Prepper Watch – Economy

1. Economic Collapse (Severity: 9)

• Description: A widespread breakdown of economic systems resulting in mass unemployment, the collapse of businesses, severe inflation, and loss of economic activity.
• Explanation: Economic collapse typically involves the total failure of financial systems, causing disruptions across industries and societies. It leads to widespread poverty, food shortages, and social instability. The risk is higher in regions with large debts and underdeveloped crisis management systems.

2. Inflationary and Deflationary Spirals (Severity: 8)

• Description: A situation where inflation or deflation runs out of control, leading to either prices rising sharply (inflation) or decreasing drastically (deflation).
• Explanation: Inflationary spirals cause a loss of purchasing power, while deflationary spirals often lead to recession or depression. Both scenarios can destabilize economies, erode savings, and disrupt the functioning of markets, leading to widespread societal issues.

3. Unemployment (Severity: 7)

• Description: A high rate of unemployment, where a significant portion of the labor force is without work and struggling to find employment.
• Explanation: Unemployment can be both a consequence and a catalyst of economic decline. High unemployment reduces consumer spending, leading to further economic contraction and worsening the unemployment cycle.

4. Loss of Industry (Severity: 8)

• Description: The sudden or prolonged decline of major industries due to factors like technological change, trade barriers, or market demand shifts.
• Explanation: The loss of key industries, particularly those integral to a nation’s economy, can result in mass unemployment and a reduction in national output, worsening economic stability.

5. Stock Market Collapse (Severity: 8)

• Description: A sudden and severe drop in stock prices across the market, typically caused by economic uncertainty or panic.
• Explanation: A stock market collapse can have a ripple effect on the wider economy, undermining investor confidence, reducing consumer wealth, and affecting businesses that rely on stock value for capital.

6. Cyber Attack Causing Chaos (Severity: 9)

• Description: A large-scale cyber attack that targets key infrastructure, such as financial institutions, government services, or utilities.
• Explanation: Cyber attacks can bring down essential systems like banking networks, causing chaos in the economy, disrupting services, and even leading to a collapse of trust in digital systems.

7. Bank Runs (Severity: 9)

• Description: A situation in which many people attempt to withdraw their funds from a bank simultaneously due to fears of insolvency.
• Explanation: Bank runs can lead to the collapse of financial institutions, as they are unable to provide enough liquidity to meet withdrawal demands. This further deepens a financial crisis and often triggers wider economic turmoil.

8. Loss of Access to Credit (Severity: 9)

• Description: When individuals or businesses can no longer obtain credit from financial institutions due to systemic risk or financial crises.
• Explanation: Access to credit is vital for both personal and business activities. Without it, businesses can’t operate effectively, and consumers can’t make purchases, leading to economic paralysis and prolonged recession.

9. Global Economic Crises (Severity: 8)

• Description: A global economic downturn caused by issues like financial instability, trade wars, or global supply chain disruptions.
• Explanation: A global economic crisis can trigger widespread unemployment, market crashes, and inflation worldwide. Since economies are interconnected, crises can spread rapidly, affecting global trade and investment.

10. National Debt Defaults (Severity: 9)

• Description: When a government fails to meet its debt obligations, leading to a default on bonds or loans.
• Explanation: Defaulting on debt can cause severe financial instability, loss of investor confidence, and potential devaluation of the currency. It often results in international consequences, affecting trade and investment flows.

11. Hyperinflation (Severity: 10)

• Description: A situation where prices increase exponentially, and the value of the currency rapidly declines.
• Explanation: Hyperinflation destroys the value of money, causing severe economic and social disruption. People may turn to bartering, currency alternatives, or even foreign currencies to survive, making the official currency practically worthless.

12. Currency Devaluation (Severity: 8)

• Description: A decrease in the value of a country’s currency relative to others, often caused by government policies or economic instability.
• Explanation: Currency devaluation can result in increased costs for imports, higher inflation, and reduced purchasing power. It often leads to public dissatisfaction and economic dislocation.

13. Mass Layoffs (Severity: 7)

• Description: A situation in which large numbers of workers are laid off across industries or sectors.
• Explanation: Mass layoffs can lead to increased unemployment rates, decreased consumer confidence, and lower demand for goods and services, thereby exacerbating economic downturns.

14. Financial Market Disruption or Crash (Severity: 8)

• Description: A sudden and significant disruption in financial markets due to factors like economic uncertainty, asset bubbles, or external shocks.
• Explanation: A financial market crash can trigger widespread panic, leading to a loss of wealth and investor confidence, with severe repercussions for the economy at large.

15. Real Estate Bubble Bursts (Severity: 8)

• Description: A sudden drop in real estate prices after a prolonged period of inflated property values.
• Explanation: The bursting of a real estate bubble can cause significant financial loss for homeowners, investors, and banks, resulting in a broader economic downturn.

16. Banking System Failures (Severity: 9)

• Description: A systemic failure of banking institutions due to insolvency, poor management, or a breakdown in trust.
• Explanation: Banking system failures can result in a loss of savings, reduced access to credit, and a breakdown of essential financial services, plunging the economy into a deep crisis.

17. Digital-Only Currency Risks (CBDCs) (Severity: 9)

• Description: The rise of government-controlled digital currencies (Central Bank Digital Currencies or CBDCs) poses risks related to privacy, security, and overreach.
• Explanation: While CBDCs offer potential benefits, such as increased control over the monetary system, they could also expose individuals to surveillance, data breaches, and centralization of financial control, leading to potential social and economic instability.

18. Loss of Access to Funds (Severity: 10)

• Description: A situation where individuals and businesses cannot access their funds due to systemic failures, government restrictions, or financial institution closures.
• Explanation: Without access to funds, individuals can’t meet daily needs, and businesses can’t operate. This severe limitation on financial freedom can lead to a complete collapse of economic activity in the affected area.

19. Trade Wars (Severity: 8)

• Description: Conflicts between countries involving tariffs, trade barriers, and restrictions that harm international trade.
• Explanation: Trade wars can disrupt global supply chains, increase costs for businesses and consumers, and destabilize global markets, contributing to economic downturns.

20. Collapse of Global Reserve Currency (Severity: 9)

• Description: The collapse of a currency that serves as the global reserve currency, such as the US dollar, could drastically impact international trade.
• Explanation: The collapse of a reserve currency would disrupt global markets, leading to economic uncertainty, increased costs for trade, and potential instability in international financial systems.