What Desperation Looks Like

“If the dollar is really plummeting and the mortgage holders and credit card companies could go belly-up any day, why is it so important to pay off our debts? Wouldn’t a collapse wipe the debts out?”

This is a question I hear frequently, but I’ve been getting it posed to me in one way or another much more lately as a result of the Prelude to a Financial Collapse articles I’ve written. Even yesterday a similar question was posed to me by a reporter for a local newspaper.  You may not be aware of this, but I write for this blog when I feel compelled or inspired by a typical topic. Today is no different; I feel compelled to answer this question as clearly as I’m able so that all of my friends and family can make an educated decision when it comes to their Financial Preparedness.

Let’s just say hypothetically that there was a nationwide financial collapse; perhaps the dollar “officially” plummeted to a tenth of its value.  What would the ripple effect look like? Will we see familiar scenes which played out in Zimbabwe in which people had to pile their currency into a wheelbarrow just to have enough to purchase a single loaf of bread? How does this happen so quickly and what are the real effects on our lives? As the value of the dollar decreases, it will of necessity require more of those dollars to obtain our everyday essentials. Adding torment to the open wound, such a scenario will likely take place in an instant when it does. I’d love to better explain “how” such a thing could happen, I prefer to focus on what the scenery looks like after such a crisis is present.

Today, when a retailer receives their goods, they are given an invoice which is usually a brief extension of credit of about 15 days.  While the retailer is in the process of selling these goods, the price of those same goods—which they will be reordering in the future—will fluctuate.  Some folks mistakenly assume that the prices of goods are sold based upon the price at which they were purchased. Such is only the case with stabilized cost of goods. Instead, items are sold based upon the consideration of what it will cost to purchase more of that item. That’s why the price of gasoline fluctuates so quickly. That’s why earlier this year you saw huge fluxuations in the price of produce. Sure, the tomatoes may have cost a tenth of what their next shipment price was to be, but unless the retailer immediately alters the price to the customers to reflect the known future wholesale price, they may find themselves without sufficient money to bring in more product in the future. Unfortunately this is only the case when products increase in price. Typically it’s only the fear of stiff competition that compels retailers to reduce their prices in response to the market. They will sell it for the highest price they are able to for as long as they are able. That’s just how it goes.

So, back to our original scenario. 

The dollar plummets in value to the point that it requires $60 to purchase something that you used to be able to get for $1.  Immediately there will be panic—even if it only registers in the hearts and minds of the retailers. Suddenly the Hershey’s Chocolate Bars that are going for $1.29 regular retail are going to have to be re-priced at $62 each—and that’s just one out of 10,000 SKU numbers in your typical grocery store. Every purchase that’s made prior to the computer system updating the prices causes the store to lose tons of money, which may compromise their ability to purchase replacement product in the 24 hours.

Adding a more complex level to all of this; imagine you being at home when the news breaks—“The dollar is now only worth 1.6 CENTS”. Naturally your instinct may be to panic a bit, wondering if the gas stations and grocery stores have heard the news yet and if you can possibly get there fast enough to get the most you can for the cash you have on hand--you and thousands of your neighbors. *sigh* Now this is just one aspect of a plummeting dollar scenario as it relates to obtaining necessary goods. Let’s consider the employment aspect now. You can bet that the moment your dollar plummets will not be an occasion for you to get an immediate raise.  While prices are soaring and the dollar is plummeting, employee compensation tends to be kept in limbo for a while. Whether it’s a day, a week, or a couple of months, that period of limbo will be painful.

Assuming that you don’t lose your employment as a result of the plummet (as would likely happen if you worked in a luxury or non-essential industry such as travel, high-end product sales, affluent real estate, or restaurants) the cost of the essential things you’ll need to purchase are now demanding more and more of your paycheck. Where you might have previously spent 55% of your income on things other then your mortgage or rent, you would suddenly find yourself needing every dollar just to feed and clothe your family. Just as the paychecks in the private sector have NEVER kept up with the cost of goods or inflation, it’s a bit naïve to believe that in the midst of such an economic disaster things will be different. As a nation and as individuals we’re carrying such enormous, enslavement levels of debt. It will not be easier to get out from under that debt in the midst of such a scenario as more and more of your money is needed just to live.

Now, one would think that perhaps the employers would have some compassion and at least try to pay their people more so that they could put food on the table. But understand what that would require; in order for a business to drastically increase their compensation levels they would have to, at the very least, be operating a debt-free business, have a substantial “what if” savings account, and be the type of business that was essential enough to their existing customers as to raise their prices and still be a viable company, and also have an inclination to do such a generous thing for their employees.  How many businesses in the world would fit that profile today?  Yup…keep looking…I’ll wait.

