, it really wasn't so bad after all, and we should welcome another 80 years of crashing. Crash implies a severe and disruptive market dislocation. I've never had a retailer hesitate to accept my FRNs in exchange for goods. The day that they do, we can start to consider it a crash.
The point I was getting at is that people have been comfortable enough to take the position that they hadn't needed to worry about what they're gov is actually doing in their names.
That's all.

[Sparky]

The point I was getting at is that people have been comfortable enough to take the position that they hadn't needed to worry about what they're gov is actually doing in their names.
That's all.


I totally agree with you on that part. And there will be a price to pay. I just think it will be more in the form of a prolonged dollar erosion rather than an actual collapse.

[Joe King]

The point I was getting at is that people have been comfortable enough to take the position that they hadn't needed to worry about what they're gov is actually doing in their names.
That's all.


I totally agree with you on that part. And there will be a price to pay. I just think it will be more in the form of a prolonged dollar erosion rather than an actual collapse.
Just how much longer do you think it will take to lose the last few cents worth of it?
The long slow devaluation has been on-going for a long time as it is. We're fast approaching "end game".

[Sparky]

The point I was getting at is that people have been comfortable enough to take the position that they hadn't needed to worry about what they're gov is actually doing in their names.
That's all.


I totally agree with you on that part. And there will be a price to pay. I just think it will be more in the form of a prolonged dollar erosion rather than an actual collapse.
Just how much longer do you think it will take to lose the last few cents worth of it?
The long slow devaluation has been on-going for a long time as it is. We're fast approaching "end game".



It will take 1-2 generations for a viable alternative to the U.S. reign on fiat currency. So I'd say this could go on for 20-40 years, which would be one more complete economic cycle. So I say we get through this crisis painfully over the next 5-10 years, and then maybe our sovereignty will be at risk some time in the middle of this century.

Our crumbling economic infrastructure is enormous. There's a lot of inertia to overcome.

[palani]

Our crumbling economic infrastructure is enormous. There's a lot of inertia to overcome.

You don't see buildings dismantled brick by brick these days. Once the foundation and support has been breached gravity will take care of the inertia.

[007]

Whether a frog is microwaved or slow boiled the result is the same.

[Joe King]

Our crumbling economic infrastructure is enormous. There's a lot of inertia to overcome.

You don't see buildings dismantled brick by brick these days. Once the foundation and support has been breached gravity will take care of the inertia.
Exactly. It's slow at first, but eventually reaches a pont where it all just suddenly falls apart.

[k-os]

For some reason, this thread makes me think of the genre of comedy called "redneck jokes". Except here I would like to substitute "redneck" with "FEDneck", as in:

If you plan to wait until your FRN is not accepted by a cashier before you worry about a dollar crash.... you might be a FEDneck....... here's your sign.... ;D


^^ That is funny.

[gunDriller]

during the banking crisis in September October 2008, it got to a point where shippers would not accept a Letter of Credit (LoC) at the docks in Long Beach.

the LoC is sort of like a purchase order, it's an agreement to pay, backed by a bank.

so shipping companies refused to unload cargo, including food destined for LA.

i think the dollar crash and the associated banking crashes will result in more stuff not getting unloaded, at the docks.


if i ran a shipping company, i'd keep some money in gold in order to keep my product moving at the dock.

Mike Ruppert sometimes uses the term, "LA is a city of 12 million people living in the middle of the desert, with a 3 day supply of food."

the dollar crash will interrupt our Just-in-Time society.


i remember the justification for Just-in-Time sometime in the '80's, when it was first pushed in the US. "it can lower our inventory costs".

this accounting concept, when applied in LA, creates a real interesting situation when that supply chain gets interrupted.

People get whiney when their blood sugar gets low.

[Sparky]

We're confusing crises, here. (A crisis identity crisis?)

During the fall of 2008, when the shippers were not accepting Letters of Credit, it was because they wanted dollars and there weren't enough dollars. They no longer wanted pieces of paper, they wanted FRNs! Do you see the irony?

