Seven years ago, Karl Rehn of KR Training and I began an experiment of hosting a preparedness conference in the Central Texas area the first full weekend of January after New Year's Day. I don't think we envisioned this going beyond two or three years, but last weekend we punched the ticket for a seventh time.
Our conference has morphed over the years, with the biggest change coming last year with a move from the conference room at Cabela's and the one day format to a two day event at Karl's facility near Giddings, TX. This move allowed us to add a firearms component which has really increased the utility of the conference.
Speakers and Presentations - Day One
We led off with Ben Weger, M.D. and a bunch of other letters behind his name I'm omitting. One of the reasons Ben is such a draw to the prepper community is that not only does he get the need to be prepared, he has also worked as a paramedic and nurse before becoming a doctor. From scraping people off the sidewalk and loading them into an ambulance to making the big decisions as a physician, he has seen it all. It's not just theory to him - he provides a full spectrum analysis of the medical challenges preppers face.
Dr. Weger spoke for two hours on both medical (illnesses) and trauma (injury) issues we are likely to see post disaster. Preppers tend to fixate on exotic pandemics and trauma caused by gunshot wounds; the reality is that the more common medical issues stem from infections we often see working in a post-disaster environment (tetanus and hepatitis from puncture wounds; gastrointestinal upset from lack of hygiene and sanitation).
Some of my takeaways from this include:
Dr. Weger has previously done two day seminars on medical issues for preppers. We hope to have him come back for another round of similar training.
I gave the lunch time presentation on the 2019 Outlook. This is a presentation I started doing at the conference a few years ago during the lunch break to help provide more information to attendees during our limited time with them.
I covered a number of things, although not surprisingly the topics in the outlook briefings have not varied much from year to year.
We continue to see the debt issue - both government held debt as well as corporate debt - growing and becoming a bigger concern as time goes on. I quoted from Porter Stansberry in one of his latest missives on the markets:
"And it's not just the amount of corporate debt that's concerning... It's also the quality. Today, $3 trillion of debt is rated at the lowest level of investment-grade debt – by far the most than at any other time in history. These companies are teetering on the edge of becoming junk credits. By taking on more debt to buy back their own stock, they risk a credit rating downgrade and much higher interest costs."
In addition, experts warn we should be preparing ourselves for the possibility of a cyber attack on the grid, affecting water, gas and electrical transmission to our homes.
We also looked at growing first responder response times in various cities. Here in Austin, we continue to see response times get longer, in part due to our growing population and under staffing of first responder jobs.
I outlined a seven point action plan for 2019:
Tracy Thronburg gave us an introduction into the use of the kubotan, a self defense method relying upon a short rod or stick. It can be very effective and is capable of being used in situations where other self defense techniques cannot be used.
The nice weather allowed us to get outside and practice strikes using trainer kubotans (graciously made by her husband, Scott, who is in the far right of the picture below). The trainers are mouse pads rolled up tightly and rubber banded together.
A kubotan can be a tactical flashlight, a wooden stick, or just a metal rod.
At the end of the day, I had Tracy go faster and with more power on me with the kubotan. I found out quickly it's a quite effective way of defending yourself.
John and Kelli Kochan then led a discussion on best practices for chainsaw safety in a post-disaster environment. Unlike the typical use of a chainsaw - in daylight and fair weather conditions, in a yard or forest away from other hazards - using a saw after a disaster might mean doing so in the dark, with flashlights, in the middle of the road during a heavy rain. It's a much different environment than most expect.
The Kochans never disappoint, and this was no exception.
The presentation covered necessary safety apparel and chainsaw accessories to make the job easier. The Kochans report they regularly have to use saws after a big storm to cut their way in or out of their driveway or on the country road they live on; they regularly carry their saws with them to work if there is a chance of severe weather before they get home.
Unfortunately, while there are plenty of places to buy a chainsaw, there are precious few ways to actually learn how to use them safely. YouTube videos are good, but they are no substitute to getting your saw out and practicing with the gear and the techniques to fell trees and process them once they are on the ground. John and Kelli's presentation help fill some of those knowledge gaps.
