Tips for major economic collapse

[James TannonParticipant]

I’ve often thought that those advocating the stocking of precious metals (like gold) are either off their rockers or….at very least in a far different income bracket than I am.

I’m a Canadian in the far north and, like all of you, I’ve noticed the system slowly crashing (empty grocery store shelves, less grocery items stalked, diminishing power of the dollar, decaying infrastructure, diminishing package contents/size, prices increasing faster than the official inflation figure, etc).

I have a gut feeling that I’m hopefully wrong about:

I think that the coming economic collapse is going to make the great depression look like a picnic and that it will be global and long term.

Many people are making the assumption that the economy will recover in 2-10 years. They might be wrong. Their ancestors may be the ones making use of the strange metal that was buried long ago.

For the average person (from what I can forecast) the coming economic storm is going to destroy them. I hate to break it to you like that, but even if you have some amazing skill to fall back on (for more income) you’ll learn that people are in such a dire situation that only life support items are needed/purchased.

Realistically, from a pure mathematical point of view, the average person will be destroyed. Certain lucky individuals in the right place at the right time may not sink as far into the dirt, but most of us are pooched. Think of the debt alone. There is more debt that is owed than there is money in the world. All of us aren’t going to make it. It isn’t mathematically possible.

That isn’t to say there isn’t hope. What I’m putting forward is that scraping 30% off of all your expenses still isn’t going to cut it when the purchasing power of your dollar cuts in half every month. My hunch is that Venezuela is coming to the world and that Venezuela currently isn’t even near to hitting rock-bottom.

That is the point. All of us are already stretched thin now (and if you aren’t go buy lots of food and gear) and most people won’t have the skills/tools/supplies to produce anything that will appreciably change their position.

Here are a few points to consider before I propose solutions to the coming train wreck:

1) Get mentally prepared. Prepare yourself for an economic future where today is always better than tomorrow. Mentally prepare yourself that it may NOT recover in your lifetime.

2) Understand that the collapse (that has already started) will accelerate as it proceeds due to cascade failures. Act quick and focus on using your diminishing purchasing power on actual life support supplies. Good clothing (for those in Canada) is a requirement. For most people it will be food that is the hardest thing to fake/get. Enough food will buy anything or anyone (when people are starving).

3) Realize that the economy is currently far worse than it looks. A) Social assistance programs are keeping the poor from committing crimes to eat. B) The average person couldn’t even take a $3000 emergency expense without selling a spare kidney. C) Credit/debt is at record levels and increasing JUST to make everything still run. For example, credit card companies are currently cutting deals where the debtor just pays $1 a month (so that the credit card companies don’t have to write the debt off…and go bankrupt themselves)

4) Realize that your greatest concerns are going to be security, shelter, food and water.

5) Realize that even though you feel like you don’t have much money today….that you’re wrong. Today, your money purchases more than it EVER will. Today, you have more discretionary money than you ever will. Today, the system is in the early stages of collapse and you can get survival gear/training from around the world shipping to your house overnight.

6) Perhaps most important, is to realize that your value doesn’t come from dollars and to realize that your debt DOES not have to be repaid. The entire financial system was built to collapse and it was a pyramid scam from the start. Without constant growth forever it was doomed to collapse. Those that created it knew it when they built it and you don’t owe them anything. You don’t have to go to the debtor camps.

Ok, now that we’re all cheering and frantically waving the flag (of your choice) let’s look at something other than doom and gloom.

What can the average person (the poor ones like me) do?

1) Act quick. Your intelligence (or at least your forethought for reading theorganicprepper) puts you at a significant advantage. Use that advantage by being faster to adapt. Deploy the tricks below faster than the general population realizes it. i.e. You are on the Titanic and you need to get on the lifeboat first. There aren’t enough lifeboats for everyone.

2) Use your strongest assets….basically that you don’t own anything important. Really, you don’t. I don’t care what type of car you have, in twenty years it will be rusted out. When the food isn’t on the shelves your house is just an inconveniently located cave surrounded by the world’s top predator (if you’re in/near a city). Your retirement savings are already stolen (if you just haven’t already realized it yet). BUT all of this is a good thing. It means you aren’t tied to the ever collapsing society. You’ve got nothing to lose! Rejoice!

3) I know (cringe) that this is going to be looked at badly, but if you know you are totally going bankrupt you should be purchasing survival supplies before you do file for bankruptcy. Going an extra $3000 in debt isn’t going to hurt the credit card company substantially and it might mean your pretty children are going to have enough supplies/gear/food/training to survive.

