Surviving An Economical Crisis

[Murph]

This is a split from this thread:

Foreign stock indexes drop while American market closed...
http://zombiehunters.org/forum/viewtopic.php?t=25138

My hope is to get a practical discussion of how to survive an economical crisis. It seems like there would be some similar concepts from natural disaster and Zday planning, but also some unique to the economy.

How to survive if you lose your job, home, car, go bankrupt, etc. Or even a wide spread recession or depression. Input anyone?

[raptor]

Here are some good links to start the discussion.

http://zombiehunters.org/forum/viewtopic.php?t=20197

http://zombiehunters.org/forum/viewtopic.php?t=23794

[XtraBright]

Hello.

I think this is a good text about the last argentinia crisis:

http://www.peakoilandhumanity.com/Furth ... s_like.htm

XtraBright

[bingo 7]

Key #1 live beneath your means.
The less you have the man after you for the more likely you will survive.
Key #2 Learn to eat less.
Key #3 Have useful skills.

[raptor]

Key #1 live beneath your means.
The less you have the man after you for the more likely you will survive.
Key #2 Learn to eat less.
Key #3 Have useful skills.

Good rules! If you can only stick to rules 1 & 3 you will still do well in life.

[Murph]

Key #1 live beneath your means.
The less you have the man after you for the more likely you will survive.
Key #2 Learn to eat less.
Key #3 Have useful skills.

Good rules! If you can only stick to rules 1 & 3 you will still do well in life.

I agree, they're good rules. I'm just not sure they'd get you though something if it came to it. For instance, I don't have much debt, I rent, I only have to take care of myself. If my income was cut in half, or the price of everything doubled. I, as I'm sure others, would be effectively screwed.

[shenkhu]

Key #1 live beneath your means.
The less you have the man after you for the more likely you will survive.
Key #2 Learn to eat less.
Key #3 Have useful skills.

no 4. keep dollar bills in hands, not in banks
no 5. if you are not quite affected by the crisis, try to act as you are

[kyle]

no 4. keep dollar bills in hands, not in banks

That's silly. The money is only worth as much as the banks and the economy say it is.

If we have an economy crash the paper money you have stashed in your couch will be as useless there as it is in the bank, you just won't be getting any interest from it.

[sheddi]

FerFAL made some informative posts with his reflections on the economic "problems" in Argentina that are relevant to the issue at hand:
http://zombiehunters.org/forum/viewtopic.php?t=19925
http://zombiehunters.org/forum/viewtopic.php?t=22684

[sheddi]

If we have an economy crash the paper money you have stashed in your couch will be as useless there as it is in the bank, you just won't be getting any interest from it.

If there's a run on the banks, you might find that your money in the bank has to stay there. Witness the people queueing around the block when the Northern Rock (a UK bank) ran out of cheap wholesale lending in September.

http://news.bbc.co.uk/1/hi/business/6996136.stm

[raptor]

Key #1 live beneath your means.
The less you have the man after you for the more likely you will survive.
Key #2 Learn to eat less.
Key #3 Have useful skills.

Good rules! If you can only stick to rules 1 & 3 you will still do well in life.

I agree, they're good rules. I'm just not sure they'd get you though something if it came to it. For instance, I don't have much debt, I rent, I only have to take care of myself. If my income was cut in half, or the price of everything doubled. I, as I'm sure others, would be effectively screwed.

If you live beneath your means consistently you should have saved the excess cash flow. This would be a buffer for the income reduction. If you lost 1/2 your income and have useful skills you can replace or at least augment the lost wages with another job.

These are good general rules, though I agree they are not meant to be the whole plan.

[bingo 7]

Cash on hand is good. If you are savvy enough, early on you may have a good return on it, but if you wait too long, atleast you have toliet paper.

[GoldEagle]

Make sure you have at least a small amount of gold and silver with you at your residence. Yes, value does fluctuate depending on the market, but it doesn't hurt and could easily become useful.

[Murph]

Make sure you have at least a small amount of gold and silver with you at your residence. Yes, value does fluctuate depending on the market, but it doesn't hurt and could easily become useful.

After reading about Argentina, it sounds like gold "junk" jewerly would better. I might hit up kmart or the pawns around here.

[Kathy in FL]

Make sure you have at least a small amount of gold and silver with you at your residence. Yes, value does fluctuate depending on the market, but it doesn't hurt and could easily become useful.

