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Will It Be Inflation Or Deflation? The Answer May Surprise You

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Inflation Or DeflationIs the coming financial collapse going to be inflationary or deflationary?  Are we headed for rampant inflation or crippling deflation?  This is a subject that is hotly debated by economists all over the country.  Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation.  Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts.  So what is the truth?  Well, for the reasons listed below, I believe that we will see both.  The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis.  This will happen so quickly that many will get “financial whiplash” as they try to figure out what to do with their money.  We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.

So why will we see deflation first?  The following are some of the major deflationary forces that are affecting our economy right now…

The Velocity Of Money Is At A 50 Year Low

The rate at which money circulates in our economy is the lowest that it has been in more than 50 years.  It has been steadily falling since the late 1990s, and this is a clear sign that economic activity is slowing down.  The shaded areas in the chart represent recessions, and as you can see, the velocity of money always slows down during a recession.  But even though the government is telling us that we are not in a recession right now, the velocity of money continues to drop like a rock.  This is one of the factors that is putting a tremendous amount of deflationary pressure on our economy…

Velocity Of Money

The Trade Deficit

Even single month, far more money leaves this country than comes into it.  In fact, the amount going out exceeds the amount coming in by about half a trillion dollars each year.  This is extremely deflationary.  Our system is constantly bleeding cash, and this is one of the reasons why the federal government has felt a need to run such huge budget deficits and why the Federal Reserve has felt a need to print so much money.  They are trying to pump money back into a system that is constantly bleeding massive amounts of cash.  Since 1975, the amount of money leaving the United States has exceeded the amount of money coming into the country by more than 8 trillion dollars.  The trade deficit is one of our biggest economic problems, and yet most Americans do not even understand what it is.  As you can see below, our trade deficit really started getting bad in the late 1990s…

Trade Deficit

Wages And Salaries As A Percentage Of GDP

One of the primary drivers of inflation is consumer spending.  But consumers cannot spend money if they do not have it.  And right now, wages and salaries as a percentage of GDP are near a record low.  This is a very deflationary state of affairs.  The percentage of low paying jobs in the U.S. economy continues to increase, and we have witnessed an explosion in the ranks of the “working poor” in recent years.  For consumer prices to rise significantly, more money is going to have to get into the hands of average American consumers first…

Wages And Salaries As A Percentage Of GDP

When The Debt Bubble Bursts

Right now, we are living in the greatest debt bubble in the history of the world.  When a debt bubble bursts, fear and panic typically cause the flow of money and the flow of credit to really tighten up.  We saw that happen at the beginning of the Great Depression of the 1930s, we saw that happen back in 2008, and we will see it happen again.  Deleveraging is deflationary by nature, and it can cause economic activity to grind to a standstill very rapidly.

During the next major wave of the economic collapse, there will be times when it will seem like hardly anyone has any money.  The “easy credit” of the past will be long gone, and large numbers of individuals and small businesses will find it very difficult to get loans.

When the debt bubble bursts, cash will be king – at least for a short period of time.  Those that do not have any savings at all will really be hurting.

And some of the financial elite seem to be positioning themselves for what is coming.  For example, even though he has been making public statements about how great stocks are right now, the truth is that Warren Buffett is currently sitting on $49 billion in cash.  That is the most that he has ever had sitting in cash.

Does he know something?

Of course there will be a tremendous amount of pressure on the U.S. government and the Federal Reserve to do something once a financial crash happens.  The response by the federal government and the Federal Reserve will likely be extremely inflationary as they try to resuscitate the system.  It will probably be far more dramatic than anything we have seen so far.

So cash will not be king for long.  In fact, eventually cash will be trash.  The actions of the U.S. government and the Federal Reserve in response to the coming financial crisis will greatly upset much of the rest of the world and cause the death of the U.S. dollar.

That is why gold, silver and other hard assets are going to be so good to have in the long-term.  In the short-term they will experience wild swings in price, but if you can handle the ride you will be smiling in the end.

In the coming years, we are going to experience both inflation and deflation, and neither one will be pleasant at all.

Get prepared while you still can, because time is running out.

  • markthetruth

    Well right now money printing is not working, they can only keep printing to the Dollar = 0 . As far as the consumer , they are stuck because the speed of technology and Disposable Convenient items

  • GSOB

    I don’t believe cash will be in high regard.

    That is, if not considering it post collapse. It’ll be worthless. The cash stashing is to ride the tide out the longest.

    I think it’ll be a long road first to even get to that point but everyday is eroding up to it.

    Inflation to hyperinflation most surely. Along with more taxes, fine increases, joblessness and
    … you get the point.
    Use your cash wisely, that is as long as it is received with confidence.

  • Stezie

    At this point, it could go either way; but, given the reckless money printing by the Federal Reserve, it may well be inflation. And considering that without the QE, the economy will falter, it probably won’t stop any time soon. Regardless, we’re in for some rough times ahead.

