Note from JWR:

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Today we present the final entry for Round 17 of the SurvivalBlog non-fiction writing contest. The writer of the best non-fiction article will win two valuable four day “gray” transferable Front Sight course certificates. (Worth up to $4,000!) Second prize is a copy of my “Rawles Gets You Ready” preparedness course, generously donated by Jake Stafford of Arbogast Publishing. Round 18 (which runs through the end of September) begins tomorrow, so get busy writing and e-mail us your entries. Remember that articles that relate practical “how to” skills for survival will have an advantage in the judging.

Preparing for a Dam Breach, by A.B.S.

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Many of my fellow Tennesseans awoke to headlines the other day that two of the Corp of Engineers dams in our area that are supposed to protect the people from floods and provide water and electricity are in danger of failure. Built more than 50 years ago, the Wolf Creek Dam and the Center Hill Dam overlook several hundred thousand people in central Tennessee, and are leaking significantly. The Wolf Creek Dam has been classified as being at high risk of collapse.

The Wolf Creek Dam is located on the Cumberland River 190 miles up stream from Nashville. The dam has had problems for more than a year and last year, officials determined repairs would need to be made to the dam because of leaks in and around it. The dam holds back 100+ miles of the Cumberland River, near Jamestown in south central Kentucky. Now, the dam is weakening and immediate action is being taken to stop what could be a catastrophic flood. The water level was dropped and more testing was done on the dam. It is the results of those tests that caused officials to put the dam at high risk of failure, though they state failure isn’t considered eminent. A gentleman I know that works for the Corps has stated that large chunks of masonry the size of small cars fall off the dam weekly, so I choose to remain skeptical about the Corps position.

If the Wolf Creek Dam were to break, starting 100+ miles up the Cumberland River in Jamestown, Kentucky, the town of Celina, Tennessee would be flooded first and most likely wiped out completely. Then, water would flow downstream toward Carthage and Old Hickory Lake impacting the towns of Gallatin, Hendersonville, Mt. Juliet and Old Hickory before flooding downtown Nashville’s riverfront area under as much as 30 to 50 feet of water. While Nashville would have some warning, many of the smaller towns mentioned would be impacted so quickly that warnings would be ineffective. The area impacted would be massive.

This has been a wake-up call for many citizens in our area. For many the threat of a major catastrophe was what it took for them to finally learn they need to be prepared for potential emergencies. What was startling for many of our citizens was that these are major impoundments maintained by the Federal government. While this was a wake-up call about the possible threat from major impoundments, most people still are not aware of smaller private and municipal impoundments that potentially pose a threat every day. Many of these small dams have ruptured in the past century leading to death and destruction on a massive scale. Some examples are the Johnstown, Pennsylvania flood of 1889 that killed an estimated 2,300 people, the Baldwin Hills Reservoir in California in 1951, and the privately owned plantation dam that broke near Kilauea, Hawaii in 2006. So what can be done to better protect you and your?

First, make a point to become aware of any and all dams that may pose a threat in your area. Even small farm pond dams can cause significant flash flooding if they breach. Floods, especially flash floods, whether from rain or dam breaches, kill more people each year than hurricanes, tornadoes, wind storms or lightning. About 60% of all flood deaths are people in vehicles that moving water sweeps away. Experts advise you not to drive or wade into flood water at all, especially if you can’t see the bottom. Water over a road, no matter how deep, can hide washed-out pavement. As little as six inches of moving water is enough to float a small car and carry it away.

Always prepare for problems before they happen. When possible build your home on high ground, and if possible never downstream from a dam. During the winter of 1991 a dam on a five acre impoundment ruptured a few miles from my home. Luckily the people a couple of miles downhill were warned and escaped harm, but their homes were washed off their foundations and across US Highway 70, which was a couple of hundred feet away. These homes were on high ground, but someone built a relatively small pond on even higher ground that had a devastating effect.

Get a copy of the 500 and 1,000 year flood zone maps for your area. These will tell you the most likely route the water will take following a catastrophic breach. They will also point out the likely flood areas from heavy rainfall or snow-melt. These are useful tools, but as shown in the previous paragraph, don’t get overconfident. When possible don’t build in these areas. It still amazes me how many people will build in the same location after floods have wiped out their homes on multiple occasions. I know some may not have a choice, but this isn’t always true.

