How to Prepare for the Coming Hard Time in the USA

Current situation. I believe at the moment, we have long past the point where deflation in prices would occur. That was supposed to happen in 2008 and 2009, but was stopped short by Quantitative Easing 1 (QE1). Now the outcome is clear: massive printing to support gov deficits and to support asset prices. All this mess about foreclosures will just strengthen the resolve of Fed to do a second round of QE (QE2), perhaps as massive as QE1. Rather than dealing with title ownerships and legal process, it is better (for big banks) to inflate to the moon so that in home prices increase in nominal terms, and people are less likely to default. It is better to be paid back in devalued dollar and avoid legal entanglement, rather than suffer massive loss on MBS through the legal process. This is likely something that they knew back in 2009 when the Fed started QE1. Currency crisis. In terms of what to do when the SHTF, you can look at what occurred during and after the currency crises of the past. For example, the Asian currency crisis of 1997-1998 brought instant hardship to the population as their purchasing power declined significantly. Some with weaker gov institutions replaced their governments multiple times until the currency stabilized. Some with stronger gov institutions survived intact. Public utilities continued without interruption in most cases. But crime rates did increase as decrease in purchasing power pushed people with marginal morality over the edge. Before the public became convinced that the currency adjustment has completed, trades for expensive items (electronics, computers, etc.) were carried out using US dollars. The currency adjustment was very violent, a lot of volatility, up until the point where foreign debt was forgiven. All assets denominated in the local currency suffered declines, which cause foreign money to come in and scoop them up. Prediction of how things will unfold in the USA. If things repeat in the same manner, we will see the following scenarios in the US: USD crashes, perhaps by 50 to 70%, and lower purchasing power ensued for several years Gold and silver, and some fiat currencies, increased in prices significantly to reflect the decline in USD, but also to reflect people's preference of being paid in alternative currencies that are more stable. Thus, if USD crashes by 50-70%, gold and silver prices will not increase by just 2-3x, but by higher, may be 3-4x. However, the USD crash will overshoot to the downside, and gold/silver prices overshoot to the upside. Timing it will be very tricky, so be careful. Our democracy will not collapse. What we will have is a change in government, switching violently between Republicans and Democrats, until the situation either stabilizes, a viable third party emerges, or we elect a president who is truly competent. Foreigners with strong currency will try to scoop up cheap US-denominated assets Banksters mostly get away with their ill gotten gains. That's what happened in Indonesia, for example. The plunderers, the elite family, no longer held real power but were protected by the new power. This prospect upsets me the most. Workers reject the decline in purchasing power and demand higher wages. At first, their effort will not be successful, but after a few years, they get what they want. Not enough to offset the total loss of purchasing power, but compensate a big portion of it. Unsustainable debts will be defaulted or forgiven. Not through USD crash. I think it really takes real defaults of gov bonds in order to reduce the debt level. Loss of purchasing power makes it harder to service debts, so I think the only possibility is to default. In some countries in Asia, deposits were never returned to depositors. Here we have FDIC so it won't happen. But I'm worried about 401K. Jobs will come back as US labor will be cheap enough to be competitive, adjusted for the technology leadership that we still have. Not all kinds of jobs, but ones for which we become marginally competitive. May be advanced manufacturing? May be IT? Research? A whole generation learned the hard way that home prices do not always go up. But, after a few years, they will start to latch on to stock bubbles in emerging market. How to prepare. Stock up on precious metals mining shares and some foreign currencies to protect your purchasing power and as a safety buffer during the currency adjustment time Be extra vigilant and live with a low profile to avoid attracting crimes to yourself The best way to protect purchasing power in to invest in yourself in the skills in sectors in which we can become competitive after 50% USD crash. Gold and silver cannot do this, unless you have tons of them that last a life time. What sectors? I have no clue. According to itulip, they are TECI (Transportation, Energy, Communication, Infrastructure). We can debate it. Direct your children into these sectors, once you are able to identify them. Equip them with hard skills (math and science). Start forming labor union if you can for your own profession. You need it in order to have stronger bargaining power to restore part of your loss of purchasing power. Closing comments. Inflation, USD crash, and some form of protectionism will be our future. Wars between nations will be fought again over the control of natural resources. They will be done covertly through finances, currencies, trade alliances, regime changes, etc., unlike WW2. I believe these outcome are unavoidable. They were avoidable in 2008 and early 2009, but our gov and Fed have chosen the wrong path. Now it is no longer time to discuss what will happen. I think it is clear what will happen. It is time for action. Try to get into a position where you can change things for better, to impact our society in a good way in any way we can. Regardless of our background and religion, surely we can agree that justice, fair play, and compassion are things we strive for in life. Don't forget to tell your children and their friends of how we got into this mess, so we can avoid a new one for at least another 80 years.