Most folks are really good about making sure they have the proper amount of insurance for their home and automobiles. But when it comes to ensuring the survival of their family in rough economic times, well … not so much.
It’s no secret that recent volatility in the world financial system has more than a few people openly talking about the threat of an economic collapse — and I’ve been explaining for several years now why I believe an economic collapse is inevitable.
If history is any guide, the good news is that it won’t result in a complete breakdown of society. Argentina has suffered through multiple collapses of its own economy through the years and life goes on — but it remains less than idyllic there.
Nobody can say exactly how the collapse of the “almighty” US dollar will unfold, but you can bet that most people will be unprepared if and when it happens. If we’re lucky, it will happen one weekend after the-powers-that-be announce a bank holiday followed by a complete fully-controlled system reset that results in significantly lower standards of living for everyone.
If not, collapse will be much more chaotic …
The worst part of any such chaotic, unplanned, economic collapse occurs in the first few weeks after the initial event that precipitates the crisis. It could be an extremely volatile and scary time — especially in major metropolitan areas — as people caught unprepared end up roaming far and wide, searching for the most basic of necessities, and doing whatever they must to ensure their survival until anew currency is eventually established that helps repair the broken supply chains. Until that occurs, however, most people will have to rely on the black market for almost everything, but life will go on, and goods and services will continue to be traded — just far less efficiently than before.
How long will it take for things to get back to a relative state of normalcy? That’s anybody’s guess, but I’ve been preparing under the following assumptions:
- A collapse of the US dollar will not — repeat, WILL NOT — result in a Mad Max end-of-the-world scenario
- Supermarket shelves will remain empty for six months
With that in mind, here’s how you should consider preparing for a collapse — in order of descending importance:
Water. If you’re dependent on your local municipality for water, what will you do if a lack of spare parts shuts down the water system for a week or two? If the situation is dire, you can get by on about one quart of water per day. However, ideally you should prepare to have at least one gallon per person per day for at least two weeks, preferably four. You should also purchase a heavy duty filter to purify additional water. Top-of-the-line water filters that will purify up to 13,000 gallons cost roughly $250.
Food. In the opening days and weeks of the crisis, the last place you’ll want to be is anywhere near a supermarket, fighting clueless hooligans or hoards of looters and panicked people. Some of the cheapest food available on a cost per calorie basis is white rice. And while canned food is preferable to dry, dehydrated, and freeze-dried vittles because it’s ready to eat and doesn’t require other valuable resources to prepare such as heat and water, it’s also much more expensive. That being said, while there may be occasional utility disruptions due to a lack of spare parts, I don’t expect catastrophic failures. You should have at least a six-month supply of food on hand. Remember: Even if the food shortages fail to manifest themselves or are quickly extinguished, the food you store will come in handy if you find yourself unemployed and unable to afford, say, $30 for a loaf of bread.
Warmth. Although I live in a warm weather climate, I realize many people don’t. If you live in an area with extremely cold winters, make sure you have a sufficient supply of wood or heating oil on hand.
Medications. If you need prescription medications, make sure you have enough to get you through until the supply chains are restored. Make sure you always have an extra bottle or two of aspirin, cold medicine and vitamins. You should also have a decent first-aid kit and, if at all possible, a supply of antibiotics on hand.
Sanitary supplies. One of the most important things we take for granted, aside from food and water, is sanitation. Make sure you have a six-month supply of multiple soaps on hand including: bar soap, laundry detergent, and dish washing liquid. You’ll also want to make sure you have adequate stores of toilet paper, baby wipes, paper towels, trash bags, and feminine hygiene products.
Employment. The best protection against hyperinflation is your own earning power. Unfortunately, those on fixed incomes like senior citizens and other retirees will be especially vulnerable to rising prices because buying power declines sharply as dollar-denominated savings and retirement accounts rapidly lose value. Thankfully, most people who manage to remain employed will be able to minimize the loss of their purchasing power because employers will be pressured to increase wages in order to allow their workers to keep up with rising consumer prices. So keep your skills polished and stay employable.
Barter items. When a national currency fails and the normal supply chains breakdown, the local economy carries on and products become available via the black market. The only difference is that instead of using dollars, people will begin trading with others for needed goods and services. Proven options for bartering during times of economic distress include: whiskey and other alcohol, coffee, cigarettes, chocolate, salt, batteries, ammunition, and butane lighters.
Defense. Even now, when seconds count, the cops are only minutes away. And you can bet that if the economy collapses your local police will be hours away. That’s because they’re going to be overwhelmed trying to keep some semblance of order — especially if you live in a large metropolitan area. After Argentina’s economy collapsed at the turn of the century, the crime rate nearly tripled. So, more than ever, protecting your home, family, and yourself is going to be your responsibility. Learn how to use and safely handle a firearm. Then invest in at least one handgun and at least 500 rounds of ammunition, preferably more. My entire family has taken multiple handgun classes and I consider those courses to be among the best investments I’ve ever made; my daughter learned to safely handle a handgun before she was 16. If you aren’t comfortable with purchasing firearms, then make sure you have alternative defense options on hand such as pepper spray because the odds are good that you’re going to need it.
Long-term fixed rate mortgages. Consider refinancing into a 30-year mortgage. That’s because, as hyperinflation takes it course, those with fixed-rate 30-year mortgages who are lucky enough to remain employed will find that the percentage of their paycheck that goes toward that mortgage payment will decrease significantly, leaving more cash to buy other necessities, like food and fuel. And if hyperinflation really takes off, they may even be able to pay off the loan completely.
