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Dollar Collapse - It Will Happen Overnight.
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Imagine waking up one Monday morning and hearing on the news that the dollar has officially been devalued. Old dollars will now buy only a fraction (say 40% or less) of what they did on the previous day. What???
No way. You gotta be kidding, right?
No!
Many economists and financial forecasters believe such an event is now not only likely, it's unavoidable. And, no, there will not be a warning. It will happen literally overnight, most likely on a Sunday late in the evening hours [My input: October 25th?] when markets are closed and most everyone is at home asleep.
Understand the dollar already devaluates on a daily basis. I am not talking about that. The way it now works is prices steadily creep upward, the result of the Fed printing more and more money to pay its outrageous debts. We live with this kind of gradual devaluation everyday. It is called inflation.
An official devaluation works differently. First, such events happen literally overnight. The dollar will devalue a bunch in one big official leap. You will not have time to prepare. It will happen because an official devaluation is the only recourse remaining to the government to stabilize debt, repayment and commerce.
Likely a new dollar will be printed (to be distinguished from the old). You will be given an option to pay in old or new dollars, but if you use old dollars you will pay much more than if you pay using the new dollar. New dollars will replace the old through the banking system, so old dollars will eventually disappear.
As for when all of this may happen, I have read reports which indicate as early as late February or early March of 09. President Obama may then declare a national banking holiday (bank closures) to facilitate implementation of an official devaluation.
If banks do close, only those people with cash in hand will be able to buy necessities, but keep in mind those dollars will buy much less. Also, during this time no checks will be accepted by merchants or be deposited. Debit and credit cards will not work to make purchases, and ATM's will all be closed. Banks could be closed for several days before they are ready to reopen with the new devalued dollar.
What Official Devaluation Means to You
First, whatever dollars you hold in cash or have deposited in banks will be worth much less. They will no longer buy near as much as they did the previous day. Whatever dollars you have in banks will automatically be revalued to reflect their new value. This means more dollars in your bank account. But keep this in mind. Those new dollars will be worth much less than your old dollars once were.
Prices on everything will increase dramatically. It means what cost say $10 the previous week may now cost $16 or $17. If you rent, rent costs will soar overnight. However, whatever debt amount you owe (say on a mortgage or credit card bill) will remain the same, but everything else will increase.
The good news is most everyone's income will increase to match the devaluation percentage. Because you will then have more dollars to pay off old debts, those debts will become easier to pay.
However this is not the end of the story. Because the government is doing nothing to address the underlying cause of the devaluation (fiat currency), inflation and more devaluations will continue to occur.
In other words, however it works (official or gradually), whatever dollars you continue to hold or bank will continue to lose buying power. It makes no difference if you hold new dollars or old, it will become harder and harder to make ends meet.
The only way to end this cycle is to exchange dollars for assets of real value called hard assets. The purpose for doing so is so you never have more paper dollars then you need to pay monthly bills. The idea is to get rid of paper dollars before they lose more value. Remember this: Whatever paper asset you hold, be it an IRA, 401K, Stock, Mutual Fund or cash, will all continue to lose value. They will ALL eventually become worthless, just as all forms of paper assets have done throughout history. Hello??
Oh and buy GOLD and SILVER. DUH!
Jim Lynn
Survive Economic Collapse
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