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Is Imminent Economic Collapse And Financial Crash Headed Our Way?

Updated on August 17, 2011

The Steps of Economic Collapse


Is a complete and total economic collapse of not only the United States, but the entire world, imminent? I won't play the role of doomsday prophet. I won't make wild predictions. I won't reassure people "everything's gonna be all right" when I don't know for certain. What I can do is explain the steps and procedures required to create a complete and total economic collapse. From there, use your own judgment. Total economic collapses are caused by a large series of economic bubbles that burst. . .

Step One: Financial Collapse

The first bubble to collapse is financial. Large financial insolvency has arrived. Bank after bank is declaring bankruptcy. Insurance companies no longer have the funds to protect you. The stock market has crashed. People start to panic, grinding the entire economy to a stand still. Banks no longer hand out loans to aspiring people who wish to start a business. Mortgage loans are kept tight. Real estate values go down, defunct mortgage loans are discovered, and record foreclosures take place. The government rises or lowers interest rates to either extreme. There is a devaluation in currency.

Step Two: Commercial Collapse

The second bubble to collapse is in commercial real estate. Little new business is created due to banks not being able to issue out loans. Venture capitalists play conservative, refusing to take the risks involved in opening up unproven small businesses. Everyone has lost their money due to the financial collapse. Consumption is down. Demand is nonexistent for many industries who are forced into closing shop. Commercial real estate values plummet to prices even lower than that of housing. However, there exist very little capita amongst the people, so very few can take advantage of this situation. Eventually many buildings are left abandoned and become an environmental hazard due to improper maintenance.

Step Three: Educational Collapse

The third bubble is the complete collapse of the educational system. Fees to get into college become vastly unaffordable. People who get college degrees cannot find jobs, and those jobs are never coming back. Young people are in enormous debt with rising interest rates. Even if they do manage to get a job, taxes and student loans take more than 50% of their incomes. Riots will hit the streets. People no longer see the value in going to college because of the current economy. High School kids drop out of school to assist their parents by working around the house or at a job. Younger couples with dwindling resources will have fewer children in order to cope. Demand for schools become non existent with declining student admissions across the board at every level. Schools shut down causing an enormous and sudden spike in unemployment.

Step Four: Government Collapse

The government announces that it no longer has the tax base necessary to support itself. As such, martial law is declared, all but the most vital members of government are removed from office. The government becomes a skeleton crew. All social services are cut. Unrest throughout the entire populace ensues as they’re demanding elections. The military is then used to police their own citizens.

Step Five: Military Collapse

Military forces become disgruntled due to low pay, little food, and the idea of attacking their own citizens. Gang groups soon emerge with technology and weapons just as advanced as the military. The military simply cannot keep up with the growing gangs and become exhausted. Millions upon millions will die. Eventually many generals defect out of the force and form their own independent battalions that rebel against the remnants of the remaining government.

Step Six: Charitable and Nonprofit Organizational Collapse

People have less and less time and money to donate to charitable causes. The reason why charities and non profits will be able to survive most of the economic collapse, are because they have huge demand and essential services in such an environment, but even they will succumb to the weight of economic collapse. People will lose faith in the charities because scams under the charitable banner will raise ten folds. Religious fanatics will emerge across all spectrums. As people lose everything, they become delusional and blame "this god" for causing all the trouble and feel "their god" is right. Religious gang wars increase at astronomical levels. Places of worship often get burned or razed to the ground. Clinics shut down and essentially turn into morgues.

Step Seven: Agricultural & Food Supply Collapse

Farmers may be able to withstand the economic collapse longer than most because they offer the most essential service out of us all, but even they will succumb under the weight of economic collapse. As food prices continue to increase and add up to more than 60% of what people earn, people will resort to farming and livestock close to their own homes and communities. It will simply be unaffordable to have the food transported into the cities and/or towns. In many cases, due to decaying infrastructures, it will simply be impossible for farmers to even bring the food to their customers. The result being big agriculture business will collapse and be replaced by a mostly agrarian society with some advanced technologies such as electricity (that will most likely fall under curfew and schedules) and the Internet. Our large advanced technological farms that make up only 2% of the land, yet were able to feed most of the population, will now be out of business. There will be coming food shortage because we have insufficient land space/allocation to meet an agrarian society and in many cases’ people will fail to adapt to this new reality

Step Eight: Economic Recovery

The rebel military forces announce they have done a coup d'etat on the remaining government. Marshall law comes to a close and an adjunct government is appointed until the country has sufficient basic infrastructures to conduct honest and fair elections. The wealthy who brought the crisis about are discovered and hung in town square. The few ordinary folk who managed any savings and didn't go into debt before the crises begin buying up the commercial real estate and rebuilding the businesses. The community gets together and rebuilds the burned down places of worship. Community clinics are built. The one room school house and/or home schooling return back in style.

