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How 'preppers' are gearing up for a US default

As the U.S. government shutdown deepens, and politicians and business leaders become increasingly worried by the prospect of U.S. debt default, survivalists like E.J. "Skullcrusher" Snyder aren't daunted.

"I always think in terms of apocalyptic events," said Snyder. "I'm ready to go."

E.J. "Skullcrusher" Snyder
Source: E.J. "Scullcrusher" Snyder
E.J. "Skullcrusher" Snyder

Snyder, who picked up his cranium-crunching nickname during a 25-year military career, is a survival instructor who works under contract for the U.S. Army, as well as a frequent contestant on TV survival shows. He is just one of many Americans who are preparing for the worst outcomes in the event of a government debt meltdown—and driving a market for survival products and services in the process.

"If you think of it in the worst terms, a whole collapse of the government and the normal things in life that we take for granted, what are you prepared to do?" said Snyder. "People who are used to foraging, or hunting, or trapping, or purifying water are going to move higher up the food chain."

'It's really a form of insurance'

That's a major reason why average citizens are flocking to survival classes, said Snyder.

"Guys that are running these survival schools are seeing an influx in regular people who want to gain these skills," Snyder said. "It's really a form of insurance."

Tom Brown, Jr., founder of the Manahawkin, N.J.-based Tracker School, is one beneficiary of this influx. Brown said his wilderness survival school, in operation for 37 years, instructs about 2,000 students annually, many of whom are worried about potential economic disaster.

"A lot of my students, about a quarter of them, are interested in a U.S. government meltdown or financial crisis," said Brown. "They're starting to take that prudent look: What's going to happen tomorrow, what's going to happen five days from now, and how is that default really going to affect us?"

But it's not just survival schools that are seeing a government crisis-driven increase in business. Companies like MRE Star, an Arden, N.C.-based maker of pre-packaged "meals ready to eat," or MREs, are also getting a boost.

"Orders were fairly steady from January to three weeks ago," said company operations manager Ken Lester. "But the orders in September were double any month from January to August."

Lester said MRE Star, which ships thousands of cases of MREs each month to customers that include U.S. embassies abroad, is now seeing larger-sized retail orders from individuals, stemming from concerns surrounding the government shutdown and potential debt default.

"Individual retail orders have been significant in the sense that people are ordering more than a couple of cases. Instead of ordering single cases, which have 12 meals, they're ordering more than a couple days' worth of meals," said Lester. "What's trending is four to 10 cases of MREs."

'I can shoot a deer out my front door'

A scene from the upcoming season of National Geographic's "Doomsday Preppers."
Source: National Geographic | Doomsday Preppers
A scene from the upcoming season of National Geographic's "Doomsday Preppers."

In the midst of the ongoing government showdown, Lester said, "People are looking to control what they can control, and that would be survival, and being able to feed their families."

George VanOrden, owner of Fulks Run, Va.-based Pro Survival Kit Co., said he is more than prepared to feed his family in the event of a societal meltdown. The retired Marine lives along the Shenandoah River on a tract of more than 30 acres that includes installations like root cellars and hand-pump-operated wells.

"Foodwise, we can survive on this property indefinitely. I can shoot a deer out my front door if I need to," said VanOrden. "I don't have fears of my family going hungry."

VanOrden sells about $250,000 worth of survival kits per year to civilian and military customers—including to his biggest purchaser, the Navy SEALs—but he does have concerns that his military pension may be at risk.

"If it got to a certain level, there's a possibility that the government could default to the point where they stop paying military retired pay," said VanOrden. "I know the government could stop paying my check at any time."

In a default meltdown scenario, it wouldn't just be military pensions that bite the dust, but the U.S. dollar itself, said Jim Rickards, a senior managing director at Tangent Capital and author of The New York Times best-seller "Currency Wars."

Though he doesn't foresee such a meltdown happening, Rickards said that the disappearance of the dollar could precipitate a return to a gold- and silver-denominated economy.

"If history has any lessons, gold is the one thing that has always performed well," said Rickards. "Gold is excellent for preserving wealth, but you'd want silver coins to buy gasoline and groceries."

Gold prices climbed steadily for most of the financial crisis, but have given back ground since the economy has stabilized this year.

'They're having a good time.'

A well-stocked pantry of canned goods is an essential for any "doomsday prepper."
Source: National Geographic | Doomsday Preppers
A well-stocked pantry of canned goods is an essential for any "doomsday prepper."

Although a default doomsday scenario is possible, Rickards said, its likelihood is still very small.

"I think the possibility of a default is extremely low, almost zero," said Rickards.

Richard G. Mitchell, an emeritus sociology professor at Oregon State University and author of "Dancing at Armageddon: Survivalism and Chaos in Modern Times," agrees.

"Absolutely zero, if we're talking in whole numbers," Mitchell said of the probability of a default.

Still, says Mitchell, survivalists will continue to prepare for disasters like a default crisis regardless of their likelihood, even if it's all unnecessary.

"They're having a good time. They're taking their resources and imagination and skills and using them to their full capacity. They're fully engaged in the world. They're crafting a new social order," Mitchell said. "But it's imagination."

—By CNBC's Adam Molon. Follow him on Twitter @CNBCMolon.

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