Wealth preservation. One of the most devastating effects of hyperinflation is the rapid annihilation of wealth; nest eggs that are carefully built up over 30 or 40 years become practically worthless overnight, leaving no practical way to recover from such a devastating loss. Unlike fiat currencies, precious metals maintain their purchasing power — which is why many experts recommend keeping somewhere between 10% and 30% of your net worth (excluding your home equity) in physical gold and silver as a hedge against economic uncertainty. As a side note, when you run out of items to barter, US currency minted prior to 1965 will be useful for trading because of its silver content; a good rule of thumb is a silver dime is always worth a loaf of bread and a silver quarter will always buy a gallon of gasoline.
So there you have it.
Yes, if you haven’t started preparing you’ve got a lot of work to do.
Yes, making sure you’re properly prepared to weather the storm that will ensue from an economic collapse is a relatively expensive endeavor. But that money you’re spending is an investment in your future.
If you have a family, you owe it to them to do everything you can to make sure they’re going to make it to other side of this looming economic calamity healthy, happy, and full of hope.
Just think of it as another insurance policy.
Photo Credit: Mike Poresky
All good advice, Len. However, I just read an article that talked about what activities people are doing that gets their names put on the government’s terrorist watch list. The top activities on the list are stockpiling food, stockpiling ammunition, and going online to read survival prep articles. Those lists must be pretty long, huh.
Bet you never thought it would come down to this, did ya, Allyn? I know I didn’t.
Allyn,
Can you post a link to that article?
Len, you had an article a couple of months back where you described some foods that store well and have high caloric value. I remember SPAM was on the list (thanks, my wife stopped bugging me about eating it). Do you have the link to it? Also, do you think gold or silver is the way to go on precious metals? My friend says only silver since it may be more ‘spendable’. Thanks
Hi Rick. Here is the link:
http://lenpenzo.com/blog/id17348-comparing-the-costs-of-various-emergency-food-supply-options.htm
With regard to precious metals, if you’re looking to use it as a temporary replacement currency to purchase food and other basic necessities — then I would recommend “junk silver” (US dimes, quarters, half-dollars, and silver dollars minted in 1964 and years prior). If you are looking to preserve your wealth, it really doesn’t matter which way you go, since you would be holding it until sometime after the collapse occurs and a new currency gets its legs under it. Remember, don’t look at buying precious metals as an investment per se (with the hope of “making money”) — its price in any fiat currency should be irrelevant to you after you purchase it, whether it goes up or down. Precious metals should be looked at solely as a means for preserving the hard-earned wealth you have accumulated over the years in times of economic uncertainty.
Len, just recently found your articles as I’m trying to save some of my 401k value. Do you have any thoughts on moving any of that to a gold IRA?
There are lots of variables to consider, HH. I think gold IRAs are a smart alternative to traditional IRAs. Usually, if you are under age 59 and a half, your 401k has a 10% early withdrawal penalty to consider. Of course, if you think the a system reset or even a huge market crash is imminent, that 10% penalty is probably not a concern.
Len, thanks for the post. You have written about what many fear but are too afraid or blissfully ignorant to talk about. I believe in personal defense and like you, everyone in my family knows how to use any firearm we own. and with a high degree of skill! I also like “junk coin”. it’s practically the only way to buy “bullion” in small spendable amounts. A thought just occurred to me, stock up on ammo too, for yourself AND it will probably be as valuable to use as a trading commodity than junk coin! That if course if you can find any to buy right now.
Have you seen the price of ammunition lately? The price has more than doubled over the past three months!
It’s crazy, even 22lr is going for $60 a box. You can’t get 223 anymore for less than $600 a case. I’m glad I loaded up on 2 cases of 7.62×39 last month. BTW, I know a reloader that sells a case og 9mm for $220 plus shipping (assuming he has anything to sell). EM me if your interested and I’ll send you his info.
The question to ask is, “Who are you trading the ammo too?” Don’t trade away bullets that can be used against you.
Good point Josh!
haha a Mad Max melt down might be quite fun…come on admit it we all want it!
No, I wouldn’t say we ALL want that! lmao
Excellent post.
I’m actually surprised that more people in the US aren’t up in arms about all the money printing that is going on.
There is almost no way all that money will ever be repaid, yet the US dollar is still fairly strong.
I think when the proverbial shit hits the fan it will happen quickly, and hopefully it will change the way the world looks at fiat currencies.
If we are to have any hope of avoiding disaster, Glen, it’s going to require our politicians turn their behavior around on a dime. But all I see is more of the same. The only question is how long can this go on. I saw today that food stamp recipients in the US reached another all-time high this week (1 in 5 Americans are now receiving them). Meanwhile, today the Dow had its seventh straight winning day and reached another new high (albeit in nominal, as opposed to real value). The Fed has been indirectly and directly manipulating the economy for so long now that true price discovery is virtually impossible. The economy is so juiced that nobody can evaluate and properly price risk any more — and that is extremely unhealthy, to say the least.
It’s only a matter of time. And most people have absolutely no clue.
The frustrating thing is, nobody can accurately predict when the house of cards will come tumbling down. It could be next week — or it could be years from now (although I would be flabbergasted if the illusion can continue much longer).
The good news is, if things don’t turn around, the longer this charade continues, the more time we have to prepare.
You do know that the Federal Reserve is privately owned, right, and not a division of the Government?
Yes, the US Central Bank is privately owned, but it is government controlled. If Donald Trump, for example, wanted to “force” the bank to obey his will, he certainly could. Thus, it is a misnomer to call the Bank “private”. It is semi-autonomous at best.
This is a valuable post, Len. Thanks. I’d like to add a few of our own survival strategies:
1. We have no debt. Zero. Our house has been paid off for years and we pay our credit cards off in full every month. We intend to stay that way.
2. I bake my own bread. Flour is still relatively affordable, and a bag of supermarket unbleached flour and a bag of yeast is generally cheaper than a loaf or two of bread.
