How Can We Prepare for the Coming Crisis?

[UPDATE 3/31/06 - Because this post has been drawing a fair amount of interest lately I'll mention that I have written a greatly expanded and more comprehensive version of this piece which was offered for sale some months ago through the website Life After The Oil Crash. That report can be found through this link and is titled Blueprint for Preparation. --SL]

As a follow up to the Timeline for the Unfolding Crisis of Mankind, we need to now address the question of “What can we be doing to help ease the shocks of unfolding events?”

The Crisis Timeline recognizes many different areas of social discord coming to a head: currency collapse, derivatives crisis, debt default, inflation, housing devaluation, oil scarcity (both geo-political and geo-logical), terrorism, war, urban strife…. But in truth, those are just the immediate, palpable issues. We might also cite less definable—although no less urgent—problems such as the severe disruptions we’ve caused in our ecosystems, the heightened incidence of unusual weather and earth disturbances, and the bastardization of our diets by the corporate food industries. These are just as real; but do they matter right now? It’s hard to say. Also, I’m not even attempting to entertain the numerous (and persistent) theories about meteorites/planets/dark stars destroying the Earth in 2012 or so….

So we can recognize that we have many critical macro-systems failing. And since they maintain an intense inter-relationship between them it strongly suggests that a domino-effect will occur once the first “catalyst” is triggered. Therefore, I believe that it is an entirely rational and necessary decision to begin making preparations and plans right now to help ease the shocks. However it’s not entirely possible to know just what specific events we might need to prepare for. So what is essential is that we take as the central axis of our preparations the theme of flexibility. We want to plan to have the maximum number of open-ended options which will allow us to respond to any type of significant events both quickly and calmly.

In formulating a practical plan, we can generally identify and focus on two principle themes as a guide for what preparations we might make. Those two themes are: the most immediately pressing concerns pertaining to Financial Meltdown, and the more protracted issues involved in addressing the need for social transformation toward a personal and cultural lifestyle that is both Locally-Based and Sustainable.

So without engaging in ideological issues, let’s talk about practical steps we can begin to take now to slowly accustom ourselves to what we face.

The direction we’re headed is Sustainable Living. The road leading there is called Deconsumption.

It’s often quoted that “History never repeats itself, but it sometimes rhymes”. As an imaginary reference, try to envision how you could prepare to live your life if you were suddenly thrust backward 200 years. Because the domino effects of financial breakdown leading gradually toward migration from the cities and possibly culminating in “oil famine” would suggest that that might be what is about to happen. But many people will not experience the next decade as a “breakdown” at all, they will experience it as a “reinvention”. Yes, we will continue to have residual attributes and accomplishments of the modern world surrounding us in a hodge-podge of ways, and technology and science will very likely continue to advance in many areas. But most of our contemporary life has been structured around easy-money and fossil-fuels, and that part will deteriorate eventually—probably much sooner than we would hope. And with it will go our lifestyle of perpetual consumption.

I’d like to share some of my thoughts on the ways we can begin to prepare now for the upheaval in lifestyle that I currently foresee. As a disclaimer, these are just my thoughts and personal plans, and should not be interpreted as advice. Your own situation, conditions, and psychology will need to determine what you make of your life in this regard. Also, keep in mind the following:

1) I live in the United States, so my views will be colored by the conditions of life here.

2) No one can predict the future reliably; all I’m attempting to do is look at current conditions and extrapolate them forward as rationally as possible.

3) Nothing turns out either as well as you think it will or as badly as you think it will.

4) All of the following suggestions, as well as any you plan for yourself, should still be beneficial to undertake even if it turns out that you experience no significant change in lifestyle whatsoever from the one you have today. So healthy skepticism should not be an obstacle to taking some kind of reasonable action.

