The coming banking collapses, and the coming failure and disintegration in the global financial system (monetary, credit, and financial asset meltdown), is going to be fast and chaotic — and will crush society and the way of life as we know it.
What will be the mechanism of the societal crush?
An intertwined systemic banking crisis coupled with a ‘just-in-time’ supply chain contagion.
The likelihood of a food security crisis within days in the directly affected countries and an exponential spread of production failures across the world beginning within a week.
This will reinforce and spread financial system contagion.
The longer the crisis goes on, the greater the likelihood of its irreversibility. This could be in as little as three weeks.
-David Korowicz, “Trade-Off: Financial System Supply-Chain Cross-Contagion”
The systemic risk:
In the globalized economy, the growing complexity of interconnectedness, interdependence and the speed of processes (‘JIT’ just-in-time), coupled with the de-localisation of production have magnified global vulnerability and opened up the possibility of a rapid and large-scale collapse.
When you think about it, it makes sense. It’s logical. It’s complicated, but then again it’s not…
In a complex and interdependent economy, fewer failures are required to spread cascading failure through socio-economic systems. The risk of cascading failure occurring has increased significantly and will result in a sort of ‘domino effect’ of failures that unfortunately most people have problems seeing or planning for.
The likely cause of such an event would be a large-scale financial shock.
The scenario:
Failing banks, fears of currency re-issue, fears of further default, collapse in Letters of Credit, and growing panic directly quickly shut down trade in the most affected countries.
As the week progresses factories close, communications are impaired, social stress and government panic increases. After a week almost all businesses are closed, there is a rising risk to critical infrastructure.
Almost immediately internal trade and imports stops in the most affected countries, and there is impairment in a growing number of other countries. Trade is impaired globally via a credit crunch.
This undermines exports from some of the most trade-central countries, with some of the most efficient JIT dependencies in the world. This cuts inputs into the production and trade into countries that were initially weakly affected by direct financial contagion.
Globally, the spread of trade contagion depends on complexity, centrality, and inventory times and once a critical threshold is passed spreads exponentially until the effect is damped by a large-scale global production collapse.
Once the financial system contagion crosses a particular threshold the destabilization of the globalized economy will be exceedingly difficult to arrest; this point may be in as little as ten days.
Once a major system collapse occurs, scale, hysteresis, entropy, loss of critical functions, recursion failure, and resource diversion is likely to ensure that the features associated with the previous dynamic state of the globalized economy can never be recovered.
CONCLUSION:
We are living in an unprecedented time of growing risks within a complex inter-dependency of major global systems for our very survival. We need to transition out of, and prepare for, a system which is seemingly teetering towards collapse and failure. Should the dominoes start falling, it will already be too late to significantly prepare. I do not know when this will happen, but I believe that it will happen. It will be life-altering and devastating (and deadly) for many. While even the prepared will be affected, those who stick their head in the sand will be affected much worse.
Source of blockquotes:
Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse
0 (today) 0 (week) 12 (month)
“And them that dies will be the lucky ones.”
Treasure Island
I tend to agree with your above stated scenario overall. The only problem is there have been some very, very, smart, savvy people who have been calling on a global economic crash for many years now for naught. The bankers, globalists and politicians have been able to throw money after money at the problem because it works!
I still prepare, but realize now we all could be sitting here in 20 years rehashing the same economic and monetary indicators over and over again. When the people truly lose confidence in the monetary system is when the pain will really start. Unfortunately, I don’t see the ‘zombies’ waking up anytime soon.
“The bankers, globalists and politicians have been able to throw money after money at the problem…”
One wonders how long that this can continue as it builds into a gargantuan global debt that can only be repaid by devaluation (or default). It is remarkable really…
@ Ken and Heff
“One wonders how long that this can continue as it builds into a gargantuan global debt that can only be repaid by devaluation (or default). It is remarkable really…”
As resident “old fart” I remember just yesterday (metaphor) the Dow was at 2000, Black Monday, Double digit interest rates, $0.25 Gas, Gas lines, the first McDonald’s, paying $15K for my first house, paying $53K for a truck. The list can go on and on. Point is the economy is and always will fluctuate. I will agree I have not seen so much debt ever, even in adjusted dollars.
BUT, when all of these things are/were going on, the .gov/banks, Fed just keeps on “printing” money and building up more DEBT. So? So Money and Debt are absolutely meaningless; they have absolutely no value at all. The US is $19.4 trillion in debt, OK, so why not $30 trillion or $80 trillion, the debt will NEVER be paid anyways.
FYI, the world debt is more like $270 TRILLION. BUT “They” will just keep on printing more and more. Just remember a roll of TP used to cost $0.10, now its $0.50, for one to be the “smart” person (prepper) buy that extra 500 rolls of TP now at $0.50 rather than in a year at $1.00….. Is that not what a prepper does? Again Money has NO value.
Will it at some time come crashing down? If/when it does is for the Weatherman and Fools to predict. I seriously don’t think we will see it in my lifetime; again it’s just too easy to print money and make it someone else’s problem by paying more and more for that roll of TP.