  • MeMadMax

    Gold only has value if you expect a recovery in the economy/banking sector back to so called “norms” or even prosperity again, what good is gold if the country is literally in ruins? Cause’ this is what will happen if the economy is destroyed…

    For all the rest of us its food, ammo, and bartering…

    • markthetruth

      was the first metal widely known to our species. It is valuable because it is rare and limited amount on the earth. It is an element a Non Corrosive soft metal and is a extremely electrically conductive metal and it’s beautiful color and shine and will never decay. It can be molded with your fingers . And gold cannot be man made like a Diamond.

      the end…

      • MeMadMax

        Yea, I know all that, but how the heck am I gonna get the money to buy some gold when I’m barely able to make ends meet and its at, what $1400 an ounce right now? Most of my friends don’t even know what gold looks like besides a wedding ring. Do you understand what I’m trying to point out? Only the well to do have gold… And the well to do will have gold after a collapse, but whats the point if food is more important?

        • markthetruth

          People eat and drank before money, it’s called Hunting and fishing all water’s except for reservoirs or public and they didn’t need gun’s either. You need Traps, Bow and arrows , and a fishing pole. Then there is fruit and vegetables off the land.

          the end…

        • Syrin

          Oh I agree. If gold hits $50,000 an ounce then it means that the dollar is worthless, and we are in a barter system.

          • markthetruth

            Barter Goes on already but the problem is there is no tax money in it for the Government so they Despise it.

            the end…

          • End the end stupid

            You’re an idiot…..

            The end

        • JustanOguy

          Learn a valuable trade… that is worth it for me to give you some food.

          • MeMadMax

            Hmm, I know how to make power, water, guns, food, hunt, build a variety of things, etc etc etc… I am way more valuable than you think… I am a Navy Engineer(Machinist Mate) =D But I don’t think I will be helping too many people, family comes first ya know.

        • Ambermane

          Silver might be a better option for you. Percentage wise, silver has out-paced gold in duplicating it’s value over time. It is true that stocking up on bullets and food would be the wiser option, but if you can, purchase a little silver. You can even get it in way smaller increments than an ounce, which are not only more affordable, but easier to trade.

        • Mustard Seed

          You are absolutely right! All this talk about buying gold and silver is pointless for the majority of Americans who can barely put enough food on the table or keep the lights on. It is ridiculous to expect them to buy metal!
          The questions keep coming up, “When is the collapse going to happen?” “How bad is it going to get?” “Is it going to be like the Great Depression or the middle ages?” Collapse is happening NOW, and it is not going to be like the Great Depression or the middle ages. A big reason is the size of our population and its inability to take care of itself.

          I keep hearing people say Americans are tough and we’re survivors. That is the biggest bunch of self delusional garbage I’ve ever heard! Some of us are tough, but the majority of us think life is rough when a storm blows the power grid for 72 hours.

          The collapse will continue, because the people running this country are idiots who can’t even fix a leaky pipe, much less a worldwide economic collapse which they (and their predecessors) created.
          The mathematical certainty of what we are experiencing is no surprise.
          People have been writing books, warning this would happen for decades.

          Our population doesn’t have the knowledge or the tools to survive like the people of the Great Depression, much less the middle ages. As hard as it is to comprehend, people are going to perish as a result of not being able to eat properly, stay warm, and/or have the medications they need to survive under optimal circumstances. Some medicines are already “scarce”.

          The population is going to start decreasing just like it did during the Great Depression, and in all likelihood, it is going to be far worse. That is why the government has strategically placed materials (including coffins) all around the country. It’s harsh, but that is the reality that is going to unfold.

        • Hal

          Yea , I know. but how much money did you blow on B.S. over the last ten to twenty years ?
          Look, my point is that even if you have gold and silver , if your still following the brainwashing mechanism they are pumping you with, they’ll enslave you anyway. Come out from among them that feed on you a thousand different ways and wise up ?
          You still have time. Control is evil, responsible liberty is good. if you vote the controller, your theirs.

      • JustanOguy

        And gold can be traded in every part of this world.

        The End..

        • Ralfine

          Probably, would a hungry man give you his food for your gold?

          To him gold has no value.

          Food has value. If you can make food out of thin air, you can make enough for yourself and sell any excess to anyone who has gold, for any price. Three hazelnuts for three nuggets of gold. Don’t like it? Eat your gold.

          • JustanOguy

            Neither does printed money unless those of us that have food / can produce food need toilet paper.

            My point is if you read above… printed up money from the banksters is going to be worthless.

          • MeMadMax

            Too many people have the normalcy factor… They think gold will have value in a post collapse world….

        • markthetruth

          And Beyond !!!

