What’s the fiscal cliff? (Hint: It’s not the brand name of the newest energy food bar.)
These are terms tossed around in relation to the economy. And to talk about them with me on DestinySurvival Radio this week was Troy Grice.
Troy has been a libertarian and a student of political economy since his teens. He parlayed his interests into a career in corporate finance. He’s also the author of three novels as of this writing.
Oh, yes. He was the second guest I interviewed on DestinySurvival Radio back in January 2011. Read about that here if you’re curious.
Meanwhile, we did our best to make some sense of what’s going on economically and what impact it will have on all of us. Naturally, we as preppers will beel the effects, too. Thus, the need to be prepared for come what may.
Economics gets complex and boring in a big hurry. I hesitated to delve into it. But Troy did his best to define terms and answer my questions. When you listen to the show, stick with it because it gets better as it goes along.
We started out by chatting briefly about a statistic I’d read which stated two thirds of Americans are living paycheck to paycheck. Troy didn’t find that hard to believe.
As for QE3, It’s short for the third round of what the Federal Reserve calls quantitative easing. It’s a fancy way of saying money’s being created out of thin air by the Federal Reserve and is being used to prop up the banking system.
QE3 is different than the previous rounds of money creation because there’s no set amount that defines when this round is over. It’s open ended.
Troy explained it better, but the idea is the banks are supposed to take the infusion of money and buy mortgage backed securities. It’s supposed to be a booster shot to the overall economy.
You can see things get complicated in a hurry. But as a result of this crazy money dance, we could all be paying more for necessities as our money is devalued and prices go up.
The Fed has painted itself into a corner with a scheme that doesn’t work and can’t be sustained. What they tell all of us is a fearmongering story that if this quantitative easing isn’t carried through, things will collapse into anarchy.
Our government’s debt is in trillions and trillions of dollars. I can’t get my head around such numbers. Can you?
In reality the banks and the government are playing with Monopoly money. And other countries are doing the same thing to keep things propped up.
It’s insanity. I’m amazed we still have faith in the monetary system at all. We delude ourselves into believing a fairy tale as long as swiping a credit or debit card buys pizza and beer or whatever else makes us happy.
Not everyone is playing along though, which is why we see barter and local currencies on the rise. Expect the underground economy to grow.
And if you buy silver or gold, you’d better get possession of it. Pieces of paper saying you own precious metals won’t mean much.
As for the fiscal cliff, anticipated at the time of this writing, it comes courtesy of the super committee Congress put into place to deal with debt ceiling issues. Hear more about it in our conversation.
Troy expressed hope because he says people are smart. They’ll figure out a way to make it. Besides that, no currency collapse or hyperinflationary event has lasted more than three years. Afterward comes a rebirth of some kind.
So if the ride gets rough and we go through what Argentina has, hang on. And in the meantime, as I often say, keep prepping.
There’s more to my interview with Troy Grice than these brief comments. Therefore I encourage you to hear our whole discussion when you listen to DestinySurvival Radio for October 4, 2012. His novels are Goldstein,Indivisible and Gaiastan. Check out Troy’s site at TroyGrice.com.
Are you preparing for economic hard times? Even a collapse? Could we be in the midst of the collapse right now?