Sure I believe we are headed to a world of complete chaos as far as monetary inflation, political controls, War, Grid Down and a whole lot more, BUT it won’t be cause by inflation and debt. Personally I worry more about a Tsunami in New Mexico or a Cyber-Attack on the Grid.
TPTB need the working stiff to keep paying Taxes and that $1.00 for a roll of TP so they can keep getting richer and have more control. BTW, ya have to remember, it’s not about money, it’s about control.
This is a good article to get the brain cells fired up, but I personally don’t agree that the world will crash in this manner. Yes Venezuela is in the toilet, but that’s not totally because of the world economy, more because of Socialism verging on Communism. Plus give them 2 years, and they will be doing fine, unlike my own checkbook 🙂
NRP
What’s funny to me is my liberal friends rolling their eyes and saying that the collapse of Venezuela has NOTHING to do with socialism. It’s free enterprise that messed up their perfect system. If everybody had socialism this wouldn’t HAPPEN. Socialism is wonderful, socialism is great, it’s just all those stupid conservatives that mess everything up…
Reminds me of the Queen of Hearts in Alice in Wonderland. “All ways here are MY ways!” while her perfect world crumbles around her.
And HRC says recent terrorist attacks have nothing to do with Islam….
Socialism, in theory, IS a wonderful thing. Most of the American Indian tribe practiced it as all shared in the food and work until they were to old to do so then they were taken care of by younger tribe members.The family unit( in older times) is another good example with the parents working so that the children are taken care of so in their later years the children can take care of them. Unfortunately it doesn’t work in practical application with larger groups as there are always ones who either want more than others or ones who want to be taken care of weather they contribute or not so we go back to where we are today with 40% of the people in the country supporting the other 60%.
Heff,
It sounds like you may have been reading too many web sites in the past that have given certain dates of collapse that never happened.
That’s exactly what those in power want, yell wolf enough and some people drop their guard and stop preparing because they don’t believe it will happen, so I’m glad you will continue to prep.
I, on the other hand, do believe we are on the verge of imminent collapse and believe those that pull the ropes of manipulation will create a series of events so severe that will be used as the excuse to blame on the economic collapse. The fear factor will also be used to remove our civil rights and it will be stated that “its for the common good”!!
The world has never been closer to the brink of war. More countries are in possession of nuclear weapons than ever before and many of those countries leaders are mentally unstable!!
Beginning next week the IMF (International Monetary Fund) will for the first time expand their group of acceptable currencies to be publicly traded to include the Chinese Yuan. Many central bankers believe China, whose holdings of gold bullion reserves is higher than all others combined, will announce that their Yuan is backed by gold. This would undermine the need for the US dollar to be the Reserve Currency and thus create the dumping of the US dollar being sold in a panic.
The west has been preparing for this by transporting troops and hardware to Russia’s borders and sending fleets of our Navy to the South China Sea. The west has also been trying to provoke Russia by assisting those who are trying to overthrow the Syrian Govt. I believe North Korea is simply being used as a puppet by China.
It’s a tricky games of chess that the US is intentionally losing because the enemy has a friend, a traitor in the WHITE HOUSE!!! Who has intentionally weakened this country in every way possible!!! He has also created an image of the United States as evil through his actions over throwing Govts. and leaving those countries in utter chaos and also killing innocent women and children with drone strikes. He has also removed any and all experienced military officers that stood up and disagreed with his views.
It’s very likely many have died who have expressed these same views publicly, so with that said I hope that Ken has a good security system in place to protect my identity. I have no doubt though that my name is already on a list of people to be dealt with in the very near future, but they’ll have to find me first!!!
If I go down, it’ll be with my boots on!!!
Stay aware and stay safe! I expect the month of Oct. to have many destabilizing events around the world!!
I see throwing money at this or that is devastatingly affecting us financially. We don’t know all what the Feds do secretly. For example, a lawsuit for a Fed audit in 2012 showed the Feds secretly “printed up” $16 Trillion in unreported bailouts.
And recently, Obama won’t tell Congress or the American people how it paid Iran $1.7 Billion in ransom money we don’t have. We NOW have $103.6 Trillion in bills we don’t have money for,(unfunded liabilities) and not all is reported.
I don’t know how this country is still standing as if people think nothing is wrong with this picture. You may say it might be 20 years before people wake up, and if it takes that long, it will be too late. I hope those of us who prepared are all self sufficient, have bomb shelters, and have our own armies guarding walled communities because I believe it won’t be just SHTF, it will be TEOTWAWKI event.
I suspect events!! Plural!! Meant to be overwhelming to the masses of those not prepared!!!
It is still standing for 1 reason. Look at all the people with their hands over their ears chanting LA LA LA LA. As long as people believe in the system and refuse to look at the real picture it will continue to last.
A global currency is a pipe dream.