          Rev 21:21 And the twelve gates were twelve pearls: every several gate
          was of one pearl: and the street of the city was pure gold, as it were
          transparent glass.

          the end…

    • Ayn Rand

      Mark has a point, as does Michael. Gold and Silver will not be worth much at first, but once city states and settlements start to function again (which they eventually will) many of the richer families in said towns will most likely want a symbol for their wealth. Gold will be worth something to them. Gold and Silver also have some industrial use, and whatever manufacturing that is left or recovered will probably want it. I do agree that the collapse will probably wipe out the entire system, but inevitably, civilization will rebuild itself.

    • YH

      Go anywhere in the world and present a gold coin, have it appraised, and you can purchase goods and services…anywhere. You can’t say that about paper currency. That is my definition of a legitimate world reserve currency.

      • Ralfine

        Or you get a low price, leave the appraiser and get robbed outside by his friends.

        Gold also makes you a target.

        • Das

          So having 10k cash in you pocket, does not?

          • Ralfine

            No. No need to tell anyone about it, or have it appraised.

            A target is someone who appears to be rich or having something desirable, like the beautiful flowers in my front yard that were stolen last week.

            A reminder to plant more thorns and poisonous flowers.

    • Cowboy

      Don’t let the bankers lose your faith with precious metals. They have been purposely driving down prices to shock and scare people into liquidating their stock.

      Gold and other precious metals DO have value. Insurgents in Africa k-ill for gold to trade for guns and drugs the paper money system was designed to be used as a form of exchange backed by gold and precious metals.
      But the banksters have been “printing money out of thin air” and with all of this cheap credit, once unemployment rises and people can’t find jobs then gold and silver will have so much value people will k-ill for it.

    • JustanOguy

      Gold is going to be great if you want to buy food from my Ranch or Farm because I’m certainly not going to take your paper unless I need some toilet paper. (And I could seriously give a hoot about the banksters and the debt they use to create wealth.)

      Gold / Silver or a trade that I need. What part do you not get when it comes to something I can take to any country in the world and get something for it?

      You really need to study up on the Weimar Republic…

      • Ralfine

        Yes, gold and greed always go together.
        Some people would sell their grandmother for some gold in the hope having made a good “investment”.

        Now, how exactly will you get to other countries after society has broken down, and hungry diabetics short on medicine are roaming the streets armed to the teeth?

        And as someone else here (or elsewhere) has pointed out: if you have a tornado-proof bunker in tornado alley you cannot even sell it because it is ugly. 🙂

        • JustanOguy

          Like the people roaming the streets that are desperate are going to be armed to the teeth…


          If I have a farm / ranch that feeds people…. do you really think I’m going to have a problem having people defend it against the clueless?


          You should study up with what happens in countries that have already collapsed…. AKA… Learn some history.


          • Ralfine

            If the people roaming the street are not armed to the teeth, why do the clueless like to buy more ammo to defend against them?

      • K

        You speak of having a ranch. While this is a better approach then some are taking. I have one question, can you hold it? Looking at South Africa, Rhodesia, and even the old west. The problem is ranches tend to be wide open, thus hard to defend. I hope you have a large well armed family. Or a lot of trust worthy well armed friends. Also remember in large open areas, the AR-15 is not your friend. Too limited range.

      • MeMadMax

        Hmm, I think bartering will trump gold and silver… When there is no economy, then there is no use for a currency…

    • TheManWithNoName

      Gold is barter

      • Charlie

        GOLD IS MONEY…

        – J.P. Morgan

    • bubba bimbo

      reminder: personal ownership of gold is a CHOICE of the US govt, if you are a US citizen…and they can deem, like in 1930’s, it a crime to refuse to sell it back to the Fed…AT A LOSS! FDR did this to force people back into the currency…check your history before you lose more money.

      The US dollar is, and will be the world reserve currency…for the next 20 years at least. If the dollar is allowed to go useless, many, many countries will be in serious trouble, with incredible wars looming (more so that globally fueled regional “world wars.”)

      Use common sense…dont you think govts will step in and FORCE sheeple to follow the flow?

  • Handog

    At this point, if you cannot afford Gold or Silver invest in Lead and Brass.

    • And food, an army runs on it’s stomach. Ammo and guns will be available for resupply, not so much with food.

  • joe smith


  • K

    Time is indeed short. Grocery and ammo prices continue to climb. But remember, water is the single most important thing. You can not really store enough of it. So you must have a continuing source of water you can access. Wells and springs are your best bet. If you have a drilled well, that is safe to drink. The cheapest method is a torpedo bucket. A long skinny bucket that can be lowered into the well on a length of rope. In the case of a spring, or any other above ground water supply. You must have the ability to render the water safe.There are many filters that will accomplish this. Also in the case of fairly clean looking water, boiling for a couple of minutes will work. As you prepare, do not forget your water plan.

