Survival Banking and Economics, by the Survivalist Banker

Survival is more than just having supplies, it is possessing knowledge, and specifically knowledge about free market (Austrian) economics and banking. One of the fundamental reasons for past productive success in the United States is because there were less intrusive government regulations, a smaller court system, and the division of labor was less cumbersome. Individuals were able to gravitate to where there was a demand that wasn’t currently being met, and were able to meet it without Big Brother wanting to not just regulate the behavior, but also steal a piece of the action if it was successful. If TSHTF, then we will need to return to our roots and be able to analyze where we can be productive and learn to maximize our trading capabilities.

While it is important to be able to sustain yourself as referenced by the many survivalist tactics in this blog, it is also important to consider what would happen if there was a form of Anarchy, meaning “no rule.” Have you thought about what would happen if the roads were privatized (Read Walter Block’s The Privatization of Roads and Highways)? Privatized courts, police, military, and even bodies of water? How does someone take advantage of this? Each person attempting to become self sufficient needs to study the nuances of these ideas because they could shape the community both during and especially after society attempts to put itself back together. Most people think of the intact government handling these aforementioned parts of society, but what if there was no government for a while, what if the oceans were even privatized? What is someone claimed the air?

If society as we know of today ceased to exist, the individuals who thrive will be those who didn’t just prepare to survive, but those that also have a business product in high demand and is lowly supplied. Survivalists need to look into their skill set and figure out their specialty. Is it creating low lactose dairy via goats? Growing herbs and being an apothecary? Eventually all our supplies will run out unless we have something that we can produce and trade. My recommendation is that someone specialize in a product more so than a skill. People will have a lot of time to learn new trades, but they won’t necessarily have the ability to learn both a new skill and have the resources to produce the said product.

An example would be to create a bank. May sound extreme but how many people really understand how a bank works? How many have studied Murray Rothbard and the ills of fractional reserve banking? Most people today know more about their iPod than the soundness of their bank’s balance sheet because they think the magical FDIC is guaranteeing their deposit. This has led to people only caring about the interest paid on their savings or money market accounts and not on the actual bank. Well the FDIC doesn’t really have any money, it just has our money that is taken via taxation. I think when banking returns post collapse, people will not put a deposit in banks with the idea of getting an interest payment on their money. Instead, they may note that the FDIC has been abolished due to lack of taxation, and that the only reason for a bank to exist is to safeguard the money, and they will be willing to pay a fee to do so. I am sure that there will not be many survivalists who not only understand banking, but will have a structural set up to protect the deposits. The entrepreneur who creates a vault like residence, has an ethical reputation in the community, has ample gold, silver, and yes even copper pennies, will most likely be the choice for a bank.

Now this banker would understand that he can have two types of accounts, he can have 100% of his reserves backed by a commodity such as gold, or can accept long term deposits with the idea of lending them out to other business’s or for real estate ventures. I don’t think anyone after TSHTF will want their money lent out at first, but eventually as society re-organizes itself, some individuals may want to take risk and allow their deposits to be lent out. If you have the time, go to YouTube and type in “How an Economy Grows and Why it Doesn’t” by Irwin Schiff. (This is Peter Schiff’s father). Although it is in the form of a cartoon, it explains how a primitive economy on an island grows and is fantastic for not only educating children, but also adults who aren’t economically inclined.

The combination of gold and guns for a banker is important, but it should also be noted that the new money may in fact not be gold or silver. Although it most likely will, at least in my opinion, be silver, there is the possibility it will be something else. The idea put forth by Frederick Hayek of competing currencies will probably be the scenario, and survivalists need to understand that currency is always spontaneously created. It is created out of need. It is possible that different parts of the U.S. will adapt different types of currency. A banker needs to be prepared to accommodate these types of transactions to help an economy grow from a primitive one to facilitate more advanced monetary transactions. Therefore understanding currency exchange is rather significant, as well as how to understand business’ and real estate on a risk adjusted basis, should the need for bank lending become demanded by the bank’s customers. Additionally, a banker may need to partner with another entrepreneurial survivalist with Radio/Communication expertise to stay in contact with other “start-up” banks, and be readily in touch with their customers.

The nuances of lending out deposits are great, and I’ll mention many Libertarians and Constitutionalists find it revolting, but it is still something that needs to be understood for a banker to be able to explain all available services to his potential customers. Understanding of all services is important, as it is the consumer via the free market that will dictate what is desired “post collapse,” not a government entity. The basis for banking, I believe, is the basis for modern society. Although my entry is devoted to economics and banking, there are many other novel business ideas that a survivalist could educate themselves on, my thoughts on this are “to each his/her own.”

In terms of education and where someone could go to get started, the booklist on this web site is fantastic, but for the topic of this entry I will make a few specific suggestions. First YouTube videos should be downloaded and stored on your hard drives. This will be very valuable because if the internet goes down then there will be no way to access YouTube, and I’m just using this site as an example since there are other comparable ways on the internet to find videos. Perusing the various Austrian economist sites (like the Mises Institute for starters), intelligent investors like Jim Rogers, Doug Casey, and Marc Faber, and specifically lectures on banking will be very valuable.

Besides just economics, investing, and banking, if there are any other areas of question such as the constitution or law, stocking up on some Andrew Napolitano video’s could be both useful and entertaining post collapse. If you really want a good laugh then just download things like Ben Bernanke was wrong, but I suspect that post-TSHTF no one will believe in Keynesian economics anymore anyway. Books will be important for trading, but as a banker, if you are able to hand out duplicated DVDs of topics to your customers you will help distribute the ideas of a free market post collapse in a novel way, and hopefully create not only better, but a more educated customer relationship than other competing bankers; although I’ll again mention that I think there really won’t be much competition in this area. Obviously food, protection, et cetera are needed to simply survive, but there is no way that free trade, and innovation via division of labor can truly help us after TSHTF unless we have sound banking, and an educated banking populace.