3. I grow my own vegetables and plan to grow a lot more this year. If my town allows it, I may start keeping chickens for the eggs.
4. We’ve cut our discretionary spending in half, at least. We used to eat out once or twice a week. Now, it’s once or twice a month. If that.
5. We try to take good care of ourselves by cutting junk food (saves money, too) and doing our own physical work outside the house rather than paying someone to do it for us. I’d rather prevent getting a chronic illness and needing a constant supply of medicines and weekly trips to the doctors’ offices. I want to avoid getting sucked into the Medical Industrial Complex as much as possible.
Additionally, I’m taking some non-monetary steps to keep myself on track. I plan to change my political affiliation. I have also recommitted myself to my religious faith, and my religious community.
I’m still not sure about owning a gun. I think it’s useful to know how to use a firearm, and I plan to look into training options for my spouse and I. We may change our minds as the year progresses.
By the way, we’ve been to Argentina. It’s probably the most beautiful country outside the US that we’ve ever been to. But it’s ridiculously expensive and I have no idea how the average Argentinian gets by.
Hi Christina.
1. That’s awesome. Congratulations!
2. I occasionally bake my own bread too. I’m sure you know this, but for those who don’t, you can buy bulk flour in sealed 5 gallon buckets that will last for up 5 years if stored in a cool, dry place. By my calculations, I believe the buckets hold enough flour to make about 55 loaves of bread.
3. A veggie garden is always a great idea. So are fruit trees. Unfortunately, I don’t have either. I do grow my own tomatoes every summer, but that’s not enough to quality as a full-fledged vegetable garden.
5. I wish I had your discipline with respect to junk food. And I should have mentioned physical fitness in my list.
With respect to the firearms, my experience was that an 8-hour basic handgun training & safety course under the tutelage of competent instructors is enough to turn even the most apprehensive people into ardent proponents. And if not, there are other alternatives, such as martial arts training, pepper spray, and — at least for home defense — a good dog (or two).
Len, Instead of stockpiling processed flour — which will go bad no matter how carefully you store it — consider stockpiling wheat berries. The berries will last forever if kept dry. Spelt berries — spelt was the Egyptian’s staple grain — found in Egyptian tombs are as viable today as they were when they were put in the tomb. A decent hand-cranked flour mill can be had for less than $100. Fresh milled wheat berries have so much more nutritional value than processed flour. The mill can also be used to turn any grain (including rice) as well as potatoes into flour.
Storing wheat berries is a great alternative to storing flour. The shelf life is much much longer.
HOWEVER, one big problem with storing wheat berries is that if you suddenly switch to grinding your own flour you will develope a very bad gluten allergy very quickly.
Since most of us live off of processed flour, you have to slowly transition to fresh ground flour from wheat berries.
That is why you should only store what you eat now. If you plan on living off freshly ground wheat berries during a collapse situation, you should start using them now. If it is too much trouble, then just store the ground processed flour and rotate it.
Josh, I have never heard of fresh ground wheat flour -causing- a gluten intolerance or allergy. (& I am in the field, so to speak). Do you have a study you can link demonstrating this? It possibly coincided time-wise with an already-developing problem? In most cases, people find that switching to more ancient grains like einkorn or spelt helps alleviate gluten problems whether fresh ground or processed. Your reminder to store & rotate what you use is important for everyone!
Christina: I recently became a first time gun owner. I saw ammo prices for my weapon go up fifty percent in 10 days. The cost of even the most basic weapons, like shotguns, are going up exponentially.
Get yours now, while you have a chance. Ammo has been extremely hard to find.
Anyone know where I can find .45 long colt? 🙂
Scary stuff but some sound advice nonetheless. I’ve recently invest in more silver than gold because as Rick points out above it’s certainly more spendable.
True, considering an ounce of gold is about 55 times more expensive than an ounce of silver right now! However, historically, the ratio has been a lot closer to 20, and occasionally as low as 12.
Len, you’re making me anxious! We live in a major earthquake zone, so some of these preparations I’ve done with The Big One in mind. But you’ve got me thinking I may need to do more…
Get to work, Kurt!
Pretty close to total anarchy, Len. Especially frightening is the prospect of 13-year-old girls carrying guns!
Interesting comment. What’s so frightening about a 13 year-old girl who has been trained to safely use a firearm to properly defend herself?
There was a time not so long ago when most kids knew how to use a rifle or other firearm.
Training training training. Hit a shirt button with a 308 at 100 yds, Hit multiple targets while moving and under duress with a 9mm. Subject: 12 years old, 3 mos of practice. Training training training.
I see no reason to fear any law-abiding citizen with a gun — as long as they have been properly trained in how to use them.
What I am afraid of are thugs with guns.
The problem is that we all are law abiding citizens, until we are not. Every criminal, wife beater, road rage shooter starts off as a law abiding citizen. I’m afraid that the average teenager being armed(particularly with a handgun) will likely result in an explosion of suicides and incidents of domestic violence. Just like teenagers cause more auto accidents they would most likely be involved in more gun related violence. Some things just require a little more maturity than the average teenager might have.
The flaw in your argument, Pete, is that the great majority of gun violence is perpetrated by supposedly “mature” adults.
I’ll go further and wager that the vast majority of gun violence perpetrated by adults, is done by those who never had a lick of firearms training, either formal, or under the guidance of law-abiding responsible family members who have been raised with firearms in the home.
I’d feel much safer in the presence of an armed teenager raised under such circumstances, than any untrained adult who learned everything he knows about firearms from the movies and TV — especially one who may have bought his gun from some thug who was selling them from the back trunk of his car. Don’t you agree?