Karl summed it up nicely on the KR Training Facebook Page:
Chainsaws are like guns - a lot of people own them, very few use them as safely or correctly as they should, and they sit unused most of the year with the expectation the user will be good at using that tool in an emergency situation.
But if flooding or high winds cause a fallen tree to land on your house or car or blocking your road, the chainsaw could become important - and the likelihood someone might use a chainsaw is probably higher than the likelihood they'll need to shoot someone.
John "Hsoi" Daub - a man of many talents - shared his thoughts on nutrition and exercise issues for those in the preparedness community. This is an area where many preppers fall down - it's tempting to buy a bunch of gear and declare yourself "prepared" without taking any effort to get yourself into shape for the physical demands that accompany a disaster.
Daub will admit he's tried a lot of different forms of exercise and activities to stay in shape. But one of his all time favorites is lifting weights. He quickly pointed out that we should all find some form of exercise we like and get started.
What I really appreciated about John's presentation was his candor about the challenges he faces with exercise and diet. He's a very fit guy with good nutritional habits; he will tell you that it takes effort on his part to make that happen. It's not something that comes natural to him, and thus we shouldn't expect it to come natural to us.
I also appreciated his encouragement for preppers to take up walking. It's a great form of exercise that has a low risk of injury. It's also practical - depending on the crisis affecting a community, a prepper may be doing a lot of walking after a disaster.
Nutrition and exercise should be a top priority for preppers going into 2019.
I finished the day with two different presentations.
I spoke on the need to Become Your Own First Responder. This is a tag line used by many in the firearms training community; I'm thinking we need to get trainers and leaders beyond the gun culture to start using it as well.
Here in Austin, for a priority one call for Austin/Travis County EMS, the stated response time goal is under ten minutes. Put another way, for the first ten minutes of a priority one medical emergency (think CPR in progress), you are on your own.
Being your own first responder can mean different things to different people. For me, it means helping to stabilize a situation by providing security, basic first aid and scene management until professional first responders arrive.
First, a bit of good news: skills are easier than obtain than ever. You can become an EMT by taking classes on line, get a ham radio license without learning Morse code, take several FEMA classes on line for free, and take Stop the Bleed classes.
It's important that people tailor their skills and training to their lifestyle. For example, a parent of two young kids may want to focus on medical emergencies pertaining to children. Meanwhile, an empty nester may want to focus on medical issues pertaining to middle age and elderly people.
Look for ways to better prepare yourself to provide basic security, first aid and scene management. What skills do you need? What training do you need? A good CPR/First Aid class, some Stop the Bleed training and exercising your License to Carry privileges will enable you to be better able to be a first responder until help arrives.
We closed with my final presentation on Checklists for Preppers. I was inspired by the book by Atul Gawande, M.D., entitled "The Checklist Manifesto." Checklists do four things for preppers:
I provided my checklists for hurricanes (thanks to Hurricane Harvey) and winter storms (thanks to the ice storm we had in January 2018) to the attendees to help jump start their efforts. But perhaps the most critical part of our discussion came we talked about how to decide prioritization between:
For example, which should you do first? Recharge the GoalZero lights (takes a long time to do) or secure the pool furniture (doesn't take long but is critical to keeping the furniture from becoming projectiles)?
When creating your checklist, ask yourself:
Speakers and Presentations - Day Two
Karl led off the Sunday morning discussion with a presentations on Firearms Preparedness, which covered such things as:
Many preppers tend to focus on firearms and knives, at time to the exclusion of other supplies and skills they need. But as Karl pointed out in one of of his PowerPoint slides, the odds of needing to use force is less than the need to have food, water, shelter, power and heat.
At the conclusion of his presentation, we undertook a Get Home Bag exercise. This required attendees to walk with their actual get home bag 0.6 miles so they can experience what it is like to actually use their bag. About half of the attendees indicated they had never gone on a walk before while wearing their bag.