From July 2008 through the October panic, the US Dollar Index soared 22%, from 72 to 88 in less than five months. Gold plummeted 30% from $1000 to $700. The entire world rushed to US dollars as a safe haven.

Now, I agree that we may be facing Just in Time distribution problems with food and other essential goods. And I agree our system is F'd up, and there is going to be a painful shakeout, and there's going to be a lot of people shocked when the curtain comes down.

But it ain't gonna be because of a USD collapse. At first, it will likely be due to a dollar shortage, where dollars become too valuable because people don't have enough of them. And then after they flood the system with dollars to meet the demand, it will lead to an eventual dilution of the dollar's buying power, perhaps over an entire decade. But expect it to be more insidious than a collapse. Expect it to lose 5-15% per year over an entire decade, so that in ten years it will have lost half of its current buying power. Simultaneously, other fiat currency may lose 60-80% of it's buying power over the same time, leaving the USD as the reigning currency champion, in a tournament of losers.

The dollar can't collapse unless all fiat currency goes away (which is an implausible scenario), or unless some other fiat currency takes its place.

The only scenario I see of another fiat currency taking its place would be through some orchestrated effort by other countries to topple the dollar, perhaps involving China and Russia. Even if the USD lost this currency battle, it would still be a competitive fight, and it would not render the USD crippled. More likely, it would end up like the British pound sterling of the past 75 years, wounded but not dead.

[palani]

http://www.gutenberg.org/etext/6949


"You can, indeed, arrange it so that
the people shall be forced to take a thousand _livres_ in paper for a
thousand _livres_ in specie; but you can never arrange it so that a
man shall be obliged to give a thousand _livres_ in specie for a
thousand _livres_ in paper,--in that fact is embedded the entire
question; and on account of that fact the whole system fails."



Thus came a collapse in manufacturing and commerce, just as it had
come previously in France: just as it came at various periods in
Austria, Russia, America, and in all countries where men have tried to
build up prosperity on irredeemable paper.



This great debtor class, relying on the multitude who could be
approached by superficial arguments, soon gained control. Strange as
it might seem to those who have not watched the same causes at work at
a previous period in France and at various times in other countries,
while every issue of paper money really made matters worse, a
superstition gained ground among the people at large that, if only
_enough_ paper money were issued and were more cunningly handled the
poor would be made rich.


It decreed that any person selling gold or silver coin,
or making any difference in any transaction between paper and specie,
should be imprisoned in irons for six years:--that any one who refused
to accept a payment in _assignats_, or accepted _assignats_ at a
discount, should pay a fine of three thousand _francs_; and that any
one committing this crime a second time should pay a fine of six
thousand _francs_ and suffer imprisonment twenty years in irons.


On August 1, 1795, this gold _louis_ of 25 _francs_ was
worth in paper, 920 _francs_; on September 1st, 1,200 _francs_; on
November 1st, 2,600 _francs_; on December 1st, 3,050 _francs_. In
February, 1796, it was worth 7,200 _francs_ or one franc in gold was
worth 288 _francs_ in paper. Prices of all commodities went up nearly
in proportion.


He who in 1790 had borrowed
10,000 _francs_ could pay his debts in 1796 for about 35 _francs_.


Nothing could better exemplify the saying of one of the most shrewd of
modern statesmen that "There will always be money."


As a natural consequence a great debtor class grew rapidly, and this class
gave its influence to depreciate more and more the currency in which
its debts were to be paid.



It ended in the complete financial, moral and political prostration of
France-a prostration from which only a Napoleon could raise it.


we shall see still more clearly the advantage of meeting a financial
crisis in an honest and straightforward way, and by methods sanctioned
by the world's most costly experience, rather than by yielding to
dreamers, theorists, phrase-mongers, declaimers, schemers, speculators
or to that sort of, "Reform" which is "the last refuge of a
scoundrel."

Comments on the French experiment with fiat that ended prior to the U.S. (un)civil war. Seems we are doomed to repeat history. Wonder who will represent Napoleon?

[gunDriller]

We're confusing crises, here. (A crisis identity crisis?)

