I still really dont understand how being out of debt will help if shtf...if the dollar becomes worthless they will have to institute another type of currency to replace it.
I guess if you lose your job and are indebted you could be screwed, but that seems to be the case regardless of any economic situation.
Im not sure rushing in to pay down your debt is the smartest thing to do, maybe take the money you were going to hand over to the bank and buy some stuff that might
help when food or goods become alot more expensive.
Things will get scary once the world stops using the petrodollar system,( trading oil in u.s currency), this is when investors will flee the u.s dollar and bonds thus collapsing the dollar.
And if things get really bad ie. no power, no banks, transportation etc. whos gonna come repo your stuff, so I wouldnt get to excited about paying back the bank.
Just my thoughts, I might be thinking along the wrong lines....maybe not.
IM curious as to whats happened with countries in the past that have completely fallen apart, how do you pay your mortgage when theres a worthless dollar in your hand and nothing to replace it.

You are refering to places like Argentina (who have defaulted several times in the last several decades), Bolivia (also defaulted several times) and 1930's Germany. It's the middle class that disappears. The rich get hurt a bit. The difference now from then is the wealthy Western states who fund the World Bank and the IMF are the one's who will fail. The IMF has already noted that they don't have enough money to help Greece. So it's a whole new world we are entering. So no way of knowing what's going to happen. I suspect the rich will lose a lot, they own the debt.

thanks for the replys JR,one things for sure the next few years could prove very interesting.

Here's a good video on the squeeze of the middle class or "downward class migration". In places where the currency looses it's value this is what generally happens. The less debt you have, the less dependent on the system you are, the better you're able to weather the storm.
http://www.youtube.com/watch?v=wy5Bw_7jgds

heres a little tidbit I lifted from usahitman.com

total fiat currency collapse occurs with remarkable frequency.

Below, I have listed a handful of the worst debacles from the past century alone:

Hungary, 1945-1946
After the end of WWII, amid the chaos of a continent in ruins, Hungary experienced the worst hyperinflation ever recorded. At its fastest pace, the Hungarian pengo was losing half its value every 15 hours.

Zimbabwe, 1998-2009
Everyone’s favorite president (and hobby economist), Robert Mugabe, raided the central bank to cover tax revenues lost to economic “reforms.” At its peak, the Zimbabwe dollar was losing half its value every day.

Yugoslavia, 1989-1994
By filling budget gaps with printed money, Yugoslavia experienced a currency collapse that, at its fastest pace, saw the dinar lose half its value every one and a half days.

Germany, 1921-1923
Probably the most analyzed currency collapse in history, the Weimar Republic hyperinflation was arguably the result of budget deficits created during and after WWI. Notably, the massive reparations payments imposed by the Allies tipped an already weak German mark into a complete collapse. Although the utter destruction of the German middle class was the direct consequence, the German hyperinflation likely hastened the rise of Hitler and the march towards WWII.

Greece, 1942-1944, 1953
Greece is dominating the economic news today, but the country is no stranger to financial disaster, as it has defaulted repeatedly throughout its history. At the worst point of Greece’s 1942-1944 inflation, the monthly inflation rate ran at a whopping 13,800%.

The above five examples are some of the worst inflation cases from just the past 100 years. Looking back even further, we see currency collapses repeatedly across empires and administrations throughout history: Rome, China, France, America.

sorry bout the huge post, but it was way to insane not to post. Again from the previously stated website.The following are 50 economic numbers from 2011 that are almost too crazy to believe….

#1 A staggering 48 percent of all Americans are either considered to be “low income” or are living in poverty.

#2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be “low income” or impoverished.

#3 If the number of Americans that “wanted jobs” was the same today as it was back in 2007, the “official” unemployment rate put out by the U.S. government would be up to 11 percent.

#4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.

#5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.

#6 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

#7 Since December 2007, median household income in the United States has declined by a total of6.8% once you account for inflation.

#8 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006. Today, that number has shrunk to 14.5 million.

#9 A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.

#10 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

#11 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

#12 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.

#13 One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

#14 The Federal Reserve recently announced that the total net worth of U.S. households declined by4.1 percent in the 3rd quarter of 2011 alone.

#15 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

#16 As the economy has slowed down, so has the number of marriages. According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married. Back in 1960, 72 percent of all U.S. adults were married.

#17 The U.S. Postal Service has lost more than 5 billion dollars over the past year.

