what would happen if we lost the internet for a lengthy period of time, I reached a strange but compelling conclusion: the food distribution system would collapseMark June 19, 2018 0 COMMENTS
Currently, about 14% of the value of all U.S. purchases is cash. The other 86% is credit cards, checks, and a few other instruments (e.g. gift cards, cryptocurrency). In the current system, the authorization of credit cards and checks is done over the internet. Without the internet, stores will not be able to accept credit cards. They can’t call in for authorization. And they probably don’t have any of those plastic machines that make an imprint of the card. Even if they did, fraud will increase at any store that accepts credit cards without getting authorization for the purchase. And credit card companies might not even accept the purchase without authorization.
Can’t the company give authorization numbers by phone? No. They are not set up to do that anymore. They don’t have the personnel. Their system is not geared for phone authorizations in large numbers. And it would slow purchases too much at the stores. So that means no credit card purchases as the grocery store, if the net goes down.
A similar situation would exist with check purchases. Currently, authorization for checks is done by the internet. No net means no purchases at the grocery store with a check. If a store decides to take checks without authorization, they will be plagued by so many bad checks that they will be forced to rescind that policy.
Quickly, grocery stores and other retail businesses will realize that they can only accept cash.
Fine. Why not just go to the ATM for cash? No can do. Those devices also work over the internet. You would have to physically go to the bank, and withdraw cash. There will be a run on the banks, and they will not have anywhere near enough cash, nationwide. There simply does not exist enough physical currency for the nation’s economy to work. You can’t increase cash purchases from 14% of total value to 100% overnight.
If the government tries to compensate by printing a massive amount of cash, the dollar will be greatly devalued. Economic catastrophe will result.
Stores will not be able to pay wholesalers and manufacturers for goods, because they will not have enough cash, and the cash they have will be difficult to transport to the seller. Nowadays, stores buy items from many different far-flung locations throughout the world. Cash-only means that many of these transactions will be impractical or impossible.
The grocery store shelves will quickly be emptied, as people spend whatever cash they have left on food. And then the shelves will not be replenished. The whole process of stores buying food and receiving shipments of food will be greatly slowed. As soon as any food arrives, it will be bought up at very high prices. The whole food distribution system will collapse without non-cash payments, which today are done mostly over the internet.
It could take months or years for the system to adapt and return to the former flow of goods to stores. The system might not recover before many people go hungry for months on end. I don’t think anyone realizes how thoroughly dependent modern commerce has become on the internet. But if the net ever goes down for an extended period of time. We will find out, to our great consternation.
How do you prep for this kind of disaster? Store food. Grow food. And keep a bunch of cash in small denominations in a home safe, (but don’t tell the wife).