Poor Man
Survival
Self
Reliance tools for independent minded people…
ISSN
2161-5543
A Digest of Urban Survival Resources
"The
reason so many problems do not get solved in Washington is that
solving those problems is not the No. 1 priority: Re-election is."
-- Thomas Sowell
solving those problems is not the No. 1 priority: Re-election is."
-- Thomas Sowell
What to do if the dollar collapses – the financial survival
report
For the past
four years we’ve been writing about how the debts assumed by the Western
democracies will overwhelm their economies. This will lead to the end of the
U.S. dollar's role as the world's reserve currency... And it will have a
profound impact on Americans' standard of living.
For as long
as we've been writing about the End of America, this writer has been showing his readers
how to protect themselves.
So we've
gathered a handful of the best essays on the topic. Each one shows you a simple,
practical step you can take to preserve and grow your wealth in an inflationary
environment. In these pages, you'll find…
- Why
You Must Buy Gold – or Even Better, Silver – Now
- A
Safe Land Investment That Can Protect You from the Dollar Crisis
- The
World's Greatest Business in Inflationary Times
- One
of the Best Trades of the Next Two Years
- The
Only Sure Way to Get Rich in Stocks
If your
chief worry is how to stop government spending from destroying the value of
your savings, this is a must-read. (Read
to the end to get the link for this Financial Survival Report).
What to do if the dollar does collapse…
An annual budget deficit of over $1 trillion, annual
trade deficit in the neighborhood of $728 billion, an official national debt of
$16.7 trillion, and unfunded liabilities of $123 trillion.
And all liabilities are being carried by an economy
generating $15.6 trillion each year in gross revenues (gross domestic product,
or GDP).
How much longer can we continue to carry such enormous
liabilities with such low income? Will we reverse the trend? Or will the dollar
collapse under the weight of so much debt?
Purely as a matter of basic arithmetic, the betting has
to be on a dollar collapse, at least eventually. It’s a matter of far too much
debt and ongoing liabilities against too few resources.
The collapse of a nation’s currency is not an unusual
event in history. In fact, it’s even more common in the past 100 years or so
due to the advance of paper currency that is not backed by physical assets. For
example, Roman coins continued to circulate as money well after the Empire
collapsed because of their silver content. No country in the world today uses
silver as a currency, or permits the redemption of currency for a certain amount
of silver or gold. A nation’s currency then is entirely a product of how
well the nation functions.
That being the case, a currency can collapse based
ultimately on uncertainty.
Here is a short
list of factors that could cause sufficient uncertainty to result in a dollar
collapse:
A run on the dollar by foreign entities…
>The government opting to print money to cover an
out-of-control budget
>A significant increase in inflation.
>The U.S. loses a significant war
>The emergence of a currency that replaces the dollar
as the international reserve currency
When we talk about currency collapse – or in our case a
dollar collapse – we’re actually talking about several possible scenarios.
In one instance, a dollar collapse could be a significant
decline in the purchasing power of the currency. For example, a doubling of
general price levels in a two or three year period would mean – in reality –
that the value of the dollar has fallen by 50%.
A more severe version could be that we have an annual
inflation rate of 50%. The dollar would continue to lose value in either
scenario, but faith in the currency will decline along with it.
A Dollar Collapse is Not Inevitable
No discussion of
a dollar collapse would be complete without considering that it may never
happen. Here are some reasons why:
The dollar is
the world’s reserve currency – there is no suitable replacement now or even on
the horizon. This allows for much greater currency distortions.
We have been
experiencing a very slow dollar collapse for the last several decades. As
dysfunctional as that is, it is also entirely possible that it could go on for
many, many more years. Let’s face it – we’re kind of used to it.
The country
might have a shift over to greater financial responsibility – the debt problems
don’t necessarily have to be eliminated as much as we need to start heading in
the right direction.
The development
of a new technology, or a combination of several, could unleash a wave of
economic growth and capital formation that would minimize current imbalances.