I’ve just got to interject here and say that  just writing about this particular angle of a financial collapse reinforces to me the importance of mastering a craft that fills the most basic needs of our fellowmen--food, clothing, shelter, transportation, etc. It also reassures me that self-employment is much less of a risk than working for someone else. Keep in mind, this paragraph is just from "The Book of Kellene", so take it with a grain of salt.

OK. Now lets look at how this will affect your creditors, such as the lien holder on your home, the landlord of your apartment, credit cards, or other forms of credit. If you are paying any credit that has a fluctuating interest rate, such a crisis will indeed be a financial disaster for your household budget. Take the case of Chase Bank last year(?--maybe two) who was desperate to bring in more money fast as they were taking a huge financial hit on the sudden number of bankruptcies among their clients, and the losses from the Mortgage Backed Securities crisis and the legislation which Congress passed forbidding them from any of their fee and rate shenanigans they had come to rely on for so long. The new law prevented them from changing the interest rate on their clients. But there was nothing in the law that prevented them from increasing the minimum payment of their customers.  They increased the payments by as much as 400% even in the face of the risk that their customers wouldn’t put up with it and go elsewhere. For those who didn’t have the credit worthiness to go somewhere else, Chase “kindly” extended a program to them in which they could lower their monthly payment if they wanted to switch to a higher interest rate line of credit.  Make no mistake about it; Chase’s move was a desperate act. They knowingly cannibalized their business by chasing off credit-worthy customers! What do you think would be their desperation level if they were to find out that billions of their assets just dropped in value down to 1.6 cents on the dollar??

Let’s look at some other harsh realities. Suppose you’re a renter.  While most landlords will try to avoid court costs of enforcing minor issues on their lease agreements, they may be more inclined to do so in light of all of the persons losing their homes because of the financial disaster ripple effect; they may be desperate enough to eliminate even those renters who are in a lease agreement in favor of those who can pay higher rents. Landlords are people and have families too. Their cost of groceries goes up just like everyone else’s. How about mortgage holders? If they’re bleeding money left and right on their balance sheet as a result of gargantuan losses due to foreclosures and bankruptcies, even the stronger banks will be desperate to get water from a stone.  History continues to show us that desperation comes out in droves when the pie gets smaller with just as many mouths to feed. With the drop of the dollar, every single one of the safety nets which banks and mortgage companies rely on will crumble. You’re minimum payment may be $1,000 a month now, and on a fixed mortgage it will be $1,000 a month, still. But the problem is that the $1,000 is no longer as powerful on the ledgers of the banks as it used to be. That which qualified them for massive lines of credit from the Central Bank previously will not get them what they need to continue to function as normal. Unlike groceries and gas stations they CAN'T  just increase their borrowers fixed payments. As a result of this crisis, the backbone of the wealth in the world becomes decayed and inconsequential.  

Financial institutions are the biggest offenders at over-leveraging themselves. Surrounded by money, they begin to take it for granted and get sloppy.  When disaster comes, sloppiness is exposed and the only one who’s making money is the mortician. The only way the industry can survive is if they get every single dollar owed to them. When you’re trying to recover from a 6,000 percent dilution of your assets, you don’t have the luxury of looking the other way. The same goes for credit companies.  Their very existence will only be possible if they are able to weather the crisis. They simply will not have the luxury to forgive the debt of a customer. On the contrary, they will have to be extremely aggressive in getting the money that’s due them. Let’s say that you have 4 children and a spouse to feed. You’ve lost your job as a result of the hyperinflation crisis. You’ve moved in with your parents along with your two other siblings and their young family. Just how bruised and broken do you think you’d be at this point if you find yourself buried in debt, beholden to desperate financial institutions? What if XYZ bank decides to leverage your desperation? What if they are willing to pay you to put pressure on your neighbors who owe them money as well? You’re desperate for sustenance and they (the banks) are desperate for money. Friends and neighbors turning on each other out of a desperate need to survive is an unfortunate common thread throughout all of the challenging moments in history. (such as Jews turning in fellow Jews to the Gestapo in exchange for one more crust of freedom--albeit short-lived). 

As the financial institutions tighten their belt, businesses will suffer a secondary wave of pain because the credit which they have come to rely on today to keep afloat will no longer be extended to them—after all, their debts will heavily outweigh their assets overnight. The National Chamber of Commerce reports that over 90% of businesses which have 500 employees or less rely on lines of credit to cover expenses presently! Imagine the fall-out of 90% of these “small” businesses failing in a matter of weeks.  A crisis of the failing dollar will only serve to compound the nightmare of the present debt load of our nation, our businesses, and our families. If you’re debt payments are based on fluctuating interest rates, you’re exposing yourself to a very realistic and painful bondage. I assure you that compassion and charity will not rule the day of such a crisis—not at the hand of the creditors anyway. Even if a human being employed by the creditors were willing to forgive or give leniency, there are only a half dozen banks in the world which are not themselves obligated to bigger and more powerful financial institutions. They simply will not have the authority to look the other way.

