Preparing for SHTF – Investing in Cash, Gold, Land, and Firearms

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by Alex Drone

Although I believe the next crisis will be deflationary, I don’t have a crystal ball. I believe the best strategy to preserve your hard earned savings is to prepare for both the scenarios of inflation and deflation.  You should divide your assets evenly between those that will benefit during inflation and those that will benefit during deflation.

It is true that much of what has taken place in America over the last 100 years has been constant inflation mixed with a few very brief spurts of deflation. Most of the time your assets would be fine parked in gold, silver, stocks, bonds, real estate, and collectibles. But the history of constant inflation has made most believe deflation will never happen and few are prepared for it. Again, that’s why you need to prepare for both.

 

There is no absolute certainty that economic calamity will happen, but you certainly want to be prepared in case it does happen. People take out insurance policies on their cars, boats, and homes so why not do it with your money as well? FDIC is NOT insurance. It is a scheme devised to keep you confident in the banking system. I’ve explained in my articles that the banking system is indeed very shaky.

The first thing you need to do in preparing for an economic crisis is to change your attitude. You need to think the opposite of what the masses are thinking. When the masses are going broke buying new homes and shiny new cars, you need to be thinking about putting off big purchases and planing for the future. Whether the crisis hits six months, one year, or two years from now you need to put off procrastinating and take action NOW. You don’t want to be in the situation with your pants down when SHTF. You don’t want to be panicking the same time everyone else is. The second thing you need to do is to get out of debt. Pay off your loans, because during deflation even low interest rates will become burdensome.

Asset Allocation:

Cash – I highly recommend only leaving enough money in the banking system to pay your bills. Anything extra should be withdrawn as cash and stored somewhere on your property. You need to accumulate stacks of $20s and $100s. However, if you have a lot of money, then it will not be practical to keep it all in cash. I recommend investing in Treasury Bills through Treasurydirect.gov or a Treasury only mutual fund such as American Century.

I don’t think the oligarchs would be able to implement a cash ban although they may try. In the most extreme situation that cash becomes  banned, it’s not likely that one day you wake up they will be completely worthless. The government normally likes to do things gradually, starting with higher denomination bills first.

Gold – Invest in actual bullion and a gold storage service. I use Gold Money as my offsite storage. There is a moderate amount of paperwork involved in setting up an account. There are other services such as Bullion Star, Hard Asset Alliance,  and Bitgold. Personally I haven’t tried them. There are some overseas service that even accept Bitcoin for funding so your gold ownership can remain private.

Land – Farm land in particular may be valuable during SHTF. Many states make it illegal to live off-the-grid, so choose your land carefully. I recommend doing temp-work on an organic farm to gain some experience. You can locate a farm through wwoof.net or workaway.info.

Firearms & Ammo – This is an area I’ve recently been exploring. I think it’s worth stocking up on ammo and firearms as they have constantly been coming under pressure from the government. I do believe that there has been a panic rush to buy weapons because of the fear of further gun control. Panic and buying on fear usually produces bubble conditions as we have seen with gold and silver. Nevertheless the future is always uncertain and it doesn’t hurt to have firearms and ammo on hand. Should prices come down during a recession, you should be buying more.

I like to buy my stuff anonymously. I use services like armslist.org to buy my stuff. You may also buy them from gun shows. Guns, ammo, and  accessories should always be purchased with cash.

Safes – I recommend you look into investing in a quality safe for your valuables. The safe should be bolted down and located where it is not obviously visible to a thief when he/she snoops around your home. You should get a safe larger than what your need. Although the following video talks about gun safes, this could apply to any kind of safe:

An even better video:

I recommend you divide your assets with half of it in cash/cash equivalents and the other half in physicals such as gold, silver, land, and firearms.

 

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