Aside from variable economic indicators, inverted yield curves, ect., what are the few things that happen preceding the collapse of an economy. Is it skyrocketing prices of precious metals, divestment against currency, government printing ridiculously large notes…?
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ELI5: The economy is like a big piggy bank that we all use to buy things we need and want. When the piggy bank is full, there’s a lot of money for everyone to use, and things are good. But sometimes, the piggy bank might start to run low, and that’s when we say the economy is “collapsing”.
Imagine you and your friends have a big toy box that you all share. One day, you notice that there are less toys in the box and some of your friends are fighting over the toys that are left. That’s kind of like what happens when the economy is collapsing. There’s not enough money for everyone, so people start to get worried and things can get a little chaotic.
It’s like when you go to the store with your mom or dad, and they tell you they don’t have enough money to buy all the things you want. That’s because the piggy bank is running low, and they have to be careful with how they spend their money.
TL;DR: The economy can be thought of as a big piggy bank that we all use to buy things we need and want. When the piggy bank is full, there’s plenty of money for everyone, but when it starts to run low, we say the economy is collapsing. This can happen when there’s not enough money for everyone and people start to get worried about how they’re going to buy what they need.
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