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Hi all,

This is my first post here, but I read often. The current financial crisis has got me concerned enough that I thought I should post on here to see what everyone thinks... I'm not great with understanding finances, as I am more of the creative type than mathematical, however, I have read on some sites the suggestion that if we default on the national debt, an economic depression is sure to ensue.

I was wondering what your all's thoughts are on the possibility of this, and if so, how soon would things begin to unravel, after a default this week? Many say this has been needing to happen for a long time... having been delayed for so long, although I can't even imagine how much more difficult a depression would be for people these days, as so many are far removed from the skills of growing and preserving their own foods, reliant on the grid, etc...
 

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Well Victorian, Im alittle like you and so many more on here. Whose to say, just looks bad and anything could happen. The odd thing is, that it seems we are already in some type of depression now, early stages, just doesnt look like one because there are no bread lines like in the past, people get food stamp credit cards. With all congress spending, and the housing market screwed up and wars we are in, and unemployment high, just looks bad, its got to eventually catch up to us. If something disrupts food flow, and transportation then this nation is in for something alot worse than pass depressions, imho. keep prepping and do your best
 

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There is a lot of misunderstanding cleverly crafted by the MSM and the government.

IF the debt ceiling is not raised that DOES NOT AUTOMATICALLY MEAN THE US goes into DEFAULT.

"DEFAULT" would occur if the interest on the debt is unpaid.

If the debt ceiling is not raised the government can PAY the interest, SEND OUT the SS checks, pay the military, etc and simply choose to start shutting down parts of agencies, departments, etc. to make up the shortfall. Much like Minnesota did last month.

The problem with that is we will all see just how unnecessary half of the nonsense funded by us is.

And BTW, it wouldn't be the first time by far parts of government have been shut down due to funding shortfalls.

The world didn't end then and it won't end now.
 

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We have spent like drunken sailors for decades now, and the piper will now be paid. It is time for serious cuts for us to even have a chance. The time has come for sacrifice. The thing is....American's don't like sacrifice! We have an entire generation that has no idea what it means to tell themselves NO. We have millions upon millions who have never gotten their hands dirty...literally. Sadly we are a nation that has not lived within its means. Similarly we are a nation of citizens who has not lived within its means as families and individuals. We have maxed out those credit cards, bought those homes and cars we couldn't afford. Why? Because most have had the attitude of a 5 year old kid in the walmart on Sat. morning...."I want it and I want it NOW!" Grown men and women stomping those feet like children! I have many friends in financial turmoil right this minute because they didn't want to save up for that bass boat or new pick-up! I work with a man that I distinctly remember telling me year before last right before he bought a high dollar boat that "I work hard and I deserve it, so I am going to get it." There you go....and two years later with a sick economy he is looking at bankruptcy over a freaking boat....of course he deserved it you know! When we do collapse financially sadly we will "grow up" the hard way. We may mature as a nation and as individuals and families. I don't wish it, I don't look forward to it, but one good thing that may come of it is that we will be given a "crash lesson" in a few things-

1. Save instead of Spend.
2. We do not "deserve" it if we can't pay cash for it
3. Credit will eventually bring you down financially

The same principals work whether you are a Nation or a family of four trying to balance your checkbook. The lessons of our Grandparents have been forgotten but we are going to get a crash course in them again soon, a course we might not forget so quickly the next time.
 

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Prepared
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I hate to say it, but we actually deserve to default. It's sort of silly that the bankster rating agencies are threatening to lower the ratings if DC doesn't shift the chairs around the deck of the Titanic a bit. The real damage has long been done, and has been going on for a few decades now. Quick paperwork between now and Tuesday isn't going to change anything at all. This might save the hides of banksters, who primarily manage funny money anyway. But it'll do nothing at all to assist Main Street, which deals in real wealth or lack thereof.

So I'd say that the Depression is coming anyway, and it'll probably just keep building up more potential the further they kick the can down the road.
 

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There is a lot of misunderstanding cleverly crafted by the MSM and the government.

