How Can We Protect Our Finances?

Welcome to this week’s Survive The Coming Collapse newsletter, brought to you by Free Survival Cheat, a set of quick, actionable, and free preparedness and survival tips and tricks from the The Fastest Way To Prepare course as well as Cloud Hard Assets–the ONLY precious metals company that I endorse.  Mention “David Morris” when you call 800-247-2812 for FREE insured shipping and the lowest markups I’ve found in the country.

– David

Survival Diva here with an important question: If the banking system and U.S. currency is being kept alive on the blind trust of its citizens, then how do we protect ourselves financially when it all comes unraveled?

If there is ever a run on the banks, as there was at the start of the Great Depression, we might experience double-trouble because of our growing dependance upon charge cards and ATM cards. It’s for sure we no longer stuff mattresses with money, nor do most of us keep a slush fund in a cookie jar. In fact, the majority of us don’t even have cash in our wallets anymore! 

This dependance on cashless transactions has the potential to bite us on the backside should a bank holiday be called as it was at the start of the Great Depression, which resulted in panicked depositors rushing to their banks to pull out their money. 

The Fed Decides the Percentage Of Money That Must Be Available At Banks

The Board of Governors of the Federal Reserve determines the Reserve Ratio, which is the amount (percentage) of money that a bank must keep on hand and available for its customers, which is based upon the amount of reservable liabilities (like your deposits) in that particular bank. This is important for anyone who expects to pull out their money at the start of a crisis, because the alarming fact is…there is only a small fraction of depositors’ money available on any given day. The rest is in electronic form or is being loaned out which brings in income for the bank.

Here’s where the problem lies; Banks with reservable liabilities of $12.4 million or less have ZERO Reserve Ratio requirements. Another words, these banks are not required to have any cash on hand, but they can still, of course, loan it out. Banks with $12.4 million  to $79.5 million worth of customer deposits are required to keep  3% physical cash on hand, and banks with more than $79.5 million of deposits are required to keep 10% physical cash on hand and available to depositors.

(David’s note:  To keep things in perspective, banks with less than $100 million in assets make up about 1% of the total assets in the banking system.  Banks with $100 million to $1 billion in assets make up another 8% of the total assets in the banking system and banks with more than $1 billion in assets hold the other 91% of the assets in the banking system.  So, the zero reserve ratio requirements on micro/boutique banks don’t REALLY have as much of a negative impact on the system as one might think.)

The issue with fractional reserves was never clearer than during the bank runs at the start of the Great Depression which eventually led to 9,000 bank failures during the 1930’s. When Franklin Delano Roosevelt called a three-day bank holiday for a three day cooling off period, banks began to scramble for the cash their depositors were demanding. But at the end of those three days, most banks were no closer to a solution and bank failures kicked into gear at an astronomical rate and many depositors lost their money.  (David’s note:  Keep in mind that the banks were scrambling for cash even before the electronic banking system.)

Lessons To Be Learned

U.S. depositors might want to take a close look at what occurred to Cyprus depositors in March of 2013. President Nicos Anastasiades claimed his only recourse to bad, unpaid loans to Greece that threatened to fold the countries solvency and eject them from EU bailouts was to temporarily close banks and seize large depositors accounts with amounts greater than $100,000.

(David’s note:  As a side note, Russians were one of the only groups of people to be able to get their money out of the country when currency controls were enacted.  How?  While banks in Cyprus were closed, their branches and/or subsidiaries in London and Moscow remained open with no limits on withdrawals.  **Slick setup, if you had the right connections.**)

What We Can Do Now To Protect Our Cash

There are several ways to avoid becoming a victim of a sudden economic meltdown like what was experienced during the great Depression and in Cyprus, and the solutions will vary between individuals.

Food and Preparedness

I am asked for advice on this issue often; whether it is better to put the lion share of cash flow into food storage, preparedness goods and barter items or invest it in silver or gold. My answer is always the same for the 99% of us who do not have unlimited funds: start with food storage and preparedness goods first. The reason? Food and critical preparedness goods will be unavailable at any price if a crisis is of long duration. Would you part with commodities like ammo, fuel and medical supplies? It would be impossible! And besides that, we can’t eat silver or gold. So start there, and once food storage and preparedness goods have been provided for, silver and gold can follow.

