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By December 9, 2012 Read More →

Why Preparing is Essential – Economic Collapse

G-5_inflation_50-94_chart, Wikicommons.org

Many Preppers believe that the most likely reason they will be using their stored goods will be a natural disaster.  It may happen.  But let me tell you what I believe is the most likely purpose those goods will need to be used; widespread financial crisis.

The food that preppers have stored will be used in lieu of weekly purchased store-bought food, not because the food at the store is not available, but because it is too expensive.  It will be used on an ongoing, regular basis (and not in response to a specific event like a natural disaster), while others financially struggle to buy food because they don’t have stored goods.  Preppers will start using a piece of rope to hang clothes to dry, instead of paying increased electric bills from an electric clothes dryer.  Self-defense items will be employed by preppers to defend their goods they had the foresight to store, instead of defending oneself.  The bad guy those self-defense items will be used against will not be the usual criminal-type, but one of the many people who did not prepare for the future state of the economy.  (As an aside, I think the secure garden will prove to be the best prepper investment of them all.).

Just like the USA and the former USSR, the rest of the world learned that economic conditions proved more important than how many nuclear warheads each had.  In the future, preppers and non-preppers will learn that our personal wealth and how we used it will be the critical factor in a person’s quality of life on a personal level.

Why do I say this?  It is because it looks like there is no way out of our current economic malaise and our long-term problem — our staggering national debt.  We simply do not have the political will to do what is necessary, never mind be able to agree on what plan to implement, to save ourselves from the coming economic pain.  Recent events indicate that the national debt will increase even more rapidly.

Residential-pantry, wikimedia commons

Ben Bernanke, Chairman of the Federal Reserve, recently announced a new quantitative easing plan, known as QE3, coming after QE1 and QE2.  QE3 plans to purchase 40 billion a month in mortgage-backed securities, in addition to continuing what has become known as operation twist.  This will continue to increase the money supply.  However, commentators debate the amount of  inflation now, and how much will come in the future.  The government says there is hardly any inflation, but as any grocery shopper will tell you, items, especially food, are costing more.  Regardless of what the official government numbers and economists say about the extent of inflation, you can count on food prices to soar in the future as the Federal Reserve carries out its latest plan.

With regard to employment, this dichotomy between  government’s official numbers, and what people really experience, continues.  For instance, the “unemployment rate” the government concedes, is still high, but is down from early 2009.  Before you rely on this and think things have really improved, realize that even the numbers show more people have left the job force in the past few years than in a long while.  We now have a job force the size it was 40 years ago. That means the numbers show many people have simply given up trying to find a job.   But no matter how you interpret or spin the unemployment numbers, what anyone recently laid off or successful in finding a job can tell you, the jobs aren’t what they used to be.

Yes, you may be able to find one, but it will not come with the same pay, benefits, or stability provided in prior job

Atalaya_pantry wikimedia commons

markets.  “McJobs”, as some have termed these new opportunities, are the norm.  Will good jobs ever return?  In the face of two major forces:  1) automation;  and 2) outsourcing (companies moving to Mexico or who knows where), there is no reason to think current trends are going to change.  So, whether you were able to find a new job or not, the overall theme is a lack of real wages.  Real wages have been stagnant since 1973.  This is one official number that does seem to jive with the reality people have experienced.

With inflation poised to rise, and unemployment (real wages,which at best are treading water) the overall economy and the growth rate will be dragged down.  For everyday folks, this means a continuing grind to get by.  As the paycheck shrinks from lower real wages, and the value of the paycheck decreases from inflation, the budget will get tighter and tighter.  Prepare for the chronic economic struggle that will lead to preppers employing their skills and goods unto everyday living.

[guest-author]George E. Bourguignon, Jr., Esq.

Mr. Bourguignon is an attorney licensed in Massachusetts.  His focus is on financial matters.  His practice areas are bankruptcy, debt collection abuse, foreclosure defense, litigation, and identity theft.  He has offices in both Worcester and Springfield, Massachusetts.

Phone: (508) 769-1359 and (413) 746-8008

Email address: gbourguignon AT bourguignonlaw.com

Website:  http://www.bourguignonlaw.com

[/guest-author]



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2 Comments on "Why Preparing is Essential – Economic Collapse"

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  1. Brad says:

    I really like what you had to say. I don’t think the food shortage will come because of high priced food but yet because farmers are not using sustainable practices. They are over fertilizing the soil that has been used for generations and mass planting more than has ever been planted before. With the population increases and abnormal weather we are only a couple of seasons away from a doubling of food prices. Farmers no longer roatate crops nor grow a wide range of things on their 500 acres, its now just corn and soybeans, or cotton, or the flavor of the week that makes them the most cash. The small farms that use the soil every 4-5 years are all but gone, they used to grow just about everything and it was totally sustainable.

    • Steve says:

      The government subsidizes bad farming practices and crushes substainable small farms that do things In a natural.  Such as raise cattle on grasses on rotated pastures.



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