Monthly Archives: April 2016

Economic Collapse Logistics For The Government

By: Tom Chatham

When a national currency collapses, the government goes into survival mode and does what is necessary to insure its continued existence. The state power becomes all important and citizens become expendable. The state exists for it’s own fulfillment.

When the monetary system collapses along with the banks, the government will still need a way to pay government employees to insure they continue enforcing the governments will. If all government employees suddenly decided to stay home the few officials that remained at their desk would be ordering 300 million people around with no way to enforce their orders. To maintain control of the population it is necessary for government minions to continue doing their job of enforcement.

This means the government would need the means to continue fulfilling the needs of government employees to insure their compliance and obedience. As long as people get the things they need to survive day to day they will continue to do as ordered to continue that supply.

The government would need to insure that a payment system and banking system would remain functioning after a collapse. The banking system may not look like the current one but something would have to take it’s place. Once the currency has failed it would be necessary for the government to issue a new currency. It may not be accepted by the majority but it is only necessary for it to be accepted by the government minions. This would allow the government to remain in control.

If the government employees know they will still be able to get food, clothing, gas and other items they need when normal citizens cannot, they will be inclined to stay on the job and do the governments bidding in order to maintain their standard of living. This would be a necessary control mechanism in the event of a collapse.

Once the banks collapse along with the currency, the FED could take over any bank branches necessary under the control of the Fed and issue the new currency through them. There may be some form of physical currency or it could be digital. Either way the government would have control over who gets any in the beginning.

The government would likely confiscate any resources it needed to fill “government stores” for the purpose of supplying government employees. The rest of the population would be left to get by on their own. In this event EO 13603 becomes more clear as the mechanism to take whatever the government needs to fill these stores and keep their people supplied. In a collapse physical goods become the only thing that matters.

Those that have the things government needs will likely be sent to camps and their property taken for government use. Those with special skills that are needed to continue the supply functions would fall under the control of government agencies and be subject to internment if they fail to do their jobs. Once government has control of critical infrastructure they can let the remainder of the country fight among themselves and do the governments job for them. The few who remain after a few weeks will be easy prey for the government.

I do not claim this will happen, only that it is one possibility in the event of a total banking collapse. Those in power will do whatever they must to stay in power. That much is born out in history. This is not meant to scare you but to make you think about the possibility of this event and plan accordingly should the worst happen. Should the government confiscate resources following a collapse, you will need to be two steps ahead of them and the general population in order to get through the events in one piece.

Many feel a collapse of any kind is impossible in the mighty USA but times change and anyone that fails to heed the warnings will pay dearly when events unfold and they find it is to late to get the supplies they need. People buy many types of insurance just in case. They save for retirement just to make sure. Then they ignore economic warnings that make all those things useless. The government helps people when it is convenient for them. The government has also shown its willingness and ability to take from people when it suits them. Any government big enough to give you anything you want is also big enough to take everything you have. And, they will eventually.

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All Depressions Are Not Created Equal

By: Tom Chatham

It has been said that history may not repeat but it sometimes rhymes. Just as the generals always seen to fight the last war people seem to prepare for the last depression. Times change and the mechanism that leads to misfortune changes with it. Looking at the past may not give us the clear answer to how to deal with the future but it can help us to determine what might happen and how to deal with it when the time comes.

We always look at the last incident because that is what we know. The problem is that social and economic conditions are always changing and they have a major impact on how things unfold. When people hear that they should prepare for another great depression they immediately think about how people survived the last one and how events unfolded. That is a good starting point but things will not be exactly the same the next time.

In the 1930’s people did not posses specialized skills, they had general knowledge that allowed them to take any job that was available. Today people are skilled in one area and loss of employment in that area requires them to obtain skills to work in a new area. The jack of all trades has been replaced by the specialist so when job loss comes they have a more difficult time finding a new one.

In the 1930’s we had a deflationary depression and anyone holding cash and bonds were able to hold on to their wealth and banks were allowed to fail. The farmers suffered from a drop in commodity prices but taxes were low and most people that had land owned it free and clear allowing them to stay in place. Today we are more likely to have an inflationary depression due to the mandate to save the banks at all costs. Anyone trying to save their wealth in cash and bonds will get slaughtered in the paper assets they hold due to massive money printing.

In the 1930’s most people lived in rural areas and people worked to help their neighbors in difficult times. Most people had the skills to take care of themselves and their families until things got better. Today most people live in urban and suburban areas and society has been fragmented into militant groups that cannot work together even in good times. Declining economic conditions will likely make society turn in on itself even more causing suffering and loss of life. Most people have no idea how to care for themselves if the system breaks down.

In the 1930’s people were forced to find new employment due to job loss because there were no social safety nets to provide for them. In difficult times they were forced to look to family, friends and the church for help but most people felt they had failed if they asked for help. Today people losing a job have unemployment, welfare, food stamps and dozens of other services to provide for them if they have no job. Many have come to rely on these services and expect the government to provide for them as long as necessary. If these services ever end it will trigger a violent response by certain segments of society.

In the 1930’s a man out of work could sell apples on the street corner for a nickel to make money to support himself. In a future depression environment anyone attempting to make some money may be selling apples for five dollars each and will likely be arrested for vending without a license. Another difference today is that most people do not want to get their hands dirty so they will opt for government assistance rather than hard work.

When people lost jobs in the 1930’s they could look for many different types of jobs they could do and they were able to negotiate pay with business owners to get the job. The large number of unemployed allowed businesses to negotiate lower wages that allowed them to stay in business. Today minimum wage laws prevent business owners from cutting wages to stay in business which will cause business closures in difficult times. The closing of businesses is a self reinforcing loop that puts more and more people out of work as time goes on.

