Recent world crises and the resultant weakening of the global economy has left many fearing the worst. There is talk of a global recession, or worse yet, a complete collapse of the economy.

While it is impossible to say whether such a severe economic downturn is upon us, understanding how to survive a potential economic collapse (whether now or in the future) could save you and your family when the times get tough. 

WHAT IS AN ECONOMIC COLLAPSE?

An economic collapse is defined as a severe breakdown of the economy at a national, regional, or territorial level. It is a broad term used to describe bad economic conditions that are not part of the ordinary business cycle of expansion and contraction.

An economic collapse usually signals the start of a significant economic contraction, recession, or depression, which can last months or even many years.

WHAT CAUSES AN ECONOMIC COLLAPSE?

There are various events and circumstances that can trigger an economic collapse, which makes it difficult to attribute it to a single cause. An economic collapse can happen suddenly as a result of an unexpected crisis such as the onset of a war, natural disaster, political unrest, and various other events.

It can also be the culmination of a series of events or ongoing circumstances which signal a weakening and fragility of the economy. 

WHAT ARE THE RESULTS OF AN ECONOMIC COLLAPSE?

The results of an economic collapse are equally difficult to predict, as the ripple effects of a severe economic downturn are widespread and impossible to accurately track. Some general and obvious results of an economic collapse are:

• A rise in job loss and unemployment. 
• Loss of value of investment markets which results in the average investor losing significant value in their portfolio.
• Slowing of production, and therefore less new innovation, fewer startups, and so forth. 
• A potential hyperinflationary environment in extreme cases where the cost of basic items increases dramatically.
• An increase in poverty which can also lead to crime, civil unrest, and various other social issues.
• Widespread business failures leading to shutting down of companies and laying off of staff. 

HOW TO PREPARE FOR AN ECONOMIC COLLAPSE

Preparation is key in order to successfully survive an economic collapse. It is important to not become too complacent when the good times are rolling, as you never know when the situation may change for the worse.

Follow these practical guidelines to ensure you are well prepared :

1. KEEP AN EMERGENCY FUND

Having liquid cash safely deposited in a savings account with your bank can be a lifesaver in times of economic crisis. First of it all, it will retain its value while market linked assets such as equities deteriorate.

Secondly, it will provide you with the best liquidity so that you can quickly access your money during a time of extreme need. It is recommended to keep at least 3 – 6 months’ worth of expenses in an emergency fund.  

2. BECOME DEBT FREE

The additional pressure of carrying debt if there is an economic collapse can put you in an extremely difficult situation. You should start working towards becoming debt free today.

This will reduce your monthly expenditure and will keep you from landing up in a precarious position should you lose your job in the future. Begin by paying off your highest interest debt such as credit cards and other short-term loans, and then move onto lower interest debts such as house mortgages. 

3. CREATE ADDITIONAL INCOME SOURCES

The risk of losing your primary job is elevated during an economic recession or collapse. You can mitigate the negative consequences of this by creating additional sources of income now before the bad times are afoot.

We live in an age of boundless opportunities to make money on the side remotely. You can start your own web business or do freelance consulting work.

Even if you have a great job, it is well worth diversifying your income sources and establishing other ways to sustain yourself. Even a few hundred dollars a month can make a big difference in a time of need. 

4. REDUCE UNNECESSARY SPENDING

Most people tend to spend recklessly when times are good and then suddenly try to adjust when there is a downturn or they lose their job. This is a big mistake for two reasons: 

• Firstly, if you make overspending a habit in your regular life, it becomes extremely difficult to adjust your spending habits when you need to do so. If you practice living with less even during the good times, it will be much easier during a financial squeeze. 
• Secondly, wasting unnecessary money on a regular basis means you have less to put into savings each month. We spoke about the importance of having an emergency fund, and living off less now can help you keep that fund growing for when the rainy day comes.  

5. MAINTAIN A DIVERSIFIED INVESTMENT PORTFOLIO

Entire markets and industries can deteriorate during an economic collapse, while others might be more protected. Maintaining a diversified investment portfolio will ensure that you are not overexposed to one specific asset class, sector of the economy, or graphical region.

While your overall asset value might still decline significantly, you will be more protected from the risk of complete financial ruin if you keep your eggs in different baskets. 

