The U.S. is $35.7 trillion in debt. They’re spending $7 trillion a year while racking up a $2 trillion annual deficit.
Imagine paying your bills with a credit card but only making the minimum payment—and then borrowing more.
That’s the situation right now. Worse, the debt-to-GDP ratio is 124%, meaning we owe more than we produce. Simple math says this can’t go on forever.
The big question is: When does the music stop? And more importantly, what do you do about it?
This is what every prepared person needs to know about the U.S. debt crisis and how to prepare when the system starts to collapse.
The Warning Signs
It doesn’t take a genius to see that U.S. finances are on an unsustainable path. For years, the government has been borrowing money at artificially low interest rates, but those days are over.
Interest rates are climbing, and that means the cost of servicing the debt will eat up a bigger and bigger chunk of the federal budget. Eventually, something will give.
When that happens, we—not the government—are the ones who will feel it first. The government will print more money to pay the bills, leading to inflation and possibly hyperinflation.
At that point, your dollars won’t buy what they used to, and everyone will be scrambling for resources.
What Happens When the Debt Crisis Hits?
Here’s what the lead-up to the collapse and the aftermath will look like from a financial perspective:
1. Bond Market Volatility
U.S. Treasury bonds are considered the safest investment in the world, but that perception can change fast. Investors will start demanding higher returns to compensate for the risk of holding U.S. debt. That means interest rates skyrocket. Higher interest rates make borrowing more expensive, from mortgages to business loans to credit cards. If you’re not ready for this, you’ll be caught in the squeeze.
2. Inflation or Hyperinflation
When the government can’t borrow enough to pay the bills, it’ll resort to printing more money. Printing more money devalues the currency, leading to inflation. In the worst-case scenario, we could see hyperinflation—where the value of the dollar nosedives, and prices skyrocket daily.
Imagine needing a wheelbarrow of cash just to buy groceries. It sounds like something out of a dystopian novel, but it’s happened in countries like Venezuela, and it’s possible here.
3. The U.S. Dollar Crashes
As confidence in the U.S. economy evaporates, the value of the dollar will plummet. This will hit imported goods the hardest. Think about all the things you use every day that are imported: electronics, tools, car parts, food. All of it becomes dramatically more expensive when the dollar falls.
4. Stock Market Meltdown
If you think the 2008 stock market crash was bad, the next one could be much worse. Companies that rely on cheap debt will be hit hardest as borrowing costs rise. Many businesses will go under, and the stock market will plummet. Retirement accounts will take a beating, and if you’re not diversified, you could lose everything.
5. Gold and Silver Spike
When the dollar becomes worthless, people will flock to gold and silver. Precious metals will surge in value because they’re tangible assets that retain their worth when paper money collapses. If you don’t have any, it’s time to start thinking about investing in some.
Preparing for the Collapse: What You Should Do Now
The good news is that you don’t have to sit and wait for the financial system to implode. There are practical steps you can take right now to protect yourself and your family.
1. Diversify Your Investments
If all your money is tied up in U.S. stocks and bonds, you’re setting yourself up for disaster. Start diversifying. Real estate, precious metals, and international investments should all be part of your portfolio. When the U.S. markets crash, they’ll take everything down with them, but other countries and assets may hold up better.
2. Stockpile Essentials
This is where the rubber meets the road for preppers. Inflation is going to make everything more expensive—food, water, medical supplies, ammo. You need to start stockpiling now. Don’t wait for prices to double or for shelves to be empty. If hyperinflation hits, your dollars won’t be worth anything, and you won’t be able to buy what you need.
Focus on long-term storage items like rice, beans, canned goods, and freeze-dried foods. Keep water purification systems on hand. Stock up on medical supplies and first-aid kits. And don’t forget ammo—it’ll become even harder to find when things go south.
3. Invest in Tangible Assets
Gold and silver aren’t just for the wealthy. You can start small by purchasing silver coins, which are more affordable. These hard assets will retain their value when the dollar collapses. Real estate is another option, but be smart about it. Don’t invest in a luxury home in the suburbs—buy land that can provide resources, like timber, farmland, or access to water.
4. Pay Off Debt
Debt is going to crush you when interest rates soar. If you’re carrying credit card debt, car loans, or a mortgage, start paying them down now. When rates climb, your monthly payments could double or triple overnight. The less debt you carry into the collapse, the better off you’ll be.
5. Develop Survival Skills
Once the economy tanks, money might not be worth much, but skills will be. You need to know how to grow your own food, raise animals, fix things, and defend yourself. Self-sufficiency will be critical when supply chains break down, and you can’t rely on the system anymore. Focus on learning essential skills like gardening, first aid, home repair, and basic self-defense.
6. Prepare for Inflation
Even before a full-blown collapse, inflation is going to hurt your wallet. Adjust your budget now to account for rising prices. Cut out unnecessary expenses and focus on buying only what you need. Use cash for your purchases to avoid putting anything on credit unless you can pay it off immediately.
You might also want to explore bartering systems with like-minded individuals. As inflation erodes the value of money, trading goods and services could become a more reliable way to get what you need.
7. Think About Security
Desperate people do desperate things. As inflation drives up the cost of living, expect crime rates to rise. Home security should be a top priority. Beef up your defenses—whether that’s installing a better lock system, setting up motion-activated lights, or keeping firearms in the home for personal protection.
If you haven’t already, it’s time to get serious about situational awareness. Know your neighborhood, identify potential threats, and plan out escape routes if you need to leave in a hurry.
Build a Network
Here’s one thing many preppers overlook: you can’t do it alone. Building a preparedness network of like-minded individuals can increase your chances of survival. Communities are stronger than individuals. When resources get scarce, and tensions rise, you’ll want to know who you can trust.
Start by talking to your neighbors, friends, and family. Find people with complementary skills—someone who knows first aid, someone who’s good with repairs, someone who knows farming or gardening. A strong network will allow you to pool resources and knowledge, making you more resilient in the face of a crisis.
Why a Network Matters
When things get tough, strength comes in numbers. Here’s why having a network is crucial:
- Shared Resources: No matter how much you prepare, you can’t stockpile everything. Maybe you have extra food, but you’ll run out of medical supplies. A network allows you to trade resources and skills, ensuring that no one goes without.
- Safety in Numbers: Security is a big concern during times of social unrest. Having a group of trusted individuals can help you protect each other and your property.
- Emotional Support: Surviving an economic collapse isn’t just about food and supplies; it’s also about mental resilience. Having a group of people who understand what you’re going through can help keep you grounded and focused on survival.
How to Build Your Network
- Start Local: Begin by connecting with neighbors, especially those who already have a preparedness mindset. Look for local prepper groups, homesteading communities, or even survivalist forums online. Many cities have local meetups for preppers where you can exchange ideas and resources.
- Leverage Your Skills: Think about what you bring to the table. Are you good at repairs? Do you have medical knowledge? Can you garden? Offer to teach others in exchange for learning their skills.
- Plan and Train Together: Don’t just talk—take action. Get together with your network to discuss emergency plans, share stockpiling strategies, and run drills. Practice makes perfect, and when things go bad, you don’t want to be figuring things out for the first time.
Final Thoughts
The U.S. debt crisis isn’t a question of if, but when. The financial system will eventually reach its breaking point, and when it does, those who are prepared will be the ones who weather the storm.
Stockpile essentials, diversify your assets, and most importantly, build a network. Survival is about more than just being ready for yourself—it’s about working together to get through whatever comes next.
The time to act is now. Don’t wait for the collapse to start preparing.