Debt Ceiling, Chicken Little, and the Collapse of the Dollar

by David Morris on August 4, 2011

Wow!  I feel so much better now that we’ve raised the debt ceiling and averted default on US debt!  This is a shallow attempt at therapeutic black humor.  You know, the kind that you use when things are really bad in an attempt to lighten the mood.  This week was somewhat of a watershed moment for people who are concerned about preparing for a collapse of the US Dollar.

As I said a few weeks ago, “August tax receipts are scheduled to be $172 billion. Interest on the debt, Social Security, Medicare/Medicaid, active duty troop pay and VA programs add up to $134 billion, leaving $38 billion for everything else. So, there IS enough money to pay the interest on the debt, Social Security, and these other programs without raising the debt ceiling.”

We didn’t have a debt crisis.  There’s no perfect example of a household equivalent to what happened, but here’s a close approximation.  Imagine that you have $1,720 to take care of your family every month and pay interest on debts you have.  You take care of all of your necessities and still have $380 left for fun, savings, and rainy day funds.  You spend the $380 on parties, toys, trips, and general wastefulness.  But that’s not enough, so you put another $1,083 on credit.

You do this every month.  You take care of your necessities and then spend a LOT more…until you have $142,710 of credit card debt from fast living.  Your banks start putting up resistance.  You tell them that you absolutely CAN’T stop your fast living and that they either need to increase your credit line or you’ll stop paying them…and your mortgage, but you WON’T stop the fast living, even though your income is down.

You try to get them excited by telling them that you’ll spend $20,000 less over the next 10 years…of course, you’ll only cut back a hundred or so this year.  But rest assured, you’ll spend less and less each year and it will add up to sizeable cuts.  After all, over 10 years, that means that you will only need to borrow another $110,000 instead of the $130,000 that you were on track to borrow.

You tell all of your friends and they’re so proud of you…after all, you cut $20,000 out of your budget over the next 10 years.  That’s almost $166 per month!  And you were able to keep your fast living lifestyle and pay your creditors.

The banks give in and raise your credit limits, but they demand that you go to counseling to get your finances in order.  They see through the charade that you’re blinding your friends with.  They publicly say that they hate you, call you a parasite, and start cutting ties and looking for ways to stop doing business with you.  They even start meeting and talking, not so quietly, about how to crush you as repayment for the pain you’ve caused them.

It’s laughable, isn’t it.  No individual household could maintain that reckless level of spending and have banks still loan them money.  Truth be told, I’ve watched people live like that, and lost a few of them end it with a pistol to the head when the pain eventually got too great.  Unfortunately, if you add 8 zeros to the story, you’ve got the situation with the US Dollar.

As I’ve repeatedly said, China hates us.  They’ve openly talked and written about how to destroy the US using drugs, psychology, media, economic attacks, and cyber attacks in addition to kinetic attacks.  Russian Prime Minister called the US a “Parasite” this week.  These are not unique or isolated views.

If they’re that upset about what our actions are doing to them, can you imagine how bad things are?  It’s like the family member of someone dying of a terminal illness calling them a parasite for cramping the lifestyles of the rest of the family.  Sure…things may be bad for the family, but they’re exponentially worse for the person who’s actually dying.

Friends, while I’m sad that there were no meaningful changes made inside the Beltway this week, I am happy that we got what looks to be a temporary reprieve.  I kind of feel like chicken little sometimes, saying that the sky is falling.  For the life of me, I don’t understand how it hasn’t.  I’m GLAD it hasn’t, but I don’t understand how it hasn’t.  Fortunately, when I got serious about preparedness, I was sick of hearing people suggest preparations that would ONLY be beneficial if there was an end of the world scenario.  As a result, I decided to limit my preparedness to skills, products, and ideas that would be beneficial immediately, if possible, and that wouldn’t just sit around unused for the rest of my life if disaster never struck.