Like Christina, we live a pretty self sufficient life, owning cattle and living by a lake that would provide water. I don’t think it will get that bad but the dollar is certainly heading to more weakness, and big cities will suffer the most since people can’t do things themselves and rely on money to provide it all.
I think any collapse is most likely to be self-inflicted. Banks have been running legacy software for 40-50 years now and this chicken will surely come home to roost one day. In this case, money in the bank will be completely valueless, gold will not be important or particularly valuable and life as we know it will stop. It will be food and water that count. Prepare now!
It sounds like you are predicting more of an end-of-the-world-as-we-know-it scenario, John.
I hope you are wrong … because I’m not preparing for that!
I think John & Len are predicting the SAME thing, but John is not specifying how long for some stability to return whereas Len is specific that he believes it will be a few months- possibly a couple years… right?
Food & water (& the ability to protect your food & water) are what counts NOW!
I have heard from someone who has been thru this scenario in another country & he has exactly 3 words of advice:
DON’T. NEED. MONEY.
You need to position yourself NOW in your daily life such that you rarely if ever NEED money for necessities. Not that you never buy sweets or coffee or never see a movie– just that you acknowledge to yourself & family that it is a luxury, and not needed. & that you can adequately provide for your NEEDS without money.
Mum4vr: I don’t believe the wide-spread disruptions will last for more than a few months.
It’s the not knowing that makes life so much fun! Thanks for the tips, I know there are several more things I should be doing to keep myself out of WalMart if/when needed.
Len, I can’t keep up. So, I guess I’ll just need your address and—directions–when the time comes. Thanks in advance.
Prolly not a very good idea, Kim. Check that … Definitely not a good idea.
Ok, I’ll consider you as NOT a humanitarian. That’s ok buddy…I got it covered. HA! But, thanks for the post–I mean…THANK YOU. It’s IMPORTANT! If you need my address, I will gladly give it to you.
I don’t need your address, Kim.
Well … unless you want me to mail you a survival biscuit or some trail mix! LOL 😉
I come from a third world country. Whenever I visit, some but very few talk about anything remotely what you mentioned. It’s one of the poorest countries on the planet. Life, however, goes on.
In the U.S., folks don’t care about their finances let alone worry about the things you mentioned. Folks follow the government. It’s in debt so why shouldn’t they. That’s the mentality.
Life will always go on. We can never be prepared for the unknown. If the unknowns were so clear, they won’t be the unknowns any more.
I remember the high inflation in late seventies and early eighties. America came back, may be not to its senses but the worst was behind us.
Inflation was high but so was interest on savings account and Certificate of Deposits. I still remember one bank in Chicago started paying 25% in interest for their 5-year CD.
Granted we should be prepared but not to the extent you talked about.
While the high-inflation environment of the late 70s early 80s made for a tough time economically, it did reward savers. I was a teenager at the time and I remember getting 18% interest on my savings account back then. It was really cool looking at my savings book (remember those?) and seeing how fast my money was growing.
I remember the early 80s too, I was a teenage and my Mom bought a CD for me in a bank that no longer exists, I was getting 11% – sweet.
Also, remember hearing stories that my great grandparents took a big stock pile of gold coins when they moved from Spain (1900s) to Latin America. They were running away from hyperinflation, hunger and pretty much a collapse of the Spanish economy. Something like what the Preppers are fearing will happen in the USA.
Len: Thank you so much for covering this. This is important information. We all need to start preparing. Just in case!
What is your opinion on sterling flatware? (I inherited 2 sets which are never used) Would those have any use in bartering?
You may be able to use your flatware for bartering, Georgia. The trouble is, many people will not be willing to give you full silver value by weight because it will be difficult to ascertain the real value of your flatware. That’s what makes “junk silver” (i.e., pre-1965 US currency) and $1 American Silver Eagles coins minted since 1986 a much better bartering option — at least when it comes to silver, because people will know exactly how much silver is in those coins.
That being said, remember, you can barter with anything of value — so don’t get fixated on silver. If food is scarce, the person who has stocked up a surplus of canned goods, for example, can barter just as effectively, if not more so, than the guy with a bunch of old silver liberty dimes. You can barter with anything that people will have a need for: toilet paper, water, matches, gasoline, etc. You can even barter your services if you have a skill to offer that somebody needs.
Personally, I would hold on to your flatware and then sell it later, after a new currency is established. I suspect it will be worth a great deal of money by then.
I’m glad I’m not the only one thinking along these lines. I wrote a somewhat similar post for Prairie Eco Thrifter called 5 Economic Assumptions We (still) Make That Wont Always Be True.
I grew up during the cold war and parents all around were either contemplating or building nuclear bomb shelters! Sometimes I wonder if N. Korea will someday carry through on their posturings….hope not!
What a great post, with clear, straightforward tips; exactly what you would need for a disaster situation! Thanks for this. Looking forward to more.
Great post, Len. I have a lot of catching up to do! For those of you who are not in agreement with firearm ownership then you should at least arm yourselves with wasp spray. It shoots up to 22 ft. and will burn the attackers eyes. I have lots of cans plus a Glock 9mm.
Thanks for continually posting about this Len. It’s something that has me very worried and I guess I’m on the government’s “terrorist” list according to one of your earlier comments.
The bottom line is I just want to have the means to protect my family and survive if something crazy happens. If that makes me a “bad guy” then I don’t want to be “good”!
It’s natural, but anyway I think you guys might underestimate the extent to which a collapse can unfold in an orderly fashion.
For 20 years or so the US has been the undisputed top dog. Maybe 40 if you think as I do that the Soviet threat was empty, bar nukes, from the late 1960s onwards as the US kicked up a gear.
