In the Hemmingway novel The Sun Also Rises, Mike was asked how his money problems came about:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Remember this, because if someone in ten or twenty years asks you, “How did the United States collapse?” You can answer “Slowly, and then all at once.”
The Collapsing Dollar
The value of the dollar, of what it can buy, has been collapsing for decades. You could argue it started with the creating of the Federal Reserve. The dollar has lost 96 percent of its value since the Fed’s creation in 1913, so there may be some truth to that.
I believe that set the stage for our collapse, but the trigger point happened 50 years ago when Nixon took the country off the gold standard and the value of the U.S. dollar was allowed to float. Well, “float” is the financial term; in reality, the dollar started to sink. Today, the dollar has lost 85 percent of the value it had in 1971. The only reason our head is still above water is that most of the other big economies also ditched the gold standard and because the dollar was the International reserve standard.
Today, we are losing that position. The United States currency is used for international transactions, and our rules govern the SWIFT banking system that transfers funds between global banks. But as the country turned to economic sanctions instead of military ones, using SWIFT as a club rather than a tool, our authority eroded. As the threat of being banned from U.S. banks grew, other countries have turned away from the dollar. Our enemies sought to develop parallel systems using Chinese currency. The Petro Dollar is losing traction.
Look around. Take a hard look past the window dressing and the pretty wallpaper, and you will find much of the underlying structure has decayed. If it feels like things are deteriorating much faster today than they were 20 years ago, that’s because they are. We’ve moved beyond the “slowly” part of the death spiral and we are being sucked in faster.
The Death Spiral
Think of the death spiral as the deadly black hole your ship of state must orbit. When the ship enters the orbit, the black star is at a great distance and the gravitational pull is so light it barely registers. In each successive orbit, the ship is pulled slightly closer, but it happens so slowly, no one notices. Bridge crews change. The captain retires. The changes are so incremental that they are dismissed as little more than rounding errors. A few old men express concerns, but they are easily ignored. After all, things don’t seem that bad.
Suddenly, the ship has to swing out of its normal path to avoid colliding with a foreign object. Only when it tries to return to its former path does the pull of the black hole seem so inexorable. Can the ship escape? Yes, but only at great expenditure of fuel and other resources. Is it worth it, the leadership team wonders? It would be easier to maintain their current orbit. They can do so for years, and they won’t be around to take the blame. They decide to let the next captain and crew worry about it. Thus, the can is kicked down the road.
We Begin to Fool Ourselves
As that day gets closer, so does the debris around the black star. Each time the crew takes corrective action, the net result pushes the ship of state further down the death spiral. Crashing into the black hole now seems inevitable. The ship’s crew embarks on a campaign to convince the citizens that getting sucked into the black hole is not the end. New, modern theories are developed that match the desired outcome instead of the actual outcome. They use “experts” and “science” to “prove” that the black hole is actually a doorway to another universe. Saner voices who argue otherwise are silenced. The old rules do not apply, the passengers are told. Everything will be OK if you just do what the captain and crew tell you.
At some point, much of the crew and passengers are convinced. The younger members have never even heard the old fears because teaching them is prohibited. After all, why not believe? By now, the gravity well is inescapable. Nothing can save the ship. It has reached the point on the death spiral where the end is nigh and all the passengers can do is hang on and hope. Far better to go down drinking the last of the Champaign than to whip up a great deal of useless finger pointing accompanied by wailing and gnashing of teeth.
Only as the ship breaks apart under them, only as the gravitational pull tears pieces of the hull off, admitting the killing vacuum, does one of the old men point an accusing finger at the captain and yell, “I told you so!”
There we Are
You can look at the graphic at the top and tell where I think we are: Pretty close to the end. We are rapidly approaching the “all at once” phase, where it does not take generations or even years to see things getting worse. Modern Monetary Theory is just that, a new theory that explains away the dangers of our current path and allows believers to ignore the danger signs. When the numbers don’t add up, we will just have to use different math, because under the new regime, 2 +2 does not have to equal four, and to claim otherwise makes you a misogynistic, racist, white supremacist who tortures his pets and pulls the legs of innocent insects.
A Glimmer of Hope
The only glimmer of hope I see is that countries have fallen before. Reserve currencies of the world have come and gone in the past. Inflation is not new. We still have vast mineral and energy resources, and a stockpile of weapons that should prevent us from being invaded by a foreign power. Yes, we will fall. We will hit hard. There will be a great disruption and we will be damaged and weakened, but we will not be destroyed.
Our job, as preppers, is to be a lifeboat when the gravitational forces pull the country apart. Our job is to survive the mass die off that a collapse will create and when it is over to help provide a path forward. Some would even argue that we should use the chaos and disruption to clean house, to set things right, to get back to a firmer constitutional foundation. That may be the case, but for now, focus on surviving.
Have the resources you can live on when the store shelves are empty, the trucks are no longer running, and our trading partners refuse to accept dollars. Ensure you have a place to go and a way to defend yourself in the vacuum that will exist when the rule of law is no more. Have a few silver coins tucked away, something that you can use for an emergency purchase when dollars are no good.
A Bumpy Ride
Be prepared for a bumpy ride and to face the unexpected. Be flexible enough to adapt and adjust to things as they are rather than as they were or as you wish them to be. Many will be caught by surprise, frozen in fear, and left helpless by the sudden change. You must be able to accept the great change and work within it rather than resisting it.
As anyone with a canoe or kayak can tell you, paddling downstream can be dangerous when you approach rapids, but it is far easier than paddling against the current. Be prepared to go with the flow and then pull over and assess your status when you reach still water.