Tuesday, December 18, 2007

Are you prepared for the ultimate financial collapse?

In my previous article, I called the 1929 depression the penultimate recession/depression. At the time, I thought this really meant the "ultimate recession". Imagine my embarrasment when I discovered the term penultimate meant "nearly ultimate" or "next to last".

But, as I thought about it, the slipup seemed almost fortuitous. In fact, the 1929 depression is far from the worst that could happen. Consider a complete financial breakdown...All utilities shutdown. All goods distribution shuts down. All retail outlets shut down. All money and traditional investments become worthless.

I'm not a doomsday theorist. I don't see the above scenario being likely in the near future. But, I don't think anyone can guarantee it won't happen tomorrow, next week or next year. I won't go into what might trigger it. You've seen the movies, and your imagination works as well as mine. Suffice to say, it is always a possibility. As a result, it makes sense to do some thinking and planning for such an event. Work through your own situation, but my thinking goes something like this.

Many own some rural property for just such a situation. I'm one, since that gives you additional resources. But, I believe even the typical single family homeowner has access to the resources required to gain self sufficiency.

Assuming there is plenty of air to breathe, your most urgent need is water. You are good for only a few days without it. Fortunately, you probably have 50-100 gallons in your house plumbing system, stored in the water heater, toilets and pipe. Don't use any of it for washing or flushing...this is your drinking water for 2-3 months. If you live within walking distance from a stream, pond or other natural water supply, you are set. Otherwise, consider setting up a system to collect rainwater and even dew from your roof, driveway or plants. Depending on your location, you probably can be self sufficient in water terms for the long term by collecting the rain and dew.

Your next most pressing need is food. You can live for a month or two without it. But, again, you probably have a significant supply around the house. Your refrigerator will be dead, so use the perishable food from there first. A loaf of bread, box of crackers and peanut butter are food for several weeks. A 5 pound bag of potatoes and a 2 pound bag of beans is good for considerably more, but save some back for seed. Even the leftover bacon grease and cooking oil will supply the energy you'll need for the first few months. The list is endless and varied, but you likely could survive with the food in your house for most of a year.

Next, check your yard and neighborhood. Dandelion is edible...roots, leaves and blossoms. The same applies to wild onions and garlics which commonly thrive in your yard. If you have an oak, pecan or other nut tree, you could have adequate food for a large part of each year. Even seeds from wild grasses such as oats, rye or almost any grass are edible and nutritous. In many neighborhoods dove, pigeons or other birds are harvestable by traps, or even slingshot or rock throwing, at least initially. If there is a stream or pond, you likely have fish, frogs, snakes and turtles.

All the above will likely become rather scarce fairly quickly, but they help provide the time for a transition. Ultimately, you'll need to live from what you grow. Start by putting newspapers, grass clippings, leaves or other debris on your grass to create a garden. Plant whatever beans, potatoes or other seeds you can find. The typical yard has room for more garden than you'll need to supply all your food. Remember you are not using water for flushing, so you've been going in a bucket and composting it for fertilizer and recycling the moisture for the garden. You'll need to know your neighbors and barter, trading both materials and knowledge. Maybe a bag of acorns for an ear of corn which, when planted will supply both a few months of food and replacement seed. Or knowledge about gardening for information about solar collectors.

Notice no mention until now of energy. Despite the fact that it seems critical to our modern lives, it falls fairly far down the priority list in a real financial breakdown. You can do without lights, heat, air conditioning and long distance travel. Perhaps you'll use wood or solar for cooking, dehyrating or sterilizing, but your energy needs are not great.

There you have a potential start. At this point you have a fairly sustainable life. Your plan will be different reflecting your local and resources, but give it some thought. This is the ultimate in personal finance.