Russians
have seen the writing on the wall and they know that they’re economy and
currency are in serious trouble. Though the Russian central bank has pledged
to protect and stabilize the Ruble, which has collapsed by nearly 50% versus
the dollar in the last several months, people aren’t taking any chances.
It’s a
scenario we’ve seen repeated throughout history when a nation’s currency was
threatened with destruction and it’s one we may soon witness in America
should confidence in the dollar as the world’s reserve currency ever be lost.
This is
what a currency collapse looks like:
“It is
a real panic,” said Kirill Rogov, an independent political and economic
analyst who is often critical of the Putin administration. “The ruble is
being devalued by 5 or 6 percent every day, and nobody knows how to stop it.”
The
ruble has lost 50 percent of its value since the beginning of the year.
Russian consumers afraid of losing their savings, as happened in a financial
crisis in 1998, flooded stores, rushing to dump rubles that seemed to shrink
in worth by the minute.
Source:
New York Times
—
“I
don’t need this car,” he said with a shrug. He already owns two Porsches and
a Land Rover. But, he figured the prices will soon go up and the ruble will
probably go down. “We are headed for a crisis,” he said.
…
Electronics
stores were packed late into the evening as shoppers scooped up iPhones and
iPads at prices over $100 lower than what they cost in the United States.
Apple’s Russian website halted online sales “due to extreme fluctuations in
the value of the ruble… while we review pricing.”
…
“We came here because we have a problem. We have a lot
of rubles which are losing value every second and we were too late to buy
dollars at good price. We came here because prices on cars will increase
tomorrow,” Katya said.
Source:
ABC News
What’s
happening in Russia with the collapse of the Ruble is that merchants are
being forced to raise their prices on goods every day. If the slide in the
Ruble continues that could turn to hourly adjustments as was seen in Zimbabwe
when their dollar crashed.
It’s a
scenario that closely mimics the Argentine hyperinflation of the early
2000′s. As noted by author Fernando “Ferfal” Aguirre in his first-hand
account The Modern Survival Manual:
Surviving The Economic Collapse, when the country’s
currency collapsed citizens had no choice but to spend their money
immediately on anything they could get their hands on. Failure to do so would
cut their purchasing power in half within a matter of hours.
Ferfal
explains:
The
banks had closed, and no one knew how much the paper currency was going to be
worth tomorrow, or even in the next couple of hours.
I
vividly remember being at the local Home Depot (called “Easy in Argentina),
and buying a few tools. The clerks
would run around like crazy, replacing the old prices with the new ones,
which sometimes changed within the same hour.
It was
depressing to see a price and notice that after peeling it off, the old price
was still there. There was no time for the clerks to remove them. There would
be a five layer sandwich of ever increasing prices that were maybe just a
couple of days old.
After a
few months, people found that they were in a very delicate position. Many
were without a job, and those who had a job were paid in a currency where the
value was dropping by the hour.
Sometimes you had the problem of reaching the cash register and finding out
that the price had already changed.
Excerpted
From: The Modern
Survival Manual: Surviving The Economic Collapse
This
isn’t some theoretical forecast of what might happen during a currency
crisis. This is how it was for people in Argentina in 2001-2002.
People
didn’t believe it was happening at first and figured their government would
save them. Of course, government officials saved themselves and their rich
cohorts, but left the people with nothing. Eventually the banks shut down,
ATM’s ran out of money and cash became scarce. As Ferfal recollects, the
economy quickly turned into a barter system where currency became physical
assets like gold, silver, food, real estate and cars.
Russia
is yet another warning sign of what’s to come for the United States.
The
timeline for the collapse of the U.S. dollar is unclear. But that it will
happen is an inevitable fact of life. And given the current national debt,
long-term liabilities, economic malaise and deteriorating wages, it is only a
matter of time.
When
that time comes it is in your best interests to already positioned for
it. You need to answer the question: What is money when the system collapses?
The
answer, when you think about it, is pretty simple. When currency becomes
worthless, physical assets will become money.
In her
book The Prepper’s Blueprint Tess
Pennington outlines some key “assets” that will still have value – both for
your use and as barter – should your dollars become worthless.
Things
like foods that last a lifetime, precious metals, fuel,
clothing, footwear and firearms will be essential. Beyond that are other
consumables that we take for granted today but will be worth a great deal
should the currency collapse and stores run out of offerings. Cigarettes,
alcohol, lighters, hygiene products, over the counter medicines, antibiotics
and as Ferfal noted, hardware tools, are all worthwhile investments that will
pay off in the future.
While
most Americans refuse to even contemplate the possibility of something like
this happening in the United States, history has proven that every fiat paper
currency ever invented has eventually fallen. We can pretend that this time
is different, but we’d only be deluding ourselves.
Confidence
is a very fragile thing and given the economic, financial and monetary
troubles we face, it wouldn’t take a whole lot to crush the world as we have
come to know it. When it starts it will happen fast.
Be prepared for it or face
the horrific consequences that will follow.
Related Resources:
Collapse Investing: Money and Wealth Preservation During
Times of Uncertainty and Instability
A Free Falling Economy Makes Bartering Go Boom
The Prepper’s Blueprint: Prepare
For Any Disaster