From tomorrow (1st October) There will be a new world currency created – The SDR. This is a basket of currencies e.g. U.S. dollar, Euro and the Chinese Renmimbi. These SDR’s will be used between the central banks.
One only needs to look at the Euro to see the disconnect between reality and dream. One size currency doesn’t fit all nationalities with their fiscal disciplines. The German financial discipline vs the Greek financial discipline couldn’t be further apart and the current situation shows it.
A worldwide financial breakdown will further insulate the nationalities. You can bet that some countries with energy assets will demand gold in payment.
Well at least I made sound investments in the 3 B’s… Bullets, Bacon and Booze 🙂
A financial collapse has only occurred when a person with a tangible asset will not accept the paper money of the ‘buyer to be’. The ‘buyer to be’ then decides to use force out of desperation to take the asset. The just-in-time delivery system can fail because of many, many reasons and now desperation has set in for the unprepared and it matters not how much paper money you have.
Yep, except for loan contracts that demand payment in US dollars such as mortgages and certain loans. If US money is refused everywhere, that will be the end of society and all will lose; not just the lenders and businesses, but even foreign countries like China who depend on our buying of their products. Most likely it will lower the value of the dollar and make it cost a lot more in dollars for services, products, gas/oil and food. Now that will cause a depression here and every country will feel it as well with us being a major import consumer nation.
As they continue to throw money at it the distance it goes is less and less. Just not as much “weight” behind the money. Eventually it won’t have enough to throw and will just blow away in the wind. When that happens the economy will come down like a house of cards on a windy day.
My stepdaughter is in collections due to the financial wreck her ex husband caused. She has pulled what little money she has out of the bank. He refuses to pay anything on their joint debt (including child support). Anyone with any experience on being in collections? Advice will be appreciated. I’m thinking that the longer she is in debt the less the money is worth so maybe that’s a good thing?
Has she considered filing for bankruptcy ?
It’s a hard decision to make but it may be her only way out
especially due to the fact that her ex is doing NOTHING to help
and it worked for Trump!
To me:
She was smart to pull her money out. She should CLOSE all joint bank accounts. If she just pulls the money out, but leaves the accounts open and he writes more checks, she is jointly liable.
If a creditor garnishes the joint accounts, even though there is no money in them, the bank will charge a large fee ($100 or more) to the depositor for processing the garnishment, even though the creditor got no money. If the account is closed, the bank can’t charge the fee. She should also close all credit cards that her husband is still allowed to sign on.
Depending on what state she lives in and whether or not she signed on other debts, she is probably liable. She should contact all creditors and let them know that she is denying responsibility for any future debts.(They could still go after her for his future debts – depending on state law – as long as they are still married, but they might stop giving him credit if they know what is going on.)
A court order won’t protect her from creditors. A divorce decree is just between her and her husband; it does not affect creditors. She can go to court and ask the court to reimburse her for the things she had to pay that he was responsible for. But that is easier said than done. A Court Judgment is difficult to collect, even a judgment against a former spouse.
Thanks Daisy,
I guess her problem is she has to have an account to have her paycheck deposited to. Unfortunately all of the credit was on her good history which is now in the toilet. They no longer have any accounts together. So very sad, he turned out be a real POS.
Bankruptcy does seem more and more viable. Question is can you declare bankruptcy if all of the banks have failed? This is going to a really sticky wicket. How do we pay our property taxes if there is no bank to handle the transaction? I have tried paying mine in advance but the state says no.
I guess you could declare bankruptcy as long as the government hasn’t failed. You don’t need a bank to declare bankruptcy. She needs advice from someone who knows her complete financial circumstances before she decides about bankruptcy.
Her creditors will find her new bank. There is a credit agency (ChexSystems) that just tracks bank accounts. Creditors usually check this agency once per year. Their creditors will eventually find her new account, and will then garnish it as soon as her employer deposits her paycheck.
If all the banks fail, then there will be no way for anyone to pay their property taxes or mortgage or creditors or anything else.
I know this is off topic, but I saw a warning on the Drudge report of a CME heading toward earth that could be significant. Any intel from MSB?
Mack
Will respond on the Saturday posting to your question.
For off-topic (open-forum) discussion, please visit the most recent ‘Weekly Preparedness’ post.
Note: You can read the most recent (150) comments from this site on the ‘Discussion’ page.
Mack,
For urgent off-topic posts, you can go to LAST weekend’s post if you don’t want to wait for next weekend. Regular visitors to this site often check the “Discussion” tab, and they will see your post.
One of my past reading subjects was the dry subject of money. Throughout history all forms of currency eventually are destroyed. The Romans devalued their gold coins with copper and silver coins with lead. The old Chinese called paper money WIND MONEY, as it’s value blew away with the wind. From my reading, only coins had a chance of carrying any value.
Today our coins contain no metals of value but in a crash, they will be used in a black market system for a period. If a new currency is printed the coins would be folded into the system because of the high cost of minting coins. All bets will be off if a total digital system is forced on us. In that case a black market would run wild, and junk silver coins will eventually fuel the black market, barter system.
