# Will there be a US economic collapse? **URL:** \ **Category:** Great Debates\ **Created:** [January 21, 2014, 2:46am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337 "2014-01-21T02:46:22Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [January 21, 2014, 4:15am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/21 "2014-01-21T04:15:27Z")
While the question is up, no one has touched on the money in circulation. Trillions of the ‘new dollars’ from the last few years are just sitting there- wealthy institutions and individuals are hoarding, so the effect is as if they aren’t there at all. If they start throwing it around, that could cause inflation, no? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 21, 2014, 4:22am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/22 "2014-01-21T04:22:10Z")
> [@Gateway](#): > > As I understand it… > > The central bank (or the Federal Reserve) is a bank that is allowed to create banknotes without any more gold being put into the national supply. One banknote stands for a set amount of gold . . . No, it doesn’t. U.S. currency has not been gold-backed since 1933. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 21, 2014, 4:30am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/23 "2014-01-21T04:30:04Z")
> [@Try2B\_Comprehensive](#): > > While the question is up, no one has touched on the money in circulation. Trillions of the ‘new dollars’ from the last few years are just sitting there- wealthy institutions and individuals are hoarding, so the effect is as if they aren’t there at all. If they start throwing it around, that could cause inflation, no? It could happen. I think inflation should be higher than it is now, so I’d be okay with that. And if inflation got too high, the Federal Reserve has a number of tools to stomp on it. And I would be very surprised if the Fed would tolerate inflation at the levels I think it should be, so we’d probably get a Fed stomp pretty quickly. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [January 21, 2014, 4:33am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/24 "2014-01-21T04:33:19Z")
> [@Try2B\_Comprehensive](#): > > While the question is up, no one has touched on the money in circulation. Trillions of the ‘new dollars’ from the last few years are just sitting there- wealthy institutions and individuals are hoarding, so the effect is as if they aren’t there at all. If they start throwing it around, that could cause inflation, no? That’s the whole dealio with the central bank; that can respond rapidly and effectively to changing economic circumstances. In this scenario you mention, the fed might do something something super slick like raise the inflation rate (currently the interest rate is fairly low - on a side note if you hear of something crazy like this goin down you better make a move that cute little rancher you been eyeballing before the mortgage rate goes to 10% (totally an 80’s thing)). Kind of reminds me of a quote by McChesney something like “the job of the fed is to take the pouch bowl away just when the party is starting to get interesting” ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 21, 2014, 4:41am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/25 "2014-01-21T04:41:40Z")
> [@Gateway](#): > > We are inflating our currency with our central bank. As I understand it … Cite? (No, I’m not asking you to rephrase the claim. I wonder where you get your financial information and understanding.) ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 21, 2014, 4:44am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/26 "2014-01-21T04:44:37Z")
> [@BrainGlutton](#): > > No, it doesn’t. U.S. currency has not been gold-backed since 1933. The US essentially went back on a gold standard (or a “gold exchange standard” if you like) under the Bretton Woods system from the end of WWII until 1971. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 21, 2014, 5:08am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/27 "2014-01-21T05:08:10Z")
> [@BrightNShiny](#): > > The US essentially went back on a gold standard (or a “gold exchange standard” if you like) under the Bretton Woods system from the end of WWII until 1971. But, that does not mean one could exchange Federal Reserve notes for – or, if you prefer, demand redemption of them in – gold dollars or eagles at any bank or government office. One couldn’t. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 21, 2014, 5:15am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/28 "2014-01-21T05:15:10Z")
> [@BrainGlutton](#): > > But, that does not mean one could exchange Federal Reserve notes for gold dollars or eagles at any bank or government office. One couldn’t. The general public couldn’t, but foreign governments could. I also think certain banking/investment institutions could as well (but I may be misremembering). But I feel like we’re having a semantic issue. I don’t have a problem with making a distinction between the pre-1933 regime and Bretton Woods. ---
**Author:** ![Gateway](https://avatars.discourse-cdn.com/v4/letter/g/dbc845/32.png) [@Gateway](https://boards.straightdope.com/u/Gateway)\ **Post date:** [January 21, 2014, 7:28am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/29 "2014-01-21T07:28:31Z")
> [@septimus](#): > > Cite? (No, I’m not asking you to rephrase the claim. I wonder where you get your financial information and understanding.) Zeitgeist It’s a movie which should be available free online, possibly on youtube. Here is a wikipedia article: [Zeitgeist (film series) - Wikipedia](http://en.wikipedia.org/wiki/Zeitgeist:_The_Movie) It may be the second Zeitgeist movie that I got the info from, or both 1st and 2nd. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 21, 2014, 7:37am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/30 "2014-01-21T07:37:27Z")
