What to do if the U.S. Banking System Collapses

The United States is currently experiencing the worst financial crisis since the Great Depression.Trillions of dollars have already disappeared from 401Ks, manufacturing and retail bankruptcies have forced record numbers of workers onto unemployment roles, and a tidal wave of foreclosures is steadily eroding real estate values along with the tax base of major cities. By all estimations the banking crisis will likely get much worse before it gets better. But what happens in the event of a total U.S. bank collapse? Is it even possible to prepare for widespread and total banking failure?

The prospect of a total collapse of the U.S. financial system might seem too horrible to contemplate, yet taking a few basic precautions can go a long way toward providing a family with a sense of safety and security should a large number of major U.S. banks go under simultaneously. What follows are some simple suggestions and basic preparations that will make it easier to survive and move on in the event of a major banking catastrophe:

Review Your Deposits and Spread Them Around if Necessary

The Federal Deposit Insurance Corporation (FDIC) insures checking and savings accounts, and also most IRAs, up to a total of $250,000 per person. If the entire financial system collapses, FDIC might not do anybody much good, but if several major banks collapse, you should be able to get your deposited funds back if you banked there…eventually. Make sure your deposits do not exceed FDIC limits, and if they do, consider moving some funds to another bank or retitling the funds to keep them under the FDIC blanket. For more information, visit the FDIC website.

Assemble All Important Papers in One Place

Crazy though it may sound, keeping your birth certificates, social security cards, passports, and any other major papers (deeds, car titles, etc) in a zip lock bag or waterproof file, is a good idea even if a major banking catastrophe isn’t even a possibility. When things go wrong quickly (storms, war, riots, civil unrest) you don’t always have time to run around the house collecting legal documents, yet if you don’t have them and need to prove who you are or get through a checkpoint, you’re in trouble. People who have lived through major disasters and wars always mention this precaution as one that can save your life when you have to leave home in a hurry.

Apply for a passport

Getting a passport takes awhile, and if you need to get out of the U.S. fast you will need one. Even if you never need a passport, it doesn’t hurt to have one. You can get the process started at any post office for a $15 fee, or you can visit GetAPassportNow and learn more.

Stockpile Food, Matches, and Other Staples.

Yes, it’s a bit creepy to have to think like this, but in fact, FEMA and the Department of Homeland Security recommended it even before the financial system went into cardiac arrest. You should have:

  • At least a 4-6 weeks worth of non-perishable food and bottled water on hand.
  • Matches
  • Lanterns
  • A small generator (if you can swing it)
  • Grill or camp stove
  • Water purifying filter. You can purchase a decent one at any camping supplies store for under $100.

A complete banking collapse and failure of the financial system will cause significant chaos and you may not be able to use money even if you have some, so keep enough supplies on hand to tide you over until you get on top of the situation.

Have an Emergency Plan and a Meeting Place

If the banks all failed completely at the same time, you can bet a fair amount of panic and civil unrest would accompany this event.

Make sure you sit down with your family and plan where to meet in the event of an emergency. If you know someone outside the U.S. who would give you shelter if necessary, talk about that ahead of time and have a plan for how to get there. You might not be able to get through by phone in the event the worst happens.

Have a Back up Heat Source.

If you live in a part of the U.S. that gets cold in the winter, consider putting a wood or coal stove in at least one room. If the U.S. were to experience a complete banking collapse, you could be without utilities for some time, especially oil, gas, and electricity.

Assemble Your Gold, Silver, and Valuables and Keep Them in a Safe Place.

Perhaps you’ve seen the commercials on TV advertising shops that will pay cash now for your ‘unwanted gold and silver’. The reason they’ll do that is that when a financial system collapses, money becomes worthless. Don’t cash in anything of value right now, and keep it safe, somewhere you can get at it quickly if you need to. It may be your only currency in the event of an emergency.

Don’t Panic or Close Out All Your Bank Accounts.

If a major financial collapse takes place it won’t matter if your money is in a bank or in your mattress; money will quickly become worthless wherever it is. Money is only a symbol of something else that has real value. At one time that something was gold. Now that something is the financial reputation of the U.S. If that reputation goes south, having a box of money buried in your yard won’t help you. If things get better, keeping lots of cash at home puts you at risk to lose it through theft or fire.


Right now people are frightened, and when people are frightened they tend to expect the worst and get even more frightened. Sometimes financial systems do collapse. It has happened historically in other countries, and it happened in the U.S. to some degree during the Great Depression. If it happens again, your ability to survive will depend greatly on your ability to remain calm, focus on what matters, and think on your feet. Be ready, be careful, and be as calm as you can. If things get better and the worst never happens, at least you’ll have a well-stocked pantry and organized documents.

Leave a Reply

Your email address will not be published. Required fields are marked *

Convert Website to WordPress