{"id":18329,"date":"2020-03-09T04:15:40","date_gmt":"2020-03-09T11:15:40","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=18329"},"modified":"2023-06-25T20:20:40","modified_gmt":"2023-06-26T03:20:40","slug":"economic-collapse-101-ten-ways-to-prepare-for-the-unknown-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id18329-economic-collapse-101-ten-ways-to-prepare-for-the-unknown-2.html","title":{"rendered":"Economic Collapse 101: Ten Ways to Prepare for the Unknown"},"content":{"rendered":"<p><a href=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2013\/03\/burning-dollars.jpg\" rel=\"attachment wp-att-35387\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-35387\" src=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2013\/03\/burning-dollars.jpg\" alt=\"burning dollars\" width=\"396\" height=\"263\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2013\/03\/burning-dollars.jpg 640w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2013\/03\/burning-dollars-300x199.jpg 300w\" sizes=\"auto, (max-width: 396px) 100vw, 396px\" \/><\/a>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 &#8230; not so much.<\/p>\n<p>It&#8217;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 &#8212; and I&#8217;ve been explaining for several years now why I believe an <a href=\"https:\/\/lenpenzo.com\/blog\/id17707-economic-collapse-101-what-will-it-look-like-and-how-it-may-start.html\">economic collapse is inevitable<\/a>.<\/p>\n<p>If history is any guide, the good news is that it won&#8217;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 &#8212; but it remains less than idyllic there.<\/p>\n<p>Nobody can say exactly how the collapse of the &#8220;almighty&#8221; US dollar will unfold, but you can bet that most people will be unprepared if and when it happens. If we&#8217;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.<\/p>\n<p>If not, collapse will be much more chaotic &#8230;<\/p>\n<p>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 &#8212; especially in major metropolitan areas &#8212; 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 &#8212; just far less efficiently than before.<\/p>\n<p>How long will it take for things to get back to a relative state of normalcy? That&#8217;s anybody&#8217;s guess, but I&#8217;ve been preparing under the following assumptions:<\/p>\n<ol>\n<li>A collapse of the US dollar will not &#8212; repeat, WILL NOT &#8212; result in a Mad Max end-of-the-world scenario<\/li>\n<li>Supermarket shelves will remain empty for six months<\/li>\n<\/ol>\n<p>With that in mind, here&#8217;s how you should consider preparing for a collapse &#8212; in order of descending importance:<\/p>\n<p><strong>Water.<\/strong> If you&#8217;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, <a href=\"https:\/\/lenpenzo.com\/blog\/id19914-economic-collapse-101-how-to-prepare-for-water-supply-disruptions-2.html\">ideally you should prepare<\/a> 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.<\/p>\n<p><strong>Food.<\/strong> In the opening days and weeks of the crisis, the last place you&#8217;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&#8217;s ready to eat and doesn&#8217;t require other valuable resources to prepare such as heat and water, <a href=\"https:\/\/lenpenzo.com\/blog\/id17348-comparing-the-costs-of-various-emergency-food-supply-options.html\">it&#8217;s also much more expensive<\/a>. That being said, while there may be occasional utility disruptions due to a lack of spare parts, I don&#8217;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.<\/p>\n<p><strong>Warmth.<\/strong> Although I live in a warm weather climate, I realize many people don&#8217;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.<\/p>\n<p><strong>Medications.<\/strong> 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.<\/p>\n<p><strong>Sanitary supplies<\/strong>. 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&#8217;ll also want to make sure you have adequate stores of toilet paper, baby wipes, paper towels, trash bags, and feminine hygiene products.<\/p>\n<p><strong>Employment. <\/strong>The best <a href=\"https:\/\/lenpenzo.com\/blog\/id602-18-scary-things-you-didnt-know-about-inflation-and-hyperinflation.html\">protection against hyperinflation<\/a> 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.<\/p>\n<p><strong>Barter items.<\/strong> 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.<\/p>\n<p><strong>Defense.<\/strong> 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 <em>hours<\/em> away. That&#8217;s because they&#8217;re going to be overwhelmed trying to keep some semblance of order &#8212; especially if you live in a large metropolitan area. After Argentina&#8217;s economy collapsed at the turn of the century, <a href=\"https:\/\/books.google.com\/books?id=GaxTDwAAQBAJ&amp;pg=PA2\" target=\"_blank\" rel=\"noopener noreferrer\">the crime rate nearly tripled<\/a>. So, more than ever, protecting your home, family, and yourself is going to be <em>your<\/em> 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&#8217;ve ever made; my daughter learned to safely handle a handgun before she was 16. If you aren&#8217;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&#8217;re going to need it.<\/p>\n<p><strong>Long-term fixed rate mortgages. <\/strong>Consider refinancing into a 30-year mortgage. That&#8217;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 <a href=\"https:\/\/lenpenzo.com\/blog\/id25716-why-paying-off-the-mortgage-early-may-be-a-big-mistake-2.html\" target=\"_blank\" rel=\"noopener\">pay off the loan<\/a> completely.<\/p>\n<p><strong>Wealth preservation.<\/strong> 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, <a href=\"https:\/\/lenpenzo.com\/blog\/id16252-silver-and-gold-the-superheroes-of-wealth-preservation.html\">precious metals maintain their purchasing power<\/a> &#8212; which is why many experts recommend keeping somewhere between 10% and 30% of your net worth (excluding your home equity) in physical <a href=\"https:\/\/lenpenzo.com\/blog\/id33261-a-first-time-buyers-guide-for-gold-and-silver-3.html\" target=\"_blank\" rel=\"noopener noreferrer\">gold and silver<\/a> 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.<\/p>\n<p>So there you have it.<\/p>\n<p>Yes, if you haven&#8217;t started preparing you&#8217;ve got a lot of work to do.<\/p>\n<p>Yes, making sure you&#8217;re properly prepared to weather the storm that will ensue from an economic collapse is a relatively expensive endeavor. But that money you&#8217;re spending is an investment in your future.<\/p>\n<p>If you have a family, you owe it to them to do everything you can to make sure they&#8217;re going to make it to other side of this looming economic calamity healthy, happy, and full of hope.<\/p>\n<p>Just think of it as <a href=\"https:\/\/lenpenzo.com\/blog\/id22332-economic-collapse-101-the-most-important-insurance-we-never-buy-3.html\" target=\"_blank\" rel=\"noopener\">another insurance policy<\/a>.<\/p>\n<p style=\"text-align: right;\"><span style=\"font-size: smaller;\">Photo Credit: Mike Poresky<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>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 &#8230; not so much. It&#8217;s no secret that recent volatility in the world financial system has more than a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35387,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[479,483,459,460,464],"tags":[],"class_list":{"0":"post-18329","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economic-collapse","8":"category-gold-and-silver","9":"category-family","10":"category-insurance","11":"category-retirement","12":"pmpro-has-access","13":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Economic Collapse 101: Ten Ways to Prepare for the Unknown<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lenpenzo.com\/blog\/id18329-economic-collapse-101-ten-ways-to-prepare-for-the-unknown-2.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic Collapse 101: Ten Ways to Prepare for the Unknown\" \/>\n<meta property=\"og:description\" content=\"Most folks are really good about making sure they have the proper amount of insurance for their home and automobiles. 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