Gold, Cash, or Barter? Financial Preparations for Surviving a Disaster

Credit cards will be useless during an emergency that involves the loss of electrical power. Short-term you will need cash, but during an extended emergency you’ll want to have goods to trade.

Credit cards, debit cards, cash machines, money in the bank, checks, having a line of credit, and other electronic-based mechanisms for buying and selling, may be useless during a major disaster.

Banks may be forced to close, and electronic transactions such as using credit cards or debit cards, may also not be operational in an emergency situation.  Further, since modern cash registers require electrical power, even a simple power outage will prompt many stores to close since their cash registers and credit card machines will have stopped working.

Even if the banking system remains fully operational, vendors need both electrical power and computer network connections for their credit card machines to work.  Most stores will not even accept a check if their electronic verification system isn’t working.  This is the weak link in our financial system.  You cannot count on using these conveniences during a disaster.

If a store is without power, it will likely close, even if it still has inventory.  Unless they have back-up generators, large “chain” stores are generally the first to close their doors.  These stores are not equipped to accept cash when their electronic systems are inoperable, and managers will deem it unsafe to let customers shop in a darkened store.  Expect this to happen.  Plan for it.  Stockpile everything you need prior to a disaster so that you don’t need to make last minute purchases.

If you are traveling or away from home when disaster strikes, get to the store and purchase what you need right away, without delay.  This is not the time to shop for the best price, nor is it the time to look for your favorite brands.  Prioritize.  Get what you need, and get out.

Even if cash-only shoppers are initially allowed into a store after a power outage, this will quickly come to an end.  Store managers will soon recognize that most of their cashiers are incapable of making change without the aid of their electronic cash registers.  Or, security concerns and the fact that cash drawers will not open without electrical power, will prompt them to close the store.  Even if a store has an emergency back-up generator, don’t expect it to remain open for more than a few hours, or a few days at most.  Small, locally owned and operated stores may remain open longer, so familiarize yourself with these local businesses now, before you need them.

Expect an increase in parking-lot robberies and theft, too.  Opportunistic criminals, as well as those who don’t have cash, will find it easy to steal from shoppers in chaotic or dark parking lots.  Knowing that police are busy elsewhere, and that security cameras are likely not functioning, criminal activity will increase.  At a time such as this, it is essential for you to increase your awareness and vigilance.  Thefts from stores, people, and vehicles, and stealing goods stored in garages and other unguarded locations, will likely skyrocket.  Expect this, and plan for it.

Unfortunately, keeping a quantity of cash on hand can easily make you a target or victim of theft, but it is nevertheless important to have some cash on hand for use in a power-out situation.  Cash kept at home should be well hidden, and money carried on your person should be in a money belt or other unusual location.  Keep some cash in your wallet or purse, in the hope that a robber will assume that it is all you have.  Remove expensive jewelry and other trappings of wealth.

If store owners perceive that the disaster will be a protracted situation, expect prices to skyrocket as supplies dwindle.  The law of supply and demand will apply, and many who have supplies will raise their prices as an opportunity to either maximize their income, or as a way to counter the panic buying of customers and hording.

While gold has value as an investment strategy, it may have little value for making purchases during an extended period of disaster.

In anticipation of inflation and economic disaster, many people have invested in gold.  While this may or may-not be a valid strategy to protect wealth, it is not helpful for operating within an emergency situation.  During an extended disaster when people are looking for food to eat, a bag of groceries will be more valuable than a bar of gold.

Though purchasing gold may be a prudent investment strategy, having goods for bartering will be more useful in the midst of a widespread, extended period of serious disaster.  Water, canned food, gasoline, batteries, candles, guns, ammunition, backpacking stoves, and other small items needed by people during an emergency, may become far more valuable to you than both gold and cash money.

As you consider your needs to buy-and-sell during an extended period of disaster, include some cash in your GO-Bag (evacuation kit), certainly.  But in an extended emergency situation, items which are useful for trade may become worth their weight in gold.  So stockpile extra quantities of items which you can use yourself, but which might also be valuable for trading.  Give particular attention to stockpiling those products which are likely to be in high-demand, but short-supply, after a disaster strikes.

What should you stockpile?  A variety of goods is best, but consider these factors when making your selection:  Products which are small and lightweight to transport, may be easier to carry and barter; food which has a long shelf life, and is securely packaged in a can or other packaging which is not easily contaminated, will be more trusted; brand-name goods which are commonly known to be of high-quality, will provide recognized value; goods related to safety, items which provide warmth during cold weather or shelter when none is available, will be in high demand.

Lastly, don’t let an emergency situation motivate you to become selfish.  You don’t want to help the hoarders, but you should help those who are genuinely in need.  In a disaster situation, it is particularly important for us to help those who are the least able to care for themselves.  We need to open our eyes to see those who genuinely need help, including those who are not asking for it.

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