#18 In Stockton, California home prices have declined 64 percent from where they were at when the housing market peaked.

#19 Nevada has had the highest foreclosure rate in the nation for 59 months in a row.

#20 If you can believe it, the median price of a home in Detroit is now just $6000.

#21 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant. That figure is 63 percent larger than it was just ten years ago.

#22 New home construction in the United States is on pace to set a brand new all-time record low in 2011.

#23 As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.

#24 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

#25 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%.

#26 One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.

#27 If you can believe it, one out of every seven Americans has at least 10 credit cards.

#28 The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

#29 It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.

#30 The retirement crisis in the United States just continues to get worse. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

#31 Today, one out of every six elderly Americans lives below the federal poverty line.

#32 According to a study that was just released, CEO pay at America’s biggest companies rose by 36.5%in just one recent 12 month period.

#33 Today, the “too big to fail” banks are larger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

#34 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to thebottom 30 percent of all Americans combined.

#35 According to an analysis of Census Bureau data done by the Pew Research Center, the median net worth for households led by someone 65 years of age or older is 47 times greater than the median net worth for households led by someone under the age of 35.

#36 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.

#37 A higher percentage of Americans is living in extreme poverty (6.7%) than has ever been measured before.

#38 Child homelessness in the United States is now 33 percent higher than it was back in 2007.

#39 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.

#40 Sadly, child poverty is absolutely exploding all over America. According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.

#41 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.

#42 In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for more than 18 percent of all income.

#43 A staggering 48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.

#44 Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.

#45 For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars. That was the third year in a row that our budget deficit has topped one trillion dollars.

#46 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.

#47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars. WhenBarack Obama first took office the national debt was just 10.6 trillion dollars.

#48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

#49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per daysince the beginning of the Obama administration.

#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

thanks for the replys JR,one things for sure the next few years could prove very interesting.

I would recommend everyone sign up for this guy's email blasts http://www.chrismartenson.com/

#47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars. WhenBarack Obama first took office the national debt was just 10.6 trillion dollars.

#48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

#49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per daysince the beginning of the Obama administration.

#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

and the arrow of all that points in one direction only, economic collapse. One other for you. If you stacked 1000 dollar bills 650 miles high it would equal the US debt.

One thing which isn't usually out in the public discussion is that this debt load is based on AAA Credit rating. Asume it's 1% If they get down graded to AA the interest rate goes higher 2%. Nothing to scearm about except it's compound interest on the debt. That means they won't be able to repa the bankers and the bankers will be able to take the collateral posted against the debt.

Now what is the collateral you ask?

One thing which isn't usually out in the public discussion is that this debt load is based on AAA Credit rating. Asume it's 1% If they get down graded to AA the interest rate goes higher 2%. Nothing to scearm about except it's compound interest on the debt. That means they won't be able to repa the bankers and the bankers will be able to take the collateral posted against the debt.

Now what is the collateral you ask?

Quite correct, and it get's better. When a country has to pay more for interest payments, they cut back on government programs to pay for it. When government has less money to pay their employees, they lay people off, who then can't buy as much in the economy, so the GDP starts to slow or drop. Thus the ratio of debt to GDP grows even more, which forces another downgrade in rating, which means less taxes governments get to pay their programs, but interest payments go up, and then they lay off even more, so GDP drops more... And down the spiral they go. Default is the only way out. Except this time it isn't one or two flea bitten 3rd world dictatorships defaulting, its every single "rich" First World countries all collapsing at once because as one goes down, central banks in other wobbley countries who hold that debt (ie Spain holding Greek debt) fail, all on the same day, at the same time.

Actually there are three ways out.
Default or a Debt Moratorium. At least 35 countries have done it in recent years. Russia, Poland, Argentina, Mexico ect. Most of those countires are doing just fine. Iceland did a variation on this. They said who's debt is this which is being foisted on the people of Iceland? It turned out the debt belonged to the private banks so the Icelanders just said, sucks to be you and Iceland is doing fine now also. The criminal bank CEOs are hiding out in the City of London.
War. This helped immensely in WWII. America (and Canada) was slowly coming out of that Depression and they still had a manufacturing base. Increased production meant increased profits for certain sectors, coughMilitaryIndustrialcough. Then the Korean war, the Veitnamese war, The Cold War fought through proxy states in Africa and South America, then Iraq, Afghanistan, Iraq, Libyia, Syria, Iran, Pakistan, They all get a new banking system while we liberate their peoples.
The third way is the New Deal. This is the best way as it enhances a society through the massive infrastructure projects undertaken by the government. Look at the Interstates, Hoover Dam, Tennessee Valley River project, and all the libraries and civic projects built in that era. Canada could build a high speed train system. Big enough country and the only one in the G20 which does not have High Speed rail. Pathetic.