Just for fun, we weighed everyone's bag prior to the start. A few data points:
During our short walk, we undertook a number of activities, including:
This was by far our best conference yet. We really struck a good balance between classroom and hands on, along with firearm and non-firearm training.
I told attendees at the end of the first day that what I find really remarkable is how speakers, with no collaboration with each other, are able to create presentations with similar messages and congruent narratives with the other speakers. I think it shows the preparedness movement is continuing to develop and mature.
We are already working on the Eighth Annual Preparedness Conference - which I am calling THE OCHO - tentatively set for January 4-5, 2020.
Originally posted at Medium.com
Like many Americans, I regularly shop for groceries on Friday afternoon.
A year ago this weekend, shopping for groceries here in Austin, Texas took on a surreal feeling as Hurricane Harvey was no longer the product of an over imaginative staff at The Weather Channel. Harvey took aim at the Texas coast, prompting everyone within 200 miles of the coast to start taking their hurricane preparedness seriously. (Why do it early when you can do it with everyone else at the same time, right before the storm hits?)
I regularly shop at our local H-E-B, which is a privately owned chain of grocery stores in Texas. I’m a big fan of H-E-B. I love their employees, along with their commitment to disaster preparedness and response. On the Tuesday before Harvey made landfall, I topped off my supplies during an evening visit to the store. The shopping excursion gave me not only the opportunity to secure any last minute items we needed, but it also allowed me to gauge how my fellow Austinites were preparing for the possibility of a hurricane, then hundreds of miles off shore.
“I grew up in Houston, so I don’t wait to get prepared for these things,” the young lady serving as my cashier told me as she swiped my purchases across her scanner. “I’ve seen what they can do, and I take it seriously.” I thanked her for her candor and for answering my questions about what she was seeing/hearing from shoppers about the storm — which, on that Tuesday night, was not much. “A few have come through buying a lot of bottled water, but so far, no one has really mentioned it.”
Most people don’t realize it, but grocery store staff can be some of the best sources of intel as to what’s going on in your community that you can find. They are not inhibited by the usual “be advised to stay calm at this time” messaging we often receive from community first response leaders. They see and hear a lot, and when things are starting to go bad in a community, they often have a lot of anecdotal data to share.
Every day leading up to the storm, and in the days thereafter, I made a point to visit that same H-E-B to see how people’s shopping habits changed as it became clear that Harvey would have some impact on Austin. The usual flow of soccer moms and retirees during daytime shopping hours quickly mutated into a crowded stream of suburban dads and working moms taking time off from their workday to buy the usual storm gourmet items — canned soups and pastas, chips, sports drinks, crackers, cereal, bread and peanut butter. Bottled water ceased to be available. Checkout lines grew to thirty minute wait times. Everyone remained cordial, but everyone was a bit put out that “all of these people” were there at the same time they were to buy their last minute items.
Fast forward to this past Friday — when there was no massive storm threatening Central Texas. There was no massive anything threatening Central Texas, as best I could tell. Other than the seasonably oppressive heat outside, Friday was just like any other day in Austin.
I finished up buying a few items for the dinner party my wife and I were hosting for some friends on Saturday. As I pulled my grocery cart into the check out line, I noticed something was wrong. The cashiers, normally whisking customers through the check out lanes by scanning products and occasionally punching things on their keypads, were essentially motionless. I turned around just in time to see a manager tell an employee to open up her register as the lanes were quickly filling up. And that’s when I heard what was holding us up:
“My credit card reader on my lane is down…they all are.”
Commerce at the local grocery store had been brought to a screeching halt because, for whatever reason, all of the card readers were down. The H-E-B staff, always demonstrating agility, began to announce that customers who could pay with cash should move to one of two lanes now set aside for cash-only transactions.
I quickly moved my cart from the lane now stuck with credit card only purchasers to one of the cash only lanes. As others began to bring their carts in behind me, I wanted to make sure they knew what was going on.