5) When complex systems achieve a certain critical stage of stress, an otherwise insignificant event can suddenly become a dramatic catalyst. The Crisis Timeline necessarily assumes a somewhat predictable unfolding of events, but that’s highly unlikely. Without doubt some extraneous “catalyst” will “suddenly” appear which will propel us headlong into the fray (and which will also likely receive sole blame for our “unexpected misfortune”). So while we can attempt to identify the various weaknesses in our societal structure, it’s not likely that we can account for how “timely catalysts” will accelerate or influence the outcome of these crises.

Ways we can begin to prepare:

Priority I: Getting Your Financial House in Order

This first set of suggestions apply to the realm of Personal Finance, and are important for everybody to heed, regardless of what your feelings are about the future. They shouldn’t even be considered to be “preparations”. They are just good financial common sense:

1) Begin a serious and systematic campaign against your debt, including your mortgage. Somewhere along the line, the American Way of Life became synonymous with borrowing money, and to this day many people don’t even consider their mortgage to be “debt” at all. But it is. And hundreds of thousands of people are about to re-learn that fact in the next few years. Debt should not be something we always seem to have and live with—it should be something we approach only after serious consideration and with a great deal of anxiety. When you take on debt, you have agreed to work for another’s profit, and you give the lender a large degree of control over your life. There are all sorts of moral reasons why we should examine the “indoctrination of debt” that has oozed into our culture, but suffice it to say that if you can’t make your payments the bank can take your house. So get rid of debt. Plain and simple. All of it. And as quickly as is reasonable. I hope you’ll pardon the criticism, but “Only fools take 30 years to pay off their mortgage!” Now hopefully you don’t have much and doing this won’t be too great a burden, but if you’re like the average American you’re going to need to radically change your lifestyle in order to get this under control. You’re going to have to break through the mantra that Patriotism = Being a Good Consumer. It does not.

Alright, I’m done….

2) How about downsizing your house? Well, what do you think? This is a personal decision, but it’s also an important consideration. Without doubt this is going to be the only option for many Americans over the next few years. They simply have too much house for one income, and the two-income dream is a trap. The point is that just because your mortgage payments are not overly burdensome, it doesn’t mean your house isn’t a financial liability. That happens when the amount of the mortgage (and equity loans) is close to the market resale value of your home. Because housing prices can (and do) fall in value, it’s possible for the value of your home to fall below its loan amount. When that happens you become “upside-down” on your loan: which means you can’t afford to sell your home because you owe more to the bank than you would make from the sale. When housing prices begin to decline, it’s going to happen fast—especially in affluent suburbs, where most two-income households won’t survive becoming one-income ones. Judging by debt ratios, many people are going to quickly find themselves upside-down, and that can lead to escalating debt default across the country, since many people will simply “walk away” from their mortgage—and their home. Also, you might want to consider “out-sizing”, as I call it, or cashing in your affluent, big-city home for a much nicer rural one—and pocketing the difference. Some cities will weather the storm better than others, but cities in general are complex entities, and complex entities break down for surprisingly simple reasons. George Ure over at the excellent www.urbansurvival.com recently wrote about what he calls “city hypnosis”—the tendency for people to remain in cities despite the decreasing quality of life they offer, because they assume that things are better there than in rural areas. But what is interesting is that most people in rural areas think the urban-dwellers are idiots to live the way they do. The truth is that because of their concentration, and the support-systems they demand, cities nurture a greater range of diversity in human life and expression. Because of this they can seem more dynamic and exciting. However city-dwellers, unlike country-folk, generally don’t have a significant level of self-sufficiency to fall back on should those city-utility support systems break down for more than a day or two. Also, most city dwellers are simply too reliant on “personal convenience”—which is a fundamental aspect of city infrastructure—to respond efficiently to a sudden breakdown. But in the end, it seems like it all boils down to jobs: they tend to be more available within cities than outside of them. However if those begin to go, so will most of the perceived “advantages” of city life….