> [@Gateway](#): > > Zeitgeist > > It’s a movie which should be available free online, possibly on youtube. Here is a wikipedia article: [Zeitgeist (film series) - Wikipedia](http://en.wikipedia.org/wiki/Zeitgeist:_The_Movie) OK; I’m not overly surprised. Do you see what I’m driving at? I don’t want to sound rude or snarky, but your own link shows > [@](#): > > It presents a number of conspiracy theory-based ideas, such as the Christ myth theory, conspiracy theories about the 9/11 attacks in 2001, and claims that bankers manipulate both the media and the international monetary system. > Released online on June 18, 2007, at [zeitgeistmovie.com](http://zeitgeistmovie.com), it became popular among conspiracy theorists. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 21, 2014, 7:37am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/31 "2014-01-21T07:37:28Z")
I’m not going to watch the movie, but here’s the economic claims according the wiki article: > [@](#): > > Part III claims that the Federal Reserve System is controlled by a small cabal of international bankers who conspire to create global calamities to enrich themselves. Three wars involving the United States during the twentieth century are highlighted as part of this alleged agenda. Events said to have been engineered as excuses to enter into these wars include the sinking of the RMS Lusitania, the attack on Pearl Harbor and the Gulf of Tonkin Incident. The film asserts that such wars serve to sustain conflict in general and force the U.S. government to borrow money, thereby increasing the profits of the international bankers. The film then goes on to claim that the Federal Income Tax is illegal. > > This section also claims the existence of a secret agreement to merge the United States, Canada and Mexico into a North American Union. The creation of this North American Union is then alleged to be a step towards the creation of a single world government. The film speculates that under such a government every human could be implanted with an RFID chip to monitor individuals and suppress dissent. Ok, that’s some grade-A conspiracy crap right there. I mean there is so much to legitimately criticize the Federal Reserve over, that you don’t even have to make up conspiracies if you want to have at them. Oh, and the Federal Income Tax was ratified by the 16th Amendment, so it ain’t illegal. And any sort of actual North American government would require a Constitutional Amendment (or admitting new states from Canada and Mexico, which we would know about if it were happening). ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 21, 2014, 9:22am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/32 "2014-01-21T09:22:36Z")
> [@BrightNShiny](#): > > I mean there is so much to legitimately criticize the Federal Reserve over … Cite? (ETA: On the general theme “U.S. government helps Wall St. at expense of Main St.”, include me in. But I don’t see the FRB as culprit.) ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 21, 2014, 9:30am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/33 "2014-01-21T09:30:26Z")
> [@septimus](#): > > Cite? Well, I think the Fed audit showed very clearly that there are a bunch of conflicts of interests going on at the Fed. The Fed is partly a regulatory agency, and a number of people at the Fed have financial stakes in the institutions they are supposed to be regulating. Plus, the fact that Jamie Dimon was allowed to serve on the Fed after Chase exhibited numerous criminal financial behaviors is pretty eye-rolling. ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [January 21, 2014, 10:03am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/34 "2014-01-21T10:03:04Z")
> [@Gateway](#): > > We are inflating our currency with our central bank. As I understand it the main thing keeping us afloat is the fact that other countries are backed by the US dollar (originally because the US dollar was very solid due to lack of inflation if I am not mistaken). Yes, we are technically inflating our currency. However, inflation is very low - bordering on deflation, which we _really_ do not want (one is not the opposite of the other, and inflation has to get _really_ bad before it becomes anywhere near as bad as even the most minor deflation). The list of countries “backed” by the US dollar is very slim. The main thing keeping us afloat is the fact that despite the miniscule return on investment, due to the low interest rates, people are still buying US bonds. That is, they see these bonds as a more solid investment than just holding onto the money, despite the fact that their interest rates are actually below inflation. > [@](#): > > In any case, if the other countries are seeing that the US dollar is a bad currency to base their money on, they will likely move to another currency (?). If this happens will not the american economy collapse? Well, if the government cannot borrow any money, it will probably go bankrupt, and this would cause a major economic collapse. _However_ - there is no reason to believe that this will ever happen, because basically everywhere else in the world has a vested interest in the stability of the US Dollar and the US economy. > [@Gateway](#): > > But then no one has heard of the idea of other countries getting off the dollar because of inflation? They’re not on the dollar. > [@Try2B\_Comprehensive](#): > > While the question is up, no one has touched on the money in circulation. Trillions of the ‘new dollars’ from the last few years are just sitting there- wealthy institutions and individuals are hoarding, so the effect is as if they aren’t there at all. If they start