Preparing for Economic Disaster

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The world sometimes seems just a tremor away from economic disaster.

“Gold is gold, and it’s the ultimate safeguard against economic disaster. What disaster? Give us time, we’ll come up with one.” (Richard Russell, Dow Theory Letters)

Antidote to Optimism

Even regular readers of this column–folks who’ve certainly encountered ample evidence of the precarious position our society is in–may sometimes find their concern lulled by the accumulated weight of day after routine day. And who can blame such people for occasionally harboring a nagging doubt about the seriousness of the challenges that we face? After all, unless they’re among the one and a half million Americans who’ve joined the ranks of the unemployed in the past 12 months, they’re probably earning more money than they were just one short year ago (and, perhaps, wondering just why that extra cash hasn’t improved their standard of living a whit).

Furthermore, we now have a new president … a man who–he claims–is determined to breathe new life into our somewhat tired and cynical nation, and who aims to increase our military spending, balance the federal budget, and cut taxes. (That’s the political equivalent of firing eight shots from a six-shot revolver or of falling off a running horse without losing your hat!)

Unfortunately, though a little bit of optimism is understandable and even healthy under the right circumstances, all too often it causes men and women who ought to know better to accept a false sense of security. And when that happens–when a belief that things aren’t all that bad and are likely to get better tricks an individual into easing back into the middle class trap of credit-card living and evenings at home wrapped in a womb of alcohol and television–that sometimes healthy optimism can be as malignant as a metastasized cancer.

On the other hand, there’s certainly no good to be gained from wringing one’s hands and living each day in a state of panic. Fear can be a great motivator, but it’s too dangerous a tool to rely on for continuing inspiration. To do so would invite paranoia, and no amount of preparation can bring fulfillment or comfort to those who are always afraid.

No, the only reasonable way to approach the problems of adapting one’s lifestyle to the world situation is to gather as much information as possible, try to anticipate how those data might affect you and your loved ones (being sure to imagine every possible scenario, from best case to worst), and then put together a plan that will protect you and yours from whatever blusterings the winds of politics and economics have in store.

First, the Problems

Although at present we North Americans enjoy access to an absolutely incredible variety of foods (there are more flavors and textures on display in our average supermarket than could have been commanded by the mightiest monarch of a century ago), it would be unwise–to say the least–for anyone to assume that such bounty will always be available. In fact, our food supply and distribution systems are at the mercy of any number of factors.

For one thing, some authorities estimate that, of all the oil supplies available to the Western world, less than one-fifth is produced in our own hemisphere. Perhaps worse yet, fully two-thirds of the petroleum available to us is in the Middle East … an area that–recent events have shown–is unstable in its own right, and certainly must be considered a prime target for Soviet expansion.

A severe cutback in the roughly three-quarters of the U.S. daily oil “diet” that’s obtained from this volatile region would have drastic effects upon our ability even to move our food from the great monocropping agribusiness “breadbaskets” where it’s produced to the rest of the country. And, when you consider that it’s been estimated that our major cities have on hand–in warehouses and on market shelves, etc.–no more than two weeks’ worth of food, you’ll see that the “good life” is built on very shaky ground indeed.

Of course, cutbacks in oil aren’t the only threats to our food supplies. Urban areas, especially, are at the mercy of temporary shortages caused by truckers’ strikes, supermarket employees’ strikes, and similar disruptions at almost any point in the distribution system.

In addition, our ability to continue to produce the huge crops upon which much of our economy depends can’t, itself, be taken for granted anymore. As you probably know, the drought that hit many areas of North America in 1980 is far from over. The Mississippi River is running at a level far below normal for this time of year, and some particularly pessimistic weather observers believe that–if we aren’t blessed with a miraculous increase in precipitation in the coming months–river levels may actually become so low that barges will be unable to transport grain to our seaports … assuming, that is, that the same drought conditions leave us with a sufficient surplus to export! (Drought cycles are also said to recur at about 50-year intervals. And a dry spring, coupled with the continuing destruction of Midwestern topsoil by “modern” farming methods, could well result in a return of the horrible Dust Bowls of the 1930’s.)

Then again, the very monetary system that allows us to purchase necessities is far from immune to threats. It seems likely that double-digit inflation will continue through 1981, while many economic analysts insist that a severe recession/depression (and such downturns have historically paralleled drought cycles) must occur if our economy is to survive at all!

Furthermore, you may not be aware of the increasing unsteadiness among international banks that has resulted from the incredible debt–some $500 billion dollars of it–that has been run up by developing nations in the past decade. A number of the Third World countries have already had to stall on repayments, and “superborrowers” such as Brazil and Poland are now faced with financial problems that may hinder their ability to repay the banking institutions that have helped prop up those nations’ shaky economies. In fact, in a recent Wall Street Journal report, Oxford economist Thomas Balogh was quoted as saying, “The Third World has overborrowed, and default might have a domino effect [that could lead to] a catastrophe.”

And Then the Solution

The best possible situation a person could find him- or herself in, of course, would be one in which he or she could provide–from a wholly owned piece of land–his or her family with adequate food and shelter even if no resources were ever available from the outside again. Now, looking at the matter realistically, it becomes fairly obvious that a great number of us are never going to be able to achieve total family self-sufficiency, and fewer still would be able to do so overnight. However, that doesn’t mean that an individual can’t take steps to increase his or her level of self-reliance.

First, remember that in all but rock-bottom worst-case scenarios, the potential future breakdowns of our food and energy distribution systems would likely not be long-lived. If you can get to the point where you could take care of your family’s needs for even two weeks without depending upon outside supplies, you’ll be well on the way to security.

Then, in addition to building up as large a supply of dehydrated or canned food as you can afford and store, you might–rather than hold onto money that, in most cases, can’t draw enough interest to keep pace with inflation–want to put some of that cash into quality tools or into any other items that have value in and of themselves. Such goods will serve the same need and get the same jobs done regardless of whether their monetary “worth” is ten dollars or ten thousand!

And, perhaps most important, begin now to invest some of your time and energy in acquiring skills that decrease your dependence upon the services that may someday not be available. You’ll become more nearly self-sufficient, save money today by being able to build that addition or raise that food yourself, and–regardless of what the future brings–become a more confident, fulfilled, and just plain happy human being!

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