I want to encourage you to take practical positive steps forward in your preparations for possible hard times this week.  Don’t panic or get frantic, but DO take positive steps forward.  Store or buy a few extra gallons of water…or a 55 gallon barrel.  Buy extras of the foods you already eat, and include a bag of rice and a bag of beans for yourself or charity.  If you’ve got money to invest, get some of it out of Dollars and into precious metals, preparedness items to resell, or foreign currencies.

I’ve got a BIG announcement coming up in the next couple of weeks and it’s going to be a game changer for how people get prepared for disasters.  I’m not going to spill the beans, but this is going to be something that you’re going to want to tell all of your friends about who WANT to get prepared, but don’t actually do anything because of time or money.

In the meantime, the US and even global economy is on such a precarious ledge right now that I’m going to do something that I’ve only done once before.  As you know, the www.SurviveInPlace.com course is a 12 week course.  Over the last couple of years, just over 20,000 people have gone through it.  It’s delivered in modules, one a week, to maximize retention and so that people will take the time to actually DO the work to get prepared instead of just reading about it.

From time to time, people going through the course ask to get the rest of the lessons immediately rather than getting them every 7 days.  We always tell them that we have gone with the one lesson per week model because of VASTLY improved retention, but we also give students access to all of the lessons if they still want them.

For anyone signing up for the course in the next 7 days (and anyone currently going through it) we’re going to unlock ALL of the modules immediately.  Some people don’t think we have 12 weeks left until a major meltdown.  Some people are just in a position where they can take massive action RIGHT NOW and want all of the lessons at once.  In any case, if you sign up today, you’ll get the entire course immediately.

To read the description and get started now, please go to www.SurviveInPlace.com.

What are your thoughts on the debt deal?  On Vladamir Putin’s comments?  On rolling blackouts across the country?  On simultaneous floods and droughts?  What practical steps are you taking to make you and your loved ones more resilient to these and other events?

God bless and stay safe,

David Morris

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{ 25 comments… read them below or add one }

+2 Vote -1 Vote +1Allen Lewis
August 5, 2011 at 10:15 am

Silver, Ammo and freeze dried foodstuffs.
Lock and load America

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Vote -1 Vote +1Mrs. T
August 5, 2011 at 10:18 am

Good Thought bringing it down to the household level for a better understanding. However, an important thing to remember is that government ALSO has the ability to tax and create more money. We can’t do that!

Thank you for some great survival lessons.

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Vote -1 Vote +1BubbaInVegas
August 5, 2011 at 1:22 pm

Can’t get tax increases through the congress right now. They don’t have to though, they can just keep printing money, selling the debt to The Fed, and perpetuating the problem. I don’t see a problem…do you? 😉

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+1 Vote -1 Vote +1Ed
August 5, 2011 at 10:32 am

Clean Karma and dry powder, folks… and maybe a little strawberries…

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+3 Vote -1 Vote +1Forrest
August 5, 2011 at 12:18 pm

In spite of what we are facing we must be prepared. The funny thing is why haven’t most of us been prepared before now? Perhaps I am naive but why do people wait until there is the possibility of trouble before preparation? At least though it is still early enough to ready ourselves. Let these lessons that we are given teach us that becoming self sustainance in turns enables us to help those who didn’t or couldn’t prepare. God is our source, prayer is our strength, Jesus our example. Let us prepare to help others in what is becoming hard times ahead.

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Vote -1 Vote +1Martha
August 5, 2011 at 12:59 pm

I too saw the debt deal, as a reprieve. More time to get our duckys in a row.
I’m long on oatmeal. 😉 More water prep, such as purifiying drops.

