Letter Re: How/Where Can I Learn About Fiber Arts?

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Dear Memsahib:

In your biography, I noticed that you wrote: “I also have taught Fiber Arts. I can shear a sheep, angora goat, or angora rabbit and wash, card, dye, spin, knit, weave, (and/or felt) the wool into socks, mittens, a hat, scarf, or a sweater.”

Speaking for those who happen to have a small herd of Angora goats, but no practical knowledge of shearing or weaving/knitting, to say nothing about “wash – card – dye – spin,” are there any books you can recommend? Or perhaps, alternatively, a DVD? Thanks, – Pete M.

The Memsahib Replies: I think hands-on learning is so much better than a book or DVD for learning fiber art skills. These are truly “hands-on” tactile skills.

I would recommend you look for a Fiber Guild in your area. These are groups (mostly women) who get together to learn spinning, knitting, felting, weaving, etc. Depending on the guild, they may sponsor workshops with a fee to attend, or there may be informal lessons at the meetings. You may also find buyers for your mohair (the fleece of angora goats) as well as your kids (baby goats, not your children) at the guild meetings.

The “Spin Off” magazine web site has a link to a directory of fiber guilds.

Another great resource is your local yarn shop. Our local yarn shop owner offers classes on knitting and crochet for a nominal cost. She also has spinning and felting teachers come in to give workshops several times a year. Maybe your local yarn shop owner can hook you up. (Pardon the pun.)

Two Letters Re: Are Simultaneous Inflation and Deflation Possible?

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We are clearly experiencing deflation, as bad debt and derivatives unwind. At the same time there appears to be massive inflation by the Fed, or else where did the three Trillion for Iraq come from?

The only “X factor” now is the money multiplier. Reserve requirements are now [effectively] zero. A good video (Flash required). But now eliminate the reserve component, [and its] Zimbabwe dollars ahoy.

Here is some scary stuff, directly from the Fed.

And here is an explanation similar to what I had wanted to write about the “Its the Economy Stupid” with Clinton and Greenspan – David in Israel

Dear Jim:
Your piece “Are Simultaneous Inflation and Deflation Possible?” was a great posting on the economic/financial storm brewing. As the “perfect storm” is just getting rolling, this is a good time for those who have not read much Austrian economics to get an understanding of what is likely to hit and why. I feel sorry for folks who have not been given the opportunity to get up to speed on Austrian economics – they are flying blind into the storm (and will get hurt, badly).

1. Robert Ringer has a simplified and easy to read introduction as to what money really is and how it got so corrupted – a great place to start,

2. A super one page distillation of the current problems.

3. After being a paid subscriber to to Gary North for many years, reading him is mandatory, in my opinion. He was very wrong on Y2K, but since then has called the top of the stock market mania (to the month!), begged subscribers to buy gold at $300, and gave years of advance warning of the housing bubble.
Get a fee subscription his Reality Check newsletter. I hope that will convince you to sign on for the full web site subscription. OBTW, I have no $ interest here – just a paid subscriber with a meager hope that if a critical mass of folks get exposed to more moral and economic sense it might help to turn this country around after the crash.
Gary North is a long term bull on gold and also wise enough to look at contrary information. For example, “Helicopter Ben” Bernanke has actually kept a lid on M1 monetary inflation, (even as he lowers interest rates). So just possibly, we’ll see a tight money recession and lower gold prices in the short run, before the (almost) inevitable long term inflation.3. For a real comprehensive education, see the Mises Institute. Here is a sample reading list. Regards, – OSOM