4) Like I stated above, cutting 10-30% of your expenses isn’t going to cut it. That (and hopefully I am wrong) is going to be like trying to plug a dam with your finger. You’ve got the option to move faster than everyone else. Project your future expenses. Trim what you can, but know that in X amount of time at current inflation trajectory your ‘normal life’ will fail. Most people will fight to not lose their homes. If you are an owner of a home beat the rush. Sell your house and move in with another family. Housing is one of the biggest expenses. If you owe more than your house is worth (soon everyone will be in this boat if I’m right) stop paying your mortgage at the first moment your projections show family financial failure. Use the saved mortgage expense to buy survival gear/training. When the crunch picks up speed it will be months or years before you are evicted (if ever). Empty houses are stripped/destroyed so it is in the banks interest to keep someone there to protect it. Remember the banks are criminal organizations (in my opinion) so return their assets in top shape please. Criminals deserve that. Certainly don’t loot your house for wire/copper before you leave and deface it so that it is a write off. If everyone did that they definitely wouldn’t evict people, and people SHOULD be evicted. Stupid stupid people. Make use of the saved rent/mortgage payments to buy gear (seeing a theme yet?)

5) Make a mutual support pact with your close friend(s). Talk now about what you would do if things went bad. If you teamed up in one house …two (or more) families could support each other. It might be ummm ‘cozy’, but you could share expenses and both postpone that starvation induced ‘lack of spark in the eyes’ of your children.

6) Learn how to survive outside of the system. Learn how to live in nature and provide for yourself. Use your time now and consider it a fun hobby (when actually you are training for the probable crappy future). The average person will NOT be able to purchase a homestead or dig and stock a bunker. They WILL be able to team up with others and at least have the minimum gear to survive in a backpack. They will be able to provide the best chance for their children (that they can afford). Learn now. Use your time now, before time is up.

Last point I’ll make is not to buy too MANY guns. Yes, buy them, but realize that you can only carry so many guns. Also realize IF you are ONLY stocking guns and ammo that four days after the grocery stores aren’t getting stocked you aren’t eating either. I hear too many people saying “I’ve got my gun. I’ll be ok”. Define “ok”
On day four no one will have food. Even with a gun, every door you kick down to rob from will have no food behind it. The only thing you’ll be eating is long pork.

Personally, I’d rather take my chances in the bug infested or tragically cryogenic wasteland that is the natural world (in Canada). I’ve spent the time learning and actually practicing how to survive out there. You can too. It isn’t too late and it is your cheapest, worst case option. You can afford it.

Again, that’s a worst case picture and worst case options. It would be far better NOT to be refugee-tastic. It would be far better to have at least secret caches or a pre-planed location.

I’ve ranted enough 🙂

Consider it as I pray my hunch is wrong!

[Molly MaloneParticipant]

@james-tannon, thank you for such a thoughtful and useful post.
I just may write this on a piece of paper and put it on my fridge: “Realize that even though you feel like you don’t have much money today….that you’re wrong. Today, your money purchases more than it EVER will. Today, you have more discretionary money than you ever will.”

[DaisyKeymaster]

Some fantastic tips. I was wondering if you’d consider allowing me to publish your post on my website, with full credit to you, of course.

PS: If you’re using your real name, we suggest you change it to a different user name here. We want everyone here to be anonymous. 🙂

[Gorilla GirlParticipant]

Thank you for putting these thoughts in writing. I’ve been thinking a lot about the fact that spending today’s money is better than trying to buy things later with inflated money. I’m trying to put together a list of items that I can’t grow or produce myself (sugar, chocolate, TP, etc) and start making heavy purchases of the items I am most short on. If anyone has a list started and would be willing to share it, I’d love to see it.

[Anonymous]

@gorilla-girl, my approach when I started to stock up on needs was to make a list too but I found out that a better approach was to just add a few more things to the usual items I regularly buy every time I went to the store, possibly taking advantage of sales. So if pasta was on sale, I bought a few extra boxes. Or if I was getting sugar, I was getting two bags rather than one. I noticed that this method I was only buying what I need, like, and regularly use rather than being influenced by someone else’s choices.

[Anonymous]

The OP make many interesting points but, as many post/articles do, relies on the author perception of WHEN a collapse is going to happen. In prepping, time is an important factor and predicting the future is hard and risky business.

For example, not paying the mortgage if you are short of money can have smaller consequences if the economy is really folding fast. But, if you time it wrong, you can be homeless because your house will be repossessed.

