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Author Topic: Need Help on Economics Issues  (Read 2271 times)

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Offline Bill Quick

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Need Help on Economics Issues
« on: February 15, 2012, 02:30:55 PM »
In the book, I have one of the primary drivers of societal collapse being the destruction of the economic system by the loss of California and the west.

I have the government rolling out "new dollars" in an effort to contain inflation, as well as seizing all gold from private citizens.  But apparently I don't offer enough real world justification/explanation for this process.

So, what I'm looking for is either American historical examples of similar things, or leads as to such things that have already been rumored to be in place - cites for that would be good.

In essence, I need to explain more fully how and why the collapse would occur, and what sort of heavy-handed government "solutions" would be likely to be mounted to stave off the destruction.

Thank you!
"You can get a lot farther with a kind word and a gun than a kind word alone."  --   Al Capone

Offline Mr. Bingley

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Re: Need Help on Economics Issues
« Reply #1 on: February 15, 2012, 04:20:28 PM »
bill, here's something that may be a vehicle...something that California's already done

http://www.nationalreview.com/corner/291103/and-now-quasi-drachmas-andrew-stuttaford



Offline Mr. Bingley

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Re: Need Help on Economics Issues
« Reply #2 on: February 15, 2012, 04:24:27 PM »
you could also look at the Cruzado Plan in Brazil in 1986

http://en.wikipedia.org/wiki/Economic_history_of_Brazil#1985-89_period

heavy-handed wage controls and price freezes, people were told it was "unpatriotic" if someone raised prices. I was actually there at the time and I remember riots and the destruction of a Bob's Big Boy that tried to raise prices in Rio.

Offline Mr. Bingley

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Re: Need Help on Economics Issues
« Reply #3 on: February 15, 2012, 04:28:13 PM »
boy doesn't this sound familiar:  http://www.floridabrasil.com/brazil/guide-about-Brazil-Economy-80s.htm
Quote
The two other stabilization plans amounted to renewed attempts at bringing inflation down from very high levels. It was soon clear that without a thorough reform of the public sector, controlling inflation would be impossible. Both plans introduced a price freeze and eliminated indexation, but there were differences between them, and with the Cruzado Plan. Neither was able to address the public-sector disequilibrium effectively. The objective of the Summer Plan, for instance, was mainly to avoid hyperinflation in an election year.

In fact, the public-sector disequilibrium became virtually locked in as a result of the 1988 constitution, which created advantages for various segments of society without indicating how these advantages would be paid for. Moreover, it transferred large portions of the tax revenues from the federal government to state and municipal governments, without requiring them to provide additional public services. With less revenue and more responsibility, the federal accounts experienced growing deficits. In addition, several subsidies were locked into the legislation. These factors and the financial burden of the public debt meant growing problems of public finance.

The 1980s ended with high and accelerating inflation and a stagnant economy, which never recovered after the demise of the Cruzado Plan. The public debt was enormous, and the government was required to pay very high interest rates to persuade the public to continue to buy government debt instruments

Offline AuricTech

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Re: Need Help on Economics Issues
« Reply #4 on: February 15, 2012, 07:47:42 PM »
Just an outside-the-box thought, tossed out there for discussion:

Why seize the gold early in the crisis, when you can get plenty of folks to turn it over voluntarily?

First, you ban further private purchases/sales of gold "only for the duration of the present emergency."  Next, you set the conversion rate of "old dollars" to "new dollars" such that people converting cash take a significant haircut in total purchasing power (bank accounts, 401(k) accounts, IRAs and the like take an even-greater haircut), while folks who sell their gold to the government will take a smaller haircut, based on the pre-EMP price of gold.  Add to this by announcing at the outset that the gold haircut will increase significantly after a fairly short period of time, and many people will see plenty of incentive to cash in their gold, all the while laughing at those fools who didn't have their money protected by having gold on hand.

Finally, debt conversions from old to new dollars slam creditors with a haircut even deeper than those imposed on bank accounts, 401(k) accounts, IRAs and the like.

Add all these together, and you have a massive transfer of wealth from the makers to the takers, all based on manipulating the degree of losses sustained in the conversion of old dollars to new.
American parachutists...devils in baggy pants...are less than 100 meters from my outpost line. I can't sleep at night; they pop up from nowhere and we never know when or how they will strike next. Seems like the black-hearted devils are everywhere....

Offline Ken

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Re: Need Help on Economics Issues
« Reply #5 on: February 16, 2012, 08:17:27 AM »
Bill, I'm not sure on how some of the communities would react.

I know there are plenty of towns, up and down the East Coast, that already have a local "currency" of their own. (ostensibly, to promote local business.)

Then there's the University of Texas.....they have taken delivery (in NYC) of $967 Million, in gold, around the first quarter of 2011. (and let's not forget, gold has gone up, in value.)

And if I were a betting man, I'd think Visa, Master Card, and American Express already have contingency plans, in case of currency failure.
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Offline Ken

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Re: Need Help on Economics Issues
« Reply #6 on: February 16, 2012, 08:32:09 AM »
“If mankind is to survive, then throughout man’s history except for a very few years the word “ship” will mean “space ship.”
Arthur C. Clarke

Offline Bill Quick

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Re: Need Help on Economics Issues
« Reply #7 on: February 16, 2012, 10:15:33 PM »
Thanks, everybody.  This is good stuff.  Anybody remember Nixon and Bretton Woods?  I remember the price controls.  They didn't work so well.  But I wasn't paying any attention to the rarifed world of high international finance back then.
"You can get a lot farther with a kind word and a gun than a kind word alone."  --   Al Capone

Offline Langenator

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Re: Need Help on Economics Issues
« Reply #8 on: February 20, 2012, 11:47:06 AM »
Just an outside-the-box thought, tossed out there for discussion:

Why seize the gold early in the crisis, when you can get plenty of folks to turn it over voluntarily?

First, you ban further private purchases/sales of gold "only for the duration of the present emergency."  Next, you set the conversion rate of "old dollars" to "new dollars" such that people converting cash take a significant haircut in total purchasing power (bank accounts, 401(k) accounts, IRAs and the like take an even-greater haircut), while folks who sell their gold to the government will take a smaller haircut, based on the pre-EMP price of gold.  Add to this by announcing at the outset that the gold haircut will increase significantly after a fairly short period of time, and many people will see plenty of incentive to cash in their gold, all the while laughing at those fools who didn't have their money protected by having gold on hand.

Finally, debt conversions from old to new dollars slam creditors with a haircut even deeper than those imposed on bank accounts, 401(k) accounts, IRAs and the like.

Add all these together, and you have a massive transfer of wealth from the makers to the takers, all based on manipulating the degree of losses sustained in the conversion of old dollars to new.

For the gold, the .gov would also have to ban export, to prevent owners of gold (with the means to do so) from physically moving it offshore, where it can be held onto, or exchanged for Swiss francs, rubles, etc, at market rates.

I'd expect to see a lot of private yachts departing Florida for the Bahamas.
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Offline SilverDeth

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