6. STOCKPILE FOOD AND OTHER SUPPLIES

During severe economic collapses, like the one experienced by Venezuela in current times, or the Great Depression of the 1930s, even things like basic food and other supplies can be in shortage.

Even if supplies are available, a hyperinflationary environment can make basic necessities completely unaffordable. It is always a good idea to keep a stockpile of food and other essential supplies (e.g., medicines, toiletries, paper supplies, tools, etc.) that can last you more than a year in tough times. This may also protect you from other crises such as natural disasters, war, etc. 

One step further is to learn to grow your own food. If you have a small garden in which you could plant a few crops, start learning how to prepare the soil and grow some basic fruit and vegetables. Not only will it make you less reliant on a potentially failing economic system, but will be an extremely rewarding process too. 

7. LEARN BASIC SKILLS

Basic DIY skills are invaluable during an economic crisis. Instead of paying someone to repair your car or fix your house, you can do it yourself for free. You could even earn some additional income by providing these services to others. Examples of basic skills that can save you money and bring great fulfilment during difficult times include things like:

• Baking bread and making other foot items from scratch (e.g., pickles, jams, fermented vegetables, yoghurt, etc.)
• Growing your own vegetables and herbs
• Sewing
• First aid and caring for a sick child
• Mechanic work such as fixing cars, motorbikes, bicycles, etc.
• Building and repairing household items such as furniture and shelves
• Basic electrical and plumbing work

8. ESTABLISH STRONG CONNECTIONS

One of your most valuable resources are the people who are close to you. When times are difficult, it is important to work together with close friends and family to overcome the challenges.

You will have a much better chance of making it through compared to trying to tough it out alone. Start building strong relationships with those who are close to you, like neighbours, friends, and family. Having the mutual understanding that you can depend on each other in difficult times is a great comfort. 

You can also practice the habit of mutual exchange (i.e., bartering), where you offer your skills in exchange for something that the other can give. This can help you circumvent the traditional economy and help you move more towards the “sharing economy”. This also reminds us of the importance of learning as many basic skills as possible, so that you may help others in need and receive their support in kind. 

HOW TO SURVIVE DURING AN ECONOMIC COLLAPSE

Hopefully you will be well prepared to deal with an economic collapse when it comes having followed the above steps. However, it is impossible to perfectly predict how a collapse in the economy will play out, and you will need to deal with the situation that is presented to you at the time. Here are a few additional steps you may need to take when you are actually faced with an economic collapse:

1. DISCUSS THE SITUATION WITH YOUR HOUSEHOLD 

The very first thing you should do is sit down with the members of your household and discuss the situation with them. Go over your finances together and work together to come up with a plan of how you will navigate these difficult times together.

It is important that you are all on the same page, but also to know that everyone has their own approach and attitude to dealing with money. How you resolve these differences and work together will have a big impact on your ability to deal with the challenging times, and strengthen your relationships in the process. 

2. FURTHER REDUCE EXPENSES AS NEEDED

In preparation for a recession, you would have practiced living off less. When you are faced with an actual economic collapse, you may have to further adjust your spending habits to be able to cover your monthly expenses. In most cases, it is quite possible to maintain a good quality of life while cutting out unnecessary expenditures. Start by cutting out spending on all the things which are not necessary for you to live on, and finding ways to reduce the costs of the things you do need. Some ways that you may be able to reduce your spending include:

• Cut out discretionary spending (i.e., stop buying things you can do without) like luxury items, new clothes that you don’t need, new gadgets, etc.) 
• Reduce transportation costs by carpooling, using public transport, walking or cycling, etc.
• Reduce housing costs by moving to a cheaper area, subletting out part of your house, or even moving in with family until your financial situation improves. 
• Reduce food costs by cooking at home instead of going out to eat. Also refrain from buying too many luxury food items that you don’t really need and instead buy simple, healthy food. 

3. GET MUTUAL SUPPORT FROM FRIENDS AND FAMILY

We spoke about the importance of building strong relationships when preparing for an economic collapse. Well, here is the time to lean on the solid bonds you have created by not being afraid to ask for support. You should also help and share your skills and resources with others who are in need. 