3) Begin accumulating gold and silver. Not as an investment, but as a store of wealth, and also as a likely vehicle for future trade. We’ve never known a life without paper dollars, so it may sound ridiculous that we might return to using precious metals for trade. But keep in mind that some countries already are. The former Prime Minister of Malaysia—which already uses a gold dinar internally—has been pushing forth a gold-based system of international trade among Islamic countries under the Organization of the Islamic Conference (he also has a central aim to see Oil priced in gold, instead of US Dollars). And more recently, Hugo Salinas Price of Mexico’s Grupo Elektra retail chain-stores is doing what is perceived as an end-run around his government by introducing a Silver Libertad into circulation through the company’s 900+ stores in four countries. They’re selling over 30,000 a month, all right here in good ol’ North America. It’s not the conspiracy theorists who are fretting about currency devaluation, it’s many of the Non-G-8 governments of the world. When Nixon pounded the last nail in the coffin of the gold standard in 1971, America began an experiment to see if we could prove the US Dollar to be the first paper currency that could maintain its value without imploding into worthlessness. And now, just 30 years later, we’ve seen a parabolic rise in the money supply that is unparalleled in history. And this doesn’t even address the means by which unbacked paper currencies serve to maintain the rule of Central Bankers over the citizenry, which is precisely why it was expressly forbidden by the American Constitution…. But the main point is to begin to see that paper currencies unbacked by hard assets are nothing more than a collective illusion, and as such it is impossible for them not to fail…it’s simply a matter of time.

Precious metals and recognized hard assets (real estate and other objects of value) are where we should be storing our wealth. So I recommend straight bullion-value coins: Gold Bars, Eagles, Maples, and Krugerrands. I don’t favor rare or collectible gold coins because of the premiums involved, and because I think they’ll be too difficult to barter with—and ultimately, that’s what we may end up doing. But if collecting is your thing, terrific…some people think this acts as a loophole should the US government decide to confiscate gold again, as occurred during the depression. And on a side note, if you choose a bank safe deposit box over a personal home-safe, call the bank every so often to make sure they continue to allow customers to access them in private. If they insist that a bank employee accompany you while you access it, remove your items immediately. Also, I don’t personally recommend gold ownership in “electronic” form such as through company stock or commodity accounts, since in worst-case scenarios you might never be able to recover your funds from financial institutions. Not to mention that your assets are still being valued in Dollars. Similarly for Perth Mint Certificates, which are a very useful investment vehicle for individuals with large amounts of money to invest, and which can be redeemed for physical gold…but again, that assumes that you will be able to do so….

One last caveat about investing in gold to keep in mind, however, is that if people’s lives become too greatly disrupted then gold will be just as useless as any other luxury, and the things of real value will be only the immediate necessities: water, food, medical supplies, etc. After all, if there is not enough stability for individuals to generate “excess work” over what is strictly necessary, then there is no need to store the value of that work. If this is the case, then barter will become the dominant means of trade.

Which leads into to the next topic…..

Priority II: Practical Preparations

If crisis events make life in the larger community so unstable that people will become overwhelmed in meeting the day to day necessities, then the world of economics and finance will have broken down completely. As such, money would be useless, and basic necessities will be the only things of value. If these conditions are very temporary, then there are a number of basic preparations one could undertake to bridge the gap until basic public services and a sense of normalcy return. Every individual should spend a weekend or two putting together a emergency preparation plan and supplies. This is just good foresight for any type of sudden unforeseen natural or manmade occurrence which might occur, such as flooding, an earthquake, chemical spill, etc. A good source for help with this can be found here: www.ready.gov.

But what if the situation is more than temporary? What if a precipitating crisis or series of crises results not in an “interruption” of life, but in a radical breakdown and effective transformation of it? While that is somewhat unlikely, nevertheless such a breakdown can indeed occur, if for instance escalating food and energy prices resulted in a disruption of food distribution as well as hoarding and scarcity, especially in the urban ones where it’s needed most. Or perhaps a generalized economic crash or depression leads to widespread housing foreclosures, resulting in outbreaks of crime and civil unrest, and a consequent flight from the cities. And what about war? Should another war develop involving global powers, there is little chance that even geographically isolated America will not experience attacks to her cities.

