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Ok preppers. A wealth of information. Here's the economic SHTF scenario...totally far-fetched but:
1. UK goes for Brexit. Rather than block the referendum, the government stupidly votes itself out of the EU.
1.5 The UK suddenly remembers that it has a massive current account deficit, and the prospect of people loaning money to it to get Sterling back with a currency loss looks unappetizing. Britain falls into recession.
2. Scotland prepares to leave the UK to return to the EU.
3. A flood of currency begins looking for a safe haven. The usual suspects are of course Japan, Switzerland and the USA.
4. Japan and Switzerland begin devaluing their currencies. Neither succeed and both countries go into recession.
5. The US, with money pouring into dollars sees the potential for problem except
5.5 The release valve is a collapsing China, that is selling its Treasuries in order to prop up its own economy.
7. As the dollar rises, all commodities route...except gold...keeping Brazil and many third world countries mired in pain.
8. In anticipation of trade blockages, companies look to separate UK and EU marketing of products. Companies choose their supply chain in one or the other. Raising costs.
9. An already weak EU bogs back into recession. Radical parties rise on the left and right and threaten to destroy the world's largest free trade zone.
10. They succeed, essentially ending Europe's power that it has held for several centuries. UK, France, Germany and Italy all get tossed into a significant recession as supply chains no longer can compete with the increased costs across borders. Euro printing destroys the currency. Dollars become the currency of choice.
11. With the collapse of the EU area, and weak results in BRIC and Japan the developing world, the US currency becomes super-premium, and deflation takes hold. The multiplier effect of money continues to fall as people hoard any store of value in anticipation of still greater gains.
12. The US nationalizes the Federal Reserve Bank and begins printing money to cover debts and make hoarding dollars unattractive. While initially it appears to be working, the amount of transactions being performed in dollars overseas is underestimated. Dollars stop being accepted completely overseas and a tremendous volume of dollars comes from overseas for anything of value. Deflation jumps to Stagflation with astonishing speed. Market efficiency begins breaking down. Normal disaster recovery efforts become less effective. Crime begins to rise.
If this is the low probability scenario, the best prep method would be:
A) Head for the hills and buy a cabin and stock it for survival mode. Civilization is about to end.
B) Stay in the mix and figure out what will be the in demand commodities for your area and keep some extra on hand....and buy some physical gold. You'll trade your way through the short term spray and come out ahead at the end.
C) Consider starting a business based on local resources value-add that people will need anyway. Your job is going anyway so you need to stay relevant.
D) The opposite of C, use money to pay off debt and look for the best employer to stay with for the coming storm. You will survive it.
E) Sell it all and head to Vegas baby. Let's go Red...
The Brexit is not a huge deal right now for most people. Remember, it'll take two years before they can physically leave the EU. Ditto if there is Frexit, etc.
The biggest take-away is that the British voters just gave the globalists the one-finger salute. The globalists are unhappy and will try to push back. This is where some preppers are starting to spout off about WWIII and such, but the reality is that this crash is more of a slow process than a 48 collapse, and the globalists seem to be too shell-shocked to do much more than issue threats through the state-controlled media: the dollar is going to crash! The pound is going to crash! Nothing will be the same!
Such BS. Europe got along before the EU and the Euro. The UK will still be trading stocks. The globalists are having a light shown on them and being warned to take their bad paper and go home. Obviously, they don't like that.
In the short term, there might be some chaos. Travelers through the UK may have some problems with exchanging money, and there might be some demonstrations in France and Denmark, since they want to leave the EU, too.
But most of us don't have a bunch of money invested in the UK, nor are we traveling there this summer, so Brexit isn't really an issue.
Lastly, it's always a good idea to be prepared for whatever is mostly likely to happen in the your area. Right now, the good people of WV are dealing with 100-year floods. I'm sure anyone who was caught in the path of the rising water appreciated being able to grab a Go! bag on the way out and get on with doing business from an alternative space.
So as far as preparing for fall-out from Brexit, you'll probably be okay with whatever you're doing now.
3. Hope for a flat out panic, when you can buy assets for pennies on the dollar.
Vast fortunes are made every time the economy goes **** up. Anybody over the age of 30 knows you can't trust an economy. Just be ready. The time to buy is when everyone else is jumping out of windows.
While it's always good to be debt-free and have some cash outside the banks, I don't see any reason to 'head for the hills' on this one. After all, everybody knew this referendum was coming up. Most of the middle class Brits knew which way the wind was blowing. Seems the only ones who were shocked were the globalists. Those guys are all out of touch, anyway.