(David’s note:  This is as much a portability issue as anything for most people.  If you know you’re going to scoot when the balloon goes up and will need the ability to travel fast and light, precious metals and/or jewels may very well be a better choice for you than having more preparedness supplies than you can take with you.  Again…the answer to this question is a an individual one and not a blanket one.)

Whichever way you decide to go, I’ve got special offers for my readers that include free shipping options…

**For “survival food” with a 25 year shelf life for as low as $5 per person, per day, click >HERE<  When you go through this link, make sure to pick the “FREE Shipping” option at checkout.**

**For gold, silver, or other precious metals, call Tom Cloud at Cloud Hard Assets and tell them that I sent you to get the lowest markups I’ve found in the country and fast, discrete, insured delivery from a 35 year precious metals veteran.  Tom’s number is 800-247-2812**

Bartering Goods

There will be certain items in huge demand during a long-term crisis. Items like bleach, salt, matches/lighters, water containers, batteries, flashlights, and candles are just a few.

You’ll also be able to name your price for things that are hygiene and cleaning related—most of which can be purchased at Dollar Stores. Remember, people will be desperate for these items and name brands won’t matter much! Can you imagine what it would be like to be without toothpaste, a toothbrush, shampoo, deodorant, Vaseline, laundry soap, or dish soap…and the list just keeps going!

One reader shared that she went out and bought a gross of reading glasses at the Dollar Store. Good for her! Many people will be desperate for reading glasses.  Your barter potential will increase as long as you take the time to think through what people will need post-collapse. And these items don’t necessarily come with sticker shock. .

Try this experiment; write down what you use throughout the span of one day; which of these items couldn’t you live without? Now imagine a long term crisis and consider what would be your must-have items.  (The 2 lists will have items that overlap, but will be distinctly different.)  This list alone will give you a good idea of what would be popular barter items.

As you begin to stock bartering goods, remember to set aside extras of key items! I use a can opener as an example frequently because it is a must-have item that is cheap today, but may not be available tomorrow. A prepper with canned goods will want to have at least three quality can openers on hand, but any extras from there would be great for barter.

(David’s note:  If you can find them, buy a few dozen P-51 or P-38 can openers.  They’ll probably set you back about .50 apiece.)

Currency vs. Silver or Gold

Most preppers prefer to invest in silver or gold because the fiat currency of today has no backing, other than the value of the paper it was printed on. Should trust in our banking system evaporate, U.S. currency could be worth precisely… nothing.

A good example of a downward spiral of a nations currency was experienced with the German Mark. In 1914, Germany abandoned the gold backing of the Mark. Prices of goods and services doubled between 1914 and 1919, followed by Germany’s being forced to make reparations at the end of WW1, and soon their once strong nation began to experience  an economic tsunami. Prices doubled again in just 5 months in 1922 and the situation continued to erode and in a fairly short time frame, the exchange rate between the U.S. Dollar and the Mark was one trillion Marks to one Dollar. At that point, a full wheelbarrow full of Marks was not enough to purchase a simple newspaper! 

(David’s note:  There is a theory in play that if there was a situation where electronic banking collapsed that US Currency would still be used as a means of readily identifiable trade for a time.  Will things play out that way?  Who knows…but I do know that after disasters like what’s happening in Boulder, cash is still king.)

There are differing views on whether it is better to invest in silver or in gold. Silver coins have one advantage over gold coins–since silver is $23.09 per ounce and gold is $1365.10, they are much more practical for day-to-day purchases.  Having said that, silver bars or gold coins would come in handy for larger purchases.

Whatever strategy you use to protect your finances, it should be made while the state of the economy continues to hold on by its fingertips, rather than after it takes a tumble into oblivion!

David’s Note: If you think that now might be a good time to put some money into gold and silver, I suggest you contact Tom Cloud at Cloud Hard Assets at 800-247-2812 and ask him about the commodities he provides from Junk Silver to Gold Bullion or visit his site at Cloud Hard Assets. I am a customer of Tom’s and promotional consideration has been made for this referral, so please let them know that David Morris referred you for a special discount.

And, for some of the most reasonably priced 25 year food, click >HERE<

What do you believe will hold the most value during a protracted crisis; bulk food, preparedness goods, medical supplies, and bartering goods, or silver and gold? Are you concerned about an economic collapse and are you preparing for it?