Weekly Survival Real Estate Market Update

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Retreat Caretakers, the Good, Bad and the Ugly
Recently I had the honor of reviewing a spectacular working retreat somewhere in Idaho. The owner, whom resides out of state, was present to give me a tour over the grounds covering hundreds of acres filled with multiple springs, ponds and varied terrain that would leave most of the readers here coveting thy neighbors retreat. I suppose I’m guilty as I write this update as well. Thank God for His grace.
The intention of this weeks update is to briefly explore the idea of retaining a full time caretaker at one’s retreat, the pro’s and of course the cons of such an undertaking and the objective of such a decision.
On the surface most, including myself, hail to an astounding NO, when the thought comes to having another person living at their retreat. What about OPSEC? Where am “I” going to stay if someone is in “my” house? What if they tell all their friends? What if….? Questions abound so let’s explore some of these on a purely logical basis, never mind someone is keeping your toilet seat warm in the winter.
First, what is a caretaker and when would one be needed? Well, generally caretakers are just that, they would be required to oversee and maintain the property in your absence and then be of utmost service while you were on site. From some quick research it is generally accepted that the caretaker lives in the home and then retires to a guest house while you are there (this could be a small apartment or a trailer on the property). There are some properties that require only seasonal attention, usually in the winter and thus caretakers may change as often as the season, making for possible problematic OPSEC issues. The best reason I can see to employ a full time caretaker is that you know your supplies and gear is safe, either they know about it and are trusted to help PM it, inventory it and rotate it or they simply are ignorant to the walls being hollow. Either way, your stomach is ulcer free and you can live your life without switching on your expensive retreat-o-cam every morning wondering if your gear is now at the local flea market.
What can a caretaker actually ‘do’ for an absentee owner? If the property is large enough there is a lot of check items that may be overlooked. For starters, like the property I reviewed there will be major daily, weekly and quarterly chores, especially in the spring and summer like:
1. Check, adjust and perform PM on the Solar/PV/hydro systems
2. Tend to animals that you want firmly in place should the retreat be activated (you won’t be able to buy them when TSHTF)
3. Tend to the garden daily and canning activities at harvest time
4. Check and rotate food storage
5. Walk the perimeter fence line and fire break attending to issues
6. Brush clean up for fire season
7. Walking trail maintenance
8. LP/OP checks (Have the critters taken a hold?)
9. Firewood cutting (maintain three years worth)

Any roads including the driveway will need to be maintained, especially in winter and after any significant storms in the summer. If there are ponds on the property who will make sure the stocked fish have a viable environment to thrive for that extra protein should food run low someday? A good caretaker also makes sure that neighborly relationships are intact and that as you approach your retreat after a major event that the odd’s are in your favor that the retreat has been well protected in your absence its’ ready to go when you arrive. The list goes on and on and is unique to each specific retreat.
I guess a good way to sum up the benefits of having a caretaker is like that ol’ Motel 6 commercial where the narrator says at the end “we’ll leave the light on for you”. A comforting feeling for sure.
What are the pitfalls of having a caretaker? I suppose even listing them here would be a waste of words as we all can think of many issues that can become major problems like theft and a total destruction of OPSEC. Those would be the worst of the worst. Should a caretaker be hired, your storage should be split into two places. The first should be the bulk of your supplies, say 75% into a known bunker that can be managed by the caretaker. The other 25% needs to be placed in a secure unknown bunker ‘just in case’, since even the most trusted person can innocently betray’ their friend. One loose word or errant comment can be an issue.
If anyone has ever seen or owned a rental property that went vacant for more than a few months then it should be obvious that homes and surrounding property can become neglected and unmanageable very quickly. A meticulous and trusted caretaker can be a blessing.
How much to pay a caretaker? Normally, in high scale urban environment caretakers (whom some are required to be certified chefs and nanny’s) are paid a salary and benefits. However, this is not the case for rural caretaking positions. Most times pay is a barter of some kind such as free room and a small stipend for duties around the retreat. The owner I spoke with had adjusted his arrangement with his caretakers over several years. In the beginning the caretakers rent was a sum and then it was worked off on an hourly rate, but this was an issue because in the summer the owner had to pay out of pocket not only the monthly maintenance tab but hours back to the caretaker since in the summer there were many projects to do. In the winter the caretaker owed the owner money since there was little to do on the retreat and this arrangement quickly was replaced with a much simpler one calling for no rent and no minimum hours, just a detailed checklist of items that needed to be completed as the seasons changed.
Another issue that roars its’ head is that caretakers normally run a cycle and over a period of time either get burned out, become complacent (or think its’ their retreat), or just simply want to move on. In the beginning they will work like Siberian sled dogs and after a time they’ll work like a seasoned union worker (no offense of course, I was a union worker years back and I knew how to take a break too!). This can be elevated by having a clear and concise contract that lays out duties owed by both parties and remedies for all.
The caretaker does not have to part of your ‘group’. There are plenty of very trustworthy individuals and families that can be ignorant to what the properties real intended purpose is so as to keep your OPSEC in place. Just remember, should a perilous situation arise it is your duty to ask them to stay and if they so choose, to keep on hand enough supplies to take care of them for an extended period of time. If you think that upon retreat activation you’ll just send them on their way, maybe you ought to re-examine your own motives and be wary, since the possibility of them returning to harm you will be very high. On the flip side, maybe a member of your ‘group’ is in a position that they can take the position to make up for any shortfalls in their capital calls to purchase the property. There are many ways to find and retain a caretaker, be very discerning and choose carefully.
So folks, either while shopping for your retreat or once you’ve bought one; consider the merits of a caretaker. After seeing first hand how a caretaker can help a retreat owner the bottom line is that if one selects their caretaker carefully the benefits far outweigh the risks. God Bless, – TS in Idaho

