SHTF Plan contributor and One Handed Economist Howard Katz has written extensively on wealth protection and asset allocation during times of economic distress. Currently, he is a gold bug, but this has not always been the case. Back in the early 80’s, when most analysts were screaming about buying gold and selling the stock market, he was recommending that his subscribers by stocks. Today, while the same analysts and economists are screaming about stocks, he is advocating wealth preservation through purchasing gold and precious metals. He is no stranger to recessions, depressions and government instability.

In his most recent One Handed Economist Newsletter (Dec. 25, 2009), Mr. Katz discusses what gold bugs believe to be an inevitable result of our current economic climate going forward – the total collapse. However, you may be surprised that Mr. Katz does not share the notion that a complete systematic meltdown of our economic and political system will occur rapidly, as in days or months, or even years:

“Gold bugs often evoke a worst-case scenario in which the entire economy of our modern world is destroyed. I have never gone along with this fear scenario because my reading of history tells me that events more very slowly. The economy of the world has only been destroyed once. This was in the 3rd to 5th centuries A.D. Fiat money caused an enormous rise in prices, and the attempt to “fix” this by price controls caused every business in the Empire to close its doors. There was no place to buy anything, and if you wanted any economic good, you had to make it yourself.

It was a disaster. The glittering metal helmets and breastplates of the victorious Roman legions in the first century A.D. gave way to leather helmets and breastplates, and suddenly the Romans could no longer defeat the barbarians. When these latter invaded, in 406 A.D., the Romans lacked the courage to fight them. Instead they expressed their fear and anger by slaughtering women and children. Rome was sacked (and most of the western Empire overrun) in 410 A.D. However, the entire process took 3 times the lifetime of an average person. It was too big for any one person to see it all. In short, the economic collapse as envisioned by many gold bugs is not going to happen. Or, more precisely, if it does happen, it will not happen in our lifetimes.”

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This may be difficult for survivalists and preppers to stomach, but it is important to consider as a possibility as well. At SHTF Plan, we highly recommend that people be prepared for disasters and crises, but things never go exactly as planned – and that may be the case for the collapse as well.

Take hyperinflationary depression, for example. Yes, they do occur, and they have in the recent past (Weimar Germany, Zimbabwe, even Argentina), but these were not scenarios that completely destroyed the economy of the entire world. If something like this were to happen in the USA, it would literally be complete and total destruction of the world economy as we have come to know it, with significant geo-political consequences, as well. We are not suggesting this type of collapse is impossible, as any number of events like a global war or mass terrorist strike on America (think EMP) could lead to rapid destabilization. But to be perfectly frank, it is unlikely that a rapid collapse would be economically driven given thousands of years of history.

So where does this leave the worst-case scenario prepper?

To answer the question, one must ask what exactly it is they are prepping for. If you are prepping for a total collapse of the system that may never come, you may feel quite foolish 25 years from now when your thousands of dollars worth of Freeze Dried food is expiring.

Preparing for disaster should not include any single event, but a multitude of events. It should not include just stocking freeze dried food and a water filter, but involve modifying your lifestyle and consumption habits before disaster strikes.

Once the SHTF, it is going to be too late to create an evacuation plan, learn how to grow a survival garden, create alternative methods to cook food or harvest rain.

These are all things preppers should be doing before a far-from-equilibrium situation occurs.

Prepping involves not just stockpiling food, but learning to live a more sustainable life.

As Mr. Katz pointed out, events can move very slowly. Rather than a total collapse of the system as you know it tomorrow, plan on the system as you know it collapsing over the next two or three decades of your life. Depressions can last twenty years, and having freeze dried food in case of supply shortages or panic is certainly a great idea that we strongly support, but learning to live with less, especially when there is less availability of goods in the marketplace, should also be a prepping priority.

So, don’t stop your prepping habits, but consider modifying and enhancing your preparedness plan and lifestyle for a variety of scenarios that may include rapid economic collapse and the more likely scenario of a deteriorating economic conditions over many years.

Howard Katz is a SHTF Plan Contributor and publisher of the One Handed Economist, a newsletter dedicated to helping you preserve wealth in times of uncertainty.