Blackout: Precious metals as an emergency currency

A power blackout that affects not just one block or one neighborhood, but the entire country, indeed the entire continent, would be devastating. But what sounds like a dystopian Netflix thriller is not that unlikely. Just in case, you should be prepared.

Blackout - power failure across the country

A "blackout" is a prolonged, widespread power failure. Since our modern way of life is heavily dependent on an intact power supply, such a blackout would quickly lead to a massively critical situation for all citizens.

A blackout can have a wide variety of causes: From natural disasters, to cyber attacks, to human or technical failure. The most diverse scenarios are conceivable.

The fact that there is no longer any electricity coming out of the socket may not sound so bad to many at first. So you just sit in a candlelit armchair and read a book? Unfortunately, no.

After all, it's not just the lights, TV and computer that go out. After just a few hours, refrigerators and freezers can no longer keep food cool, and in winter the apartment quickly becomes cold without electricity.

Without the Internet, the number one source of information is no longer available. Rail and public transport can no longer run and refueling at the gas station would be very limited (pump at the gas pump).

This would also make it difficult to buy food and other goods. It is obvious that electronic payment methods will fail. But ATMs will also be out of action, the bank will not disburse cash without a digital booking, and retailers' checkout systems will not work. The entire logistics system would probably also be affected - many shelves would remain empty.

Crisis prevention: Prepared for the worst case scenario

If the power supply collapses in large parts of the country, in the whole of Austria or even on the entire continent, you have to be prepared. You certainly don't have to become a prepper and prepare yourself for the collapse of any civilization, but every citizen should take some crisis precautions.

Official agencies in Austria recommend having the following items at home to be self-sufficient for up to 14 days:

• Drinks & food supply: Approximately 35 liters of liquid per person and non-perishable food is recommended. Special food for infants, for example, should also be considered. Also the supply of pets should not be forgotten.
• Lighting: Flashlight with enough batteries, candles, lighter and matches should be ready in case.
• Gas stove: In order to be able to cook without electricity, it is recommended to have a gas stove or fondue stove with appropriate fuel at home.
• Receiving news: To always receive current information, a battery or crank radio makes sense. News about the situation can also be received with the car radio.
• First aid & hygiene: In addition to important medications, a first-aid kit with bandages should generally be available. A corresponding supply of hygiene items is not wrong.
• Money: In any case, you should always have enough cash at home to buy important in case of emergency. It is recommended to have smaller bills and coins.
• Heating alternative: Individual rooms can be heated well with fireplaces and tiled stoves. Be careful with bottled gas heaters. In any case, think of sleeping bag, warm clothes and blankets.

An emergency power supply by means of a generator will often be difficult in a private environment. However, it may be worthwhile to purchase one if it could be used to supply important equipment, e.g. on farms.

More information on how to prepare for a blackout and what to look out for can be found at the Austrian Civil Defense Association, the information pages of the Austrian Armed Forces and on oesterreich.gv.at.

Precious metals as a crisis precaution?

Anyone who deals with the subject of blackouts repeatedly comes across the tip of acquiring precious metals as a substitute currency. In an emergency, the precious metal could then be used as a medium of exchange to obtain food and other goods.

But do precious metals really make sense as a reserve currency in the event of a blackout? To be honest, probably not. In the event of a widespread blackout, cash remains the most reliable means of payment.

Exchanging gold and silver coins for goods in barter trade would not only be difficult (who then even knows the current value of a gold or silver coin?), but probably also a rather bad deal for the precious metal owner.

If the blackout were to last for several days, there are contingency plans in place to ensure supplies for the population: From a distribution of food to ration coupons that could be used to make purchases.

Nevertheless, we advise everyone to hedge part of their assets with precious metals. In many other crisis situations, gold and silver can take on the role of a crisis-proof store of value. Because in economic crisis situations, gold has proven itself time and again in history. A collapse of currency crises, financial crashes, a collapse of the banking or even monetary system. With gold, you were always on the safe side.

In this case, the motto is to divide one's own precious metal reserves into sensible units: Smaller units are easier to trade. When buying, the premium may be somewhat higher, but when selling, you do not have to make more liquid than necessary.

As an emergency reserve, common bullion coins - the better known, the better - and LBMA gold bars are suitable. Austrian silver shillings make sense as a smaller unit.

How high is the risk of a blackout in Austria?

Basically, the risk of a nationwide blackout in Austria or in Europe as a whole is very real and higher than some might think. Austrian expert Herbert Saurugg explains that the risk of a blackout in Europe has increased significantly in recent years.

The Austrian Armed Forces most recently stated in the Security Policy Annual Forecast 2021 that "the greatest risk for a next systemic crisis in Austria [...] is certainly a nationwide power, infrastructure and supply failure (blackout) [which] experts expect to occur within the next five years and which Europe and Austria only narrowly missed on January 9, 2021."

Nevertheless, the civil defense authorities and the Austrian Armed Forces have plans in place and are prepared for a blackout. The regulatory authority E-Control is also confident that it will be able to react to a blackout within a few hours.

According to experts, Austria also benefits from the high share of hydropower in its energy mix. This is because Austria's hydropower plants are "black-start capable," meaning that they can be restarted independently of the power grid.