Preparing for government failure

It is inevitable that the United States government will fail, what is difficult to determine though is when it will fail. The unfortunate thing about governments is that they are a device for people who seek power, and power corrupts. While citizens can tolerate minor abuses of power there will be a breaking point which will lead to a revolution or change in the system.

For the colonies that breaking point was the Boston Massacre (1770) and Boston Tea Party (1773). Those events were nearly 4 years apart and the US Constitution wasn’t ratified until 1787 – 14 years after the Boston Tea Party. Change in government takes time and will be very tumultuous.

It is hard to see what the breaking point with the current government will be. It could be another offensive war that spreads the military too thin, it could be a default on the debt, or it could be another police raid that results in a dead dog. There is also no telling when it will happen – it could be in 2 years, or it could be in 200 years.

This country was built on independence – families escaping repressive governments in search of a better life. It started with the Pilgrims, and continued with the Irish, Italians, Germans, Africans, Chinese, Mexicans, and other heritages from across the world.

Your ancestors didn’t take shit from the governments that ruled their lands and that includes Native Americans that fought for the rights to their land. They took a huge risks for freedom and natural rights. Many died in a journey to America and others broke close relationships with friends and families. Unfortunately for the US government, this is the DNA of our country.

Americans are not going to lay down and take tyranny from politicians. We demand our freedoms because our ancestors fought for those freedoms. Compared to a majority of other countries across the world, Americans are mostly free. That being said, our freedoms have been declining over time, not increasing. For every “win” there are 10 losses in liberty – think Patriot act, airline travel, or other banking laws that prevent anonymous banking.

The government views all money that you earn as theirs, and they just let you keep some of it. When in reality, the money you earn is yours and the government steals a large portion of it. That is why they consider a tax cut as spending item. They are paying you money that they believe is rightfully theirs.

To have control of this money they have implemented laws that give them more oversight of what you earn. That is why you can no longer open up a bank account without providing a social security number, or why you must report any foreign bank accounts in excess of $10k. Gradually laws of this nature will increase and sadly the majority of citizens aren’t interested in this issue.

The long term goal for politicians is to know where all your money is, and how to confiscate it when they need it. When things are good with the economy there will be no need for them to take your money, however when the US government hits the breaking point you will seem them acting in desperation and begin to steal your property. If you don’t think this is possible in America, just take a look at the Executive Order 6102.

The risk of government confiscation increases during government failures. If you believe we are moving toward more government failures it would be wise to diversify that risk. If you believe that we are moving toward less government failures, diversification won’t make as much sense. You can just stop reading now and go on your merry way.


Many of y’all will say, “I’m plenty diversified. I’ve got real estate, equity, bonds, cash, and a good paying job.” The question though is your real estate located in America, is your job located in America, are your investment holdings with American companies, and is your cash held in US dollars? If the answer is yes – you aren’t diversified.

The best way to get rich is to put your money in one basket and watch it closely, and the best way to preserve wealth is to diversify your investments. Americans have been getting rich simply by being an American. For the past 50+ years we have been able to build wealth without realising the risks involved with this strategy. It has paid off handsomely for many Americans and the common thought is that it will always be this way. It will not.

I’ve created a brief checklist of things you can do to help diversify your investments. This is just a starting point and you will need to explore further to improve your own situation.

  • Work with multiple banks both nationally and internationally for your savings and investments.
  • Consider holding tangible assets outside the banking system (gold, silver, or even nickels).
  • Hold your cash in multiple currencies.
  • Make sure your investment allocation are in line with the global GDP (approximately 50% US, 50% global).
  • Consider investing in foreign real estate and land.
  • analyse if your job is dependent on the American economy or other economies.
  • If you are a business owner, can you diversify your customer base globally?
  • If you are a business owner, diversify the legal status of your business to multiple countries.
  • Limit and minimize debt which may keep you locked to certain jobs or locations.

There are many resources on the web and from others across the world. The hardest part will be finding people that you can trust to help you diversify. I would recommend incorporating investing and travel together so you can gradually become more diverse. For instance, take a vacation to China and stop in Hong Kong to open up a banking account. Also participate in conferences of like minded people to build those relationships.

Your goal is when the government hits that breaking point you won’t lose everything. You won’t need to risk your life in a revolution to protect your property. If they freeze your US bank accounts, you will still have access to needed funds. Hopefully, we will never see the day the US government comes to a breaking point because it will lead to a lot of pain for all citizens. But it is foolish to not be prepared for that scenario.

The ideal situation is the government fixes the issues that may lead to insolvency, but when I see both republicans and democrats argue about how much to increase spending (rather than whether or not to increase spending) I don’t have much faith in the process.

To prepare for government failure you must accept that government failure is possible. Only when you have accepted that can you begin to prepare for it.

Eric Bandholz is the founder of startups Sovrnty Communications and Previously he has worked as a Financial Advisor for a leading investment firm.