Time Line of the Economic Collapse
After extensive study about the coming economic collapse, I offer this time line of the probable sequence of events going into the economic collapse.
Because of the world wide economic crisis Thailand, Indonesia, Taiwan, Korea, Greece, Brazil, Russia, China and others are exporting cheaper and cheaper goods to the U.S. The reason they are doing this is because they have huge debts that must be serviced or they will have to go completely bankrupt as nations. They are trying to keep themselves from sinking into the economic abyss, grabbing for anything that is still floating, Their lifeline is the exportation of cheep goods that will hopefully entice us to buy, importing our money to them and exporting their debt to us. The U.S. economy is still afloat but do we have the buoyancy to float the entire world? Will the U.S.S. Titanic safely navigate through a economic sea of deflationary and inflationary icebergs? This is the predicted sequence of coming events step by step:
1. Cheaper imports flood the market throwing our domestic economy all out of whack! Exports decline and demand for more expensive domestic goods falls, weakening stocks.
2. The Federal Reserve perceives the weakness in stocks as a cooling of the economy and injects more loan money into the system by lowering interest rates. Consumer and corporate borrowing increases, more money is loaned into the economy, A false feeling that the government has a handle on the economy. The stock market jumps soaking up investment money as the bubble expands.
3. Imported goods are purchased in higher and higher quantities at the expense of domestic goods. Don't just buy that cheep Korean TV, get a loan and get that cheep Korean automobile. Consumer borrowing increases. Bargains galore!
4. The economy heats up for mortgage refinancers, importers and retailers. Personal debt sores and corporations mortgage themselves to the hilt! Cheaper and Cheaper goods come from a depression riddled import market. Low interest pulls almost everyone into purchasing more with loans.
5. Consumers have a buying bonanza and corporations scoop up liquidating factories world wide. Every last available credit dollar chases the bargains. The bubble economy hits its climax.
6. Money leaves the country, chasing bargains. Credit crunch, less money to keep our economy running. The tide changes.
7. Reduced capital in the economy causes recessionary forces to show themselves. Consumer spending slows down. Large corporations are forced into deep restructuring to pay debt and to compete with cheaper imports. Plant closings, down sizing, reductions, layoffs pick up pace.
8. Family income is threatened by corporate restructuring, Dad gets laid off, Mom gets a second job, Junior gets a part time job. It seems that everyone is shifting from spending to getting out of debt, less consumer spending.
9. The banks get spooked by mounting bad debt and loan less.
10. Credit dries up. Small businesses begin going bankrupt on a large scale. Layoffs increase and unemployment rises. More people default on their loans. Real-estate and similar investment assets loose value. Being in debt becomes very scary, very few purchases made with credit.
11. The situation worsens, the stock market crashes into a deep bear market.
12. Anyone with paper money socks it away, paper money vanishes. Depressionary forces set in.
13. A mad rush to get available cash out of the banks. Limits on withdrawals. Bank Runs, cash is scarce.
14. Banks go bankrupt caused by bad loans and runs on the banks. The government bails out the failing banks, and what do you want in Bank Runs? Physical cash, you know, that stuff that is green with some old dead president's picture or statesmen on it. The Federal Reserve and the IMF make huge money loans to the government for bailing out failed banks, paying for new welfare programs and to get the economy back on its feet. The government meets the desperate demands for cash money by printing larger and larger bills, inflation of the paper money supply.
15. Owners of paper money dump it for hard assets, more money chases fewer goods causing
Hyper-inflation.
16. Government rationing! Black Market! Riots! Or Worse?
Are you prepared for what is coming? Will you come out of it prosperous and ready to seize opportunity? Do you have food-storage; Gold and Silver Coins; Cash on hand; and copper-clad coins?
Last Updated on 10/21/98 by Darren Perkins 