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+1 Vote -1 Vote +1Sailorman Andy
August 5, 2011 at 1:39 pm

First, you have to plan a budget that the Dems in our government seem incapable of understanding since they think they can spend and borrow their way out of debt. Many of us who carefully budget every penny have very little if any financial padding for more than neccessities. Our fearless leaders have possibly delayed the inevitable, but there has to be an end to spending more than their income. At the rate of decline with our fiat money, it makes sense to divorce yourself from the dollar, so rather than save, it makes it more profitable to spend every dollar now, but spend looking toward the future. Although metals are increasing in value almost on a daily basis, how liquid will they really be when people who failed to plan are starving? How many of those on a tight budget can actually afford the present price even though gold and silver are still a bargain? Isn’t it a better choice to buy even a fifty five cent can of tuna extra when you shop for groceries when that fifty five cents will be worthless in the near future?
I think that water, food, seed, and ammunition will become the “money” of the future for a time. Since we need to plan “long term”, these are my savings instead of dollars.
Off subject a bit, but we have decided that we will not depend on doctors and their drugs to maintain our health. Coloidal silver and food grade hydrogen have been, and still are, an inexpensive alternative to even prescription drugs. With all the information on the net, almost anyone can do the research into these alternatives. Knowlege gained is time well spent.
The ride will be rough, but some of us are belted in…..Thanks again David. I value your insight and information. For God, family and country, Andy

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Vote -1 Vote +1Kaytee
August 5, 2011 at 1:49 pm

Not surprising re: PM Putin’s comment– and he’s right. The US government HAS become a parasite, one that feeds not only on the “global economy”, but also on its own people.
My congressman (Rep D. Hunter) was one who voted against the latest “debt deal” (the one that passed…), and is also pretty strong re: measures to strengthen border security and halt illegal “immigration”, so will continue to vote for him.
For more immediate “prep”– recently got a hose rated safe for drinking water, and will be filling 2 55-g “food safe” water barrels as soon as I get them placed on our patio (they’re partially full right now, and I can’t move them by myself). Filled up two more 5-g “food safe” buckets with rices this week, and “rotated” about 1/2 a bucket of pasta (all from CostCo). Been “practicing” with our solar oven, and we recently re-roofed our house with tile (fire danger is a problem here). Have replacement filters for our Berkey water filter for when the current ones need switching, full propane tanks for the propane grill, charcoal (and plenty of wood…) for the regular grill and the “volcano stove” (which also can use propane). Already have fairly extensive 1st aid and food supplies, although I do need to go through and “rotate” short dated items.

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Vote -1 Vote +1Joe U
August 5, 2011 at 3:36 pm

Just hope I can get my 150 gallon potable water storage tank FILLED before the sh** hits the fan! Silver-check, guns-check, ammo-check, perimeter alarms-check, friendly and armed neighbors-check, 90 day food supply-check. Boy Scout Motto – BE PREPARED!

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Vote -1 Vote +1Bartley
August 5, 2011 at 4:40 pm

90 day? from what I have heard, people should prepare for a YEAR. Gawd, is it that bad?

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Vote -1 Vote +1Sue the frugal survivalist
August 5, 2011 at 5:38 pm

I’m concerned about UG99, the wheat rust that also attacks several other cereal grains and is spreading unchecked. I suspect this has contributed to the famine problems in Africa. What really frightens me is that the news does not cover UG99 even though it will severely impact the world’s food supply. Our wheat has no resistance to this virus.

Google UG99.
You’ll soon want to stockpile some food.

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Vote -1 Vote +1Martin
August 5, 2011 at 7:48 pm

Silver, ammo and food and water. Lots of people can’t afford gold, but I think silver will be better used. Start buying silver, either ‘junk’ silver in pre 65 dimes, quarters and halves, or Morgan and Peace dollars. You can still buy junk silver for cheep, just don’t think of them as dimes, quarters or halves, think of them as barter silver. Ammo. Even if you don’t use it as ammo, if you have common caliber ammo, like 22 LR, you would be suprised what a box of 22’s would trade for, for one in need. Have enough to use as well as barter. Food. My guess is the way we are heading, 90 days of food is a pipe dream. Shoot for a minimum of a year unless you want to join those on the gov’t dole, if it is even possible for this gov’t to dole out anything except to welfare reciepents (AKA democrats). Start eating beans and brown rice now and become accustomed to this food. Pinto beans are high in protein, can be used in many receipes, are great for diabetics, will keep you alive forever and are still cheap. 25 lbs at Costco about 13.00. They will last for years and years and are great canned. If you don’t can yet, it is easy to learn and provides an instant meal. Water. If you are on a city water supply, try to save up enough to buy a 5000 gal water tank and keep it full at all times. 5000 gallons should last a family for months if used sparingly. Same applies to those on a well, and pumping to a large tank will make your well pump last a whole bunch longer. A well pump which has to continuallly come on and off is hard on it. Turning it on for an hour once a week just to keep the tank full will allow it to last years longer. A 5000 gallon tank will cost upwards of 2500.00. I keep a 1500 watt stock tank heater in mine, and even when it’s 36 below 0, the tank always provides water. What is your life worth? 55 gallons won’t last long, and like Dave says, water is the essence of life. You can’t live more than a few days without it.

