If the Dollar Collapses, What Will You Do?

Poor Man Survival

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“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

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 he’s been writing about the End of America, he’s 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):

More at:

http://poormansurvivorblog.blogspot.com/2014/11/is-collapse-of-dollar-inevitable-how-to.html