1) Begin to assess your long-term sustainable water and food needs right away. You should begin by stocking your pantry with at least a month or two of canned or dried goods and bottled water. Also, get in the habit of draining a gallon or two from your hot water heater every two or three months, to clear the sediments. It not only prolongs its life, but your heater is the primary water storage for most homes, so you want that water to be as potable as possible. Preparing for a more prolonged period of uncertainty and change, however, is going to require a more sustainable supply. And a sustainable supply is going to involve gardening (or farming), and typically a rain barrel for rainwater collection if you don’t have a reliable groundwater or fresh water supply available. (Barring this, a good water distiller can collect ambient water from the air, but will generally require electricity to run—this could be supplied by a modest PV (solar) panel and battery arrangement which you can easily hook-up for yourself. Water distillers come in many sizes and types, but a simple way to get the idea about them is to go to EBay and search under “distiller” or “water distiller”, you’ll get plenty of info.)

An excellent resource for a whole host of books on how to embrace more “traditional” living and hobby-farming is at Storey Publishing.

A good book on sustainable growing within limited space is John Jeavons’ classic How to Grow More Vegetables, or his scaled-down and more accessible primer on the same subject: The Sustainable Vegetable Garden.

You don’t necessarily need to undertake a large garden right away…the point is just to become familiar and experienced with what is involved in one. You can begin to learn right now just by planting a modest garden in your yard or even on your balcony.

Also, the flip-side of trying to grow your own food is to be able to preserve it during the winter months. So if you’re so inclined, you might study up on the art of preserving food without refrigeration. This means canning and pickling, and also a process called lacto-fermentation. A good, easy, comprehensive guide to traditional food methods is Sally Fallon’s Nourishing Traditions.

2) If you live in an urban area and you can realistically swing it, you’ll probably want to look into purchasing or building a sustainable home on about 10 or more acres of arable land—and preferably between one and three hours from any large population. This step is obviously not going to be possible for most people, and again, you shouldn’t take out a large mortgage to do so. But this is a primary means for achieving flexibility should you experience either a temporary disruption of life or a more permanent one. You don’t need it to be a “second home”—a one room cabin will certainly serve most purposes in a pinch. In fact, if you live in an area that doesn’t experience freezing temperatures you could rough-it for several days with just a flat spot on which to pitch a tent (although if you need a more prolonged getaway, it’s going to be necessary to have a place in which you have already stored food, water and supplies…). But whatever it may be, you absolutely must have access to well water, or at the very least an above ground freshwater supply. If the property has significant dead-wood on it, so much the better—although a full propane tank will tide you over also. And you’ll want to have some books, seeds and implements there which will allow you the capability to grow a fair-sized garden.

Again I’ll say it: it’s very difficult to predict the future we face with any accuracy. But even looking at the broad brush-strokes, we can recognize that “cities” are very complex organisms, and there are many crucial life-lines and systems supporting them, any one of which can cause serious repercussion should they break down. So it’s not irrational to take a more pro-active approach, and use the current social stability we have to begin to acquire the flexibility to address any coming changes in a way that might allow you to more seamlessly transition into a new life should that be necessary. That way you won’t be just watching and reacting as your old one is torn apart. And a sustainable second “home” is the most convenient solution for meeting any of a wide range of disruptions that could affect urban functioning.

So what does “sustainable” home mean? Well essentially it means that it should be possible to permanently live in it should you suddenly (or not so suddenly) lose all access to public utilities: electricity, water, natural gas, trash and sewage disposal, etc. You probably won’t be as comfortable as you are in your primary residence, but you will quickly adjust and make a new life for yourself and your loved ones (many of whom may need to move in with you…). This falls under the “deconsumption” part of this weblog, because Sustainable Living is where our nation is headed, whether it’s as a result of the more immediate crisis to our financial system or the slowly creeping crisis that is the end of cheap fossil fuels. And if you are planning on building a home, it won’t be difficult to find a homebuilder who is well-versed in methods and materials for building sustainable housing. Some aspects can be retro-fitted to an existing dwelling, but others are best included in the original housing plan.