4. PROTECT YOUR HOME AND FAMILY

Extreme economic collapses and recessions can lead to social degradation such as more violent crime, petty theft, scams, and so on. This has been clearly demonstrated in Venezuela and is one of the reasons why so many citizens have fled the country. You may need to take action to safeguard your home and protect your family from criminals and other dangers during a severe recession. 

5. KEEP EARNING

If at all possible, make sure to keep the money flowing in. If you have a job, go the extra mile to prove that you are a valuable employee. You should be seen as the last person to be laid off in your employer’s eyes.

In the meantime, keep networking and working on generating alternative income streams so that you are not left stranded without any income if your employer does need to shut down. 

6. DON’T STOP ENJOYING LIFE

Finally, and most importantly, don’t allow yourself to be ruled by fear and sadness. There is no reason to stop enjoying and appreciating life just because you are faced with economic difficulties.

Be grateful for the things you do still have and keep having fun in the ways you can with those you hold dear. You should try to see the situation as a challenge on your creativity and flexibility, and encourage friends and family to come up with inventive ways to have fun without spending money all the time. 

CONCLUSION

Of all the disasters which can face a society, an economic collapse is one of the most challenging to deal with. Due to its nebulous nature and widespread impacts, it is very difficult to escape its effects. Being adequately prepared to deal with a sever economic downturn before it arises, and knowing how to respond when you are faced with it, is vital in order to make it through intact.

You will probably have to accept that you will be impacted one way or another, but the severity can be greatly reduced with the right approach. Most important of all is to continue living with joy and hope in the midst of the difficult times, and not get sucked into needless fear and anxiety. 

The truth is dark, but it’s something everyone needs to hear.

“Collapse” requires definition. Here it means rapid, large-scale loss of central government control, major state institutions failing, or descent into widespread civil war and state disintegration within ~2–3 years. Predicting exact collapse is impossible; instead, identify countries where credible risk of severe state failure by 2027 is meaningful based on current trajectories of political fragmentation, economic shock, elite fracture, external intervention, and insurgency. Factors considered: weak state capacity, severe economic crisis (inflation, currency collapse, debt default), active or escalating armed insurgencies, elite splits, loss of monopoly on violence, humanitarian breakdown, and major external interference.

High-risk cases (elevated probability of collapse or severe state failure by 2027)

• Libya: Persistent fragmentation between rival governments, powerful militias, foreign backers, and a stagnant political process. Renewed fighting or collapse of a fragile power-sharing balance could produce rapid state failure.

• Yemen: Ongoing multi-sided war, collapsing institutions, and chronic humanitarian catastrophe. A political or military shock—renewed large-scale offensives, foreign withdrawal, or fragmentation—could accelerate collapse in the near term.

• Somalia: Longstanding governance gaps, fragile federal-local relations, and an active al-Shabaab insurgency. Setbacks in international support, internal elite splits, or major military defeats could tip parts of the country into broader loss of state control.

• South Sudan: Deep elite polarization, recurring localized conflict, weak institutions, and economic distress. Renewed large-scale ethnic fighting or breakdown of power-sharing arrangements can lead to rapid unraveling.

• Haiti: Severe political vacuum, gang rule in Port-au-Prince, economic collapse, and limited state capacity. Continued inability to restore security or credible governance creates a substantial near-term risk of de facto collapse in major population centers.

Significant risk (not imminent collapse but materially elevated chance of serious state failure)

• Sudan: Though a major collapse occurred after the 2023 military–militia war, the country remains at high risk of further breakdown, wider fragmentation, or long-term partition depending on conflict dynamics and foreign intervention patterns.

• Afghanistan: Taliban controls territory but faces economic collapse, governance legitimacy deficits, insurgent pockets, and humanitarian crisis. Renewed insurgency, external shock, or loss of central cohesion could produce deeper state failure in certain regions.

• Lebanon: Economic collapse, dysfunctional politics, and Hezbollah’s armed autonomy create risk of institutional paralysis, local state-within-state dynamics, and potential escalation into broader collapse under a severe shock.

• Burkina Faso / Mali / Niger (Sahel states): Military regimes, insurgencies, economic strain, and eroding public services increase the chance of deeper state failure or de facto fragmentation if insurgent gains accelerate or coups produce prolonged delegitimization.