  • Tim

    Mike Maloney holds this view. His latest video is really good. Google “Silver & Gold – The Big Picture” and it will be the first link that comes up.

  • Jedi

    Don’t underestimate the wisdom of the average Joe American. Americans are smart,
    and they know when the economy is growing and when it isn’t. People can see the
    green shoots for themselves. They don’t need to listen to ivory tower
    economists, when they can see new job opportunities, see their stock portfolio
    increase in value, or when they can refinance their mortgage at a fantastically
    low interest rate. The American people have spoken: this is a recovery, pure and

    • Horse

      Are you high ?
      The “average amerikan” is too far interested in the next game, his beer and that pack if smokes he needs.
      Most only watch the things they want to see and hear, so totally in the dark.

      • Das

        Oh thanks for reminding me, almost out of beer

    • Das

      I guess he forgot we print 80 billon every 30 days

      • jokyjo

        Print Ben Print!!!

    • Ayn Rand

      Yes there are millions of new job opportunities. And a lot of high paying ones too. Stocks will rise FOREVER, just like last time. Yup, mortgages and being a debt slave are AWESOME!
      Have fun living in a fantasy world Jedi Knight.

      • Ayn Rand

        Disregard everything I just said. I did not realize Jedi was being sarcastic.

    • Jedi

      I was just joking LOL:)

      • Ayn Rand

        I am so sorry. I did not realize you were being sarcastic. It can be difficult when you are just reading it on a computer!

    • Mustard Seed


  • strangewalk

    Arguments about inflation/deflation are based on production-supply macro economic models that no longer exist. Most of the recent money printing by the US has been digital and has simply replaced digital money that vanished in the banking system–nothing lost, nothing gained. Also, the outside world is not interested in seeing the dollar drop significantly, since the loss would be theirs even more than ours. While it is true that prices will continue to slowly rise, the amount of money people have to purchase will not as the money in circulation continues to drop. What’s happening now is a transformation of the US, and the whole world, into a giant serfdom with the 99% licking the boots of the 1% for crumbs–there won’t be a collapse–it’s not in the plan.

    • GSOB

      A transformation instead of a collapse is like Nazism, or some other fascist movement,.. is interesting, but the conservatives, freedom loving, educated people won’t allow it.

      The money in circulation will rise, I think you meant, not drop.

    • TtT Engine

      We’ve been on a rapidly growing monopoly money system since Nixon took us off the gold standard in the 70’s. They print, borrow and spend what they need and then tax us into oblivion. We have been spared the Weimar monetary system thus far. The Bernanke Baron pumped a cool trillion into the wreckage of the Euro banking system and no one batted an eye. This Baron has us loaded up on 4 rounds of “easing” and is printing up $85 billion per month. Money for nothing and chicks for free, eh Bennie Boy ? The stock market is to Las Vegas as the Hedge Funds are to the House dealers. It’s all about Worldwide governance and the eradication of the Judaio-Christian value system.They are both moving along quite nicely thanks to the leftist lie of tolerance, pacifism and social justice. They even got the Catholic Scribes and Pharisees aka the CCB singing their song hook, line and sinker. Nice work agreeing to OB death care. These tax oppressors will soon be literally taxing your breathing and eye blinks. The skunks in Maryland are now taxing run off water space. Worldwide armageddon actually interferes with the utopian leftist totalitarian march. The freikazoid Al Goreleonie’s biggest fear should be world war or God intervening and turning off his pagan enviro ponsi scheme. These evil SOB’s have infiltrated every aspect of our lives, INCLUDING THE CATHOLIC CHURCH with much less human carnage [they ignore the 55 million U.S. abortions] caused by the likes of of Hitler, Stalin, Mao, et. als. Keep on prepping your mind, body and soul because it represents the last frontier of your liberty. Christi Fidelis !

  • Syrin

    When you buy precious metals, buy PHYSICAL precious metals, as in you can hold a gold bar in your hand, and beat GARY over the head of it when he comes to your house for his fair share of your stuff. Do NOT buy ETF’s. Currently the central banks are selling off their paper gold at RECORD rates driving the prices of gold and silver WAY down. In fact, there is a very good chance that the physical PM market will split from the ETF market since the price is being so heavily manipulated. On the flip side, central banks are acquiring precious metals by the TON. Do what they do, not what they say. They are trying to convince you that precious metals are a horrible investment when the reality is it will be one of the few things left with actual value. Now may be your last best time to buy actual physical precious metals. I won a gold mine, and I’m a physician, that’s how strongly I feel about what the future holds for the dollar.

    • Joe Shmo

      Not only are the central banks trying to convince you what a bad idea buying gold and silver are, but just read all of the metals bashing articles that are popping up all over. Yahoo finance is just filled with them. I really laugh at your frequent comments directed at GARY, the progressive. Funny stuff. Sorry GARY, but you don’t get my stuff either.