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+1 Vote -1 Vote +1Kaytee
August 6, 2011 at 3:24 pm

” If you are on a city water supply, try to save up enough to buy a 5000 gal water tank and keep it full at all times. 5000 gallons should last a family for months if used sparingly. ”

And pray tell, WHERE would you PUT a 5K gal tank if you live in a city??

Most city lots are pretty small with little in the way of yard space even for SFHs, and most city residents live in apts/condos or “townhouses” with no, or almost no, yard space. Add to that, the problem of a lot of housing projects being “planned communities” with lots of rules/regulations re: what you can and cannot have in your front yard or showing from your side/back yard/balconies, and almost nobody in a CITY would be able to follow your advice. Putting it on the roof isn’t a viable option, either– just to upgrade to a tile roof required that we add “structural support”; even if we had a flat roof, I doubt we could have “upgraded” enough to support 20 tons of water plus whatever the tank weighs.

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Vote -1 Vote +1Suzanne
August 5, 2011 at 8:25 pm

And finally S & P has lowered the credit rating. I wonder if anyone will finally wake up! All but one of our SC Congressmen voted against this last Obama idea. If O thinks it’s OK–look out! Piece by piece this great country is being destroyed–it is so very sad. I just wish I knew what, exactly, what to expect. I almost feel like a ‘hoarder.’ But, hurricanes tend to make us better able to think about being prepared and how to go about it.

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Vote -1 Vote +1K West
August 5, 2011 at 9:16 pm

Now is the time as the storm clouds are coming close. We must make final preps. Try to talk to your family members and let them know the crash is upon us.

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Vote -1 Vote +1Ron G
August 5, 2011 at 11:06 pm

When the debt debacal was in full swing the Republicans did not hold firm and our county will pay for a long time. When election times comes these people need to be voted out.
Russia and China have been looking for any excuse to critize and conquer the US.
Thank you Dave for the Urban Survival Course. The ideas discussed will be useful and people need to prepare now for tough times ahead.
The time to prepare is NOW.

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Vote -1 Vote +1john
August 6, 2011 at 1:12 am

like martin said silver ammo food and water needs to be had and will be rushed to in the comming weekend and i bet you a silver dime it will happen and the news of the lowering of the creddit rating of the united states happen on trash day for the news and when the crap hits the fan it will happen starting sunday afternoon withthe asian markets taking the brunt of the hit and we will seen something that has not happen since the depression of the nineteen thirties and those who are prepaired will fair better than those who are not and the have nots will come after us and the looting will begin

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Vote -1 Vote +1Sailorman Andy
August 6, 2011 at 8:58 am

I returned today to read recent comments and realized that I had left a word out of my last submission. What I wished to impart was the use of food grade hydrogen peroxide to combat many ills that we encounter. We also use small amounts of coloidal silver to purify our water after filtering it first. We make our own with a simple coloidal silver generator that is battery operated so is portable and grid free. I do a lot of research into alternatives because I forsee a time when we will have to depend upon ourselves completely in order to survive.
The downgrade of our credit rating for the first time ever is an indication as to how serious the threat to our survival has become……….Is the sky really falling??? Andy

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Vote -1 Vote +1QuantumVerp
August 19, 2011 at 12:02 pm

Andy! There is a lot more to peroxide than you probably know! Read about the biggest medical discovery of the century, no, millennium! It is the ‘Holy Water’ we’ve been without!
Check out my web-site, http://peroxideman.com

Good luck to all sentient beings while the social misfits reap their just deserts!

