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Old 10-05-2013, 11:29 AM
Northern-Lights Northern-Lights is offline
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Default What happens if we default?



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http://dcclothesline.com/2013/10/05/...b_source=pubv1

Pretty good article on the ramifications of default. Our house of cards has got to crash at some point.....I just hope I get home from Afghanistan before it does!
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Old 10-05-2013, 11:36 AM
sevenmmm sevenmmm is offline
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What side of the UP do you hail from?
Old 10-05-2013, 11:47 AM
Kansas Terri Kansas Terri is offline
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That is *IF* we default.

So far they have been creating more money, and I think that they will continue. Around 1965 my allowance was a quarter, and on a good week I could buy 5 candy bars on sale with it.

But, the government prints money and the more money is out there the less it is worth: the days of buying a candy bar for a nickel or buying a new car for $3000 is long gone!

In my opinion, the government will avoid default buy creating more money, and I hope nobody here has an adjustable mortgage!
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Old 10-05-2013, 12:10 PM
sevenmmm sevenmmm is offline
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You ought to like this RP interview Kansas Terri - in line with your idea:

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Old 10-05-2013, 12:18 PM
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I view a default as the road to change and recovery, but I'm likely in the minority as far as that goes.
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Old 10-05-2013, 12:46 PM
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I view a default as the road to change and recovery, but I'm likely in the minority as far as that goes.
some expert suggested pain and disruption for upwards of six months to reset from a complete default and restart. the path we are on looks like a slow, painful decline for 20 years, like Argentina.

regardless of how long it actually takes, I think a complete collapse offers a quicker recovery than the path we are on.
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Old 10-05-2013, 12:56 PM
Imperator Imperator is offline
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Quote:
Originally Posted by Northern-Lights View Post
http://dcclothesline.com/2013/10/05/...b_source=pubv1

Pretty good article on the ramifications of default. Our house of cards has got to crash at some point.....I just hope I get home from Afghanistan before it does!
That's a load of crap. All you really need to do is look at what happened to other nations that have defaulted in the past. Most of the banana republics have done so and those effects haven't lasted generations. Our credit worthiness would take a hit and people wouldn't want to lend to us anymore, but that's not a bad thing, it's a good one. By extending what amounts to an unlimited amount of credit, people around the world have enabled our corrupt politicians to not only make pie-in-the-sky promises to get elected, they've also pushed the consequences of past mistakes into the future. At some point this is all going to end and we'll have to pay the piper. Better for it to happen sooner rather than later. But with the idiots in Washington doing everything they can to kick the can down the road, all they're really doing is ensuring that the crack up boom, when it comes, will be far worse than it should have been. But what do they care? So long as they're out of office they won't take the blame. Isn't democracy wonderful?
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Old 10-05-2013, 01:03 PM
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I don't think we will default. Is it possible for them to just keep printing money until our money is so worthless that a candy bar cost a million dollars? Then pay off debts, and start a new currency? Is that possible?
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Old 10-05-2013, 01:09 PM
Imperator Imperator is offline
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I don't think we will default. Is it possible for them to just keep printing money until our money is so worthless that a candy bar cost a million dollars? Then pay off debts, and start a new currency? Is that possible?
Mexico has done it several times in the past. It's created great hardship for the people. For all intents and purposes it's defaulting. Basically you say you're converting to the New Dollar standard and that 1,000 old dollars equals 1 New Dollar. The only benefit to doing things that way is that you avoid the word default and low information voters don't penalize you at the ballot box.
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Old 10-05-2013, 01:16 PM
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Mexico has done it several times in the past. It's created great hardship for the people. For all intents and purposes it's defaulting. Basically you say you're converting to the New Dollar standard and that 1,000 old dollars equals 1 New Dollar. The only benefit to doing things that way is that you avoid the word default and low information voters don't penalize you at the ballot box.
Do you think that is what we are headed for? If so, what is the best way to prepare for this situation?
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Old 10-05-2013, 01:17 PM
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For a long time, they have been creating new money by borrowing. This only benefits the big bank lenders. The debt ceiling is a lie. See above re the White House petition at

http://wh.gov/lTvU6

The Secretary of the Treasury has existing authority to create more currency. No action by Congress or the President is required, but the President could direct the Treasury to do so. Creating new currency is no more inflationary than the previous borrowing program, and to the extent that the created currency pays of a debt, thereby eliminating accrual of more interest, the created currency is deflationary.
Old 10-05-2013, 01:22 PM
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I have mixed feelings about this. Part of me would rather the US go ahead and default so the healing can begin...I just dread the mayhem and the possibility of China and other debtors reeking havoc. If the debt ceiling is raised, it's avoidance and simply placing a bandage over a hemorrhaging artery and we will continue to bleed out painfully.

I have a daughter about to give birth to her first child in early November. I have nightmares about them caught in insanity where they live, Ft. Worth; and unable to get out. But, the thought of continuing to simply print money is almost more frightening. I don't want us to go the way of the Miramar Republic. That didn't work out well, at all.

I simply pray very hard that whatever happens, God will watch over my children and keep them safe and get them to me when it all goes to hell and at this point...it's definitely "when" and not "if" unless something miraculous happens.
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Old 10-05-2013, 01:24 PM
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I have mixed feelings about this. Part of me would rather the US go ahead and default so the healing can begin...I just dread the mayhem and the possibility of China and other debtors reeking havoc. If the debt ceiling is raised, it's avoidance and simply placing a bandage over a hemorrhaging artery and we will continue to bleed out painfully.

I have a daughter about to give birth to her first child in early November. I have nightmares about them caught in insanity where they live, Ft. Worth; and unable to get out. But, the thought of continuing to simply print money is almost more frightening. I don't want us to go the way of the Miramar Republic. That didn't work out well, at all.