Odds ‘n Sods:

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I recently heard from three different storage food vendors that they are getting deluged with orders. Apparently, the recent economic news and reports of grain shortages have worked together to cause people to suddenly want to lay in a supply of long term storage food. Both Mountain House and Alpen Aire now have orders backed up 45 to 60 days. Many storage food vendors have run out of stock, so expect to wait at least two months for shipment. I only expect the order backlogs to increase in coming months, so don’t dawdle. Prices are also likely to increase, since most of the packaging companies are changing prices “as needed” (based on cost increases) rather than the traditional annual price list updates. OBTW, I heard from Ready Made Resources that they still have some 6-can cases of Mountain House Freeze dried foods (with a 30+ year shelf life) in stock, and for just the next few weeks they are offering SurvivalBlog readers free shipping in the continental US on selected items. These include Hearty Beef Stew (case price: $180, free shipping) and either Spaghetti and Meat Sauce or Chicken and Rice (case price: $122, free shipping). They also sell the Alpen Aire SuperPak System, with enough food for two people for one year (or one person for two years). This is 1,200 pounds of freeze dried food for $5,825, (1% discount for paying by check. The normal retail is $6995!) Best of all, they are offering free shipping, which is a savings of around $735, depending on the shipping destination. For the SuperPak, allow 6 weeks for delivery.

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Eric flagged this: ‘Panic’ wheat buying across the US., and SF in Hawaii sent this: Food shortages loom as wheat crop shrinks and prices rise. Down to just a 10 week supply? It is a good thing that most SurvivalBlog readers stocked up on wheat more than a year ago, back when it was still relatively inexpensive.

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RBS sent this example of Nanny State stupidity: Guns Melted for Peace. For peace? Back in 1940, Mr. Haywood’s recent ancestors would probably have been thrilled to own any gun, since the country was in imminent risk of foreign invasion. What a difference a couple of generations of the soft life makes. OBTW, did those buffoons realize that the gun in the picture appears to be a very rare limited-production handmade Krausewerk Collectibles stainless steel .45 Luger, currently worth more than $100,000? Seeing it get the abrasive cut-off wheel treatment in the second photo was sickening. What a waste! Obviously, the Nanny State has run amok. OBTW, the only thing worse than a Nanny State is a Surveillance Nanny State. (The UK now has the highest number of CCTV cameras per capita in the world.) My advice to SurvivalBlog readers in the UK who value their freedom: Take the gap!

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Richard C. sent a link to an interesting do-it-yourself project: IR LEDs for Dazzling Closed Circuit Television Cameras

Jim’s Quote of the Day:

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“Of all tyrannies a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies.
The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” – C. S. Lewis

Are Simultaneous Inflation and Deflation Possible?

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I often have friends and clients ask me how I can talk about inflation and deflation in the same breath. They’ve asked: “But I thought that inflation and deflation were contradictory. How do you think that we could experience both inflation and deflation at the same time?”

