1) Economic collapse in America will begin when food inflation becomes a major crisis.
Currently there is a serious shortage of farmers the U.S. While there has been a boom in non-productive service oriented jobs in U.S. in recent decades, very few Americans have pursued productive jobs, especially in the agricultural sector. This has created a situation in which there is rising demand for but decreased production of food. Couple this with the fact that when governments create monetary inflation, prices of all goods and services do not rise equally. Inflation occurs greatest in products that people need most and cannot cut back on such as food. As the U.S. federal government continues creating money out of thin air to pay off its debts, and the resulting inflation occurs, the first thing Americans will buy in the beginning of the economic collapse will be food, and this will drive up prices considerably. It has been suggested by preparedness experts that families should stock up on non-perishable food supplies and have at least a six month reserve of food should food shortages become a serious problem in the coming economic collapse.
2) The Federal Reserve will further the economic collapse by inflating under the auspices of Quantitative Easing.
The Fed will continue to attempt to prop up the stock market with Quantitative Easing (inflation) to make the economic recovery look real. However, when it is realized that the economic recovery is phony and the stock market declines again despite the 600 trillion dollars created during QE2, the Federal Reserve will initiate QE3. QE3 could be the final mistake by the Fed that will lead America into hyperinflation (rapid loss of purchasing power). Should hyperinflation actually happen Americans will need to be extra prepared in order to survive economic collapse.
3) The U.S. median home price will decline markedly in silver, yielding an opportunity for holders of silver to buy homes during the economic collapse.
The Federal Reserve will probably be successful at stabilizing housing prices with its inflationary monetary policy. It will also be successful at massively diminishing the purchasing power of the dollar, which will actually make it easier for Americans to pay back their mortgages. However, the Fed will not be able to reinflate the housing bubble. The housing market is likely to continue to decline in terms of real money (gold and silver) during the U.S. economic collapse. The current median home price is $170,600 or 5,500 ounces of silver. With the Fed continuing to print massive amounts of money, and the substantial inventory of homes still on the market from the housing boom, the median home price could decline to 4000 ounces of silver in 2011. The Federal Reserve’s Quantitative Easing will virtually guarantee that the median home price in the United States will decline to 1000 ounces of silver and possibly as low as 500 ounces of silver within this decade.
4) There will be a huge increase in municipal debt defaults.
The faltering economy of the past two years and impending economic collapse has seriously weakened the fiscal soundness of cities and municipalities. Revenues are just not keeping up with expenses. Because of these fiscal problems, investors are taking their money out of municipal bond funds in unprecedented amounts. The federal government has a printing press to pay its debts with when tax revenues fall, but cities and municipalities do not. Consequently, bond yields are expected to rise dramatically in the second half of 2011 with a series of defaults following.
5) The U.S. economic collapse will cause more Americans to buy gold.
Most Americans today have no idea what the price of gold is. In fact in this video you can watch a man try to sell a one ounce gold coin for $50 with no takers. People in general are simply clueless about the value of gold and its importance in a sound monetary system. Now the mainstream media is saying there is a gold bubble because it has been above $1400 per ounce for most of 2011. However, since very few Americans own gold and are more likely to be sellers rather than buyers, it is impossible for there to be gold bubble. By the end of 2011 more Americans will buy gold as they come to understand its value as real money and a protector of wealth in an economic collapse. As the public becomes more knowledgeable of gold we could see its price in 2011 rise to $2000 per ounce. Free market economists expect gold to rise to $5000 or more per ounce within this decade.