Preppernomics: How to Survive While the Dollar Dies
by Daisy Luther, The Organic Prepper
I really don’t like to make predictions.
I’m not Zoltan, the fortune-telling dude in the machine – you know, the one with the turban who waves his mechanical hands dramatically over a crystal ball and tells you of your future in a heavily accented voice.
But, I think there is something coming in 2015 that we all need to be concerned about, and I wouldn’t be doing my job, writing these posts, if I didn’t warn you.
Some people are going to roll their eyes and call me a doomer. Some people are going to say, “You warned us about stuff all the time, and it hardly ever happens.” Some people are going to revert to cognitive dissonance and say, “Life is too short to worry all the time.”
But there is something very troubling on the horizon, and it’s going to affect us all. From most reports, the outlook for 2015 is not particularly bright.
Economically speaking, the bottom is falling out.
Sometimes to see the future clearly, we need to look at the past.
The most recent economic disaster that the US has suffered was in 2008. In just a few weeks, trillions of dollars of American wealth was simply vaporized in what was classified as “The Great Recession.” Over the next 3 years, American financial well-being was diminished by 40%.
Despite what the White House would have you believe, there’s been no significant recovery. And the signs that portended the 2008 crisis are all there, warning us, if we’d only pay attention.
Michael Snyder of The Economic Collapse Blog wrote a post with a grim warning last week. Although we’re all being told to spend, spend, spend, because everything is wonderful, the same thing happened in 2007, right before it all hit the fan for many Americans.
Sadly, what we are experiencing right now is so similar to what we witnessed in 2007 and early 2008. The stock market had been on a great run, people were flipping houses like crazy and most people were convinced that the party would never end.
But then it did end – very painfully.
The signs of trouble were there, but most people chose to ignore them.
Sadly, the exact same thing is happening again. (source)
The biggest indicator of impending financial catastrophe can be seen at the gas pumps. While it seems like a great thing to be spending fewer of our hard earned dollars getting from A to B, it is a deceptive sign that all hell is about to break loose in the financial world. An article on SHTFplan warns:
On the surface the recent drop in the price of oil has been a huge boost to America’s pocket books. But according to some analysts we shouldn’t be to quick to celebrate. The U.S. Oil and Gas industry has seen incredible job growth during the recession, with nearly 800,000 new jobs being attributed to domestic fracking and drilling expansion. At over $100 barrel, there was plenty of money to go around.
But with a sub-sixty dollar price point, it’s quite possible that all economic hell is about to break loose.
Thousands of recently highly paid workers have been laid off after the oil price plummeted 50 percent in 2014. At least four American oil-producing states are already facing budget problems due to decreasing oil revenues.
In a study published last year, the Council on Foreign Relations warned the largest job losses caused by sharp decline in oil prices are going to take place in North Dakota, Oklahoma and Wyoming, where the number of drilling rigs is decreasing.
According to Tom Runiewicz, a US industry economist at IHS Global Insight, if oil stays around $56 a barrel till the middle of the next year, companies providing services to oil and gas industry could lose 40,000 jobs by the end of 2015, while oil and gas equipment manufacturers could slash up to 6,000 jobs.
These workers can earn more than $1,700 a week, much higher than the average $848 a week payment for other workers, the WSJ reported. When experienced workers lose their highly paid jobs, they stop paying their bills.
Those are the conservative estimates and they are based on a $56 price point, which is almost exactly where we are today. But Saudi Arabia and other OPEC nations have suggested the price could drop to $40 or even as low as $20.
In such a scenario we could easily see widespread layoffs in an industry that currently employs over 10 million Americans.
Unfortunately, that isn’t the worst of it. It’s only the most noticeable first domino in the row. Snyder points out that these low prices could have even more brutal ramifications than massive job losses:
The big banks are holding trillions in commodity derivatives that could blow up if the price of oil does not rebound. Overall, there are five U.S. banks that each have more than 40 trillion dollars of exposure to derivatives of all types, and the total global derivatives bubble is at least 700 trillion dollars at this point. (source)
That’s not all. According to an analysis by Tess Pennington of Ready Nutrition, job security is ephemeral.
