1. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13

    What will happen in society if the financial system collapses?

    Discussion in 'Plot Development' started by Leonardo Pisano, Jun 6, 2011.

    I wonder if you guys @CWF could help me a bit with my conspiracy thriller The Money Pit. The story is about a New World Order conspiracy. The leading plot is bringing about a financial collapse, induced by a systematic bank run (not on an individual bank, but on any bank). While I have flashed out the storyline I need some realistic elements (to give the resulting chaos a flavor of reality) what will happen in society (people behavior; governmental actions; ...), and it would be interesting for me to hear other people's ideas/views on the matter, both on the local level and international level.
    Of course if you know of posts/docs where something concrete is written that I could use to derive ideas from is perfect too! Thanks in advance.
     
  2. darkhaloangel
    Offline

    darkhaloangel Active Member

    Joined:
    May 27, 2011
    Messages:
    190
    Likes Received:
    5
    Well people would start trading in goods and services as it was in the old days.

    Craftsmen would get a lot more money, as would people like builders, but they only be paid in other goods, food, drink etc or services, such as swapping a job for an education for their kids.

    In the cities this would be terrible - as many people work in finance or in paper shuffling, which will have less place in the new world order.

    There may be an increase in slavery, prostitution and arranged marriages, as people start being traded.

    It will ultimatley bring out the best and worst of people.

    The govenement or the army - or both may try to take over (for better or worse). Although, I don't really know, personally I think the govenement will step in and create a new currency, which is what happened in Germany post WW1 when their finances went mental.

    Good Luck!
     
    1 person likes this.
  3. McHamlet
    Offline

    McHamlet Member

    Joined:
    Oct 25, 2010
    Messages:
    17
    Likes Received:
    0
    Location:
    Thailand
    Why did the New World Order group want the bank run? What did they think would happen? I'm just wondering because that should set a framework around following events.

    In any case, panic and a certain amount of chaos would ensue as darkhaloangel said. People would, I presume, start to group together in communities more based on proximity than anything else as communications and transport systems would likely break down, at least temporarily depending on the severity of the collapse. There'd likely be riots and looting as people looked for someone to blame or looked for ways to take advantage of the situation. It would be an exciting but mostly unpleasant time I think. A few more details about the background to the crisis and how severe it ended up being might help.

    How for example could a systematic bank run be organized? Almost every adult has one or more bank account, why would they all (or a good many of them) run to take out there money? How was that set up?

    (I'll understand though if you don't want to give away too much of the plot.)
     
  4. JimFlagg
    Offline

    JimFlagg Contributing Member

    Joined:
    Apr 26, 2011
    Messages:
    375
    Likes Received:
    6
    You have to go no further than the Great Depression of the 1930s to see what would happen because it already has.

    "How for example could a systematic bank run be organized? Almost every adult has one or more bank account, why would they all (or a good many of them) run to take out there money? How was that set up?"

    Back before the FDIC, your money was only backed by the bank while it was in the bank. When a bank failed and filed a chapter 11 your money was gone. So when there was news of a bank that was about to fail, people would run to the bank and get their money out while they could.

    Today, peoples bank account are backed up by a form of insurance. It is only for about $250K depending on the type of account. There could still be a small run on the bank by people who have accounts with more than $250K in them but most people are not this rich. Also, this is very unlikely because most banks will merge or sell them selves to another bank when they are having problems; hence the idea of a World Bank in the end times because all banks merge into one. Lets hope that never happens because having a monopoly on banks would be scary.

    Where you would see a run on the bank in today's terms would be in the stock market. People who are invested in a bank may want to sell their stocks causing more people to become scared and want to sell their stocks and it begins to snow ball. This is all done by brokers now so you would not see a bunch of people waiting outside the bank to get their money. It would all be done over the phone.

    I am no economist so I would suggest you find a friend who is studying accounting or economics to help you.
     
  5. njsdca
    Offline

    njsdca New Member

    Joined:
    Jun 6, 2011
    Messages:
    2
    Likes Received:
    0
    Love this idea! I agree with Jim, the great depression is a great way to reference the chaos.

    In addition to that, you can guarentee that this would not just be a financial collapse of national proportions, it would be a global crisis. It's actually pretty interesting because we were EXTREMELY close to this happening (Lehmen Brother's/AIG collapse). I, like darkhalo, believe that the most essential skills will be valuable (medical field, pilots, cooks, farmers, engineers, handymen). Hopefully it wouldn't turn too dark (but I would definitely include that in the story :D) people do crazy things to survive!

    Cool story!
     
  6. Mallory
    Offline

    Mallory Mallegory. Contributor

    Joined:
    Jun 27, 2010
    Messages:
    4,274
    Likes Received:
    191
    Location:
    Tampa Bay
    The dollar would be worthless. It'd take 50 bucks to get, say, a canned soup. Things like orange juice, sweets etc would be pratically impossible luxury items. During the pre-WII collapse in Germany, people were literally carrying around their money in wheelbarrows because it took so much doller currency (cough) to buy even the simplest things. Also, I'd imagine there'd be a lot more violence as people resorted to stealing and robberies just to feed their families.