We see what’s happening now with less than a third of the existing homes in foreclosure and unemployment just below 10%,  and state tax revenue is down an average of 10% throughout the U.S.—revenue which is critical to pay for a broad range of safety services. The budget of most states is fed 80-90% by tax revenues. Just imagine what would happen to these precarious positions that state government and utilities would find themselves in if there were a serious drop in the value of the dollar. The budgets of power companies, communication services, and  sewage systems are not self-contained. Customers of essential services have long been viewed as a leveraged asset, sold off for a few pieces of silver in cash today with a cocky sense of wealth and prosperity for the future. Yup, things are precarious indeed.

Ultimately, I hope that this article helps the reader better appreciate why any debt is a ticking time bomb for the future. There’s not a single tax write-off today that will be viewed as worthwhile when feeding your family is put at risk. We’ve only scratched the surface of the consequences of this scenario, but I feel that it clearly demonstrates why being completely out of debt is vital to being self-reliant. This is what desperation looks like. No one wears the colors of desperation well. The only way to avoid the pain of this scenario, or at least minimize it, it to eliminate your debts as aggressively as you can now.

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Comments

Another great, thoroughly thought-out and timely article. Thank you, Kellene.

I took a great sigh of relief for about two seconds after reading this as we have no mortgage. BUT imagine the price of just utilities. Even if the grid is still up, monthly electric bills in this scenario would become impossible to pay.

All the preparations from the extended pantry to the Sun Oven are likely to be needed much sooner than anticipated. Every dollar we spend needs to be prayed over and prioritized.

WOW, I have been wondering for a long time what this could look like.....I am still kind of stunned....wow! Thanks for walking us through this senerio.

This account of a financial breakdown is perhaps the worst I've ever read. It lacks credibility, reality and even common sense. It in no way portrays either current or future events as they are likely to unfold.

Just for starters:

"What if XYZ bank decides to leverage your desperation? What if they are willing to pay you to put pressure on your neighbors who owe them money as well?"

What in God's great name is this supposed to mean? This is the most irrational statement I've ever read. Anywhere. Tell me, what kind of "pressure" am I going to be able to put on my neighbor if they aren't paying their mortgage? What exactly am I able to do to them? Threaten to kill them? That would land me in jail. Burn their house down (which may burn mine down as well)? Ring their doorbell at 3 am and play "door bell ditch'em"? This is an insane statement.

Statements such as these would make most reasoning, educated people pause and ask themselves "what in the world is she saying?" People who simply read and digest this type of "information" without processing it and "putting it to the smell test" are likely to believe it without thinking. Intelligent people would have gotten to that part of the story and clicked out of it and moved on.

I hope more people stop and smell what this story is saying - or selling - before swallowing. It just doesn't make sense.

CJ, presuming you actually would like an answer to your question "what in God's great name is this supposed to mean?"...

It's a lot easier to avoid a piece of mail than it is to avoid a human being constantly barraging you with reminders and demands to pay. Perhaps you haven't experienced this before and thus can't relate. I also believe that you're underestimating the power of "those who have" when there's a lot of "those who have not." We're living in a very comfortable time right now and yet already there's more corruption in law enforcement and the court systems than we can shake a stick at. Do you really think that someone couldn't get away with illegal pressure? Collection personnel are ALREADY using illegal tactics to get their money and if someone wants to fight back they have to have the MONEY to last the arduous drawn-out court system.

I'm sorry you found my writing so offensive. I would have loved to spend more time going into details such as this, but as it was the article was already too lengthy. It's too bad though that you saw fit to write such a lengthy insulting diatribe instead of just asking for clarification. Too bad indeed...

CJ, there are endless accounts of just this type of thing happening during the nazi regime, people desperate for food would turn in their neighbors for the rewards. If you would open your mind to the real life stuff going on around us you would see this world is slipping away from the way we have always assumed it would be. Certainly not the things you described but neighbors snitching on the fact that you have firearms or maybe stockpiled food for instance. Snitches work for the police all the time and it will be much worse if we really do have a full scale break down of our society. Your reaction was over the top to be truthful and Kellene has always provided us with information that is well thought out, she is always trying to provide us with the latest information and even if you disagreed with her assessment your comments are offensive to me and I am sure most of Kellene's regular readers. A apology should definately be considered. Keep safe all!!