3) Work to develop a practical skill (if you don’t already have one) that you could use to barter with. Become knowledgeable about plumbing, electricity, cheese-making, small engine repair, growing peppercorn plants, whatever…. It should preferably be something most people don’t know, but that most people will value…and which you don’t need too much technology or specialized equipment for. Be clever about it. For myself, I’m currently learning to install solar water heaters, and I’ve even found a non-profit in Wisconsin that gives classes in it. I figure hot water will always be a luxury that people won’t want to live without. I’m also curious to learn about building and running a home-made whiskey-still…my guess is that if things really start to fall apart, the feds will have their hands full over the next decade, and won’t worry too much about a new generation of gin-runners….

4) Strengthen a network of friends whom you feel would have much-needed knowledge or qualities for building a mutual support system should you experience a few years of uncertainty and upheaval. In all reality it is not possible for a very small group of people to survive for long “left to their own devices”, especially in a climate that experiences freezing weather (ever see the PBS series “Frontier House”?) It will be critical to be able to pool knowledge, work and abilities. So why not try to show a new appreciation for people in your life who possess diverse interests and skills, especially physical ones? Education, specialized knowledge, and “book-smarts” are valuable qualities in our present time—but they probably won’t be so useful in the next. Make friends with your G.P., not your plastic surgeon…your plumber, not your lawyer…. Host some BBQ’s or dinner parties…or at least include them in your humorous-email address book….

5) It’s prudent to keep a Grab ‘n’ Go bag. This is a backpack or sport-bag you keep tucked away in your closet which contains a couple changes of clothes, some spare cash, and back-up supplies for everything you would absolutely need to have to get you by for a few days if you suddenly had to leave your house immediately and make a run for it. You’ll get the gist of it at www.ready.gov. Also, you’ll probably want to change it from winter clothing to summer clothing each Spring, and vice versa in Fall.

It’s a good idea to get yourself into the habit of never letting your gas tank get to empty. Furthermore, if you live in a heavily populated area, then along with the grab ‘n’ go bag, you would also need to spend some time formulating a series of escape routes and plans—i.e. how would you get outside the city as quickly as possible by car?…by motorcycle?…by bike?...etc. What if major roads are blocked? And where would you go first? Should you make any special preparations ahead of time to ensure your escape plan works smoothly? How would you arrange to meet up with family and friends if they were not with you, and phones were not accessible or working? This step is easily overlooked but incredibly important. You’ll want to spend some time thinking things through, so that you'll have a ready-made response to work with should you need it. Also, this step more than any other gets your mind focused on envisioning the realities of what could happen to you—in your particular situation—should a crisis of any sort arise.

6) You might sock a little booze and cigarettes away for use in barter. They seem to be time-tested tradable goods in almost any situation.

Priority III: Restructure your Life for Maximum Flexibility: Mentally, Emotionally, and Physically.

When the avalanche begins, life will begin to become more and more chaotic. We will find ourselves torn between the desire to cling to what we have and know, or moving and readjusting into a new way of life. The latter choice is going to be the most difficult to take, since we can’t know ahead of time what that new life will be like—we will be literally making it up as we go along. But in times that demand action, uncertainty and hesitation can be costly. And if you are locked into your current way of life and thinking, or if you cling to complacency and denial, you’ll be like a deer in the headlights. It’s going to be very tempting to think: “This is America!…Things can’t get that bad…Our leaders say they can solve this problem if we just all tow the line…Somehow I’ll weather the storm…”. And maybe that’s so…. But it is very, very unlikely that not taking responsibility for your life is going to be the proper response to a large-scale crisis. Also, our media and government are hardly quick to admit the truth, so it’s likely that they will continually report that things seem to be “turning up soon”…even as the long slide continues to unfold.