This was not a stupid vote. This was a sovereign nation standing up for what is rightfully hers -- liberty, independence and self-determination. The EU needs the UK more than the UK needs the EU. Anything to the contrary is just bluster.
Give it a couple weeks for the globalists' feathers to come unruffled. Now the fun really begins...which nation will be next? Greece? Italy? Ireland? You know as soon as one more leaves, the whole stinkin' and corrupt EU will fall apart.
It couldn't have happened to a better bunch of bureaucrats. Hail Britannia; so long, Cameron! The Brits have found their stones!
As soon as I read that the "government stupidly voted", I made the decision that anything said after this would be worthless.
For the first thing, governments don't vote, the subjects of Britain vote and secondly no vote is stupid. Any vote is a reflection of the peoples wishes and has to be respected.
Technically, the referendum that was voted on doesn't mean anything. The government will have to vote the repeal of its EU election.
When the US wants a significant change to the course of its country, such an ammendment to the Constitution, it requires 2/3 of the voting members to make sure the country is truly behind the change. A simple majority, it could be argued, is not a clear mandate for such a large change. Even in the polls running up to the vote, it appeared to change every day.
Thus, I think such a dramatic change for a government to take with such a narrow electorate mandate is stupid....but that is an opinion that I should have not included. (Losing a small fortune yesterday likely influenced the mood).
The point is this. What I see a lot of in prepper items are areas where people go to woods, get the mythical 40 acres and a mule and essentially live a fairly isolated life while a problem goes and passes and then moves on. There's nothing wrong with many of the survival tips, but I'm greedy. I'm also not physically great, I need medicine, and am very unhandy.
When SHTF, I've got to do it in the city. I left a rural paradise, because there was little for me to contribute there. I moved to Chicago and got a trade. I saw the Recession coming, thought Tech would fare better than anything else and then moved to Silicon Valley in CA.
Now, I don't know when, but the multiplier on money has been running fairly undisturbed for an amazing number of years. The next SHTF scenario will economic IMO. Long gone are the Ford plants where Steel goes in one end and finished cars go out the other...so a setback to globalization promises to kill industries because of input availability price.
Take Boeing vs Airbus. Right now, they compete for the same sales. Boeing makes a lot in Washington, but also in other states. Airbus makes some in Spain, France, Germany etc. If the EU fades, Boeing is going to crush Airbus in every market.
When that house of cards falls, and like the big earthquake always talked about....nobody know when. Some of us will want to survive in the cities, because people like me can't survive in the wild even with the best of conditions. Yet somehow those large cities in Europe, despite waves of fiat currency, plague, new governments, war etc....somehow those families survived and some thrived.
So the options are really, bug out, stockpile goods for trading later, take an industry (say flour is cheap now, but if trade breaks down, I could fill a void that could be done profitably), or conserve (save and get rid of debt) or gamble it....Those are what I see most people's options. I'm sure there are more.
One person plans on riding it out in a nice home in LA. He has solar panels. He has 12 months of food in his cupboard. He's gone to great expense to install a 30,000 tank of water under his home. He has a gas grill in his backyard. That isn't a typical, but he has another tank underground to be able to have grillout for a very long time. He knows his neighbors very well. He's very wealthy, but careful. I'd call him the perfect city bug out guy.
Another person has a warehouse that is filled with Jack Daniels. She figures those will be trade items. She simply assumes people will always want to drink and will want a recognized name. She has pallets of the stuff.
My neighbor has a full shop in his garage. He is good at repairing things. If he loses his job, he simply starts repairing things full time.
My wife and I have been attacking this economy first. We've been accumulating rentals (people still need a place to live) and have been doing well in this economy. I think the economic SHTF will be triggered by deflation, so after binging on offensive investments in the downturn (stocks, real estate) we've been defensively deleveraging our excess these past two years and buying a bit of gold. Of course, deleveraging takes a lot more time than leveraging. Things like Brexit are scary in case we don't get there fast enough. However, if rental rates go down and i don't have fixed interest to pay, I can lower rents to stay competitive. The losers are those that can't move with the price rate because they have debt to pay.
So I'm looking for other answers. People say California is a horrible place to do it. I think differently. But, the solution will likely be a bit more fluid.
Europe did fine without EU prior to 1993, they will do fine without it. It was an experiment to financially compete with the US regarding trade. It failed. It's far from the end of the world. Life moves on.
Actually, England gives a two finger salute (palm in).
Yanks give one finger.
I'm just waiting to see what our resident Brit has to say. I'm sure it will be sunshine and rainbows.
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