It appears that the confidence in the economy may be another over-inflated attempt at masking the true state of affairs. In fact, some of the largest U.S. corporate conglomerates are planning for massive layoffs in the coming year.
CEO of the Coca-Cola company, Muhtar Kent dubbed 2015 as a transition year and notes that 2015 will most notably be “the most important year for us to make the changes in terms of a leaner, better-operating model.” He adds, “The consumer is challenged everywhere around the world,” Kent said in a conference call. “There is a lot of volatility in the world, in currencies, in interest rates, in growth rates and in geopolitical issues.”
In order to cut losses due to a disappointing quarter, the popular soda company plans to cut at least 1,000-2,000 jobs in coming weeks to try and rein in costs. As well, other major companies have also felt the buoyancy of the world economic markets. Halliburton, USPSand even IBM are also hinting at layoffs in 2015.
There’s concern that the coming year will also be the beginning of the energy sector layoffs. Crude oil has plunged to nearly $50, and energy companies have begun announcing cuts to their 2015 capital budgets of as much as 25 percent. As well, rig counts are falling in Texas as companies shut down drilling operations. Source
Since 2008, prices of products have continued to rise in order to adjust for the declining economy. As Mac Slavo of SHTF Plan points out, the Baltic Dry Index, a key indicator of economic health and stability, has collapsed to nearly the same levels. (source)
It certainly doesn’t sound like the outlook for 2015 is the rose petals and sunbeams that Washington is promising.
How will the financial collapse affect you?
Maybe you aren’t an investor. Maybe you don’t have real estate. Maybe you are absolutely certain, without a shadow of a doubt, that your job is secure. Perhaps you have money in the bank.
The trouble is, the money you are working overtime to make, the security you feel that you have by saving it…it’s imaginary. It’s nothing but a giant fraud that keeps you a slave to the system. Joshua Krause of The Daily Sheeple wrote about the dollar:
But what is it really worth?
Nothing. It’s worthless, and that’s the godawful truth. I’m not exaggerating to make a point either. It’s not just overrated, overinflated and backed by nothing but confidence. It is quite literally worthless. Less than worthless in fact! Our fractional reserve banking system spews out “money” that is nothing of the kind.
This thing that we spend our whole lives desperately trying to accumulate; that builds our roads, feeds our bellies, pays our mortgages and fuels our dreams. This glorified token that puts our kids through school so that they may spend their whole lives trying to accumulate it as well, is not really money. It’s debt! And it’s not even your debt. It’s somebody else’s liability. ( source)
Not only is your money worthless, here a few more ways the current economic trends may still affect you.
- Prices will go up. We’ve seen an almost unprecedented increase in the price of food over the past couple of years, even as the quality of the food available plummets. This is due to massive droughts, early freezes, and basic cost-of-living increases.
- Unemployment will continue to ripple through the country. Those without jobs now are equal to the number of unemployed during The Great Depression. As the economy plummets, that number will almost certainly exceed the previous highs.
- Obamacare mandates will continue to impoverish the middle class. The most ill-conceived policy in history, Obamacare has increased monthly payments while decreasing coverage for nearly every person who is gainfully employed. And, if you refuse to procure coverage through Obamacare, expect attempts to penalize you into compliance. This is adding to the unemployment rate as employers struggle to keep their doors open and drop full time staff to avoid having to pay their portion of the O-care payments.
- Rents will increase. If you don’t own your home, prepare to pay higher rent as landlords try to cover their losses of income in other sectors. Foreclosures will be on the rise, which means there will be fewer homes available.
The bottom line is, income will remain the same, decrease, or even disappear entirely for many of us. Meanwhile, the price of darn near everything will go up. Expect to pay more for things like keeping your utilities on, feeding and clothing your family, keeping a roof over your heads. Aside from that, those dollars you are carefully saving? They are only providing you with the illusion of security.