I run this blog on libertarian investments. I talk politics, economics, money, and investment strategies. Occasionally I get challenged on my commentary and I even get challenged on the investment strategies. One particular challenge is that if I am giving suggestions from a libertarian point of view, that the number one goal should be survivalism.
The interest in survivalism is immense. With the economic troubles starting in 2008 and the election of Obama, combined with the internet, the interest in this topic is enormous. There are literally tens of thousands of people who believe that there is going to be a complete breakdown in our civilization.
I do believe there is major economic trouble ahead. There could be massive rioting, particularly in big cities. There could be a significant increase in crime. There could be higher unemployment, more poverty, and an increase in homelessness. However, I think the chances of seeing a complete breakdown in civilization are very low.
One investment strategy I have recommended that the survivalists out there should like is one of my hedges against inflation. I recommend storing up on extra food and other necessities when they are on sale. You can’t buy extra milk and other things with near-term expiration dates, but there are a lot of things you can store up on. You can buy extra soda, bottled water, canned foods, frozen foods (although they wouldn’t last without power), cereals, rice, etc. You can also buy extra toilet paper, paper towels, deodorant, shaving cream, shampoo, soap, etc. As long as they are things that you will eventually use, then I figure you can’t really lose anything with this strategy. The prices of these things will most likely not be any lower one year from now.
I give this strategy as primarily an inflation hedge. But it is also a good idea in a survivalist sense. If there is a hurricane, snowstorm, or some other natural disaster, then having extra food will be important. You should always have enough extra food to last you at least one week, at a minimum.
The survivalists will not like this. They will tell me I have to get a second house in the country and raise my own food and prepare for the worst. While I can’t be one hundred percent sure that something won’t happen, I am not going to turn my life upside down to prepare for something that will most likely never happen.
I only see two things that could realistically happen to cause a breakdown in civilization. One is hyperinflation and the other is some kind of a terror attack.
I have said before that I think hyperinflation is unlikely. While I can definitely see high price inflation happening, I don’t see the Fed and the rest of the bankers promoting a policy that would destroy themselves.
As to a terror attack, this is a little more likely, although it would have to be really bad to disrupt society that much. It would have to be something major, like an airborne illness. Unless, there was a major pandemic, society would find a way to continue on.
I don’t think many of the survivalists understand what they are saying. If there was a complete breakdown in the division of labor in our society, then most of the survivalists would perish too. Maybe they could hold on for a little while longer, but not by much. How would they protect their gardens or farms? How will they get any medical care? What happens when their shoes are worn out? Can they survive the heat and cold of the seasons? How will they protect their property?
These questions could go on and on. We take so many things for granted, we don’t even think about them. We are talking about a society where you can’t go anywhere (there would be no gas and it wouldn’t be safe). We are talking about all stores being shut down. We are talking about staying in your house for the rest of your life or until most of the population dies off. We are talking about the need to have several people bonded together. They would have to take shifts in order to guard their property 24 hours a day.
If you believe there is going to be a breakdown in civilization like this, then you must turn your life upside down to prepare for it. Tinkering around the edges will not get you far. Tinkering around the edges will allow you to survive a hurricane or a short-term breakdown. This is why I will not go to full-fledged survivalist mode. It is not worth the costs. It won’t be much of a life to live anyway if it ever did happen.