8 Reasons Why No One Should Ignore the Coming Economic CollapseMichael Snyder, Contributor In fact, once upon a time I was fully convinced of that. When I was a kid I quickly realized that my elementary school teachers really didnt have the answers, but I had total faith that those running society at the highest levels were experts who were looking out for our best interests. As time went on I kept progressing in my education, and by the time I was finished with law school I came to understand that none of our experts really know what they are doing, and they are definitely not looking out for our best interests. The blind are leading the blind and we all need to finally admit that the emperor is not wearing any clothes. Unfortunately, most Americans will repeat the mantra of if that was true I would have heard about it on the news until it is way too late. Most people are waiting for the authorities to tell them what to do instead of thinking for themselves. Sadly, time is rapidly running out and a lot of people are going to end up getting totally blindsided by what is coming. The man in charge of our financial system, Federal Reserve Chairman Ben Bernanke, is not going to save our economy. He didnt see the last financial crisis coming, and even after things started falling apart he continued to insist that housing prices would not go down and that we would not have a recession. Well, it turned out that we had the worst housing crash and the worst recession since the Great Depression of the 1930s. The biggest reason why the U.S. government is 16 trillion dollars in debt is because the system is designed to create gigantic amounts of government debt. Yes, without a doubt the vast majority of our politicians are corrupt and/or incompetent, but even if we replaced every single one of them our economic problems would still persist until the underlying structural problems were addressed. Most Americans are pinning their hopes for an economic turnaround on the upcoming election, but the truth is that neither Obama or Romney has a plan that will fix things. That statement is going to upset a lot of people on both sides of the political spectrum, but it is true. Over the past 40 years the total amount of all debt in the United States has gone from less than 2 trillion dollars to almost 55 trillion dollars. This bubble is going to burst no matter which political party is in power. Obama and the Democrats have tried to kick the can down the road and extend the party by spending 5.3 trillion borrowed dollars over the past 4 years, but by doing so they have made our long-term problems far worse. The next wave of the economic crisis is fast approaching and people need to get prepared. So what do I mean by that? Well, preparation is going to look different for each family, but there are some general principles that apply to almost everyone. For example, during an economic collapse hard assets are preferable to paper assets. Also, during an economic collapse necessities become much more important and luxuries become much less important. For many more tips, please see this article. For the moment, I want to focus on some of the really bad things that could happen to you if you choose not to prepare for the coming economic collapse. You Could Find Yourself On The Wrong End Of A Banking Crisis During a major financial crisis the banking world can change very rapidly. You could wake up one day and discover that the bank holding all of your money has failed. You could wake up one day and discover that because Ben Bernanke has printed trillions upon trillions of new dollars to fix the financial system your life savings have been devalued by 50 percent. You could wake up one day and discover that your bank account has been converted over to a new currency that is worth far less than the one you thought you were holding. Such a scenario may sound unthinkable in the United States (at least for now), but this is the kind of thing that millions of Europeans are extremely worried about right now. Just check out what is happening in Spain. After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks. The macro situation in Spain is getting worse and worse, Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. There is just too much risk. Spain is going to be next after Greece, and I just dont want to end up holding devalued pesetas. During the month of July alone, 94 billion dollars was pulled out of the Spanish banking system. So that means that the equivalent of 7 percent of Spains GDP was withdrawn from Spanish banks during July. That is a full-blown bank run, and Spains problems are just getting started. Eventually these kinds of problems will show up in the United States as well. You Could End Up Losing All Of Your Investments But at least U.S. bank accounts are federally insured (for whatever that is worth). When it comes to investments, you better be very sure that the firms you have your money with are not going to collapse on you. For example, many of you have already heard about how Gerald Celente had losses in the six-figure range when MF Global went bankrupt. He has been warning about the coming economic collapse for years and he still got victimized. The following is what he told one interviewer about what he learned from this incident. Whats the take away from this? Its to make sure you have every penny in your pocket. Because just like MF (Global), screwed everybody else. Your also gonna get the