‘And the Band Played On’.
…exactly. It keeps on playing.
Here’s a thought, since hardly anyone seems to be concerned of the ‘real’ state of the economy and its enormous gargantuan debt from FED ‘money printing’ towards ‘the problem’ (money which will never ever be paid back), one wonders why the powers-that-be don’t simply print 10,000 bucks for every one of the sheeple… heck, why not 100,000? That should fix everything, right? A spending boon to the economy? …just add it to the existing debt. If the people are too dumbed-down to recognize that money printing dilutes value, then maybe this thing could go on forever?
I simply shake my head at what has happened… amazing. A seemingly upside-down world.
For the price of the last bailout (700 billion?) they could have written a check for $2000 to every man, woman and child in the US. If even a small percentage used that money to pay off debt, the income of the banks, credit unions and credit card companies would be cut drastically. They can’t have that–the financial system is “too big to fail.”
If another small percentage actually saved that money (horrors!) that would be money that wasn’t available for manipulation and control! That can’t be allowed! Saving money is seen in the same way as saving water and not letting it run downstream into the municipal water systems. If you trap it on your own property, they can’t sell it back to you. If the money is saved, it’s not out there increasing the bankers’ profits.
That just won’t do. So solve the problem by giving the money to the banks. Yeah, that’ll work. Trickle-down economics, right? Give the money to the big guys, who’ve proven they know how to use it, and some will get down to the streets. Someday. Maybe.
…and as long as the sheeple have their bread and circuses, everything will be fine.
Heinlein?
No statement should be believed because it is made by an authority.
Robert A. Heinlein
An author I follow, not to take anything away from Heinlein, is Nassim Nicholas Taleeb. He just said today on Twitter something to the effect that I didn’t think anything was wrong with the European banking system until a European finance minister came out today and said nothing was wrong.
@ Ken
Is that not what the Feds are doing now? Welfare, EBT, Unearned SS, Obama-Care, Free this Free that, again the list is HUGE. The Feds already give millions of millions pf sheeple a FREE check.
The US economy is supported but what % of the working class, SO to what point do the “taxes rate” go? 40% 60% 80%, is that not called Socialism or should I say Hillary Economics?
I go back to what I said before, what used to cost $0.10 now cost $0.50, will it end? I don’t believe it will. Even if there is a discount in the “value” of money, say 50%, that $0.50 roll of TP will still cost $0.50 in the working classes hard earned labor, yet her/he will only make 1/2 as much. And yet the Freebie Sheeple will demand more.
I agree 100000% (inflation) with you, sooner or later some sort of “crash” will come, I envision the Great Depression, but “it” will be a lot worse since the Feds believe they, again, can just keep printing more and more. Plus the fact 96% of the US are truly Sheeple.
The problem is NOT the economy; the problem is the People that want everything for nothing. We live in a land of “Freebies” and all out lazy people…… and yeah, yeah I know, not everyone.
NRP
PS, you hit the nail on the head….. “If the people are too dumbed-down to recognize that money printing dilutes value, then maybe this thing could go on forever?”
Please don’t use a board brush to paint all SS as unearned. I assure you I earned every penny of what I contributed into SS Acct. Now that I’m getting some of it returned to me monthly people are calling it an entitlement and I say to hell with that!! What about all those that have paid into the system, but for whatever reason died before collecting any of it.
The SS fund has more $$$ worth of Federal IOU’s in it than actual $$$!!! But when it was first introduced The POLITICIANS Lied and said it would NEVER BE TAXED!!! It would NEVER BE USED FOR ANYTHING ELSE!!! I’m ready for a revolution to repeal many of the illegal laws and eliminate many agencies and reduce the size of this tyrannical govt!!! NOW!!!
Sorry for the rant, but I had to hit the PRV, (Pressure Relief Valve), LOL!!!
@ Being Watched
Please read what I said, I did not say “SS as unearned” I did say “Unearned SS”. Like you I will be collecting SS. I have paid into SS for better than 40 years I feel I have earned it, unlike those that show up on our doorstep expecting an handout and collect SS just because they “got to the US”.
There is a LOT of difference
NRP
OK, then laws should dictate that ONLY US citizens should qualify for benefits to SS. Just as the right to vote, citizens ONLY!!!
I can collect SS in a few short years, IF, it is still a viable system. (which I am doubting)
We have made arrangements a long time ago to protect our SS “contributions” (confiscatory based) as best as we no how.
We are trying to continue to enhance our preps, and to go for the strategic (long term) road ahead.
“All the world’s a stage, and all it’s people players;
They have their entrances and their exits;
And one man in his time plays many parts,”
Whenever it all happens, I really hope it doesn’t happen soon.
Still fresh out of highschool and looking for a job… Gotta love how most people won’t hire you because of lack of work experience.
I really need to get out there and apply more, though, I’m still trying to prep with what I have. I would love it if I could just get married, buy a large property in the middle of nowhere with like-minded neighbors, and live peacefully, mostly off of a garden and hunting–I don’t know if that’s too far fetched in these times. If it happens too soon, I will probably be doomed. Prayers are appreciated guys!