That situation is changing, and clearly you have your massive public finance issues and crazies of both sides in Washington. (Mainly your crazies are on the right IMHO whereas ours in the UK are on the left at the moment, but I’ll be even handed about it! 😉 ).
Anyway, the UK once ruled the waves, was the world’s most powerful nation, and the sun never set on the Empire. Now we do royal families and London Whales. A slow decline from uber-power that the US might face.
Since the turn of the last century the £ has devalued against the dollar as we got blown up in World War 2 and then lost the Empire (and our stiff upper lips!). I can’t find a reference but from memory it’s been a decline from something like $4:$1 to today’s £1.51:$1.
Granted, you might not think the UK had a great 20th Century, and I’d agree. But the lights (mostly) stayed on, people went to work, life expectancies increased, we all drank more soda.
I think you’re right to say life will go on as reality catches up with the US fiscal situation, bottom line. Just maybe that there won’t be a six-month chaotic hiatus. More a slow descent into a new reality.
Moreover I actually think the US is far better placed for the next 100 than the UK was back in 1900, so even more reasons to be optimistic. 🙂
Great points, Investor, and I agree with you. Somewhat.
I’m preparing for six months of chaos to be conservative. I suspect (and pray) that things will get back to some semblance of order within a month.
I think the odds of an orderly “collapse in slow motion” that results in gradual declining standards of living is now less likely than a more rapid currency collapse that offers a few weeks of relative chaos followed by an immediate decline standard of living. But it isn’t out of the question. Personally, I’d rather see the latter so we don’t drag this thing out; I want to see us wipe the slate clean and return ASAP to more personal responsibility for everyone, the end of the nanny state, and sound fiscal policies.
As for the “crazies” in the US — if I had to choose one side, I’d encourage you to look at the left. It is the left who broke away from America’s original concept of limited government, and have relentlessly pushed for the currency-crushing big-central-government policies that have allowed the federal government to become the leviathan that it is today, now ruthlessly consuming almost half the wealth the private sector creates — and wasting most of it. But that’s a discussion that belongs in my weekend Black Coffee series. 😉
Storing extra medications is a good idea, however, it is much harder to get antibiotics now when you are actually sick. How can anyone get extra antibiotics to store for emergencies?
Visit a web site called “Doom and Bloom”, it is a great site written by a Dr and Nurse who are preppers.
Dr. Bones has several articles about how to easiy get antibiotics now, as well as some excellent info on real shelf lives of medications. The site is ful of medical knowledge related to a collapse situation. I print any of his articles to keep for a bad day.
The most common antibiotics are available relatively cheap, without a rx, & often in “storable” powdered forms at your local farm store! In most cases, these are exactly the same product human patients pay so much for at the pharmacy, & in MANY cases, the bottles are actually dosed/ labeled for human use. (I recently bought a large bottle of Keflex tablets (at an Orscheln or maybe Tractor Supply…?) supposedly for cattle that was -only- labeled for humans & had to call the vet to determine correct cow dose!)
Unfortunately for my family, we are highly allergic to most of these common antibiotics altho we have them on hand for our livestock.
Fortunately for my family, I have a veritable pharmacy of antibiotic herbals in my own back yard that are safer and more effective in our experience. For more info on this– visit your local library! It’s free!
Fish Antibiotics. You can buy them from any pet store or even Walmart. Get a medicine first aid book that will help you determine which are used for which infections. (IE Amoxicillin vs. Ciproflaxcin).
Their names are a bit different when buying as “FishCillin” but the are literally the SAME pills. Trust me I have one from an Rx and opened it and saw. They are the same.
Everything written above is right and the author did a good job informing sometimes unaware readers. But one thing IMHO is not correct.
I had “luck” to live through short period of hyperinflation in 91-93 when my country (Lithuania) got independence and then we abandoned soviet rouble and had our temporary currency. I don’t know the exact rate of monthly inflation but it was like that: you got your paycheck (rather monthly payment in cash) and went directly to the shop to spend it because next month payment was twice the size and so were the prices. But local banks implemented the rule that all debts were “indexed” i.e. recalculated according the official inflation rate. So if you had a debt it increased every month as did the inflation. But at the same time the banks did not “indexate” your savings in the bank and you lost them at the rate of inflation.
So the advice to take loan and do not get rid of debt waiting that it will disapear due to inflation may be a wrong advice, especially if we remember the precedent in US – when government was saving the banks because they were “too big to fail”. Banks have more “strong hand” in government than average not organized loan bearers and they can lobby any laws to save “their money” in case of financial armageddon. In my opinion better be free of any obligations toward these guys.
Vytas, thanks for your insight. Your points are well-taken. Having no-debt clearly eliminates the risk of potential “re-indexing” of loans to the official inflation rate.
However, I recently reread the terms of my mortgage, which is a legally-binding signed contract between two parties; there is no clause in there regarding re-indexing in times of hyperinflation. None. Article 1 Section 9 of the US Constitution prohibits ex-post facto laws. So, if Congress passed a law rewriting the terms of my existing mortgage, that would mean the rule of law here in the US would have to be completely abandoned. Could it happen? Sure. But if it does I can assure you, at that point, paying the mortgage will be the least of anyone’s worries. The bottom line: For financially responsible individuals who can afford it, I think leveraging low-interest-rate loans here in the USA is well-worth the risk.
I find kinda funny that you are prepparing for 6 months of total mayhem in your country, but at the same time you think that the banks(banks!) will respect your legally binding contract in those six months of mayhem. Because banks are the most honorable folks out there
Even when you talk things that sound all doom and gloom, you are still an optimist, I really like you Len
Spuky, the banks in America don’t make the laws. They cannot unilaterally change a contract.
