Economic Survival 101: Liquidity & Long-Term Strategy

by Daniel Brouse
April 5, 2025

Capital Preservation is Now Survival Rule #1

Capital preservation has always been important — but in today’s economic environment, it has become absolutely critical. On April 4, the phrase dominating Wall Street was “The Wealth Effect.” Normally, the stock market and the real economy are loosely connected — the ups and downs of stock prices don’t immediately ripple through everyday life. But these aren’t normal times.

Since February 19, we have witnessed one of the largest and fastest evaporations of wealth in U.S. history. Entire retirement accounts, life savings, and investment portfolios have been cut down in weeks — not years.

If you’ve been following my advice, you would have begun exiting the stock market as early as July, with a goal of being 100% out of stocks by January 21. Sadly, many didn’t. And now, the consequences are becoming painfully clear.

The sharp contraction in wealth is not just a stock market story anymore — it’s spreading. It’s affecting real people, real spending, and real businesses.

This is The Wealth Effect in action.

Why It Matters

When people feel poorer, they spend less — not just on luxuries, but on everything. Airline stocks, hotel chains, cruise lines, car companies, and even high-end retailers are feeling the squeeze. Discretionary spending is collapsing.

Remember: the stock market is often called a “leading indicator” — it signals where the economy is heading, not where it’s been. But right now, it’s more like a real-time broadcast of wealth destruction.

Preserving capital was the first step.

Now comes step two:

Liquidity Testing: What Good Are Assets If You Can’t Use Them?

Liquidity is a word investors throw around, but in times of crisis, liquidity becomes survival.

Liquidity simply means: How fast — and with how little friction — can you turn something into usable cash?

But here’s the catch: liquidity isn’t just theoretical. You need to test it.

Practical Liquidity Drills

1. Bank Accounts:
   Can you access your money digitally (debit card, online transfer)?
   Can you physically withdraw it (ATMs, branch visits)?

2. Brokerage Accounts:
   Sell a single share of stock.
   Move that money to your checking account.
   Then, physically withdraw it.

See how long that takes. Time every step. Note every fee. Every delay. Every “unexpected problem.” This is your liquidity test.

3. Retirement Accounts:
   Try withdrawing $1. Even if there’s a penalty, learn the process now — not when you’re desperate.

4. Alternative Assets:
   Gold: Can you sell an ounce and get cash today? Where? How?
   Bitcoin or Crypto: Can you convert $1 worth to local currency — and then get that in your hand?

5. Physical Cash:
   Do you have enough for at least 2-4 weeks of emergency needs — but not so much that it creates storage and theft risk?

This is not paranoia. This is rehearsal. When you’re hungry, the person with practice will eat first.

Long-Term Economic Survival Planning

Liquidity is for short-term survival. But what about the long-term?

There’s an uncomfortable possibility investors need to consider: If current economic policies — particularly those championed by Trump and his allies — stay in place, we could be heading toward intentional dollar devaluation.

Trump has openly said he favors a weaker dollar to juice exports and reduce debt burdens. That sounds fine on cable news. But in the real world, a falling dollar means your savings buy less and less — possibly very quickly.

What Happens If The Dollar Weakens Dramatically?

In that environment, capital preservation shifts from holding dollars to holding value — and that’s a very different skillset.

But each alternative comes with its own risks:

Bottom Line: Adapt or Lose

→ First, protect your assets. Preserve what you have.
→ Second, test your liquidity. Don’t assume. Verify.
→ Third, begin developing an exit strategy from the dollar — not out of fear, but out of discipline.

This is Economic Survival 101.

The people who survive economic storms are not always the richest. They’re the most prepared, the most adaptable, and the most liquid.

Are you?

RESOURCES:

Trumpenomics: The Decline of the US