24 votes

Debt vs. inflation

I have a question for y'all.

As it is for many of us, money is tight, yet I feel like I am not ready for the economic crash. I don't have enough food stored up to last more than a couple of weeks unless I get extraordinarily creative, I don't have enough water to last us more than a month, only some camping supplies, no source of fuel or heat beyond some firewood, and so forth and so on. We do have a savings account with a significant amount in it, but it'll only last us a couple of months if we lose employment (which I doubt will happen, being in the military). Our only silver is a single American Eagle coin that my husband's father gave us for a wedding present back a few years ago.

Basically, I really want to get serious about getting ready for the economic crash, but I feel like I have to go into debt in order to do so, which I don't want to do. I'm used to living within my means, and I do not want to develop bad spending habits just in time for frugality to really mean something. But I worry that it might be easier to pay off debt than it will be to buy food when the hyperinflation hits (and we don't know when it will hit).

Anyway, I'd like to hear y'all's thoughts on the matter.




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I think that's smart

I don't advise anyone put the majority of their savings in Bitcoin.

I think people misunderstand and think Bitcoin is a challenger to gold/silver. It's not. It's a companion/ally to gold/silver because they all challenge fiat currency and get their value solely from the free market. People can use Bitcoin for the ways it's better than gold (like free transactions over distance) but still keep the majority of their wealth in precious metals :)

Learn new skills

such as gardening, canning, or anything that helps make you self sufficient. No matter what happens with the economy you will have the skills. You can use them with experience when needed or teach them to others in trade. Most can be learned for very little money; they simply take time, motivation and patience. (Most are surprisingly fun too.)

A Loaf Of Bread Will Probably Pay Off Any Debt...

...once the crash hits. However we are not guaranteed when it will hit so I do not recommend getting into debt. I also would recommend having the least amount of cash on hand as possible. As listed in the other comments, people will not be looking for paper when they need a smoke or are starving.

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You can prep without going into debt. If you are looking

at going into debt, you're taking the wrong prep advice.

It should not cost you an arm and a leg to prep.

But it will cost you your present lifestyle.

By that I mean, begin to change your life NOW to the way it will have to be when the collapse happens.

Don't wait to learn how to live differently. Do it now. Make it everyday living.

The biggest and most expensive mistake people make while prepping is trying to prep to sustain a lifestyle that they can't sustain without gobs of storage and "stuff."

Prepping isn't about "stuff" though a few essential tools come in handy.

Prepping is about mental preparation, and specifically about SKILLS.

Go camping once a month minimum. Without fail. Like clockwork.

Learn the skills NOW.

(and I don't mean out of your car or in a cabin - I mean camping for real)

Start with some cheap gear, then work your way down to a knife and a flint.

Get an SAS or Army Field Manual.

Practice everything in it.

You can't store piles of water and keep it drinkable. But you CAN learn how to collect it and purify it.

You can't store piles of food and not get "cabin fever" by eating it's limited variety. But you can store a large variety of seeds and learn how to garden and save seed.

Those who are already living closer to what they can maintain after the collapse will be better equipped and able to handle it than those who are trying to store up to maintain a barely affordable lifestyle now.

Think about it. If you are just making ends meet now, how long do you seriously think you'll last if you attempt to maintain that same living standard with a collapse?

You can cut out a lot of cruft, and in doing so IMPROVE the QUALITY of your life now with your family, and you'll be much better prepared for anything life throws at you.

The biggest mistake people make is trying to hold on to "stuff."

That is expensive and not doable for most. And even those that manage it, will lose it in the collapse anyway - despite their best laid plans.

Prepare by learning skills and teaching them to others. You'll be much more "secure" if you do.

-p.s. - get out of paper and into real dollars.

As you save money by changing your lifestyle, shift your excess pay into silver. Particularly, what is known as "junk silver." It isn't junk, it just isn't a collectors item for beauty or rarity. These would be <1965 dimes, quarters and halves, and any <1936 dollars. Gold is okay if you have lots of excess pay, but I wouldn't get anything too large or too much of it. Most of what you will use post collapse for everyday purchases will be silver.