    Hope I helped.
     
    1 person likes this.
  7. Daydream
    Offline

    Daydream Contributing Member Contributor

    Joined:
    May 3, 2011
    Messages:
    562
    Likes Received:
    13
    Location:
    In another dimension.
    I think a revolution would be very likely.
     
  8. Mallory
    Offline

    Mallory Mallegory. Contributor

    Joined:
    Jun 27, 2010
    Messages:
    4,274
    Likes Received:
    191
    Location:
    Tampa Bay
    Hell yeah. That too. ;)
     
  9. Daydream
    Offline

    Daydream Contributing Member Contributor

    Joined:
    May 3, 2011
    Messages:
    562
    Likes Received:
    13
    Location:
    In another dimension.
    This is actually a really interesting question. Been wandering the same thing. The story I'm currently writing actually deals with a global revolution. Not through a breakdown of the financial system, but through Eugenics.
     
  10. Mallory
    Offline

    Mallory Mallegory. Contributor

    Joined:
    Jun 27, 2010
    Messages:
    4,274
    Likes Received:
    191
    Location:
    Tampa Bay
    ^ Send me a PM if you want any help. I love that type of story. (I've been helping LP with his and it's awesome)
     
  11. Daydream
    Offline

    Daydream Contributing Member Contributor

    Joined:
    May 3, 2011
    Messages:
    562
    Likes Received:
    13
    Location:
    In another dimension.
    Sure that sounds good thanks! I'll give ya an add incase I do :)
     
  12. cybrxkhan
    Offline

    cybrxkhan Contributing Member

    Joined:
    Jun 16, 2009
    Messages:
    423
    Likes Received:
    13
    Coincidentally, one of my stories, while it doesn't actually deal directly with this, deals with events a century or so before a similar economic-political collapse occurs (events that obviously foreshadow and/or lead up to such a collapse). And while it also takes place in a fantasy world (well, light steampunk resembling our late 1800s and early 1900s), I think it also sort of functions similarly storywise. Long story short, the world basically runs out of most of its coal reserves, which has been fueling the Industrial Revolution; no one knows what the heck to do once all the coal has pretty much gone away, so almost everything that relied on coal - from the telecommunications system to the transportation - basically becomes useless. The story itself deals with (well, rather, has as its background (it isn't the most important thing in the story per se)) the deterioration of the largest empire in the world, the leader of this industrialization, and how its lack of political unity and inability to control growing social unrest basically leads it down a spiraling course of self-destruction that the entire world follows.


    Ultimately, it is almost definite that in these kinds of situations, a kind of political change will occur - maybe not an outright collapse of society - and that probably, I think, will be one of the most important things. In your case, since you have only a financial collapse, I'm assuming that implies that other things, such as the power system and the national government, still can theoretically function, even if on a limited scale and/or even if there's tons of pissed people running around. In a financial collapse, the government will obviously have to do something drastic to keep people in check - or face being overwhelmed itself. As someone already pointed out, post-WWI Germany is a decent real-world example. Why did Hitler come to power in the first place? Well, because there were a lot of angry and confused people, and Hitler seemed to be just the focused and determined guy to get them out of the financial bubble.

    Other historical examples abound, even though many of them may not be caused by banking per se. Part of the reason why ancient Rome "fell" was because its economy was getting screwed over, for instance. Imperial China also experienced something similar several times, wherein oftentimes local leaders would gain more power than the main central government, and as the agricultural system starts to fail, civil war breaks out, toppling the current dynasty.
     
  13. Ellipse
    Offline

    Ellipse Contributing Member Contributor

    Joined:
    Jun 8, 2010
    Messages:
    714
    Likes Received:
    32
    Cash can become worthless in society, but gold, silver, and jewels will always have a value. People will hoard those items to pawn or trade as needed.
     
  14. EdFromNY
    Offline

    EdFromNY Hope to improve with age Supporter Contributor

    Joined:
    Jun 13, 2010
    Messages:
    4,681
    Likes Received:
    2,534
    Location:
    Queens, NY
    There are some good comments, but I would offer a cautionary note. As the financial crash of 2008 showed, the kind of systemic failure seen in 1929 is less likely now because governments know they have to intervene. Assuming you are basing your novel in the US, there are structural safeguards, including the FDIC, so that people would not lose everything. In addition, banks borrow from other banks worldwide.

    But the biggest concern, I think, is in constructing a feasible cause for it all. Even in the Great Depression, runs tended to occur on individual banks at various times. It would take quite a lot to convince depositors at every bank that they needed to get everything out immediately. Plus, who would stand to gain even if it were possible to cause it?

    In Debt of Honor, Tom Clancy posited an attack on the financial markets as an act of war (between nations), and even that seemed far fetched. Not asking for details, obviously, just saying it's something I see as a challenge.
     