CJ-- Actually what she is saying is very true. My husband runs a business. Last summer, a collector called him to ask about an employee's vehicle. They wanted to repossess the employee's truck, but didn't say that. They made it sound like they were supposed to do some work on the truck. My husband didn't understand how "sneaky" the collector was being, and said, "yes, his truck is here on the parking lot". They came to his workplace and repossessed his truck. A few weeks later my husband got a $100 check in the mail for being a "locator". He sent it back because that was never his intention. He honestly just didn't understand they were wanting to take the truck.
So, yes, what she is saying it true. They pay people to inform on others.

Ah...boy, they just get sneakier and sneakier. Interesting.

SO much valuable information in this entry! Karen's right--you always explain everything so well. Can't wait to share this with DH...maybe he'll finally get it! Thanks Kellene!

Would someone PLEASE tell me what DH means? I keep reading it all over the place and I still haven't figured it out? Do I have to be the member of a special club or something? *grin*

DH: Dear Husband, DS: Dear Son, and DD: Dear Daughter. :)

I feel so enlightened now! :-)

I second the wow. This is something I've thought about, I have a monthly mortgage payment at a fixed rate and never thought about the bank raising that during a dollar collapse. This makes me feel much less secure, I suppose everything we do to prepare for other crisis would be good in this scenario as well.

I'm still searching for the home buisness that is right for me. Haven't found it yet, but will continue to search. I've canned about 10 cases of Jams, Jelly and smoked fish this summer. I made a double batch of lotion bars last night, I have not yet conqured knitting socks? Someday I'll find something worth selling.

Lotion bars? Do tell...

Bees wax, coco butter, olive oil and avacado oil. It comes out like a bar of soap, only it's a lotion, or lip balm, safe enough to use on babies or sun burn and really great for everything related to skin.

I'm trying to make as much as possible at home, or to at least know how to.

If you have a fixed rate, you're MUCH better off than those who do not. Just don't even think of being late on that payment if such a scenario were to play out.

Louise I agree with Kellene. Home business, or even freelancing is the way to go. It is my business to help moms get on track with that. If you need help I would be glad to be a listening ear to help you flesh out the best route for you! (for free)

Kellene Spot on article. We are blessed enough to have our home and vehicles paid for. We still have a bit of outstanding debt by way of student loans and medical bills. Should this atrocity occur, do you feel those types of debt would be subject to the 'turncoat neighbor' scenario?

Ok, sorry - I'm slow - So we have a mortgage. Its a fixed rate, with a fixed monthly payment. If the dollar were to crash we would still need to make the same payment - is that right? Our dollar per dollar value with our mortgage wouldn't change - but the price of everything else would thus taking more of our money, leaving less for the mortgage. Am I understanding correctly?

I was wondering out loud to my husband the other day about removing all our savings/bonds/retirement and paying off the house and then starting over on the retirement savings. What do you think about that idea? He didn't think too much of it! LOL Wondering about running it by the financial advisor.

Yes, you've got it, Dawn. Fixed rate, by contract, would require the payment to stay the same but the burden placed on our budgets in the other areas of our life would be very challenging to carry.
Regarding your question, let me first do the obligatory, yet obvious, disclaimer, lest anyone feel frisky and litigious at the same time. :-) I'm not an attorney, CPA, or any other officially recognized consultant on matters of the law or finance. That being said, I would TOTALLY agree with your strategy. I can't imagine anyone who's been educated in that field who would support such a notion though. Again, that's why Spiritual Preparedness is the first priority--ponder, pray, take action.

I wonder if this happened, assuming that 10% of the American population that "owns" a home has their mortgage paid off (and that's a very high estimate), would the other 90% be forced out of their homes due to foreclosure? And with the dollar being so devalued, no one would be able to afford to pay cash for bank-owned home. Then would it just be neighborhood ghost towns full of squatters who would take advantage of the 10% who are debt free? Not arguing with you in the least, just trying to play this out in my head with a different scenario.

I lived in a neighborhood where 20% of the homes were in foreclosure and most of them just sat there, not foreclosed on. The banks were so inundated with foreclosures to deal with, that people were living there payment-free. The HOA had no power to enforce rules or dues. It was a mess.

That same city I lived in happened to be pretty unique. It was a debt-free city. I had never seen or heard of such a thing. Granted, there was no library, out-dated parks, but the city was 100% debt free. It can be done. If a CITY can do it, heck we can too.