If you’re in a position to do larger investments, what are you looking at?  Food production?  Private security?  Foreign loan arbitrage?  Micro and pico power production?  Other investments?  Share your ideas and thoughts by commenting below:

Chapter 22 of “Implant”, Diva’s Christian novel dealing with RFID implants is available. You can Click Here to continue reading. 

God bless and stay safe,

David Morris and Survival Diva



  1. Click Here did not work for me, is there another link I can click on?

    Chapter 22 of “Implant”, Diva’s Christian novel dealing with RFID implants is available. You can Click Here to continue reading.

  2. James McDonald says:

    I am an CAl Technican medically retired from Kennedy Space Center, I have built a few 5 volt solar panels & a couple of 20 volt panels. Being able to recharge Phones, MP3 players and Tablets and deep cycle batteries will be a great barter item. Also charging rechargable batteries and radios will be of great help. I will not do this at my home but barter else where to keep OPSEC. As not everyone will be wanting to trade or barter but will want to take! I am(on limited income) stocking up on medical supplies, food, water filters, booze and some items to give to friends and neighbors. As having neighbors to help watch out for the roving gangs/groups will be invaluable. As this worked out great when we had those 3 hurricanes in 6 weeks a few years ago. Helping your neighbors and friends as much as possible gives you the extra eyes that you will need! Its just the cost of trying to be ready and not having a lot of money to do it, but as one of my friends said; 30% ready is better than 0%!!!

  3. I have been watching and pondering the financial situation for some time. If/when the banking system comes unraveled I believe we will go through several stages (in other words, different things will work better to protect you at different times). We all seem to be on board with storing food, supplies, barter items and other things already discussed. Gold, silver and land are longer-term stores of wealth assuming they don’t get taxed or confiscated out from under you. First though, you have to get though the initial stages of a crisis with as many of your assets left as possible. Some thoulghts:

    Bank accounts. Cyprus introduced a new concept for helping out too big to fail banks–“bailing-in”. Instead of taxpayers being responsible for the mistakes of big banks, in Europe they desided that customers of Cypriot banks were UNSECURED CERDITORS of the banks above the insurance limits. Previously the shareholders and creditors had to lose all their money before this hit the depositors. Now depositors were equivalent to unsecured creditors and this money was taken from them and they were given stock in the bank instead (this did not help businesses make payroles, pay bills, etc. further undermining their economy). Not just Europe but even Canada has now also formalized the same legal language. Is the US poised and ready to do the same thing whenever they feel they can slip it past? This makes it very important to know the relative safety level of your bank. Even if your deposits are below the insurance levels for each account, the stronger and more conservative your bank the easier time should should have getting at least some of your money back to use in the early stages of any crisis. Reserve requirements for banks are minimums. You want a bank which holds itself to higher standards.

    The Weiss Financial Strength Indicator is most commonly used to independently assess bank strength/safety. It uses a straightforward reportcard grading system (A & A- excellent, B+, B & B- good, etc.) You can look up the grade for your bank or look for the best banks near you by going to Or, you can ask the bank manager. I have personally weaned myself off ATMs and now do as much banking with a smaller well capitalized local bank as possible.

    Note: Keep an eye on how the bankrupcy of Detroit City unfolds regarding who gets classified as unsecured creditors–this should give a hint where US law is heading if they are allowed to class pensioners, etc. as unsecured creditors.

    Cash. If a bank holiday is declared, initially cash will be king. For this reason (and any other big emergency) I do keep one month’s expenses in cash (outside the banking system including safety deposit boxes). Who knows what prices would do in such a situation but chances are that price controls or serious reprocussions for price gouging would be the order of the day. Also, certain loan repayments may or may not be suspended for the duration of the holiday.

    Standing in long lines for too little money to do any good (al la Cyprus) is what I hope to avoid along with any social unrest likely to happen there. But, I do not want so much cash on hand that I get noticed in the event things get bad enough for the bank holiday to be used to roll out a new currency to replace the dollar and I have to trade my cash in. I am also prepared for this cash to become worthless if things fail too quickly but I believe the possible flexibility of having cash when businesses are cash starved and others have only plastic to offer outweighs this risk.