During the fall of 2008, when the shippers were not accepting Letters of Credit, it was because they wanted dollars and there weren't enough dollars. They no longer wanted pieces of paper, they wanted FRNs! Do you see the irony?

From July 2008 through the October panic, the US Dollar Index soared 22%, from 72 to 88 in less than five months. Gold plummeted 30% from $1000 to $700. The entire world rushed to US dollars as a safe haven.

Jeez - nice clear explanation !

in 2010 when people fled to the dollar, it wasn't quite as traumatic for gold. looks like they fled to gold too.

wonder what will happen next ... :o

[Joe King]

We're confusing crises, here. (A crisis identity crisis?)

During the fall of 2008, when the shippers were not accepting Letters of Credit, it was because they wanted dollars and there weren't enough dollars. They no longer wanted pieces of paper, they wanted FRNs! Do you see the irony?
It wasn't that the shippers weren't accepting liners of credit, it was that the lines of credit weren't being extended to the purchasers of the goods being shipped.
Which is why the buyers had nothing to "pay" the shippers with. The shippers would have gladly accepted credit as payment had the buyers been able to offer it to them.

What that all came down to is that the creditors lost confidence and no longer wanted to continue extending credit to those who relyed upon that credit to continue bringing in new supplies.

Think of it like this.
You import widgets and because of decades of inflation you've come into the habit of using credit to purchase widgets because you know that you'll be able to re-sell them for more in the future thereby making your widget purchases easier to pay for because you're now able to use tomorrows inflated dollars to pay for yesterdays shipments.

Once your creditors see that your debt is going up faster than your anticipated future ability to pay, the credit stops and you're left waiting for widgets you can no longer get, but that you needed to get in order to be able to pay for the last shipment. At which point you go into default.

That's why the credit crunch of '08 happened. Creditors lost confidence and as a result, the gov in all our names, gave the creditors what amounted to ernest money so that the creditors might again have enough confidence in our future ability to pay, to resume extending credit.
How they actually did that was by agreeing to buy the bad debt the creditors had gotten burned by. The creditors were "once bitten, twice shy".


It's the same reason why people in general are having a harder time aquiring credit at all these days.
We're just not seen as being "worth it" as much as we collectively had been in the past.
Which is what will eventually drive up interest rates.
i.e. at some point the creditors will eventually demand higher rates in order to keep extending credit.


BTW, when you say they wanted FRNs instead, are you implying that there's a difference between digital dollars and physical {frn} dollars? They're both nothing more than evidence of past debts.





From July 2008 through the October panic, the US Dollar Index soared 22%, from 72 to 88 in less than five months. Gold plummeted 30% from $1000 to $700. The entire world rushed to US dollars as a safe haven.And what were they really investing in? Our govs ability to tax us in the future because the us gov was seen as too big to fail, and therefore a seemingly safe bet in the short-term.



Now, I agree that we may be facing Just in Time distribution problems with food and other essential goods. And I agree our system is F'd up, and there is going to be a painful shakeout, and there's going to be a lot of people shocked when the curtain comes down.

But it ain't gonna be because of a USD collapse. At first, it will likely be due to a dollar shortage, where dollars become too valuable because people don't have enough of them. And then after they flood the system with dollars to meet the demand, it will lead to an eventual dilution of the dollar's buying power, perhaps over an entire decade. But expect it to be more insidious than a collapse. Expect it to lose 5-15% per year over an entire decade, so that in ten years it will have lost half of its current buying power. Simultaneously, other fiat currency may lose 60-80% of it's buying power over the same time, leaving the USD as the reigning currency champion, in a tournament of losers.That 5-15% lose in value represents an increasingly smaller and smaller amount over time in a system that has, over time, been relying on taking bigger and bigger bites out of that value. Those two facts are on a collision course.

Also, keep in mind that dollars increasing in value is but a symptom of less credit having been previously extended.



The dollar can't collapse unless all fiat currency goes away (which is an implausible scenario), or unless some other fiat currency takes its place.They don't have to "go away" for a collapse of the dollar to occur. All that takes is a lack of confidence on the part of our creditors in our over-all ability to pay in the future.
In the '30s the dollars went away to the point of causing destitution and it didn't "collapse". Rather, it went on to become the World reserve currency.
In a collapse you could have a boatload of them and they'll do you no more good than monopoly money would.