Between 1935 and 1960 or 70 something it was illegal for US Citizens to own gold. So, don't count those chickens. If they did it once, they can do it again.

Here is some back up for that outrageous thought:

http://en.wikipedia.org/wiki/Gold_certificate
http://www.usagold.com/gildedopinion/buckler2.html
http://en.wikipedia.org/wiki/US_Gold_confiscation

[bingo 7]

Make sure you have at least a small amount of gold and silver with you at your residence. Yes, value does fluctuate depending on the market, but it doesn't hurt and could easily become useful.

Between 1935 and 1960 or 70 something it was illegal for US Citizens to own gold. So, don't count those chickens. If they did it once, they can do it again.

Here is some back up for that outrageous thought:

http://en.wikipedia.org/wiki/Gold_certificate
http://www.usagold.com/gildedopinion/buckler2.html
http://en.wikipedia.org/wiki/US_Gold_confiscation

That was Gold Coins. However, many countries just continued to mint coins with the preban date on it and it was perfectly legal to have it.

[Kathy in FL]

My husband was in banking for 17+ years and we've owned our own business for over 12. We aren't Rockefellers or anything near that but here are a few principles that we live by that have gotten us through lay-offs, family illnesses, and deaths in the family. We both started from lower middle income families. We are both in our early 40's so we've still got a loooong way to go before we can retire. We also have five kids to raise and I haven't worked outside the house for nearly 12 years though I am full partner in our business. Hubby stopped working at the career he got his college degree in four years ago and so we are now completely dependent on our business as our sole source of income.

Your mileage may vary, but this is what has worked for us.

1. Not all debt is bad. You just need to keep your debt to income ratio under control. With debt you can leverage your assets to increase your worth. For example a home mortgage is a good debt so long as it does not cause you to struggle to take care of your other bills and responsibilities. But remember to buy at a discount and not at the top of the market just because you can.

2. Credit cards are not bad; however, you should never put more on your credit card than you can afford to pay off at the end of the month. Use it like a revolving account as opposed to adding more debt than you pay off of it each month.

3. Before you go off buying anything or taking vacations, etc. accrue and maintain a 3 to 6 month "safety net" for all of your monthly expenses. Then, lock this money away and don't touch it accept to add to it until you actually need it. NEED man ... not want. This isn't to pay for a jacked up new car, living room furniture or even a down payment on a house. This is money that is going to keep you going in the event of an emergency.

4. Always take care of all NEEDS before you spend a half-penny on WANTS. If you prioritize where the money goes, it will likely always go in the right places.

5. If you have kids, start planning for their future now. That means setting up an educational and/or savings plan for them now as opposed to trying to figure out how you are going to come up with the money when you really need to. Don't ever give your kids access to this money until they have fulfilled their obligations to get it (attending college and getting good grades or show you a written plan and budget of how the money is going to be spent, etc.) For instance, our oldest will be starting college in the fall but we aren't in a dither wondering how it is going to be paid for because we planned for this when she was still a toddler. Same with the remaining four ... scholarships are good, but they don't pay for everything that's for sure.

6. Don't buy your kid a car until they actually need one ... and make them work to get it. Cars are not rights, they are responsibilities. This will also keep your insurance premiums down. And no crap about ... well they worked for it. If they are under 18 and living at home they need your permission for any legal documentation ... car titles, insurance, etc. In most states minors still need their parents' permission to get a license. As for your own car, better to spend the money keeping it up now than have to having to jump into a higher monthly payment because it died and you've been forced to buy a new one; its cheaper than way.

7. Always have at least one month of food in the house at any given time, preferrably one month of shelf stable food and not just stuff in the frig and freezer. Same with water. Note: I shop monthly rather than weekly and I always go with a grocery list and planned menu. You'd be amazed how much money this will save you. At the same time though, be ready to take advantage of sales that will help you flesh out your pantry.

8. Shop the sales but don't get married to them. Just because something is on sale doesn't mean it is a good buy. Anytime you shop price compare. This goes for everything ... not just food, but cars, household future and appliances, etc.

9. Shop thrift stores if possible, or at least price comparison. The thrift stores in my area are really picked over all the time. The yard sales have also gotten pretty pathetic. However, there are some great flea markets and farmer's markets around here. But even then, you can still find better deals in regular stores on new or dicontinued items if you keep your eyes open.

