The economy is on the verge of collapse. It's no secret that our country is facing a lot of problems right now, but it would be naïve to think these issues will go away anytime soon. In fact, they're only going to get worse as time goes on. If you want to know what might happen next and how you can prepare yourself for it, we've got all the information here:
Lower purchasing power for wages.
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. It affects everyone, but it can be felt more acutely by those on low incomes.
Inflation occurs when the supply of money increases faster than the supply of goods and services available for sale in an economy. When this happens, there are more dollars chasing fewer goods, so prices tend to increase as a result (this is also known as inflation).
For example, if you have 10 apples and someone offers you $1 each for one apple or $2 each for two apples, which would you choose? You might take home two apples because they’re worth twice as much—but what if tomorrow everyone else asks twice what they paid yesterday? Suddenly your apples aren’t worth nearly as much anymore; they haven’t changed at all physically—but their value has decreased because everyone else now wants them too! This leads us back again to our initial question: why does inflation affect wages negatively?
Government intervention in financial markets.
Government intervention in financial markets is one of the signs of an economic collapse. When a government intervenes, they are showing that they don't have faith in the free market to work itself out.
The government may intervene through bailouts, quantitative easing or legislation. Bailouts occur when the government steps in to help a corporation or industry stay afloat when it's on the brink of collapse. Quantitative easing is when a central bank prints money and injects it into their economy to stimulate growth and prevent deflation (which is bad). The third way that governments intervene is called "legislation" where they make laws limiting what companies can do with their money (like how banks used to be required by law not to lend more than 10% of their deposits).
Declining consumer confidence.
Are you worried about the economy? Are you concerned about your job security, retirement funds, or savings? Have you been watching your investments and wondering if they're safe? If so, you're not alone. A study by CNBC shows that consumer confidence is at an all-time low: “The most tangible evidence of this economic anxiety was a record high in the number of Americans who said they were worried about their personal finances and economic prospects over the next year.” That's right—people feel like they might lose everything! And it's not just middle class people who are feeling this way; many wealthy individuals think that they could soon be living in poverty as well.
High national debt levels.
A country's debt is defined as the total amount of money it owes. This could be in the form of bonds, loans or deficits. Debt can be good or bad depending on how much is borrowed and what assets are purchased with it. For example, if a country borrows money to build infrastructure like highways and bridges, this can help increase productivity and growth for future generations. However, if a country borrows money on credit cards without any plan for repayment then it will eventually default on its debt payments as well as lose credibility with investors who may choose not to lend more money in the future
Excessive consumerism and low savings rates.
You may be tempted to spend your way out of this mess, but don't. Consumption is not a good thing—it's just another form of borrowing or debt, and it can lead to economic collapse.
Consumption is not the same as savings. Just because you're saving money doesn't mean that you're spending less than you make; it just means that you're investing more in things like stocks, bonds, and real estate instead of blowing all your money on food and beer like an idiot.
Consumption is not the same as investment: When someone invests in something (like a startup), they're putting their money into something that could be profitable later on down the line—and if it does turn out profitable someday then there's no guarantee that anyone will actually get any benefit from those profits at all since there might not have been enough profit generated yet for everyone who invested early on before going public with their business model to reap any benefit themselves yet (this dynamic explains why so many people worked hard only to lose out when companies such as Enron went bankrupt).
There are many things pointing toward an economic collapse
There are many signs that the economy is on the verge of collapse, including:
a recession, which is a period of lowered economic activity
uncertainty about future economic conditions
financial instability and/or decline in value of currency (i.e., inflation)
If you are worried about the future of our economy, take heart. While there is no guarantee that we will avoid collapse, there is a lot we can do to help ourselves in the event that it does happen. The first step is to start becoming more self-sufficient and less dependent on others for our needs and wants. That way if things get bad enough where we have no choice but to live off the land then at least it won't be so hard because we've already learned how!