IF the debt ceiling is not raised that DOES NOT AUTOMATICALLY MEAN THE US goes into DEFAULT.

"DEFAULT" would occur if the interest on the debt is unpaid.

If the debt ceiling is not raised the government can PAY the interest, SEND OUT the SS checks, pay the military, etc and simply choose to start shutting down parts of agencies, departments, etc. to make up the shortfall. Much like Minnesota did last month.

The problem with that is we will all see just how unnecessary half of the nonsense funded by us is.

And BTW, it wouldn't be the first time by far parts of government have been shut down due to funding shortfalls.

The world didn't end then and it won't end now.
Re-read her original post and the post before yours... no one said anything about the debt ceiling meaning default automatically or even mentioned the debt ceiling at all. She merely asked if we did default what that might mean...
 

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Re-read her original post and the post before yours... no one said anything about the debt ceiling meaning default automatically or even mentioned the debt ceiling at all. She merely asked if we did default what that might mean...
Which is bred from the completely erroneous description of Aug 2 as "default". The vast majority of the citizenry are convinced that NOT raising the debt ceiling is an automatic default. It is simply not true.

The expiration of the time limits on raising the debt ceiling do not automatically mean a default. That is what the MSM and the government are LYING about. Outright, boldfaced, fork tongued LIE.

ALL that is going to happen Aug 2 IF there is no deal is that there will be not enough funds to continue on in the same faulty accounting Aug 1.

There will then be choices. It is NOT an automatic "default".

It's a moot point anyway ... the 10 yr treasury interest rate dropping 15 basis points Friday WITHOUT a corresponding Dow/Nasdaq crash tells me that it's been a done deal for awhile now, all political posturing and maneuvering aside.

That along with the little noticed absolutely horrific GDP numbers that suggest we are slipping back into an "official" recession (as if all of us in the REAL world don't know that already).
 

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Prepared Firebird
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We are currently in uncharted waters with this debt ceiling mess. No one really knows what will happen if we default on our debt, because this has not happened before. However, that doesn't stop the media from showcasing a lot of so-called "experts", who are all expressing their best "guesses" as to what will happen.

Re the possible depression part of your question......I am in agreement with others, who think it is already in progress. Maybe others don't see bread lines in their town, but I do in mine. People line up, once a week, at the local community center, to get ONE free loaf of bread distributed to anyone in need of food.

Some of the local churches are also running free lunch and free dinner programs once a week for homeless and unemployed people. The lines are long for these, too. The same churches allow people who have lost their homes and are reduced to living in their cars to stay in their parking lots at the church. The library is full of men with backpacks sleeping at the computer desks. When they're awake, they try to panhandle the library patrons. Which is the primary reason that I have stopped going to the library.

I live one block off the main highway. We frequently have vagrants and panhandlers going door to door in my neighborhood, asking for money. My apartment building has a dumpster that tenants use for garbage and trash pick-up. I've seen street people picking thru the stuff in this dumpster and standing next to it, eating discarded slices of pizza, etc.

In case you are wondering, I don't live in the slums. This is (or was) a nice well-kept neighborhood of middle class families. I moved into my apartment three years ago. NONE of this stuff was happening, then. It sure is, now.

If this isn't a depression.......it certainly seems like a reasonable facsimile of it.
 

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Svensk hamster
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We have spent like drunken sailors for decades now, and the piper will now be paid. It is time for serious cuts for us to even have a chance. The time has come for sacrifice. The thing is....American's don't like sacrifice! We have an entire generation that has no idea what it means to tell themselves NO. We have millions upon millions who have never gotten their hands dirty...literally. Sadly we are a nation that has not lived within its means. Similarly we are a nation of citizens who has not lived within its means as families and individuals. We have maxed out those credit cards, bought those homes and cars we couldn't afford. Why? Because most have had the attitude of a 5 year old kid in the walmart on Sat. morning...."I want it and I want it NOW!" Grown men and women stomping those feet like children! I have many friends in financial turmoil right this minute because they didn't want to save up for that bass boat or new pick-up! I work with a man that I distinctly remember telling me year before last right before he bought a high dollar boat that "I work hard and I deserve it, so I am going to get it." There you go....and two years later with a sick economy he is looking at bankruptcy over a freaking boat....of course he deserved it you know! When we do collapse financially sadly we will "grow up" the hard way. We may mature as a nation and as individuals and families. I don't wish it, I don't look forward to it, but one good thing that may come of it is that we will be given a "crash lesson" in a few things-