I think this is an excellent question and it has, at its root, some similarities to an assertion made by another reader on Facebook/this blog. I have to agree that your scenario is possible. I think it's plausible that many banks would be unable to foreclose on homes due to a lack of staff, overcrowded judicial systems, etc. But one thing to remember is that even if XYZ bank were to find themselves shut down and thus unable to take any legal action, we have to recognize that their debts serve as leveraged assets to the people "above them". Warren Buffet has invested $5 billion in Bank of America this week, but I assure you that he had a guarantee/leverage of a much more sizeable amount of dollars in the form of these debts, assuring him that if B of A were to go down, he still would have the legal right to take over and collect on the mortgage debts. Keep that in mind. To put it another way, just because Bank of America goes under doesn't mean that Dubai International (made up name), who invested in B of A with these debts as collateral wouldn't have the wherewithal and motivation to pursue foreclosures more aggressively than they are now. I know the saying that "*bleep* flows down hill" but when it comes to money--the ownership and benefactors flows UP hill. Where one entity might fail, another entity has ensured that it can legally take over in order to protect it's financial interests.

Another consideration is that there is a strong demand for rental properties right now as people so many are losing their homes. This market demand is falling short so dramatically that Congress is being lobbied aggressively by the banking industry to stream-line the foreclosure process so that the properties can at least be used as rentals by the banks while they are waiting to sell it to qualified borrowers.

Keep in mind that foreclosure would only happen if a person was unable to make their payments. Not everyone one--such as the 90% scenario you pose--will lose their home just because of the collapse of the dollar. But yes, this scenario will indeed magnify the problem that we are getting a taste of right now. For now, foreclosure is VERY profitable among some key players who have personally been extended an invitation to make a LOT of money. (I wrote an article about just how much that is and how it works, but I can't find the blasted link to share with you right now. I'll have to revisit that cause it's bugging me that I can't find it.) In order to make this money the FDIC needs to be healthy and well-funded, but in the event of a collapse scenario, FDIC's precarious balancing act would come crashing down and they would not be able to honor their agreements with these large financial players. WHEN that happens, I'm convinced that we will see more desperate responses to the foreclosure crisis, and yes, it's very likely that deserted cities would be commonplace, as will "tent cities." (CBS already did a story on a few "tent cities" that have started popping up in parts of the South as a result of the present foreclosure crisis.)

Understand that it's not because the banks are inundated with the number of foreclosures that is making for a slow foreclosure process, rather it's because they are meeting some significant resistance in the judicial system as some lawyers and pro se defendants are starting to fight back. (Yet another color in the scene of Desperation to consider). When the banks were able to get away with their robo-signers and questionable titles they only needed to throw more money at the issue to keep cranking out the foreclosures. But this legal resistance is definitely proving to be a glitch in their system. ("60 Minutes" also did an interesting piece on this issue.) So, yes, there are many instances in which people are able to stay in their homes without a payment for long periods of time. But I believe we haven't seen the true fangs of the mortgage industry quite yet. The collapse of the dollar would definitely require a change of scenery from what we have today.

So, I think I answered your question. *grin* If not, well then, darn it. I'm going to have to give you your money back. Sometimes folks have got to ask me a question like I'm a 2 year old so that I can be clear on what I'm answering. :-)

Wow! A debt-free city? Wasn't that called the City of Enoch and wasn't it removed from the earth and taken up to heaven? j/k

True, my question was not very clear, but your answer was, so thank you for that. City of Enoch. lol. I wish.

"Wow! A debt-free city? Wasn’t that called the City of Enoch and wasn’t it removed from the earth and taken up to heaven? j/k"

I heard that tale/myth also....I asked how could this be true? Maybe it was a city sized "ship of the heavens" (UFO). :-)

Heck, if you simply wait a year or two for your paychecks to increase to keep up with inflation then you could very quickly pay off your bank mortgage and have your house owned! That is, of course, that you were able to stay employed, fed, clothed and so on.

Kellene,

Lotion Bars are made from Beeswax, Shea Butter, and apricot oil, and a essential oil for frangrance. You can find how to make them by looking up Hard Lotion Bars on the internet. They are wonderful! I got my beeswax from a local beekeeper; of course it was just a bucket filled with wax, honeycomb, bee parts, and honey. It was simple to prepare it, and much cheaper (FREE) than puchasing a pound or so of cleaned wax. The Shea Butter I found super cheap on amazon along with the apricot oil.

Once you try it, you'll never want to use any store bought lotions again!

Loved your article. Mind if I put it on my blog and of course give you credit, while telling everyone where to find more great articles from you?

