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This past year was jam packed with news of all sorts.  Some was surprising, some of it was expected, while other news seemed to either be another dot to connect or an outlier dot to be connected later.  We even got news from time to time which even in today’s world could be considered bizarre or surreal.  Suffice it to say, were we receiving the current news of today just 15 years back, the financial and social worlds would have been in outright panic.  Not so today, the sheep are sound asleep even while a few well intending herders are sounding the alarm.  The populace in general have become dumbed down, beaten down and barely able to read past whatever headline it happens to be for the day.  Let’s call the condition “comfortably numb”…

I promised to write a “fictional” account of what my thoughts were “the day after” the financial lights go out.  This effort could easily be expanded into a full book because the ramifications of the coming credit meltdown are so far reaching.  The following is my opinion and as such, if you don’t agree with some of the possibilities I will provide, then please just smile, grin and bear it or just stop reading.  Here goes…

For years Jack and Jill America had gone through the daily life of what they believed was the American dream.  They’ve been married 25 years and have their 2.3 children.  Life has been getting tougher though, Jack and Jill both work but neither has had a substantive raise in nearly 10 years and their firstborn is now 3 years into college with the younger one getting ready for next fall.  They have accumulated some assets over the years but will have to refi their home’s equity to complete paying for college.  They’ve done everything they were told to do by the mainstream.  They’ve contributed to their 401K’s at work and even added to personal IRA’s and even 529 plans to help pay for college.  Jack and Jill have so far “climbed the hill” of life without any major setbacks, this is about to change as will their entire life!

Going into a long weekend, Jack and Jill have a conversation over dinner.  They talk about the recent headlines they’ve been reading and the topic turns to the economy and markets.  The Dow just five days ago hit an all-time high and the employment news earlier in the morning was really good!  The problem is, the employment news said the housing industry was doing terrific, particularly in their region.  Jill works in the mortgage market and Jack works for a bank so they both know this news doesn’t really add up, the discussion morphs into “are they really telling us the truth”?

Then, something starts to happen at the front of the restaurant.  It looks like four or five couples are all arguing with the owner and the discussion is becoming heated.  You see, their credit cards are not working, none of them!  One gentleman slips out to cross the street and get cash from the ATM to pay his bill …but he came back empty handed.  The “tone” begins to change once another customer who went to a different ATM machine returns with the news his card was also denied.  The owner decides to call the police because it looks like he is going to be stiffed on most all of the tables since he generally is paid by credit or debit card 85-90% of the time.  The police inform him this is happening everywhere in the city, at gas stations, Walmart, restaurants, everywhere!  So, Jack leaves his business card and promises to come back on Monday to pay, a nice gesture but one he had no idea was pointless!

They spend the weekend watching the news feverishly because they found out it was not “just” their city having these problems …it was all across the nation.  They feel some relief on Saturday morning as the “news” tells them a coordinated hack attack has taken down the clearing system for banks and is only temporary…but their warm fuzzy feeling turns to near fear when they go online to the internet.  It turns out, the banks are being closed indefinitely and something about China and gold …and dollars being refused by foreigners.  Jack doesn’t get it nor does Jill, how can this be?  What do you mean the banks are closed and dollars not being accepted?  Dollars are used all over the world …and what is Jack supposed to do Monday morning if his bank is closed?  Will they still pay him his salary?

Monday morning comes and Jack goes to work only to find a sign in the front door “Bank closed indefinitely, sorry for the inconvenience” and a sign on the employee entrance with a phone number to call.  He calls and gets a recording, “due to circumstances out of our control, you will not be required to attend work until further notice”.  A cold chill washes down his back and he calls Jill.  She is already on her way home because her mortgage company is also closed, what are they going to do they wonder?  The first thought in both their minds is “food,” what are we going to do for food?  When they meet back at the house, Jack pulls out $300 from a drawer that he tucked away after coming back from vacation last month.  On their way to the store, they see huge lines as they pass gas stations.  They both wonder why there are lines since credit cards aren’t working but they soon find out …the grocery store is mobbed and the shelves are almost bare.  All of the canned goods are gone as are the basic staples like rice, pasta and beans.  There are a few vegetables left, along with spices and condiments but nothing else.  They were apparently too late.

As they were leaving the store, Jill thought, “what about dog food” for our 3 beloved canine children?  Just as she started to say something, shots rang out and a big commotion near aisle nine.  Oh my God said Jack, this whole thing is breaking down!  They rushed out of harm’s way, got in their car and sped home.  How could this happen they wondered as the stock market was near all-time highs?  How could “hackers” create such a havoc and now apparently some lives are going to be lost?  How could this happen, THIS IS AMERICA!

As they pull into their subdivision with the intent of getting online to get a better idea of what was actually happening, they are stunned when they see a sign at the front gate.  The sign says “MANDATORY MEETING for ALL HOMEOWNERS tonight at 7:00 PM”.  They just look at each other and say “this is not good”.  What is going to happen?  They were about to find out!

With trepidation, Jack and Jill showed up at the completely filled community center, the pitch and decibel level were off the charts.  So much commotion and so loud, until some guy started clanging two metal garbage can tops together to get people to quiet down.  As it turns out, the “guy” happens to be a long time County Sherriff’s Deputy, Dave.  He informs the crowd that they are now on their own, as is everyone else in the country.  The banking system has come down and will not be back up for an indefinite period of time, “the big one” everyone knew was coming but had ignored for so long, has finally arrived.  The National Guard has been called out to the cities as have regular military.  The cities are war zones he says, it’s only a matter of time before it spills out and into the suburbs.

