Financial Collapse - Survive or Thrive?

[Tarrel]

I guess everyone's circumstances are different, determining how they will be affected and how they will react. Personally there are two things on my radar:

1. A short-term banking crisis (much as we're seeing in Greece now) caused by a shock to the system (e.g. contagion from a collapsing economy elsewhere). This would manifest itself as a liquidity problem in the banks, with bank-runs adding to the problem. Credit may freeze, causing difficulties with payments and procurement of supplies, leading to local shortages. If an individual bank collapses, I don't think it will stop at that. The ensuing panic will cause other banks to topple in a "domino" effect. In this case I have doubts over the Government's ability to meet its obligations to savers under the FSCS. Cash in hand will be needed in order to survive day to day, but local prices will rise as shortages occur. I maintain "classic preps" for this scenario; car fuel tank kept full, spare fuel stored, domestic oil tank kept full, coal and wood stores kept full, stock of food, cash on hand. I believe this scenario is survivable, although we might all come out of it poorer as a country. Think 2008 on steroids.

2. A longer-term worsening of the country's financial standing (perhaps caused by having to deal with two or three of the above types of shock), leading to a major re-evaluation of ability to fund such things as the NHS and state pensions. I am 8 years from pensionable age. I don't have much in the way of private pensions but we do have capital in the form of bank savings and property. Our low outgoings mean that I'll be able to live quite happily on the state pension as it stands, if it stands!

My worst case scenario would be a short-term shock, leading to an unrecoverable loss of bank savings, followed by a severe reduction or elimination of the state pension. I am mitigating against this by moving slowly but surely towards self-sufficiency, but I'm very aware that being self-sufficient can be hard work when old age kicks in. We took a decision to "downshift" to Northern Scotland early, rather than making it a "retirement project" as many people do. We wanted to do this so that we could build up our situation while we're fit, energetic and enthusiastic enough to do so. We're "intentionally poorer" as a result, but there is enjoyment to be had in simple pleasures.

My gut feel is that the financial system as we know it is not sustainable, and will disappear. However, there will always be the need to trade goods and services, and to store value. So the old prepping adage applies; have a skill or the ability to make or grow things, that will be in demand and that you can sell or exchange, however the transaction takes place.

I have three healthy lads who are busy pursuing their own lives in various parts of the country. If things collapse to the point where their livelihoods are under threat, there is a place for them here with us. It's one of the main reasons for coming here. Our woodland has the capacity to provide for several families sustainably.

Sorry if this doesn't answer each of the questions directly, but hopefully it gives a sense of how we see things, and our trajectory.