Will You Be A Petrol Dollar Victim – The End Of The Middle Class

End Of The Petrol Dollar Era And Collapse Of The Dollar

End Of The Petrol Dollar Era And Collapse Of The Dollar

The U.S. government and most other first-world countries are in serious fiscal trouble. That should be no surprise to you if you have followed this blog for any time at all.  The U.S. Treasury secretary recently stated the fall-out would be “catastrophic” and last for generations if the congress failed to raise the debt limit ceiling yet again.  Much of the domestic production in the U.S. is subsidized in one way or another.  Everything from food to fuel and from automobile production to real estate. Those subsidies are paid with ever-increasing debt. On top of that over 100 million citizens are in one way or another partially or totally dependent on government entitlement programs.

It is inevitable that at some point the world’s reserve currency, the US dollar, will be dramatically devalued or abandoned altogether as the world’s reserve currency…the Petrol dollar. I do not know what event will trigger this… it could be an escalation of a war in the Russia region or the Middle East, or some major environmental catastrophe, or a successful coalition of China and Russia.  But “what” triggers the collapse is irrelevant. What is really relevant is how average Americans will be affected when that day comes.

In recent months many working Americans have seen their health care costs increase 50%, 100% or even more. But this is just the beginning. When America’s debt problems come to a head the subsidies will slam to a halt, and that will lead to severe cost of living increases on food, fuel, energy, vehicles and most imported products.  That will leave those who never saw it coming in a state of shock, anger and despair, with no way out.

End of the middle class

End of the middle class

Casey Research analysts have interviewed business and political leaders in over one hundred countries.  They have surmised that the U.S. middle class will be wiped out when the petro dollar dies and the U.S. dollar is not longer the world’s reserve currency.  And that day is coming much sooner than we care to think.  The gap between the ultra wealthy and the remaining middle class will widen and the cost of living of the average “middle class” family could double, triple or even quadruple, reversing over 40 years of prosperity and world economic leadership.

In this interview by Sound Money Campaign, Casey analyst Marin Katusa lays out the reasons that the cost of living will explode and your freedoms will be eroded following the loss of world reserve currency status.  They also start to lay out a case for why the middle class is at risk.  Face it, Americans, Canadians and many Europeans have ridden a long wave of comforts and relative luxury compared to many less fortunate regions of the world.  But that is a double edged sword.  The long ride as the most affluent nations has been nice on the way up, but we are ill prepared for the kind of significant belt tightening and strife that will hit us hard on the way down.

In North America and Europe we can expect to spend a higher percentage of our income and savings just to survive.  Many will be faced with spending substantially more each month for food, heat, electricity and fuel for our vehicles.  There is a good chance that everything that is currently subsidized by the government will double or triple overnight… and it will only get worse, if you can even still get the products and services.  Out of pocket healthcare costs will continue to escalate out of control.

So what is the average citizen supposed to do to cushion the blow?

No Pilot, No heading, No direction, NO PLAN!! Crash and Burn Baby. Think food it's all abo

No Pilot, No heading, No direction, NO PLAN!! Crash and Burn Baby. Think food it’s all about food.

Well, hopefully since you are still reading this blog post, you have passed step one.  The very first step is to recognize that the s##t is going to hit the fan and only the well prepared will stand a chance to preserve their standard of living, comfort and relative freedom.  First step is recognizing that inept or corrupt politicians and greedy banksters are quickly driving great nations to the point of bankruptcy and collapse at the peril of the entire middle class.

But recognition of the problem is only the first step.  Without “action” the recognition of a problem is merely an academic exercise.  But before action, a wise man needs a plan.  Your survival plan is your blueprint for how you will lead your family to safety and comfort in the face of an economic collapse in your home country.  Don’t skip the planning stage or you may find yourself wasting valuable assets on solutions that will not buy you the freedom and safety you really want.

Think about it for a second.  Hundreds of millions of citizens are partially or fully dependent on government subsidies or entitlement programs for their very survival.  What will these people do when the governments finally shut down the subsidies and entitlement programs?  As I have said so often, at that point, your assets and your emergency stockpiles may become your biggest liabilities as angry, hungry crowds seek a solution to starvation.  And even if the hungry crowds do not rise up, you have bankrupt city, state and federal government officials looking to suck you dry.  And, finally, with what little is left, you have runaway inflation or paper money devaluation chipping away at what is left.

There really are only three key elements of a sound survival plan if you hope to get your family through a currency collapse relatively unscathed.

1.  Redeploy Some Assets Into Things You Can Touch

Get some of your savings, 401ks, IRAs, stock investments and the like out of paper while the getting is still good.  The value of paper money is on a downward spiral headed for massive devaluation.  This is nothing new.  It has happened in every civilized society for as long as there has been fiat currency, with no exceptions.  There is a piper to pay for the sins of runaway printing of currencies backed by nothing but bits and bytes.  Why so many Americans, Canadians or even Europeans think it cannot or will not happen again in their own country is beyond me.  Folks, it is inevitable.  As sure as night follows day.  The value of your printed money and paper assets are on a continual slide to worthlessness.

With a stroke of a pen the powers-that-be can wipe out the value of your paper assets.  They can tax them away or deflate them to worthless, as they seem to be on course to do at this moment.  It would seem that a wise man would move a reasonable amount of their assets to something a bit more tangible.  For me, that is a mix of some gold and silver for liquidity and strategically selected real estate that should hold its value, either because of its income producing potential or because of its unique investment potential.  The assets you hold should be such that they maintain or increase their value as the Petrol dollar crashes and America’s debt bubble bursts.  Much more on that strategy in a future blog post.

