Tuesday, November 13, 2012



This is about the global effects in the event of a likely ECONOMIC COLLAPSE in the U.S. around 2014-2015 versus the planned FISCAL CLIFF to be implemented in January 2013. This is not just economic theory. It concerns the daily lives of each and every one of us.

First let me define these in layman's terms:

"ECONOMIC COLLAPSE" means first and foremost HYPERINFLATION, where the currency value plunges significantly if not totally over a short time period, which would be caused primarily by the exponentially burgeoning national debt load, currently standing at $16 Trillion, where the interest alone could out-weigh the entire national revenue, plus the loss of confidence in the said currency on a global basis. To illustrate this, the world has seen 57 bouts of hyperinflation in history. The 5th most severe one was in Germany in 1923, when prices doubled every 4.7 DAYS, which led to the rise of Hitler, the Nazis, the Jewish persecution, WW2 and the Holocaust. The top two most severe were in Hungary in 1946 and in Zimbabwe in 2008, when the prices doubled every 15 HOURS. Prices doubling means the currency value halving. So, if prices double in the U.S. once every month, then the U.S. Dollar's value would be halved once every month. Your pay check, or pension check, would still show the same number of dollars, but your purchasing power would shrink accordingly. Lay-offs and home foreclosures would be rampant, numerous companies would fold, and unemployment would skyrocket. If the Dollar falls, say, to 20 cents of today's value, a gallon of gasoline would cost $40, for starters. This would cause the transportation system, for one, to grind to a halt, leading to shortages and outrages of a full range of goods and services, including food, fuel, medicines, manufacturing parts, etc. People not laid-off would leave their jobs in droves, and all kinds of systems would fail, including electricity, water, even police and the military. By the German example, the social effects could be horrendous. This could happen any time; the latest estimate I have come across is 2015.

The "FISCAL CLIFF", planned to take effect as of 2013. This is basically a self-administered austerity measure, or "belt-tightening", towards reducing the burgeoning of the national debt. Instead of the nation borrowing more and more to maintain its standard of living and the facade of prosperity, it raises revenue, mostly by taxes increases to the tune of some $500 Billion, and expenditure reduction by about $110 Billion, mostly in cuts of non-essential social programs and the military, about 50/50. By these measures, the national could pull upwards of $600 Billion from the economy, thus alleviating the need to borrow the same amount. The result, of course, would be a diminished economy, where the purchasing power of the average consumer, and thus consumer goods transactions, would be reduced, and lay-offs, business closure and home foreclosures would rise. A new recession would descend across the land, and many would suffer, but this would hopefully forestall a full scale depression, and hopefully postpone it indefinitely.

Now what would the global effects of this FISCAL CLIFF be? Considering that the U.S. is the largest consumer of imported good, all nations exporting their goods to the U.S. would be drawn into the recession. Canada comes to mind, since the U.|S. is its biggest trading partner. If American demand for fuel decreases, Canadian oil exports will be dealt a blow - which from an environmental view point is a good thing. China is the largest exporter of consumer goods to the U.S. - check the labels of most items in Wal-Mart or Costco. If Americans buy less, China will export less. Chinese manufacturing will decline, and fall back on domestic consumption. But if the manufacturing sector shrinks, there will likewise be corresponding lay-offs in China, and the purchasing power of Chinese consumers will likewise decline, and so will the Chinese economy. The E.U. is already in serious economic turmoil, and any reduction of European exports to the U.S. will deal the European economy a serius blow.

And in the case of an American ECONOMIC COLLAPSE? Its global effects will that as depicted in the above paragraph times 10 or more. So, all in all, the FISCAL CLIFF and the ECONOMIC COLLAPSE are lose-lose proposition. Our decision is in whether we want to lose medium, or lose huge.

Anthony Marr, Founder and President
Heal Our Planet Earth (HOPE)
Global Anti-Hunting Coalition (GAHC)

1 comment:

Dixie Good said...

Very interesting. What do you propose to "lose medium" rather than lose big? Can you recommend any actions the average person can take to soften the blow?