The only scenario I see of another fiat currency taking its place would be through some orchestrated effort by other countries to topple the dollar, perhaps involving China and Russia. Even if the USD lost this currency battle, it would still be a competitive fight, and it would not render the USD crippled. More likely, it would end up like the British pound sterling of the past 75 years, wounded but not dead.
This is happening right now. Loses are starting to be cut., and that will continue at an ever accelerating rate until it reaches a point of critical mass and everyone realizes that the Club is on fire and then rush to the exits.
We, the people of America paid extra for front row seats, if not backstage passes.
i.e. we'll be the last to see that we've actually been using monopoly money to buy stuff with.

[Book]

Now, I agree that we may be facing Just in Time distribution problems with food and other essential goods. And I agree our system is F'd up, and there is going to be a painful shakeout, and there's going to be a lot of people shocked when the curtain comes down.



Americans just learned this week that 500,000,000 eggs contaminated by salmonella were NEVER inspected by any government agency. Half a billion eggs and not one FDA or USDA inspector.

Think about that.

Think about that again.

http://online.wsj.com/article/SB10001424052748703882304575466020771861484.html?m od=googlenews_wsj

:oo-->

[AndreaGail]

I remember when back in high school when i worked at the supermarket we were just about to receive a shipment when a huge storm hit and the trucks could not get up the mountains. milk and most dairy was out that night. two days later most produce was out. people were furious

its just amazing how the JIT system relies on split second transportation and delivery and if something happens it all comes crashing down



during the banking crisis in September October 2008, it got to a point where shippers would not accept a Letter of Credit (LoC) at the docks in Long Beach.

the LoC is sort of like a purchase order, it's an agreement to pay, backed by a bank.

so shipping companies refused to unload cargo, including food destined for LA.

i think the dollar crash and the associated banking crashes will result in more stuff not getting unloaded, at the docks.


if i ran a shipping company, i'd keep some money in gold in order to keep my product moving at the dock.

Mike Ruppert sometimes uses the term, "LA is a city of 12 million people living in the middle of the desert, with a 3 day supply of food."

the dollar crash will interrupt our Just-in-Time society.


i remember the justification for Just-in-Time sometime in the '80's, when it was first pushed in the US. "it can lower our inventory costs".

this accounting concept, when applied in LA, creates a real interesting situation when that supply chain gets interrupted.

People get whiney when their blood sugar gets low.

[Defender]

Americans just learned this week that 500,000,000 eggs contaminated by salmonella were NEVER inspected by any government agency. Half a billion eggs and not one FDA or USDA inspector.

Think about that.

Think about that again.

http://online.wsj.com/article/SB10001424052748703882304575466020771861484.html?m od=googlenews_wsj

:oo-->
That's cause they're all too busy inspectin' the people who want to sell 5 eggs from the chicken coop in their backyards.

[Saul Mine]

It wasn't that the shippers weren't accepting liners of credit, it was that the lines of credit weren't being extended to the purchasers of the goods being shipped.
Which is why the buyers had nothing to "pay" the shippers with. The shippers would have gladly accepted credit as payment had the buyers been able to offer it to them.

What that all came down to is that the creditors lost confidence and no longer wanted to continue extending credit to those who relyed upon that credit to continue bringing in new supplies.

The important point, in relation to the OP, is that nobody predicted this, and in fact nobody could even figure out what had happened until quite a while later. The details of a collapse are always unpredictable; if it were not so, it could be prevented.

[Joe King]

It wasn't that the shippers weren't accepting liners of credit, it was that the lines of credit weren't being extended to the purchasers of the goods being shipped.
Which is why the buyers had nothing to "pay" the shippers with. The shippers would have gladly accepted credit as payment had the buyers been able to offer it to them.

What that all came down to is that the creditors lost confidence and no longer wanted to continue extending credit to those who relyed upon that credit to continue bringing in new supplies.

