I shouldn’t have been so shocked. Considering the economy, and the state of the banking sector, I probably should have expected it, but it was still a bit of a surprise. One of my acquaintances revealed to me that she now has a few thousand dollars buried in—not the market, not the bank—her backyard.

And she isn’t even close to being the only one.

Take Mr. Latham, for example. Not long ago, this 45-year-old Alabama cattle farmer and electrician drove his Chevy into Montgomery, stopped at the bank and withdrew $8,000 from his CD account—all in $20s. That was the day the Dow Jones fell 777 points.

Back on the ranch, Mr. Latham placed the bills in Ziploc bags, sealed them inside a watertight container, and stuck them in a hole dug in a remote corner of his property.

Mr. Latham says he knows that if the Federal Deposit Insurance Corporation takes over his bank, he will probably be able to get his money out, but he is not sure how long that could take. Now he can get his hands on “cold, hard cash” anytime he wants, he says. Latham says the $8,000 is an insurance policy against economic instability. “I’m hedging my bets,” he says.

Call it what you will—“insurance policies,” “rainy day funds,” “get-out-of-town money”—all across America people are beginning to stash emergency cash, gold coins and silver bars. The way this economy is going, it’s probably a good time to be a shovel salesman.

What does it say about the economy when people put more trust in their backyards than in banks? Isn’t America supposed to be the financial capital of the world?

Locks and Bullets

Further, what does it say about the economy when the two top consumer purchases in America right now are safes and guns?

Sales of home safes increased an astounding 50 percent this October for the nation’s top safe maker, Sentry Safe—and that follows double-digit sales increases in previous months. Home Depot too has experienced a double-digit increase in safe sales over the last several weeks. Lowe’s stores report similar increases as well.

As for the guns, the fbi received more than 374,000 requests for background checks on firearm purchases for the week ending November 9—an almost 50 percent increase over the same period last year. Some analysts credit the increased interest in guns to President-elect Obama gun-control fears. But others note that, generally speaking, each time the economy slows, gun sales tend to rise.

“It could be a telling sign about the nation’s priorities, safety concerns and financial insecurity—and whether there are mixed feelings about the impending Obama administration’s ability to ease economic and security woes,” says the Washington Times.

The plain and simple fact is that America’s economy is in serious trouble, and people are beginning to realize it. The evidence is accumulating in leaps and bounds—far beyond the increasing pawn-shop, garage-sale and food-bank activity.

Banking on Bullion

The widespread shortage of bullion across the United States (also in Canada, Australia and elsewhere), for example, is a clear indication the economy is deteriorating. It is also a sign that faith in the U.S. economy is breaking down.

In times of economic stress, investors seek the perceived safety of precious metals, shunning paper currencies that politicians can create at a click of a button to “stimulate” economies. And right now, investors are seeking that safety in record numbers.

Many coin shops and bullion dealers report drastically reduced supplies (if inventory is available at all) and very long wait lists. Earlier this year, in a shocking announcement, the U.S. Mint suspended gold sales for its American Eagle 1-ounce coin. Then the following month it suspended sales of its only other major gold product, the pure gold American Buffalo coin. Krugerrands are reportedly in short supply too; the South African Rand Refinery said it was temporarily out of the popular gold coin earlier this year.

Most recently, the Australian reported that the Perth Mint in Australia was no longer selling gold and was suspending orders until at least January. “All around the world there has been a heavy run on physical gold and there is a shortage of supply,” said the manager of bullion and rare coins dealer Jaggards, Robert Jaggard. Gold and especially silver on eBay is selling for a whopping 140 percent over spot prices in some cases. California Numismatics, one of the larger precious metals dealers in the U.S., is showing zero inventories for many bullion products.

Some of the gold is going to Europe. For the first time since the early 1980s, France has become a net investor in gold. Remember, it was France not trusting the U.S. dollar and asking for payment in gold that helped initiate a run on the greenback during the 1970s, which led the U.S. government to unlink the dollar from gold.

European central banks may now be hoarding gold too. Analyst Julian D.W. Philip says Germany and Switzerland, two of Europe’s largest gold holders, will sell virtually no gold this year. The German Bundesbank recently slammed the door on gold sales, essentially saying it was a strategic asset not to be squandered and that it was an “important factor for the confidence in the stability of the euro.”

Around the world, Russia, China, Middle East oil exporters and many other countries are also scaling up their gold reserves. Saudi Arabia purchased an astounding $3.5 billion worth of gold over a two-week period in November. (For information on why a rising gold price is a bad omen for the economy and the dollar’s role as the world’s reserve currency, read “Gold Price Warning Signs.”)

But the gold and silver coin shortage is not the only economic indicator that the economy is in real trouble.

Best Worst Option

Along with safes and handguns, America’s other big seller is U.S. treasuries.

Historically, U.S. government bond sales also do well when the economy is uncertain. Investors must think things are really uncertain, because so many investors have panicked into the U.S. Treasury bond market that it has driven yields to record lows. People are so afraid of the current Wall Street meltdown that they are willing to purchase federal bonds that pay interest rates far less than the rate of inflation. In other words, these people know that they will technically lose money by purchasing treasuries, but are willing to take the loss in order to avoid the possibility of an even greater loss in other investments like U.S. businesses, the stock market and the real-estate market.

Just the fact that so many people have purchased treasuries should be a warning about the state of the economy. Unfortunately, this time the bond market will not prove to be a safe haven. Bond market investors might be getting set up for a treasury market massacre of historic proportions. The perceived safety of U.S treasuries is eroded with each new stimulus package promoted by politicians—and the bailout packages are being approved with heedless abandon.

The reality is that the only way America will be able to pay for all the bailout plans is to cheat and electronically create a whole bunch of new money. And there is nothing like a hyperactive digital printing press to destroy the credibility of the government, its bond market and its currency. Since it makes them easier to come by, each new dollar created devalues the worth of all existing dollars. U.S. bond holders run the real risk of being repaid in dollars that have drastically reduced purchasing power.

Don’t be fooled by the relative good times that many Americans continue to experience. “Breadlines didn’t form in November 1929,” says economics blogger Charles Hugh Smith. “[T]he structural damage took years to play out then, and it will take years to play out now. So don’t rush things … we’ll get to a visible depression soon enough.”

Tough times are on their way.

But in crisis, there are always opportunities—at least for a while. With the way the economy is going, there is sure to be all kinds of short-term demand for bunkers, bullets and Bibles.

In this age of crisis, however, by far the best investment you can make is the Bible. Make it come to life by reading the book Mystery of the Ages.