The two ladies behind me — we’ll call them Lady 1 and Lady 2 — did not receive the news well. Lady 1 became quite indignant. “Well, they MUST take my charge card,” she insisted, despite the fact that I had just told her what the store staff was telling everyone else — the credit card readers were down throughout the store, and they could only complete transactions in cash. She pointed to the sign above the register with great enthusiasm — “It doesn’t say ‘cash only’ on the sign!” as if I was trying to mislead her.
Not believing me, she skipped ahead of me to ask the cashier herself, who promptly confirmed what I had just told her. Lady 1 could not believe the store would not take her “charge card” (is this term still used these days? I don’t hear it that often). Her frustration was palpable.
Lady 2 had a less expressive response — in fact, it hardly expressive at all. She seemed to struggle to comprehend what I was saying, as if I were speaking in a foreign language. “They aren’t taking credit cards?” she asked, looking puzzled, right after I had told both her and Lady 1 the store’s credit card system was down, and that cash was the only way to continue with your transaction.
I carry a reserve amount of cash on me, in a separate part of my wallet, for such situations. (A friend who passed away two years ago this week suggested I start doing that — thanks Jeff). I paid for my groceries, watching as my fellow shoppers continued to crowd the check out lines while they vocalized their frustration. I quickly left, not wanting to stay cooped up with a lot of upset shoppers.
As someone who regularly advocates preparedness for a wide spectrum of perils, it takes a lot to surprise me when it comes to the lack of resilience we have in America. Friday’s experience, however, was surprising even to me. In a week where the S&P 500 set record highs, Austinites became visibly upset when their grocery stores would not accept their credit cards for payment.
In the bigger scheme of things, this was clearly a first world inconvenience. The card readers eventually came back on line (I’ve been to that store twice in two days since the incident, and the card readers worked just fine.) This wasn’t anything which should have upset people.
But that’s not how people responded. I guesstimated that five percent of the shoppers had sufficient cash on them to purchase their items. The other 95 percent expressed various responses, ranging from C’est la vie to disbelief to downright anger.
This is what happened when there was no crisis coming to our community. There was no hurricane or shortage of food. There was no Bank Holiday of 1933 type of event. What would have happened if the credit card readers had stopped working when something was actually going wrong in our community?
September is National Preparedness Month, and one of the things I am stressing to anyone who will listen (besides getting themselves and families prepared for the possibility of a disaster) is to start carrying cash in the event there’s a larger scale problem with electronic transactions. Carry enough cash at all times to buy groceries and a tank full of gas to get you home.
This isn’t an extreme idea or evidence of a doomsday mentality. Some days, the credit card readers just don’t work for whatever reason. Be ready to take care of yourself and family should it happen at your local grocery store or gas station.
I travel a lot for my day job, which means I spend a lot of time on airplanes and in airports. I got my pilot's license when I was 18 and my instrument rating ten years later, so I don't think of myself as a fearful flyer.
Overall, I've had decent luck while flying. I have had my fair share of hiccups, but I don't remember most of them - it's just something that goes with the territory.
Yesterday's flight to Salt Lake City was an exception.
Like many of you, I've read some articles lately about the rise of air rage as of late. And while I've seen an increase in tempers recently, it's never really impacted me until yesterday morning. Sitting in my assigned seat, a man in his mid twenties stowed his bags in the overhead bin and violently slammed it shut above my head. Without saying a word, he tapped me on the shoulder and pointed to his seat.
Red flag number one.
I stood up (I always pick the aisle seat) to give him easier access into his seat, and I noticed he wreaked of alcohol.
Red flag number two.
At this point, I was not worried. I am quite used to tuning people out sitting next to me, thanks in part to the Bose headphones I take whenever I fly. (Bose headphones are one of the greatest investments a business traveler can make.)
Despite the fact there are three seats on this row and it's clear that there are only two of us sitting on this row, he elects to sit next to me in the middle seat, leaving the window seat empty.
Red flag number three.
A flight attendant came by to ask him a question about his ticket. He slurred his words in response in a completely incoherent fashion. Trying to be nice, I made some comment about how I hoped the airline got their seating arrangement squared away soon.
His response? "I hope your <expletive> shirt doesn't piss me off."
Red flag number four.