Toilet Paper

I've stocked up on shoes, socks, underwear, toilet paper, rice, and beans. (Cigarettes, beer, chocolate, coffee, etc., -- if you can't give them up; or you could buy to barter with, but it's more risky.)

The price of toilet paper has already gone up, and it's one of those things you know you'll want to have, so you might as well buy it early. I get individually wrapped rolls in case I want to barter.

I figure the shoes, socks, etc. are mostly imported cheaply, but that when the dollar is seen to be losing value, we'll be paying more. If there is any kind of disruption or high cost to transportation (fuel), those will cost much more and they take a long time to ship.

Watch for going-out-of-business sales (e.g., the K-Mart near me is closing). I've also picked up garden tools at garage sales. I don't really need them, because they're duplicates, but others will. I marvel, still, at how cheap the imported hoes and rakes are (less than $10), but again, if transportation costs go up, or we get into trade wars with China...

I expect that as the dollar tanks, there will be a land-rush into real estate, as there was in the early 80's by Iranians and others dumping dollars. What else can they buy of ours that will hold value? For that reason, I don't think real estate will go to zero, but having enough set aside for a few months (years?) of mortgage payments is always good. At least in California, we have Prop 13, which keeps our property taxes from going crazy, and you want to make sure you have a fixed rate mortgage. That debt, assuming you have a job, skills, or assets to sell at higher and higher prices, should get easier to pay.

Can you live in your house without heat? Insulation is really helpful. Extra blankets are cheap at thrift stores. Get them before there's a demand.

When you have limited income, you might as well buy what you would be buying, anyway, only buying bargains, early.

What do you think? http://consequeries.com/

Toilet Paper?...

...dollars would work just as well.

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Save your old phone books

or take them off your neighbors' hands. That could make good toilet paper if needed, and it is very compact to store. You might have ink on your bottom, but that's better than s*** on your hand.
There are lots of good barter items, as some have mentioned--coffee, cigarettes, alcohol. If you stock up on some of that, make sure you store it properly.
The pennies and nickels idea is practically free.
I would definitely stock up on some disinfectants or soaps, else you and your family will achieve food poisoning or other digestive problems for certain, no matter how much you have to eat. Bleach makes sense, but is hard to store a lot of. Try some essential oils that are anti-bacterial, anti-fungal, anti-virus, etc. Easily found on the internet. Get GOOD (therapeutic) quality, not aromatherapy stuff. Maybe some kind of iodine or disinfecting tablets for water.

Don't Need All That

If you grow Aloe Vera plants. They are great for stomach problems, they are antivirals, antibiotics, antifungals, They are great for cuts, burns rashes and EVEN Brown Recluse bites! You can eat them rub them on and more. I cured my cat's eye infection with aloe vera leaf. Research it!

skippy

You should have ZERO SAVINGS IN DOLLARS, instead,

you should have a discretionary account of cash on hand or in a local community bank only budgeting necessary expenditures for a month only. The rest of the savings should be in metals and you should hold them in physical rounds.

HERE IS MY FIVE STEP SOLUTION:

1) You have to restructure the way you value your time and form a new schedule.

2) create a schedule where you use permaculture experiments to close loops on all of your costs.

3) create seller accounts in online or local exchanges to market assets you have and are willing to get rid of at your leisure. This will open exchanges and relationships.

4)Funnel all of the excess capital from permaculture savings and exchange generating production to your silver accounts.

5) manage all of this on a spreadsheet and expand upon the schedule in a way that suits your uniqueness.

This will lead you to a successful future in the new paradigm,

cheers.

Whether you think you can or you can't, you're right. -Henry Ford

Debt is a terrible solution

Most of us are in the same situation as you, living paycheck to paycheck which makes being prepared difficult. Part of being prepared is getting debt-free. I followed Dave Ramsey's Debt Snowball and it worked well for me... simple concept - pay off the smallest bill and when that is gone, put that payment into the next smallest bill. It took me 2 years and now all I have is a mortgage.