By the time the government tries to rewrite any laws to “reindex” any loans, the smart people will have paid off their loans with worthless hyper-inflated fiat. Even during the Weimar Republic’s battle with hyperinflation — which lasted for several years — the German government didn’t bother to reindex any mortgages until the very final stage of collapse. And even then the reindexing was a paltry 10% or 15% of the original value in terms of gold.
As for the optimism … I hope for the best, but prepare for the worst! 🙂
Question then…I still have debt from cards that we are religiously paying off (medical emergency with a disabled son).
I have great equity in my home and already have a mortgage with a low rate and years into it…
Would it make more sense to redo my mortgage to “refinance” and pay off all the debt at once, even if my mortgage were to go about 3/4 or so of a %?
I’d hate to resort to withdrawing $$ from my 401k nest egg early and get smacked for that.
Any input? Would be totally appreciated. Thanks!
I’m wondering…what about other countries like Canada. Will they be hit too? Should they be stocking up on goods?
I believe collapse here in the US is going to impact Canada and other countries very little, if at all, James.
The US is going to end up feeling the brunt of the pain because we currently have the world’s reserve currency, which ends up subsidizing a lot of the things we currently consume here. As a result, a collapse of the dollar will end that privilege and most middle- and lower-class Americans will then experience a significant drop in their current standard of living.
50% of Our (Canada’s) National Reserve Funds are in USD, upon the collapse of your US dollar we are halfway in the toilet…
Mass majority of Our exports are to the USA, (you are Our largest trading partner) hence not many Americans will be buying Our stuff at that time.
Canada will also be in economic turmoil upon SHTF in the USA.
Yes. Unfortunately, Canada has almost zero gold reserves. At least they have plenty of gold and silver underground waiting to be mined.
Hopefully, the powers that be will do a hard reset to keep the supply chains from breaking. If they do, times will be tough for awhile, but everyone will eventually recover and we can all get back to a real production-based economy that generates real wealth — as opposed to the current illusion that is propped up by printing paper IOUs that will never be repaid.
What happened to these posts? Are you feeling more optimistic now? The posts seem a little frivolous recently. Cable options, payday loans, ticket master, road trips? Just curious, your blog is at a minimum always entertaining!
Glad you asked! Here’s the latest post in my series:
http://lenpenzo.com/blog/id19914-economic-collapse-101-how-to-prepare-for-water-supply-disruptions.html
A Collapse in US would not be anything like Argentina?
What about Iceland? They defaulted on their debt and there was not a rampant rise in crime? What does this say about the people in Iceland and Argentina?
Consider these points.
Spain, Portugal, France, Italy, and Ireland are in much worse economic shape than the US and none of those countries can print their way out of their problems.
The US dollar is still the reserve currency for the World.
All the talk about China becoming the next reserve currency is a decade away and at best it will become a 2nd world reserve currency.
If the US were to default/revalue the US dollar then this means that 25 to 50 other countries have already defaulted.
Think about this! It would be a world wide collapse.
When the EU China and the US decide on currency revaluations then they will likely do it together or in some sequence to quell unrest.
What if China and US work out an agreement to cancel some of the US debt in return for this country or that state?
There really are an infinite number of future possibilities?
The US is in the process of losing reserve status right now, Anthony. The percentage of the world’s transactions conducted in US dollars has been shrinking rapidly ever since Ben Bernanke unleashed his quantitative easing campaigns. And if the House of Saud is ever overthrown, or they renege on the petrodollar agreement — reserve status will immediately end.
When the collapse comes, worldwide markets for almost everything will freeze up because price discovery will become impossible.
Until a new national or world currency can be rolled out, the only transacted commerce will be local — via barter, silver, or perhaps a temporary scrip issued by a local jurisdiction.
The longer it takes to establish new currencies (both local and national) the longer the markets will be frozen and store shelves will sit empty.
I’m prepared for a 6-month period of economic chaos. I’m praying it’s not longer than that. In reality, I suspect worst case market disruptions will last only one or two months.
One thing is certain, if/when the collapse comes, we’re all going to know who the ants are — and who the grasshoppers are too. Which one are you?
Len I’m just learning about this less than a week ago and it has completely shattered my world. It makes me feel powerless and depressed for my countries future. Can you give reason for your beliefs that the collapse won’t last longer than 6 months? I’m afraid of the widespread death of my American brothers and sisters that will surely happen.
The only reason to be depressed, Matthew, is if we continue to wallow along in our current backward economic environment for years and years, where savers are punished, debtors are rewarded, government spending is out of control, crony capitalism runs rampant, and everything is being propped up only because central banks are printing more and more money to keep the illusion of prosperity alive.
Collapse is necessary to reset the system and return our economy to a healthy state where our currency is once again reliable store of value, savers are rewarded with appropriate interest, and debt is acquired only reluctantly.
The reason I believe supply chains will be restored within 6 months is simple: because it’s in everyone’s best interests to do so. That’s why a new money system will be rolled out as quickly as possible. The alternative, to me, is inconceivable.
Well spoken sir, things it would also be good to have on hand- medical handbooks survival handbooks, and various tools 4 trades
Thank you, Nathan. And I agree with your additional suggestions.
I live in an apartment and thinking about moving to a house to avoid the crime that will take place where I live.
I was wondering what is the best area to move to.
Something very rual, or a place with some homes but not a lot
I just don’t know what type of area is the best
Look forward to hearing what your input is!
The conventional wisdom is lower density areas mean less crime.
That being said, I’m not packing up and moving away from my suburban home to a farm in the boondocks.
Good advice. Nice to have succinct, easy to follow tips in one place. If others are like me they could get dissuaded and distracted by all of the possible “chaos situations” that we can face. As you discuss, a good rule of thumb is to prepare for expanding lengths of time. Gather enough for a week. and then two weeks.. ETC.
