How to prepare for the bankruptcy of a country (re: Ukraine and others)
First of all, I know this is a forum which is mostly used by Americans. I still think that we have some Ukrainian girls here and additionally we should ALL be preppers to a certain degree imho.
Secondly, I am not from the Ukraine.
But I still want to give my brief advice on how to prepare and behave during a bankruptcy/collapse of a whole country. It's not a certainty that you will need any of these items, getting them is like getting insurance:
1. Get cash, preferably foreign cash, i.e. dollars and some gold/silver coins (if you can afford them). DONT HOLD YOUR SAVINGS IN A DOMESTIC BANK. Avoid your local currency.
2. Get protection, i.e. guns AND sufficient ammo. Nobody is going to care about gun laws once the s... hits the fan by the way... Learn how to shoot.
3. Get some food reserves for a month or so.
4. Get basic medical supplies, especially if you need some meds on a regular basis.
5. Get some gasoline reserves. You can either use them or sell them at sky high prices.
6. Get cigarettes and alcohol (vodka) as trading goods. Addicts will exchange anything for drugs.
7. Have family and friends you can trust, you can't survive alone. Make sure they prepare themselves, too.
And now you can call me a nutjob ;)
PS: I put this post into the camming section, because my guess is that all Ukrainian girls on here are cam girls.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
I'll second this. We were trapped in Ukraine when the 2008 stock market crash happened. Hubby was keeping for about a year all his cash from his contract jobs in Hrivna in shoe boxes in the closet. Due to banking/foreign exchange rules, he could only trade for about 500 Euros/week without 12 signatures, so we just kept to the minimum. October 2008, about $70,000 in currency became worth about $8000 in a week, and the banks were closed to prevent a run on the bank. He managed to get what he could for it from a mafia exchange place, and that's how we had enough to live for the next few weeks while they dismantled his workplace, fired who they could, and then cancelled his contract.
That was just a stockmarket crash in the US effecting Eastern Europe. I can't even imagine how a civil war would royally screw the financial system. At least it seems the telecommunications structure is still ok for now if you have internet access. I really hope everything goes as peacefully as it can there.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
I pray for the people in Ukraine, is terrible what i saw/ see in the news, brings bad memories here. God help You guys!
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
I am glad you wrote this thread! It is important to be prepared in case of a disaster. I think the US girls need to be careful as well, so this is sound advice across the board. George Soros just bet 1.3 billion dollars that the stock market is going up crash this year. Also, I heard Russia banned cash withdrawals recently?
Anyway, great list. Thank you!
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
^^^ Living 'way south of the border', for better or worse, I get to see a whole lot of examples of national currencies experiencing major problems. As Tinybug already pointed out regarding Ukraine, Venezuela, Brazil, Turkey, Argentina, India, and many other countries now find the 'purchasing power' of their national currencies taking a 'roller coaster ride'. This often results in very fast 'depreciation' of the currency ( like prices rising noticeably from one day to the next ).
And, indeed, one of the first things that these countries seem to enact in an effort to 'support' their national currencies is 'Capital Controls'. 'Capital Controls' officially limit the ability of the country's residents to access their own money held in national bank accounts. 'Capital Controls' also officially limit the ability of the country's residents to exchange their local currency for a 'foreign' currency. 'Capital Controls' also officially limit the ability of the country's residents to transport money across the country's border ( both physically and 'electronically' ).
Another thing that these countries often try is to enact is 'price caps' ... in an attempt to stop rapidly rising prices for food, energy and other necessities from rising to the point where they become 'unaffordable' for working class citizens. Unfortunately, local businessmen are smart enough to realize that they cannot remain in business if forced to sell their 'products' at price levels that are less than what those 'products' actually cost. Thus the likely result is shortages / empty shelves.
Between the gov'ts official Capital Controls, and the typical shortages / empty shelves of necessary products at 'capped' official gov't prices, the next evolution is usually a 'black market' ... where the local currency can still be exchanged ( at far less than the 'official' exchange rate ) and where necessary products can still be purchased ( at prices far higher than official 'capped' prices ).
For individuals living in such countries, for better or worse, it sometimes doesn't take long for their local currency to match the definition of every 'fiat' currency ... i.e. paper and ink that are inherently worth nothing. Thus to preserve whatever 'wealth' has been accumulated, it's usually a very good idea to turn to alternate assets which are inherently 'valuable' in and of themselves. Indeed this starts with gold and silver, extends to alcohol / tobacco / drugs, and ultimately extends to gasoline / bullets / antibiotics / toilet paper.