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+1 Vote -1 Vote +1Brian
August 6, 2011 at 8:59 am

What a depressing bunch of comments! May I remnd everyone that the world hasn’t ended yet and won’t til it is literally uninhabitable — probably not tomorrow, the next day, or even next week. (See the book of Matthew, in the Bible.)
Yes, the US is in bad shape, financially and morally, but God is still in control of this country as well as the rest of the world. And He wants to be in control of each of our lives, but gives us the individual choice, here.
David, you’re not a “chicken little” and survival planning is neccessarry if we are to survive the comming chaos. I just think a little perspective, from time to time would help us all. Do we have much time? Maybe, maybe not. but I don’t think it’s quite panic time, yet, just a speeding up of events that we need to prepare for in advance, if possible.

I wish you all good luck on your journeys to preparedness, whatever that means to each of you and your families. We will all probably need all the luck and grace of God that we can get.

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Vote -1 Vote +1Jarrod in Texas
August 6, 2011 at 10:54 pm

I am a new prepper, and have been trying to get my food supply up. I was reading a book the other day that stated that Mormons are taught to have a year supply of food on hand. By luck two Mormon missionaries came by my house to ask me about my faith. I told them that I was a Christian, but I would like to learn more about their canning and food storage procedures. They were more than willing to help. Though you may have religious differences Mormons are on the right track. I plan on meeting with the head of their local food storage program.

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Vote -1 Vote +1Danette Zak
August 16, 2011 at 10:29 pm

Jarrod, I would love to hear more about your meeting with the Mormon in charge of their food storage program. We have found a couple of places on line which are Mormon out of the Salt Lake City area and have bought from both of the them. One is Food Insurance, in which one can pay for it monthly and they send you a box monthly, or how ever you want to do it according to your financial needs. The other is Wise Foods, which we think might be better mainly because of their packaging. They package their food in white tubs and in mylar bags and the food is pretty good, they will send you a sample if you request it. They do not have a payment program, but they do have specials and you can buy as little as you want or as much as you want. Both companies are great to work with.

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Vote -1 Vote +1Annie J
August 7, 2011 at 2:49 am

We have been doing some type of preparation since before Y2K, Just never quit since then. My daughter determined us to be hoarding and all the other negative things we are called by those who do not make themselves aware of what is going on around us. We have 2 children here in town, 5 gks and assorted other relatives who do not have ability to do very much prep for themselves,not to mention several friends that will need assistance. We see our preparations as being not just for us, but to help others in the coming situations. I for the most part agree with Brian but would refer to Nehemiah. They prayed to the Most High God who would give them the victory, posted the guard and continued work on the wall, At times they had a weapon in one hand and tools in the other. Preparation against the enemy while taking care their responsibilites. I think we are responsible to prepare for the worst and pray for the best in every situation. David, your articles and book have been very helpful since we do not have a place outside of our city that we can plan to go to. Perhaps we will be able to get that a bit later, but for now it is home sweet home. Thanks for you dilligence in preparing the info for us. I just hope that we will be good stewards of it.

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+1 Vote -1 Vote +1CHERIE
August 7, 2011 at 5:10 pm

WOULD THOSE OF YOU THAT BUY COLOIDAL SILVER DIRECT ME TO THE BEST WEBSITE (REPUTALBE) FOR PURCHASING FOR MY FAMILY.

THANK YOU!!!
CHERIE’ IN SOUTH CAROLINA

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Vote -1 Vote +1Doug
August 8, 2011 at 12:07 am

Went all hell breaks loose, he who has the guns and bullets controls. That’s another reason the democratic/liberals want to rid us of 2nd amendment rights. Without our guns we become powerless to the elites and those still with guns.

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