What Would Jim Rickards Do?

Snow in Texas… wildfire on the West Coast… frequent and unusually powerful hurricanes…

This year has been a not-so-gentle reminder of exactly why we prepare: The unexpected can happen anytime, anywhere… and it will.

In 2018, I expect we’ll see a noticeable rise in folks taking their disaster prep more seriously — stocking up on emergency supplies of food, water and batteries. But there’s one aspect of disaster prep that newcomers often overlook.

Cash.

Cash Is King

These days, we tend to rely on digital forms of money such as credit cards, debit cards and direct deposits. Most folks don’t have more than $50 or so of “walking-around money” in their purse or wallet.

But electronic forms of money are worthless when the electricity goes out, as it typically does in a severe storm, earthquake or flood. Credit card machines, ATMs and bank computers will all be unable to function.

The first step to preparing for a cash crisis is putting together a “Financial Crisis Emergency Kit.” This is simply a stash of physical cash and some precious metals kept in a secure location at your home.

I recommend starting with $1,000–1,200, mostly in twenties. Twenties are easy enough to store and you shouldn’t have trouble asking traders to make change. (However, it’s still a good idea to have at least $100 in smaller bills.)

A little over $1,000 should be enough to weather most crises. But a prolonged, large-scale event will quickly exhaust those funds. Recently, I asked financial expert Jim Rickards, economist and author of the best-selling book Currency Wars, what he would put in his kit to offset this problem.

As Good as Gold

“Keep 20–50 ounces of silver on hand in the form of American Silver Eagles from the U.S. Mint,” says Jim. “Twenty ounces will cost about $400 at today’s prices, including commission from a reputable dealer.

“In desperate circumstances in which no one’s digital money is good, a pure silver ounce will gladly be accepted by stores with goods to sell. The merchant can easily convert the silver back to cash when the disaster is over. That makes silver the perfect ‘medium of exchange’ in times of trouble.”

Jim is right — American Silver Eagles are a great idea. Currently, they are valued at about $20 each and are easy to carry around.

Now, some people might say gold is a great investment for a financial disaster. But try bringing it to a market and buying bacon with it!

It’s too heavy and worth way too much. Imagine asking for change for your $1,200 ounce of pure gold. Not only is this unlikely, but it could also make you a target.

If you’re not ready to drop $400 on a stash of silver coins, you can start buying individual bullions at just $20 apiece and build your kit over time — just as you would with your stock of emergency food and other supplies.

The post What Would Jim Rickards Do? appeared first on Laissez Faire.