Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. – Ecclesiastes 5:10, NIV
In the past week, there’s been an enormous amount of virtual ink spilled on the banking crisis. I confess I’ve read dozens of articles and columns without a much clearer grasp of what’s happening than before I started. (Ironically, one of the best explanations can be found within the dry humor of “Awaken with JP.” Watch his hilarious “Banking Collapse Explained for Dummies.”)
Why these banks are failing is beyond both the scope of this column and my personal comprehension. Some have speculated it was focusing too much on “woke” investing rather than shareholder returns. On the other hand, it doesn’t look like the bankers have a much better grasp of finance than I do, based on some of the videos emerging. “Is it surprising that Signature Bank failed?” notes this Twitter post. “Their executive team spent millions of dollars to produce music videos & TV shows about themselves. Try not to cringe as you watch this.”
Whatever the reasons behind the crisis, literally billions of dollars have been wiped out. Supposedly even Prince Harry, Meghan Markle and Oprah got caught in the carnage. While those on the inside engaged in suspicious activities (selling stock and handing out bonuses), the vast majority of depositors were taken completely by surprise. The whole thing fell in about 48 hours.
And see, that’s what concerns me. How many other financial institutions may face similar disasters? How many other banks are just fine – until they’re not?
As of this writing – and in the spirit of never letting a crisis go to waste – we learn Moody’s Investors Service downgraded its outlook for the U.S. banking system, that Biden is effectively nationalizing the deposit base of the entire U.S. financial system, that financial regulators are being asked to censor social media to prevent bank runs and that bank fears are going global. Some say the feds are using the bank meltdowns to kill off regional and local banks and consolidate power. Some claim – with justification – that this is an orchestrated situation designed to push America toward digital currency.
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So instead of writing a clever and witty summary of events (something I’ll reserve for more financially literate people), I’m writing this from the perspective of an ordinary housewife watching the problems with America’s financial system.
I’m seeing the cascading effects of high-level banking and government intervention combined with millions of terrified Americans who fear they’re going to lose their life savings and retirements. A banking crisis is frightening enough for economists and those in the know. Imagine how much worse it is for those NOT in the know – the ordinary people who have worked hard their entire lives and managed to maintain a modest financial cushion, who must now attempt to decipher the conflicting reports (“Everything’s fine!” “No, everything’s about to collapse!”), wade through the finger-pointing and blame game, and try to salvage whatever rainy-day cushion they had.
As an example, consider this heart-pounding Twitter thread of someone who had two companies, his personal savings and his mortgage with Silicon Valley Bank as he tries to save his finances.
Needless to say, rumors are flying thick and fast. On one side, our politicians are assuring us the economy is sound, banks are safe, and everything’s glorious. On the other side, the more paranoid types are warning this is the start of another Weimer Republic, and by golly, if you don’t already own a mountain of gold, you’re doomed. In all likelihood, the reality is probably somewhere in the middle.
But one thing is becoming crystal clear: There are big winners and big losers in this game. Spoiler alert, your average Joe Sixpack is not one of the winners.
Ironically, before Silicon Valley Bank was even on the national radar, I had ordered a book called “When Money Dies” by Adam Fergusson. First printed in 1975 and reprinted in 2010, it’s a well-researched history of the hyperinflation that took place 100 years ago in Germany. I only received it a couple days ago and have barely had a chance to crack it open.
But the Prologue was sobering enough. “The German people were the victims,” Fergusson writes. “The battle, as one who survived it explained, left them dazed and inflation-shocked. They did not understand how it had happened to them, and who the foe was who had defeated them.”
The story of the dramatic hyperinflation, continued the Prologue, “is one which the great authorities have sometimes seemed to lose touch with: the effect of inflation on people as individuals. … Disaster itself was devalued: in contemporary documents the word was used year after year to describe situations incalculably more serious than the time before.”
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Fergusson concludes his Prologue by writing: “This is, I believe, a moral tale. It goes far to prove the revolutionary axiom that if you wish to destroy a nation you must first corrupt its currency. Thus must sound money be the first bastion of a society’s defense.”
Sound familiar?
Everything is happening so fast. By the time this column is published, who knows what new information may come to light, what other financial institutions may have collapsed, or what nefarious financial schemes may be orchestrated?
No one knows how this banking crisis will end. For us personally, we have our money spread out among three separate credit unions, and have for several years. At this point in the Biden economy, that seems like a wiser move than having all our eggs in one basket.
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Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