A major war. For
whatever reasons, nations seem to better tolerate hyperinflation and crumbling
finances during war time.
A dollar
collapse is far from certain. Any of these conditions – and a few others –
could prevent it from happening.
How
to Protect Yourself During a Dollar Collapse
When you
consider the circumstances that can either cause or prevent a dollar collapse
it is absolutely clear that it is completely beyond our control at the
individual level. Whatever the outcome, all we can do is prepare and try to do
our best to live within conditions as they are. Here are some suggestions on
what you can do if a dollar collapse were to occur (remember, not saying it
necessarily will):
1.
Put your trust in God.
It is
regrettable – but true – that we may never put our trust completely in our
Heavenly Father more than when it seems as if the walls are collapsing around
us. And that is exactly what a dollar collapse will look and feel like. No
matter how bad things get, God can guide us through the worst of it in ways
that we can’t imagine. This is a good time to remember that God is bigger than
our problems, even
if they’re at the national level.
2.
Develop hands-on job skills.
Most discussions
of a dollar collapse center almost exclusively on how to preserve your investment portfolio
(or savings) from the collapse. But most of us will have a far more basic problem
– how
will we make a living? Traditional jobs will disappear quickly, so
think of skills that will enable you to either grow, build, or fix things. Growing food,
generating power, repairing cars and computers, or even building (very)
inexpensive homes will enable you to barter. Needs will be basic so the
possibilities are pretty wide open.
3.
Save up all the money you can now.
Even in a
currency collapse, having money saved
will be an economic virtue. At a minimum, you’ll need to have cash available to
cover living expenses until you can figure out how to make a living. You may
also need cash in order to help you retool to make your living. Of course,
depending on if there was a partial or whole dollar collapse, this advice may
or may not come in handy.
4.
Have some money in precious metals.
When it comes to
currency collapse, putting your money into precious metals is a default
recommendation. I’m not completely convinced this will turn out to be true, but
between gold and silver
you might want to go with silver. It’s lower value will make it more practical
as a barter asset. Just remember that a currency collapse will cause all types
of distortions, some of which can have a negative effect on precious metals.
Buy some, but don’t overdo it. Precious metals alone are unlikely to completely
insulate you from the fallout of a dollar collapse.
5.
Get closer with family, friends, church, neighborhood and community.
Crisis always
brings us closer. We may not feel as much of a need for people and involvement
during times of prosperity, but they’re God’s blessing in a disaster. We’ll
need people and community to help and to be helped by, to barter with, and to
entertain ourselves in ways we can no longer afford to.
What are your thoughts on a dollar collapse? Likely, unlikely,
impossible? And if you think it is possible, what should we do to prepare for
it? Leave a comment!
Read the Inflation Survival Report here:
Related Resources…
9 Reasons Why You Can't Save
Savings is money that we put aside for when we need it. It's something that we all believe in, yet so few of us manage to do. According to the Bureau of Economic Analysis, in August 2012, personal savings was 3.7% of disposable personal income. We give many reasons for not saving more. Here are some of the most common ones and what we can do to overcome them.
Savings is money that we put aside for when we need it. It's something that we all believe in, yet so few of us manage to do. According to the Bureau of Economic Analysis, in August 2012, personal savings was 3.7% of disposable personal income. We give many reasons for not saving more. Here are some of the most common ones and what we can do to overcome them.
Thanksgiving for Less
It's really hard to find ways to save on your Thanksgiving dinner because it doesn't get a whole lot cheaper than a turkey dinner! Still, I have found some ways that you can save and today I'll pass them on to you!
It's really hard to find ways to save on your Thanksgiving dinner because it doesn't get a whole lot cheaper than a turkey dinner! Still, I have found some ways that you can save and today I'll pass them on to you!
Putting
yourself into the holidays with handmade gifts
read more here
read more here
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Bruce ‘the Poor Man’
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