The repayment of the debt is called Austerity. Canada has about ten years to go. I'm not sure we're ever going to get there to full out austerity as we have Oil and it will be going through the roof shortly. However, our social services will continue to be cut back while our debt load will increase as will unemployment.

May you live in interesting times.

Actually there are three ways out.
Default or a Debt Moratorium. At least 35 countries have done it in recent years. Russia, Poland, Argentina, Mexico ect. Most of those countires are doing just fine. Iceland did a variation on this. They said who's debt is this which is being foisted on the people of Iceland? It turned out the debt belonged to the private banks so the Icelanders just said, sucks to be you and Iceland is doing fine now also. The criminal bank CEOs are hiding out in the City of London.

Defaults, as both are the same, is benign only in a world where there are rich countries which have growing economies who can absorb the losses. It's different when the default is occurring in one of those "rich" countries, there's no one else to take up the loss.

War. This helped immensely in WWII. America (and Canada) was slowly coming out of that Depression and they still had a manufacturing base. Increased production meant increased profits for certain sectors, coughMilitaryIndustrialcough. Then the Korean war, the Veitnamese war, The Cold War fought through proxy states in Africa and South America, then Iraq, Afghanistan, Iraq, Libyia, Syria, Iran, Pakistan, They all get a new banking system while we liberate their peoples.

War takes energy. The US was able to sustain a war on two fronts because they produced more oil than they consumed. Not true today. The US's ability to fight a war today stretches their resources to the breaking point. The small conflict of Afghanistan shows this. We in Canada would be in serious trouble if we were involved in a new war on the same scale as WWII, and we could be the country at the center of a new resource war.

The third way is the New Deal. This is the best way as it enhances a society through the massive infrastructure projects undertaken by the government. Look at the Interstates, Hoover Dam, Tennessee Valley River project, and all the libraries and civic projects built in that era. Canada could build a high speed train system. Big enough country and the only one in the G20 which does not have High Speed rail. Pathetic.

The repayment of the debt is called Austerity. Canada has about ten years to go. I'm not sure we're ever going to get there to full out austerity as we have Oil and it will be going through the roof shortly. However, our social services will continue to be cut back while our debt load will increase as will unemployment.

May you live in interesting times.

Government projects can only work if there is the resources and economic growth to fund it. That doesn't exist today.

Peak oil, and the inequitable effects it will have (worse for debt countries like the US) serious restrictive effects on trying to pull a country out from the brink. I don't see it, I see economic collapse within 10 maybe 20 years.

Is English your first language?

I was unable to parse the sense of some of your sentences. What little I could understand though seems to show that you don't have a good grasp of economics.

Is English your first language?

I was unable to parse the sense of some of your sentences. What little I could understand though seems to show that you don't have a good grasp of economics.

which ones?

I'm not into going over your entire post part by part. You are incorrect in all of your assumptions. However, that should not stup you from preparing for a default between 10 to 20 years. LOL

Debt jubilees and moratoriums are a valid way of dealing with the bankers. I have no clue as to what you're on about in that sentence.

I find your assertion that we would be at the centre of a resource war laughable. Study NAFTA, It ensures we have to send those resources to the States, for a pittance.

Peak oil is a conspiracy theory put out by the Oil companies to boost prices. Fiat currencies allow politician to do what they want.

You have some basic work to do. Take Care!

I'm not into going over your entire post part by part. You are incorrect in all of your assumptions. However, that should not stup you from preparing for a default between 10 to 20 years. LOL

Debt jubilees and moratoriums are a valid way of dealing with the bankers. I have no clue as to what you're on about in that sentence.

I find your assertion that we would be at the centre of a resource war laughable. Study NAFTA, It ensures we have to send those resources to the States, for a pittance.

Peak oil is a conspiracy theory put out by the Oil companies to boost prices. Fiat currencies allow politician to do what they want.

You have some basic work to do. Take Care!

Peak oil isnt a conspiracy theory, it is a fundemental fact all limited resources face. World oil production peaked in 2005, been flat since.