How to Survive an Economic Collapse

how to survive an economic collapse wall street signhow to survive an economic collapse wall street sign

There are countless catastrophes we should prepare for, and while “general” prepping helps with all of them, some require specific actions or preps. This article explores one in particular – how to survive an economic collapse.

There is no doubt that the current state of the US is ripe for economic disaster. Though stocks are at an all-time high, our current debt is completely unstable. We’ve accrued more in debt just within the past ten years than we have throughout the rest of US history. The U.S. debt as of this writing is roughly $27,310,582,000,000. If the U.S. population is at 330,610,031 people, that equates out to $82,606/person.

The US economy is in a very tenable position.

It’s been said before that when America sneezes, the whole world catches cold. If the US economy collapses, the entire world economy collapses. That alone should be cause for hesitation.

So, if we can see the warning signs, and it does seem as if the economy is very likely to collapse sometime in the near to immediate future, what can we do to prepare? Are there steps that we can take to mitigate the effects of such a global disaster to both ourselves and our families?

Economic Depressions vs Collapse

To begin with, I think it’s important to differentiate between economic collapse and economic depression. A depression is a rather normal part of the market cycle. As Adam Smith points out in Wealth of Nations, these occasionally happen as the market corrects imbalances within itself. Maybe there’s some form of bubble akin to the Dutch Tulip Bubble of the 1600s where the price of rare tulip bulbs increased to preposterous levels before people lost entire fortunes when the market corrected itself. Who knows. The point is that economic depression is rather normal.

We all witnessed the effects of the crash of 2009. Thousands lost millions. Yet, if they had kept their money in those sinking stocks rather than withdraw, they would now have exponential returns for their initial investments. Why? Because markets do fluctuate.

I also don’t believe that events as bad as The Great Depression can truly be called a collapse in any sense of the word.

When I say collapse, I’m referring to situations such as post-WW2 Germany, Zimbabwe, Venezuela, and the like. When you literally have to pay for a loaf of bread with a wheelbarrow full of bills because of hyperinflation, THEN you have economic collapse.

How Do We Prepare for Economic Collapse?

Thankfully, history can give us some advice here.

As Ayn Rand points out throughout her books (particularly in Capitalism: The Unknown Ideal), it is production which is true wealth. The person who produces, whether that be food, shoes, holsters, or some other form of tangible good, is the one who holds true wealth. They’re adding something to society, creating something that others need or want.

In the same spirit, I would argue that the person who can provide a tangible service as well also has true wealth. An electrician who can provide light to a building, a plumber who can ensure personal hygiene is a diminished issue, and a doctor who can repair a wound are all examples of people who may not necessarily produce tangible goods (such as in the case of farmers, leatherworkers, and blacksmiths), but they still are able to produce a service that is both wanted and needed.

electrician on ladderelectrician on ladder
Learning a skill that people need will help you weather an economic collapse.

So, one of the first things that we can do to prepare ourselves for economic collapse is to become capable of producing.

This can be done in two primary ways: by the learning of a new skill or by getting into the business of producing merchandise.

Learning a New Skill

This is part of the reason that I went and became a locksmith. I have more than one job but wanted to have something of a backup plan perchance something should happen to my primary income. Tradesmen are both necessary and (typically) in short supply. Learning a concrete skill seemed to be something that would provide a fairly decent insurance policy should I need to fall back on something else. I’m glad I did, too. We’re a ‘key’ business.

Whether it be plumbing, carpentry, farrier work, or any other kind of trade for that matter, the point is that becoming proficient in a trade is to make yourself proficient in something that is likely to always be necessary. To look at a rather morbid example of such, we can analyze what the Germans did to the Jews throughout the Holocaust. Whether you are reading Schindler’s List, Maus, or The Man Who Broke into Auschwitz, you can see that it was the Jews who knew a trade such as metal polishing, mechanical work, or machining were (at least for a while) kept alive. (Of course, I’m by no means saying that pianists, teachers, and shopkeepers had no value.)

Learning to Produce Products

The second aspect would be investment in a particular merchandise. It involves producing products, starting a side business of some sort, perhaps. True, this often requires increasing one’s knowledge in a particular field, but there are some regions where it is simply the investment that allows a man to produce. As the saying goes, it takes money to make money.

This is where a shopkeeper would fit in. It is because such a man has invested capital into supplies that he is able to produce wealth for himself. Post-economic collapse though, which supplies will help one to produce wealth, however? Well, that leads me to the next topic: bartering.

