The stages [of the crash] are laid out below. The first three have already occurred.
1 INITIAL CRASHES
- Crash of the residential property market
- Crash of the commercial property market
- Crash of the stock market
2 INITIAL KNOCK-ON EFFECTS OF CRASHES
- Loss of homes
- Loss of jobs
3 IMMEDIATE ACTIONS BY GOVERNMENT
- Bailouts for select groups
- Dramatic increase of debt
- Politicians going in the opposite direction of a real solution
The first knee-jerk reaction began immediately, with the Government attempting to "make the problem go away" as quickly as possible. Almost invariably, at this stage, the corrective strategy is hastily prepared and shortsighted, assuring further deterioration of the economy.
In this stage, the politicians on both sides fail to focus on a real solution. Instead, their primary focuses are, first, to avoid a painful real solution, and, second, to engage in finger-pointing, each political party blaming the other for the problem. The problem worsens steadily until one of the next series of major dominoes falls. This is usually sudden and triggers the toppling of other dominoes.
4 SECOND WAVE OF CRASHES
- Major crash in stock market
- Currency plummets
- Increased bankruptcies
- Increased unemployment
5 INTERNATIONAL TRADING PARTNERS REACT
- Foreign countries refuse to accept more debt
- Foreign trade slows dramatically
At this point, the Government introduces dramatic change, such as ill-conceived protectionism, which backfires almost immediately.
6 GOVERNMENT INSTITUTES DESPERATE SELF-DESTRUCTIVE MEASURES
- Defaults on debt
- Restrictive tariffs on imports
- Currency controls
7 ECONOMY REACTS IN LOCKSTEP TO GOVERNMENT ACTIONS
- Hyperinflation - dramatic increase in food and fuel costs
- Massive unemployment
- Extensive foreclosures
- Extensive bankruptcies
At this point, the dominoes are tumbling quickly, and a rapid unraveling of control is about to take place.
8 SYSTEMIC COLLAPSE
- Bank closures
- Extensive homelessness
- Food and fuel shortages
- Electric power becomes sporadic, blackouts common
As these factors unravel, the public mood turns to a combination of blind fear and anger.
9 SOCIAL COLLAPSE
- Crime rises dramatically (particularly street crime)
- Food riots
- Tax revolts
- Squatters' rebellions
10 MARTIAL LAW
- Creation of special army to address "domestic terrorism"
- Random killings become commonplace
At first, the authorities focus mostly on violent subjugation and arrests; then, as prisons quickly become hopelessly overcrowded, camps become the norm. Soon, these too become unmanageable, particularly as a result of high cost of food and manpower. At that point, the solution turns to the killing of anyone who is suspected of a crime and, more frequently, anyone who is not submissive. (This will not resemble the Gestapo of the late 1930's. It will be less organized and more chaotic.)
If revolution is to occur, it will happen at this point. Many people will feel that they have nothing to lose, and anger will be at its peak. If revolution does take place, it will not be an organized movement as such. It will be spontaneous, and breakouts will manifest themselves like popcorn popping, largely at random, with ever-increasing frequency. At some point, it may possibly evolve into something more organized.