Other desirable physical assets might include long-term food stores, land with productive capacity, personal energy production facilities that may include wind, solar or hydro, or some form of food production. Anything that is likely to offset the continued price rises for the basic necessities of modern life. Given that we are now in more debt as a nation and individuals than ever before, it’s not hard to see where this is headed.

2. Streamline Your Spending and Reduce Your Dependence On Debt

The “system” knows no mercy.  Like a game of musical chairs, when the time runs out somebody’s butt is going to hit the ground hard.  Unfortunately it is more like some 100 million+ butts are going to hit the ground hard.  One of the main causes for this is that way too many people in first world countries live well beyond their means “chasing the dream” and dependent on credit for survival. Or in other words… slaves to the bankers.  Let’s face it, if you are dead broke, have no assets and owe your future to the bankers…. you are screwed.  Your short-term options are slim to none.  Your only option is to suck it in, stop the spending and work like a banchee to get back on top of your situation.

Luckily, most of the DRescapes readers are not in that situation.  Sure some of them may be stretched a little thin, but most have some savings, 401ks, IRAs, investments or other assets to protect.  For them the strategy is a little different.  Sure, spending less on non-essentials is part of the strategy, but maybe even more important is to rethink where you are and where you are headed…. and WHY.  What is it that you hope to achieve on that first world country treadmill?  More free time?  Better health?  Less stress?  A bigger house or more toys?  A higher social status?  A feeling of financial security?  What is YOUR reason for continuing to ride the never-ending treadmill?

Part two of your plan needs to be for you to figure out how to spend less, borrow less and stress less while still achieving all that you are seeking.  As they say… a dollar saved is better than a dollar earned.  Heck, you don’t even have to pay taxes on a dollar saved…. YET.  In a future post I will go indepth on one way to get what you are looking for AND save money too.

3.  Work On Your Exit Strategy And Get Your Assets And Family Out Of Harms Way

Theft of your assets, either legally through taxes and devaluation, or to hungry mobs, is largely a matter of convenience.  If all you own is sitting in a bank or investment house in your own country, how hard do you think it is for a desperate government official or tax man to grab it.  If your assets are tied up in real estate and other fixed assets sitting in your own country, exactly how hard is it for them to grab those or tax them?  If your assets are stuffed under the mattress in your house… do you really think they are out of reach?  Let’s face it… assets sitting in your home country are “sitting ducks” if times get really tough.  And times will get tough if the currencies are grossly devalued as will probably happen with loss of world reserve currency status in the U.S. or collapse of currencies in other countries.

A wise man will look for ways to spread his risk.  In the case of assets the easiest way is to get some of your assets out of your home country… while you still can.  With overarching monetary controls and restrictions on the transfer of assets, it is getting harder and harder every day to move assets outside of your home country… especially in the U.S and Europe.  But don’t worry, if you live in some other bankrupt country, restrictions, taxes and even confiscation is headed your way too.

And for most of you there is something even more important to you than your assets…. your family.  When times get tough, will you have the groundwork in place to protect your family and to set them up to still have a good lifestyle.  That may mean packing up and moving to a new country where the population is much less dependent on government entitlements, handouts and subsidies.  Some country where the people are better prepared to handle the hardships without turmoil.  For my family, I found that place to be the north coast of the Dominican Republic… near Cabrera.  On the DRescapes website you will find plenty of first hand interviews with other families that also discovered this little safe haven

Again, in a future post we will go in much more depth about one way to start to spread your risks outside your homeland if you should so choose.

Summary

For now though, the path is set and there is nothing real positive on the horizon in most of the major countries.  The financial and credit markets are in a mess and there really is no way to undo the damage that has already been done given aging demographics in most of these countries.  There simply are not enough new workers to sustain the added demands of an aging population and all of the entitlement programs and subsidies.  You will either have a plan in place when the SHTF, or you won’t.  I hope you are not in the latter group.

Not Exactly Roughing It - Affordable Paradise

Not Exactly Roughing It – Affordable Paradise

In the future posts I will share with you what has worked for my family and others.  I will show you that it really is possible to live a very rich and full life for a fraction of the cost in many parts of the U.S., Canada and Europe.  I will show you how little it costs to get world class healthcare and inexpensive healthcare insurance.  I will show you how you can eat the freshest organic fruits, vegetables, seafood, poultry and beef for much less than it would cost in the U.S. and other countries.  I will show you how little you can expect to pay for utilities year round, yet still enjoy a comfortable home or business.  I will show you through interviews of other expats how easy it is to get a small business established when virtually all government intervention is wiped out.  Hang on, because you may just discover a way to live a better life, achieve your REAL goals and still hang on to most of your savings.

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johnsteven March 16, 2014 at 12:09 am

So true living a rich and happy life.The true meaning of that statement is not riches in the material sense but riches in the sense of belonging, happiness, friendship,less stress,healthy lifestyle.etc.I lived the fast life, rat race, perks etc.
Been here a long time .WHEN THINGS ARE SIMPLE LIFE IS LESS COMPICATED.
I live happier, healthier and less stress than before.
Having been here as an expat for 15 years, 4 of which have been full time i know i made the right choice.Regards john steven.If anyone would like to chat just email me on johnstevenpesc@gmail.com

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