Barter Society

I think that one of the first things that people need to realize when it comes to economic collapse is that things revert to a BARTER society. Look throughout history, and you’ll see that this is the case. The world doesn’t go to pot and a day later people are walking around and trading gold coins with one another. (I believe Joe Nobody illustrates this point rather well in his Holding Their Own series).

No, people start with trading goods and services for other needed/desired goods and services. Greece proved this with their recent economic collapse within the past five years or so. People traded eggs, milk, and meat for what they needed. I think it’s important to note that the farmer – a producer – was the one that was able to provide this for people as well. HE had true wealth throughout the collapse.

Again, in Venezuela we saw the same thing. People resorted to trading bananas for haircuts. The FIRST thing that becomes of value during an economic collapse is goods and services. True, there will be a very short window in which cash is king until people realize that the paper they have trusted all those years is now truly worthless in every sense of the word, but that window is short.

Barterable Goods and Services

barter economybarter economy
Are you prepared to barter?

So, after the brief cash window closes, after your world resorts to barter, the question becomes: “Okay, so what do I barter with? How do I get the things that my family needs?”

Regarding goods, I believe that the following is a good list to begin with. These are the things that people are going to need, and that are going to hold intrinsic value post-economic collapse:

  • Water – Particularly water bottles. These are readily portable, and not so value dense as to be unpractical for trade.
  • Water Filters – The majority of Americans have less than 3 days of food in their home. That includes water. If people can’t afford their electric bill, post-economic collapse, they are going to need access to safe water, and a water filter provides that.
  • Ammo – I truly believe that this will be one of the most practical and widely accepted forms of currency. It’s been used before as a currency, and it’ll be used again.
  • Guns – Value-dense, but there are going to be people who want them to protect their families from post-collapse violence. The demand for guns skyrocketed this year thanks to the riots and government action. What do you think the demand will look like post-collapse?
  • Gasoline Containers – Everybody will need them, and very few have them.
  • Food – There will always be a need for food, and – as witnessed by food bank lines – one of the first indicators of economic downturns.
  • Diapers – Parents go through thousands of these per year and will not have an adequate supply for their kids post-collapse. I believe reusable cloth diapers will be important.
  • Body Armor – Value-dense, but people will want it. There are record sales of it this year, and that desire will continue in a violent, post-collapse economy.
  • Coffee – It creates an addiction, and the withdrawal effects SUCK. People are going to want coffee, and there are ways to store it for a long time.
  • Boots – There will be an increase in the amount of walking the average man does thanks to the unavailability of gasoline. Shoes will wear out and need to be replaced.
  • Coats – Clothing wears out, new people are always being created, people constantly change size, and people always need it.
  • Gloves – There will be an increase in outdoor work, and gloves wear out.
  • Alcohol – Another thing that mankind can’t seem to get enough of. I just wouldn’t broadcast how much of this stuff that you have. People kill for it.
  • Tobacco – Another addiction that I wouldn’t broadcast you have a lot of. Cigarettes were routinely used as currency among POWs in WW2, and still are used in prisons throughout the world as currency.
  • Baby Formula – If breastfeeding is no longer an option, people are going to need formula to feed their babies. Parents WILL feed their babies, and there will be a dire need for such. Once again, not something I would advertise that I have a stockpile of.
  • Gasoline – This will always be needed for vehicles and generators.
  • Salt – Needed for meat storage since it is very unlikely that people will have access to constant electricity for refrigeration.
  • Medical Supplies – Crutches, slings, gauze, various first aid equipment and more will be in short supply. People always hurt themselves, and very few of much stored for their own first aid.
  • Medicine – There will always be a need for medication.
  • Spare Gun Parts – Guns break, and few have spare parts stored.
  • Condoms – People are going to realize that now is probably not the best time to get pregnant. If you staple three of them together and sell them in multi-packs, you can create a market for your baby formula as well! (I’m kidding, I’m kidding.)
  • Holsters – The thousands of people who bought pistols to keep in their nightstand will come to realize that they need a way to carry their weapon around with them. Things will be too dangerous to do otherwise, and many forget to buy a holster ahead of time.

When it comes to services, these are the skills that I believe will be in great demand post-economic collapse. It would be wise to learn at least some degree of proficiency in one of them.