Hang in there youngster! Keep applying and you will run across someone that “gets it”. People have to start somewhere and some of us still see through the fog. Once you do find a job then learn a trade in the off hours. Find a mentor or possibly get financial aide to go to tech school.
It’s a good goal you have….it takes work to get there though. And a plan!
Youngster
It is not the lack of experience, you need to show an employer your willingness to learn on the fly and do a good job at it. Did you do odd jobs for the neighbors, your family while still attending school and making good grades? That is what you need to bring to the table.
My dh belongs to group of retired military which grants scholarships to the school which their chapter members name sake graduated from. I can tell the brightest who are going to have all the $$ are set aside when we are going over the applications. Why?? They are going to receive the scholarships others will not qualify for.
We/I look for those who have initiative, putting more time into achieving their goals. That shows me they want that scholarship, are willing to work for it, and go the extra mile to accomplish their goals.
Ken–I know off subject but afraid it would be lost in the shuffle.
Some advise from a manager that does interviews on a weekly basis for a large retail chain.
A huge problem I see in people that I interview (especially younger ones) is their appearance. Do not go to a job interview with dirty cloths,shirt un-tucked ,hair not combed,smelling bad(not showered) bad breath ect, I have had people show up for interviews in slippers,barefoot,wearing tee shirts with foul language or inappropriate symbols on them, shorts,flip flops ect. While the law dictates that I still have to interview them I know they have no chance for a job with my corporation. Do not act like you know everything,try to get the interviewer to talk about the company.Remember if they are in that position they are most likely proud of the company they work for and the position they have attained. Always remember you only get one chance to make a first impression
To Old Guy:
Nickels contain more valuable metal in them than their face value. Other commodities traders like Kyle Bass bought almost a roomful of them in the aftermath of the last crash of 2008. Kyle Bass was one of the people who bought Credit Default Swaps so he was able to profit from the Housing collapse of 2008. He runs a hedge fund out of Texas.
There is always a market crash/market correction in the fall of a presidential election. It has been happening all the years I have been tracking it. My guess is it will happen this year as well. What nobody knows is the depth or extent of the market correction. I see the President having very little ability to affect the economy.(I believe it is the other way around.)
On this site, when we tell each other to prepare it is similar to “Preaching to the choir”. But thanks for the reminder Ken. Market corrections generally take place around mid October(ever since 1929). In the meantime, I continue working and adding to my stores of Charmin TP so I can Wipe The World with NRP.
Coin-flation base metal calculator now shows a nickel to be worth 3 cents. When I started saving them they were worth 5.8 cents. They are still worth 5 cents which would be good if 5 cents was worth 5 cents!
Currently scrap prices are down due to low demand. I don’t know how one would separate the copper and nickel in a nickel to their two separate elements. I guess it could be done but probably very costly. Monel is a useful alloy of nickel and copper so I guess nickels could be converted to that if we suddenly had a huge demand for monel.
Yes, but look at the lowly penny (1982 and earlier) 95% copper. FMJ anyone?
Deutsche Bank is crashing. Bank Holiday set for Oct 1 in Germany.
Please show where you get this information.
Poorman,
Media reporting yesterday that Deutsche Bank lost 1/2 it’s value almost overnight as investors started pulling their money out. The fear is, they have 14 billion in outstanding debt, but only 6 billion in assets, and will be unable to cover withdrawals, needing German government bailout. German government says they will not bail them out. As to date they will close for a cooling off period, I have not heard.
I knew they were told they would get no bailout. I just question the Bank Holiday statement as I have heard this from no other source. Not that it can’t happen I just wanted to know where the info came from
Deutsche Bank: an article from BI (not sure I can state the name) had a analysis of the bank condition. Seems they have a two-pronged problem; 1.) is the $14 billon judgment they owe from the 2008 financial mess (mortgage backed securities)-opinion is the bank will probably negotiate this down ($7-$9B, hard to believe a billion is a little). As of 22 minutes ago, it appears the bank has a $5.4B agreement with the US government and stock is taking off. The bank has reserved around $9.5B for this thing.
And, 2.) the banks operating cost is out pacing the revenue stream and they are slow to react; somewhere around 101,000 employees and an additional 30,000 consultants with retained earnings dropping and lower revenue; the analysis stated they need to change the business model (read cut costs), the biggest cost is people. This is the long term problem.
The 2nd largest German bank just laid off f20% of it’s workforce for cost reduction.
an analysis, not a analysis…
also, it’s 20%, not f20%… f20 kind of looks like the Aruban florin or the Netherlands Antillean guilder, have used the Hungarian Florin but not the Aruban version.
..earth to Major Tom……
OK Hungarian FlorenT, not FlorenT.
The final indignity, it’s Ground Control to Major Tom.
Time to go…
F-l-o-r-e-n, ?
What a mess we are in!