Hmmm...I hadn't heard of that before. I definitely want to check that out. I'm such a skin care snob. :-)

O.K. A couple of suggestions then for what to use essential oil-wise to compound the effect. The lemongrass I use is excellent because it's primary constituent is geraniol, which helps to build the collagen fiber for tissue regeneration, while likewise being a natural anti-biotic. It also has a passive constituent of caryopohyllene oxide which supplies oxygen to the skin, thus preventing fungal infections and warts. I know, I'm a geek. :-) But knowing what the constituents are of a particular essential oil is vital for me for the same reason that folks look at the "active ingredient" content of generic OTC meds vs. name brand.

As for the article, the only thing I'm able to give permission for is for the first few lines with a link to my site for the rest of the article--much like what you see me do on the website already. Anything else would threaten to compromise the copyrights that the publishing company anticipates.

I second that once you try it you won't go back. My mother used to spend a lot of money on mositurizing creams, now she uses home made lotion bars.

Great
For most of us that have a mortgage I can say that I will now have nightmares until I lose my home.
Why save food if you stand to lose the roof over your head?
*overwhelmed*

I'm cringing. I knew that this article would be tough on some. But, on the bright side of things, if you have a fixed mortgage, then that will be the best value you've got if the dollar collapses.
Seriously...if this is a reality then folks need to just go back to the first principle of preparedness and start from there. One thing I've noticed about keeping those in order of prioritization is that if they are focused in that order, things have a way of working themselves out. I was reading tonight about that large family that's featured on TLC--"19 and counting" I think...and they have absolutely no debt, no mortgage, nada. They are not millionaires, they have just steered away from debt all along. If they can do it, so can we who don't have anywhere near that number of kiddlins. :-)

could you paint a picture of how student loan debt might effect us? this is the only debt we hold--soo want to pay it off as quickly as possible!

You know, I'll have to do some more research on that, but to be truthful, my knee jerk reaction would be that that would be one of the safer debts to have, if you had 'em. I'll talk to DH and get back to you. (Yeah, I know what DH means now and can use it. hee hee)

Basically the bankers become feudal landlords. The "new" slavery.

EXACTLY, Diane. And desperate persons become their lackeys.

I understand that in the past banks were given permission to "index" mortgage debt to the inflation rate. So that your mortgage payment would increase as the inflation rate increased. It would devastate most people. Therefore, if you have the wherewithal, keep a careful eye on this ploy and when it gets seriously discussed, pay off the mortgage.

That's a good point, Bob. Such behavior is typically only seen from the boutique banks and not the more mainstream ones. However, you did remind me of another problem with this scenario and that is the commercial properties. All commercial loans can a "call feature" meaning they could be called in at any time for any reason. Some pseudo regional crisis have been triggered because a bank called in all of the loans of a particular type of property. Certainly such desperation would add to the chaos. I'm going to have to mull that over a bit more and look at the domino effect.

I fear that this will play out in the not distant future.Also, I understand that my situation is much better than most and many will not be able to do what God has helped me to do. So, with that being said these are some of my thoughts regarding what is likely to happen. Security is of utmost importance so stock up now while you can.
1. BECOME DEBT FREE ! Sell anything and everything you currently own and do not really need. AS Dave Ramsey says " make the kids think they are next". Get a second job but get completely debt free.

2.Install an alternate source of heat or two or three if possible. We have natural gas, propane and wood inserts in the fireplaces. I live in an area where I can cut my own wood for heat. Insulate to the maximum. We installed 12 inches of additional insulation for a total of 18 inches and I live in the south. Replace old windows--especially if they are metal with aluminum clad wood windows. In my area Window World charges $188 for any size window up to 48' wide. I do not own or get any money from window world.

3. Have alternate ways to cook.WE have gas and propane in our house and the ability to cook on the wood insert. Also, alcohol emergency stoves with a supply of hand sanitizer as fuel. Can foods as they are partially/completely cooked and can be eaten straight from the jar if necessary. Not tasty but it will keep you going.

4.I have built an outdoor kitchen equipped with propane grills, flat top, charcoal grills, fireplace, two wood stoves, wood fired oven and suitable seating for 20. No, it did not happen overnight. We also have a fire ring in the back yard for coffee and smores etc. when the weather is good.
5. We grow our own food, raise chickens for meat and eggs, ducks, guineas, turkeys, rabbits and hunt deer, squirrel, rabbits. We are now building a "fly house" for pigeons, quail and pheasant for harvest.
6. We now have a 30x30 ft green house with wood heat and solar powered fans for heat and ventilation. We have 6 tons of composting manure free for the moving. I have a wood chipper and can grind wood and leaves for compost.
7. Berkey water filters with a 20 year supply of replacement filters based on their recommended usuage. Well and pond for water sources.