  • Farming – Food production will be vital, and the man with beehives, fields, a garden, chickens, or dairy animals will be able to produce an item that people need on a daily basis.
  • Ranching – Much different than farming. Whether you know how to manage cattle for somebody else, or have the knowledge to raise them of your own accord, cattle, sheep, goats, and so on are going to need to be cared for to provide meat, leather, hides, and more for people.
  • Mechanical Work – Vehicles, generators, and more will break down and people will need them to be fixed.
  • Electrical Work – Wiring solar, pumps for wells, and more will always be needed.
  • Machining – It is likely that there will still be factories producing, and machinists will be needed for such.
  • Gunsmithing – Accidents happen, and few trust their own abilities to fix a firearm. Gunsmiths will be needed for such events.
  • Leatherwork – Primarily for holsters, gun straps, and clothing.
  • Medical Work – There will be a dire need for such workers post-economic collapse. People will be unable to afford their medications, or regular healthcare services, and thus there will be a drastic increase in acute conditions. Medical workers will be needed to address such, even if it is on the individual barter basis.
  • Protection – Herds, businesses, neighborhoods, and residences are going to want permanent protection, and will be willing to hire experienced armed men to do so. Knowing how to patrol, set up a perimeter, and dispose of threats will be in demand.
  • Baking – Knowledge of how to make bread will allow you to produce an item that everyone will need and want post-collapse.
  • Textile Creation – Whether this comes in the form of knitting, crocheting, tailoring, or so on, there will be a need for items of cloth as clothing gradually wears out, is lost, soiled, or stolen.

Keep in mind that all the above are general lists. Undoubtedly, you will be able to think of both goods and services that will have post-economic collapse value that are not included above. These are simply given to get your mind thinking about some sure-fire ways to be able to barter for what you need in the event of an economic collapse.

What About Precious Metals?

silver precious metalssilver precious metals

There are two reasons gold and silver have been omitted:

First, the use of precious metals doesn’t seem to come into common use until well after the period of barter transactions.

Second, I believe that precious metals are much more important for wealth evacuation. Let’s take a look at both of these in more detail.

To begin with, seldom throughout history do we see precious metals instantly being reverted to as currency post-economic collapse. Why? You can’t eat them, you can’t drink them, and few understand their inherent value (ask a friend what the current price of gold is to find see). Even fewer can tell if the gold/silver that you are offering them is the real deal or a fake.

Stocking precious metals is now how to survive an economic collapse. People don’t want gold and silver after an economic collapse. They want to be able to feed their families. Gold and silver will not be a readily used means of exchange in such an event.

To further complicate matters, gold is incredibly value dense. As of this writing, gold is a little over $2000 an ounce. That’s a lot of value wrapped up in that little coin. If you need ammunition, and go to buy it from some small-time reloader, do you think he’ll be able to honor the equivalent of an ounce of gold’s worth of ammo? Odds are he won’t even have that much in stock. If we really want to examine the issue, I think that silver would be a better form of currency, precious-metals wise.

Silver is currently around $25/ounce. That’s a much more useable value amount on a daily basis. (If you want to read more, read about the best silver for preppers.) However, what we see throughout history is the reversion to barter, not to the gold standard.

Gold Exception – Wealth Evacuation

If you’ve got to get the heck out of somewhere, and fast, then I believe that gold is where it’s at. Silver is too bulky. A pocket full of gold coins would allow you to “start fresh” somewhere a bit more stable (if you can find such a place). Shoot, we can even look at the US post-Civil War here. Southern money was worth nothing after the war. However, those with gold and silver were able to have something with inherent value that would be redeemable for the new currency. 

Again, we can look to the German Jews of the late 1930s. This was a very scary time to be a Jew in Europe. The persecution was very real, and things were heating up. The man who was able to sew gold coins up into the hem of his jacket, and get the heck out of Dodge ASAP was able to arrive at a new and politically friendlier climate with at least some of his wealth intact and under the radar. Baggage is lost and stolen. Clothing seldom is. Thus, I believe that one of the best purposes of gold is wealth evacuation.

How to Survive an Economic Collapse Summary

If you had asked people a year ago if they ever thought the entire world would enact lockdowns and throw refuse people for not wearing a surgical mask at Kroger, they would have said you were nuts. Yet, here we are. Why is it so improbable to think an economic collapse couldn’t be next? All of the warning signs are there? Is it foolish to just ignore them, and pretend that things will always continue on as “normal”?

I’ll let you come to your own conclusions.

Hopefully, however this article has helped you to come to some decisions on the matter. Hopefully, it has given you something to think about. Are there other factors with economic collapse that you don’t think I covered? Are there other skills or goods that you believe to be inherently valuable post-economic collapse? Let us know in the comments below!

(Photo credits: Neil. Moralee I said “cut the red wire” ! via photopin (license). Alex E. Proimos Wall Street Sign via photopin (license). Sustainable Economies Law Center 123 barter copy via photopin (license).)

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