Seeing how critical the problems are for our way of life, I know that it’s going to be extremely difficult for things not to snowball out of control. And I’m not the only one. The number of level-headed, educated, intelligent people to foresee disaster for the American way of life is growing quite large. If you’ve found this website, you’re probably already traveling within that circle. But it’s important to understand that at some point soon that number will reach a kind of critical mass, and that’s the point when the people who have not prepared will find themselves already left behind. Because as more people begin to recognize a trend, the windows of opportunity pertaining to it close up. And for those behind the curve, by the time they decide they may need to take action the markets will already be falling, the price of gold will already be escalating, residential housing prices will have plummeted and the hobby-farms will have been snapped-up....

The key to flexibility is preparing in advance. And that means becoming sensitive to what is happening around you and in your society. Which further involves being able to separate the information that is important from the vast amount that is nothing more than a waste of your time. And ultimately you’ll have to spend time examining your life and attempting to identify the things that you cling to, and bring those dependences clearly into question.

Here’s one small example of something I’m working on in this regard. I’m a plate-cleaner. I even find I get a trifle upset if someone wants to try a little of something on my plate. So I’ve been making it a task to leave a couple bites behind whenever I eat. It’s a small thing, but I find it to be an effort nonetheless. And it’s a “do-able” step toward my ultimate goal, which is to try to leave myself feeling just a little un-satiated when I eat my meals. There’s no necessary reason to feel full at the end of every meal, and it can be very useful to accustom yourself to not being ruled by your appetite.

Another example might be to address one’s dependence on working for a specific salary level, or perhaps a dependence on being employed by someone else. To do this, you may try to begin thinking like an entrepreneur. What would you do if you lost your job tomorrow, and saw no possibility for finding employment? Do you know a few legitimate and credible activities or businesses you could start up on-the-fly to bring in some money?

When I traveled in India a few years ago the value of this became strikingly clear, because despite all the outsourcing of Western jobs into that country I would guess that almost half of the people you see on the street of any town or city are in an absolutely unemployable situation. So it’s a vivid representation of the importance of having the ability to employ yourself. There were many, many beggars, obviously, and almost as many con schemes (which, while morally reprehensible, will at least help to keep your head above water). But even these things depend on having a steady stream of wealthy “targets” available. (I’ll also attest to the impressive humanity of the Indian culture, which respects the basic right of other people—in contrast to places like Nairobi where many of the under class seem to find it much more convenient to resort to violence and crime to get by). And occasionally I would meet someone who has organized a profitable venture out of nothing. The common quality of those successful people seems to be the sense of responsibility they take…not just in living their lives, but in respecting their lives and the conditions they find themselves in.

That said, you should also not put your life “on hold” because of forebodings about the future. What is important is simply to be aware of the pressures that will probably be coming to bear on all our lives in the near future. Through a continued effort at awareness we will find the guidance we need, while we continue to embrace the hope for a better tomorrow. And on this sentimental note, I’ll also state my unshakeable belief that in times of social hardship, being a good person is going to buy you infinitely more goodwill and support than any material goods you’d get by being an opportunist. It’s the more difficult path, to be sure…but that’s why it holds greater rewards. So remember that whatever our future holds, we will not be facing it alone.

And on that note, perhaps the best advice I know is to sincerely strive to more and more fully appreciate the life you have right now. It’s difficult to become aware of all the ways in which our society and lifestyle are out of balance without feeling anxious, angry, cynical or just helpless. But as far as material progress goes, we’re living in the greatest era in human history, and have a lot to be thankful for. Just because our age of consumption has to end doesn’t mean we’ll be returning to the Stone Age. Man has shown a remarkable adaptability to changing conditions of life, and if you could speak to someone living in the “Dark Ages” I’m positive they’d feel every bit as complacent about their lot in life as anyone you speak to today. Everything is relative. But there is truly transcendent wisdom in the adage: “Hope for the best. Prepare for the worst. Accept whatever comes.”