Apocalyptic movies usually involve one of six things; zombies, robots, nuclear warfare, natural disasters, aliens and demons. All these concepts of a dystopian world continue to drive the masses to craze. However, pop culture somehow missed one type of world-destroying event; ECONOMIC CRISIS. Most people aren’t aware of its danger and miss out on starting their economic collapse preparation.
How important is it to start your economic collapse preparation? Can economies really collapse? After all, the government can just print more money, right? WRONG. And yes, an entire country’s economy can actually collapse and lead to starvation. It will plunge tje commodity trade and might even lead to enforced labor to keep the country afloat! Curious? Read on to find out more.
In this article, you will learn about:
- The History and Effects of Economic Collapse
- Reasons you need to start on economic collapse preparation
- How you can start with your economic collapse preparation
Economic Collapse and Survivalism
I know what you are thinking. “Why is a prepper blog discussing financial matters?”
Yeah, I know it sounds weird when a prepper blog talks about something not related to bushcrafting and survivalism. BUT, if you look back at the history of survivalism, preppers are more known for preparing for economic crisis than bushcrafting.
The original concept of survivalism rooted in the Cold War era. The fear and threat of social and economic collapse and nuclear warfare. Fear was worsened by the 1960 inflation and US monetary devaluation. It was perceived that the government and the market can fail to provide supply to the public if shortages and system failures occur. Hence, the idea of economic collapse preparation.
Why You Should Start Your Economic Collapse Preparation
“Great Depression”. Perhaps that phrase is enough to explain why you should start in economic collapse preparation. While technically not a form of economic collapse, the Great Depression is the best example of a crisis you should be prepared to deal with.
The Great Depression was a world-shaking economic crisis that toppled world economy and caused job-loss and inflation to sweep across the world. The United States alone had an unemployment rate increase of 607% and foreign trade shift of -70%. This caused a chain reaction that rippled to other countries who had a trade relations with the United States. Worse, the situation was aggravated by the retaliatory tariffs imposed by countries for the sake of self-preservation.
Learn from History
As preppers, we learned three things from the Great Depression:
- Even if your country is an economic superpower, the economy can collapse once a major trade partner undergoes a period of depression.
- The world economy can collapse from debilitating decisions of local government. Just like the case of the retaliatory tariffs.
- Having a job in a stable company does not necessarily mean you’re financially secured. The 607% unemployment rate increase is a big proof and so are the thousands of business establishments that were forced to close.
Examples of Economic Collapse
Truly, the Great Depression was terrifying enough. Unfortunately, it was not the only economic collapse that bent the flow of history. The following are notable cases of how drastic economic collapse can affect a country:
- Economic Collapse of USSR (1980) – an increase in death rate swept across Russia. It was notable that a big chunk of the death rate comprised of men over 50 years old. The primary cause of death was alcohol.
- The 1998 Russian Financial Crisis – right after the recovery from the USSR economic collapse. Russia suffered from drastic cuts from government budgets and low prices as result of the Cold War.
- The Present Venezuelan Economic Crisis (2013-present) – the economic policies of the president, Nicolas Maduro along with the fall of oil prices and several other factors, caused the economy of Venezuela to collapse. The GDP fell by 40% while crime, corruption, poverty and hunger drastically increased.
- Hyperinflation of Weimar Germany Economy (1920)- the Weimar Republic suffered from hyperinflation. German mark was devalued to a point that a US dollar was worth 7,400 marks by December 1922. It was caused by a plethora of factors including reparations, excessive printing of money and many others. German mark became useless and Germany had to buy foreign currency and commodities using goods and services.
Years later, Bruning’s Policy of Deflation came into effect. The policy exacerbated the economic crash and made the public grow wearier of democracy. Therefore, paving the way for Adolf Hitler’s NSDAP. Yep, you read that right. As I mentioned earlier, economic collapse can give rise to a fascist party that is ready to assimilate the world!
How to Start Your Economic Collapse Preparation?
Reading the examples above, you are probably more than convinced that you SHOULD start your economic collapse preparation. RIGHT NOW! Hence, I laid out a few guidelines to help kickstart your journey to preparedness. Brace yourself and be astonished by the following financial life hacks.