I'm mentally turning on all of the switches now: Full situational awareness on. Conflict resolution optimizer on. Verbal judo mode engaged. Aisle arm rest now in the up position in case he starts punching me and I need to get up quickly.
Gear check: my Fenix flashlight (with strobe capability) in my pocket. The heavy carabiner I keep clipped to my briefcase is now off and in my pocket as well.
Seat belt check: belt buckle opens to the right, in case I need to quickly stand up.
He continued to talk incoherently, encouraging me to engage in sexual relations with myself. Occasionally he asked me a question. I couldn't understand him, of course, because he was hammered. I told him I'm hard of hearing (which isn't true) in an effort to use verbal judo to throw him out of his OODA loop; I asked him if he could repeat the question. In reality, I'm baiting him: I was hoping he raised his voice to overcome my alleged hearing deficiencies so that other passengers can be made aware of the situation. He didn't take the bait, however.
We took off, and five minutes later I decided to get more people in the boat with me. I ignored the "fasten your seatbelt" sign and walked back to the rear galley to advise a flight attendant, "The gentleman in 23 B is drunk and wants to fight me."
The flight attendant reports they are aware of his intoxication - "we've already had one issue with him, and he shouldn't have been allowed on the plane. We won't be serving him alcohol. Would you like to move to another seat?"
I declined, because I was somewhat concerned that me moving my things may make the situation worse. I'd already made a mental note that there was a young boy sitting directly in front of him. Had things deteriorated, that kid would be in the danger zone. I told the flight attendant let's see how the next few minutes go before we take any further action.
At some point, The Gentleman In 23 B realized I was not going to be belligerent with him. As we teach in the Texas License to Carry class, Ego State Theory suggests people remain in the adult ego state in this scenario - try to de-escalate the situation - and not respond in kind to his verbal aggression. It seemed to be working, and he attempted to apologize for his behavior in a sloppy drunken fashion.
A few moments later, the flight attendants began taking drink orders, and of course, he ordered more alcohol. The flight attendant was professional but firm - they refused to serve him. And while he was drunk, he was not stupid - he lobbied me to buy a drink to give to him. I just kept smiling and saying "No, I am good, man - thanks anyway" - which is a nonsensical answer to his request, but he was having a hard time processing it. (Knocking drunks out of their OODA loop is pretty easy to do.)
He even reached forward to tap the boy sitting in front of him on the shoulder - presumably to ask him to buy him a drink - until he realized the kid was way too underage to be of help.
The remainder of the flight was fine, although he was annoying. Despite the fact I was wearing Bose headphones, he kept tapping me on the arm to ask me what I am reading, whether I was a Mormon, and how he learned to fly a plane before he could drive a car. He continued to talk even though I had the headphones on.
The flight attendants appreciated my patience, asking me for my ticket so they could give me some frequent flyer miles for my trouble.
Throughout the ordeal, I made the following notes:
Many of you will find this final point odd. But last night during my evening prayer, I thought of that young man and prayed for him. I will continue to do so. Anyone that drunk at 8 AM who thinks it's a good idea to threaten and berate someone he's sitting next to has a lot of problems. I don't know what's going on in his life. I prayed for peace and healing. I prayed he would find his way and become a responsible citizen.
At the end of flight, this was a "no harm, no foul" event. But it could have turned out differently.
This is not a political statement. Please don't try to read anything political into this. If you're looking for political commentary on the current immigration situation on the southern border, this blog will disappoint you.
I'd like for us to look at the current immigration situation as an allegory for the state of preparedness in the United States.
In short, it looks something like this:
I would argue you could use these same seven events for essentially any disaster that affects America. Hurricanes, wildfires, earthquakes, flooding - the pattern is quite predictable.
What is missing from both the immigration emergency and every other disaster we face is a noticeable lack of interest in fixing the root of the problem.
How can you say that, Paul? Congress could fix this if the <insert political party here you don't like> would come to the table and pass a bill to fix it!
No. That's not the fix.
In preparedness, in immigration, in gun violence, in poverty, in virtually every problem that befalls us, we conflate the band aid with the cure.
