Last week I recommended building your own private “seed bank.”
Today I think there’s another type of preparation you need to make. Even if you consider yourself prepared, you might have overlooked it.
And with Hurricane Sandy currently pounding the Mid-Atlantic Seaboard (and currently on its way for Vermont, where I’m writing today) I’m sure you’re familiar with the kind of manic attitude many people have when the weather threatens.
You see people buy milk, eggs, coffee, bread and bottled water ahead of a storm – whether it’s a massive hurricane, or even a mild snow storm.
Of course, everyone recognizes that a few basic staples may be enough to get you through a day or two of impassable roads or power outage – but no one seems to fathom that these simple groceries probably won’t help you much if the storm really gets severe.
So today, while the markets are closed, I’d like you to envision what kind of long-term preparation you should make. Again, in the event of a real crisis it will be much too late to prepare. Like buying a gallon of milk the night before a hurricane, if you wait until the crisis hits, you’ll be competing with lots of other people scrambling and jostling for remaining goods and supplies.
Seeds are a good start, as is a supply of bottled water, or a water filtration system. I’m not going to go through a long list of vital supplies you should have. I’m sure that you can come up with your own list fairly easily.
But in a long-term emergency situation, there’s one thing you’ll likely need that doesn’t immediately spring to mind.
If credit card machines don’t work because the power is out or banks have frozen accounts, you’ll want cash.
Even a few hundred dollars stashed away somewhere safe in your house can be a lifeline. Because if the banks are closed and credit cards don’t work, cash will be king.
Even if we are in the midst of a currency crisis, foreign currency can work too. I’m not far from the Canadian border, and some border towns already accept Canadian dollars on par with American dollars. So I have some Canadian currency on hand as well.
In a currency crisis, cash can still be useful. If you have dollars and you can use them instead of your gold or silver, that’s not a bad deal – even if prices are highly inflated.
I’d rather drop $100 of Federal Reserve notes on a few gallons of gasoline than a commensurate amount of silver – because in a real currency crisis, that $100 of silver will be worth a lot more tomorrow, while the dollars will be worth a lot less.
So keep cash on hand – spend it first rather than dip into your gold and silver, and keep all of your physical money close at hand, safe and secret.
Good investing – and be safe during this storm.