The important point, in relation to the OP, is that nobody predicted this, and in fact nobody could even figure out what had happened until quite a while later. The details of a collapse are always unpredictable; if it were not so, it could be prevented.
There were people who saw it coming. They just weren't listened to.

I'd say it should have been obvious that our creditors would do what they did once it became obvious to them that our future ability to pay could not keep up with debts previously incurred. It was also obvious 5 years ago that we were rapidly approaching that point.
Back in 2005-2006 it was clear that housing and real estate in general was the "asset" that was driving the Nations consumption and that real estate ws in a bubble.
If a little guy like me could have seen it coming just based upon the information readily avaliable at the time, why couldn't the big guys?
I told lots of people back in '06 that we were about to have a big recession. Told people not to buy a house then, but to wait. Didn't do any good though.

But if you're talking about knowing exactly what firms would crash/need bailouts and on what day, or what day the market would crash, probaly no one knew those details for sure. Just that it was imminent. {although on a hunch I did in fact pick 10-01-08 as crash-day back in January of that year}

It's just like back in '99 when anyone should have been able to realize that the stock market was primed for a crash.
I mean, just how many non-earning, grossly over valued companies does it take for people to realize they've been sold pie-in-the-sky?
...but of course the ones who bought it couldn't see it as it would be admitting they were wrong, and their profits depended upon them being right.

The reason these things have happened all comes down to what you always say about too many people being infected with the spirit of stupidity.
And you're dead-on when you say that, because there really is a spirit of stupid in this Nation and it blinds people by filling their eyes with $ signs.

[Gknowmx]

Joe, you say that there were people who saw it coming. But isn't that just survivorship bias? we have 6 billion people on this planet that could make 1000s of "warnings". That someone might "predict" something and say they saw it coming is usually not useful without the context of all of the rest of their predictions and warnings. And then there are the folks that will say that prognosticator so-and-so has predicted the last x number of crashes. Again, this is useless without context. I am with Taleb on this, saddly, most are simply 'fooled by randomness'.

[Joe King]

Joe, you say that there were people who saw it coming. But isn't that just survivorship bias? we have 6 billion people on this planet that could make 1000s of "warnings". That someone might "predict" something and say they saw it coming is usually not useful without the context of all of the rest of their predictions and warnings. And then there are the folks that will say that prognosticator so-and-so has predicted the last x number of crashes. Again, this is useless without context. I am with Taleb on this, saddly, most are simply 'fooled by randomness'.
I'm not saying to "predict" it in fortune teller kind of way, just that IMHO it was easy to see that an implosion was coming.
All you needed to see was our collective level of debt rising faster than our collective earnings, while realizing that mostly everything was being financed by ficticous real easte prices.
I realized then that unless some other form of obtaining easy credit manifested itself, the party would soon be over.

[Sparky]

Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.

However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.

[Joe King]

Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.

However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
IMO, lack of faith in credit is lack of faith in the currency as the currency itself is based upon debt. Which requires confidence to enter into to begin with.

[Carl]

Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.

However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
I think what's being confused is the dollar and credit. There won't be a dollar collapse any time soon but we may very well experience a global collapse of credit. And credit constitutes the vast majority of what we call the money supply. The majority of high-powered banks are running on government sanctioned accounting fraud to keep their doors open and it's just a matter of time before it all catches up with them, and with us.

So Sparky is right, we shouldn't worry about a dollar collapse, we should be worrying about credit collapse, which will be far more pervasive and devastating.

.


.

[Joe King]

Joe, your explanations clarify why lack of faith in future ability to pay can cause a disruption to distribution and availability of product.

However, this is completely different than lack of faith in the currency itself. That seems to be what is being confused in this discussion.
I think what's being confused is the dollar and credit. There won't be a dollar collapse any time soon but we may very well experience a global collapse of credit. And credit constitutes the vast majority of what we call the money supply. The majority of high-powered banks are running on government sanctioned accounting fraud to keep their doors open and it's just a matter of time before it all catches up with them, and with us.