Let me explain, starting with a bit of background: The fractional reserve banking system, based on usury, creates money. Here is a simplified example: Each time you deposit a $1,000 at your local bank, the bank then lends nearly all of that money out to someone else, charging interest. The bank holds just a small reserve (“the fraction”) to cover the their likely daily withdrawal demands. Now, say that $950 of your deposited money is borrowed by a business, to purchase raw materials. The seller of those materials will deposit the payment check into his own bank. But then that bank can again lend nearly all of it out. The process goes on and on. Thus, the banking system has a multiplier effect: With the present-day 10% cash reserve requirement in the US, each $1,000 that you deposit eventually becomes more than $7,000. These additional dollars are electronic dollars that are created out of thin air. This puts a lot of new money into circulation, so it is essentially inflationary. Everyone is happy, as long as they all can keep paying their interest. (But by its very nature, the interest-driven banking system creates winners and losers. The losers cannot pay the interest, and go bankrupt. This explains why so many businesses fail each year.) The bankers are the happiest of all, since they make money from everyone on virtually every transaction, in the form of interest and fees. They earn a tremendous amount of money on the float.

The multiplier effect is an almost magical process, and everything hums along nicely in good times. But then comes recession. You get laid off from work. Instead of depositing money every week, you start to withdraw money. Your bank must cover those withdrawals. Things get interesting: when deposits decline, the multiplier effect also works in reverse. The reverse multiplier effect is deflationary. By withdrawing $1,000 from your bank, you are effectively removing $7,000 from circulation. The foregoing example is oversimplified, but is a useful illustration.

Now let’s look at home mortgages. These have always been a cash cow for banks, because of both an un-backed currency and fractional reserve banking, we live in a chronically inflationary environment. Therefore, on average, price of houses go up more than they go down. And mortgages are “safe” because most people are consistent about making their monthly payments. They might miss a car payment or merely pay the minimum on their monthly credit card statement, but they will miss a house payment only in extremis. Nobody wants to lose the house where they live.

Today, in 2008, we are living in exceptional times.The price of suburban houses, fueled by artificially low interest rates for more than a decade, inflated for so long that they created a speculative mania. At the peak of the mania in 2005 and 2006, people bought houses that they couldn’t really afford with no intention of ever living in them. They saw how fast the market was rising, so they bought houses purely on speculation, to either rent them out, or to quickly re-sell them (“flip” them), for a tidy profit. They often knowingly signed up for adjustable rate mortgages (ARMs) with relatively low “teaser” introductory rates, scheduled to be reset to much higher rates–with monthly payments that then would be higher than the buyer could afford to pay. The buyers did so, with the expectation that they would sell their “spec” house before the interest rate reset. But then interest rates went up for a while, and stopped the market bubble from expanding. This pause pushed more houses onto the market. Seeing the turn in the market, the more astute speculators immediately put their spec and rental houses on the market. Almost overnight, there were 6 or 7 houses available for each buyer. As the inventory grew, inevitably prices fell. (As I often say, the law of supply and demand is inescapable.) More and more speculators, unable to sell their houses, fell behind on their payments. Banks started to foreclose. Those foreclosed properties have now started to hit the market, further flooding the supply of unsold houses. This has started a downward spiral of house prices, as the market naturally seeks equilibrium. Since macro market swings tend to be prolonged and over-exaggerated, I wouldn’t be surprised to see the prices of residential real estate decline 30 to 40% nationwide, and as much as 70% in the erstwhile “hot” coastal market areas that were grossly over-inflated. As the market nears bottom, there will be some genuine bargains available in three or four years. A similar process, I believe, will soon occur in the commercial real estate market, as the economy slows.

