The worst thing about a financial collapse is that you cannot predict when it is going to happen, how soon it will happen, or how long it will last for.
All you can do is take the steps needed to prepare for an economic collapse, embrace frugal methods, and start thinking about your bank and wallet as a survival tool, rather than a spending tool.
When the last economic crisis hit, the 2008 financial crisis, the world was shocked at the speed in which it set in. From what started as a meltdown in the US mortgage market, the rest of the world collapsed in a domino effect in rapid succession.
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For most of us, that economic collapse was something we just weren’t prepared for, and for those that were not prepared, it was a very tough period.
The question everyone is asking now is ‘when is the next economic collapse?’. It could be this year, the next or in five years. But as many economists argue, we are due for one, and the next one could be much worse than the previous financial downturns.
Since the only thing we can do is ready ourselves for another economic downturn, we take a look at 8 steps you can start taking now to survive an economic collapse.
But first, let’s take a look at some of the basics, to understand why we need to prepare for an economic collapse.
What is an economic collapse?
Simply put, an economic collapse, interchangeably used with the term financial collapse, is a series of very severe economic conditions. Many survivalists and preppers say an economic collapse is the one thing that they are preparing for, as it includes several symptoms that place risk on our necessary needs, such as food, water, power, and safety.
One of the worst factors about a financial collapse is the fact that it doesn’t abide by a timeline. Natural disasters, for instance, while very destructive, are short, with their duration measuring only for days let alone weeks. This allows recovery efforts to commence almost immediately. Economic downturns, however, are unmeasurable in length and for most, will last a minimum of a year, with the aftereffects resonating for several years as a nation recovers.
During an economic collapse, some symptoms affect large companies and industries, with very visible signs, felt in the family home. For instance, common symptoms of collapse are high bankruptcy rates, widespread unemployment, hyperinflation, a spike in death rates (attributable to depression or other financial causes), social collapse, and a high increase in crime.
What causes an economic collapse?
Financial systems can be affected by a large number of different scenarios, and for the most part, a country can bounce back quite quickly with severe financial fluctuations going undetected by the majority of the population. But for the causes, they seem to be factors that can create a ripple effect in a country’s financial industry, resulting in economic loss shockwaves.
If we look back at history, one financial collapse is not like the other. Yes, their symptoms are the same and in the home, loss, grief, and stress are all experienced, but their causes remain unique.
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The 2008 Global Financial crisis was triggered by factors such as the burst of the US housing bubble, easy credit conditions, fraudulent lending services, overleveraging, and shadow banking practices. This is different from Venezuela’s economic collapse, which has only been felt in that country and not across the world. In Venezuela, the causes of its economic crisis were caused by presidential policies and a fall in oil prices as well as several other contributing factors. Since its beginning, Venezuela has experienced severe spikes in crime, corruption, poverty, and hunger issues.
There have been some other economic downturns that have completely different causes but have all displayed widespread unemployment, poverty, hunger, and social chaos. They include:
- 1998 Argentine Great Depression
- 2001 Turkish Economic Crisis
- 2008 Icelandic Financial Crisis
- European Debt Crisis
- 2014 Russian Financial Crisis
The economic crisis is not just limited to societies, it can also be limited at an individual level. But, an individual can recover much quicker than a society, by making good choices for him or herself. Keep in mind, this his pernicious crisis can likely be prevented or minimizes with some planning. Avoiding certain situations and leaning towards safe investing strategies can make all the difference.