I strongly disagree on your defense suggestions though. (Especially for a beginner) IMO – A shotgun is a much better choice for home security. Handguns can take a good bit of training to become accurate with. Also the nuances of a semi-auto (jamming, misfires, etc) could be a big “OH SH!T” moment when you’re up against a real threat. I find handguns best utilized as backup and conceal carry weapons. A perfectly fine 12 gauge will probably cost half as much as a new 9mm. You’ll appreciate the much larger margin for error if it comes to that. And the diversity of shotgun ammo allows for multiple uses, alongside defense, such as hunting small, plentiful game like birds or large game like deer. The learning curve is also much more manageable in my opinion. Sure you can’t hold 15+ rounds, but if 5 or 6 rounds of 00 buckshot doesn’t neutralize the threat then you’re in trouble regardless.
It certainly doesn’t hurt to have a backup pistol (or 5) though. 🙂
Great comments, Chris. I considered a shotgun. As you noted, they definitely have their advantages for home defense. In fact, I will probably be buying one soon.
But they have their disadvantages too. Their spray pattern makes it easier to hit your target — that’s great if I am aware of the threat while it is still outside my house but less so once the threat gets inside. Especially in my case, with two kids and two large dogs in the house.
As for accuracy concerns, and dealing with the rare times when a semi-auto jams or misfires; that’s not too big of a deal — the key is to get properly trained. A couple of 8-hour handgun courses and occasional trips to the range take care of that!
Len, I agree with a lot of what you say. I am, however, a very liberal Democrat. The Republicans have our military stretched WAY too thin with the wars in Afghanistan, and most especially going into Iraq, which was a scam. I think W should be on trial for killing all of our soldiers and innocent Iraqis based on NOTHING. WE need our military, and we need the money. I still believe in helping people. Also, you can’t say you’re for small government, and then get into a woman’s uterus based on your religious beliefs, which the Republicans do. Also, it’s not anyone’s business if 2 men marry each other, or 2 women marry each other. ALSO based on religion. This is a country based on the Constitution. Can’t have it both ways, and Capitalism doesn’t help anyone but the rich. Compassion is an asset too.
Hi Melinda. My loyalty is to any politician who believes in smaller government, states’ rights, and, especially, returning the US federal government to its original limited role as outlined in the Constitution (mainly national defense and as the protector of property rights).
First off, I can assure you, capitalism helps everyone. Products that improve the lives of everyone, such as the computer you’re using, aircraft, automobiles, and countless medical drugs and advances were all invented because of capitalism. While not perfect, it is the only system capable of allowing somebody at the bottom rung of the socio-economic ladder, to get to the top based on their own merit. Which system do you prefer?
As a limited-government type, when it comes to reproductive rights, I understand where you are coming from but … The funny thing is, politicians who claim to champion government staying away from “a woman’s uterus” are the same politicians who have no problem allowing the government to meddle-in and dictate how our lives should be run regarding far-more common and far-reaching areas of everyone’s lives. For example, just to name a few:
1. Our ability to protect ourselves with firearms.
2. The type of light bulbs we can use
3. The size of toilets we can have in our homes
4. The type of foods we can and cannot eat
5. How a business owner chooses to run his/her business
6. Forcing us to buy health care insurance — whether we want it or not
7. Dictating where my charitable contributions go, via confiscatory high taxation used to fund inefficient government welfare programs. (Until the mid 1960s, charity was mainly handled by churches and the private sector, who received their money from private citizens who had more disposable income to donate to charity — and they did it better and far more cheaply than the gov’t does today!)
There are countless more.
If I am forced to choose a politician who falls on one side or the other, I guess my priorities are different than yours. I believe it makes zero sense to permit government intrusion into all other areas of my life simply to uphold my so-called “reproductive rights.” Especially since Roe vs. Wade already protects those rights. Wouldn’t you agree?
As for Bush … far more soldiers died in Afghanistan and Iraq under Obama than Bush. I think it’s finally time for O and his supporters to take just a little responsibility for things that happened on their watch — what do you say? 😀
So well said!
I would also like to add that Republicans DO NOT CARE who has sex with who… boy girl, we don’t care! But we also don’t like it in our faces all the time! We don’t need to see it on the television on every single sitcom and movie… I hate to break it to the Dems but not every woman is a lesbian and not every man is secretly wanting other men.
Thank you, Liz. 😀
“The conventional wisdom is lower density areas mean less crime.
“That being said, I’m not packing up and moving away from my suburban home to a farm in the boondocks.” – Len
But, Len, it might be useful to think about land as a store of wealth, compared to precious metal. Land can provide food and fuel independently of the usual supply economy and is not so subject to robbery as precious metal. Also, the bitcoin needs evaluation as a store of wealth (admittedly speculative, since virtual currency is in it’s infancy.
Ralph, I definitely think productive land is a reasonable way to hedge for monetary and supply chain collapse. It’s not my cup of tea, but it will be a great hedge for many people. As for land not being subject to robbery … I’m not so sure. There is nothing stopping a desperate government from raising property taxes to onerous levels that can’t be paid in times of fiscal distress — and we all know they will happily seize it if need be in lieu of taxes paid!
Unlike land, you can also easily hide precious metals from the government and thieves. (And, yes, I can hear some of you out there mumbling that I’m being redundant.)
Hi Len,
I don’t understand how my mortgage payment will go down?
You wrote this below.
Long-term fixed rate mortgages. Consider refinancing into a 30-year mortgage. Thats because, as hyperinflation takes it course, those with fixed-rate 30-year mortgages who are lucky enough to remain employed will find that the percentage of their paycheck that goes toward that mortgage payment will decrease significantly, leaving more money to buy other necessities, like food and fuel. And if hyperinflation really takes off, they may even be able to pay off the loan completely.
