Survival Skills

The Prepper’s Economic Paradox

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business-closedThose of us paying attention clearly see that the global economy is at best rapidly changing, and more realistically, is rapidly disintegrating. There is a significant probability that we are headed for some degree or some form of economic collapse, if not various other crises as well. This presents a unique dilemma for those of us trying to position our financial, career, and business affairs to best navigate these stormy waters.

I won’t pretend that I have all the answers to this dilemma. None of use have a crystal ball that allows us to know exactly what challenges the future will bring, except that the future will inevitably bring change and challenges. However I have some suggestions to consider, and questions to ask, which can assist with decision making as we move forward into the future.

Some strategies are “no brainers.” Reduce or eliminate debt, and invest in tangible hard assets. Storage food, precious metals, farmland, weapons and ammunition, off grid energy production (PV solar panels, wind turbines), medical supplies – these are not only essential items, but will also hold their value over the long term, unlike most paper assets. If you don’t have a significantly large amount of assets to oversee, finding good uses for those assets is actually the easy part (contrary to what most financial advisers will tell you). If you do have a significantly large amount of assets, you may want to evaluate stocks in companies with significant tangible assets that produce essential goods and have a low stock price relative to tangible asset value. Though I must add my disclaimer that if you don’t physically take position of an asset, you potentially don’t own it. However, this article is not  primarily targeted toward passive investors. It is targeted to those who work for a living, as active small business owners or employees of such.

So what about the labor and earning side of the equation? What about those who desire to, or already do actively run small businesses? What about future career choices?

What are good options for future careers or small businesses? No one says that in a collapsed economy we all have to only become farmers and ranchers that hide out in the hills. To the contrary, we will need to diversify skills to rebuild civilization, so that we don’t revert to living in a new dark ages. The more prepared we are to handle a disaster by being ready to rebuild immediately, the quicker we will recover from whatever ruin occurs. But how do we accomplish such a large task?

These are not easy questions to answer because the near future is likely to look substantially different than the present or the recent past. On the one hand technology is advancing, changing the rules of business and employment, but on the other hand our political, economic, and cultural institutions are at best passively falling apart, and at worst are active tools of destruction.

This brings us to the concept of the prepper’s economic paradox. As defined by me, the prepper’s economic paradox is the phenomenon when economic activities that may be considered valuable in the circumstances of today’s economy may likely not be valued in the very different circumstances of the economy in the near future, and the inverse is also true. Those economic activities which will likely have significant value in a very different future economy may not be particularly profitable now, or may not offer ideal business models under current conditions. In short, what you do to earn a living today may not be practical in the future, but positioning yourself in a career that is functional in the future, may not be practical to survive on today. Some examples would be helpful here.

Currently, with the influx of cheap manufactured goods from China, a smaller fabrication and machine shop involving CNC equipment and 3D printers may not be particularly profitable or offer an ideal business model based on the scale of the operation. However, if you foresee a future in which trade breaks down between China and the US, such a business could become very profitable and valuable as Chinese manufactured goods could be in short supply. Such a breakdown in trade could easily occur due to war, or due to a currency crisis, if for example the US “Dollar” lost so much value that the Chinese no longer accepted it as a method of payment.

Another example might be if there is “terrorism,” war, or a future economic disruption large enough to shut down large fuel production facilities, such as crude oil refineries, fracking operations, and international crude oil trade. At such time, smaller bio-fuels operations producing bio-diesel and/or fuel grade ethanol might provide a financial and strategic advantage for you and your community. However, currently, while the cheap frack fuels are flowing, a bio-fuels production facility is likely not going to be particularly profitable.

If you foresee a future that involves a “grid down” scenario, or one in which energy use is highly regulated, restricted, and controlled (i.e. Agenda 21 style), then perhaps you could invest in a surplus of energy production equipment (PV solar panels, wind turbines, invertors, charge controllers, batteries, etc.) with the intent of creating your own small local “utility company” service. Currently, the lack of perceived need and regulatory hurdles may make such an endeavor impractical. But if the grid goes down for any length of time, people will be glad to have and pay for such a service, and under those circumstances I doubt there would be much regulatory enforcement. This point is particularly relevant given the numerous documented vulnerabilities of the US power grid, and the threats of EMP or CME damage.

There are also different types of small businesses that are much less likely to survive major economic or political disruptions. Businesses that provide services, such as accounting, insurance, most financial services firms, potentially law firms (depending on what law is practiced), etc. will likely not fare well. Businesses based on the existing rules will face significant obsolescence when the rules change or cease to exist, and in order for businesses to survive, they will have to change their model according to the circumstances.

Businesses based on real, tangible items will likely fare much better, particularly if those items become in short supply from the existing dominant suppliers. Your small farm may not compete well with the supermarket when the supermarket is full. But when the supermarket is empty, or if the supermarket is forced to only accept electronic payment transactions in the new SDR currency, your small farm may do quite well if it is well stocked and you accept barter or precious metals for payment.

I’m sure readers have at least ample if not greater imagination than I, to think of numerous examples of small business operations that would work well in such potential futures, but not presently, and those that may work well currently, but not in the future. Perhaps in the future a rebuilding business model might be a local “bank” based on silver coinage including junk silver?

Think of this as “civilization triage” through small, community oriented businesses. There are some who may argue that this is akin to profiteering from disaster, but I disagree. I am not suggesting that excessive prices be charged for such things. In fact in these types of scenarios it is unlikely that potential customers (“the market”)  would be able to bare such excessive prices. It is more of a matter of being able to provide necessary products such as food, toiletries, tools, fuels, and even raw materials in an economically functional way.