Starting last summer, the turn in the US residential housing market had a profound effect on the global credit market. The millions of subprime mortgages had been repackaged in lots of creative ways, and the indirect investors in these debt instruments naturally began to wonder what was backing them up. These investors were willing to turn a blind eye when prices were rising, but when the market started to turn, they got nervous. Some of them started pulling their money out of hedge funds that had visible exposure to subprime debt. Two hedge funds managed by Bear Stearns were some of the first to suffer. In more recent months, the subprime contagion has spread, as more and more investors have realized that they have no way of knowing what tangible assets represent surety for their loans. Again, the repeated aggregation and “repackaging” of these mortgage-backed securities created opacity, right when investors sought transparency. Then, to make matters work, it was revealed that the big credit rating firms such as Fitch, Moody’s, and Standard & Poors were in collusion with the mortgage bankers. In what amounted to kickbacks and bribery, the credit rating firms had agreed to artificially inflate the credit ratings of hedge funds and banks with residential mortgage-backed securities (RMBS) exposure. This destroyed the reputation of all banks and hedge trading houses –even those with sterling credit and that had no exposure to subprime of midprime mortgages. Once the rating scandal developed, even “AAA” rated investments became suspect. The end result was that the global credit market essentially shut down. Unable to assess their risk, investors stopped investing, and in turn, bankers stopped lending. This squeeze (remember the reverse multiplier effect that I mentioned?) limited cash to meet the banks withdrawal demands. Rather than declare bankruptcy, some of the hedge funds “temporarily” suspended investor redemptions. Meanwhile, they scrambled to have their parent companies and Uncle Sugar bail them out. This explains the multi-billion dollar “write-downs’ that you’ve seen mentioned in the newspapers.

So now we are in an environment where global credit has shut down to a trickle. The current credit contraction, in terms of its effect on the economy, is actually more severe than that of the 1930s. (The economy is now far more dependent on credit than it was in the past.) There is no liquidity, so there is no chance at all for “business as usual” to continue. But yet we still see the talking heads on CNBC pitching the latest “hot” stocks. Are they blind? Are they spending their weekends picking psychedelic mushrooms? In my estimation the stock market is presently primed for a collapse of epic proportions.

Overall, given the credit squeeze, we are in a situation that is similar to the early 1930s–which was a distinctly deflationary period. Rather than letting the credit collapse cause a worldwide depression, the central banks (including the Federal Reserve banking cartel in the US) are floating huge un-backed loans through creative mechanisms–such as the discount window–to any bank that asks for cash. Hundreds and hundreds of billions of dollars. But this is not enough to stem the tide of deflation. The pendulum has already started to swing in that direction, and it is gaining momentum. At this point, it is almost impossible to stop. All that Bernanke and Company can hope to do is soften the blow. Mark my words: There will be recession and massive economic dislocation. The recession may be deep and long enough to qualify as a bona fide depression.

Do you remember Jim Cramer’s public meltdown back in August of Aught Seven, when he was screaming “Open the discount window!” His tirade was a foreshadowing of the severity of the current crisis. He could see what was coming, and he briefly let the world know what he felt in the depth of his heart. (He has since then become less vociferous.) It is also noteworthy that at roughly the same time, Cramer also let slip his prediction for “upside down” home investors–the folks that I call contrapreneurs–when he recommended that they “just walk away.” In much the same way that I predicted back in early 2007, Jim Cramer saw the advent of what is now euphemistically called “Jingle Mail”.

Another key point that I’d like to emphasize is the difference between the availability of credit and the willingness to lend or invest. Helicopter Ben could keep lowering interest rates all the way to zero, but still not make the housing market turn around. As a point of reference, the Japanese lowered rates to zero in 2001, in an attempt to end their chronic recession that started in 1992. It didn’t work very well. In fact, they didn’t feel ready to raise rates back above zero for five years–until their economic indicators crawled back up into the black, in 2006. But this respite was apparently brief, since Japan once again appears to be sliding into recession. Their recession, by the way, got its start in 1991 when the over-inflated price of Tokyo real estate collapsed. It took 14 years for prices to start to recover. Gee, based on their experience, I guess that we can look forward to many fun-filled years ahead, here in the States.

Is the foregoing making things clear, or just muddying the waters? You might still be asking: “How I can talk about inflation and deflation in the same breath?” Here it is in a nutshell. Assets such as real estate can be deflating at the same time that commodity and consumer prices are inflating. Why? Because Mr. Bernanke and his cronies have an unlimited supply of paper and ink. The banks are now begging their pals in Washington for huge bailouts and “economic stimulus” though artificial incentives such as tax rebates–on the scale of what could amount to trillions of dollars. As I’ve mentioned before, bailouts and cash infusions that large cannot be financed solely by taxes and bonds. The government will be forced to monetize the additional debt. As I mentioned in a recent article, monetization is highly inflationary. It is not just gradual leverage like the fractional reserve banking multiplier effect I described. Rather, it is an almost instantaneous dump truck load (or as Chairman Ben would call it, a helicopter load) of cash, rapidly hitting the economy. This monetization will not go un-noticed. It will push up consumer and commodity prices and simultaneously push down the value of the US Dollar in international exchange.

