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Why Preppers have it all wrong

Prepping has not only gone mainstream, it's infected even the billionaire culture as referenced recently on a ZH article:

When it comes to “prepping”, many among the elite take things to an entirely different level.  As you will see below, the elite are willing to pay big money for cutting edge home security measures, luxury bomb shelters and superyacht getaway submarines. Some of the things that the elite are demanding for their own protection go beyond even what we would see in a James Bond film, and serving the prepping needs of the elite has become a multi-billion dollar business.  Meanwhile, the media outlets that the elite own continue to mock the rest of us for getting prepared.  All the time we see headlines like this one that appeared in a major American news source: “Preppers: Meet the paranoid Americans awaiting the apocalypse“.  Well, if we are paranoid for setting aside some extra food and supplies for the future, what does that make the people that you will read about in this article?

Financial prepping has been the mantra of the 'hedge' fund community since it started to exist.  Instead of just blindly buying stocks and hoping the market always goes up, 'hedge funds' provided a 'hedge' in case the market actually didn't go straight up.  Of course, this is now just for lazy investors, now it's possible to buy options for almost any situation, and insurance companies will sell insurance for anything - even being abducted by aliens (over 30,000 policies sold in Europe according to Geico).

Description of the prepper & background

So let's take the average prepper, metaphorically speaking.  You have your safe house, stockpile of supplies, food, ammo, tools, toilet paper, shortwave radios and other electronics powered by cranks, etc. etc. etc. (depending on how deep your infection).

Financially speaking, you keep your savings in a combination of cash (US Dollars, Euros, and Swiss Francs), gold, silver, bitcoin, and bearer bonds.  If you are really savvy, you're holding the paper on several nearby farms in a fair deal whereby they pay down their principle in cash and interest & fees in milk, beef, and in the summer vegetables.

You own several properties in the names of charities you've setup just for this purpose... ok you get the idea.  Take it to the extreme.  The estute prepper has done all this and more - he's ready for anything!

The problem

Now the calamity comes - whether it be a global pandemic, alien invasion, terrorists, the United Nations with foreign troop invasion - take your pick.  It's really bad, but you survive - because you are ready for anything!  So now you've survived - NOW WHAT?  

Do you come out of your bunker after the smoke has cleared?  What will you do all day?  What will other survivors do?  Will you try to communicate with other preppers?  What if in the process of that communication - you discover that you are a little more prepared than they, and they trick you into a meet whereby they kidnap you and force you at gunpoint to give up your safe location and supplies?  

What if there is a secret group of 'anti-preppers' who are right now preparing for ways to steal from preppers, based on their security flaws and lack of planning?  

What if there is a group right now setup by the government, who is monitoring preppers, that within 24 hours of said 'calamity' will be taken into custody (or otherwise dealt with).

What is to stop the military from seizing your supplies, and forcing you to join their chain gang?  

The problem is that in order to really be 'prepared' - one must strive to be a stronger fighting force than the strongest army in the world (be it whatever you think in your opinion) because in a real crisis, the only currencies are 1) intelligence and 2) accelerated lead.  Accelerated lead is a quickly depleting resource whereas intelligence can grow and be self-replicating.  

Prepping generally speaking is a good thing, to use example of global pandemic - if everyone in the world is prepared and follows WHO guidelines, the pandemic will not exist!  Probably the same could be true with financial markets.

The point here is to realize that like with anything - the popularization of 'prepping' has warped the purity of the concept.  

The idea itself - very noble.  But in practicality, in reality, if there is an apocalypse, where are you going to go shopping with your gold and silver coins?  

Especially in America where we like to do things to extremes (like eating for example) - we've taken prepping to a new fangled art form.  But it's this 'new level' that is the snake oil - not the concept of prepping.

Just in case

Mossberg sells a package "Just in Case" that includes survival kit, shotgun, all neatly packaged in a waterproof tube (that also can double as a flotation device).  It's a great analogy for the prepping movement.  It's a great thing to have - JUST IN CASE.  99% of buyers of this will never use it.  

But - IT'S BETTER TO HAVE IT AND NOT NEED IT, THAN TO NEED IT AND NOT HAVE IT!  -The Avid Prepper

Financial Prepping

What can one do to financial prepare themselves?  This completely depends on the situation, and depends on the extent you want to prepare for.  As a general rule, you just want to be more prepared than your neighbor, but only a little.  That means - forget about the kevlar suit that can withstand 1,000F burns, or the bitcoin wallet that can only be opened with one time pad; each hidden in 2 secure locations in Europe.

Also, forget this naive idea about hoarding physical gold or cash - as if it will help you.  You're just painting a target on your back!  Where will you spend this cash?

Some reasonable prepping steps to be a 'pure prepper' 

  • Have a healthy options portfolio
  • Take the other side (even if you don't agree with it)
  • Invest in some really crazy ideas - if everyone you know says 'don't do it - it's crazy' - DO IT!
  • Invest and trade LOCALLY, at least a little.
  • Keep multiple accounts open with different TYPES of brokerage firms/banks - not only the same institution where your 401k is.  Not all of them will die.
  • Participate in some class action lawsuits for securities or similar cases - even if you won't get a big payout.  When the dollar bubble really pops, you'll have a friend who can help you get 20 cents on the dollar from Bank of America.
  • Make some foreign connections, who may not be in the same predicament as most in America
  • As much as possible, try to do things for yourself.  Having your deck resurfaced?  Do it yourself!  Do your own research - don't rely on a service (and certainly not your broker!)  
  • Educate yourself!  Learn a foreign language, or study that course in wreath making you've been putting off for so long.  Remember, although the world is a large place - the majority of nuclear fuel rods are made by hand by Samurais in Japan:

Although Japan Steel Works is a major corporation with 5,000 employees, it also maintains a samurai sword blacksmith, in a small shack on a hill above the factory in Muroran, where a single craftsman still hammers steel into broadswords, as the company has done since 1917.

Just remember.  For those who think the apocalypse is coming - there are just as many who believe it's already here.  Just ask some Detroit residents.  

Looks like the Zombies have already invaded and destroyed our cities.