shaft, I dont care who it is. Whats gonna happen when you get a message from your brokerage, from Fidelity or somebody yeah infidelity. Or how about Raymond James, I dont care who they are! You have ETFs? Oh, theres a little error over here, we dont have your money. We dont have your positions. I went to a meeting and the speaker said ETFs of GLD are supposed to be held by HSBC in a vault in Hong Kong or England some place, and HSBC, this guy said, is the biggest shorter of gold. Well you figure it out! They are the ones that are holding it and theyre shorting it? So the takeaway is to make sure you have every penny in your possession. If the funds that you are relying on for your financial future are being held by a brokerage or by an insurance company the truth is that you could potentially lose every single penny during the coming collapse. The financial institution that you are depending on could suddenly go poof and your money could be gone just like that. Recent legal rulings have made brokerage accounts much more vulnerable. Jim Willie explained why this is true in a recent article. The critical jump might occur in account thefts from futures brokerage to stock brokerage, which began in November 2011 with MFGlobal, then appeared in July with Peregrine Financial Group (PFG-Best). All private accounts from MFG and PFG have been pilfered, with a blessing of the theft by the courts, seen in the Sentinel Mgmt Group ruling. The federal Appellate courts August ruling (CLICK HERE) sets precedent for future private segregated account thefts, which were once considered sacred and untouchable. No more in the United States, not in the unfolding of criminality that stretches from USGovt offices to top corporate offices, with blessings sprinkled by the courts. The jump would be a major extension of the Fascist Business Model that nobody talks about. The major financial firms can rely upon this appellate court ruling as precedent, so as to protect their legal right to re-hypothecate client funds in their high risk leveraged positions and loans. It sure would be nice to use my neighbors house and car to firm up my casino weekends. Stay tuned to the ongoing Morgan Stanley implosion, which could force the vanishing act of 50 to 100 thousand private stock accounts. The firm is the largest stock brokerage firm in the land. The dreadful impact will be nasty and might awaken the US masses. MFGlobal and PFG-Best surely did not. Your financial advisers will swear up and down that your investments are safe.But look at what happened to the clients of MF Global and PFG-Best.Their investments disappeared like dust in the wind. This isnt meant to scare you. It is just important that you understand that the landscape has totally changed. You Could Lose Your House During the last recession, millions of Americans lost their homes. Some of them had poured hundreds of thousands of dollars into their homes and they lost it all. Why did this happen? Well, the number one reason is because so many American families are living on the edge. They purchased homes that they could not afford and they just kept living paycheck to paycheck as if nothing bad would ever happen. But when many of those people lost their jobs, suddenly they could not make their mortgage payments and they lost their homes as well. Sadly, we appear not to have learned much. Today, 77 percent of all Americans are living paycheck to paycheck at least some of the time. You Could Lose Access To Electricity Why dont more Americans have a backup source of power? Most Americans are totally dependent on the grid, and that works well until the grid goes down. Just look at what is happening down in Louisiana. The hurricane that just roared through was not even that strong, and yet more than 100,000 people are still without power. The following is from a recent Huffington Post article. Tens of thousands of customers remained in the dark Monday in Louisiana and Mississippi, nearly a week after Isaac inundated the Gulf Coast with a deluge that still has some low-lying areas under water. Most of those were in Louisiana, where utilities reported more than 100,000 people without power. Thousands also were without power in Mississippi and Arkansas. So what would you do if there was a major national crisis of some sort and the grid went down for an extended period of time during the winter? When Thieves Get Desperate They Will Steal Just About Anything Over and over it has been proven that when people cannot feed their families they will steal to get what they need. When things hit the fan here in the United States, we will see widespread looting and robbing. In fact, we are already seeing it happen in Europe. Just check out what is happening in Spain right now. Unemployed fieldworkers and other members of the union went to two supermarkets, one in Ecija (Sevilla) and one in Arcos de la Frontera (Cadiz) and loaded up trolleys with basic necessities. They said that the people were being expropriated and they planned to expropriate the expropriators. The foodstuffs, including milk, sugar, chickpeas, pasta and rice, have been given to charities to distribute, who say they are unable to cope with all the requests for help they receive. Unemployment in the Sierra de Cadiz is now 40%. And already crime is rising in many areas of the United States. In some communities thieves are stealing just about anything that is not bolted down. Just recently, 49 cows that were