This is best demonstrated by surveying your own social media feed. Count the number of stories that depict what's going on at the border, that talk about our immigration laws, that complain about the government's policy, that complain about the current or previous president. That's your denominator.
Now count the number of stories that provide any meaningful explanation of how to fix the problems causing these people to leave their home countries. That's your numerator.
Numerator divided by denominator = The Fix Ratio
I did this myself. One day earlier this week, I counted 50 stories in my Facebook feed complaining about our immigration laws, President Trump, and President Obama. How people who support President Trump are horrible people, and how people who support President Obama are horrible people.
In that same space of Facebook feed, the number of stories that addressed how to fix the problems in the home countries motivating people to try to immigrate to the United States? Zero.
That gives us a Fix Ratio of 0/50 = 0.00 percent.
Disasters are no different.
After Hurricane Harvey, how many posts did you see on social media about the storm itself? How many did you see of the damage and suffering? About how much government aid will be necessary to rebuild?
And then compare that with the number of posts you saw on discussing how much of that damage and suffering could have been avoided if people had taken preparedness seriously?
The Fix Ratio for Harvey? Still pretty low.
In America, we aren't interested in the fix.
Because the fix is hard.
The fix requires us to do something beyond changing our Facebook status to make sure we register the correct outrage congruent with our political team.
The fix requires money.
The fix requires a changed mindset.
The fix requires different priorities.
The fix requires effort, training, and sacrifice.
The fix requires that we stop dividing ourselves into tribes along economic, religious, political, racial and gender lines.
The fix requires us to look at things in a non-emotional manner, where political scores aren't kept.
In preparedness, the conversations we really need to be having are:
UPDATED 3:25 PM CDT 6/24/2018
At the risk of being accused of making this political, I urge you to watch this short interview of former DHS Secretary Jeh Johnson from today. I just saw this right after I posted this. Listen to the last sentence he makes in this clip: "You can deal with this on the border, you can try different things....but unless we deal with the underlying causes that are motivating people to come here in the first place, we are going to continue to bang our heads against the wall on this issue."
He's absolutely right. And this is the kind of thinking we need to be applying to our preparedness challenges as well.
See for yourself:
OBSERVATIONS IN TRENDS AMONG LTC STUDENTS
I am but one instructor, who teaches maybe six LTC courses a year. But here are the trends I am noticing as the last year or so:
MONTHLY PREPAREDNESS TRAINING IN AUSTIN WITH ADRN STARTS OCTOBER 11
This is big news – The Austin Disaster Relief Network (ADRN) is hosting some great preparedness training opportunities.
First, make sure to register for the I AM Ready Preparedness Conference on September 27-29. Emergency medicine, food production, civil unrest, emotional readiness, and other topics will be discussed. I plan to attend. I hope to see you there!
Next, ADRN is in the process of creating monthly training opportunities to help people get better prepared. These will be held on the second Thursday of the month, starting October 11, at Riverbend Church on 360. More information will be forthcoming. I want to make sure those of you who are interested get this on your calendar….especially the fact it will be every second Thursday.
I will be helping out with the monthly preparedness training. For those of you who have been asking for a monthly preparedness get together to hear presentations and learn new skills, this is what you are looking for.
MORE TEXAS SCHOOL DISTRICTS ARE ALLOWING STAFF TO CARRY FIREARMS
As of last month, 217 school districts in Texas allowed staff to carry firearms. There were only 172 in February. That’s a 26 percent increase in two to three months.
Note that the Texas Association of School Boards anticipates more schools will move to the armed staff model in response to the Santa Fe High School shooting.
In case you are wondering, there are 1,023 ISDs in Texas. Now, 21 percent of them allow for armed staff.
NEXT THREE MONTHS: WARMER AND DRIER THAN NORMAL
Here are the latest forecasts from the National Climate Prediction Center. This was issued yesterday.
The rains we’ve had of late are helping reduce our wildfire risk, but please note the official forecast for the rest of summer calls for hotter and drier weather. Please be mindful of the heat risks while outdoors as well as the wildfire risks.
