What is an Economic Collapse?

[Mr Deathcare]

An economic collapse is a breakdown of the economy characterized by high rates of bankruptcy and unemployment. It is usually followed by years and years, or even decades of economic depression, social chaos, and civil unrest.

 

The United States has been propping up the stock market by flooding it with money through bailouts which give it the false appearance that it is more profitable.

 

When the government begins printing up money without anything to back it, this becomes a form of currency manipulation.

 

Why is another Economic Collapse Imminent?

 

1. The U.S. has unprecedented, massive amounts of current and coming debt.

 

2. Foreign countries have experienced their own crises, and they cannot offer added levels of debt funding for the U.S. Even if they could, they are unlikely to do so.

 

3. Productivity is declining, and everything the government is doing is further hurting productivity.

 

4. The U.S. is printing unprecedented, massive amounts of money and no longer has an ability to control inflation and deflation.

 

Although U.S. Treasury markets and the dollar are currently being manipulated by the Federal Reserve’s purchasing of Treasury Bonds, watching the Dollar Index (DX) and comparing with an increase in the price of Gold can give a good indication of when the market will fallout. In the past 10 years, the dollar has lost around 40% of its value. Gold has increased 460% in value in comparison to the Dollar. Gold’s increase is directly related to the devaluation of the US Dollar. Rising Gold price also indicates a surging international demand in precious metals, especially in Asia. It has been accepted that, when the dollar decreases in value, gold moves up, and when the dollar increases in value, gold falls. The odd change is over the past four months, there have been uncommon incidences in which gold’s price has increased at the same time the dollar gained in value. These uncommon incidences have lasted brief periods of a few days, however they show that gold is starting to move on its own path, slowly disconnecting from the dollar.

 

In 2009 we experience a surge in oil prices to around $145 a barrel. There were rumors running wild that some fuel stations were out of gasoline. The average national price of a gallon of gasoline was $4.12 on June 19th, 2008. With the middle east in chaos, the price of a barrel of oil is heading toward $150. One of the fastest ways to economic collapse is expensive or disrupted oil.

 

If China or Japan, who are the largest holders of US Treasuries, decided to change them for quicker maturing treasuries, or you started seeing a reduction in treasury holding you can assume the economic collapse is on it's way. When a country or large investor partakes in this behavior it means they have lost the good faith backing of the United State Government. The current US Debt sits at $14.02 trillion dollars. This debt cannot be sustained with out a constant flow of cash from other Countries. The Federal Reserve is currently trying to stall or hold off this event by purchasing U.S. debt which is basically currency manipulation, but done legally by the US Treasury. This is the same as paying the monthly payments on a credit card, by taking cash advances from another credit card. Just like the old saying "borrow from Peter to pay Paul".