  15. JimFlagg
    Offline

    JimFlagg Contributing Member

    Joined:
    Apr 26, 2011
    Messages:
    375
    Likes Received:
    6
    Who are you going to revolt against? The government is not responsible for what the Banks do. I guess you could revolt against a bank but once it fails what are you going to do? This is why there was no revolution in the 1930s.

    You could leave the country causing even further economic issues. If this happens, eventually the country becomes so week that another country will attack. It is more likely that a war with another country will happen than a revolution within our own country.
     
  16. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    Hi McHamlet - thanks for your thoughts! The systematic bank run will emerge because there isn't enough cash in the system and people panic... Roughly, fractional reserve banking is responsible for about 1:10 ratio. My guess is that of 3-5% of the people take their money from their accounts the system breaks down... THAT part of the plot is the core of the book and is for me not a problem. I am quite deep in these conspiracy things - see for instance my short stories on my soapbox. It's just that I want a realistic scenario. I think some martial law, complete standstill of economies and local bartering are sensible elements.
     
  17. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    Thank you for your concerns. There is too much to say about this; more than I can write in this space. But to say a little: the elite wants a one-world currency to control the entire economy. At some point they will just pull the trigger. The story unfolds in Europe, but is not much different than in the US. Face it: the US is broke. The cork they are floating on is that the dollar is the world reserve currency, meaning that oil, etc must be purchased with dollars. Just to provoke a little thinking: which country threatened that they would accept other currencies? (Libya). But this side is about writing, not about world politics, so I better stop :)
     
  18. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    Thank you.

    @all: I am not so concerned that my plot is unbelievable in terms of how the systematic run is triggered. See my reply to McHamlet above.
    FWIW: the insurance is covered by ... the US government? And who keeps the government, who produces nothing, afloat? Yes, the people by taking cash payments.... So who is insuring whom, exactly? :eek:
    For whom is interested OUTSIDE this fiction story in what is really going on, PM me.
     
  19. EdFromNY
    Offline

    EdFromNY Hope to improve with age Supporter Contributor

    Joined:
    Jun 13, 2010
    Messages:
    4,681
    Likes Received:
    2,534
    Location:
    Queens, NY
    Well, two things. First, the "elite wanting a one-world currency" and being Europe-centered is kind of odd, considering what consolidation under the Euro has done (see Greece). Second, the US is certainly not broke. In debt, yes, but not broke. I only mention this because with a novel of this type, feasibility is key.
     
  20. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    Yes, gold/silver is an important part of the plot.... Likely their price shoots up tremendously when the fiat money system collapses.
     
  21. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    Good points. BTW, who do you think financed Hitler?
     
  22. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    It's about a cabal for a one-world government and a one-world currency. BTW, this is already in the making: the government structure is IMF/Worldbank for finance, the UN for politics, etc. On these levels decisions are already made -- without any democratic process (ex: US attacks Libya -- didn't go through Congress, or did I miss something?)
    For a one-world currency: the IMF is talking about the bancor - a term coined by John Maynard Keynes. Search these terms and you get a ton of background info.
    But my story is fiction, remember? :)
     
  23. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    It's about an Anglo-American conspiracy by a number of banking families. The Euro is a trial for further consolidation. I am not worried about feasibility/believability.

    The USD is the world currency PLUS their military might keeps them going. As long as you can print your way out (oops: that is old-fashioned; it's now magically called Quantitative Easing), you survive. But at some point China and others will pull the plug and the dollar will come in a tailspin. It's just a matter of time.
    Not sure if I am right -as I am in EU I cannot sense the atmosphere directly- but people in the US tell me the US is rapidly changing. Liberty is taken away by regulations, police brutality everywhere (TSA etc), and so on. I hope my novel is not becoming non-fiction....
     
  24. Leonardo Pisano
    Offline

    Leonardo Pisano Active Member

    Joined:
    Jan 21, 2011
    Messages:
    453
    Likes Received:
    13
    I am grateful for Mallory's support in proofreading, at the moment mainly on the strategy level.

    @DayDream: if you need help with research, feel free to send me a PM.

    @All - thank you your useful ideas and suggestions, and critical notes.
    On my soapbox (blog) I have posted Ch 1 (requires registration), so who is curious just drop by. The short stories are hopefully edutainarial (made that word up!).
     
  25. EdFromNY
    Offline

    EdFromNY Hope to improve with age Supporter Contributor

    Joined:
    Jun 13, 2010
    Messages:
    4,681
    Likes Received:
    2,534
    Location:
    Queens, NY
    No, if anything, China will continue to prop up the system, and eventually use American industry for subcontracting.

    There are certain quarters where that is the view, but it's an extreme view. Regulations are, if anything, weaker than they were 10 years ago (those who don't like the new healthcare legislation would scream, but most of that is hyperbole). Police brutality everywhere? Sorry, just not so. TSA maintains security at airports that is no different than what you see in Europe.

    I won't belabor the points, as you have already indicated that you are not concerned about realism. Every writer makes those calls on his/her own.
     

Share This Page