So what comes next? In my estimation it will be a continuing downward spiral for house prices, declining commercial real estate prices, more hedge fund collapses, some enormous derivatives melt downs (that will likely spawn municipal bond failures), and bank runs. As the economy slows, the flow of funds going into banks will dry up–both as individual depositors get laid off, and as foreign investors decide to find safer places to put their money. A silent run has already been going on for months, at the institutional level. Meanwhile, the FDIC has identified a growing number of “problem” bank and they are quickly adding staff to be prepared for big bank runs. (Hmmmm…What do they know that we don’t know?) But the Generally Dumb Public (GDP) remains clueless. I predict that the private depositor bank runs will start shortly. I believe these runs will be started both by domestically-chartered banks and S&Ls, as well as by international banks that have branches in the US. They will put limitations on withdrawals and balance transfers, starting with home equity lines of credit. These withdrawal restrictions will make depositors nervous. Bank runs are 99% psychological. All that it will take is just one rumor stated on a talk radio show in just one major US city, and the avalanche will begin. It could begin very innocently, for example: “Bank of X says that I can’t draw any more money from my home equity line. But I know that my house is still worth $500,000, and I only paid $420,000 for it. So if its not my house that is causing it, then there must be some other trouble at the bank. I’m going to tell my friends to get their money out of Bank of X, right away.” The avalanche, once started, will be huge. It will take down virtually all the banks and S&Ls, regardless of their subprime and midprime exposure. Yes, the FDIC will make good on their long-standing promises, but that will take months to resolve. In the meantime, people will be short of cash. Even worse, this shortage of cash may mean that many people won’t be making their house payments. Which means even more delinquencies and foreclosures.

Be ready for bank runs. Even the mainstream media is catching on to the threat. Be ready for far-reaching “temporary” executive orders that limit withdrawals. Be ready for the bank run jitters to spill over into other effects that could escalate into veritable mass hysteria: stock market collapses, commodities spikes, and public outcry for “moratoriums”, “debt relief”, “suspensions”, “debt restructuring”, “stimulus packages”, “buy backs”, “grace periods”, “liquidity injections”, “collective stock purchases”, “public investing”, “bank holidays”, “open market operations”, “wage and price controls”, and huge “pump priming” public works programs. Brace yourself for an assortment of government edicts and massive market intervention hidden behind a huge smokescreen of Orwellian Newspeak and double talk. By the way, also be ready for restrictions on international currency movements–but only for us little guys with greenbacks–not for the financiers’ multimillion dollar wire transfers.

Depending on the outcome of the next presidential election, government reaction could range from merely “large”, to downright gargantuan. (The latter may go down in history as “Obama’s trillion dollar bailouts.”)

What is really needed is the abolition of fractional reserve banking and un-backed fiat currencies. A monetary and banking system based on usury is the root of the problem. Debt-based money and currency inflation (a hidden from of taxation) are both parasitic at the core. We need honest (specie-backed) currency, and traditional warehouse banking. In the long run, honest money will prevail. The recent run-up of crude oil above $100 a barrel, spot gold above $955 per ounce, and spot silver above $19.25 per ounce–all time highs–are indicative that the market recognizes the real value of the US Dollar. Incidentally, I also think that the folks at WIR Bank in Basel, Switzerland have had the right idea for 70 years, through the use of private credit clearing circles.

Letter Re: Building a Kalashnikov at Home

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Dear Jim,
As you know, it’s legal in America to build your own standard firearm for personal use [by manufacturing your own receiver.] One of the best ways to get a discreet, legal, off-paper SHTF rifle is an imported de-milled Kalashnikov (AK) kit, with a new, home-built receiver.

Take a look at this web site. His heat treating and machine and tool instructions are accurate. This is the best site I’ve seen on the subject. I was able to tear down a Romanian kit and assemble a working AK in about 8 hours. Beginners will likely need a couple of weekends. – Michael Z. Williamson

Odds ‘n Sods:

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Billy S. found this piece: Is Zimbabwe-style Inflation Coming to America? $500,000 for a cigarette?