The Fed along with other Central Banks have tried every form of QE they can to keep economies artificially propped up. We have all sorts of extra printed money floating around, but savers are being punished with almost no interest income, and in some countries negative rates (which don’t work – look at Japan). The Central Bankers are pretty much out of options and appear to be at a loss as to where to go from here.
We cannot trust any of the gov’t economic reports, which are often adjusted when published or quietly adjusted months later when few are paying attention. It’s really tough for us regular folks to get good info to use to make our own decisions.
I think all we can do is keep paying attention, and trust our instincts – if it feels like things are getting worse then trust your feeling and act accordingly. Keep watch – keep reading and listening. We are all ahead of the game because we are paying attention when others are not. Many people are complacent because they have never lived through a true depression or collapse so they think it can’t happen. We all know better.
The government will always get it’s money. It will always get it from the people.
Think about all the different types of taxes you pay. There is federal, state, and municipal taxes. Add on property tax. If you think you own your property/house because you have paid off the mortgage, wait until you can’t pay your property tax. Then there is your car license. Why does it have to be purchased every year, rather than when you purchase your car and one time only? Add in the hidden tax. What percentage of gas is tax? Buy a pack of cigarettes and see how much is tax. There is also the hidden excise taxes. The average person has no idea what that is. Finally, there is the sales tax. What little you have left to make purchases is also taxed.
My guess is that during a financial crises (especially if it is slow) the government will raise all these taxes. My advice is to put money aside for property tax or pay in advance. All your preps will be meaningless if you are homeless.
While I am not a doom and gloom person, I look at reality clearly. Self preservation is the goal. Prepping is the means to that goal. We have no influence whatsoever in preventing a global financial collapse.
The point to ponder is that China and the U.S. are on the verge of having to reissue their monetary systems by doing a devaluation of their currencies. this will be a “you turn in a $1,000.00 and we reissue you a new totally tainted colored currency amount of $100.00” as an example. The Fed has in all National banks (Any bank controlled by the Comptroller of the Currency,) in sealed canvas bags a new currency that is tinted by face value, (100 dollar bill is red, 50 is blue, 20 is green etc)this money has resided in national banks since the 60s only National Bank Examiners are allowed to audit this sacks when in a national bank doing an audit. They do this audits without ant any banking personnel present in the cash vaults. This emergency money was to be used after a nuclear war or a “social economic collapse” The paper money was no problem to replace however the Fed realized they could never replace coinage…so starting in the 80s they quietly required all banking institutions to turn in any dollar coin or 50 cent pieces notice how silver dollars even clad ones, susan b’s and kennedy halfs disappered, the thought was most people would not stockpile nickles, dimes and quarters (coinage will still be face value after a reissue unlike currency) I was a National Bank Examiner during the late 70s I had to open count and reseal those bags during audits of National Banks in the Central Midwest……the Government has been worried about a doom and gloom event for decades………..The truth will set you free so listen to you gut instincts it will serve you every time
One thing that I haven’t seen mention here so far is the inter-connectedness of all major banks through derivatives. It’s been estimated there are in excess of 1 quadrillion in play today.
Derivatives are in essence bets against losses, with the same paper involving many players. Bank A may have protection against a huge loss, but banks B, C, D, E, F are obligated also as parts of the chain. The problem arises when bank D is found insolvent. Bank A exercises its claim due to the original loss, but since bank D defaults, banks B&C are stuck with tab. This is how the dominoes start falling, because when bank A can’t collect on that one contract, it also can’t pay on other contracts.
It can literally happen overnight. A medium size bank in Taiwan closes unexpectedly, and in 12 hours Goldman Sachs is under water. Everyone is trying close out contracts, but nobody wants to pay. It’s musical chairs without the chairs.
So, don’t get out the party hats when you hear the words “Bank Holiday”.
Hi Ozarks Tom,
Yes… I think you’ve done a really good job illustrating how many financial institutions are at risk, and how invisible that risk may be. As banks and investment houses lay-off parts of a risk they’ve taken (much like a bookie spreading around too many bets on a single game) the risk spreads and infects others. With global investing and connectivity the domino effect can be catastrophic when one of the big players goes down.
There are many facets to this coming nightmare, but here’s one a lot of non-preppers can understand: America has had a Zero (or now .25%) Interest Rate Policy since the Crash in ’08. Now imagine your job is with an insurance company or a pension plan and your (fiduciary) responsibility is to safely invest money, to pay your customers.
As the last 8 years have past, the safe investments have all dried up. All that’s left is the stock market or investment vehicles that are somehow tied to the stock market. I love how financial advisors are selling various annuities now as “safe”. There are no safe investments today paying more than a CD, using the word “safe” like It was used before about 2000. THAT is why the Fed is propping up the stock market. THAT is why everything feels like a house of cards. It is…
Lake Oz,
Yes, this is a huge problem. The huge pension funds and others who are supposed to invest “safely” have nowhere to invest with any kind of return. Yet, their business plans are geared toward getting a certain percentage return each year to sustain the integrity of the fund and support outgoing payments. With this artificial holding-down of interest rates (ZIRP) and in some countries negative interest (NIRP) there’s no way for the portfolio managers to both provide safety and return – and there has not been for 7+ years. There has to be a consequence for this at some point, just cannot predict the timing.