    • PD1979

      Your “precious metals” will be worthless in the times ahead! Only by learning how to harvest from nature, grow own food, having clean water and a clean heart before God will open up the doors for the future! Jesus Christ are the way to God! Remember that Syrin and you other readers! Love WILL prevail over hate!

      • The Bible makes it clear that many will have gold, yet it will be of no value to staying alive. Food is where it is at folks…if we are at the end of the age, a great tribulation will soon be upon us, food and water, safety and security, these will be what has value, not gold or silver, though for awhile they will be valuable, but then it gets down in dirty. Get right with God. Network with informed friends and make some plans…

      • bubba bimbo

        you guys are forgetting that the US govt forced 1929-1938 depression era folk to sell back their gold at a loss, to force them into the national currency…FDR did this, and it worked. And the banks stored back the gold that they sold at higher prices…who won that game???

  • Apologist49

    “Deflation” in the title, not “Delfation” 🙂

    Keep up the great articles!

    • MichaelfromTheEconomicCollapse

      Thank you for catching that. I proofread these articles carefully, but sometimes I let a really bad mistake like that slip through somehow. 🙂


      • markthetruth

        Your also put even instead of every single month.

        the end…

  • Ray H

    The article fails to mention the potential for a
    Cyprus type event with the next collapse making your savings inaccessible. Government’s
    dramatic response may be a Cyprus style haircut of your savings

  • JB

    This article is exactly right. As a financial advisor, I have moved my clients into mainly T-bills and gold. I buy gold through a mutual fund run by a very smart manager. Your jewelry is enough physical gold. When the deflation hits bottom and the dow hits 3500 then you unload all cash and buy as much equities, commodities, and real estate you can as you will make a fortune in the hyper inflationary wave that will come. The money printing would be 5 to 10 times what they are doing currently.

  • Syrin

    One more point, there is a lot of speculation that at the emergency G7 meeting held in London this weekend, there were talks of dumping all paper gold, buying physical in bulk by the central banks. After they acquired “enough”, they would create a single international currency backed by gold. Were that to happen, gold would hit 50,000-100,000 an ounce, but they would likely make it “illegal” to own gold. Why? Because they are evil bastards…

    • Das

      Never happen. I can’t get that lucky. F$@k I would be rich!!!

      • Syrin

        I have read this from many sources. it is a possibility.

        • H8TheFed


          FDR made it a crime for citizens to own Gold in 1933. Everyone had to turn in their Gold for $20 of paper currency per ounce. People were locked out of their safe deposit boxes at the banks (big surprize) until the contents could be examined. The newly aquired Gold from this nationwide robbery went to the Federal Reserve Bank (another big surprize) and then it was revalued at $35 per ounce. Yeah, the federal government is capable of just about anything. History (past and present) prove it.

      • Mustard Seed

        Yes, but how much will a loaf of bread cost? Or a gallon of gas?

  • bfast

    I disagree with your premise. I believe that had Bernanke not turned on the presses, we’d have seen deflation in 2008. However, I believe that the printing press is capable of stopping any onslaught of deflation.

    I believe, therefore, that hyperinflation will be the hallmark of the next wave. However, hyperinflation will be followed by formal default. Default will be messy in deed.

    • markthetruth

      The Bubble we Not end up in good Shape either way, It will either Inflate and POP or deflate and end up a SHRIVELED MESS.

      the end…

  • CitizenS

    The people in my neck of the woods are starting to wake up! I see once “deer plots” being turned into vegetable gardens. I believe holding some physical gold and silver are a good thing, but u can’t spend it if your starving to death. Peace be with all, and when it all comes crashing down, take back which is rightfully ours.

  • stopthesocialism

    I think a good rule of thumb for inflation/deflation is that finite commodities will inflate, while the price of labor based manufactured goods will deflate. More people, and more automation erodes the value of labor.

  • bobcat

    These are uncertain times. I would not bet the farm on anything and that includes gold. That said, it’s a good idea to hedge your bets. If you can get some gold coins and silver coins, by all means do it.

    • markthetruth

      I’d keep the Farm and buy cattle,chickens and breed them. Grow wheat ,corn and whatever, and then get your gold coins by selling your food .

      the end…

      • JustanOguy

        Exactly! Glad somebody gets it and has a little knowledge of history.

  • Eoin W

    It appears certain bank bail ins will occur when the banking system begins to collapse. If this takes place then the majority of people will lose all their savings. Even if the losses do not ahppen through bank confiscation the popping bubbles will cause huge losses for most. If no one has any money how can deflation be avoided? With so much wealth destruction and in such a vicious deflationary cycle can the central banks really print enough to cause massive inflation? Especially considering that bank wealth creation has only gone to select “Country Club” types so far, is it realistic to think they’ll create large sums of money to give to the average citizen? If they don’t then we still have the problem that everyone is broke.