I beg to differ..most people I know would gladly string the bank along foir as long as they can,pocket all cash or things of value and burn the damn thing to the ground in an act of defiance to the bastards that caused the problems to begin with.It will be Anarchy and not the backstabbing your friends and nieghbors that you speculate.People will band together as we have before and fight off the Tyrants ...What planet are you from ?..This is America,not some 3rd world [censored by Prep Pro for content] hole with savage subhumans as the subjects.

I think you are correct in that there will be a lot of wonderful people banning together to help one another. I'm doing my darndest to ensure that I'm surrounded by such people today and tomorrow in the event of a crisis. Unfortunately, this particular side of humanity which I portrayed is not out of science fiction. It's happened again and again throughout our history in this nation as well as others.

It was FRIENDS and neighbors who betrayed fellow friends to the Nazi regime. It was FRIENDS who betrayed other friends when law enforcement was attempting to illegally confiscate firearms throughout New Orleans after the storm. It was friends who betrayed their Japaneses friends in order to have them confined to Japanese interment camps after the attack on Pearl Harbor. For every sexual assault which is inflicted upon a woman or a child, 85% of the time they knew and trusted their abuser. It was the closest of friends who betrayed Christ to the Romans. Every year it's fellow Wal-Mart of Best Buy shoppers who trample on their neighbors the day after Thanksgiving for the sole purpose of being able to purchase an electronic or special toy of the year at a discount. It was a high ranking member of our government (Karl Rove and Dick Cheney) who are supposed to protect the citizens of this nation, but who betrayed a highly decorated and qualified CIA agent (Valerie Plame), putting her and her family at risk for death--all because they had a personal beef with her. Shall I continue in addressing the myriads of "patriots" who were known friends of General Washington but who betrayed them to the British Army in exchange for the temporary reward of food and to avoid harassment? Here's another scenario right from today's news. A man is being forced to stop selling pumpkins from his front yard because a neighbor complained. Sounds like the everyday propensity of mankind.

Such a possibility is certainly not pretty, and my whole purpose of this blog is to encourage folks to minimize their exposure to these realities. But in order to avoid them, we need to be aware of their possibilities. One can't dig out of a hole if they don't even know they are in one.

I did not have space to mention medical considerations in my last post but please stock up and learn to make your own collodial silver.

Kellene, I'll have to do some digging to find the link, but Rawles posted a letter on Survivalblog recently in which someone commented that they'd been keeping a couple .999 silver pieces at the bottom of a Britta water pitcher for years and that their family hadn't been ill during that stretch of time. This might be an alternate method that would work in lieu of trying to make colloidal silver itself.

Thanks Nick...and thanks for always spelling my name correctly. :-)

Thank you for the Colloidal Silver link. It appears the Steve Cox 5 photos are no longer visible. Any tips for reviving the photos?

Kellene,
Makaing colloidal silver is extremely easy as you know. I bought the material for the generator from a company for $49.00 plus shipping. All I had to add was 2 AAA batteries and 1 nine volt battery along with a 1 quart mason jar.

This has enough 12 guage silver wire to make literally gallons and gallons of collodial silver. I purchased an additional 1 oz of .99999 14 guage silver wire. The unit comes with complete easy to follow instructions. I am teaching my 9 year old grandson to make this as my time is probably short and I want the futre generations to know and am teaching all the process.

The link is http://www.atlasnova.com/CSGenerator1.htm ,

I have no affiliation with this company other than purchasing from them and will make no money if others buy. We need to help each other if possible without regard for profit.

Sandman

I have been preaching this to whomever would listen. I don't think I have ever heard it put so succinctly. I plan to print it out to give to those who are computer illiterate, and will pass the link on to those who are. Thank you so much. There are so many who lack even the basics of understanding what we are all about to face. Pay those credit cards off, and prep like crazy.

Roberta in Covington, Georgia

Hey Roberta, I'm so glad you like the article. I'm sorry that my blog isn't so great for non-techno folks, but please be mindful of our copyright when you're sharing this. I can't risk compromising my book publisher's expectations of copyright material. Thanks a bunch.

Another great article. I think that you are very close in your assessment of the chaos that would occur in such a senario. Although, I also think that you have sugar coated it a little bit. Things would become very ugly, even to the point of cannibalism, within a very short time. When you consider the fact that much of this generation is trained to get what they want, now, or they go berserk, there are going to be huge segments of society that will be crazed lunatics, having an entitlement mentality. Only the oldest of us know how to take care of ourselves, generally speaking. The baby boomers and younger have had everything handed to them on a silver platter and will try to take what they want, like they always have, from everyone else. (Speaking of them as a group and not individuals; there are exceptions)

There are many who deny that this could happen, but I think that it is imminent. There have beem many who tell me that we are too good and gentle a people for violence, but when everyone is starving, all kindness is abandoned and the survival mentality rules. Civility is the first casualty of anarchy.