However, Lake Oz, let’s not forget those public pensions.
Government workers, and there are more of them than there are in the private sector, will be expecting their pension checks. I believe in a slow depression that they will still receive them. We, those on depleted private pensions, will still be expected to pay our taxes so the money can be transferred to the public pensioners.
Agreed. I think the mostly likely way all this ends is slow and ugly too. The big “disaster movie” versions of SHTF has the advantage of a massive heart attack. Quick and kinda clean and sorta merciful. Slow means pain and trying to help and not being able to, or needing help. It means local gov’t raising property taxes to keep police on the streets even if no one has a job anymore. Sorry, I’m in a bad mood and should stop.
Hi Pieface and Lake Oz,
Agree with both of you… and I too can see a slippery downhill slope as one piece of bad news after the next comes to light. I think I’ve said this before, but right now it feels like death by a thousand cuts.
In California, CALPERS, the public employees retirement system is hopelessly ONE TRILLION DOLLARS underfunded, by the very municipalities, counties that ONLY contribute (pass in) the employees percentage, and do not contribute their share. This will collapse the California economy as soon as it gets any more wobbly than it already is. I was fortunate Enugu to extract all of my contributions from CALPERS when I retired, and we are not expecting my retirement from them for future retirement payments.
I’m getting nothing as soon as the morons in the state legislature realize that the taxpayers do NOT have the monies the legislators think they do.
Political pimps are as useless as a cast iron toilet seat in winter. That seat actually has far more value than ANY politician!
TPSnodgrass
Then you missed the bill good ol Jerry signed into law. He plans on those who do NOT have retirement accounts (similar to Social Security) will pay into the state of CA. Their hard earned money will go into a retirement account held and run by the .govs of CA.
Wish I could tell you the name of the legislation he signed, but I caught it on Thursday a short little blip on the news and that was it. Knew that it was on the designing board but thought it was shut down.
How very sneeky-oh,how considerate of the illustrious governor.
If one has to fill their states coffers all they have to do is steal from the working businesses and employees bank accounts.
Robbing Peter to pay Paul…..
I guess we were extremely fortunate to get out when we did, took a relatively “small” financial hit, but we are no longer at the mercy of Jerry and his issuance if “treasurer’s warrants” (state version of Federal Reserve promissory notes)!
I grieve for my fellow native Californians who cannot get out!
TPSnodgrass
We are not tied to the CA .gov but due to dh health we can not up and move. I/we are looking at a section of land which I spoke with my sister about. It looks like we as a unit might purchase it.
Now they are tied to the .gov as they own a businesses here which will effect their employees. She was ready to take flight when I broke the news to her. Peeved is such a nice term to explain the sky rockets in flight when she went off, plus she works at a medical facility and her hubby runs the business.
They wanted to sell the business as part of their retirement, as they started it from the ground up. Time is NOT on their side in this matter unless it is challenged in the courts and we all know what time frame that will take.
Happy you got out when you did. It is becoming a larger cesspool as Sac is Sacking the peoples bank accounts.
On the moving…..if it gets worse, we will find a way to move one way or the other.
antique collector
I read the part about CA being a trillion underwater on their pension but didn’t quite get what the gov. just signed that changes things. Would you or someone spell that out?
Ken were you already planning to post this article or did you have some insight to what was going to happen today with the Deutsche Bank?
Tomorrow will be very interesting to see how the contagion spreads across the world economies. If tomorrow is just as bad, we maybe facing another “Black Monday” event.
Adapt and Overcome.
I have been watching the Deutsche Bank debacle for awhile, and it may be a ‘trigger’. We shall see.
Should be interesting.
Let’s see just in the US recently:
ITT Technical Institute closed all campuses nationwide.
Regency Beauty school closed all campuses nationwide.
Wells Fargo Bank is slammed with sanctions that will cost them trillions & will most likely be sold or close.
From what I have heard through my contacts there will most likely be a big box retailer closing all its stores. This may not be till after the holidays, but when a large distributor decides to stop providing them services and goods it’s not a good thing.
There are many other closings that took place this year (that I can recall) Sports Authority, Sports Chalet both were major players a few years back.
I think we are already into the financial crisis big time it’s just being hidden very well. This episode with the Deutsche Bank may just show everyone what really is going on.
Adapt and Overcome.
All store closings:
https://www.thebalance.com/all-store-closings-2891887
It says 2015 in the header, but look down and the 2016 update is there. The 2015 list is still there, just below the 2016 stuff. If you are like me, there’s more than one on their list that I said to myself, “Self, are they really still in business?” For you all up north of the US try
http://www.huffingtonpost.ca/2015/01/15/retailers-closing-canada_n_6480972.html
Frog in the pot of water. Little by little warm it up and the frog won’t notice. Until it is too late. In this case, board up a store here, there, and who’ll notice? I notice. So do a LOT of others that are interested in the direction this country is headed. Is it getting warm where you are?