Penny, your mortgage payment will not go down in nominal terms — but it will decrease as a percentage of your overall paycheck IF hyperinflation takes root AND you remain employed. That’s because your employers will be forced to increase your wages significantly just to ensure you have enough money to buy food and keep the utilities on! They really have no choice, otherwise people would simply not work.
During hyperinflation, your paycheck could easily double or triple in a relatively short period of time — but your mortgage payment will not change.
That’s not to say you will end up getting rich; you won’t because most of your raises will be used to pay for the skyrocketing prices of food, utilities and services. The good news is you should be able to pay off your mortgage very quickly with the little discretionary income you’ll have left over.
Excellent article!
I am so amazed at how many people have insurance for everything, but don’t insure their themselves with many basic supplies that can sustain them, ie. extra food, clothing etc.
Yet have a playstation, xbox, cellphones out the wazoo, cable tv etc.
Fantastic article, Len!
I found this article (and your website) by doing a Google search. I did this because I’m just an average Joe and economics is not my strong point, but I can see that something is very, very, very wrong when I look at the economy in not only the US but also in most other Western countries (including Australia, where I live), even though most economists could quote various statistics that I don’t understand to tell me why I’m overreacting and that the fundamental of the economy are sound. Therefore, I am beginning to think about the practical things that I can do now to prepare for the difficult times ahead – which is why I think this article is really useful. You don’t need to be a genius to figure out that you can’t live beyond your means forever and that eventually you WILL have to pay the money back!
As well as physical fitness which you mentioned in one of the above comments, I would also suggest a couple more things to add to your list:
* Follow up any health issues which you have been too busy to do anything about because it’s not urgent or painful so you just haven’t got around to doing anything about it . Decent medical treatment will probably become MUCH more expensive in the future so it would seem like a good idea to address these issues now.
* Cash! According to Ferfal’s book (which I bought and would strongly recommend), he suggests having at least a few thousand dollars in your local currency in small denominations stored somewhere in a safe place in case your bank suddenly closes its doors (hopefully only temporarily!) and you need to buy essentials from shops or people.
(I also have a comment about gold but I’ll post it under your article ‘Silver and Gold: The Superheroes of Wealth Preservation’)
Thanks again, Len!
Great comments, John. Thank you.
Len, you mentioned that in Weimar, Germany, the mortgages weren’t reindexed until the very end. However, I read an account written by a Weimar Germany survivor who explained that when the next currency was implemented, the government instituted a “tax” on everyone who benefitted from their mortgage debt being deflated away…so if a person paid off their mortgage during the hyper inflationary period, they owed 50% of the current price of their house in new taxes. Never underestimate the power of a desperate government to steal resources from its citizens…a collapsing government is like a wounded animal with its back against the wall.
Basil: In his book When Money Dies, Adam Fergusson notes that the government rats did impose a recoup tax on some people who smartly paid off their mortgages as their currency was imploding, but it was only retroactive to a short time period (I can’t remember at the moment how short, but I think it was one year prior to the end of the “paper mark” demise). Everyone else who paid off their mortgage for “pennies on the dollar” made out like bandits.
In the US, there is the Contract Clause — found in Article 1 Section 10 of the Constitution — which prohibits ex post facto laws that impair contract rights. I’m not a lawyer, but I maintain that a mortgage is indeed a contract between a borrower and lender, and therefore subject to the protections afforded under Article 1 Section 10. I’m sure I’m not the only one who agrees with that.
My mortgage is denominated in US dollars. It will be paid back in US dollars, per the contract — not the new currency that will surely replace the US dollar (even if it is given the exact same name).
Len,
A very timely article and a great way for people to get their feet wet for prepping for what is eventually coming down the road.
Hopefully the message will get out to more people and hopefully they will listen.
Thanks, David. Unfortunately, I believe 99 out of every 100 people who read this will do absolutely nothing — and then panic when it is too late.
Great article Len.
Unfortunately, economic collapse can be initiated by any number of triggers; physical and financial. And, despite what the headlines say, we never really recovered from the last financial crisis. The next one will take us out at the knees because even though everything looks sweet from a distance, no-one has any reserves left: governments, especially.
Printing money only inflates the bubble and therefore, the inevitable bang, louder.
In my corner of the world, Australia, we survived the last crisis easily because our mining boom was in full swing and there was plenty of cash to splash around. That’s no longer the case. The mining boom is over. The export dollars are drying up, whole industries are disappearing and unemployment numbers are increasing.
The free market is a lie and a healthy, sustainable economy cannot exist while the market continues to be manipulated by vested interests. I reckon those vested interests know what’s coming and they’re milking it for all it’s worth.
A correction is inevitable. If the banks decide to call in their debts (ie; no bail out from the government) or shut their doors, then things will get very interesting. Very quickly.
Having a ‘Plan B’ is ALWAYS smart thinking. Always!
Hi I am 60 & my husband is 66. He is planning on retiring next year. We live in a major earthquake zone in town . I am torn between refinancing my house to a lower rate & pmt Or taking on a larger loan & pmt & moving to the country. My current home has a sun room & is mostly big windows everywhere. I worry about us being able to protect ourselves with these walls of windows. I have chickens but feel I wouldn’t be able to keep them or have a garden because of looting. Also feel if we lose our SSI & pension how will we live either way. I need input for this decision so badly and feel my window of opportunity is closing. Either way we go will we end up on the street? We have no debts except our home. Thank you anyone for opinions
When purchasing a firearm please consider the importance of a commonly used caliber…if your ammunition is difficult to find in good times then it will be almost impossible to find during a collapse…there’s no expiration date on ammo so stock up.