Step 1: Always Have a Cash on Hand
A crashing economy moves faster than a Nazi blitzkrieg. Prices are always volatile and increasing. Hence, you only have a short time limit to react. If your country’s economy begins to crash, your cash can decline to a few cents-worth in a matter of days. This is where your cash-on-hand comes in. Always have cash on hand for your economic collapse preparation. You can either utilize your money to buy necessities before cash value drops. More importantly, you can save them until you really need to spend. The latter choice is more feasible if you have prepared in terms of basic necessities such as food and water.
In addition, cash-on-hand is the fastest source of money. Other sources of cash (such as receivables and cash on the bank) can take time to liquidate. Moreover, the cash in your bank can magically disappear if the bank goes bankrupt as a result of the economic crisis and mass panic-withdrawal.
Step 2: Get out of being Indebted
During an economic collapse, your primary concern will be your family’s survival. However, a ghost from the past named “debt” can come knocking on your door. Your creditor needs to ensure his/her survival too, right? Chances are, your creditor will exhaust legal options to squeeze your debt out of your wallet thus taking away chunks of your budget. It will be too much of a hassle to face both your creditor’s wrath and the economic collapse. Instead of only having to allocate budget for your survival, you have to pay for something that will not help you deal with the economic crisis.
It is sometimes inevitable to become indebted, especially if you have a business and is looking to expand. Just keep in mind that you should get out of your debt as soon as possible before taking the next step on economic collapse preparation. Especially if the interest rate is not so negligible.
Step 3: Prepare a stash of Basic Necessities
Here is something a little more bushcraft-related for you; prepare a stash of food, water, medicine, and other basic necessities for your economic collapse preparation. The keyword here is “Self-sufficiency”.
If an economy collapses, the chance of finding basic supplies shrink. During a crisis, supply chains can be disrupted to a point that the supplies will not reach the market on time. Producers will become bankrupt because of price drops. Then, markets are either forced to sell on very high prices to cut losses or sell on very low prices for fear of further devaluation. Either way, panic buying will be a trend. If you are one of those who did not store necessary supplies, you’ll have to cross your fingers every single time you go to the market.
“Health is wealth.” During an economic collapse, that statement is quite literal. You should stay able-bodied for as long as possible so that you can continue the path of self-sufficiency. Hence, you should fend off diseases. Trying to avoid getting sick is part of your economic collapse preparation.
For starters, you should store a couple of Med kits which contains everything related first-aid stuff such as tourniquet, sterilization, lubrication and antibiotic medicine. Here is a list of items you should have in your first aid kit:
- Adhesive Tape
- Duct Tape
- Super Glue
- Rubber tourniquet
- Plastic bags
- Hand Sanitizers
- Aluminum Finger Splint
- Antiseptic Solution
- Spoon and Medicine Cup
- Antibiotic ointment and medicine
- Analgesic medicine
- Antipyretic medicine
In addition, you should also prepare the following basic medications in your medicine cabinet:
- Cough Medications
- Cold Medications
- Pain relievers
- Analgesic, antipyretic and antibiotic medicine
Stock as much of these medications as possible. You’ll never know when you’ll need them. Just imagine yourself having constipation during the collapse with no laxative in your cabinet! OUCH! Kidding aside, a good overall health is necessary for being self-sufficient. Furthermore, medications can possibly be traded as a commodity in case cash is too devalued to be used.
An empty stomach is a bad way of self-preservation. If you want to outlast an economic crisis, you need your full strength working and thinking your way out for your economic collapse preparation. Check out the following guidelines:
- Canned goods are your best bet. They are well-preserved and will take a long time to expire.
- Canned meats will last for a long time and are good sources of protein.
- Carbohydrate is king. You will need extra energy to outlast the economic apocalypse, I mean crisis. Keeping rice, pasta or cereals around is a good choice. Specifically, rice is a wise choice since it can last for a long time if stored properly.
- Canned fruits and vegetables take up too much space and provide fewer carbohydrates. However, they are good sources of vitamins so consider them if you have enough space available. Alternatively, you can settle to the Carb is king philosophy and take multivitamins to cope up for the lost nutrition.
- Only prepare food you actually like to eat. Why? Because you can eat them when the expiration timer is about to hit zero, assuming the crisis don’t occur.
- Powdered milk can last for a long time and provides vital nutrients such as Amino acids, protein, carbs, calcium, and potassium.