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Courtesy of our friend Eric comes this from The Seattle Times: Wheat Hits Record on US Inventory Report

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PMac found us a “Fun little list of Dream BOVs

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John S. suggested the economic commentary in video clip of Glenn Beck’s interview of Jonah Goldberg, the author of the book “Liberal Fascism”

Jim’s Quote of the Day:

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"In our recent survey of the African battlefields, we discovered more positively every time that it was not Boer marksmanship that made the difference in those wars so much as Boer gun handling. Contrary to widespread belief, the Boers did not do significant damage at great range, but when they got into a firing position at a reasonable range, they shot carefully in order to hit rather than by volley [fire] in order to scare. It seems apparent that these men, while good shots, were not extraordinary shots. What matters is that when they came on to shoot they used their individual weapons purposefully rather than ostentatiously. Carefully aimed rifle fire at short range is overwhelmingly demoralizing. What happens, however, is as the range shortens improperly organized warriors tend to shoot carelessly. The difference is decisive." – The Late Col. Jeff Cooper

Note from JWR:

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The high bid in the current SurvivalBlog Benefit Auction lot is now at $80. The auction is for three items: a 120 VAC/12 VDC BedFan Personal Cooling System (a $99 retail value), kindly donated by the manufacturer, a Thieves Oil Start Living Kit (a $161 retail value) donated by Ready Made Resources, and a copy of the latest edition of “The Encyclopedia of Country Living” by the late Carla Emery (a $32 retail value). The auction ends on March 15th. Please e-mail us your bids, in $10 increments.

Letter Re: Drastic Changes in the Global Derivatives Market–Be Ready for the Mother of All Bailouts

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Scroll down this article to the link to the Quarterly Derivatives Fact Sheet. It shows Citi[Bank] exposed to $3 trillion and J.P. Morgan at $7.8 trillion [in OTC derivatives.]

Continue to the bottom of the piece for “Intelligence Czar Can Waive SEC Rules.” It looks like the Plunge Protection Team is operating in overdrive.

Eisenhower warned of “The military-industrial complex”. What about the corporate-government complex? This looks like something Il Duce would have been proud of.

Best wishes for our free enterprise system, – William

JWR Replies: I’m glad to see that some readers took the time to look through the soon-to-be defunct Economic Indicators page link that I provided earlier this month. The executive summary for the Q3 2007 Quarterly Derivatives Fact Sheet mentions “U.S. commercial banks generated $2.3 billion in revenues trading cash and derivative instruments in the third quarter of 2007, down 62% from the $6.2 billion reported in the second quarter. This decline is attributed largely to the difficult trading environment in credit markets.” That is putting it mildly!

In more recent months, the banking community has been fleeing the derivatives market like a bunch of scalded cats. Since August, the volume of new OTC derivatives has dropped by a whopping 97%. But the scary thought is that there are still trillions of dollars in banking derivative bets in play, with very risky CDS hedges still active in very large numbers. Many of these contracts will not expires for years. In essence, many of the outstanding derivatives were essentially “borrowing short and lending long.” Any time that there is a big swing in interest rates or credit expansion/contraction, such traders are at risk of getting murdered. Every derivative has party and a counterparty. If one party goes belly-up during the life of the contract, there is a huge naked exposure.

Yesterday, rumors been circulating that the Bank of America (BofA) and other bankers (including some from Switzerland) are very quietly courting the US congress, seeking a big bailout. Here it comes, folks! As I mentioned previously, BofA recently bailed out Countrywide, to the tune of $4 billion, partly with taxpayer dollars. (One reason cited was that Countrywide was on the hook to BofA for some huge derivative plays, and that by buying them out, BofA effectively became both party and counterparty which zeroed out that derivative paper.)

