Of all the “investments” one might make at this time, one of the best may be to be prepared for a breakdown of the economy as we know it. This is not necessarily a prediction – any more than having fire or flood insurance is a prediction that you will have a fire or flood. Nevertheless, it is based on an observation that there are many factors that may render the relatively near future quite a bit different than the recent past. This may seem kooky to some, but at least I am kooky in good company. I note the billionaire master investor, Richard Rainwater, has gone public with his own “preparing for major change” plans, and if you begin to pay attention you will find that many wealthy individuals have been making similar preparations for themselves. Is there something they know that you aren’t hearing about on the evening news?
What I am talking about could be summed up as: the lights go out and don’t come back on again. Foreign oil shipments stop, or are blocked. Maybe freight shipments of goods from China and elsewhere become impossible. Maybe food is no longer delivered to the supermarket. In short, an economic breakdown something like what happened to the Soviet Union, but possibly on a worldwide scale. In such case, there will be no rescue because there will be nobody to do the rescuing.
There is a surprisingly long list of factors that may lead to such an outcome. The gradual and irreversible decline of world oil production, beginning approximately now, is one that has been getting the most attention. I would also note the much more dramatic potential collapse of North American natural gas production, which is imminent since the continent’s natural gas production verifiably peaked in 2001. Major ice deposits such as the Antarctic ice shelf or the glaciers of Greenland have been melting at an accelerated pace, with some geologist and geophysics types now whispering that their collapse could take place within a couple decades, raising sea levels by tens, if not hundreds of feet. Given that most of the metropolises of the world are less than a hundred feet above sea level, we can imagine the effects of all of these going underwater simultaneously. Fisheries production is near collapse, and grain production has been falling for several years now. Grain production is now well below consumption, and formerly large world grain stockpiles have been run down to multi-decade lows on a days-use basis.
This is just a short list, which does not address the verifiable and dramatic increase in geophysical activity worldwide, notably earthquakes and volcanic activity, or increasingly bizarre weather. Seattle was just hit by a hurricane – in December. It was called a “windstorm” in the news, and downplayed, since we all know Seattle doesn’t have hurricanes, but when you have a cyclonic storm hundreds of miles wide with hurricane-force winds in excess of 100mph – what is it if not a hurricane? Disappointed skiers in North America (where the temperature is 14 degrees Fahrenheit above normal, again) might try getting on the plane to Israel, which recently got snowfall. A New Madrid fault quake would cut every connection – bridge, gas line, electric line, etc. – across the Mississippi, and potentially reroute the river itself into the Atchafalaya drainage, where it would have naturally gone years ago if not for a lot of levee work. This would bring to an end the entirety of Mississippi-based shipping. Even this doesn’t get at all the things that have been going on, and the more perceptive have probably noticed that the moon and stars have been misaligned for a number of years now, or that anomalous weather has not just been an Earth phenomenon, but a phenomenon of other planets in the solar system as well.
Living doesn’t really take anything more than keeping warm and dry – you don’t even need to be dry if you are warm – and maintaining a stable caloric and nutritional intake. Nevertheless, a great many people, when faced with the idea of “preparation,” conclude that they should try to maintain life as it exists today. (Toilet paper seems to have become a sort of totem for modern industrialized life.) This is vastly complex and difficult. They purchase high-capacity electric generators and may store several years’ worth of food and petroleum products. Let’s think about the food to begin with. If everyone is starving (as would quickly occur if shipments from food-growing areas ceased), then you will a) share your food with the hungry, in which case your supplies will quickly run out, or b) you will attempt to keep others from making use of your supplies, in which case you will man the machine gun posts until you are eventually overrun by those who become aware that you have the supplies they need. Many wealthy people have taken the well-stocked bunker approach, but it is expected that this will not be successful, as they will become natural targets due to their large stockpiles, perhaps falling victim to the very mercenaries they hired to protect them from the hungry hordes.
Thus, in the interests of suggesting something that might work better than the rich guy’s strategy, and also something that a person of any means could undertake, I propose a much simpler, lighter, and more flexible approach. The ultimate goal should be to be able to produce food, and this means seeds, animal husbandry, gathering, hunting and fishing. As far as shelter is concerned, the goal should be basic foul-weather clothing and a knowledge of simple shelter design. Since mobility will be key — many places where people now live will not be habitable — and there will ultimately be little means of mobility except for walking, we should be able to carry our lifestyle upon our backs. Thus, let us consider preparations which, in total, weigh less than thirty pounds, and cost less than $1000.
1) A basic backpack. It’s hard to carry stuff in your hands. Maybe something by Lowe Alpine, which is well designed and not very expensive. Shoot for 40-90 liters.
2) Good footwear. Running shoes are fine, although there are more durable alternatives. Plus at least two pairs of good quality athletic socks. Clothing can be begged/borrowed/improvised, but good shoes can be hard to come by.
