Like a lot of the regular visitors to this forum, I spend some time thinking about emergency/survival preparedness and stacking physical metal. Occasionally, though, I wonder - am I preparing for the wrong event? Does it logically follow that civil society collapses as the "Great Keynesian Experiment" reaches its denouement? Let's put our skeptic's hat on in this thread and apply some serious analysis to the situation. I'm not necessarily advocating any particular view on this, I just want to create a marketplace of ideas, supported by realistic assumptions or credible evidence.
I will get the ball rolling:
1. The Worldwide Debt Crisis. If this is the cause of the End, policy reactions are well documented: an orgy of money-printing to monetize all debt worldwide (a/k/a a currency war) or explicit default/contagion that brings down our global financial system. Leaving aside for the moment which endgame is preferable for the average American (default, definitely), what results follow from each outcome?
A. Monetization. Hyperinflation. Prices skyrocket. Panic, but for how long? I have a friend that lived through hyperinflation in Ukraine, and she lived to tell the tale. What hyperinflation will do, primarily, is spread the pain of debt default among all citizens rather than simply creditors. They will be paid back in nearly worthless dollars, but we will all be paid in nearly worthless dollars by our employers too, if we have one. It could happen, but I think total lawlessness would be unlikely for the following reasons:
a. Law and Order. Government could still pay police, fire and other vital service providers, albeit with inflated dollars. Even in Greece, where austerity has led to significant budget cuts (not necessarily required in a hyperinflation scenario) law and order hasn't collapsed. Times will be tough, for sure, but I don't see a collapse of basic law and order in the cards. It will be impaired, sure. Crime will skyrocket. But I don't see governments, local, state or federal, in structural danger.
b. Power and Water. Worst case scenario, the government could seize power plants and transmission facilities if utility companies refused to provide service. Occasional interruptions would be likely, but massive outages would be avoided at all costs. There is no reason to believe the government couldn't run these facilities with the help of employees, which would be more than happy to pitch in.. for a fee.
c. Economy. There will certainly be businesses that won't adapt to a hyperinflationary environment, but there's no reason to assume it would cause economic freefall that would fatally wound the government. Other countries experiencing hyperinflation did not become failed states, just very uncomfortable ones - (Weimar, Zimbabwe). I think it's safe to say that people selling goods will be less likely to part with them, which will lead to some market dislocations, at least until prices stabilize, or a generally accepted alternate method of payment develops, probably a mixture of barter and precious metals. While there could be scarcity of some resources for some period of time, it is a bit longer of a stretch, in my opinion, to assume the collapse of law and order. The government will move heaven and earth to get everyone fed, and will still have the resources to do it. We still possess the world's reserve currency, and no one can force our government to pay back loans/interest it doesn't have, let alone in a more stable currency.
d. Political. Real danger here. Idle hands are the tools of the devil. Enough people unemployed, waiting in line for food could cause some real problems, especially if the police (as they inevitably will) mishandle the situation. If a political movement coalesces around some radical solution, it could spread rather quickly and displace the politicians we know and love. Little problem there... history suggests it might be even worse that what we've got.
e. Psychological. The most severe danger. Panic begets panic, violence begets violence. However, the ordinary American simply has no appetite for violence, real violence. People tend to mind their own business as long as they aren't starving. Until someone explains to me how we suddenly can't feed each other, I don't see how a major panic develops. What will happen is everyone trying to convert cash into hard assets, all at the same time, which will cause some tension, to be sure. I could see things getting out of hand, but someone will have to explain to me why it is likely, much less guaranteed, that this will occur.