The correct analysis is that both deflation and inflation are possible. Anyone who warns just of inflation or deflation is missing half the puzzle - James Rickards
A few years ago, I spoke at my annual preparedness conference on the risk of another financial downturn. I think I may have stunned, if not outright upset, some of the attendees when I said:
Guys, here's the good news about the next financial crisis. We now know what one looks and feels like. We know it's survivable. And best of all, we know now what to do to protect our finances.
Perhaps they were taken aback by my use of the term "good news" when discussing the next financial crisis. While there's no doubt the crisis we endured ten years ago altered countless lives and our nation's history, we also learned a lot about ourselves, our economy and our government during that era.
Fast forward ten years. I've done several YouTube videos over the past year on the need to have a financial plan for when the market has its next big downturn. Today, I'd like for us to discuss what that means and how someone could go about doing it.
I'm not talking about the garden variety market corrections we see from time to time, which are necessary to a healthy marketplace. I'm talking about the need for a plan in the event we see something like we saw in the 2008 financial crisis.
I won't spend a lot of time making the case that such a financial crisis could occur again. As I talk to people about the prospects of another crisis, I find people either believe that it can happen again...or they don't. My job isn't to convince you it can happen. My goal is to provide ideas to those who believe that it can.
Inflation or Deflation?
One of the first questions we have to ask ourselves is whether we expect an inflationary event or a deflationary event. Simply put, will the next crisis be one where prices rise rapidly - faster than our wages? Or will it be another 2008, where prices for not only stocks but also cars, homes, and consumables falls dramatically?
Those who are concerned about the risk of another crisis often debate this enthusiastically. I don't think it's really necessary to debate the issue; I'd rather be prepared for either scenario and not worry about guessing which crisis may befall us.
For guidance on what to do in an inflationary crisis, Forbes contributor Clem Chambers outlines five investments which historically done well during such events. They include:
Meanwhile, contrarian financial expert James Rickards suggests we should be prepared for both deflationary and inflationary crises. In the aptly entitled article "Why You Should Be Prepared for Both Inflation and Deflation," Rickards outlines how you should invest in either scenario.
For the deflationary crisis, Rickards recommends cash, bonds and raw land. In an inflationary crisis, he recommends commodities such as gold and oil, stocks in blue chip companies with significant ownership in hard assets, along with collectibles such as fine art.
To help you identify what stocks you might choose in a market downturn, Kiplinger's has a list of blue chip stocks you should consider during a deflationary scenario.
Rickards recommends we "prepare for both [scenarios], watch carefully, and stay nimble."
If You Expect Another 2008 Style Crisis, Why Not Just Invest In Those Things That Did Well Back Then?
You certainly could, and fortunately we have some good clues on how to do that. U.S. News came up with seven stocks that performed well during the last financial crisis. As you scroll through these stock ideas, you'll see many names you recognize. You'll also quickly identify a trend with these stocks: companies that sell lower cost items and entertainment options did well during 2008-2009.
Can you make money while the stock market falls?
Consider investing in an inverse ETF which goes up in value as the stock market falls. Investing in one of these funds is very easy - you buy it just like your buying a stock if you're using an online trading account. For those who feel really adventurous, the inverse ETF with ticker symbol SDS is a leveraged inverse ETF. In rather simplistic terms, for every one percent drop in the S&P 500, SDS goes up by two percent. The catch, of course, is that for every one percent increase in the S&P 500, SDS does down by two percent.
It's not a trade for the faint of heart, but it can really provide meaningful gains in a deflationary event where the stock market is falling.
What can you do with your 401(k)?
The 401(k) issue is tough, because most people have very limited investment options. Your best bet is to study each of your investment options within your 401(k) and see how they fared during 2008-2009. That will give you a sense of what your best options are during a deflationary event. In that scenario, you may find it's better to just put your 401(k) in cash and ride out the downturn, knowing that the the dollars in your account are increasing in value (dollars increase in value compared to other currencies and investments during deflationary events.)