I would also point out that, while smaller countries are more vulnerable to the local currency 'roller coaster', in point of fact for the past 40 years EVERY currency is now a 'fiat' currency. Along those lines, the USA has already put laws in effect which limit the ability of Americans to remove existing assets from the country without first paying a 20-30% 'estimated tax' on the value of those assets. And US banks and investment houses already have contingency plans to limit withdrawls of customer money.
At the moment, thanks to the US dollar continuing it's claw-hold on still being used as the world's primary 'reserve' currency, of all of the 'fiat' currencies the US dollar is considered to be the 'least dirty shirt' in the proverbial laundry basket. However, as Tinybug alludes to, even the US dollar is not immune to a possible future worldwide economic 'shockwave'.
Without going too far afield, I would point out that Japan, China, Russia, and the Saudi's ( petro-dollars ) all seem to be 'playing currency games' right now. In counter-balance, the Eurozone still has it's hands full with Greek, Italian, Spanish & Portuguese pseudo-bankruptcies, and the US FED is now being 'steered' by an inexperienced new 'captain'. As such, the potential risk of a worldwide economic 'shockwave' is arguably higher today than it has been for the last 40 years ( and yes that includes 2008 ! ). IMHO it's no coincidence that the US dollar denominated prices of gold, silver, oil, most commodity foods etc. have recently entered a 'new' uptrend.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
This whole thread makes me want to take a xanax. So scary.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
Ammunition is not only useful but may make good trade goods or even currency.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
Quote:
Originally Posted by
LAChloe
This whole thread makes me want to take a xanax. So scary.
You and me both. :-/
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
One other suggestion is to make exit plans for somewhere more stable, until things settle down.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
Quote:
One other suggestion is to make exit plans for somewhere more stable, until things settle down
^^^ that's an important consideration for both economic reasons as well as reasons of personal safety. However, thanks to Capital Controls as well as border controls, sometimes this is easier said than done. And, obviously, owning property or having family in the area which must be 'left behind' complicates matters even more.
Quote:
Ammunition is not only useful but may make good trade goods or even currency
Indeed, that's why I have my own reloading press and bullet molds for a few popular calibres, and one particular unpopular caliber I deliberately use with most of my own guns, .40 S&W !!! My rationale regarding .40 S&W is that, if that size of ammo is extremely limited, nobody is going to want to steal my 'non-standard' .40 S&W chambered guns or ammo versus the ubiquitous 30 caliber AK's and AR's or 9mm / .45 standard pistol stuff. But I'll gladly reload 30 cal or 9mm or .45 for my neighbors if they bring me their brass ... and also bring me a few peaches, oranges, some red snapper, some venison etc.
By the same token, I also have my own tabletop distillation equipment. The local peaches make great brandy, and the local oranges make a passable triple sec !. I'll gladly share these with my neighbors as well ... in exchange for some eggs or peppers or whatever. I've never tried to use it to distill vodka though. For that I think I'd have to buy a 'reflux column' to go in place of my regular still 'head'.
In fact, this whole thread topic is one of the reasons that I chose the particular 'way south of the border' country that I did.
The local currency is officially pegged to the US dollar, and virtually all local banks offer US dollar denominated accounts !!! If a financial 'shock' were to ever occur, a local branch of an international bank also offers a means to quickly transfer US dollar denominated funds from my local account to a pre-existing US dollar denominated account in a New York branch ( which I opened before I left the USA as a CYA measure ).
If the s#!t were to ever hit the proverbial fan down here in terms of personal safety, I can take a 20 minute fishing boat ride to a different country or a 20 minute drive to a different country, without having to face a ton of border / customs delays ( which is one of the reasons I drive an AWD Subaru ). In fact, depending on what sort of vacationing gentlemen happen to be in town at the time, I might be able to hitch a ride on a private yacht or private plane all the way back to Miami, the BVI, the Bahamas, etc.
However, short of a well organized paramilitary problem, my ex-pat neighbors and I can definitely field enough 'firepower' to discourage a handful of local 'troublemakers' - such that I probably won't need to worry about having to 'get out of Dodge' in a big hurry. Unfortunately, in any situation where financial shock or civil unrest is an issue, being 'prepared' is not enough. Having a stockpile of food or alcohol or gold coins does no good whatsoever if you don't also have the means to stop local 'troublemakers' from simply ripping off everything you have so carefully stockpiled. This is an issue that modern day 'preppers' never really seem to come to terms with.
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
On a different aspect, consider the following ... from
(snip)"You can't teach an old dog new tricks. At least that is the impression one gets when considering the credit exposure of the two large Austrian Banks still active in the Ukraine (a third one, Erste Bank, wisely shut up shop in Kiev in late 2012).