    Note: If you keep cash keep the bills small and use and replace them regularly. A couple of years ago I tried to use 3 $50 bills with small pictures of Grant on them to make normal purchases at large stores and they aroused way too much attention in every case. The bank took another two such bills as deposit without any problem though. In a crash situation passing large or older bills might be like yelling “I have a stash of money, follow me home.”

    Gold and Silver. If there is a Stock Market Crash, your gold and silver coins are NOT initially likely to rise in price as stocks fall. The reason for this is that is gold and silver prices are currently set by the “paper market” prices established in the commodities market. When stocks drop fast, traders who trade on margin (borrowed money) are required to sell anything else they hold in their accounts which still has value to pay back the money they borrowed. In the short-term, this pushes everything down at the same time. What is likely to happen to physical metals such as coins is that the spread between the market price and what the purchaser/seller pays/receives gets much bigger. It also means that coins disappear and cannot be found for immediate physical delivery at any price. This is telling you that this is not the time to panic and sell your gold and silver even if it’s down big as the price drop should be short lived. All this to say that gold and silver are prone to big moves up and down and as David Morris mentioned in the article above the time to buy is before the collapse, not after.

    Stocks/IRAs. The bankrupcy of commodities trading firm MF Global (ex-gov. and sen. for NJ Jon Corzine CEO) revealed that the firm had taken customer money and used it to make risky trades for its own benefit. Many large customers of MF Global found the accounts they traded daily to make a living or hedge their farm production frozen.

    For normal indiduals who have a small traidng account or IRA, if you stick to the big brokerage firms who have substantial reserves and trade only on behalf of customers and not for their own accounts, it is highly unlikely that your funds could be lost due to such rogue trading. However, brokerage firms are allowed to lend your shares of stock held by them (in your name) under their account to individuals and firms wishing to short this particular stock. If the whole financial system collapses, this loaned stock might not be able to be recovered if overall losses exceed reserves. Old fashioned stock certificates in your own name are the way around this but they are a real pain to sell. Your IRA’s mutual funds may or may not allow their underlying shares to be borrowed–good question to ask your provider.

    Interest Rates. For 36 years (1946 – 1982) interest rates generally rose. From the peak in 1980 – 1982 to today interest rates have generally fallen and are now at historic lows. Even if the Fed does not lose control of interest rates and there is not another financial crisis, we are at (or close to) a turning point which should see interest rates rise for the next 20 to 30 years. Few know what that will mean to the economy. While it sounds good to load up on debt at low interest rates, should too much debt catch you without a job or on a low fixed income it could easily overwhelm you and sink your overall prepping efforts. Best to keep your debt as low as you can for as long as you can.

    For me, protecting your finances is all about diversifying your efforts so you can “live to fight another day” even if parts of your plan fail. I ignored most of the straight financial stuff for most of my life. Now I am trying to correct that. Hope what I have learned so far helps somebody else.

  4. Liquor and cigarettes were cash in the Depression. My father traded his Phaeton (still considered a sports car above all others) for an old fishing boat. He knew the Depression was coming. Every day, he cooked the fish outdoors in a steel drum with oil in it, and sold fish dinners for 3 cents. He traded fish for chicken to expand the menu.

    He made brandy out of grapefruit from his grove.

  5. I have maybe a different view of finances in a collapse than most here. I am a financial planner by trade and work with average people. I am not a huge fan of gold and silver at least as an investment. The markups are generally very high and to tell the truth neither gold nor silver have an intrinsic value other than the value we attribute to them. Silver has a bit more value as it has many industrial uses but not uses that preppers will putting it too.

    So how do you prepare? I would say work to pay off your debt, build an emergency fund, and diversify your investments with things like no load mutual funds that cover the entire investment world. Look at income producing properties and small businesses that would be in demand in an economic collapse. Could you add gold and silver? Sure but I would add guns and ammo first. Be careful which “financial advisor” you use as most are just sales people who really don’t know and generally don’t provide financial planning. A great place to look for planners is This is the National Association of Personal Financial Advisors, the largest group of fee only planners in the country.

    Along the way of course keep working on your preps. I am in favor of things like booze, medical supplies, ways to filter water, of course ammo and seeds and a lot of toilet paper and personal hygiene products.

    I fully expect the federal government to ruin or at least severely damage the US currency along with the economy. This may take the form of “entitlements” being cut or very much reduced and will at least involve much higher inflation than have seen probably in several generations. Imagine all of the “gimme dat” people on the dole when the well runs dry.

