No matter what part of the world you live in, you can feel the pressure of a potential world economic crisis. The European markets are still depressed, major world economies like Greece, Italy and Argentina are failing to rebound, Venezuela is in a state of total chaos. The U.S. economy, while showing signs of improvement, still has a long road back, and current political bickering in the House and Senate is slowing the process.
Personally, you may already have been directly affected by these pressures, and are even now dealing with your own “financial crisis” – facing job loss or foreclosure, rising prices and falling incomes. However, even if you are doing well in the “Trump Economy,” do not be lulled into a false sense of complacency. Being prepared for a major economic upheaval, makes as much sense as being prepared for a hurricane if you live on the coast!
There are many top economists the world over that believe, despite what politicians and pundits may be saying, that nothing short of a complete overhaul of the entire financial system will stop the financial nightmare that is headed our way.
Is the World Financial System on the verge of a catastrophic failure? Respected experts say that if you know your history, the answer is a definite “Yes.” The US has been through 3 major financial upheavals in the past. Current world events indicate that the fourth, and quite possibly the worst yet, could be just over the horizon.
A world financial crisis of the magnitude that could be coming will be as devastating to your way of life as any hurricane or earthquake – and you must be equally prepared!
Why We May Be Facing an Impending Economic Upheaval
Most of you probably aren’t paying much attention to what is going on with the European and South American economies, but that is a big MISTAKE. Because believe it or not, what is happening in Greece, Italy, Argentina and Venezuela right now, could one day be happening in our own backyards!
Did you know that the U.S. national debt recently passed the 19 trillion dollar mark? State and municipal governments are also facing unprecedented amounts of debt. Tens of millions of American families are in debt way over their heads, and more American families fell into poverty in 2011 than any other time since the great depression. Despite drowning in this overwhelming sea of debt, the banks deemed “too big to fail” just keep getting bigger and the Federal Reserve continues to pump up that expanding debt bubble. You know what happens to bubbles – they can only expand so far until they BURST!
This is not political. It is not about which Party has the right plan to solve this crisis. The simple fact of the matter is, it is impossible to keep racking up debt at these staggering rates forever – without paying the piper. Unfortunately, our politicians – ON BOTH SIDES OF THE AISLE – still believe that the current financial system can be fixed with the usual ways.
How to Prepare for an Economic Meltdown
When the financial crisis of 2008 hit, do you know what the biggest danger was for most Americans? It was that they would lose their jobs and not be able to pay their bills.
That is exactly what happened during the last recession. Millions and millions of Americans did end up losing their jobs, and because so many of them were living paycheck to paycheck, they also ended up losing their homes. You don’t want that to happen to you. So the first bit of “what you need to do right now” advice I am going to give you, may not sound “sexy” or earth-shattering, but it may very well be one of the most crucial you read in this blog.
You need to have an emergency fund saved up that can cover your expenses for at least six months.
I don’t care if you work at Wal-Mart, or are a CEO, this way if you lose your job or your business tanks, you will be able to keep going for a while until you make you next move.
Did you know that these days it takes the average unemployed American more than 40 weeks to find a new job? And that number is only going to get higher in the next major economic downturn.
So, the first thing you need to be sure of, is to make certain that you have plenty of cash saved up. If you are currently living paycheck to paycheck you are extremely vulnerable.
The next thing you need to do is GET OUT OF DEBT. When financial troubles hit, you don’t want a horde of bill collectors banging at your door. This is especially true of Credit Card Debt. There isn’t any kind of debt nearly as toxic as credit card debt. For example, if you have a $6000 balance on a credit card with a 20 percent interest rate and only pay the minimum payment each month, it will take you 54 years to pay off that credit card. During those 54 years you will pay $26,168 in interest charges on that credit card balance in addition to the $6000 in principal that you are required to pay back, and that is before any fees or penalties are even calculated!
It is only after you have your financial house in order that you can think about what to invest in currently to accumulate as much wealth as you can between now and the crisis, so you have the right kind of assets on hand when it hits.
What you must do immediately is move at least 10% of your net worth into gold or silver bouillon or coins, put them in your own safekeeping – not a bank vault or safety deposit box.
In the event of a major economic event, it is highly unlikely that you will be able to get your money out of your bank. In a crisis of the magnitude that we are discussing, banks will collapse quickly, and you will not be able to rely on the FDIC or other federal safeguards to protect your assets. You need to put at least 10-20% of your savings in hard silver or gold coins, and you will at least have that percentage of your savings to count on.
Beyond physical precious metals, you should keep enough cash on hand — secured in a home safe, not in the bank – to cover at least one month of your total household expenses. Of course, paper currency will become devalued quickly, resulting in hyperinflation — such as is currently going on in Venezuela — and worthless eventually in the aftermath of a severe meltdown. However, in the very early stages of the crisis, especially as those who are less prepared find that they cannot get any money out of their banks – cash will retain significant value.
You should store this cash in small bill denominations, 20’s, 10’s, 5’s & 1’s. Stores that have supplies will definitely stop taking credit cards for payment, and you can be sure that ATMs will be emptied.
Besides the steps to protect your assets, and to have some valid currency, you MUST prepare for a Financial Meltdown, just as you would for any major natural disaster that could leave you figuratively and literally “out in the cold.”
Make sure your Bug Out Bag(s) are already to go with fresh supplies, your bugout vehicle is packed and completely fueled, and your home is secured with at least 3 weeks to one month of stored food and supplies in place. Be prepared to defend you home and supplies, as well as to leave in a hurry, should things get very bad.
If you have prepared a Safe House, be sure it too, is well-stocked, and consider Bugging Out to it ASAP, before the Sh*t really hits the fan.
This is only the basics on how to be ready for a major economic collapse. In future articles we will discuss Disaster Capitalism, Crisis Investing, and how to thrive in the aftermath of a collapse.
Written by Mike F. Strong