There is no shortage of disasters, from natural to manmade, that could strike at any time. Nuclear war, an EMP strike, or World War III all seem like things that might happen as soon as next week or not for years, if ever, depending on leaders in places like Iran, North Korea, Russia and China. Natural disasters, from earthquakes to forest fires, could strike without warning. If a tornado or flash flood threatens, we might get just minutes of warning while we usually have a few days notice before being hit by a hurricane or blizzard.
I prep to withstand them all and survive the weeks, months or years that follow. We stockpile food. I have a secure location and good shelter. We have gravity-fed water, wood heat, and a solar power system to help us when the grid is down. I have guns and ammo for self-defense. We stock medical, first aid supplies, and all sorts of tools and gear. We also have good relations with our neighbors and live off the beaten path. The chickens give us eggs daily, the garden provides food every summer, and there is wild game and fruit to be gathered in the surrounding wilderness areas. We don’t have a bunker, but we feel well-prepared nonetheless.
I have added something new to my list of things to prep for. Thanks to the actions of Trump, I am removing “Socialism” as a short-term threat, and replacing it with another threat. This new threat may hit in a few years, possibly by the end of the decade.
Default Dangers
I am prepping for the day the interest on the U.S. deficit goes so high the country defaults on its debts and refuses to pay them off. When it happens, it may not be called a default. The government may dress it up and call it a “jubilee” or a “debt holiday,” which sounds kind of fun. But we won’t be lounging on the beach with little umbrellas in our drinks on this holiday; we’ll be trying to find our way forward as banks close, the market halts trading, and all federal payments grind to a halt, from EBT cards to Social Security payments.
Default. It’s what happens when a company doesn’t make payments on its outstanding bonds and loans or fulfill other legal obligations. It happens to other countries but has never happened to the United States.
Just because it hasn’t happened doesn’t mean it won’t. We’ve never owed so much money and had so many unfunded obligations. A day will come when the government can no longer borrow enough money to pay its debts and the interest due. (We already spend more on interest payments than defense.) When the country’s credit rating drops to “junk” and people and institutions stop lending it more money, the government will have to default or “print” money, and either will lead to a collapse of the U.S. financial system, a devaluation of the U.S. dollar, and a breakdown of the global economic order.
Reaching the Credit Limit
Why do I think a government default is a possibility? Because the U.S. needs to borrow $28 trillion over the next four years.
Some of this will be to operate the government. The “Big beautiful bill” passed by the House extends the debt ceiling by $4 trillion, so even with any DOGE savings, the government wants to spend more.
The rest of the $28 trillion will go to repay older debts as they reach their term. In effect, the government will pay off loans it made at less than 2 percent interest with new loans made at around 5 percent interest. That refinancing will rapidly drive up the cost of servicing our debt until the country reaches a point where no one will want to lend them more money.
Think of a family that owes $36,000 on their credit card at 20 percent interest and pays $7,200 a year in interest. That’s $600 a month they can’t spend on their other needs. They get another card and use it to pay for their expenses. But the new debt is at 24 percent. Before long, it costs them $9,000 annually just to pay the interest, and then $12,000. They rack up more debt until the banks stop lending money to the family. Without a new card, they cannot afford to live, so they stop paying the bill, defaulting. This is the predicament the U.S. is in, but with nine more zeroes on the debt and a lower interest rate (at least for now).
The family can declare bankruptcy, erasing some portion of their debt because most credit card debt is unsecured. The government will have a more difficult time dealing with its creditors.
Preventing a Default
I think there are only a few things that can prevent an eventual default, and most of them are not good.
Much as WWII pulled the country out of the Great Depression, another large, lengthy war could prevent default by jumpstarting production and manufacturing as the country goes on a war footing. For this to work, we must harness patriotism, sell war bonds, and win the war, capturing the enemy’s assets. We must also swallow the inevitable war-time losses of people and material.
Second, we could become a producer nation again, lowering our trade deficit and raising our tax base by manufacturing more goods and selling them domestically and abroad. Trump is trying to jumpstart manufacturing so the U.S. will be a producer nation again. He wants to produce more oil and natural gas to export for similar reasons. Unfortunately, without the threat of war, he will not be able to shift sufficient production quickly enough to make a difference. He is on the right track, and his actions combined with DOGE may delay the collapse, but success is a long shot.