    Inflation is hitting us now, if you doubt this go and buy a half-gallon of ice cream. You will find it is now a quart and a half and costs more than a half-gallon did five years ago.

  6. Richard W. Schultze says:

    to get up to par quickly on how to do most anything, try the Foxfire Books.

  7. I would think the best investment would be ammo, both for your own safety, ability to hunt for food, and for barter: just be careful who you barter with. They may just decide to use that ammo against you and take your entire supply. :/ Any recommendations on that issue, David?

    • It all depends on the situation you’re planning for. In a Mad Max scenario, I would agree that ammo would be a good item to stock up on for barter.

      But there are have been a lot of disaster/survival situations where ammo wouldn’t have been a preferred barter item, such as NYC after 9/11, and multiple post-tornado, post-hurricane, post-wildfire, and post-flood scenarios like what’s happening in Boulder right now.

      At some point in a long term disaster, if things keep deteriorating and ammo gets used, it will probably go up in value, but it would be good to have things on hand that you could use as a medium of exchange sooner and with a wider range of people.

  8. Just one more thing, David. I started finding old books at resale shops on the way things were done without electricity, i.e. how to sharpen an old wood saw and how to build a grain mill. This info right now may not be worth much and I have not read most of the books yet, but the knowledge they contain may be very important in the future. So last thing, all the gear you have does not replace the knowledge of how to live without it. Stay safe my friends.

  9. I clicked on the link for 25 year food and got a site talking about eye health. Z health. Is that where it is supposed to take us?

  10. Since I have limited resources I have concentrated my efforts toward food, supplies, tools and barter items. I also reason that in the absence of a real currency, people who have supplies that people wish to purchase with gold or silver will be able to set their prices at whatever value they wish, and depending on whom you try to purchase items from with the gold and/or silver, they are more than likely not to have the purchasing power you put into them. Since, as stated in the article, gold and silver cannot be eaten or used for much other than a substitute currency, if you are hungry enough or in need of certain supplies enough, the person with the commodities can really stick it to the person with the gold and/or silver. It would be nice to think people would try to be fair and honest with other people in need, but time and again, we see price gouging or attempts at it with most disasters. I would not expect less during a serious, long-term disaster.

    • Gena, you’re partially correct, but the people who control the commodities can stick it to the buyer REGARDLESS of what the medium of exchange is. What keeps this from happening is multiple sellers of commodities competing in a free market.

      With gold, silver, cash, bat dung (joking), or whatever the accepted medium of exchange is for an area, as long as you have multiple sellers who aren’t in collusion, the price will be determined by what willing buyers pay willing sellers.

  11. We appear to have the same priorities, David. I was already a tool user, so I started with ammo, then quickly moved on to food, then preparedness supplies (medical, survival, comfort.) I am now starting to collect silver coins, which I feel will be the most usable format after paper money devalues.

    I’m still trying to find sane pricing on foodstuffs to put up. The cost of MREs is like going out to dinner at a medium priced restaurant for every serving of food: untenable. ChaChing! Anyway, I hope you resend the proper link to us.

  12. Steven McGrath says:

    I just made a siver buy from Cloud Hard Assets. Tom is the real deal. I placed an order and in less than three weeks my silver arived. Over the phone, easy, done.

  13. The exact mix of food, supplies, tools, barter goods, cash, gold/silver, etc. depends on individual sircumstances but please don’t forget to apportion an appropriate amount of limited resources to skills and knowledge ( like David Morris and Survival Diva create).

    Never be afraid to spend money on skills and knowledge people need–when stored in your cranium, they are easy to transport, way harder to confiscate and may be traded over and over to folks that lack them. For example, if you want to be able to use wild edibles to suppliment your food supplies you might need to pay to spend time with a local expert to confirm that you really do know the difference between a wild carrot and hemlock (poison) or yarrow (medicine)! Not doing so might be hazardous to your health. Since I expect to be relying on some animals no matter what the future brings, I just purchased a course from a wholistic veterinarian so I can learn more ways to keep animals healthy. Other people may need to forego the latest cool new firearm and use that money to learn to fire at something other than a stationary target.

    Banking and currency are such a timely subject–I will save my comments on that for a second post in the morning since it’s getting very late.

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