William Thien

Archive for October 14th, 2013

I am reading a series of novels by James Wesley Rawles (Founders, Survivors, Patriots) which are centered around an economic disaster in The United States of gargantuan proportions, a massive and continuous surge in inflation he calls “The Crunch.”

Due to quantitative easing and manipulation of the dollar after 2008, the dollar suddenly becomes worthless, much like The Deutschmark during the Wiemar Republic where you may have seen in your history class it took a wheelbarrow of currency to buy a loaf of bread. In JWR’s books the dollar eventually becomes so worthless that people stop going to work because they have not been given corresponding cost of living increases. Even the workers at the electric company stop showing up. The result, everything shuts down. Everything. At first there is general rioting in the streets. Then gangs of bandits form and ravage the country.

The books are interesting reading and often contain lists of items you will need to survive if such an economic event happens. Though they are good reading, I’m not so sure something like “The Crunch” is inevitable. The premise of the books is anchored in a real circumstance of an economic collapse created by our own government, yet I am doubtful such an economic collapse will occur. Here is why. Interest rates are low. All the FED has to do is start raising interest rates. There will be less money and/or money will be more expensive to obtain for the purposes of loans in particular, and so the value and strength of the dollar will correspondingly increase in value. In this way The FED can control inflation. At least for a little while.

It remains to be seen what will happen after that, post intervention. Because the government essentially created the monster in the first place (another argument for less government intrusion into the economy) it remains to be seen if the government can control the monster or will it ravage the countryside? I am not so sure about that.


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