For over 10 years now, we've been openly advocating that folks take action
to become more prepared should crisis arrive. And for a long time, this
advice relegated us to being labeled "tin-foil hat doomsday
preppers" (and other less-polite monikers). The media just couldn't
figure out any other box to put us in.
But now, the concept of taking at least some responsibility for
your own future well-being by increasing your self-reliance is finally moving
towards the mainstream.
Of course, government agencies have long ascribed to "situational
planning" in case sudden unrest were to happen. Nations around the world
have long invested in redundant supply chains, as well as well-stocked
disaster 'continuity caves', fortresses and hardened facilities of all sorts.
It's strikes us as puzzling that most private citizens fully expect their
government to be prepared for disaster like this, yet don't see similar
wisdom in practicing a similar approach to preparation in their own life. In
fact, many go so far as to denigrate and even mock their friends and
neighbors who do.
Perhaps that gap between what's considered acceptable in a public
institution but not in a private home is best explained as abdication of
personal responsibility. It happens a lot in our society. Live your life
and let the government worry about the scary stuff. They'll take care of
us if something bad happens.
We think it's a huge error in judgment (remember Katrina, anyone?), but we
understand why it's a convenient and comforting narrative to hold. Plus, it
frees up a lot more time to shop at the big box stores and keep up on the
Kardashians. Life's more fun and stress-free...right up until some unexpected
disruption occurs.
Well, we here at Peak Prosperity deeply believe in shouldering our own
personal responsibility. And not just to protect our own private well-being,
but also that of the communities we live in and depend on.
After all, Peak Prosperity's mission is To create a world worth
inheriting. You don't do that simply waiting to see if the calvary is
ever going to show up. You assume responsibility for your own destiny, and
inspire others to do the same by offering your support and serving as a
living model for others to emulate.
Those expecting/demanding the State to have high emergency preparedness
while not practicing the same in their own lives lack integrity. Nobody
respects a low-integrity person for very long. (Pro tip: Don’t fly your
personal jet to give a lecture on the importance of addressing climate
change.)
A resilient nation is built from the bottom up, starting with resilient
households. Enough of those households creates resilient neighborhoods, and
those in turn lead to resilient towns and cities. And then counties, and
states -- you get the point.
So taking steps to be partially self-sufficient in the basics of life –
food, warmth, shelter and water – and have useful experience or skills
(medicine, fixing things, building, distilling, to name just a few) just makes
sense. You don't have to strive to be completely self-reliant -- it's not
realistic or necessary. Just position yourself to reduce your lifestyle
requirements during times of strife, and to contribute valued support to
those whom in turn you ask for help.
Preparing Is Rapidly Going Mainstream
For years now, I’ve written that the highly wealthy people whom I
encounter through conferences, family offices and private consultations all
got the “bug out” vibe after the 2008 crash, if not before. Today, many of
them are more thoroughly prepped than us regular folks can imagine.
Disaster prepping is now acceptable enough that this week's article in The
New Yorker had no trouble finding high-profile executives to talk to on
record. I couldn't help noticing that the reporter avoided inferring that
these folks were crazy, or implying as much. I guess once a critical mass of
super wealthy tech entrepreneurs jumps on the bandwagon it’s suddenly
hip to be a prepper?
At any rate, if you haven't already seen the article, it's a real
eye-opener:
Doomsday Prep For The Super-Rich
Jan 30, 2017
Steve Huffman, the thirty-three-year-old co-founder and C.E.O. of Reddit,
which is valued at six hundred million dollars, was nearsighted until
November, 2015, when he arranged to have laser eye surgery.
He underwent the procedure not for the sake of convenience or appearance but,
rather, for a reason he doesn’t usually talk much about: he hopes that it
will improve his odds of surviving a disaster, whether natural or man-made. “If
the world ends—and not even if the world ends, but if we have trouble—getting
contacts or glasses is going to be a huge pain in the ass,” he told
me recently. “Without them, I’m fucked.”