The reason debt is so bad, is because it is a fixed monthly cost, when energy and food costs are skyrocketing, you begin to have to cut back on those things so you can still pay your fixed debt. If you skip out on your fixed debt... you eventually lose everything... including the roof over your head. And if you lose your job... fixed debt doesn't go away. Food you can cut back on, but monthly bills are still due.

So get that debt paid off... credit cards, car loans, etc. These are not your friends. Then get prepared and remember things of value... silver, gold, and land. If you have them, keep them... if you can get them without going into debt, get them.

Remember if banking collapses... you wont be able to have access to anything stored in the bank. Saved fiat money will still become worthless whether it is in the bank or in your house. Collect trade items (comfort things people like)... once again without going into debt. Invest in a safe for your silver/gold... but remember the best safe, is one nobody knows is there. A well hidden floor or wall safe is better then one that can be moved to the thieves den to be opened.

Once your debt is gone, spending a little every month on these preparations is all you need to do. Build a small garden area that is fenced to keep grazers(deer, etc) out. Keep stores of heirloom, non-hybrid seeds to be planted if need be and get practice growing a garden next year. Practice makes perfect.

This is advice for weak minded...it does not make dollars and

Sense (cents) if you have a bill for $500 at 2% and a bill for $5000 at 4% and you pay the small bill first, your throwing away money....do the math. If you pay off bills that have the highest % of interest first you save more money period.

Actually your solution results in failure for the weak-willed.

Yes, you save money by going after the highest interest first... but if it is $30,000 of debt, that will take years to pay off, and MOST people in our instant gratification system will quit (give up and fail). Instead, you go after the small debts, which are paid off quickly and they reinforce the idea that you can succeed at this task, plus as small debts are paid off you can roll those payments into a bigger debt payment... ie. a snowball affect.

Debt holders are favored in highly inflationary economies

If you owe money at a fixed rate of three pct and inflation is running at 20 pct you are a winner, provided you bought valuable assets with the debt you took out and you are able to keep up the payments.

If you can't keep up the payments and the debt holder seizes your assets you lose but if the assets are not subject to forfeiture or you can continue to pay you win

Please subscribe to smaulgld.com

Win? What is called the monetary system is w/o money.

We have a debt based "legal tender system." Loans are "created out-of-thin-air. The few that run the racket are supposedly not outlaws for they write their own. They don't call themselves in-laws, but I digress.

Do you wonder why super rich have debts? Were we not told, we borrow from those that have saved? Really? Something is amiss.

For those that do not create loans-out-of-thin-air, we lose. We lose purchasing power. We lose every time a Federal Reserve note is printed. It is put on the Federal Reserve systems ledger as National Debt. We are on the hook for payment of interest & the principal they lack. We lose paying what they call interest due. We lose on what they call principal (what would they know about that?).

So, it is not favor we curry when the Federal Reserve loans "legal tender" to the US government or their member banks.

If you receive an honest loan from a friend or family, it would not be wised to call it winning, as no matter which side you are on, the perceived value of what you are working to repay is going down.

Yes, I take your point that all thing being equal except high inflation, payment value would become less & less; however, please read history. As high inflation turns ugly quick, then chaos ensues. Folks worry little about debt. They shift to survival mode.

Man is the only species that gives a wit about debt.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Whatever food storage you do,

Whatever food storage you do, if it's not just stocking up on more of what you currently eat, make sure you start using some of it now to get everyone in your family used to it.

In the extreme stress of a disaster crisis, everyone is already easily susceptible to gastrointestinal upsets and the last thing you want to do then is change everyone's diet, as that's then a recipe for constipation and sometimes even serious intestinal blockage or on the other end, diarrhea and dehydration.

Store what you eat and eat what you store.