Same thing can be said about debt. Paying off your debt is good because take some stress off your life in case you lose your source of income. But if you know that all banks are going to fail tomorrow you should load all your credit card spending on survival items because that debt will never be collected. The problem is that if the collapse doesn’t happen tomorrow you have to sell your equipment at a loss to pay off the credit cards.

So, be careful. The current down phase of the economy could last longer than we think (it has lasted longer than I thought possible) and your plan should be designed so you do not take a loss, whatever it happens.

[Anonymous]

@DF is right. Back in the 1950’s young people said “why should I go to college?”, “Why should I plan for retirement?”, etc. because we are all going to die in the nuclear war anyway! Well, the nuclear war never came and what kind of life did those folks have? Poor, I expect.

What if you followed @JT’s plan when the stock market crashed in 1987, 1999, and/or 2008? The economy came back, although I readily admit it may not the next time. Nobody knows. Be careful that you don’t shoot yourself in the foot with this strategy!

[Mouse WizardParticipant]

And that’s the rub. Being trapped in one world (with its own set of expenses) while burning both time and money to acquire skills and supplies for an alternative future that may or may not come to pass. Almost no one has the independent wealth to just buy a ranch somewhere and staff it up, or take weeks and weeks off of work to attend courses in whatever skill sets you hope will carry you during the salvage age.

[Crow BarKeymaster]

If I recall correctly, Daisy had a great article about despite being a prepper, she also still enjoyed various modern amenities.

I see prepping as a lifestyle. S may or may not HTF.
But in the meantime I have slowly acquired skills here and there.
I did take a Adult Education EMT-B night course, after work. But I deemed that as a valuable skill set to have in case of SHTF. Then later, I took time off from work and spent the money on the NOLS Wilderness EMT course. Again, I felt those were value added.
But I did not go into debt to attain those skills.
I learned to make bread from a book. Cheese too. Making bacon. Gardening is not only a good skill to have but is fun and enjoyable too. I made my own hard cider. That took some trial and error, but I finally got it!
I see a lot of new preppers, join a site and make a bee line for the Firearms section. They focus on all things tacti-cool and never think of the fundamentals.
Gaining the knowledge and experience, while developing a new, prepper lifestyle. And have fun with it!

[Anonymous]

In the early 1980’s I was a single parent and my daughter was still young. We lived only a 10 minute walk from my parents and my daughter would stay with them when I took college night classes. I worked all day and took classes at night. Fortunately for me colleges cost between $30 and $300 each so no debt. The point is you can take night classes for whatever courses you can find and still keep your day job. I worked, took classes, ate, slept and even had a little time for my family. I did this for 5 years. It is hard but you can do it too.

In a similar example you can join the arrl.org, find a ham radio club on their site and join your local club. Go to the club’s meeting and events and you can get some hands on experience with ham radio. If you decide study for the licencing exam(s) they are a bunch of great folks who will answer your questions.

Nothing worth having is easy. That’s just the way life works.

[LittlesisterParticipant]

James, I do agree 100% of what you are saying. Forget gold though. Silver is still cheap enough for most people to buy. Stick with that if you can. Just enough to help get past the inflation.  Get out of debt now. And put some cash away in a safe place in your home. Learn how to garden and can veggies and meat. Meat is not hard to can. Use the Blue ball book and follow instructions. I to was once leary of canning meat. But now have been doing it for past 5 years with no problems. I can tell you that the chicken I can, I use a lot for chicken salad. So much better than canned chicken from a store. Same with tuna also.

[Uncle GunnysackParticipant]

Well, I started gardening, got critters and stocked up on Staples at Walmart and Sam’s Club in bulk.salt, sugar, powdered creamer, coffee, tea, knorr rice and pasta sides, country time lemonade, very few canned items, mostly bags and boxes (lighter and burnable). Gaurds against bland food (per Selco) and bulk that we can build around and vary. I also bought seeds in bulk at rural stores to get what grows in my area. Not flush but steady buys. Chances are good that govt keeps water on. I have stocked up on digging tools and chopping tools, also on cotton balls,vpetroleum jelly jars, and bleach products since they are more shelf stable than bleach. Sanitation kill massively in the third world, as does infections from cuts. My dad’s family used white dog liquor tailings from moonshine for this in the great depression. Meat is a seasoning only, you need to stretch the utility of your critters, especially chickens and guinea hogs. Canning is essential, that’s where used bricks and scrap sheet metal for rocket stoves will make cooking less stressful an your split woodpile, you can use the leftover branch ends and twigs for that. Plus, booze is currency in bad times so learn how to distillery now and buy #50 bags of sweet feed now at country supply stores, that averages $8 and bread yeast is cheaper than that. Once again, rocket stoves are very useful. If you can’t afford a root celler, used trash cans, do ainage pipe and even 5 gallon buckets make good caches, if situated in a shady well drained spot and buried. I chop down saplings or transplant brambles over mine. That’s a fair bit of digging.