So Sparky is right, we shouldn't worry about a dollar collapse, we should be worrying about credit collapse, which will be far more pervasive and devastating.

.


.
I wasn't saying we should worry about a dollar collapse first. IMHO that'll come last when everyone finally sees it for the monopoly money it is.

[Gknowmx]

All you needed to see was our collective level of debt rising faster than our collective earnings productivity, ...... I realized then that unless some other form of obtaining easy credit manifested itself, the party would soon be over.


Fixed it for ya ;D

We have to realize that we need to produce more than we consume.

A monetary system crash is cooked in the books; like flipping a coin and calling heads or tails (inflation/deflation), we don't know which outcome we got until the coin lands; but we KNOW the coin WILL land, it is part of the game. So isn't the production of the coin in the first place. Right now instead of using an honest silver quarter, the coin flippers have convinced us to call "heads" or "tails" (inflation/deflation) with a chocolate coin on a hot day at noon on an asphalt parking lot. When the coin melts, everyone knows the game is over regardless of whether it landed heads or tails up.

Can we come to this realization before the crash or after? We need to get out of the sun, off the asphalt, and back to work and stop playing games. If we dont produce more than we consume, no monetary system is going to work.

A critical component of any monetary system more complex than bartering is the concept of time; beyond the present tense. If all we focus on is present consumption without a realization of the importance of producing with the future in mind, the world will become a very ugly place; There is a monetary system that IS even simpler than bartering…… plundering for the moment.

The monetary system shenanigans will continue until there is a human energy crisis as energy is the currency of all life. The ultimate currency correction is rapidly approaching and it is very clear that as a civilization we are doing far too little to preserve our civilization as 6 billion humans know it. The ultimate currency correction may deflate humanity by 90%. This may not be a bad thing-for the 10% that make it to the next civilization.

[StackerKen]

preps and barter are for during SHTF

PMs are for AFTER SHTF when things begin to normalize, so you have a vehicle to transfer your pre-SHTF wealth into the new system.


I dont know why people think theres going to be this mass junk silver trading going on. How many people in your daily life do you know that even has a clue as to what a silver merc is or what its worth today? What makes you think they are going to have any after SHTF to give you to buy some beans off of you? Are you going to sell your last pound of rice for 5 mercs and a 1/10 panda?

Common goods will be traded for common goods. You've got and excess of rice, I've got an excess of flour, we swap. This is assuming a total collapse of any currency trading. Maybe youll get some jewlery if you're lucky.


Eventualy a new currency system, whether fiat or not, will ineveitably take over. This is what your PM's are for.


I don't see the supermarket taking silver for food.
May not be much food there anyhow

But there will be folks like Ponce that will take silver for TP.

That's why I like silver dimes :)


Thats said, I don't think the Dollar will completely collapse...But it can't hurt to (try to) be prepared

[palani]

I don't think the Dollar will completely collapse...But it can't hurt to (try to) be prepared

Military script. When the black market gets too out of hand they announce you have a week to turn them in or else they become valueless. Have too many of them and questions will be asked "how did you get so many" and "did you get them by legitimate means".

[Joe King]

I don't think the Dollar will completely collapse...But it can't hurt to (try to) be prepared

Military script. When the black market gets too out of hand they announce you have a week to turn them in or else they become valueless. Have too many of them and questions will be asked "how did you get so many" and "did you get them by legitimate means".
If that were to happen, people who have "too many" will make a mad rush to try to convert them into some type of tangible asset in an attempt to preserve their "wealth".
Unless of course all commodity transactions are banned for that same week.

Really though, if you want to get technical about it aren't we already using script?

[Joe King]

All you needed to see was our collective level of debt rising faster than our collective earnings productivity, ...... I realized then that unless some other form of obtaining easy credit manifested itself, the party would soon be over.


Fixed it for ya ;D :) Eh. Whichever way you prefer it is fine by me, because in my book they're the same.
i.e. you can't earn if you're not producing something someone else wants. Be it an automobile, or an earnings report for Google. Or anything in between.



We have to realize that we need to produce more than we consume.
Most definitely.

