Those with an attentive ear to the tracks listening for the approach of the next economic crisis, the financial rumblings from Russia are growing loud enough for most to hear. With the devaluation of the ruble (down 50% against the Dollar this year), the drop in oil prices (not good for an economy dependent on it) and western countries’ imposed sanctions for Putin’s actions in the Ukraine, it is tempting to cheer, to conclude Russia and its heavy-handed president had this coming. But as we all know, today’s world is interlinked. Countries are networked together in a larger global economy. And with the benefits such connectivity brings, it also sends waves back out to everyone when financial failures hit just one. We witnessed this in the Great Recession. That was then and this is Russia, now.
How can Russian problems hurt us in the U.S.?
A good question. Since Russia’s entrance into the World Trade Organization 3 years ago, economic trade with them has amounted to only 0.1%, meaning we don’t do a whole lot of business with them. U.S. stocks have been rattled somewhat in the last few days that could stunt economic activity if the trend continues. But those slim ties don’t add up to a wealth of concern. Besides, that’s the big stuff. The average family seems to have been spared any negative effects and with all honesty, there’s been more to smile about lately. Over the last few months, U.S. consumers’ wallets have thoroughly enjoyed the lower gas prices. There’s a bit more money in our pockets allowing us to stock some away or spend a little extra on holiday festivities. Where’s the doom and gloom?
Well, there’s the kicker. As the saying goes, it’s always calm before the storm and that storm is only waiting for the right conditions to descend. While the U.S. has weathered the threat of a Greek bankruptcy and current recessions and downturns in Japan and China, Russia’s problems could become… scary. Should the global economic dominoes line up in the right order… if the Russian central bank and other corporate entities begin defaulting on loans, loans provided and held by European banks, banks that are already mopping up from various other crises, that would lead to profound complications and topple the first dominoes. They would tumble across Europe and continue straight across the Pond to the U.S.
What would those developments mean for US preppers? How would we prepare for the tumbling dominoes here? The first step is already taken; the threat is recognized. The second, third and all after that will help prepare you for however far the economy may fall.
Run of the mill Recession to Economic Collapse
While no one feels any recession is something to brush off, it is better than the alternatives. If you’re anticipating a downturn or recession or even a depression, there are a few strategies to weigh, each with their benefits. During the last recession, debt was a significant issue. People’s lives were beaten up due to mountains of debt. For this reason, consider paying down yours before the crisis hits. You will owe less and have fewer demands placed on your money when the time comes for belt tightening. Another route is to start an emergency fund. Begin putting money aside to create a cushion for yourself. This will ensure there is money on hand to keep the heat and lights on, to buy food and to get your family by until things start turning around.
Now, if you foresee a broader economic collapse paying down debt or building up an emergency fund isn’t worth the resources. Viewed against the disaster of a full economic collapse, paying down a credit card is hardly a concern. Preparing for these circumstances, resources are best directed towards building your stockpiles of food and water, ensuring your home is equipped to exist off the grid and your family has all they need to survive sheltered in place.
Concerns of economic collapse drive a desire to ensure for financial security on the other end when the new economy forms. Precious metals (gold, silver and platinum) hold their value was making them viable currencies for what eventually emerges. However, during the collapse and for a significant period after, a transitional economy known as a barter economy will most likely take shape. People will trade for goods and services they require to survive. Consider pooling together a selection of these tradable commodities and skills beforehand;
- Extra food supplies
- Hunting and food preservation skills
- Food seeds and collection skills
- Knowledge to build and maintain water collection and filtration systems
- First aid/medical supplies and treatment skills
- Knowledge of medicinal herbs and natural medicines
- Ammunition and ammunition production knowledge
- Learn to distill alcohol and brew beer
- Candle making
- Radio repair
Any combination of these will make you and your family valued members of a barter community and will ensure a place for you all as the country repairs itself. While we can’t always predict global events accurately, preparing for the worst will ensure you can weather the moderate storms and emerge ahead of the game.