I simply pray very hard that whatever happens, God will watch over my children and keep them safe and get them to me when it all goes to hell and at this point...it's definitely "when" and not "if" unless something miraculous happens.
Always remember that with God all things are possible.
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Old 10-05-2013, 01:41 PM
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Do you think that is what we are headed for? If so, what is the best way to prepare for this situation?
It's hard to say for sure. Anyone who really studies economics will come to the conclusion that you can't say with any surety what exactly is going to happen and, especially, when it is going to happen. About the best you can do is spot trends and extrapolate from historical examples.

What I can say is that whether or not we fix this problem we will be in for some painful times. Last time we had his issue, Paul Volcker the head of the Fed of the time, raised interest rates to something like 15% and held them there for 4 or 5 years. This had the effect of destroying credit and brought the monetary supply down. This was one of the big events that caused the US to recover in the mid to late 1980's. Unfortunately the Brenake Fed has increased the monetary supply to the point where the Carter administration's inflation looks like a bucket of spit compared to a lake. It will take a far larger interest rate increase as well as more time to recreate the Reagan miracle.

I don't think any of the parasites we have in Washington have the intestinal fortitude to do that so what we'll end up with is default, or if we're unlucky, hyperinflation. Hyperinflation happens when people realize that the paper money they hold will only lose value and they try to buy anything other than paper money so that they will have hard assets with which to trade when money dies. And we'd also default, but that would be the least of our worried then. Have I scared you sufficiently yet?

As to what to do. Well there are a few things you can do now. Stockpile your survival needs now. Food, shelter and safety are the big three. What is just as important, from a societal, standpoint is to include people who don't prep in your planning. This is where many preppers and I part company I think. If you can, as far as you're able, mitigate the effects of economic disaster, you get a greater chance of avoiding societal breakdown. That goal is sufficiently important that I think each individual should devote as much as they're able to in order to lessen the chances people will turn bandit when it all comes falling down.

Complementary to this, and another thing I don't think many preppers spend too much time thinking about, is production. While it's a good idea to prepare, I don't think enough though is given on how to produce things people will want. The big three, food, shelter and safety will be in big demand so that is where I'd suggest you start. Personally I'm looking at various hydroponics setups in order to find the most efficient one that can be scaled up in an emergency to provide a lot of food very quickly. How much of a bargaining chip do you think you'll have with refugees if you can not only provide food, but turn them into producers as well. Once you have the food situation under control you can look at things like shelter and other wants and needs people have. Not only that, but as an oasis of sanity you will have a large number of protectors who will have just as much a stake in seeing you succeed as you do.
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Old 10-05-2013, 02:21 PM
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The problem with default is that the US dollar and US Treasury Bonds are so tightly woven into the world Economy that the whole world economy will suffer drastically. 1/3 of the Chinese Central Bank reserves will be become based on a contract in default. Social Security would collapse. The dollar would plummet. It's a great recipe for a depression that leads to a world war.
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Old 10-05-2013, 02:27 PM
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My personal belief is that they know our economy has no way to be saved. I think their main concern right now is to just keep bailing to keep the boat afloat until some other poor sucker takes over then they can blame it on him/her. It's a no win situation and it can't continue forever....collapse is imminent.
Old 10-05-2013, 03:14 PM
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Zero Hedge, had an interesting article about passing the 'x' date & avoiding default.

http://www.zerohedge.com/news/2013-1...go-past-x-date

Discussing the 5 possible options. If there is a hard default, I think we'd be looking at the US Dollar loosing the world reserve currency status; likely to be picked up by China or Russia, or possible even the WMF's Special Drawing Rights (SDR's), that they been pushed heavily for years now. Perhaps that would be the point where we'd see the Amero officially launched to replace the Canadian, US & Mexican fiat currently in place.
Old 10-05-2013, 03:29 PM
Sacajawea Sacajawea is offline
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Read Ferfal's book. It's an easy answer, but truthfully, he covers the stuff we need to know and think about. What the first weeks are like... how people still work and live... what happens to local government & services... crime, etc.

He doesn't have a "scenario"... he tells you what it was like for him and people he knows well, to live through it. It helps because you're not trying to see through the unknown.
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Old 10-05-2013, 03:42 PM
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Originally Posted by Shaz View Post
I don't think we will default. Is it possible for them to just keep printing money until our money is so worthless that a candy bar cost a million dollars? Then pay off debts, and start a new currency? Is that possible?
If they do, I'm finally gonna pay off my student loan
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Old 10-05-2013, 03:46 PM
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For now I feel we will just keep kicking the can down the road till it is flat and can be kicked no more.

They will increase the debt ceiling they have no other choice and they know it.

BUT I agree it is to late to stop a collapse of some kind how bad will it get n one really knows. I thought back in 2008 do not bail out the banks just let it happen as it has to and get it over with.

I just hope we have a few more year my family is grown and my grand kids ar just starting out in life. None of my family except my son believe anything will happen they just like most people live in their bubble and daily routine but I hate to say i sooner or later their bubble will brake.

I have been slowly preparing I hope I have a few more years as I need it not just preparing for one but for my entire family who lives in their bubbles.

Let us all hope things can stay as is but we all know something has to give so prepare in any way you can preparations are better than none.

My biggest concern is I have an escape from the city we all live in but the rest os my family does not.

If things do get bad the city is no place to live believe me I have fought wars. One would only stand a chance with a complete collapse if they could convince their say block to all work together and we know this will ever happen.

I hope I have time to get some land away from the city then it will be up to them to make it to were I am.

Let us all hope for the best while preparing for the worst.
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