Biggest casualty of WWIII - fractional reserve banking?

[atiff]

Hi all,

One thing I keep wondering about is the effect of the Twilight War smashing up the fractional reserve banking system. EMP would wipe out lots of digital records, and bank runs would wipe out pretty much all banks, I would imagine. I think this would lead to massive social problems, to put it mildly...

- The shooting war starts in China, interest rates go up (risk) and stocks go down; bank runs shut some institutions, refinancing debt kills off some companies
- Ditto again when Germany opens up the European front, but possibly larger scale given the central role of Germany in European banking
- First nuke attacks wipe out China's ability to repay debt; banks forced over the edge in writing off Chinese loans that paid for military equipment?
- Nuke attacks in Europe and North America gut the electronic banking system, shutting down most/all major forms of modern commerce, and economies grind to a halt.

Has anyone put thought into this area of effect of the conflict?

[helbent4]

Atiff,

That's some great thinking!

I think the global economy would crash, especially after the destruction of much of the world's petroleum extraction, transportation and refining capacity. This would account for a general shift to a barter/scrip or gold economy.

Records may still remain; you'd think that with the threat of nuclear warfare there would be backups made and stored underground or in Faraday cages. However, the collapse of financial and banking institutions would mean the records are of little

Tony

[Mohoender]

This would be of little consequence and huge ones. It will wiped out the ability to pay debt but it will make debts disapear anyway.

Money and exchange systems will be refunded. The way we think commerce will disappear but we will refund commerce and use new/old ways:
- back to barter
- having gold or land will be better than having a ton of useless banknotes.
- Values of things will change and what you think of being valuable will quickly become scrap.

No big deal.:p

[atiff]

I was thinking not just of personal commerce, but governmental commerce as well. For example:

Someone just mentioned in another thread about maybe the US Govt buying Pucaras from Argentina after the nukes - with what would they do that?

How are governments going to buy petroleum? Pay equipment contractors? Buy MREs? etc....

I think it turns into "appropriation" rather than "payment" quite quickly. And I think it all turns sour really quickly as well. Thoughts?

[helbent4]

Someone just mentioned in another thread about maybe the US Govt buying Pucaras from Argentina after the nukes - with what would they do that?



Atiff,

Glad you asked: hookers and cocaine! No, seriously, gold bullion would be a good bet.

If Argentina wasn't affected by EMP, then they could literally run a tab with the government.

Unfortunately, appropriation is probably going to happen. I'm not sure if the US government is obliged to compensate people in this case, In Canada tey are, under the law (a War emergency under the Emergencies Act).

Tony