3) Clothing for all kinds of weather. Modern outdoor clothing is amazingly good. The basic “outfit” consists of “midweight” long underwear tops and bottoms and a polyester “pile” jacket. Maybe two pile jackets for a bit more warmth, an extra pair of midweight or fleece bottoms, and a hat and gloves. All of this might weigh 5 lbs.
4) Some sort of outerwear/raingear. Among the most versatile is the basic military poncho, which you can buy for about $20. You can bet this has been used in every conceivable situation, and works as both outerwear and as a rudimentary shelter. It’s also good camouflage, which may be useful.
With that alone, you can get from point A to point B by foot in all sorts of conditions. A person, even a relatively out-of-shape one, can easily walk 15 or 20 miles a day on paved roads. Thus, in ten days’ time, you could go 150-200 miles. Don’t be afraid to walk out of wherever you may be.
A simple blue poly tarp, the sort you can buy in a hardware store, makes a fine shelter. However, you can also make all sorts of simple structures from branches and other such natural material. I would recommend the Tom Brown books for instructions to build anything for a night to multi-year residence, from basic forest materials. You can make your own cordage from natural materials, but it would save quite a bit of time and effort to bring a roll of sisal twine and some nylon rope. I would also suggest a “space blanket” or two, which can be used as a fire reflector, cape, or rudimentary blanket. The books by John and Geri McPherson are also good.
Learning how to make fire with a bow drill is worthwhile, but for the shorter term it is easy enough to stock up on butane lighters, Esbit fuel bars, magnesium lighters, and so forth, all of which might weigh perhaps a pound.
A good knife is indispensable, and indeed a couple good knives might be the right way to go. Something good for hacking like a machete or hatchet, and a smaller knife for filleting fish and butchering game, or small-scale carving perhaps. Plus a sharpening stone. If you had to have just one tool, a Chinese-style cleaver would be good for everything from chopping small trees to mincing garlic.
The best way to hunt animals is not with a gun or even a bow and arrow, but with snares and traps. Indeed, this method is so effective that it is illegal in most places, which is why nobody does it. A wide selection of snares and traps, of good-quality steel cable, might weigh another five pounds. Shop at Buckshot’s Camp.
Likewise, fishing with a rod and reel is fine, but a gillnet may be better. That’s why net fishing is also illegal in most places. Pack a broad selection of hooks and line (tough to make yourself, but you can make a pole out of anything), and a couple gillnets, which can also be used to net birds.
A selection of a hundred varieties of fruit and vegetable seeds is remarkably lightweight – about three pounds. Be sure to get “heirloom” non-hybridized seeds.
A light sleeping bag and foam sleeping pad could be very welcome. For a very light sleeping bag, you can buy some reflective “space blanket” survival sleeping sacks, which weigh about 9 oz and cost maybe $20. They also have the advantage of being waterproof. These can be made warmer simply by piling leaves on top.
A little plastic trowel is handy for all sorts of digging projects, from latrines to post holes to drainage ditches. With a folding military-type shovel you can make entire underground shelters.
Thus, we’ve covered seeds, hunting and fishing. Gathering you can learn from a book, and again the Tom Brown books are a good one-volume reference. Animal husbandry is a bit tougher since you’re not going to be hitting the road with a breeding pair of goats or a box of live chicks. However, it might be worth learning about this anyway. You can even raise wild animals, such as ducks, and there could be feral chickens and hogs about. A hurricane in Hawaii in 1992 freed a population of chickens from their cages, and they have been happily breeding in the wild ever since.
A good week’s worth of no-cooking food should also go in the pack. Consider nuts, peanut butter and jelly, cheese, hard sausage, chocolate, etc. A water bottle – a 2 liter plastic soda bottle is fine – a cooking pot (two to four liters aluminum, with a lid), a frying pan, and so forth.
At home, you might keep a few months’ worth of food. Secure a good supply of water and, if climate demands, a reliable heat source.
The image of preparedness also includes a chunk of good farmland, I suppose, but this is not really necessary. In the event of such turmoil, upon migrating to farm country one would find either small survival communities willing to take new members (strength in numbers) or land whose previous owners will never show up to claim possession.
Lastly, and by far the most important, is a good attitude. If (heh heh) such a thing were to occur, consider it a grand adventure rather than a “disaster” – a child would, for they don’t know that they were “supposed” to go to school rather than having a walkabout in the countryside. The ultimate goal is to gather in cooperative groups of good-hearted people, and treat each other well.
Have a splendid 2007!
for The Daily Reckoning Australia
Editor’s Note: Nathan Lewis was formerly the Chief International Economist of a firm that provides investment advice to institutional investors. Today, he is part of the investing team at an asset-management company. He has written for the Financial Times, Asian Wall Street Journal, Daily Yomiuri, Japan Times, Pravda, Dow Jones Newswires, and other publications. He has appeared on financial programs in the US, Asia, and the Middle East.
He writes about economics and other matters from time to time at his website, New World Economics.