As a society, we insure many things; health, life, cars, home and contents, income protection etc. The normal mechanism by which this is achieved is that individuals or organisations pay a premium to an insurer who will pay out if certain events occur. You cannot however buy insurance to protect against the failure of the financial system. Given the increasingly likelihood of this occurring perhaps it is time that we as a society start insuring ourselves in other ways.
This insurance should take two forms. The first should be contingency preparations capable of dealing with an immediate financial crisis. Withdrawing additional cash from the bank and maintaining a supply of staple foods and other necessities will provide a buffer against the initial stages of such a crisis. It is difficult to estimate how long such a crisis could remain acute but if it got to the point where you had to rely on your contingency items then the timeframe would probably be measured in months.
The second form of insurance should be considering the longer term. It involves re-learning and practicing the skills that have been part of the human experience for most of its history. Being as self sufficient as possible in as many areas as possible, whether as an individual, family or community, will reduce the impact of a major financial crisis. Additionally if enough people take this approach rapidly enough, the severity of any such crisis may be reduced and its imminence delayed. Heeding the warnings by organisations such as the Club of Rome back in the 1970s might have helped us avoid our current predicament. Better late than never perhaps!
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Like all insurance policies, we hope that we will never need to make a claim. But the inability of political and economic leaders to understand the challenges of our times suggest to me that it is better to be prepared a week, month or even years too early than five minutes too late given the nature of the risks we presently face!
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