The two banks concerned are Raiffeisen International (RBI) and Bank Austria (BA), which together have exposure of 8 billion euro (approx. $10.9 bn.) in the Ukraine. This is only a small percentage of their total loan book, but still, it is quite a bit of money for banks based in Austria. Guess what: 70% of the credit extended to Ukrainian borrowers is denominated in foreign currencies. Right now there is no foreign currency against which the Hryvnia is not crashing. Evidently, European banks have learned nothing from foreign currency lending debacles suffered elsewhere, from Hungary (where the government forcibly converted the loans into Forint and saddled the banks with huge losses), to the extremely popular Swiss franc loans they have extended just about everywhere they are doing business.
In the context of the once highly popular CHF loans, the customers the banks favored with these 'excellent opportunities to save money' were as a rule not sophisticated financial market wizards, and so were relying on the 'expert advice' dispensed along with the banks' sales pitch. They were told that the Swiss franc would always remain stable against the euro. Since Swiss interest rates were considerably lower than euro interest rates at the time most of these loans were peddled, there was 'free money' waiting to be picked up. And then the crisis hit, and suddenly the Swiss Franc became worth a lot more. Instead of saving money, borrowers suddenly found themselves in dire straits.
Guess what is going to happen with foreign exchange denominated loans in the Ukraine.
As noted above, in terms of their total lending, the exposure of Austria's banks is not very large (in RBI's case an estimated 3.5% of its assets). Don't forget though that for fractionally reserved banks the loss of even a small portion of their total exposure is meaningful.
With only about $1 bn. in government debt owed to foreign creditors falling due this year, a Ukrainian government default can probably be avoided for a while yet. However, the Ukraine is bleeding foreign exchange reserves fast. That is eventually going to have an effect on the economy, as imports can obviously not be paid for in Hryvnia and the Ukraine has a perennial current account deficit. Press reports meanwhile indicate that businesses in Kiev largely remain closed post revolution, boarded up and guarded by the apparently still ubiquitous street fighters of the revolution."(snip)
This blurb raises some important take-aways regarding Ukraine in particular, as well as smaller countries with their own ( fiat ) currencies in general ...
#1 - Imports of gasoline, food, repair parts, pharmaceuticals, etc. ALWAYS must be paid for in a 'hard' currency ... primarily US dollars. Individual countries can 'print' as much of their local currency as they want, but ( with the apparent sole exception of the USA ) the other countries supplying gasoline, food, repair parts, pharmaceuticals etc. will not accept that local currency as payment. Thus the country in question MUST have a source of 'hard' currency ... typically exports of it's own oil, food, raw materials etc. ... if it going to achieve lasting economic stability
#2 - To remain stable in the long term, the rate that 'hard' currency is being spent on imported items must balance out against the rate that 'hard' currency is being earned via the sale of export items. However, these days, few countries find themselves 'earning' more 'hard' currency than they are spending. A 'negative' trade balance between imports and exports can be financed by borrowing 'hard' currency from foreign lenders ... for a while.
#3 - when the economic situation starts to unravel, the negative economic impact not only affects the country in question, but also affects all of the foreign lenders from which the country in question has borrowed. As the blurb states, Ukraine's economic situation is likely to soon devastate several Austrian banks who are now likely to experience major loan losses. It then remains to be seen whether these banks will be allowed to fail ( thus directly impacting the Austrian economy as well as individual Austrian depositors as well as counter-party banks in other countries ), or whether an Austrian / EU taxpayer financed gov't 'bailout' of those banks will be necessary.
#4 - If those Austrian banks are allowed to fail, it remains to be seen who else will be negatively impacted ( Austrian depositors not being able to access their savings ? Borrowers located in yet more countries having their loans called ? Counter-party banks in other countries experiencing cascading losses ? ). If a 'bailout' ensues, which taxpayers will wind up paying higher taxes to cover the cost ? What will the economic impact be of those higher taxes 'removing' money from the local ( Austrian ? German ? French ? ) economy ?
Re: How to prepare for the bankruptcy of a country (re: Ukraine and others)
Quote:
Originally Posted by
Melonie
^^^ that's an important consideration for both economic reasons as well as reasons of personal safety. However, thanks to Capital Controls as well as border controls, sometimes this is easier said than done. And, obviously, owning property or having family in the area which must be 'left behind' complicates matters even more.
If you're living in a country that economically unstable, it would probably be a good idea to have a bank account in a foreign country. Even if you can't take your family with you, if you are able to get a good job in a foreign country, you could send money home to help them. Adult entertainers often have opportunities to work abroad.