throwing it around, that could cause inflation, no? This is pretty much predicted by modern Keynesian theory - that inflation is very difficult in a liquidity trap economy, and once those situations end, we will see inflation. However, the fed can deal with inflation, and it sure beats what we’ve got going on now. > [@Gateway](#): > > Zeitgeist > > It’s a movie which should be available free online, possibly on youtube. Here is a wikipedia article: [Zeitgeist (film series) - Wikipedia](http://en.wikipedia.org/wiki/Zeitgeist:_The_Movie) > > It may be the second Zeitgeist movie that I got the info from, or both 1st and 2nd. :smack: Ugh. Zeitgeist is a _terrible_ source. It’s a poorly-researched piece of conspiracy crap that gets almost everything wrong straight from the get-go. I mean, you’d think that it espousing various 9/11 conspiracy theories would be a red flag, but apparently some people believe that crap. Its understanding of economics fails on a very basic level, its claims about Christianity are almost without fail false, and its full of the same conspiracy garbage we’ve all heard a million times. Citing Zeitgeist is like citing Loose Change, or the National Enquirer. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [January 26, 2014, 3:06am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/35 "2014-01-26T03:06:19Z")
> [@Budget\_Player\_Cadet](#): > > Ugh. Zeitgeist is a _terrible_ source. It’s a poorly-researched piece of conspiracy crap that gets almost everything wrong straight from the get-go. I mean, you’d think that it espousing various 9/11 conspiracy theories would be a red flag, but apparently some people believe that crap. Its understanding of economics fails on a very basic level, its claims about Christianity are almost without fail false, and its full of the same conspiracy garbage we’ve all heard a million times. Citing Zeitgeist is like citing Loose Change, or the National Enquirer. I watched zeitgeist before I took a couple of classes in Economics and studied the issues in much greater depth. If I remember right, zeitgeist gave what I now consider to be an incomplete picture of the situation and the functioning of the banking system. I remember the impression I got after watching zeitgeist that the banking system was designed to fleece the populace, and it sounded somewhat plausible. After studying economics in greater depth I got a much more complete picture that aligns much better with observable reality. To me zeitgeist is sort of the equivalent of the whole Acorn thing, creative selective reporting. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [January 26, 2014, 4:18am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/36 "2014-01-26T04:18:35Z")
> [@Little\_Nemo](#): > > As others have noted, no gold is involved. A dollar is worth a dollar and nothing else. Basically, a dollar is backed up by the promise that the United States economy is good for it. You’ll accept a dollar when people offer it you because you have reasonable certainty that other people will accept it in the future when you offer it to them. And this system works - people in other countries, who have no legal requirement to do so (and are even legally forbidden to do so in some cases), accept dollars because they believe in their ongoing value. Which is why not raising the debt ceiling and paying off US debts, or even threatening to do so, as our Republican “friends” advocate, is such a very, very, very, very, very stupid idea. ---
**Author:** ![sweat209](https://avatars.discourse-cdn.com/v4/letter/s/9fc348/32.png) [@sweat209](https://boards.straightdope.com/u/sweat209)\ **Post date:** [January 26, 2014, 6:19am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/37 "2014-01-26T06:19:48Z")
> [@Gateway](#): > > We are inflating our currency with our central bank. As I understand it the main thing keeping us afloat is the fact that other countries are backed by the US dollar (originally because the US dollar was very solid due to lack of inflation if I am not mistaken). > > In any case, if the other countries are seeing that the US dollar is a bad currency to base their money on, they will likely move to another currency (?). If this happens will not the american economy collapse? > > What do you think the likelyhood of this happening is, and what are the signs to watch out for? If it happens what advice do you have (where to move, what actions to take, etc.) That will not cause the US economic collapse want will cause it will be the trillions of trillions dollar debt and for past 20 years no president can fix the high unemployment problem. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [January 26, 2014, 6:41am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/38 "2014-01-26T06:41:12Z")
> [@Fear\_Itself](#): > > So where is the inflation? The stock market, real estate, farmland, etc ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [January 26, 2014, 6:50am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/39 "2014-01-26T06:50:22Z")
Depends what you mean by economic collapse. Everyone is inflating their currency right now so it’s hard to say folks will give up on the dollar. What else will they hold? There will be another recession soon. When that happens watch out because the true believers of inflation are at the helm. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [January 26, 2014, 7:54am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/40 "2014-01-26T07:54:22Z")
> [@WillFarnaby](#): > > The stock market, real estate, farmland, etc That is not what we mean by inflation. [Previous page](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337.md?page=1) [Next page](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337.md?page=3)