It is not fear-mongering; it is fact. The kind of money system that we have across the world is a "fiat" system which means that our money represents the good faith of the governments and the people to honor its value - unlike physically valuable coins, or currencies that represent actual assets like gold/silver, as if a dollar was a coupon that could be redeemed at the bank for those things (as it used to be but no longer is). A "backed" system doesn't have the same growth needs as a "fiat system, but I believe all "backed" systems in the world have converted to "fiat" over the past several decades.
A "fiat" economy requires continued economic growth - exponential growth, which means it has to keep doubling, not just growing - to
not collapse. So far there has been enough energy (oil, coal, etc) available to support this kind of growth, but we are already seeing a limit to how much and how fast energy can be extracted and made available - all over the world. Energy limits will slow growth, and slower growth makes it more likely that the currency will collapse.
The stimulus efforts, which create more money to pump into the economy, have the undesirable effect of lowering the value of ALL the money (more money in circulation = less value for each unit of money). When people talk about the government "printing money," they are talking about the stimulus programs and this issue.
Still I think "collapse" is an extreme end and that this really should not be the focus (maybe the use of that word is a bit of sensationalism?) The fact is this: When energy limits, which we have not previously felt, start slowing down economic growth all over the world, the effects will be widespread. Some likely effects are: higher costs of food and other necessities, rising taxes, decreased municipal services (police, schools, etc), decreased infrastructure maintenance (roads, bridges, etc), decrease in value of traditional investments (stocks, bonds, 401Ks, etc), people having less to spend on goods and services because prices and taxes have gone up, people out of work because other people have less to spend on everything...
Jobs can only exist when people have money to spend, and much of the current job market is for things other than basic necessities. When times are tight, jobs are pared back to those providing necessities and the other jobs get dissolved.
These things will happen no matter what currency your country uses, because they are all tied together and in some ways are all the same (they are all tied to the US dollar as the reserve currency).
You mention that you are in Canada. It is possible that Canada will feel these effects later than some areas of the world because of Canada's relatively rich natural resources (oil, uranium, etc) compared to other countries. So you might watch this unfold in other countries for awhile before you see it in your own life.
No one knows exactly how this will unfold, when the effects will begin to be recognized publicly, how fast or how slow it will happen, or how many years it will stretch over. Could be soon and fast, could be far-off and slow, could happen as "a series of short, sharp shocks," the earliest of which we have already experienced. (In the US, for example, there was a significant oil price spike in fall of 2008.) Could be in the next five years, could hold off until the next generation, but it seems likely that we will feel the effects within our lifetime and even within the next decade.
I don't see this as doom, I see it as eyes-wide-open. If we know it is coming and understand why it is inevitable, we can think about how to weather it best. Hopefully enough people will realize this is happening and technology will advance to allow us to make intentional changes (to our expectations, to how we use fuel, to how we use money, etc) that will ease the effects of this process.
Quote:
Originally Posted by HeatherAtHome  I feel like I'm living in my own little bubble here. Is the US really that bad off? Are there really so many people out of work? Is it really on the brink of collapse? Or is it a bunch of fear mongering, or just certain areas that are having trouble being focused on and not everyone across the country?
I'm in Canada and I don't see this going on. DH had some possible trouble with work loss 1.5 years ago but things have settled down since then.... There are jobs here, people are working and if they leave one job, they're able to find another. *Knock on wood*
A big thing is that I've stopped watching tv/news so I tend to pick up info online or through John Stewart and Stephan Colbert.
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This guy has been interesting to follow the last few years and I often found his analysis to be accurate.
