Future of America - Political & Economic

When I ask the question about whether we will see the end of America, I am not suggesting that we will see the physical end of our country or even the loss of its name. What I am wondering is, will we see the end of America as we know it.

America is in deep trouble. Tax revenues are not even coming close to expenditures. Government regulations seem to be growing even worse against capitalism. Entrenched groups are creating insane policies.

Around half a century ago, Ayn Rand predicted that America would arrive at this point. How was she able to predict this? The answer is through a strong understanding of philosophy, economics, and politics. Ayn Rand understood that the Republican party was in favor of corporatism and war, while the Democratic party was in favor of big social programs. This meant that both the Republicans and the Democrats were in favor of big government, they were just fighting over what type of big government.

And this is what we have witnessed for many decades. Government continues to grow bigger with even more complex laws. Prisons and jails continue to grow, while the war on drugs enriches many government agencies. Our war on drugs has grown so huge that it is even beginning to destabilize Mexico.

This century we attacked a foreign country under the pretense that they were producing weapons of mass destruction. This was done despite the fact that military satellites can easily detect small amounts of radioisotopes, so we knew that Iraq was not trying to refine uranium.

As an example of the difficulty of hiding such an endeavor, Iran has spent billions of dollars to build multiple complexes working on refinement of U-235 and it is still taking them years to reach their goals. These complexes are easily discerned by satellites. Iran doesn't even attempt to hide what they are doing. Do you really think that Iraq could have been secretly building nuclear devices?

Any one of the above problems could be dealt with in isolation. It is the interaction of them that is pushing America into a disaster. Our military power protects us from any foreign occupation or attack, but it will not protect our economy.

And that is what will destroy the America that we know in the end. Right now, our economy is surviving on large injections of money. Unfortunately, this is like keeping a person working without sleep by giving him amphetamines. It keeps taking more and more drugs to keep him going.

Stop giving him drugs and he will collapse from exhaustion. But continue to give him drugs and he will eventually do the same, but only worse. But like a drug addict that just can't stop his habit, America is just using more and more stimulus money to keep going. The final result may be delayed, but the final suffering will be worse.

So how bad can it get? The truth is that I don't think anybody knows. But we can look to other countries as an example. When inflation gets out of hand, luxuries become very cheap, while food and fuel become very expensive.

Savings, pensions, and fixed income could become worthless. If you can get out and perform any kind of work you will probably obtain enough food to eat. Farms will still probably produce food, you will just need to find something to trade for it.

The secret to surviving hyper-inflation if you are not prepared is to understand that before the invention of money, we had barter. You will need to trade something for food, whether that is land, property or labor. But it will need to be something of value to the recipient.

Money has two main purposes. One is as an efficient means of trade, the other is as a way to store wealth. Silver and gold did both in the past. Today, we use paper and it is losing it's ability to store wealth. As more and more people realize the problem with paper currency, they will try to spend it faster and faster. Eventually, a time will come when it cannot be used anymore.

The best way to prepare for hyperinflation is to have some silver and gold in reserve somewhere. You should also have a year worth of food staples like beans and rice.

Hyperinflation does not last forever. Once it gets started, it takes a couple of years to completely destroy a currency. Your extra food doesn't have to last forever. In the meantime, you can still earn some money and immediately spend it for necessities. Other options are to barter or to grow your own food.

Most people are overweight and this will reduce their need for food. About 40% of the food in America is wasted and certainly that would end during a hard time. Most of us can survive off about 50% of what we normally eat. Combine the two together (.6 * .5) and we can survive with only about 30% of the food that we normally need. We could also buy raw materials like flour and oil to make our own bread. I estimate that I could survive on only a dollar a day in food if I needed to do so.

I suspect that we will have a few riots in larger cities when food supplies are interrupted, but most people that avoid them will be okay. The smarter people will just move out the largest cities before things get really bad.

I lived in Oregon in early 1979 when inflation started to worry some people. The most interesting thing at that time was that about one in five stores starting to accept silver coins for purchases. Eventually, you could buy hamburger or a burrito for about two dollars or one silver dime.

There were signs everywhere with alternate prices listed in silver coins. Many places started to accept silver coins at a 10 times ratio, eventually rising to a 20 times ratio before dropping again, then eventually the signs disappeared as people regained some trust in the dollar.

I suspect that the same thing will happen again if we start to see serious inflation. People will start to offer a premium price for silver or gold coins. And if (or when) we get hyperinflation, then most stores and businesses will switch to silver and gold coinage.

The silver and gold holdings of private citizens in America may actually end up saving America from it's government. We may end up with two economies. The old economy of government workers and welfare recipients will be using a dying fiat currency, while a new and efficient economy is born that relies on silver and gold coins.

Some states will probably embrace the new economy and be reborn. Other states will fight the silver and gold economy and destroy themselves in the process. If you are living in America, be sure to move to one of the reborn states.

Here are some hubs related to economic survival:

Basic Investing 101
The Best Expatriate Country for You
Best State to Be Homeless