If an economic collapse were to occur, chances are it would happen rapidly, without warning. The unexpected nature of an economic collapse is one of its integral ingredients—without prediction, the structures that keep the economy intact would fail, with no safeguards in place or attempts made to stave it off.
The US economy nearly collapsed in 2008. With a run on banks the likes of which hadn’t been seen since the Great Depression, panicked investors withdrew funds to the tune of $140 billion dollars—an all time, record breaking high. If the withdrawals hadn’t stopped when they did, the US—and probably global—economy would have ground to a halt.
That doesn’t just mean banks would close and a lot of people on Wall Street would be out of a job. That means planes would stop flying, trucks and trains would stop rolling, and your local grocery store would run out of food.
In the event of an economic collapse, personal lines of credit would disappear. The plastic card you carry in your pocket would become just that—a plastic card, all but worthless. Banks would shut down. Supplies of food, gasoline, and basically everything you rely on being able to buy in the store would become exhausted. Eventually, if the collapse were large and long enough, local governments would shut down—meaning water and electricity would cease to flow. Emergency services might become unavailable. Communication networks could go down.
Economic Collapse: How Likely Is It?
There are several scenarios that could trigger an economic collapse, and though they might seem unlikely, there are factors at play on the global stage that could make any of them a terrifying reality if things were to happen in a certain way.
In the event that the US dollar were to rapidly lose value, it could create hyperinflation. A run on banks could force their closure—perhaps even their permanent dissolution, and as they began to fail they would halt lending, lines of credit, and eventually even cash withdrawal.
If anything catastrophic happened to the internet—some kind of widespread outage that prevented online transactions and international banking to occur—that could lead to economic collapse on a local or global scale. A terrorist attack of sufficient size could halt shipping for days or weeks. A massive oil embargo would have a similar effect.
If something happened in the US that could cause widespread civil unrest—something like supermarkets running out of food—violence could erupt from sea to shining sea. It’s possible that a combination of these events could overwhelm the government’s ability to prevent or respond to a collapse.
Protecting Yourself in the Event of an Economic Collapse
Remember that an economic collapse could happen without warning. Protecting yourself in the event of widespread economic disaster might become difficult. As is the cast in most crisis situations, survival usually comes down to preparation and information.
Though difficult to predict and impossible to stop once it begins, economic collapse would be survivable. Here is a list of steps you can take to be better prepared in the event that something like this should occur during your lifetime.
Educate yourself on basic economic principles and keep an eye on the markets so you can attempt to spot signs of instability or the potential for economic collapse long before it occurs. Know what constitutes a stock market crash, and if one occurs, realize that a recession is likely to follow. Carefully monitor economic indicators in that event so that you have as much warning as possible, should things become much, much worse.
The more liquid your assets are, the faster you can withdraw them from banking institutions should the need arise. Make sure you can get to the bulk of your money within a week’s time. Cash may become worthless in a total economic collapse, and the old idea of stockpiles of gold bullion isn’t a practical one—gold is heavy, difficult to transport, and perhaps most importantly, needs to be guarded. It may be better to put your money into something useful, like dry goods, certain kinds of over the counter medicines, anything that would have low or no supply and high demand in a post-collapse economy.
Keep your travel documentation and passport current so that you could, if the situation called for it and you had enough advance warning, leave the country to ride out an economic collapse. Research likely places you’d want to travel to in that event—places that would be easy to get to, would allow you in, and in which you could stay for a few months, minimum, while the worst of the crisis played itself out.
Though it may be unlikely, it pays to be prepared, and by following the steps above, you could take the necessary steps to keep yourself and your family safe in the event that the economy should completely collapse. Keep your eyes open!
To your survival,
P.S. I recommend you take this short quiz to assess your financial vulnerability in the event of an economic collapse. If you’re anything like me, you’ll be shocked at the results.