1. Save instead of Spend.
2. We do not "deserve" it if we can't pay cash for it
3. Credit will eventually bring you down financially

The same principals work whether you are a Nation or a family of four trying to balance your checkbook. The lessons of our Grandparents have been forgotten but we are going to get a crash course in them again soon, a course we might not forget so quickly the next time.
This post deserves a wider audience. It should be translated to every language spoken in the western world.:thumb:
 

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I was a soldier not a sailor but the money we spent was our own money, not debt our children, grandchildren, great grandchildren will have to pay back b/c my parents generation actually bought into ss and medicare and forgot one of my grandparents lessons, "if it sounds tooo good to be true, it is."
 

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Hi all,

This is my first post here, but I read often. The current financial crisis has got me concerned enough that I thought I should post on here to see what everyone thinks... I'm not great with understanding finances, as I am more of the creative type than mathematical, however, I have read on some sites the suggestion that if we default on the national debt, an economic depression is sure to ensue.

I was wondering what your all's thoughts are on the possibility of this, and if so, how soon would things begin to unravel, after a default this week? Many say this has been needing to happen for a long time... having been delayed for so long, although I can't even imagine how much more difficult a depression would be for people these days, as so many are far removed from the skills of growing and preserving their own foods, reliant on the grid, etc...

congratulations on your first post!


It's my opinion that this is an 11th hour smoke screen they will push through a budget with plenty of ear marks, other BS and specifically TAX INCREASES FOR US.

yahoo news says their close to a 3 trillion dollar budget plan

http://news.yahoo.com/white-house-back-debt-talks-deadline-looms-003141546.html


OK, At 3 trillion with "budget cuts" we are looking at perhaps a trillion in deficit spending anyway? Point is it's irrelevant weather we reach bottom this year and this budget or next year or the year after it is unsustainable.


US federal budgets ....
2011 Total revenue $2.17 trillion (estimated)
2010 Total revenue $2.381 trillion
2009 Total revenue $2.7 trillion
2008 Total revenue $2.7 trillion
2007 total revenue $2.5 trillion
 

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it's not like we don't have oil or coal.

The future gold is going to be food crop land and irrigation water... average annual crop growth growth/ demand increase is about 10% so by 2021 a 100% from today by 2031 200% above where we are now.

http://www.fao.org/docrep/007/y5648e/y5648e05.htm


We may in fact be in a better position in the future relative to many countries.
 

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angel waiting
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Re-read her original post and the post before yours... no one said anything about the debt ceiling meaning default automatically or even mentioned the debt ceiling at all. She merely asked if we did default what that might mean...
Regardless of what her original post said he gave her some very good information regarding the difference between defaulting and raising the debt ceiling which by the way most americans don't understand at the least he added some insight someone else may have missed.
 

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angel waiting
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congratulations on your first post!


It's my opinion that this is an 11th hour smoke screen they will push through a budget with plenty of ear marks, other BS and specifically TAX INCREASES FOR US.

yahoo news says their close to a 3 trillion dollar budget plan

http://news.yahoo.com/white-house-back-debt-talks-deadline-looms-003141546.html


OK, At 3 trillion with "budget cuts" we are looking at perhaps a trillion in deficit spending anyway? Point is it's irrelevant weather we reach bottom this year and this budget or next year or the year after it is unsustainable.


