There are multiple possible threats to civilization including natural disasters and human-made calamities. One of the most likely threats is a complete economic meltdown. A total US economic collapse can be brought on by a wide range of factors including:
- Hyperinflation brought on by a rapid and unprecedented decrease of the dollar value.
- A major terrorist attack that completely destroys infrastructure and impedes the free movement of people and goods.
- A large scale civil war that renders the government useless in exercising its mandate and carrying out its responsibilities.
It is worth noting that there isn’t a widely accepted definition of what constitutes a complete economic collapse. There have been rare notable instances where the US economy has come close to complete annihilation, including:
- The Great Crash of 1929 which was a result of a natural disaster (devastating storms) in the Great Lakes Region.
- The OPEC Embargo of 1973 which increased the price of crude oil by more than four-fold.
- The Great Recession of 2008 commonly attributed to the collapse of the housing market.
This article will explore the possibility of a complete US economy collapse and offer some practical tips on how to cushion yourself and survive in such an event.
5 Risk Mitigation Strategies for a Total Economic Collapse
First, it is very unlikely that the US economy could completely collapse to the point where it is irreparable. Part of the reasons for this point of view includes:
- The Federal Reserve has measures in place to prevent or mitigate the collapse of the dollar value. The Contractionary Monetary Policy contains these implements for prevention.
- The US military can quell a large scale civil war. An all out enemy land invasion is out of the question for the same reason.
- Homeland Security is well equipped to deal with a large-scale terrorist attack. Such an attack is also very unlikely especially considering post 9/11 security measures. Furthermore, the first role Missile Defense Agency is to prevent a nuclear missile attack.
It is for these reasons that the worst plausible scenario would be another recession or economic crisis. The following risk mitigation strategies should help you to survive such an eventuality. These strategies also work in a complete economic collapse scenario.
1. Prepare for a Stock Market Crash
A stock market crash is tough to predict. A crash is, however, a likely scenario, and you can prepare yourself for by diversifying your investment portfolio. Keep commodities, bonds, and stocks.
The instinct for most people in the event of an uncertain economy or impending crash is to sell stock as quickly as possible. In this case; sell some of your bonds and commodities and use the proceeds to buy stock which is now at rock bottom prices. The economy will eventually recover, and your stocks will see returns many times over. An economic downturn can prove to be lucrative if you remain calm and clearheaded.
2. Keep a Significant Number of Liquid Assets
Liquid assets simply mean assets that can be converted into hard, cold cash in a short time, usually in less than a week. Holding these assets is among the best risk mitigation strategies that you could employ because it means having cash to buy essentials or bribe if necessary.
Among the best liquid assets include cash stored in a safe and discreet location (preferably in small bills), money market accounts, and savings accounts. Gold bars are cumbersome to transport and may not be of much value in case of a market crash or economic failure. Gold coins are far more useful as they are easy to carry around and easy to trade.
3. Learn Basic Survival Skills
Learning basic survival skills is a two-fold process. Firstly, it is important to acquire skills considered as valuable in a traditional or cashless economy. These include repair, cooking, and farming. The idea is that you can trade your skills for basic needs such as food, shelter, and clothing. These practical skills will be in high demand in an economic collapse. Cash may be useless, but useful skills are great risk mitigation strategies as they can always be exchanged for something.
Secondly, learn basic survival skills. These should help you to survive in the unlikely event that the economy has collapsed beyond repair. In this case, survival will be the preserve of the fittest. Your continuing existence will depend on your level of physical fitness and to have basic survival skills including hunting, farming, foraging, and self-defense.
4. Keep a Stockpile of Food and Water
A worst case scenario means you only need two things; enough food and water until you can come up with a long-term solution. Reserve enough food and water to last you and your family for at least two weeks. The supplies should give you time to assess the situation and come up with a long-term survival strategy. Opt for canned and non-perishable foods that are high in nutrition value. Store clean water in plastic containers and ration accordingly.
Beware of looters because survival mode brings out the worst in human nature. Keep your stockpile in a secret location, preferably in a location other than your home. A complete economic collapse will likely follow a breakdown of law and order. Secrecy, self-defense skills, and weapons will be your best allies in this case.
5. Keep a Current Passport
Assuming that the United States is the only country facing a complete economic meltdown, your best chance of survival may be to leave the country. A US economic collapse will likely trigger the collapse of the global economy. Other countries may, however, have their risk mitigation strategies to protect themselves and may be willing to take in refugees. A current passport that is easily accessible may be your ticket to survival.
A complete US economic collapse is unlikely but not impossible. These risk mitigation strategies can be applied now to give you peace of mind should the worst happen. Above all else, avoid making rash or emotional decisions as these could seriously impact your chances of survival. Remain calm and maintain hope that the economy will eventually repair itself even in a worst case scenario. Your primary job is to survive long enough to see this happen.
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