Amazons stock is up 30% this year. Keep an eye on them. When it tanks, more will follow. Think dominoes.
Stores closing. Jobs lost. Income nonexistent. Can’t pay rent. Can’t pay mortgage. Can’t buy gasoline. No grocery stores open. Time to get creative. Uh….no. Now is the time to get creative. Now……actually last year….is the time to get all the stuff you can get. Food. Protection. And that’s the starting point. And how much? I hope 1/2 of what I already have. Then……what about after things get close to being back to ‘normal’? Holy crap. I just got to the ‘prepared’ point. Now I have to think about ‘the new way’. Well, I guess it’s one step at a time. First, you gotta get there. Second, surviving afterwards.
Good luck to all.
When FDR took office as president in 1933, the first thing he did was declare a bank holiday that lasted a week. Banks back then had been failing individually for some time, until it all started to collapse.
Nowadays, with the dependent inter-connectedness mentioned above, we could see the contagion spread quickly in spectacular fashion.
That vision of Slim Pickins riding a bomb comes to mind… hootin’ & howling all the way down…
Headlines this morning: Largest Dutch Bank (ING) To Fire Thousands
One day after Germany’s second largest lender confirmed reports it would lay off nearly 10,000 employees, or about 20% of its entire workforce while slashing the bank’s dividend for the rest of the year, the Dutch newspaper Het Financieele Dagblad reported that ING, the largest Netherlands lender, will announce thousands of job cuts at its investor day on Monday.
Note: Deutsche Bank stands at the center of the European financial system – it is a major counterpart of all relevant European banks, and broader.
Contagion if it crashes?
Or will the German government (or other) rescue it?
Read this comment over on ZH…
“It’s Friday, we’ve got a collapsing national bank right in front of a long holiday weekend (Germany), we’re on the brink of WW3, are about to plunge into the Greater Depression (effectively recognized, again, in October) and we’re about to witness the Grand Reset of a former World Reserve Currency (China into the SDR).”
“This has been orchestrated beyond belief.”
“The problem with socialism is that you eventually run out of other peoples” money. Margaret Thatcher
So what part of that don’t you get……
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Thomas Jefferson
Just wondering what happens when you replace “socialism” with “service economy.” Oh wait, that’s what’s outside my window and covered by Zero Hedge…
And replace truly creating wealth with the “financial industry”
Well CRAPO
After reading all the post and with the newest headlines this morning, PLUS what Hedge is reporting, and chatting with my finance guy for a bit last night I guess I was trying to be a little optimistic yesterday in my post… HAHAHAH Oh yeah, and updating my check-book UGHHHHHHH
So much for NRP trying to spread a little good will and cheer… 🙁
Guess I need to stock up on a little more Gin and TP.
I give it 6 months folks if Killary gets in and we lose Congress to the Dems. After that Killary will appoint Lib Judges and the rest is down the toilet from there.
God I have a headache..
NRP
My take is that everything will keep moving along until it doesn’t. Sure, things will slowly get worse but as has been pointed out, when the right trigger hits things will come tumbling down faster than anyone expected, IMO. We could slow burn for 20, 30, 50 more years while earning power and individual rights continue to disappear into the ether. We could also suffer a shock to the system tomorrow that could bring everything down.
All I can do is continue to build my supplies and skills for the eventual collapse while enjoying life as if everything will be okey dokey forever.
Yes, it is a balancing act to be well prepared, situation-aware, up-to-date with alt-news and worldly events – all the while enjoying life too!
I am fortunate to fully enjoy life while also striving towards a more self-sustaining lifestyle. It doesn’t feel like ‘work’ to me (yet 😉 ), rather, it’s ‘rewarding’.
does seem to be “spreading”…
in the Irish Examiner
“Ireland at risk of another banking disaster
One of the Central Bank’s most senior officials has warned that Ireland is at risk of repeating the catastrophic economic mistakes of the past less than a decade after the country was cast into financial ruin.
In a series of pointed remarks, Central Bank director of credit institutions supervision Ed Sibley warned that Ireland must, at all costs, remember the lessons learned since 2008 but added that he feared they are already being forgotten.
He further admonished Irish banks for failing to meet targets set by the Central Bank, as well as for showing signs of returning to a toxic culture of bad lending and dragging their feet in finding solutions for thousands of mortgage holders in arrears.
“We must not forget the lessons from the bubble and the more recent past, such that we never again have such a catastrophic and systemic failure of lending standards and practices. Some memories do appear to be surprisingly short, both within the banks and outside them,” said Mr Sibley.”
I suggest the sheeple do some research along the following lines: How many nuclear reactors are there in the world. How many are in the US. How many tons of radioactive fuel (uranium) this represents and finally what happens if ANY event causes nuclear reactors to be unmanned. Here’s a clue. Buy one gun and one bullet.