Now, it seems, BofA and the other banksters expects Mr. and Mrs. US Taxpayer to bail them all out of their exposure to subprime-backed bad paper! I have warned you, folks: Get ready for the mother of all bailouts. As I’ve said before, there are not nearly enough tax dollars or foreign investor dollars to bankroll these gargantuan bailout. It is very likely that the Federal Reserve will be forced to monetize this debt–effectively creating money out of thin air. This will be outrageously inflationary. Monetization is something that I mention when I wrote the opening chapter of my novel “Patriots: Surviving the Coming Collapse”, back in the winter of 1990. But I never anticipated Federal over-spending on this scale. If the bailouts take place the way that I predict, we are talking about many hundreds of billions of dollars–and possibly even trillions of dollars–by the time all of said and done. Warm up the helicopters, Ben!

Dear readers, I must warn you once again: Get out of any investments other than mining shares that are US dollar-denominated, and into tangibles, pronto! Got Ammo? Got grub?

Two Letters Re: Thoughts on Overseas Retreat Destinations

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I concur with David in Israel regarding overseas retreat destinations. Before any of this discussion was brought up for survival locations, I entertained the idea of relocating to New Zealand, but not for survival reasons. As much as I am attracted there, I rule it out now. I also served in the Middle East as a soldier and served in Moscow, in a different capacity. I spoke fluent Russian at that time. Residing in a foreign country is just that, foreign. Don’t kid yourself, in a real situation, you don’t have much of a chance, even with family. Your best bet is to stay here and circle the wagons. Plus, since you’re reading this blog, we ‘survivalists’ all need you here so that we can help each other. – Flhspete


Hi James,
I disagree with Tonga as a retreat location. I spent six weeks sailing through and visiting most of the islands from the Ha’apai group south including Lifuka, Oua, Nomuka, Kelfesia and Nuku Alofa. These islands are small, low lying and hit with tropical storms, including cyclones almost yearly. There is severe lack of fresh water on most islands to the point that the Tongan Navy has to supply some islanders with fresh water by boat. There is no way for most of the islands to be self sustaining for more than a few dozen people without resorting to “the other white meat”. Guns are heavily restricted, and there were recent riots. The place is ripe for a coup.

Sail or fly there for a visit. You will have fun as the people are very friendly and the water sports are very good. But don’t even consider it for a retreat location. A far better choice would be the Marquesas islands. Even though they are French controlled, the islands are very mountainous, sparsely populated and have rich soil. They are also out of most cyclone paths. Regards, – Bert W.

JWR Replies: Most of the islands in the Marquesas have unreliable rains, and hence are overall worse than Tonga, in terms of water availability. Like the rest of French Polynesia, residents of the Marquesas are subject to some draconian gun control laws, including universal registration. For that reason, I don’t recommend any of the French-administered islands. At least Tonga is an independent, sovereign nation. I included it on the list mainly because of its reputation as a tax haven.

Letter Re: G.O.O.D. by Canoe or Other Boat

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I have been reading your blog for some time, thanks for all the great info.

One idea that I have not heard much about is using medium size rivers as a way to Get Out of Dodge (G.O.O.D.). I know that it would require just the correct locations for both your work as well as your retreat. But a lot of large cities are near some sort of river or lake. In the best case if you work or live upstream from your retreat you could have a small flat bottom or a canoe stored some place to get back to your retreat. I am always surprised how quietly you can move in a canoe. And if you make your move at night you would be even harder to detect. If your retreat is a short hike from the river it could work out quite well. If you live or work down stream you could paddle back upstream or you may want to look at a small trolling motor. These little electric motors are very quiet and the deep cycle battery could then be used with your solar panels once you get to your safe place. If you are lucky you may be able to use this waterway as a way to travel after things hit the fan. The drawback would be that others can use it as well and may be using it for bad reasons. Maybe some of the other readers could add some ideas of their own. I know traveling by canoe creates some problems of its own but it may be better than walking down the road when they are full of cars that are stalled out or just gridlocked. Thanks, – Korey

#1 Son Replies: I have given some thought to people Getting Out of Dodge with a canoe or small boat, since we do quite a bit of canoeing here at the ranch. If you could do it overnight, it might work. As soon as it starts getting light, you might have trouble. Firstly, anyone padding along in a canoe makes a perfect target. He’s not moving too fast, and has nowhere to hide. Since this will be the day after TEOTWAWKI many people might go into WDNNSB Mode or might think that they can shoot up whomever they please. Even if the savages don’t kill you outright, they might shoot a few holes in your canoe for fun.

Odds ‘n Sods:

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