The deputy also informs everyone that he will not be going to work the next day as he would not be paid anyway.  He lives in this neighborhood and plans to stay home to protect his family and belongings, he also informs “all of my other coworkers have made the same decision,” we are all on our own now.  Most shocking to Jill was when he asked for a show of hands as to who had firearms and who didn’t.  She had no idea that almost three quarters of her neighborhood had guns.  She was not a real fan of guns but Jack convinced her they should get their concealed handgun licenses.  They had had their licenses for several years but the sad part is they never bought any guns because they didn’t see any immediate need, they do now!

Deputy Dave pretty much took over from that point.  He chose who he wanted “guarding the gates” for a rotation on a 24 hour basis.  The neighborhood also had several ex-military personnel.  In almost light switch fashion, the community turned into a functioning military garrison.  He also made clear, any crime from within would be dealt with swiftly and severely, theft of anything from within would be considered a capital offense.  Groups began to form.  Close neighbors began to group up and talk to each other.  Jack and Jill saw three of their immediate neighbors all together and approached them.  What are we going to do they all asked?

What exactly did “indefinitely” mean?  One neighbor said he didn’t think there would be much of a problem for more than a week or so as his computer geek friends told him the problem was being fixed.  Another neighbor said he wouldn’t be so sure of that, the Chinese have asked for an audit of U.S. gold and would not accept any dollars for any trade until they were satisfied we still had some gold to back our dollars.  He went on to say the Chinese were rumored to be paying $50,000 per ounce for any and all gold for sale which would make U.S. gold worth trillions of $ …if we still had it.  Jack asked the question, “what does gold have to do with any of this, dollars are in the banks, not gold?”  You see, Jack, (like 95%+ of the populace) even being in the financial world didn’t understand what was happening even after the fact.  His ignorant bliss was being shattered.

Several days passed, the dog food was almost all gone.  Jack looked in the pantry and calculated they could keep eating for another 5 days before the food was completely gone.  There had been talk about food pantries the government was setting up in cities, word also got around about one opening in the little town three miles away.  Jack thought to himself, at least we won’t starve.  His relief then turned to panic as Jill came in from next door, she was just informed that one of the neighbors was shot and killed as he was leaving town.  He had gone in and bartered for a little bit of food, now, he and the food were both gone.  In less than one full week, the United States had gone from “model civility” to lawlessness.

Jack was furiously thinking about what he could do to feed his family.  He remembered the little old lady down by the river who had chickens, maybe he could buy some eggs?  She was only two miles away and it would be safe to go on foot by jumping a couple of fence lines, so he told Jill his plan and set out with his $300 cash in hand.  Sure enough, the little old lady was there and she met Jack with a shotgun pointed, she remembered him though from the bank.  Jack asked if he could buy some eggs and she said “with what?”.  Jack told her he would gladly give her $20 for a dozen eggs and the old lady just laughed at him.  He said “how about $100 for a dozen?” she laughed again and said he couldn’t have any eggs for $1,000.  She would however consider accepting something “real” in exchange.  If he had a bicycle, or some 20 gage shotgun shells or something she could use, then he’d have some eggs.  She thought to herself, this guy is a banker and understands money, maybe he has silver for exchange? … (Fat chance, I had to throw this one in for laughs!)

Jack got back home and told Jill the bad news about the eggs, he said the old lady actually wanted “something” for the eggs instead of his dollars.  Jill now thought to herself, maybe jewelry or cooking utensils?  What about her handheld sewing machine?  Jill made the trek herself and did end up coming back with two dozen eggs and a promise for four dozen more next over the next 2 weeks so at least they would have something be it ever so small to eat for a time.

This little bright spot turned dark pretty quickly as all of a sudden the lights went out.  They had not thought of this, nor did they think about their water supply.  People were getting sick from drinking the water as the plant workers were not working to purify it.  But now, now that the electricity is out, so is the water supply.  No electricity = no pumps, no pumps = no flow, could it get any worse?

Jack and Jill lived for this first two week period after the banks shut down as well as they could considering their circumstances.  They had little food stocked up.  Nothing much to barter with.  Even though they only lived two miles from a river, they had no way to purify water.  If they did have food stocked up, they didn’t have any guns or ammunition to protect it (but they did have their “licenses!”) or themselves from other hungry souls in search of food.  They went from a casual dinner together one Friday night to living like barbarians within two weeks.  They had no clue whatsoever was coming, and when it did, they had no idea nor ability to deal with it.

As I mentioned at the beginning, this saga is fodder for an entire book.  I apologize for not touching on all facets but it just could not be done in the space available.  Suffice it to say, when the banking system comes down, EVERYTHING will change.  Think of what life will be like within cities?  Think about the average American today.  50 million live on food stamps and over half have less than $500 in savings.  These people don’t have the ability to prepare.  Think of the millionaires out there who have their wealth in banks?  Or in stocks which cannot be traded?  How many Americans can live off of the land today?  Five percent?  Less?

Without credit, nothing will work.  Distribution will definitely break down which means after the shelves are cleared, they will not be re stocked.  A new currency, one the people can have faith in as well as one that foreigners will accept will by necessity be introduced.  How long a banking/system closure takes place is anyone’s guess, however, it is not a guess that a financial panic will engulf the U.S. as well as most of the world.  We have lived a fantasy which has also engulfed “values” of all sorts.  Asset values, wage values as well as social values.  All of these will be re set.  I can assure you, the “mindset” of this nation will change more drastically than any time in her history.  I believe we will see a major shift in ideology, ethics and faith.  If anything good can come from what I believe is coming, it will be this shift in thought process toward truthfulness and godliness.  We as a nation have been moved so far down the rabbit hole on purpose to hide what was happening.  Our society has been so dumbed down, the really sad part is when the tsunami does hit …the majority will still not understand why.

I assume if you are reading this then you already know “why,” your job now is to decide “what?”.  “What?” …as in what you should do to prepare the best you can for what is mathematically coming!