stolen from a farm in Massachusetts were discovered at an auction in Pennsylvania. Who would be desperate enough to steal cows? In other areas of the country thieves are stealing air conditioning units from churches and they are stripping copper wiring out of city street lights. Are you prepared to defend your property when desperate thieves come knocking? Shortages Can Happen During an economic collapse shortages can happen very rapidly. Thanks to the popularity of the just in time inventory philosophy, most stores do not have much stuff sitting around in their back rooms. When things go bad, you may not be able to get the things that you need. Just look at what is happening in Greece. Right now, medicine shortages have become a major problem. The following is from a recent Bloomberg article. Mina Mavrou, who runs a pharmacy in a middle-class Athens suburb, spends hours each day pleading with drugmakers, wholesalers and colleagues to hunt down medicines for clients. Life-saving drugs such as Sanofi (SAN)s blood-thinner Clexane and GlaxoSmithKline Plc (GSK)s asthma inhaler Flixotide often appear as lines of crimson data on pharmacists computer screens, meaning the products arent in stock or that pharmacists cant order as many units as they need. When we see red, we want to cry, Mavrou said. The situation is worsening day by day. The 12,000 pharmacies that dot almost every street corner in Greek cities are the damaged capillaries of a complex system for getting treatment to patients. The Panhellenic Association of Pharmacists reports shortages of almost half the countrys 500 most-used medicines. Even when drugs are available, pharmacists often must foot the bill up front, or patients simply do without. You Could End Up Dependent On The Government Dont think that it cant happen. Today, 46.7 million Americans are on food stamps and more than half of all Americans are at least partially financially dependent on the U.S. government. That may be hard to believe, but it is actually true. During the month of June, the number of Americans added to the food stamp rolls was three times greater than the number of jobs added to the economy. What a great recovery, eh? If you do not work very hard to prepare for what is ahead right now, you could also end up dependent on the government. You Could Lose Your Life Whenever there is a major economic crisis there is a spike in suicides. And these days Americans are more wrapped up in materialism than ever before. When the coming crisis strikes there are going to be millions upon millions of extremely depressed people. Suicide is about the most desperate thing that you can possibly do, but when people lose all hope of things turning around a lot of them are going to take their own lives. It is foolish beyond belief, but a lot of people are going to make that choice. We are already seeing a significant spike in suicides over in Europe due to the economy. The following is from a recent CNBC article. A growing number of global and European health bodies are warning that the introduction and intensification of austerity measures has led to a sharp rise in mental health problems with suicide rates, alcohol abuse and requests for anti-depressants increasing as people struggle with the psychological cost of living through a European-wide recession. No one should be surprised that factors such as unemployment, debt and relationship breakdowns can cause bouts of mental illness and may push people who are already vulnerable to take their own lives, Richard Colwill, of the British mental health charity Sane, told CNBC. There does appear to be a connection between unemployment rates and suicide for example, he said, referring to a recent study in the British Medical Journal that stated that more than 1,000 people in the U.K. may have killed themselves because of the impacts of the recession. This research reflects other work showing similar rises in suicides across Europe. This is why I stress that preparation is not just about physical things like money and food. We all need to get mentally, emotionally and spiritually prepared for what is ahead. If we understand what is happening and we come up with a plan to go through it, we will be in far, far better position to endure the coming crisis than people that are totally blindsided by it. A recent article on shtfplan.com entitled How Horrific Will It Be For The Non-Prepper explored some of these ideas more fully. I encourage people to go check it out. For the moment, most people will just go on with their lives as if nothing is wrong because times are still quite good. But time is running out. In fact, we might not have much time left at all before the next major downturn. A recent CNBC article entitled Its Coming: One Pro Sees Big Stock Selloff in 10 Days detailed how some analysts are warning of a major stock market decline later this month. An equity strategist for Goldman Sachs is predicting a September selloff that happens so rapidly he is telling clients to protect themselves before Sept. 14. The reason: Market disappointment over key meetings of the European Central Bank and Federal Reserveall within the next 10 days. September may turn out to be a bad month for stocks or it might end up being just fine. But one thing is for sure. Time is running out. Are you ready? This article first appeared here at the Economic Collapse. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. linkwithin_text=Related Articles: 