Third, there could be high inflation. In fact, if options one and two don’t happen, inflation inevitably will. By reducing the value of the dollar, the value of the money we have to repay goes down. If we experience 100 percent inflation over four years, the deficit is effectively cut in half. The country can then pay it off more easily because inflation will have raised the tax base and GDP. But while inflation may be good for the deficit, it’s bad for the citizens.
I think the most likely plan is some combination of the three, including a big dose of inflation.
How to Survive Inflation
It is possible to live with inflation, but Americans are not very good at it. Nonetheless, we did it in the 1970s and prior generations did so during WWI. Argentina seems to do it at least once a decade. Right now, Argentina has 85 percent inflation. Turkey’s inflation rate is 42 percent. Their populace may be unhappy, but their governments have not collapsed.
Living with inflation will take some adjusting. Do it well, and you will come out ahead. Do it poorly or not at all, and it will leave you behind.
The key to economic survival during inflationary times is to have an income that adjusts almost as fast as inflation. If you own a business, you must be nimble and raise your prices rapidly to not lose money. If you have savings, they must be invested in assets that appreciate with inflation and retain their value, such as physical goods, real estate, and precious metals.
As we have proved in the past, it is possible to recover from inflation, even if it is challenging. Recovering from hyperinflation with your currency and currency intact is impossible. Hyperinflation will result in the same or similar economic collapse as a default. Default, one hopes, will be managed, while hyperinflation is unmanageable. That’s why it is often referred to as “runaway hyperinflation.”
Prepping for the Collapse
Many of our preps will serve us well during a collapse. Crime will rise, so our location shields us and our defense may be necessary. We will eat our preps if we cannot afford to buy food, or if it is not available because the international payment system has collapsed and no one wants to ship food to the country or across the country without a guarantee of payment. Our other preps will also help.
We can also barter with our preps, be it a can of Spam, a bar of soap, a box of ammo, or a dozen eggs. Just as our hen’s eggs are in high demand now, they will be during or after a collapse. However, instead of charging $5 per dozen (or $10 with inflation or $50 if there is hyperinflation), we will use them for barter. Two dozen eggs for a haircut. A quart of honey for an appointment with the chiropractor. A box of .30/30 rounds for a few pounds of ground beef from one of the local farmers who raises cattle. The value of our preps will adjust as the cost of similar goods in the store rise with inflation.
One of the biggest preps I plan to make in 2025 will be to buy more junk silver, also known as 90 percent silver or constitutional silver. This includes dimes, quarters and half dollars minted before 1965. (Some would include silver dollars as well.) Interestingly, a $10 roll of 1962 quarters has the same amount of silver as a $10 roll of 50-cent pieces or two $5 rolls of dimes, 7.2 ounces.
I had planned to boost our long-term food storage in 2025, but I am putting buying silver ahead of buying food. Our stored food will last another year. I am not convinced the price of silver will.
Junk Silver for Barter
At the time I am writing this, you can buy $10 face value of junk silver coins for $245. 1,000 dimes, which at ten cents each have a total face value of $100, will cost about $2,450, which is less than a one-ounce gold coin. My plan is to buy 1,000 junk silver dimes and 400 junk silver quarters (also $100 in face value) before the end of 2025. Combined with the few rolls of junk silver I have picked up over the years, we will then have a decent store of coins that are quantifiable and recognizable with a set weight of silver. They will be ideal for conducting face-to-face transactions during the default and the unsettled period of recovery.
Given the disparity between their prices, I would rather spend $2,450 on 1,000 silver dimes or 400 silver quarters than spend $3,000 on an ounce of gold. During a collapse, I am far more likely to need to trade for something small—like filling a five-gallon gas can—than I am for something expensive.
Gold generally increases in value during inflation and is thus a good store of value. If we get hyperinflation, gold will become the equivalent of priceless, meaning I doubt you will find anyone willing to sell their gold to you. Silver will also increase in value, but because a dime contains only about .072 ounces of silver, it will be easier to part with. Thus, junk silver becomes a good “currency” with which to negotiate trades and purchases.
If you go to your local coin store and buy $25 worth of junk silver dimes every payday, you’ll have a couple hundred before you know it. Give it some thought.
NOTE: I am not a financial advisor, accountant, tax professional, lawyer or an expert in precious metals, and I am not giving you financial advice; I am simply relaying what I plan to do. Do your own research and consider consulting a financial professional before making any financial decisions, including those related to buying or selling precious metals.