Huffman, who lives in San Francisco, has large blue eyes, thick, sandy hair,
and an air of restless curiosity; at the University of Virginia, he was a
competitive ballroom dancer, who hacked his roommate’s Web site as a prank.
He is less focused on a specific threat—a quake on the San Andreas, a
pandemic, a dirty bomb—than he is on the aftermath, “the temporary
collapse of our government and structures,” as he puts it. “I own a couple of
motorcycles. I have a bunch of guns and ammo. Food. I figure that, with that,
I can hole up in my house for some amount of time.”
Survivalism, the practice of preparing for a crackup of civilization,
tends to evoke a certain picture: the woodsman in the tinfoil hat, the
hysteric with the hoard of beans, the religious doomsayer. But in
recent years survivalism has expanded to more affluent quarters, taking root
in Silicon Valley and New York City, among technology executives, hedge-fund
managers, and others in their economic cohort.
Last spring, as the Presidential campaign exposed increasingly toxic
divisions in America, Antonio García Martínez, a forty-year-old former
Facebook product manager living in San Francisco, bought five wooded acres on
an island in the Pacific Northwest and brought in generators, solar panels,
and thousands of rounds of ammunition. “When society loses a healthy
founding myth, it descends into chaos,” he told me. The author of
“Chaos Monkeys,” an acerbic Silicon Valley memoir, García Martínez wanted a
refuge that would be far from cities but not entirely isolated. “All
these dudes think that one guy alone could somehow withstand the roving mob,”
he said. “No, you’re going to need to form a local militia. You just need so
many things to actually ride out the apocalypse.”
Once he started telling peers in the Bay Area about his “little
island project,” they came “out of the woodwork” to describe their own
preparations, he said. “I think people who are particularly attuned to the
levers by which society actually works understand that we are skating on
really thin cultural ice right now.”
In private Facebook groups, wealthy survivalists swap tips on gas
masks, bunkers, and locations safe from the effects of climate change.
One member, the head of an investment firm, told me, “I
keep a helicopter gassed up all the time, and I have an underground bunker
with an air-filtration system.” He said that his preparations
probably put him at the “extreme” end among his peers. But he added, “A
lot of my friends do the guns and the motorcycles and the gold coins. That’s
not too rare anymore.”
Tim Chang, a forty-four-year-old managing director at Mayfield
Fund, a venture-capital firm, told me, “There’s a bunch of us in the Valley.
We meet up and have these financial-hacking dinners and talk about backup
plans people are doing. It runs the gamut from a lot of people
stocking up on Bitcoin and cryptocurrency, to figuring out how to get second
passports if they need it, to having vacation homes in other countries that
could be escape havens.” He said, “I’ll be candid: I’m stockpiling
now on real estate to generate passive income but also to have havens to go
to.” He and his wife, who is in technology, keep a set of bags
packed for themselves and their four-year-old daughter. He told me, “I kind
of have this terror scenario: ‘Oh, my God, if there is a civil war or a giant
earthquake that cleaves off part of California, we want to be ready.’ ”
(Source)
The message here is clear enough: The wealthy have caught onto the
idea that the probability of a major social disruption is high enough to
merit serious action.
Prepping is now becoming “a thing.”
And that makes it increasingly OK to talk about in the open. That's a
great development; we at Peak Prosperity have been waiting for this milestone
for a decade now. But it comes with a cost: the more people who awaken to the
risks we face, the faster the peaceful complacency society has slumbered in
will dissipate.
From here it’s only a hop, skip and a jump for the newly-awake to start
losing faith in our debt-based fiat money system and the massive
unsustainability of the economy built on top of it. As our readers know
very well, once you understand how these systems are structured, it's hard
not be shocked by their fragility (not to mention their deep
unfairness).
For example, our food distribution system relies on a lot of moving,
integrated parts. If any one of these breaks down, the shipment of food
(and pharmaceuticals, and many other components of daily life) simply stops.