• Ethiopia: Tigray war and other internal conflicts undermined national cohesion. Broader spread of ethnic violence or renewed large-scale interstate war could precipitate severe loss of central control in regions.

Moderate risk or conditional vulnerability (vulnerable to collapse given severe shocks)

• Pakistan: Economic crisis, political instability, and tensions between civilian elites and the military create vulnerability; outright collapse remains less likely absent a catastrophic chain of events, but regional destabilization could produce severe governance failures.

• Venezuela: Deep economic collapse and institutional erosion have created de facto state dysfunction already; full institutional breakdown or fragmentation is possible if supply chains, security structures, or elite bargains break down further.

• Myanmar: Military junta controls much territory but faces an increasingly effective armed resistance and economic collapse; prolonged insurgency and loss of control in border regions could produce de facto partition or collapse in parts of the country.

• Democratic Republic of Congo (DRC): Chronic localized violence, weak state capacity, and resource-driven armed groups make certain provinces liable to state failure if conflict intensifies or international response weakens.

Argentina / Sri Lanka cases: severe economic crisis combined with weak institutions increases risk of deep instability, though collapse into total state failure is less probable within this timeframe.

Key caveats and framing

• “Collapse” is a spectrum: full territorial collapse is rarer than regional state failure, institutional paralysis, or prolonged civil war. Many countries slip into de facto fragmentation without formal dissolution.
• Time horizon matters: 2027 is near-term; most state collapses result from multi-year deterioration plus triggering shocks (civil war spark, elite split, economic default, major external intervention, natural disaster).
• External actors and international responses matter: foreign military support, sanctions, peacekeeping, or emergency assistance can prevent collapse or, conversely, exacerbate it.
• Prognostic uncertainty: forecasting political violence is inherently probabilistic. The listed countries are those where existing evidence—ongoing conflict, governance failure, economic collapse, elite fragmentation, and foreign entanglements—produces a meaningful near-term risk profile.

Practical indicators to watch through 2026–2027

1. Loss of government revenue or hyperinflation/currency collapse.
2. Major defections in security forces or breakdown in command-and-control.
3. Large-scale internal displacement and humanitarian access collapse.
4. Significant territorial gains by non-state armed groups.
5. Public elite fragmentation (competing governments, rival capitals).
6. Withdrawal or escalation of foreign backers and peacekeepers.

Examples of typical collapse pathways (illustrative)

• Rapid military defeat of central forces by insurgents combined with elite flight and international disengagement (e.g., scenarios similar to 1990s state failures).
• Fragmentation of the capital into gang-controlled enclaves, paralysis of national institutions, and humanitarian breakdown (Haiti-like trajectory).
• Prolonged siege/war between rival factions with foreign proxies turning the conflict into de facto partition (Libya-like).

Summary judgment
By 2027 the countries with the most credible near-term risk of collapse or severe state failure are Libya, Yemen, Somalia, South Sudan, and Haiti, with Sudan, Afghanistan, Lebanon, Sahel states, and Myanmar carrying significant conditional risk. Many other fragile states remain vulnerable to collapse if compounded by major shocks. Continuous monitoring of the indicators above will give the best short-term signal of accelerating failure.

You have to define “economic collapse”. The Bush Recession of 2008 was a serious economic collapse and came close to being a major catastrophe. The Trump Recession of 2020 was also quite bad and we experienced economic hardships not seen since the Depression.

So, what would be an economic collapse to you? Could those things happen again? Sure. As bad as those times were, it could be worse. I think the economic collapse of 1929 was much worse because we didn’t even have the tools or the knowledge we now have. At the time, Herbert Hoover’s solution was to raise taxes. No one would ever raise taxes in a collapse now.

The US has, through it’s history, suffered many major economic collapses. If not for the war of 1812 it’s possible the US would have dissolved as the result of economic crisis.

In the old days there were absolutely no mechanisms to ease the pain of collapse – no unemployment insurance, no CCC, no food stamps or welfare, no tax breaks or rebates – nothing. When the economy collapsed it stayed broken until it fixed itself, something that took a long time and a great deal of hardship requiring enormous sacrifices.