10. Minimize the amount of money you spend on eating out. Man oh man, will that kill a budget fast. Which means learning to cook. And cooking from scratch would be even better if you have the time for it. Find the balance that fits your budget.

11. Make a budget and stick to it. Review it regularly to make sure that you are following it or if there are ways to save more money. Or if you have a budget item that requires more allowance ... but that means taking it away from other areas.

12. Put money in savings at least once a month, preferrably weekly or bi-weekly. And then don't touch the savings account. Don't use it to offset bad check writing habits (over draft protection). Just learn better habits.

13. If you get a bonus, put it in the bank, don't just go out and spend it. Or at the very least, put it away in savings until you've had a chance to think about the best way to spend it.

14. Don't pay your bills even a day late. Nowadays, companies are turning in those kinds of late transactions to credit scoring agencies as soon as they occur. A couple of late payments will kill your credit score right when you might need it.

15. Keep meticulous records. This is very important for a couple of different reasons. Taxes (in case you get audited), insurance proof (in case you need to submit a claim), personal budget review, etc.

I'm sure there are a ton of other good ideas out there. We all have common sense. But in a bad economic period, you want to be in the most favorable situation possible. Personal liquidity is a good thing, but debt isn't automatically bad. You just have to be in control of your particular situation rather than your situation controlling you.

A note here and not everyone will agree with me. Booze and cigs are wants, not needs. If you add up all the money spent on these every year by the average person there is no wonder people aren't saving any money. If you like really good booze then buy it at a discount by the case and then ration it out. And cigs ... well ... I ain't going there. My dad had his first heart attack at 48 and while he had genetic markers that probably didn't help, the primary reason for his early heart attack was smoking. 'Nuf said on that, we all pick our own poison.

[Kathy in FL]

Make sure you have at least a small amount of gold and silver with you at your residence. Yes, value does fluctuate depending on the market, but it doesn't hurt and could easily become useful.

Between 1935 and 1960 or 70 something it was illegal for US Citizens to own gold. So, don't count those chickens. If they did it once, they can do it again.

Here is some back up for that outrageous thought:

http://en.wikipedia.org/wiki/Gold_certificate
http://www.usagold.com/gildedopinion/buckler2.html
http://en.wikipedia.org/wiki/US_Gold_confiscation

That was Gold Coins. However, many countries just continued to mint coins with the preban date on it and it was perfectly legal to have it.

It also included gold certificates.

Either way, they were confiscated and unspendable here in the US during that time period. If they were in your safety deposit box they were confiscated. If a store turned in coins in a deposit they were taken away as contraband the same way counterfeit dollars are today. So businesses stopped accepting them. They coudn't be exchanged on the foreign market either, from my understanding.

I can get more links for this if you want them.

[Kathy in FL]

Executive Order 6102
From Wikipedia, the free encyclopedia


In an attempt to address the causes and effects of the Great Depression, Executive Order 6102 was signed on April 5, 1933 by U.S. President Franklin D. Roosevelt. It prohibited the "hoarding" of privately held gold coins and bullion in the United States. The Order was given under the auspices of the Trading with the Enemy Act of 1917, as recently amended. The government required holders of significant quantities of gold to sell their gold at the prevailing price of $20.67 per ounce. Shortly after this forced sale, the price of gold from the treasury for international transactions was raised to $35 an ounce. The U.S. government thereby devalued the dollars (which it had just forced citizens to accept in exchange for their gold) by 41% of its former value.

The order specifically exempted "customary use in industry, profession or art"--a provision that covered artists, jewelers, dentists, and electricians among others. The order further permitted any person to own up to $100 in gold coins (equivalent to about $1,550 as of 2006).

Section 9 of the Order noted the punishment for failure to comply could include a fine of up to $10,000 or up to ten years in prison. Nevertheless, anecdotal accounts later related that many persons who possessed large amounts of gold simply ignored the order and hid their gold until the Order ceased to be in effect. NOTE: they hid it, not spent it.

The government held the $35 per ounce price until August 15, 1971 when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard.

