What to Do When the Economy Collapses

People who study the stock market note that major downturns – called corrections on Wall Street – occur every seven to eight years, on average. The last time stocks plummeted was during the “Great Recession” of 2008.

Before that, there was the Dot.Com Bust of 1999-2000 when the market fell
23% in one day of trading. And before that, many baby boomers and students of the ticker tape remember the “Black Monday” Stock Market Crash of 1987 when a seller panic caused values to plunge 23%.

If you look at an historical picture of the Dow Jones Industrial Average,
a zig-zag line climbs upward in time, from left to right.

The Dow is setting all-time highs which has many market forecasters
wondering when the next corrective decline in stock values will happen, and how bad it will be. These people think in terms of “when,” not
“if.” They prepare constantly for changing economic conditions.

Even people who aren’t invested in stocks, bonds, or other tradeables feel
the impact from a shriveling economy. Dollars shrink as prices rise.

One important fundamental to grasp about cash dollars is that they have
value because people think they havevalue. Today’s U.S. dollar bills are no longer backed by gold, silver, or any other commodity that has intrinsic value. U.S. dollars are fiat currency – backed by air.

The United States Federal Reserve – which is not a federal organization,
despite its name – has been printing paper money hand over fist. One gloomy economic theory is that people will eventually realize that paper money has no inherent value and it will become worthless.

Value is in the eye of the beholder. Cash money only has value if someone
with goods or services that you want will trade. So what will happen if and
when the day comes that a national or global economic collapse makes dollar bills valueless?

The forces that drive all economies are supply and demand. These won’t go
away even if paper money does. When people start to trade in the new
Barter Economy, some things will be worth more than others.

Suppose an economic disaster had closed all the grocery stores and
everyone had to live off the land and their wits. Now imagine a peddler came along with these items:

  • Eggs
  • Hens
  • Coops

If you had a place to keep them, hens and coops would be much more
valuable than eggs. Otherwise, you would probably value only the eggs.

The same idea applies to trading fish versus fishing poles and tackle
versus teaching how to fish versus showing where to get fish.

In addition to the standard SHTF stored goods – food, water, medical supplies, and other essentials – have some hand tools handy: hammers, pliers, knives, saws, axes, and screwdrivers. A left-handed monkey wrench could come in handy when a loaf of bread costs $1,000. (Don’t laugh, it’s happening in Venezuela.)

Learn now, before an economic collapse, how to grow foods you like to eat.
Start storing seeds and refresh your reserves regularly. Odds are everyone
else, post-collapse, will want to taste your surplus harvests – for a price.

Knowing where natural water sources are located near you is very valuable
when the faucets run dry. Find out how to tap a spring, build irrigation
ditches, dowse for water, and dig a well.

Building supplies are high-demand items whenever there is a catastrophe.
Stock up on screws, nails, caulk, wire, rope, generators, survival stoves, and
batteries. Solar panels would be very nice to have when the power goes out. But they are useless if you don’t know how to hook them up.

Likewise, household supplies will be highly prized when Walmarts shutters
its door. Cleansers, blankets, warm clothes, and toiletries will some of the
first necessities other people will also desire.

Gasoline-fueled vehicles will retain their value until there are no more
reserves. Perhaps an electric car isn’t such a bad idea?

Firearms and ammunition are the backbone of survival in a post-apocalyptic
world, sad to say. If you are new to guns, find a local NRA chapter or gun club
and choose a weapon that is tailored to your size and ability to handle it.
Then get a couple boxes of ammo. Then go to every seasonal gun show and buy
some more ammo. Fire off rounds at the rifle range regularly to stay in
practice. Keep your firearms clean, oiled, and stashed in a safe place AWAY
FROM CHILDREN.

Is it that far-fetched to imagine a world where we traded food for
bullets? Thinking along that line, acquire firearms that use very common
cartridges. “The most common pistol cartridges are 9mm, 38 Special and .45
ACP. The most common rifle cartridges are .22 Long Rifle, 7.62x39mm, and
5.56x45mm,” according to Skilled Survival.

Since the topic is economic collapse, let’s remember to talk about gold
and silver. These precious metals will always retain value in the long run. But
you can’t eat a Krugerrand (South African 1-ounce gold coin). Also, species –
as in coins – are heavy and bulky to lug around. If you have small coins such
as 1/10, 1/4, and 1/2 ounce pieces, get a wearable money belt online to make
your coin stash portable.

Based on my personal experience, if you had to choose only one surplus
item to stock up on to prepare for an economic collapse, it would be Snickers
bars. No kidding.

It doesn’t take long for people’s cravings to kick in after the local
Quicky-Mart has boarded its windows. An inventory of chocolate, tobacco
products, soft drinks, and other basically addictive substances will serve you
well when others who failed to prepare begin to fail.

One last observation: developing useful abilities and figuring out how to
teach them to others is probably the most precious asset you could have when
paper money is out of fashion. Even if you can’t afford to stockpile barter
supplies, you can turn your energy toward mastering homesteading and wilderness
survival skills.

The economic preppers who have it all going on – stored supplies and know-how – will be ruling the roost in
the post-collapse cashless world.