    Perhaps wiser commentators can explain how we get from deflation to inflation when no one has any funds because i cannot square this circle.

  • Wally

    Everyone is forgetting one thing. When a collapse happens a real collapse not 2008 we will have many more things to worry about then not having any money. First off when the Great Depression happened here in America crime rates actually dropped. Families drew close and neighbor helped neighbor in many circumstances. That was then and this is now. People were way more civil then. People had something called morals and people had integrity and people had respect. Society today will unravel so quickly that it will be blinding because a lot of people today are not civil and have no morals or integrity. People today kill someone because they are making too much noise or they feel they were disrespected in some way. Any female in your life will be targets for rape or worse. Home invasions will be the norm. Look at the hurricane and long island where gangs were posing as utility employees in order to perpetrate home invasions and theft. Lack of money will be a problem but it in my opinion will be the least of your worries.

    • jokyjo

      Good point Wally. America is so morally corrupt now that many people will be doing very bad things in a collapse and I believe security should be foremost in everyone’s mind. I worry about my adult children that live in a large city. I live in a small town so I feel a little safe but no one really knows what will happen when the SHTF. We can only prepare and hope for the best.
      I just try and enjoy each and every day now with my family and friends and live life to the fullest while at the same time try to prepare as much as possible.

    • El Pollo de Oro

      Wally: Yes, violent crime is going to skyrocket when the economic conditions go from bad to worse in The Banana Republic of America. No doubt about it. When people lose everything and have nothing left to lose (as Gerald Celente says), they lose it. And when Americans lose it, we’ll be looking at widespread Third World criminality: violent home invasions in broad daylight, kidnapper gangs, bank robberies galore. To make matters worse, you will see widespread police corruption in the BRA just like you have in México, Guatemala, Honduras, Venezuela and El Salvador. When Americans are being terrorized by thugs and well-organized criminal gangs, the cops might be in on it .

      “When people get hungry and desperate, things get ugly. And I’ll tell you where it’s
      really going to get ugly: crime is going to go to levels we’ve never seen
      before.”—Gerald Celente

      “I think the type of civil unrest that might erupt in our cities will be far less civil than what happened in Egypt.”—Peter Schiff

    • bfast

      I dare to differ here too, Wally. I may be wrong, but hope I’m not. My belief is that the tough times produce character (Romans 5:3-4).

      When tragedy happens, such as 9/11 or Katrina, people suddenly put down their pettiness and join together. I believe that when the economic system crashes we will be overwhelmed by co-operation more than by selfishness.

      • smallergovnow

        you and wally are both right. there will be unprecidented crime but there are a lot of good people that will band together as you suggest.

      • GSOB

        Yes, all things work together for good, for those who are in Christ.

      • ArchaicSEAL

        You are right in some regards, but fail to see beyond your hope. In the events you mention bfast, people still had food, shelter and security to go home to after helping the victims of those events. Only the victims living in those areas experienced the tragedy.
        Now try to imagine EVERYONE experiencing the tragedy at once with no one to turn to and no help coming from anywhere. Human beings quickly turn to the “every man for himself” ideology and become the animal. Especially in America today where we have been hammered with the cultural mindset of getting ahead at the expense of others, as well as the idea that we have to be better (read: richer) than the jones’. This will, inevitably, lead to a dog eat dog society and law enforcement will NOT be able to keep up. Honestly, local law enforcement will disintegrate when they can no longer be paid to keep the peace. Moreover, DHS is preparing for this with a national police force. The implications of THAT is even more frightening in the long run.

        • bobjo1972

          And who will pay the DHS goons? And what will they buy with that “money”?

          When/If it all goes SHFT, there will be no law, there will be no JIT deliveries of the food and big screen TVs.

          Until then, we will experience a slow decline with crime and corruption rates steadily increasing, until it finally cracks.

          • Hidefvi

            In your case there will be local militias. Small groups who had weapons. Cops , farmers, certain head honcho types. There will still be food for those who are in the tribe. Thats when living in a city won’t be so cool. This is of course mad max living. I’d rather just get shot in the head. Whats the point of surviving that crap? Not my cup. I’ll ride the wave all the way till that moment not thinking about having to raise pigs or chickens or shoot a gun to survive. Seems those guys are miserable when all is normal can’t imagine having some low brow idiot telling me what to do.

      • ibantam

        adversity builds character in believers who already have character, but those who have not will lose even the little character that they thought they had.

  • JustanOguy

    Love you Michael… HOWEVER…

    The biggest losers of an “Economic Collapse” are going to be the Banksters… As it should be.

    People with knowledge should not be scared of what happens to Wall St. when it does happen. (Let them burn as far as I’m concerned.)