[palani]

if you want to get technical about it aren't we already using script?
This is my point. A FRN is military script.

If there is a rush to commodities to get rid of soon to be worthless paper then the ONLY motive a seller of a commodity would have to accept paper before the deadline is that he would believe he could convert it legally to the new system. There is a degree of risk involved for the holder of the commodity.

[Gknowmx]

Fekete had something to say about this: http://www.professorfekete.com/articles/AEFWhatGoldAndSilverAnalystsOverlook.pdf

For those here thinking in linear terms (ie slow condinued devaluation of the dollar), Fekete offers a non-linear explanation worth considering.

[kregener]

Good GRIEF!

Total monetary collapse? Take the Rodney King riots and extrapolate them out times 1,000 in every major city in America.

Grocery store accepting silver?

Stores will be stripped bare in HOURS.

Fires - nobody to put them out.
Rampant crime, murder, robbery, theft, looting - no cops.
No trash collection.
No infrastructure maintenance (streetlights, potholes, water/gas mains).
Power outages - nobody to bring it back online.

There are not even enough military to enact Martial Law in every major U.S. city, let alone everywhere.

If your plan is to 'bug in', all I can say is, good luck!

[Book]

Stores will be stripped bare in HOURS.
Fires - nobody to put them out.
Rampant crime, murder, robbery, theft, looting - no cops.
No trash collection.
No infrastructure maintenance (streetlights, potholes, water/gas mains).
Power outages - nobody to bring it back online.



http://i242.photobucket.com/albums/ff134/LaSandra_n_Parnell/z24VagabondsofGor.jpg

http://i242.photobucket.com/albums/ff134/LaSandra_n_Parnell/z15RogueofGor.jpg

Yippie!

:D

[Hatha Sunahara]

It might be foolish to assume that TPTB haven't prepared for the collapse of the dollar. I would assume that they already have a Plan B that they will trot out immediately when it becomes obvious that the dollar is dead. I'm not assuming it's the government that is planning this. The government is planning to deal with chaos and dissent--FEMA and Homeland Security perhaps being the main actors here. TPTB work through the secret government--the 'advisors' and 'thinktanks' like the CFR and the Brookings Institution and even more subtly through the Tavistock Institute which originates the propaganda that supports their agenda.

My best guess is that they will initially try to 'reboot' the current privatized monopoly on the creation of fiat money, rebranding it as something 'new and improved'. They will also try to introduce a global currency in a system that has the same defects as the current system. The MSM will filter out any competing ideas, and the sheeple will acquiesce without asking too many questions, thinking that the 'authorities' know what they are doing. If that pans out for them, they will likely have bought themselves another hundred year monopoly on the creation of worthless money backed up only by peoples' willingness to work for this script.

It seems to me the upcoming dollar collapse is a golden opportunity to develop an alternative money system that is free of the defects of the current system. The one feature that needs to be eliminated is the creation of money through 'debt' aka 'charging interest for a loan'. Creation of money needs to become a public utility, and no one should be allowed to charge for that service any more than it cost them to create that money. Certainly no one should be allowed to charge interest on the loan of money that one conjures up for free. The entity that creates money should not be allowed to charge interest for that loan. Anyone else who does not create money should be allowed to charge interest if they lend money that they earned through 'endeavor'. Banks should only lend money at interest that is deposited with them by savers. If they lend out more money than that, they should not be allowed to demand collateral, nor charge interest for such loans, and only reasonable service fees. Banks should not be allowed to do any financial transactions other than loans. There should be simple, easy to understand laws regarding lending and borrowing of money.

These simple (hah) reforms would remove the power of the banksters and create a system that has long term sustainability (provided the usurers are unable to subvert it). There would of course need to be additional reforms to deal with monopolistic private corporations who would step into the shoes of the banksters. Corporations should not have the rights of persons before the law. The government should have the power to dissolve corporations that violate public trust. If there are laws that insure an arm's length relationship between corporations and the government, we would not need to worry about the emergence of fascist regimes.

We should use the opportunity of a painful dollar collapse to fix not just the money system, but the legal system as well.