- Try to be as self-sufficient as possible. That is, have renewable sources of food such as a vegetable garden or a fish pen. Passive income is a thing, even in terms of food!
You won’t last for more than 4 days without water. Therefore, storing water is a must. You can refer to our separate post about long-term storage of water for a detailed instruction. For the basics, you can refer to the guidelines below.
- Become self-sufficient with your water supply. You can use water filters to make obscure water potable.
- Only use food grade containers for storing your water.
- Always have small bottles of water ready in case you need to quickly abandon your home.
Step 4: Have a Passive Income
As crisis strikes, there is no guarantee that you will retain your beloved job. As the Great Depression proved, even the mightiest companies can be knocked down by a well-placed financial jab. Hence, there is no such thing as a stable job. Having a passive income helps you in your economic collapse preparation.
Even if your company does not rely on supply chains and is focused on rendering service (firms, call centers, agencies etc.), the client base can be cut by the collapse itself. Thus, you should establish a source of passive income. Microbusinesses are fine so long as you know that they are still sustainable despite an economic crisis.
Step 5: Deposit your Money in Different Forms of Cash Storage
This step does not refer to storing a coin in a jar and storing the bill to a piggy bank. It means that you should not keep your money in a single bank. As I said earlier, your money can magically disappear if your bank goes bankrupt. Hence, you should not deposit all of your money in a single bank account. Take a look at the following guidelines:
- Always leave a sizeable amount of fortune with you -You will need fast cash when a crisis erupts.
- Deposit money in multiple currencies – if your local currency gets devalued, you will find that your hard-earned saving that is enough to buy a car is now only enough to buy a liter of gas! But if you save a good portion of your money through a different currency account, your wealth is not drastically devalued. Take note, however, that you can’t exchange currencies like crazy. Forex charge can rack up too. You also risk depreciating the money you deposited if the currency drops in value.
- You can use digital wallets such as Paypal to store your cash. Take note that it is slower to withdraw your money from such sources.
- You can also try to establish an offshore account (while complying with the law) in a bank from a country you know will not be hit hard by an economic crisis in your country.
Step 6: Improve Personal Security
“What, Nazis again?” Naaah. While an economic collapse can raise doubt to the current ideology of the government, it is not a supremacist rule you should be worried about. Why not think about how law and order will be in a complete disarray when the economy collapses? Take the case of the Venezuelan crisis for example.
Yes. All hell can break loose. Activists and looters can cause both chaos and anarchy. To minimize risk, check out the following guidelines:
- If feasible, don’t live in major cities (especially the capital). Revolutions, rallies, and demonstrations are bound to happen in these places.
- Learn self-defense. You’ll never know when desperate looters will run amok and steal your valuables away. Worse, they can hurt you and the people you love if you do not know how to defend against them.
- Arm up. If it does not hurt your personal beliefs, you should legally stock munitions and a reliable weapon. If you prefer not to do so, you should at least have basic self-defense weapons such as pepper sprays and tasers.
Step 7: Stock Commodities
Invest in commodities like gold and silver while they are cheap. It is highly unlikely that gold and silver will depreciate along with your local currency. You can think of this as depositing your money on a foreign currency account. If you find a way to sell them at a non-depreciated price, the gold and silver you stocked can source of a large sum of cash.
If you follow these guidelines, you will know enough to survive a dystopian world where money almost means nothing.
Though not entirely cataclysmic, the economic crisis can cause the very foundations of civilization to crumble. Why not prepare to survive one? With all the heat in the battleground called “geopolitics”, there is nothing to be certain about. You do not have to live in the U.S. or China to feel the intensity of the trade war. Once trade chains collide, everything else will follow. Worse? Local governments will try to self-preserve only to aggravate the situation. In the end, it is the common people that will fall into the crack generated by all these unnecessary conflicts.
- Jerome Blum, Rondo Cameron, Thomas G. Barnes, The European world: a history (2nd ed 1970) page 885
- Orlov, Dmitry (2008). Reinventing Collapse: The Soviet Example and American Prospects. New Society Publishers.
- “Venezuela mantiene 4 años en recesión”
- Barnes, Tom (August 30, 2018). “Brazil deploys the army to Venezuela border as thousands flee economic crisis”. The Independent.
- Board of Governors of the Federal Reserve System (1943). Banking and Monetary Statistics 1914-1941. Washington, DC. p. 671.