On the evening August 15, 1971 in New Orleans, Louisiana, James U. Blanchard, III and Evan R. Soule', Jr. founded the National Committee to Legalize Gold (NCLG) in response to President Nixon's announcement that the United States was abandoning the gold standard. Over the next several years, the NCLG waged a national campaign to enable American citizens to again own gold in any form. The campaign included repeated national mailings and regional press conferences in which the U.S. Treasury Department was challenged to act when an illegal bar of gold bullion was displayed to the newsmedia. The NCLG hired a 1926 Steerman bi-plane to continuously fly over Washington, D.C. during Nixon's Inauguration in January 1973 with a banner that read "LEGALIZE GOLD" -- an action which received national publicity. In New Orleans in February 1974, the NCLG held the largest (up to that time) privately-sponsored monetary symposium entitled "Investing Towards Freedom". That symposium further galvanized actions in support of proposed Congressional legislation to legalize private ownership of gold in any form. Several decades later, derivatives of that first symposium continue every Fall in New Orleans.

The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373 [1] [2] which went into effect December 31, 1974. P.L. 93-373 does not repeal the Gold Clause Resolution of 1933, which makes unlawful any contracts which specify payment in a fixed amount of money or a fixed amount of gold. That is, contracts are unenforceable if they use gold monetarily rather than as a commodity of trade.

[GoldEagle]

Make sure you have at least a small amount of gold and silver with you at your residence. Yes, value does fluctuate depending on the market, but it doesn't hurt and could easily become useful.

Between 1935 and 1960 or 70 something it was illegal for US Citizens to own gold. So, don't count those chickens. If they did it once, they can do it again.

Here is some back up for that outrageous thought:

http://en.wikipedia.org/wiki/Gold_certificate
http://www.usagold.com/gildedopinion/buckler2.html
http://en.wikipedia.org/wiki/US_Gold_confiscation

That was Gold Coins. However, many countries just continued to mint coins with the preban date on it and it was perfectly legal to have it.

It also included gold certificates.

Either way, they were confiscated and unspendable here in the US during that time period. If they were in your safety deposit box they were confiscated. If a store turned in coins in a deposit they were taken away as contraband the same way counterfeit dollars are today. So businesses stopped accepting them. They coudn't be exchanged on the foreign market either, from my understanding.

I can get more links for this if you want them.

That's why I said both gold and silver. It's not a bad idea to at least have a little on hand.

I remember reading a story about a man in Cuba who, before Castro took power, bought loads of silver and put it in his walls of his house. Just thought it was interesting.

[Kathy in FL]

Other links on gold confiscation in the US:

http://users.rcn.com/mgfree/Economics/goldHistory.html

http://www.the-privateer.com/1933-gold- ... ation.html

http://www.kitco.com/ind/Laird/apr062006.html

http://news.goldseek.com/GoldSeek/1196605589.php

[undeaddeadguy]

10. Minimize the amount of money you spend on eating out. Man oh man, will that kill a budget fast. Which means learning to cook. And cooking from scratch would be even better if you have the time for it. Find the balance that fits your budget.

Dear God that's so true. Living in college sucks because you can't really cook for yourself, which forces you to buy food. A meal around here ranges from 6.50 - 10 even... verses a $2 cup of ramen noodles...

I hate expensive food...

[Kathy in FL]

I didn't mean to hijack the thread discussion. I just think it is very important that if you are discussing ways to secure your assets in the event of an economic catastrophe of whatever flavor, that you have all the facts.

And like Gold Eagle pointed out, redundancy is a good thing. Don't just have paper dollars, or gold (certificate or coins) or silver, etc. Have back up plans for your back up plans. Keep in mind that the rules change all the time and if its been done once it can be done again ... both the bad and the good.

[GoldEagle]

I didn't mean to hijack the thread discussion. I just think it is very important that if you are discussing ways to secure your assets in the event of an economic catastrophe of whatever flavor, that you have all the facts.

And like Gold Eagle pointed out, redundancy is a good thing. Don't just have paper dollars, or gold (certificate or coins) or silver, etc. Have back up plans for your back up plans. Keep in mind that the rules change all the time and if its been done once it can be done again ... both the bad and the good.

Of course. I do agree with this. But there's nothing wrong with having a (small) stash of cash, gold, silver, etc, and a (large) stash of necessities.


Does anyone know what some of the most desperately needed items during the Depression were? I think it'd be interesting to see if history could repeat itself.