In the 1930’s the monetary system not only survived but cash was worth even more. The next depression will likely see the monetary system collapse and cash become worthless. This will likely lead to the creation of local currencies and barter among individuals. The attempt by bankers and governments to create new fiat currencies will likely be rejected to a large degree.

In the 1930’s most properties were owned by people that utilized the land themselves. The investor mentality of today will see the mortgage market collapse and the investors buying properties to flip lose it all. Some experts expect to see a 75% to 90% drop in land prices in the coming years.

Many of the things that allowed people to get through the last great depression will not save them this time. Social and economic conditions have changed and different methods will be required to get through the depression we are now entering. Where once cash and bonds were a safe haven gold and silver will, be now. The ability to negotiate wages is gone and wage laws will insure massive closings of businesses forcing people to become self employed to avoid the wage laws. Overall the standard of living will drop dramatically and most people today will not be prepared to accept it.

There are some things that are likely to be the same as before. Those who need help will once again need to turn to family and friends for help. Those that own land free and clear will be able to keep a roof over their head. Those that can supply their own needs will make out better than those dependant on others. Those with multiple job skills will make out better than those with no job skills. Those that can produce a product to sell will make out better than those in the service industry.

In order to learn from the past you must look at current trends and extrapolate where we are headed from here. It is not an exact science but those that pay attention to details will likely fare better than those that go blindly along their daily lives expecting things to always be the same.

Good Investments For The Coming Year

By: Tom Chatham

With more and more people raising the alarm about a coming recession, and possible depression to end all depressions, it is only natural for people to think about where they should put the wealth they have been able to hold onto. If you still have any wealth to speak of after the past several years, congratulations. If any of that wealth is in paper assets that can disappear overnight, you really need to think about a safer place to store it in the coming months and years.

As they say, if you can’t hold it, you don’t own it. If the banking system shuts down due to hackers, enemy attack or government edict, any money you think you have could disappear quickly never to be seen again. At that point all you have to prove it ever existed is a piece of paper that no longer means anything.

We are heading into a rapidly changing future where nothing can be taken for granted. When the current social and monetary system ceases to function, you will need wealth in the form of physical items to get by from day to day. Wealth is the excess production you have to save for the future. It does not matter what form that wealth takes as long as it preserves value for future use.

In a serious crisis, wealth in the form of physical goods can mean the difference between suffering and getting by. In a crisis, physical goods are as good as cash when the time comes to trade for items you need. In today’s crumbling system there are some notable goods that not only hold their value but can increase in value when times get tough and people scramble for limited resources.

Guns-
These not only provide security and can put food on the table but they hold their value over time better than many items. They can be worth many times their original cost when they can no longer be bought due to the lack of a functional financial system or decaying social condition.

Ammo-
Like guns, ammo can be stored for many years and current social conditions seem likely to make ammo costs stay relatively high for many years to come. Like food, when you need it you will be willing to pay many multiples of it’s original cost to get it making suppliers very important people.

Canning supplies-
Any disruption of the food distribution system for prolonged periods will force people to return to home canning to insure a food supply for their family. Most people no longer have canning supplies at home and when the time comes that they realize they need them, the cost will be very high if you can even find them. Anyone stocking extra canning supplies beyond their own needs will find them a good trade item when the time comes. Canning supplies like everything else will continue to rise in price in the coming years.

Gold and silver-
As the ultimate time tested wealth storage mediums, gold and silver will allow those that store them the ability to make good deals in the future when paper assets have lost all value. It does not matter if the price goes up or down, they always maintain their value through good times and bad. Today, price manipulation has made these metals available to the public at a major discount to their actual value but that will only last as long as there is confidence in paper. Those stocking up now will reap the rewards for their forward thinking .

Alternate energy systems-
When the grid goes down or energy prices spike at a time when many people no longer have meaningful employment, the ability to maintain energy in your home will mean a great deal to impoverished families. Generators are great but during a long term crisis, the ability to maintain power with a generator is limited. Even if you have a large supply of fuel your generator will likely fail at some point due to extended use. Solar and wind power systems offer the advantage of a one time expense and after that offer years of low or no maintenance to maintain power for critical systems such as lights and refrigeration. They are also much quieter than generators to avoid undue attention from the community.

Tools-
Tools can come in many types and forms. Tools allow you to fix or build items you need. They also provide you with the means to provide services you can charge for giving you a business to fall back on if it is ever necessary. Good quality tools can last a lifetime and maintain their value over time.

How-to books-
Knowledge is power. When you have the proper knowledge you can write your own destiny. Knowing what to do and how to do it when everyone else is running in circles gives you a major advantage in life. Knowledge also provides you with the ability to use that knowledge for trade or business purposes that can earn you income for items you need. It is difficult to put a price on a good library.

Food-
In a crisis food is the ultimate currency. Regardless of what the social conditions are, people will need food. Since most of the population lives in urban environments today, they are dependent on food deliveries to stay fed. When that system fails those with excess food supplies or an ability to produce more will have a form of wealth they can use. Your money will actually be growing on trees.

There are many resources that you can store depending on your abilities and needs but these offer some of the best returns for the investment over time. The need to store wealth is for future consumption when you may not be able to earn the money due to age or economic conditions. The ability to invest some of your wealth now in items that will reduce consumption and supply your future needs is a winning proposition for most people. Only you can know what you expect from the future so you must plan accordingly now to avoid the worries later.