Others may argue that such services should be provided out of generosity or gratuity due to the emergency nature of the circumstances, and that may have some validity – in the short term. However, for any civilization rebuilding to be successful in the longer term, it has to be economically viable. And that is going to require some business transactions and financial support, whatever form those may take. If we don’t create such operations based on voluntary transactions, we can be certain that people will be screaming for “government” to provide these things in a coercive manner. It is doubtful that people calling themselves “government” will be competent enough to rebuild civilization in any kind of timely manner (just look at New Orleans after hurricane Katrina). It is also unlikely that people calling themselves “government” have much interest in rebuilding society according to a model that we would prefer. It is a near certainty that IF they are competent enough to do so, and follow through, it will not be done in a manner that is voluntary or cooperative, in the manner in which small local businesses would likely be.

A common theme that I would like to propose is one I have mentioned previously, and that is using small businesses as a vehicle to create positive alternatives to existing controlled and oppressive systems. If you are unsatisfied with the current systems in place, to the degree possible, outcompete them with better alternatives.

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

-R. Buckminster Fuller

If we want to rebuild the future in a way that is more liberty-oriented and economically stable, what we need are more liberty minded and preparedness minded entrepreneurs to build economically viable alternatives to circumvent, replace, or outcompete existing oppressive structures. Then we need market participants to support those businesses.

From the career perspective as an employee rather than an entrepreneur, it is a near certainty that job security and stability will be completely gone, if they aren’t already. You will have to be adaptable, constantly learning new skills (or old “antiquated” skills), and to think in terms of how future scenarios could be radically different from the present, and what the economic and career implications will be. There are at least two fundamental truths about human economies and those are that incentives almost always matter, and if people have the capacity, freedom, and incentive to build more prosperous conditions, they usually will.

Here are just a few suggestions of things to consider.

1. Water scarcity, energy scarcity, potential food scarcity, government oppression, and the threat of war and terrorism (real or false flag) are all growing trends.

2. There are many potential hazards that viable prepper business would need to be ready to endure. These could include currency collapse, power outages (long and short term), banking outages, resulting lack of demand, supply chain collapse, resulting lack of essential inputs. Etc.

3. Government tyranny is likely to either get much worse, largely go away completely due to the collapse causing an inability to project force, or some combination of the two at various times.

4. While it is useful to consider the most likely scenarios, it can also be useful to give at least some thought to scenarios that are very different from what you are expecting. I’ve heard this referred to as “consider the opposite” or “the tenth man rule”. For example, in my case I might consider what would happen if suddenly technology advanced so rapidly, government tyranny regressed so rapidly, and people en masse matured so rapidly, that these overcame all the economic, energy, environmental, and political problems we currently face, and we suddenly had a profoundly positive advancement in human civilization, without destroying ourselves with the technological progress in the process. I don’t see these scenarios as likely, but it is a useful Gedankenexperiment or thought experiment none the less.

5. It is also useful to think and plan in terms of probabilities. We can’t predict the future, but we can rate different scenarios in terms of how likely they are to occur. Business analysts and military intelligence personnel call this “scenario planning”. Essentially, be prepared for various scenarios based on the probability that you think they will occur.

Prepare more for that which is more likely, while not completely ignoring preparation for lower probability scenarios.

Asking the right questions is sometimes more useful than thinking you have all the answers. With that in mind, here are some questions you can use to evaluate your current or future business or employment plans.

1. During a future crisis scenario, will you still be able to obtain essential goods from your suppliers? Will they accept payment in the forms that you have available? If not, can you replace those goods with something you can produce yourself? If not, what alternative model might you use for your business?

2. If the banking system goes down, will you still have a method to accept payments? What about a method to make payroll if you have employees? What can you use instead of the electronic banking system?

3. During a future crisis scenario, will there still be demand for what you produce or sell? Is it essential enough? Even if there is demand, will people have the means to pay for it? If not, can you barter for labor or goods you need to operate your business? How will you communicate that you have such a business? How will you move your goods from one place to another?

4. How could new or altered government laws or regulations negatively impact your business? What if there were no laws or regulations at all? How would that impact your business model?

5. Is your current business model, employment, or company you work for, resilient against the crisis that you see coming? If so, where might the vulnerabilities be? If it is not, can you make your business model, or your employer’s business, resilient enough to weather the crisis? If so, what do you need to do to make it so? If not, based on your current circumstances and skill sets, what alternative business or career could you transition to that would be more resilient and sustainable?

6. If your employer will be a viable business, how will they pay you?

7. If any of the crisis scenarios you are expecting do come to pass, rather than being adversely affected by them, how could you use those circumstances to your advantage or to the advantage of your community? Think in terms of strategic jujutsu. While the criminal elitist oligarchs of the world frequently use this approach for nefarious purposes, (“never let a crisis go to waste”), we too can use this approach for constructive endeavors if we only put our minds to it. For example, as a teaser, we could apply strategic jujutsu thinking to create alternatives that would make the implementation of a “cashless society” backfire, and instead of increasing the power of the banking elites, could actually undermine their financial power base.

As always, I’m trying to focus more on solutions without ignoring the realities of the problems, and I encourage all preppers and liberty activists to do likewise.

What about you? What businesses or careers do you foresee as being smart directions for the future scenarios you foresee? What strategies do you see as being useful in the coming uncertain times?

– Syndicated from Source

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