    Bottom line is Michael… the true producers of what matters such as food are going to continue to produce and sell our products one way or another so people can eat.

    This fear, gloom and doom is really kind of Beese when you really understand this and know what it’s going to take when the banksters get what’s coming to them.

    Debt free with thousands of acres and ranch land… I am really looking VERY forward to the day that the house of cards collapse on the debt creators.

    For the sheeple who don’t get it… there will be chaos. Just a suggestion… but I think you should start focusing your articles to help people get it so they don’t fall to the Beese that happened back in 2008.


  • chilller

    Many of us can’t afford gold so silver is the answer. It will follow golds rise. Just remember, supplies and barter are for the crash…gold and silver is for the recovery. PM’s will continue to go up since this will be the money of choice for countries outside the US. Once a sane system of financial security is established that everyone can live with, the price of PM’s will go down. Until then the PM’s are the only store of wealth that’s safe.

    • JustanOguy

      Not exactly… the only store of wealth is farms and ranches so you can sell food for PM’S.

  • JAH666

    The Japan bond market was halted before it was open even one minute last night, and their main NIKKEI index closed down 1500 points! Is this the trigger that Michael said we should keep on the lookout for? The next 48 hours will be very interesting, so keep alert (and keep the car gassed up).

    • Had a thought about you last night, what is it you say, tune out, drop out, something like that? Was re-reading a neat booklet titled “War Tax Resistance Through Low Income/Simple Living”. Great points in it!

      • JAH666

        Sounds like the booklet you mention contains a lot of the same information as I have been reading lately. The expression you remember coming from my soapbox is: Tune In, Turn On, Opt Out. This was coined by Charles Hugh-Smith on his blog recently. I have adopted the expression, with attribution. A lot of the tenets come from sources like the booklet you have and the “degrowth” movement. Check out both on-line. In a world where it seems like individuals have very little control over how things get done, living ones life as a statement of resistance is about all we can do. Be seeing you…

  • jokyjo

    Thanks for your blog Michael. You were one of the people who helped me wake up last year.

  • jsmith

    Wherever I go I see signs saying “We buy gold” or “Cash for your gold” and “Silver.” Now, if gold and silver are actually dropping in price you would think the shops would be selling, no? Why are they buying? What do they know that we don’t know?
    So if somebody is selling their metals, somebody is buying them. Is this a duh moment?

    • South Park Fan

      Watch the Season 16 south park episode of Cartman becoming a Cash 4 Gold scammer. The gold ends up being melted back to the Federal Reserve according to Tray Parker and Matt Stone.

  • Gay Veteran

    “…For example, in Cyprus during the crisis, the LAST thing you wanted to have was gold. Nobody would take gold there for payment….”
    I guarantee that if you had Austrian once ounce silver coins (1.5 euros) or gold coins (for example, 0.1 ounce) that you could buy anything you wanted.

    • jim

      I guarantee that if you had Austrian once ounce silver coins (1.5 euros) or gold coins (for example, 0.1 ounce) that you could buy anything you wanted.


      • Gay Veteran

        gee, like no one could get on the internet to figure out what one ounce of silver was worth

  • TtT Engine

    Those of you that have been diligently prepping, good work and may God Be with us. A major concern would be if the financial collapse was massive enough to produce large scale hunger, crime, riots and home invasions. Home protection might be a higher priority than food. If your location shows signs of stabilty and relative prosperity, you automatically become a target for the thieves, criminals and those lacking morality. All your hard work and preparation could be wiped out in one home/land invasion.There is an elderly husband and wife near my location that have a small working farm that is very visible from the road. They do not at all appear to be able to defend themselves. There age alone makes them very vulnerable. Pehaps those of us that have home defense capability and less in the way of long term food storage supply could defend the defenseless farmers. Barter home/land protection in exchange for fruits of the Earth. Good must partner/align with good and fight to the end against evil. Christi Fidelis !

  • My prediction with the environmental resource depletion:

    Inflation: Food, Water, etc

    Hyper Deflation: Almost all devices that rely on energy, suburban housing, cars, etc

    I don’t see the fed having much energy or resources to print a ton more money if the power grid were to go down due to shortages of coal, oil, or natural gas. As the result, I don’t see Weimar style Hyperinflation happening. If mass layoffs occur, even more deflation would happen.

    My personal prediction: The materials economy and mass scale marketing are not sustainable environmentally indefinitely. If the human race wants to survive and thrive, we will be forced to make decisions in which are not the most profitable for the bankers and investors. This may include things like: a debt jubilee, learning to grow our own food, putting farms back in the cities again, reviving the railroad system, renewable energy, reduction of energy use, and assembling the goods we do use locally instead of shipping them half way around the world (even if that means pay US wages to assemble), and focusing on small town culture everywhere as opposed to big-box stores. We will have to put happiness and quality of life as a higher priority than corporate profits. The sooner we adopt this policy, the better our chances of survival.

