Yesterday’s article in the Democrat and Chronicle entitled “Americans Aren’t Completely Helpless in Financial Crisis” claimed to provide some helpful advice to local families for how to prepare for the worst. Unfortunately it stopped far short of the most wise recommendations. I have compiled a list of some preparations that will really make a difference if we have a prolonged depression in this country, some of which I have done myself on a poor college student’s budget. If I can do these, so can you!

1) Buy Gold.

Sorry Democrat and Chronicle, saving is a good idea, but having money in the bank or paper cash under your bed is hardly going to make a difference if there is hyperinflation in this country. Many financial analysts around the world have been sounding the warnings about dollar devaluation. The only way to protect some of your wealth is to move it into hard assets like Gold, Silver and other metals. Even the commodities markets provide a safe haven for investors during rough years.

2) Store Food

The D&C article did not even mention the possibility of food shortages in the US, but the oldest among us can remember what happened during the Great Depression. Back then over 7 million people died of hunger, and that was with the vast majority of the population being self-sufficient. It used to be commonplace to store up food in the event of an emergency, a hard winter, cost savings or being able to smooth out the seasonality of the diet. Today this is not the case. There is a global food shortage right now and the question is whether it will reach the US. If the value of the dollar continues to slide then we may not be able to afford to import our food or even keep the food grown locally. It’s just smart planning because it is insurance you can eat.

3) Get Out of Debt

This one may be the hardest. The D&C article suggested that “Americans also must use credit responsibly,” meaning don’t get further in debt. Good advice, but it would be better to get out of debt completely if possible. I realize that this is an impossibility for many Americans - including me - but the threat of deflation after a period of inflation can leave people who were prepared for the latter completely vulnerable to the former. In a situation of deflation, money becomes more valuable, but debts become larger too. The Great Depression was largely deflationary in nature and many people lost everything they owned due to small amounts of debt that ballooned in value due to deflation. Because it is imposible for the average person to know whether there will be a period of deflation or inflation with an instable economy, it’s best to be prepared for both.

In reality, the recommendations made by the Democrat and Chronicle are wise during times of economic prosperity. Living within your means is a good idea that too few of us have been able to do. I certainly haven’t at this point in my life. However, with the serious crisis we are facing now it would be even better to follow the above.