I even like to think that I, myself, would rather starve to death, that to kill another person. But, I have never been in the situation where my children and grandchildren are dying from lack of nourishment. I also have never been in a situation where someone else is trying to take away my source of food to feed my family, so I don't know what I would do. Do You?

"There are many who deny that this could happen, but I think that it is imminent. There have beem many who tell me that we are too good and gentle a people for violence, but when everyone is starving, all kindness is abandoned and the survival mentality rules. Civility is the first casualty of anarchy."

I cannot deny it could happen, but it is not for sure. Many responses are possible. One can look at the responses in the areas hard hit by Irene and see cooperation, people helping each other, supermarkets giving away food etc. A similiar spirit of cooperation was evident after the Japan quake/tsunami/nuclear disaster. One can compare this to the aftermath of Katrina for more negative possibilities.

Anarchy is a lack of effective government. After Irene, in the limited areas government was not effective, people pitched in till it was effective again. In Japan, despite a general lack of effective government people likewise reacted cooperatively and government regained effectiveness. After Katrina, a signifcant minority took advantage of the lack of effective government, and a siginificant minority of government was more interested in asserting control and authority, than in helping people or letting them help themselves.

A challenged government is not always rendered ineffective by that challenge, one can look at the recent currency crisis in Zimbabwe for one example. In fact it is more common for crises to grow government power, often to the detriment of the people, Syria being a current case of that. Outside intervention may change things there, but an inconsiderate government concerned with consolidating its authority can easily be worse than a disorderly citizenry.

Snowleopard
Your faith in the goodness of people is admirable, and I do agree with you that there will be pockets of good people who will band together and help one another. Perhaps I have become too cynical in my old age, but I still think that society will collapse very quickly and inevitably.
I would like to think that we would reach out to one another, like the victims of Irene, but Irene was a cat 1 storm; not a diffuclt situation at all. The people of Japan are a very respectful and honorable people and there were no reports of either looting or other criminal activity after the crises that they faced. The American people (in general) are not capable of such dignity. We have become a wicked and idolatrous people and we will get what we deserve.

When we remember the lack of effective government in the Katrina disaster, we realized that this same ineffetivness will be magnified in all areas of the country, not just one small area. I agree with you, that some in government will respond by trying to utilize the crisis to assert more control, which I think will compound the situation.

I am prepared, so I do not fear such a scenario, even though I know that it will be extrememly difficult for everyone. I hope that I will be able to find some people who are willing to work together and help one another.

Absolutely I do, Steph. Look at the Jews who sold out their fellow Jews in Germany to the Gestapo just for an extra meal.

So I have a mortgage and that

So I have a mortgage and that is it but this is really discouraging because I don't see any way to pay it off early. This frustrates me to no end (my mortgage) but what am I to do other than feel hopeless? I am doing everything I can. It is discouraging to read this because I want to be out of debt but I can't. Any suggestions?

I'm 100% certain that in

Preparedness Pro's picture

I'm 100% certain that in situations such as you've described, we simply need to focus on the 1st Principe of Preparedness--that of Spiritual Preparedness. Wherever you get your source of strength from, that's beyond your existing capabilities, that's where we have to tap into on situation such as this. I don't think the Lord gives us the book of Revelations and all of the warnings in the scriptures to discourage us. He does so because KNOWING what will come and what's possible to come, will prove to be very helpful when the storms come. It's the only reason why I write such articles or why I study "what to expect"--so that I'm better Spiritually and Mentally prepared. There's only so much we can do; He only asks that we're "doing everything I can". We should take strength in knowing that instead of seeing it as a source for discouragement. Doing all that we can is significantly better than the alternative and is rewarded accordingly.

They would most likely have a

They would most likely have a new system in place and come out and say if you reaffirm your debts in this new system you will be fine. This will allow them to have you voluntarily agree to the changes. Mind you that they most likely will starve or allow violence to drive you into it. The devil will be in the details, but foreclosing in mass like that would cause an armed uprising. Also, the politicians would face an angry mob looking to hang them and would push this type of scenario.

This would also allow them to save the mindless zombies in the cities who support all their stupidity. The country folk like me would just shrug and sit back and wait for this to resolve itself. I'm being polite in describing the chaos that would happen in a long term event. It is the city types who support all the taxes, laws, regulations, etc that are driving the rest of nuts. At least that is how I see this playing out at first.

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