As the economy continues to decline and we start to realize what lays ahead for us, a discussion keeps cropping up over what kind of investment should we make for the coming times. We know that we will have to buy some sort of supplies or other needs, but will we be able to simply pull out that little piece of plastic, or will hard currency be required? To be sure, only time will tell, but based on history and comparing it to what I see today, I have a couple of predictions to make regarding the question.

Before we get going down the road to buy a loaf of bread, let me clarify money, and its relationship to emergency preparedness planning. First of all, there are several different ways to look at the issue of hard money. One of them is as an investment instrument. People can trade and deal in currencies just like any other stock, and buy when a value is low, then sell when the value is high and make a profit from the sale of those holdings. It’s not a sure fire way to make an income, but if you are savvy in the ways of the market, the potential is there to make a proverbial killing in the markets.

The problem here is that if the ultimate meltdown does occur, will you be able to cash in on your investments, and use those funds to obtain needed supplies and equipment? In reality, I don’t believe so. You will most likely not be able to recoup on any of your investments, and in fact, you will not be able to get back the cash you initially invested, either. Why is that, you wonder? Because if in fact the ultimate melt down does occur, there will be no financial infrastructure available to process your request. There will be no bank to give you any of your money back to you. That’s if the ultimate meltdown occurs, that is. There are varying levels of collapse that will affect your investments to varying degrees. For that reason, I would suggest that you only deal in these sorts of investments if you can afford to lose everything you’ve invested into the game.

For purposes of emergency preparedness planning, we need to look at money a little differently. We need to look at money as it was initially developed. Money, in its basic precept is a tool for barter, and nothing more. If you need to hire a handyman to rake your yard, you trade a bit of cash in trade for his time. The handyman takes that cash and trades it for groceries or gas for his truck at the C-store. The store owner uses that cash to pay his employees and buy new gas and groceries. And the cycle continues on and on, dollar bills trading from hand to hand until you go to the bank and cash your paycheck so you can give that cash to others in exchange for what you need.

However, should this cycle become interrupted, how much value will that cash you hold have to those who possess what you desire? The so called leaders of this country are determined to implement what is called ‘smart grid’ technology in this country. That smart grid can very easily, according to some, be disrupted. Should this occur our entire financial infrastructure would come to a standstill. Banks would be unable to open. ATM would cease to function, and retailers would not be able to process credit card payments.

Your only option at this point would be cash. However, as a society we have become so entrenched in the security and convenience that little plastic card has that few of us carry much cash today. Some people I know carry just enough cash to get a couple of snacks and that’s it. Next time you are visiting a fast food joint, watch the number of people that pay for their meal with plastic. It’s amazing how many people do that. I’ve even seen people pay for a cup of coffee with a card. Granted, most of these transactions are via a debit charge rather than a credit charge, but it’s still an electronic transfer of funds. Paper checks are processed the same way today in larger chains as well. The money is taken from your account immediately rather than days later as the check goes through its processing routine.

Stores and gas stations may stay open in the event of a catastrophe, depending upon the severity and type, but if they cannot process credit and debit transactions, the only option is cash. Some may take paper checks, but that possibility is iffy at best. For the long term, you need to be prepared to live without that little piece of plastic. To do that, you’ll need to figure out an amount of ready cash you think you may need for a short duration when the infrastructure may be down. And remember that more than likely; we will see a sharp increase in the price of goods as those goods availability dwindles in the markets. Plan on at least three times what you would spend for goods today as an inflation buffer.

And then, as retailers find that their own credit lines are gone, and they cannot get any more products for their shelves, cash will become less and less meaningful. At some point we will find ourselves living in Bartertown, of which I have written on before. You’ll either need to have some product, or a skill that can be traded to get what you need.

Buffers against that time will only be what your preparedness plans have provided for you. For the most part, food will be a standard trade good, so try to have sufficient stocks of food with which to trade with. And just as a suggestion, you may want to use that as an opportunity to unload some of the shorter term foods that are either coming to their use by date or have gone past it. Desperate people won’t bother with dates, and if the food is safe, there’s nothing wrong with using it to barter.

Skills will eventually become barter tools, provided you have a marketable skill in the coming times. That being the case, I would suggest you learn how to do something that you don’t do now. Working for twenty bucks an hour in a call center may be good money, but if there is no infrastructure, as would be the case in a nationwide EMP attack, then there is no job, and no income. What will you do to provide for your family?

Remember that cash will be the only way of conducting business when the collapse finally begins, so make sure you’ve plenty on hand. But don’t flaunt it. Hide it and hide it well. There are dozens of ways of hiding what you’ve got, but I won’t describe them here as it would make for easy pickings by those with criminal intent. Pay attention to my writing and you’ll be able to pick out the clues as to what you should do.

The revolution has just begun, and it will be years before it comes to an end. We’ll have lots of distress in the meantime, and by developing your plans now, you’ll have an easier time of it later.

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