What happens during an economic collapse exactly?

Question

I've heard some alarmists say that it means there will be a total breakdown of society...meaning no law, no food, and no work. I've also heard that that is not exactly right, there would still be some structure but it just wouldn't work as well.

Answer 1

I don't think anarchy will break out. We are too established to just descend into chaos. Most of us want some rules and some order. The economy seems to be facing two possible outcomes. Deflation or Hyperinflation. Deflation equals falling prices but no money to spend.(Good to have savings) Hyperinflation equals rising prices with money that quickly loses its value. (Savings account loses value) Our fearless leaders seem to be moving to the inflation side of things. To be on the safe side, plant a garden and find a local food producer and support them. Cut your expenses. Pay of your credit cards and high interest debts. Live within your means. Get to know your neighbors and local community. Get a bicycle. Buy some pre 1964 silver coins. Read books. Etc.

Answer 2

If you had studied your history, you would know about the late 20's and 30's.  The alarmists are probably taking their alarm from that period when the things you mentioned did happen in the American society for about a decade, triggered by the Herbert Hoover administration, that was very much like the Bush administration.  Banks failed as they are currently, we had extremely severe weather (dust bowl) as we are now and the above about food and no jobs also happened as they are happening now.

The above circumstance gave rise to legendary gangs and gangsters who became heroes of the people, ie., John Dillinger, Pretty Boy Floyd, Ma Barker Gang, Bonnie and Clyde, Baby Face Nelson, Machine Gun Kelly.

There were soup kitchens and bread lines, many of them sponsored by gangsters like Al Capone.  

The election of Franklin Delano Roosevelt and the government programs he instituted brought us out of that sad period.

Answer 3

Extreme economic collapse cause a form of feudalism, the example give of the 1920's and gang land control are good example of this, central government loses control and has the negotiate with many local governments, the Mafia is in fact just that and it's history was nothing more than that!

Lack of centralised government is like the Old days with lords and barons doing there own stuff on their own turf and answering very lossy to a central power, which is only as powerful as the balance it can maintain!

An interesting thought for those who wish for less government control, is that not every one will get a big or even little slice of the cake, in fact many who believe this will be good for them will be rather socked by the final out come.

Answer 4

The mistake a lot of people make is assuming the future will be like the past.  

Depend on the government?  How will the police and fire departments afford gas for their vehicles, schools are moving to four day weeks, cops are using golf carts.

Hmmm, what will happen.

The market will tank.  Bank runs will begin.  The govt will stop trading on the markets and declare a bank holiday.  Currency will get revalued.  Store shelves will empty.  There'll be massive amounts of layoffs.

People don't realize how tenuous our oil driven economy is - a hurricane in the gulf, unrest in Africa, a ship sunk in the Persian Gulf, a terror attack in the US and everything is turned on its head.

I'm leaning towards some type of currency revaluation.  At some point our creditors (China #1) won't continue to hold onto $'s because of the devaluation.  If China were to dump all of its debt holdings the $ would tank and we couldn't afford to import oil.

If I was someone concerned about the uncertainty of it all I would keep some cash on hand $1,000 or more, buy a few extra cans of food every week, make sure that I have batteries, extra blankets and some water.  Basically be prepared to be self-sufficient for a month.

Due to the cost of oil, here in the Northeast, people will be freezing to death this winter.  The numbers of hungry are increasing.  

To them the economy has already collapsed.

Answer 5

Economic collapse. Sounds scary, right, only what the heck does it mean?

Probably something different to everyone you ask.

Some folks are concerned that the US might have an economic collapse in the near future, although I have no idea what they mean. Housing prices are down a little, people are buying less, meaning a tick up in unemployment, and with the government spending so much money on war, they can't spend more at home to take up the slack. Could be a long slow economic period until we can get out of the military messes, but hardly sounds like "collapse" to me.

Answer 6

I wouldn't obsess about it because, due to the economic collapse during the Depression, many government protections were put in place to prevent total collapse. It won't happen. As you said, there will still be structure even during a depressed economy.

But in very hard times, which can still happen, the very wealthy protect their assets and everyone else has to become very cost efficient and creative to maintain their assets.

We are spoiled in America and unwilling to stop our addition to Starbucks and dining out. Nowhere in the media coverage of the mortgage meltdown have I heard the suggestion that people take in boarders to make their mortgage payments. That's what the smart people did in the Depression to survive. Americans need to get smart and cut way back on their expenses or they will suffer for their self-indulgence.

Answer 7

Our economy is going in the crapper right now, and some people think that with the housing bust and the credit crisis that it's going to lead to the next Great Depression by the end of the year.  Even in grocery stores food supplies would run out within 3 days.  It technically could happen, but I don't think on that scale.

Answer 8

Live in Argentina. That is what happens

Answer 9

It would be like 1929...at first. However it is as you have added. People don't know nowdays how to survive...to make do and do 'without'.

We could adapt back to learning to take care of ourselves, but I really think that some sort of Mad Max scenerio will more likely(at least in the cities).

1929 was a world where people respected one another...nowdays...lol.

I am sure a collapse would start as it is...with high fuel. Fuel is the base for the price of everything,(if you haven't already noticed this in the stores) and so begins inflation. I am really curious as to how perpetual this is, and how far one will drive the other.

As everyone is tightening their spending, I have been watching business after business close their doors in my area. Lots of restraunts, and small businesses have closed. So once all the small buisness is gone(as it's going) what happens when Walmart pulls out?

    The car lots are filling up with pick-ups which have lost almost half of their value in just six months( A new Ram 1500 QC 4x4 $34,000 sticker was $27,000 on promo 6 months ago...now selling for $15,000). This overnight has made everyone who owns newer a pick-up $10,000 less richer,(and upside down) as trade in values fall right off along with the new stuff.

I have watched the housing market all of my life, and never have seen the market stall(and in some areas really go backwards) as it has. This is a big sign to me that we are on the edge of something major.

  One other major difference between 1929, and now is that our government is out of money, surviving on borrowed money, and wont be able to bail us out with more borrowed money. They(we) owe too much.

The only 'New deal' I can forsee is a raw deal as I believe this whole crises is artificial, and has been created by the world bank(fed) with the intent of breaking America. If they can break America, they can install a one world government. Were in the final stages of them setting up the New World Order. Will it work? I think not! One thing is for certain...We have a rough road ahead.

Long Live USA!

Answer 10

A good example of economic collapse was Germany in 1920's and 1930's.

Around 1923 Germany had hyper-inflation.  Their currency lost so much value that people had to bring a huge bag of money just to buy a loaf of bread.  A lot of businesses closed.  And a lot of people lost their jobs.

There was a lot of unrest in their society.  But there was no complete breakdown of law and order.  Of course, Hitler and his n***s came to power then.  And everyone knows what happened after that.

Answer 11

The same thing that happens during the collapse of a marriage. People have been "married" to their work outside the home and family for years without end, giving more loyalty to an employer for the trade off of cash. This has weekend the family bonding time to such a degree that we see scattered families everywhere from the dried up crust of elasticity. What was the essence of family is now crust for the pies of some new economy.