    • Madcap

      Interesting points all. I would say that also deflationary will be any discretionary items. People are not going to continue buying 1000 dollar stereos when gas is 10 bucks a gallon, for instance. We will see all of these pleasure items take a dive. What an absurd spot we have gotten ourselves into.

      People will need to learn to find value in family and friends and truth and what is really important, basically. I bet suicides are going to skyrocket to rates hitherto unbelievable. And be prepared to kill in order to survive. God forbid.

      • A lot of the “need to kill to survive” depends on people’s attitudes toward the transition and how much they are willing to work to make a sustainable food system in a localized setting (as opposed to shipping everything from far away) and do it with organic materials. Yes, we will need to find value in family and friends. We will need to re-learn skills our ancestors used. Moreover, we need to news media to educate people on what they need to do to survive and what the future holds. We need to stop focusing on the stock market, take control away from the CEOs and corporate execs, and put the framework in place for a re-localized economy and re-think many rules of society. We will need to change the rules to favor re localizing, local farming, etc. We may have to re-distribute wealth. We may have to adopt policies that don’t cause families to lose everything through long periods of unemployment (putting food on the table and having a place to live may get higher priority than bills and debts being paid, for example). Full reserve banking may have to be implemented instead of partial reserve, perhaps under government control or regulation. We will have to change zoning codes, and we may have to allow things excluded by insurance companies to survive.

  • severus

    oh yay!

  • Washington76

    “You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.”
    George Bernard Shaw

  • Cyber Revengeance

    I don’t think there would be a collapse. when fed increases interest rate then the economy will contract or slow down. USA GDP is increasing every year. Even in 2008 there was increase. So why would collapse. in case of debt matter, USA debt will increase if US economy performs bad and decrease if it performs good. Whatever is going to happen, will happen slowly and it would take a decade to unfold.

  • Bob

    have been seeing, from time to time, rumors that the government is
    planning to outlaw the use of cash. The latest speculation is that the
    Federal Reserve will announce a plan to phase out cash by the end of
    next month. They want ALL transactions to become electronic, so as to
    monitor all sales and be able to inflate the money supply with greater
    ease. I have also heard that they are planing to eliminate money
    competition like Bitcoin.

  • Shmeggle Marxist

    why does the 85B injected each month propel the stock market forward? honest question.

  • Shmeggle Marxist

    everyone should grow a beard

  • Shmeggle Marxist

    I just found out, “Top 100 You are in the top 100 most active users on this site.” This should not be, there must be 100 other semi intelligent humans out there who with the love of Christ can outpost me. LOLOL

  • jaxon64

    Michael, 2 questions for you…….
    How long do you think the deflationary period would last before it “whiplashed ” into the inflationary event..?
    Secondly, during the deflationary event, do you think it would be best to use up as much of the fiat currency that you have when values are down as you can? Seems like the logical thing, but then again, common sense seems to be inverted these days.
    Thanks, Jaxon

    • MichaelfromTheEconomicCollapse

      The deflationary period will last anywhere from a couple of months to a couple of years. It all depends on the response from the federal government and the Federal Reserve. They are the ones that will be creating the inflation.

      And you have good instincts. You will be wanting to use your dollars for other things during that time when cash will be king.


  • Paul Folbrecht

    I’ve done a great deal of research & thinking about this subject myself, and I largely agree.

  • oldwarzone

    The following was taken from passages in a few pamphlets during the cold war of the 1950’s


    In the event of an economic collapse for any reason, the existing local, state, and federal police and military and fire fighters, medics, and other authorities will work together first to secure and defend small areas and places of interest to maintain peace and stability including police stations, sheriff offices, court houses, hospitals, gas stations, major food stores, post offices, reservoirs and water pump stations, major gas and electric stations, schools.
    Guns and ammo wherever they are found will be taken and secured. The families of authorities may be placed in secure facilities to also assist as needed.

    For personal safety and general security, few people will be allowed to live by themselves. As determined by leadership, all food will be rationed, local food distributors and breweries secured, farms and green houses reviewed for viability and taken over as needed.
    In the reduction or absence of imported energy, people will assist in all aspects of growing and harvesting and packaging of foodstuffs, energy production, and other areas.
    All persons will be expected to assist in Trash Detail, Clean-up, and Neighborhood Security Detail. Looters, black markets, and criminal activity will be subdued. Business activity will be resumed, along with education and training and other activities.

  • Former Marine

    I agree with both. Just be prepared and know who you can count on and start talking with them. Food, shelter, weapons for examples should be high on your list on things to do this year. Get your finances and family in order, and you will be better off than 80% of most Americans. If the worst does not happen, then you will still be in better shape in the long run.
    Former Marine

Finca Bayano

Panama Relocation Tours



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