For inflationary events, the advice listed above is solid - find a mutual fund option that invests in hard assets, such as commodities and real estate.
Again, this will require a little research on your part, but it's not hard to do.
How to create your plan
I'm not a financial adviser. But I will tell you what I am doing now, and what my plan is, in an effort to give you some ideas.
First, I am currently fully invested in the stock market. I believe, as many experts do, we should expect the stock market to go higher for some time to come. That's not to say some event couldn't cause a major sell off or inflationary spike. But for now, my plan is to sit tight and remain invested in equities.
Once I decide it's time to change my investment strategy, I'll take two steps:
This is not as hard as you think. It does require you to do a little research. Spending time with a financial adviser you trust would also be a good use of your time.
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Preparedness isn't about buying a bunch of guns and military rations, waiting for "the big one." Much of what you will do to get better prepared will be tedious and boring.
And that's the good news - if you find your preparations tedious and boring, it probably means you're doing it right.
Currently called "Disease X," a new strain of bird flu in China is racking up significant fatalities - roughly 38 percent of those people infected are killed by the disease.
Newsweek ran this article on June 15. Other publications, such as The Atlantic, published articles as recent as three days ago decrying our lack of readiness for the next pandemic, such as Ebola. Even if you take away the unnecessary political bias in The Atlantic piece, it's clear the threat of pandemic is starting to bubble to the surface again in the minds of the disaster cognoscenti.
Pandemics rank high on the fear factor, in large part due to movies about pandemics over the last few years. The recent Ebola outbreak which saw two nurses in Dallas contract the deadly disease further alarmed Americans who were paying attention to such things. Slate provided an extensive timeline on how these two nurses contracted the disease and unwittingly exposed others to it.
CNN ran a piece last year entitled "Seven reasons we're more at risk than ever of a global pandemic." As with any mainstream media piece, all the bases are covered: increased global travel (widely understood and appreciated), climate change (the predictable boogeyman for various things that ail us), and calls for communities to become more resilient (a great idea, and one I advocate).
But one item stood out as a bit unexpected but intriguing nonetheless: "Faster communication raises the risk of pandemic." According to the CNN infographic, the worst case is "fearful rumors may trigger panic, which might hinder key institutions like stock markets and emergency responders."
A few weeks ago on my YouTube channel, I spent a fair amount of time discussing this article from B.J. Campbell entitled "The Suprisingly Solid Mathematical Case of the Tin Foil Hat Gun Prepper." I mentioned in my video that the article is perhaps one of the best articles on preparedness I had ever read, and I encourage you to spend time reading it as well.
In Campbell's effort to explain that those who are into preparedness are justified based upon a statistical approach using historical data, he writes:
The zombie apocalypse is obviously pure fiction, but it has an allure to a few tongue-in-cheek preppers because of its functional completeness. If you are prepared for zombies, you are literally prepared for anything. The key fixture of zombie preparedness is a fundamental understanding of what happens when our systems of economics, governance, and civil infrastructure fail. There’s a great one going on right now in Venezuela, with people eating rats and dogs, incapable of trading in the local currency, and a general humanitarian disaster associated with descent into anarchy. No class of person is more capable of riding out a situation like that than a well-provisioned zombie prepper. Various fixtures of zombie prepping include:
While no one I know truly believes there is such a thing as a zombie apocalypse, the closest thing to one would be a global pandemic like the ones referenced above. Watch the movie World War Z sometime to get a feel for the parallels between a zombie outbreak and a pandemic.
The pandemic scenario - or zombie apocalpyse if you prefer - is a useful tool to those in the preparedness and disaster planning community for the reasons Campbell mentions. It provides us a scenario requiring full spectrum readiness: food, water, power, sanitation, security and medicine.
Feel free to dismiss the concerns over another pandemic (although experts will tell you it's not a good bet to make - check out these reports from CNN and NPR). But for all of us who advocate for better readiness at all levels, fewer perils give us a better assortment of "things that would go wrong" than a pandemic.
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Here's where I tell you what I think about things I think about.