US federal budgets ....
2011 Total revenue $2.17 trillion (estimated)
2010 Total revenue $2.381 trillion
2009 Total revenue $2.7 trillion
2008 Total revenue $2.7 trillion
2007 total revenue $2.5 trillion
I agree poster. Their 3 trillion in spending cuts isn't going to do us jack good because it is spread out over 10 years what we really need is spending cuts in excess of $2 trillion per year and raising of revenue to start paying down the debt we already owe. Anybody who runs a household budget seems to grasp the concept of spend less than you make better than Congress does, maybe they should let the American public balance the budget for them. I bet we could do a better job in half the time.
 

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This post deserves a wider audience. It should be translated to every language spoken in the western world.:thumb:
It is a fantastic post.

And yet you will hear folks claiming we can't cut "spending" because it will CAUSE a recession.

Insanity.

The reality is that "spending" IS going to be cut .... the easy way or the hard way. Funny how thousands of towns, counties, townships, school systems, cities, even states are slashing budgets, cutting waste and fat, and MAKING DO with LESS money. Yet our federal government (most of it) refuses to accept REALITY. They are hell bent on growing the problem.

Ronald Reagan had it right when he said the most dangerous words in the world you can hear are "I'm from the government and I'm here to help".

Never more true.
 

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it's not like we don't have oil or coal.

The future gold is going to be food crop land and irrigation water... average annual crop growth growth/ demand increase is about 10% so by 2021 a 100% from today by 2031 200% above where we are now.

http://www.fao.org/docrep/007/y5648e/y5648e05.htm


We may in fact be in a better position in the future relative to many countries.
We definitely are in a better position. We have sooo much farmable land. Going to back to 1800s farming and smaller communities is possible post collapse. If I was in the market for a bol, I would make sure it's somewhat close to an existing railroad line. We will still need some goods from other locations and the railroads are THE source to move these goods.
 

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It's a trick...get an axe
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To answer the question a little differently:

If we default, we have several problems.

1st, the stock market collapses. Not the end of the world for normal people, but huge problems for employers and industry.

Our credit rating go to a "D" rating which shoots interest rates through the roof, for us, the government and business. That means EVERYTHING will become expensive due to production costs going up, material costs, supply and demand changing, taxes, etc....

Good chance we lose the dollar as the world's reserve currency. You'll have 48 hours to take all cash you have and run to the store and load up. Make as many trips as your cash can take you. You'll need as much food as possible to get through the season and hopefully some sort of economic recovery plan. Or bug out to somewhere you can live off the land. But, that's a whole other website...oh wait! We're on it!

With what's going on, we are the closest ever to the country collapsing. People who think you're paranoid or odd are now itching their heads and gaining a bit of hind-sight. We can come out of this ok if we as a country make the right, hard, and moral choices. Unfortunalty, we are governed by politicians who typically don't know what those words mean.

What can we do?

Prep. Long term food stuffs, seeds, clear plastic rolls, 5 gallon gas cans filled for Bug outs, plan a place to go, bug out bag in the car, buy a mountain bike, think about ways to make money without a job, buy some pre-1965 silver coins, sell your stuff you can sell, etc...Not an EMP or a nuke type of SHTF scenario, but a really long slog like the Great Depression.

Transfer 401k's, IRA's, anything in the market and transfer it to cash/money markets for the short term. This will protect you from the immediate sell off and market crash.

If you need to refi a loan or get a loan, do it now because the rates WILL skyrocket.

Payoff anything you can because they can raise interest rates on variable loans or use the terms of use to justify an increase.

Put your ear to the ground w/ your neighbors. Glean info on who's who and what's what. OPSEC says do not incriminate your self but use conversation to find like minded individuals.

DON'T TELL ANYONE YOU ARE PREPPING. Unless they are trusted and useful members of a team you are putting together. That takes time, effort, trust, and direct personal knowledge.

This may be too much of a post, and it can go a lot of different directions but the idea now is to focus on THIS economic scenario and nothing else....of course if the Chinese or Russians decide to take advantage of our weakness and strik...sorry, thought I was in a 1980's movie again....;)
 
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