I know I'm just farting in the wind because the current system is too well entrenched to allow any of these things to happen. But if these things don't happen, we don't deserve to call ourselves civilized.

Hatha

[Jewboo]

Good GRIEF!

Total monetary collapse? Take the Rodney King riots and extrapolate them out times 1,000 in every major city in America.

Grocery store accepting silver?

Stores will be stripped bare in HOURS.

Fires - nobody to put them out.
Rampant crime, murder, robbery, theft, looting - no cops.
No trash collection.
No infrastructure maintenance (streetlights, potholes, water/gas mains).
Power outages - nobody to bring it back online.

There are not even enough military to enact Martial Law in every major U.S. city, let alone everywhere.

If your plan is to 'bug in', all I can say is, good luck!

Global stocks plunged with the Emini locked limit down for the longest period on record, crude oil tumbled as much as 33% as WTI plunged as low as $27.34, and the yield on the 10Y Treasury crashed to an all time low of 0.31% after Saudi Arabia launched a price war with Russia, sending investors already panicked by the coronavirus fleeing for safe assets. (https://www.zerohedge.com/markets/dual-coronavirus-oil-shocks-crash-world-markets-10y-yield-craters-futures-pinned-limit-down)

:)

[Jewboo]

Global stocks plunged with the Emini locked limit down for the longest period on record, crude oil tumbled as much as 33% as WTI plunged as low as $27.34, and the yield on the 10Y Treasury crashed to an all time low of 0.31% after Saudi Arabia launched a price war with Russia, sending investors already panicked by the coronavirus fleeing for safe assets. (https://www.zerohedge.com/markets/dual-coronavirus-oil-shocks-crash-world-markets-10y-yield-craters-futures-pinned-limit-down)

:)


US stock trading was halted on Thursday morning after markets in New York dropped as much as nine percent right at the opening bell, triggering a mandatory pause. The heavy losses continues as trading resumed. (https://www.rt.com/business/482943-us-markets-face-another-bloodbath/) The Dow Jones Industrial Average lost around 2,000 points or more than nine percent in the first minutes of trading. The S&P 500 fell almost 200 points, while the Nasdaq Composite lost 550 points, each dropping over eight percent, and triggering a 15-minute stoppage in trading at the New York Stock Exchange. (https://www.rt.com/business/482943-us-markets-face-another-bloodbath/)

:)

[monty]

https://constitutionalmilitia.org/the-state-electronic-gold-currency-plan/There is an alternative to FRNs, CBDCs etc., transact in specie More here ---> https://constitutionalmilitia.org/the-state-electronic-gold-currency-plan/
https://constitutionalmilitia.org/wp-content/uploads/marketing_alt_curr_1776_debit_card-scaled.jpg

[ziero0]

You get forced into Equity which operates on any random thought flitting through the chancellors mind because Law is incompetent. Law is incompetent because it does not interfere in maritime affairs. Your contracts are maritime because paper money is maritime. Like all insurance is maritime.

Non-paper money instruments that are not substance based do not cure this defect.

There is a solution. It is called 3036 one dollar Fox stamp. When I started buying them they were $4 each. They are now $15. For the function they perform (removing your contract from Equity) they are worth much more.

[monty]

You get forced into Equity which operates on any random thought flitting through the chancellors mind because Law is incompetent. Law is incompetent because it does not interfere in maritime affairs. Your contracts are maritime because paper money is maritime. Like all insurance is maritime.

Non-paper money instruments that are not substance based do not cure this defect.

There is a solution. It is called 3036 one dollar Fox stamp. When I started buying them they were $4 each. They are now $15. For the function they perform (removing your contract from Equity) they are worth much more.

I was in the Chilean Embassy in Los Angeles several years ago. I notice that they had some special stamps on their paperwork. Perhaps for the same reason.

[ziero0]

I was in the Chilean Embassy in Los Angeles several years ago. I notice that they had some special stamps on their paperwork. Perhaps for the same reason.

Don't ever discount the power of the post office. WW2 was a postal action. Australia uses their Navigator series stamps for the same purpose as the Fox.