The first big collapse in 1819 changed the fabric of the nation. It was caused by land speculation, lack of any banking regulation and the crazy inflationary practices of banks that printed their own money. When the crash occurred, they refused to honor their obligation to trade gold for their worthless currency. In addition, the US government defaulted on 19 million dollars of war bonds it issued to pay for the War of 1812. The crash was precipitated by world economic woes after the Napoleonic wars and exacerbated by poor government polices and inaction by President Monroe. The impact was major migrations of people who lost everything, notably to what later became “Texas”. Without the collapse, there would be no Texas. It also created the understanding that the country needed a national school system and began the policy of the “One Room Schoolhouses” as an organized, metered and supervised government activity.

Other huge collapses happened in 1837 and 1857. In 1837 the lack of a central bank and any bank regulation led once again to runaway inflation and the lack of real gold and silver to back the money. The major banks in the US refused to honor the gold commitments again and there was no regulation of bank of last recourse. The panic was started by a worldwide collapse in the price of cotton, America’s biggest export and resulted in a domino effect of unemployment, stagnation and deflation. In those days, the US was a resource exporter dependent largely on Europe to consume our resources and when a recession hit Europe, it crippled the US. Once the deflation set in, the collapse fed on itself. There were food and flour riots by people who had no money for food and no jobs. However, at the time, the US was undergoing a technological transformation and railroads, steam power, industry, and so on began an explosion that suddenly employed people at good wages and literally saved the United States. At the same time, the Gold Rush began which caused migration and forced a lot of specie into the system that was starved for gold and silver. The sudden need for lumber, coal, steel and so on outstripped the power of cotton on the economy and great fortunes were made. However, no banking regulations or central bank was created to help solve future problems.

In 1857, the first worldwide Depression occurred. The US had rapidly over expanded to meet the needs of local and international needs and when Europe fell onto hard times, the newly invented telegraph sent the news around the world which caused rash financial decisions the were bad for the economy. The telegraph was the main cause for the rapid and massive collapse as all over the US people became immediately aware of the crisis, which allowed it to feed on itself. It was exacerbated by the loss of the SS Central America caused great panic because New York, the financial controller of America, was depending on that gold to pay off its debts and back its specie. The US still had no monetary controls, central bank and all the banks printed their own money, as much as they wanted, resulting in local inflation. The Panic of 1857 was remarkably similar to the crash of 2008. The nations biggest food supplier collapsed, precipitating the collapse of the insurance companies backing it resulting in the collapse of credit and the bankruptcy of many railroads. Midwestern farm communities collapsed as commodity prices fell to pennies. Entire towns went bankrupt, but compared to the North, which was dependent on railroads and supplies coming from the South and Midwest, the Depression was much less felt and helped lead to the Civil War by making southern politicians realize the power of their products and the weakness of the Northern financial system. Some banking regulations were put into place and all paper money 20 dollars and over was ordered destroyed to help quell inflation. There were also limits put on fractional lending. It became among the first time the Federal Government exerted its authority over the banking system, something Lincoln would expand during the Civil War.

One thing we have learned is that nations need strong central banks; there needs to be tight monetary control and that we are all interconnected across the world, moreso than ever now. The US has 3 trillion dollars in exports – 1/8th of the economy. Should exports fail due to world crisis, America would fall into a self-perpetuating collapse of all its interlocked systems. Unemployment would skyrocket. The other thing we’ve learned is that no matter how bad things get, they always seem to recover. People have to eat, they have to live somewhere and they have to move around. This means some minimum level of economic activity will always be supported.

One need only look at Russia in its current circumstances to see how resilient nations are economically. The US could sustain its economy through government intervention alone. There would be hardship but it would be cushioned. So a total collapse of the US is highly unlikely. The US can grow all the food it needs and can produce all the oil it requires. Based on those two factors alone, the US can survive any major economic cataclysm albeit at some seriously reduced circumstances and with enormous hardship, homelessness, migration and pain. In a major economic collapse it would take enormous national will to prevent a dictator from seizing power – will we probably don’t have. A dictator could command the economy with all the pitfalls that entails, but it would also feed the people and in the end, bread and circuses have always served dictators.