During an economic collapse, most governments will go into debt, now you might think that this debt will be to different companies and manufacturers which employ a large percentage of the population, and in case of an economic collapse, governments will try to keep these companies afloat no matter the cost.
The truth is that we are fairly far from a total economic collapse, the entire world relies on trading and even if some financial bubbles burst as the housing bubble did in 2008, it still was only a small dip rather than a total economic collapse. Not even world wars made the entire world economy to collapse, its effects were mostly local, although in case of an all-out nuclear war the global economy will probably collapse.
The truth is that all that money which the government owes is coming from banks, it’s almost like the banks have any government by the balls, and we are just seeing a puppet show every 4 years with the election, no matter who is the president if an economic collapse will come there is nothing to stop it. During the past couple of years, you probably have noticed that a lot of governments are pushing to get more immigrants in, no matter where they come from or if even they could benefit the country.
A lot of presidential candidates even promise free healthcare to all illegal immigrants or undocumented immigrants as they call them in an attempt to blur the line of who is in the country legally and who is illegal. Imagine a world where free healthcare is just a flight away, just set foot on US soil and you have free healthcare, which the US taxpayer pays. Now combine free healthcare provided by the US for the entire world in case open borders becomes a thing and add economic migrants, now if that isn’t an economic collapse just wyting to happen I don’t know what is.
The truth is that governments who are pushing for open borders and accepting basically anybody do not really care if these people will actually work or not. The main idea of getting as many people is them to join the financial system, the government gets loans from the banks, this money will be spent on immigrants in form of welfare and subsidies, and you the working person will have to pay these loans back in form of ever-increasing taxes.
Western countries have basically ruined the core family values, and less and less people are getting married and having children, this is why getting as many immigrants is so important for these governments, new people, more debt and higher taxes. Now think of a system that constantly needs more money to produce more money and debt, it almost sounds like a massive pyramid scheme. If you want to prepare yourself for imminent economic collapse, then my recommendation is to read my recent article 75 Tips for economic collapse preparation (list).
Debt makes the world go round
You have probably heard the phrase “money makes the world go round” but the truth is that money=debt. The federal reserve loans the government money, with an interest, meaning that for every dollar they get they will have to pay interest, which basically means that the $1 is worth $1+interst for the federal reserve and for the government it is $1-interest. Currently, the US government has 26 trillion dollars of debt, and the last time when the US had no debt was in 1835.
It is fairly safe to say that in the foreseeable future the US government will not be able to pay off the debt. The US government should increase the taxes or limit its spending in order to pay off this debt, and as increasing taxes or limiting expenses isn’t very popular, no presidential candidate is even hinting at wanting to eliminate this debt. If you do not live in the US, you might think that you will not be affected, but everything that happens in the US has a ripple effect on the whole world just like the 2008 financial crisis.
Even North Corea would be affected by an economic collapse in the US, as there will be a lot less money coming from foreign aid.
Who owns the money
Most people see the government as an all mighty entity which has everything under control and makes or attempts to make the country develop financially. The truth is that any government no matter where in the world you live is in debt to a bank, in the US it is the Federal Reserve. Now you might think that such an institution surely must be owned and operated by the government and if you go to https://www.federalreserve.gov/faqs/about_14986.htm you might think that it isn’t owned by anybody.
The truth is that the FED as been made by banks and not by any company back in 1913 and these banks have been pushing to make an institution such as the FED for at least a hundred years prior. Basically the FED is owned and operated by a handful of banks which all are privately owned, imagine that having the ability to basically print money out of thin air and then lend it to governments with interest if you would do that from your basement you would be in jail.
There are only a handful of privately owned banks who made the FED and they are still in control of it like the Rothschild Bank, Warburg Bank, Lehman Brothers, Lazard Brothers, Kuhn Loeb Bank, Israel Moses Seif Banks, Goldman Sachs, and the Chase Manhattan.
Current political climate
At this point the question isn’t if an economic collapse will happen but when will the economy collapse, and the current economic climate isn’t helping at all. The US government is one of the biggest spenders in the world, and arguably it isn’t spending the borrowed money that well. The current economic class is so far out of touch with reality that it is scary and will probably not end well.
If you love history then you have probably heard of Marie Antoinette and Louis XVI of France, both were executed by the people. At one point when Marie Antoinette heard that people are starving and that they don’t even have bread to eat saying “let them eat cake“, which just shows how out of touch with reality she really was. The problem is that politicians all over the world are fairly well off, they do not face the problems and challenges of the average person, and them being in an echo chamber surrounded only by rich people isn’t helping at all.
This is why we will see more and more people with strange ideas running for the presidency, anything from open borders, free healthcare, free colledges and such are only the beginning. These people do not know how and who will pay for all that free stuff, they just want to be elected and are willing to say anything. If you want to know more about the age in which we are living currently than I recommend you to read my recent article Signs of a declining civilization ( Age of Decadence ).
In the past, most currencies had a gold standard, a thin strip of gold which was giving money its value. This was a great idea as in case of an imminent economic collapse gold and silver would still be worth something. The problem is that most countries have ditched the gold standard and either have paper or plastic as money, I don’t mean plastic cards, but money made out of plastic. The main reason why this gold standard was removed is that banks couldn’t simply print out money from thin air, but by removing the gold strip only the sky is the limit as to how much they can and want to print.
You probably have seen a big push during the past couple of years to incentivize people to use credit or debit cards, at this point most of the money is in electronic format so basically the banks don’t even have to spend money on printing them out. Precious metals like silver and gold will still be valuable, even if the economy goes down the tank if you want to know how much silver you should have read my recent article How much silver should a prepper have (simple math).
People living with borrowed money
Around 180 million Americans have credit cards, and around 41% of households have some form of debt according to this site. As almost half of the population is in debt in one form or another, and the government is in debt with over 23 trillion dollars, things will get much worse. Currently, we are experiencing an economic bubble, unemployment is fairly low and income security is fairly safe.
However, the government will go into debt every year with increasing amounts of money, which sooner or later means that the population will have to be taxed higher. Not to pay off the debt per se, but just to keep things afloat. Once people who are already in debt will have to pay more taxes, they will simply stop buying more useless shit as they do now with credit. There are a lot of people who pay for one debt or another their whole life, anything from student loans to houses and cars.
The problem is that during an economic collapse you will still have to pay the same amount of money every month towards your debts, and most of these debts are liabilities rather than income-producing debt. Some might argue that getting a university degree is an investment for the future, but in an economic collapse scenario what are you going to do with your degree if you can not find a job?
The American dream is a mirage, your house with a white fence, a nice car and a stable job should be achievable without any debt. Instead, most people start their adult life with $100k debt for a useless degree, then a debt for their car, house and living expenses for their family. This is an extremely risky situation as you have put up everything on the line based on that you will always find work and you will always be able to pay off your monthly debt payments.
The problem is that life is unpredictable, something as a broken leg could financially ruin you. If you have a job that covers your health insurance that doesn’t mean that your entire world will not fall apart in a matter of months. The company might pay for your medical bills, but who is going to cover your monthly expenses, and once you stop paying your debt towards your house and car you might find yourself homeless and without a car.
You will probably also lose your job eventually, or you could go into more debt to get your car and house back which will make a never-ending circle of paying your monthly debt off and hope that when you retire than you can finally rest, provided that there is no economic collapse and you get your pension reduced.
As you can see, our current economic situation is fairly fragile, although a total economic collapse is fairly unlikely as the entire world is connected and most countries depend on one another for vital imports which they simply can not produce domestically.