There’s a lot of apocalyptic chatter in the media these days, more so than usual. And you know it will only get worse as unscrupulous people seek to cash in on 2012 hysteria. This, in addition to the usual threats (anthrax, Jihadists, armies of the undead, and the ever-present menace of a robot uprising), has me somewhat worried. It’s not that I buy into the doomsday scenarios (there are plenty to choose from), but it has brought to my attention the need to be prepared when the merde hits the ventilateur.

Bring it, zombies!
Get some, zombies!

Despite my Five Flags lifestyle, I pay close attention to financial markets and there are plenty of signs that do not bode well. The U.S. economy is experiencing record levels of bankruptcies, defaults and foreclosures. Chief among these is housing, which represents the biggest part of consumer spending. Despite historically cheap interest rates, the demand for loans to purchase U.S. homes has sunk to a 13-year low. With the expiration of the home buyer tax credit, home sales in May fell to the lowest level ever recorded. There is now over a year’s worth of unsold homes flooding the marketplace and of this March, U.S. banks had an inventory of 1.1 million foreclosed homes, which was a new all-time record, up 20% from one year ago. U.S. Banks repossessed 269,962 U.S. homes during the second quarter of 2010, also a new all-time record.

Then there’s the debt. The U.S. national debt currently exceeds $13 trillion dollars and according to Erskine Bowles of President Obama’s national debt commission, if we continue on our present course, the U.S. government will be spending $2 trillion just for interest on the national debt by 2020. We could buy our way out of this, but what we’re buying comes mostly from other countries, so our trade deficit is now around $50 billion a month, double what it was a year ago.

It seems that no matter what our federal government tries; increasing the amount of money spent, spending more money, expanding how much money is being spent, this pesky deficit just won’t go away.

So of course, people are starting to freak out to the point of stockpiling ring dings, frantically buying gold and attending Glenn Beck’s rally on the capitol mall. Laugh all you want, but like Steven Colbert, I too am ready to follow Beck in his silver freedom spaceship that runs on human tears.

I don’t consider myself an alarmist, and I also don’t want to be left with my cheese in the wind. So recently I came across a post from a permaculture list that I thought offered excellent advice on practical preparations for hard times. If you’re not hip to the whole permaculture thing, it’s a great body of knowledge around sustainability and self-sufficiency. You can find out more through the Permaculture Research Institute of Australia. I was so impressed with this philosophy that I have been collaborating on a permaculture project in China that would be the first agrotourism business of it’s kind in the country.

Now on to living well while preparing for life that more resembles Thunderdome.

1 – Get Out Of Debt: The old saying, “the borrower is the servant of the lender”, is so incredibly true. The key to insulating yourself from an economic meltdown is to become as independent as possible, and as long as you are in debt, you simply are not independent. You don’t want a horde of creditors (editor’s note: or zombies) chasing after you when things really start to get bad out there.

2 – Find New Sources Of Income: In 2010, there simply is not such a thing as job security. If you are dependent on a job for 100% of your income, you are in a vulnerable position. There are thousands of different ways to make extra money. What you don’t want to do is to have all of your eggs in one basket.

3 – Reduce Your Expenses: Many Americans have left the rat race and have found ways to live on half or even on a quarter of what they were making previously. It is possible – if you are willing to reduce your expenses. In the future times are going to be tougher, so learn to start living with less today.

4 – Learn To Grow Your Own Food: Today the vast majority of Americans are completely dependent on being able to run down to the supermarket or to the local Wal-Mart to buy food. But what happens when the U.S. dollar declines dramatically in value and it costs ten bucks to buy a loaf of bread? If you learn to grow your own food (even if is just a small garden) you will be insulating yourself against rising food prices.

5 – Make Sure You Have A Reliable Water Supply: Water shortages are popping up all over the globe. Water is quickly becoming one of the “hottest” commodities out there. Even in the United States, water shortages have been making headline news recently. As this becomes more critical, it will be imperative for you and your family to have a reliable source of water. Some Americans have learned to collect rainwater and many others are using advanced technology such as atmospheric water generators to provide water for their families. But whatever you do, make sure that you are not caught without a decent source of water in the years ahead.

6 – Buy Land: This is a tough one, because prices are still quite high. However, home prices are going to be declining over the coming months, and eventually there are going to be some really great deals out there. The truth is that you don’t want to wait too long either, because once the Fed’s inflationary policies totally tank the value of the U.S. dollar, the price of everything (including land) is going to go sky high. If you are able to buy land when prices are low, that is going to insulate you a great deal from the rising housing costs that will occur when the U.S dollar tanks.

7 – Get Off The Grid: An increasing number of Americans are going “off the grid”. Essentially what that means is that they are attempting to operate independently of the utility companies. In particular, going “off the grid” will enable you to protect yourself from the rapidly rising energy prices that we are going to see in the future. If you are able to produce energy for your own home, you won’t be freaking out like your neighbors are when electricity prices triple.

8 – Store Non-Perishable Supplies: Non-perishable supplies are one investment that is sure to go up in value. Not that you would resell them. You store up non-perishable supplies because you are going to need them someday. So why not stock up on the things that you are going to need now before they double or triple in price in the future? Your money is not ever going to stretch any further than it does right now.

9 – Develop Stronger Relationships: Americans have become very insular creatures. We act like we don’t need anyone or anything. But the truth is that as the economy melts down we are going to need each other. It is those that are developing strong relationships with family and friends right now that will be able to depend on them when times get hard.

10 – Get Educated and Stay Flexible: When times are stable, it is not that important to be informed because things pretty much stay the same. However, when things are rapidly changing it is imperative to get educated and to stay informed so that you will know what to do. The times ahead are going to require us all to be very flexible, and it is those who are willing to adapt that will do the best when things get tough.

“The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I’ve been doing my part.” – Marc Faber

More about Marc Faber, fellow Chiang Mai expat and fund manager.