[James MitchnerParticipant]

Anyone who believes we will all wake up tomorrow and find ourselves in the deepest, darkest, societal and/or ecumenic collapse is simply wrong.  Advising people to run out and charge up their CCs and place themselves even further in debt thinking they will not have to pay any of it back is just bad advice and I am surprised Daisy would want to publish it.  How many out there would be swayed to do such a thing and loose everything they still had as a result of it.  Think a moment… how long have we been reading articles claiming that a collapse is imminent, but things keep right on moving along?  Will a financial collapse happen?  Yes!  But we know neither when or to what degree.  Reminds me of those instances some members of a cult sold or gave away all their worldly possessions to go stand on top of a mountain to wait the imminent arrival of the “mother ship”.  They finally all trudged back down disillusioned to be destitute in the same ‘ol world.

If the electronic banking system shuts down for whatever reason cash will be king for a brief period.  Have cash!  Those cards won’t be working and you will not be buying anything without cash.

It has been said that gold is the store of wealth for the powerful.  That silver is the currency of the common man.  That barter is the currency of the serf.  And that debt is the currency of the slave.  Both gold and silver have been the medium of exchange for over five thousand years.  So, some will tell you to forget it.  Buy another sleeping bag instead.  Foolish considering how cheap silver is now.  For the price two would pay to eat at a fast-food restaurant you could buy a US Silver Eagle and put it away – around $16.  Gold is expensive when most look.  But not altogether unaffordable if one tries.  Both gold and silver are a store of wealth.  Neither can be inflated away.

[WhirlibirdParticipant]

Plata Y Plomo.

The two things that the commoner can put back, besides food and water to ride out the turbulent times.

It is an investment strategy, but it is simple.

But the biggest thing that you can do to avoid trouble such as happened in the depression is to not be in debt.

Pay off the credit card, and everything else that you can. Most of us will still have a house payment but if that, food and utilities are the only expenses, you are more likely to come through unscathed.

Part of the problem back in the depression was that everyone was living on credit. Credit for the car, the new fangled fridge, for the radio, and so on. You lose funding and suddenly you can’t make the payments and lose everything.

Most of could survive a pay cut as long as we didn’t have the extra bills such as the newest iPhone, the second or third car, cable, etc.

Take that extra rifle and pay something off, sell those ‘collectibles’ and pay something off.

Use the credit card, but make a payment to cover it the next day.  Why the CC? For the fraud protection.

[Crow BarKeymaster]

@James,
to a degree, I agree with you concerning PMs.
But as Selco pointed out, it is only when all the other needs are met (Maslow’s hierarchy of needs) is when PMs may actually come into play, and a actual working economy.
You can spend a lot of money on PMs and not get the equivalent post-SHTF.
A dozen eggs are going for about $3 a dozen currently.
Post-SHTF, the JIT/BAU system has collapsed, what would the going rate for a dozen eggs be? 5, 10, or even 20 pieces of silver? A 1oz gold piece?
Sound crazy?
After a few days, someone just might be willing to part with their PMs for a dozen eggs to feed themselves and their family.
It is only when all the other needs have been met, and there is actual wealth for luxury items, and in a real working economy that PMs will have value.
Until then, I would be more inclined to trade for ammo, medical supplies, real tools than PMs.

[James MitchnerParticipant]

Most of us have a tool box.  We don’t depend upon the same tool all the time.  As the job changes we use the appropriate tool for the job.  During a bank “holiday” when the doors are locked and the ATMs and CCs don’t work, cash is the appropriate tool.  PMs may be also, but to a lesser extent since most businesses are not set up to accept PMs as payment.  But, individuals may be.  Another appropriate tool at that time.  If food/fuel and other necessary items become scarce or even unattainable, then barter items will be the proper tool, backed by what preps you have managed to stock.  But it will be a mistake to think that those who have been pulling the economic strings all along have gone away and will not be demanding debts be paid in some fashion.  You can bet they won’t be suffering physically or financially like we will.  Some medium of exchange will appear.  We just don’t know what it will be.  You can be certain that once the new economy surfaces using the new currency, PMs will still hold their value.  Another sure bet is that a government, whatever shape it will take, will still be in power at some level.  In essence, Joe S the Rag Man down the road may not want silver as payment since his needs are much more basic.  But you can bet that the emerging robber barons that always surface will want it.

[Author]

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