- Shane

PS - One of the great things about food storage today is that nobody has to first embrace a dire 'doom & gloom' pessimism to rationalize doing it any more. Just the fact that food will likely cost more next year makes plenty enough sense to buy/stock up more of it, cheaper, today.

The wise Modern Survivalist said something like...

...focus on things that BOTH help you prepare for the world reading AND help you out if there no world catastrophy.

Health...learn gardening...learn sowing...etc.

Going in debt to get silver neither helps you now or if the poo hits the fan.

The best deal on food I have found is right here.

You don't have to go into debt. Take a look.
http://www.costco.com/all-emergency-food.html
.
About $400 is what I spent...and feel great about having these tubs tucked away. These prices are delivered.
.
You should start with this one,,
http://www.costco.com/Deluxe-Survivor-700-Total-Servings-Var...

I got some of those

very nice. Peace of mind knowing that with a family of 5 (3 kids / 2 adults) we have enough on hand just in those emergency tubs I got to stretch out a good 2-3 months (depending on how much you try and stretch it). and it's a nice hedge living in the Midwest since you never know when freak tornado / snowstorm /whatever happens. Look at the folks in NY/NJ, if the just had 1 of those tubs, they'd be in worlds better shape at least in terms of foodstuffs. Every thing you can do to remove a source of worry when SHTF time comes will be a blessing. Having a even a few weeks of food supplies can go a long way towards letting you focus on meeting up with family, getting out of big cities, etc. If you're not having to worry as much about where to get your next meal (or how to feed your SO or kids), that's one less thing to distract you when you're already going to possibly be tired, cold (or hot), scared, and worried about a TON of other stuff.

I'm adding to my stockpile of readiness "stuff" as I can as well, and staples are a solid bet. As are books - as other said, either get the skills or grab some books about foraging, homesteading, survival medicine, etc. All useful when you're "on your own".

If you like the idea of being

If you like the idea of being like a pirate or a bandit, take a loan, buy what you need, and run off to the australian outback under an alias

If you stay, you can take your chances that way. If you go, Australia I hear has a nice employment situation.

Consider the Irish and what they've always historically done when hard times hit.

23

C_T_CZ's picture

Extreme couponing

Learn about extreme couponing, then use those techniques to build up a massive reserve.

rEVOLutionary Ads: It's Better Than Sitting On Your Rump Doing Nothing™

Not sure why someone would

Not sure why someone would have down voted your comment. Extreme couponing seems it would be a good idea in terms of getting lots of supplies without having to go into debt for it.

Some extreme couponers get hundreds of dollars worth of supplies for just a few bucks... it's practically free.

Maybe whoever down voted you didn't realize exactly how much money could be saved doing this.

From what I understand, though, it can take a significant amount of time, both the shopping and planning for shopping. For some who do it's nearly a full-time job.

...

again, consumerism isn't the answer

this is a short-term solution and will work brilliantly if the economy is rebuilt within a few months... does anyone think it'll only be a few months?

At their inceptions, the #Liberty, #OccupyWallStreet and #TeaParty movements all had the same basic goal... What happened?

Buy more silver because

Buy more silver because anything that you cant afford you will be able to afford during the crash. So anything you miss you can buy in the months after the collapse and as more economic exchanges starts to occur

Depends on how bad the crash

Depends on how bad the crash is.

I recently read a short story about some lady who was on the titanic. She got off the lifeboat for a minute to run back to her room. Instead of grabbing her jewels and money she went there to get a handful of the fruit (apples or oranges) that she had in her room.

Anyhow, my point is that if things get really bad money and possibly even real money (silver & gold) might not have the most value. For example, if your local water supply no longer worked or if it was contaminated, how much would you sell your last gallon of fresh filtered water for?

...

um... a new form of consumerism is NOT the answer

parallel currencies won't do you much good if the corporate machine isn't producing new goods for consumption.

All that silver will come in very handy when a new economy is born, but it's not going to help you when this one collapses. What's my incentive to give you my potatoes & meat in exchange for your piece of metal? Can I eat it? Does it keep me warm? what's the value?