-Donovan D. Westhaver

Do you feel the entire world is headed for complete economic collapse within the next 10 years?

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    • profile image


      5 years ago

      We used to acquire at the top of existence but lately We've accumulated some sort of level of resistance.

    • profile image


      7 years ago

      It seems that we are looking at the rumblings that cause the tsunami.

      The rumblings of 77 million boomers starting to wake up to the call to "cash out".

    • profile image


      7 years ago

      The collapse of currency is the only way I see anything ever changing. All this political bickering will only lead to our nation declaring insolvency to all debtors.

      After being cast from the global market, we'll have no choice but to make our own goods & become self sufficient, and live within our means again, because nobody will loan us the time of day, much less anymore debt!

    • dswan9 profile image


      7 years ago from Amsterdam and London

      very depressing lets hope ur wrong

    • DonDWest profile imageAUTHOR


      7 years ago from Halifax, Nova Scotia, Canada

      American Choices:

      The food crisis is already beginning, I have explained that in my most recent hub, titled "Starved People.” The reason why it will be the final bubble to go pop is because we have little choice but to hold onto that bubble as long as possible. Food takes priority above all else. The agribusiness does have some advantages over the local farm in a varied diet and food choice, but long term you're right that we will get punished for having all the food in the hands of so few. BTW, the local farmer isn't completely finished in some areas of America, and in Canada the local farmer is still around.

      In fact, there are signs all of the following bubbles are in progress, have already mostly passed, or are about to begin. Even in "care bear" Canada, my provincial government is coming to the realization that education is vastly over funded for the demand in place. There are now talks of cutting education by up to 50% (an education bubble). Our housing sales went down by 27% this fiscal year, yet home values increased by $7000 (peak of a housing bubble). In my neighbourhood 1/3 of the houses is for sale with nobody who can afford to buy at the prices listed. Step into the mall, and you'll notice half of the mall spaces are shut down (commercial real estate crisis is in full swing here). The government is already cutting pensions on most of their staff. There are signs of the military collapse as well. Halifax is a military town and many guys who are returning home complained they were ill-equiped to deal with the harsh desert terrain in Afghanistan (you need more than the conventional three meals a day to do a physical job of that nature in the desert). One of our bases has already been ordered to shut down so we could concentrate all our military in a single larger base to save money. Housing projects for military families have grinded to a halt. The nonprofit sector is booming, but that too is a bubble created by the despair caused from the previous bubbles that are bursting.


      I'm following the basic tenets of economics that what goes down, must surely go up, and then back down again, etc. There will be a recovery, never once did I specify this recovery would resemble anything like the United States of America. When Rome fell, it was replaced by a Christian empire, that was a recovery, but life never was the same. Something will emerge once the entire economy hits bottom and can only go up, but it won't be anything like America. Truth of the matter once I hit stage eight, "recovery,” I am entering the territory of pure speculation rather than economics. Not a fan of fortune telling, all I know is that some sort of recovery will take place.

      There could be a "stage nine,” civil war that shortly takes place after the stage eight recovery. I can see that happening in America as once the crash reaches it's bloody ends, larger/more influential states with high amounts of natural resources may separate from the union and try to stake it out on their own.

      I had a vision of Texas forming a new confederacy with numerous southern and Midwestern states. California then forming a Pacific Union with all the states along the pacific coast. Michigan forming a Great Lakes Union with numerous northern heartland states. Finally, Washington and all of the US Eastern Seaport forming the traditional union states. But this is quite a lofty prediction to make so I refrained from publishing it, but I'm throwing it out there to consider.

      America is a large nation, highly populated, with many localized subcultures, I can see the nation splitting up several ways once the economic crash is complete. The only question then would be if the union will allow these states to succeed peacefully. History says separatist movements are never met peacefully.

    • American_Choices profile image


      7 years ago from USA


      Voted up and useful - thank you!

      Great information presented here. I agree with the food but in a different manner, food will be or is already controlled by a handful. The family farmer is a rare breed.

      What used to be a substantial farm has now become a mega farm. Like retail, if you are not a mega giant, you will suffer.

      The vastness of the middle class is dwinkling quickly becoming the most engangered animal in America. While China and India's middle class is growing. I am happy for India and China but feel we as Americans have chosen to give away our own economic power.

      I am gravely concerned for the standard ofliving of my grandchildren IF they continue to reside in America. The global marketplace is changing rapidly.

    • profile image


      7 years ago

      Steps 1 to 7 make a lot of sense to me. Good thinking.

      But for step 8, you assume that America will remain in one piece. What does history tell?

      Alexander the Greats empire fell apart. The Roman empire fell apart. Even China had periods in the history, where bits and pieces dominated over a functioning empire.

    • vrajavala profile image


      7 years ago from Port St. Lucie

      I'm afraid you're right


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