Cities only have about 3 days' worth of inventory at any given time.
Should a shock occur to the system, even a minor one like a winter blizzard,
supply can dwindle out in a matter of hours as people scramble to get what
they can.
Here’s an image of shelves at a Wal-Mart in Charlotte NC taken as a
relatively minor snow storm was approaching the area on January 6th
2017.
(Source)
The line between “well stocked” and “stripped bare” is merely a matter of
public awareness. Once people become worried about the possibility of
scarcity, their mad scramble to hoard what they can actually creates
the very scarcity they dear. That's because our system is deliberately run on
a just-in-time basis, in order to maximize profit. Excess inventory incurs
storage fees; so we "optimize" our supply chains to avoid it. But
it begs the question: perhaps the human suffering costs of quickly running
out of essentials during an emergency is higher than the dollars saved by
keeping inventory levels minimal?
Our fractional reserve banking is structured the same way: it only works
if everyone doesn’t show up at the same time demanding to withdraw their
money. If that ever happens, there isn't nearly enough supply for
everyone. Once the illusion is exposed, then people get panicky and start
grouping into angy mobs
Think it can't happen here? Just talk to folks in India. Two months ago
they would have agreed with you. Today, the most they are allowed to withdraw
for their bank is a few hundred dollars worth of banknotes per week. Here's a
video of a run on a bank there where the swaming masses quickly stampede over
the security guards, trampling elderly patrons in the process:
And it's even worse in Venezuela. There, the limit is US$5 per day. If you
had US10,000 of savings in the bank, at that rate, it would take you 5 and
half years to withdraw it all.
Playing the Odds
Of course, most truly catastrophic events are quite rare. Rather than
worry about them, it usually makes sense to simply ignore these tail risks
and carry on with your life.
I do this rather than stress out about a large asteroid impact or a
Yellowstone supervolcano eruption. While either of these *could* happen in my
lifetime, the odds are incredibly low and there’s virtually nothing I can do
to prepare for or predict such an event. So I don’t even try.
Other potential threats to our well-being, however, have much higher
probabilities. And yet, most people are quite content to ignore the need to
prepare, no matter how high the risks. Few people maintain a deep pantry,
which is why the store shelves invariably get stripped as a big storm rolls
into town. And only a small minority of people living along California's
active fault lines have put together a well-stock earthquake kit.
But more cadres of thinkers are embracing the wisdom of investing in an
ounce of prevention today. In the New Yorker article, the techies from
Silicon Valley seem more inclined to ‘do the math’ and follow logic:
Yishan Wong, an early Facebook employee, was the C.E.O. of Reddit from
2012 to 2014. He, too, had eye surgery for survival purposes, eliminating his
dependence, as he put it, “on a nonsustainable external aid for perfect
vision.” In an e-mail, Wong told me, “Most people just assume improbable
events don’t happen, but technical people tend to view risk very
mathematically.”
He continued, “The tech preppers do not necessarily think a
collapse is likely. They consider it a remote event, but one with a very
severe downside, so, given how much money they have, spending a fraction of
their net worth to hedge against this . . . is a logical thing
to do.”
As we've advised for years, even if something has a low probability, if
it's result would be catastrophic, then buy insurance if you can. Prepping
for a major "grid-down" power outage is simply a no-brainer for
those who have decent math skills. The calculation is eminently rational, as
there a number of potential causal factors (weather, sabotage, squirrel) and the downside could be quite large.
So, with all the potential looming risks out there -- economic shock,
social disorder, supply chain failure, to name just a few -- what are
practical, affordable, achievable steps a prudent person should take?
In Part 2: Preparing Prudently, we present a specific list
of the most useful preparations, along with links to helpful resources and
services for carrying them out. Nearly anyone can implement these, and nearly
everyone should. The more of us who prepare wisely today, the more of us who
will be in a position to be of service when the next crisis arrives.
Click here to read Part 2 of this report (free
executive summary, enrollment required for full access)