At their inceptions, the #Liberty, #OccupyWallStreet and #TeaParty movements all had the same basic goal... What happened?

Prepper in the Military

I think you bring up a good point. I'm getting out soon, but even those that are lifers or have a while before their contracts end have to realize that the military is no guarantee of financial security or personal safety. Eventually the pyramid scheme of the dollar will collapse, and when government becomes unsustainable I doubt the military, even with all the oaths people swore to serve no matter the situation, will be sustainable when people can't put food on the table. It's hard wearing the uniform and being a true freedom lover. I wake up everyday feeling one part of me is contradicting the other, and that's the last thing any soldier should feel. But once you wake up, you really can't go back to sleep. Sorry I didn't really offer tangible advice. I guess my comment is more a show of solidarity. I salute all those serving, and double salute to all those brave enough to be part of the rEVOLution also.

I'm just getting in. I wrote

I'm just getting in. I wrote this a while back and things definatly haven't gotten easier. I would love to here your story and any tips on what I can expect being "awake" and in the military. I feel like "serving" contradicts everything I believe in now. And not a single person I've reached out to (Except here on DP) remotely understands. Incredibly frustrating...

http://www.dailypaul.com/211996/attn-veterans-and-active-dut...

"War is a Racket" - Maj. General Smedley Butler

http://lexrex.com/enlightened/articles/warisaracket.htm

Hmm

Well you're coming in as an officer, so based on officer regs alone, the more involved in activism you get, the more risk you're taking, since you're 'supposed' to know better. All I can say is, I've met some awesome officers, retired and still serving, on here. I don't recall names right now, but my opinion is do what you can without hurting your livelihood. And be careful of what you share with people openly. Most kids in the military are brainwashed (no fault of their own), and may easily report you for some type of wrongdoing.

im no soldier and have no

im no soldier and have no idea what it must be like, but i feel for you. Keep your head up you have an ability to take that label and persuade people even faster. Turn the thing you are dreading and put it on a video.. you have no idea how proud or how important it is to see veterans standing on our side. It gets easier and easier to break into the war machine as time goes on... we need you guys to be loud and proud so we can go into battle with confidence

i'd focus more on having a plan together

I've been "prepping" for about 4 years now... take that at whatever value you wish to assign it.

Rather than worrying about having months' worth of food/water/fuel you need to focus on a plan to be able to continue to obtain these things.

Do you have a garden? Having your ducks in a row so you're ready to plant in the spring is key! Look into some of the non-traditional methods like the popular "100lbs of Potatoes In A Barrel" technique. You can also grow lots of stuff inside. Peppers & herbs thrive indoors if they can get enough light.

Stock up on Mason Jars and learn what's involved in canning your veggies. (look into starting your own yeast cultures for vinegar, bread and beer)
Learn about how to salt-cure/brine/smoke meats so you can store protein for longer periods of time.
Take a quick look at your home's gutters and develop a plan for catching that rain water in a barrel. If you're in an area where drought is a potential problem, start (and I know this sounds gross) saving bath-water for watering crops. As long as you don't use heavy-chemical soaps/shampoos, this won't harm your crops or the people eating them. You can also tier your property so rain-water flows into a reservoir or at the very least flows through your crops in an efficient way.
Stock up on hunting ammo so you can obtain fresh meat.
learn how to distill alcohol. grain-alcohol can work as a great fuel-source, cleaning agent and has many other applications.
Watch some videos on building your own solar panels. You can build your own solar set-up for about 5% of the price of buying one.
Invest in a water-purification system of some kind.
Build a chicken coop and get some hens.
Build a rabbit hutch and get some rabbits.
If you have enough land get some sheep. they can provide meat AND wool.

Worry less about having ready-to-consume stuff on-hand and more about how to survive after you run out of those supplies.

At their inceptions, the #Liberty, #OccupyWallStreet and #TeaParty movements all had the same basic goal... What happened?