Get a weather radio. If a large dam breaks, warnings will be broadcast through the emergency channels, but don’t count on this when dealing with smaller dams. If a warning comes down that a breach is about to happen, get out. I know many of us including myself don’t really trust the “authorities”, but I think in these cases the wise thing to do is “bug out” and get to a safe location, then assess if it was the proper mode of action later. To do this, plan and scout several potential escape routes. Most people will take the route they are most familiar with, and it always seems to be the same route, which turns the road into a parking lot. Often smaller less well known roads can get you out of the area faster. In my area the local emergency personnel are encouraged to learn the local off road trails in case something happens to the main roads. This would also be advisable for the general public, as this may be the only way out. Set up a meeting place that all the members of your family or circle know about as a rally point. It is also a good idea to designate a family member or friend in another county or state as a contact person. This is so anyone who can’t arrive at the rally point can check in with their status and location. We saw this happening many times after the tsunami in Indonesia as many tourists became separated from their parties. Make sure everyone has the number, email address, or whatever. This information should be memorized in case they become separated from their wallet, date-book, etc.

Sometimes the opportunity to evacuate is lost through hesitation or just bad luck. In these cases one should try to find an area to “evacuate vertically”. In many cases this means sturdy built, tall buildings, towers, or hopefully a mountain or hill. If the water approaches too rapidly, this may simply be a tree. Again, scout around to see what would be available if something were to happen.

If you have to escape a flood or any situation it is a good idea to have a emergency pack with sufficient supplies ready. This may include food and water, first aid gear, medications, a change of clothes, communications gear, fire starting supplies, and in my case a spare set of eye-glasses. I also suggest having a cache of supplies in a secure location, just in case you need them.
Hopefully nothing like this will befall you, but being prepared could mean the difference between life and death should the worst ever happen

Letter Re: Converting Gas Engine Vehicles to Propane

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James;
I haven’t seen much discussion to date in SurvivalBlog on Propane-burning vehicles as a retreat / bug out / EMP-proof vehicle. From what I understand, Propane combusting vehicles are not as popular in the USA as they have been in Canada, not to say we have a large amount of them running on streets, however, they are here and they are available. I’m looking at a EMP proof vehicle right now which happens to be a 1985 Chevy, 4×4, 1/2-Ton which has been converted to propane. Are their any issues with this that you may or may not be aware of as an EMP proof convertible vehicle?

Propane is currently cheaper [per gallon] than gasoline and as you know stores much longer than that of Gasoline or [even] Diesel. If it can be done, others should start looking that way. Aside from the small amount of loss in power, the pros could far out weigh the cons providing they can be EMP-proofed, which I don’t know anything about when it comes to propane vehicles. Please advise. Thanks in advance. – Dan S.

JWR Replies: Because propane might be hard to come by “on the road”, I don’t recommend propane for bug-out vehicles, unless your retreat is within range of one tank of fuel. But propane is ideal for trucks and tractors that will not often leave your retreat property. I prefer converting pickups rather than SUVs, since propane fuel tanks are relatively large. For some details, see this blog piece that I posted in June.

A 1985 Chevy will have an electronic ignition system. But it is not too difficult to retrofit a traditional ignition system (with rotor, points, and condenser) at the same time that the fuel and Carburetion systems are converted to propane. (Owners of newer vehicles should be advised that there are other microprocessors present in critical subsystems. (Most notably solid state voltage regulators and components in the fuel and transmission systems that should also be retrofitted to make a vehicle “EMP proof”).

There are some issues involving payment of road taxes, in some states, when converting to propane, If it were not for that, I believe that propane conversions would be much more popular. (Consult your state and local laws before doing a conversion.)

Propane or “GNC” (Gaz naturel comprimé) conversions are popular in many countries. For the sake of versatility and flexibility, I highly recommend that one of the vehicles at your retreat can be run on propane. With today’s soaring gasoline and diesel prices, you will have the added benefit of buying fuel that is less expensive, per BTU. (At least at the present day.)

Odds ‘n Sods:

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Andrew Hankinson, a journalist at FHM magazine in the UK, e-mailed us to mention that he is looking for a survivalist in the US to spend a few days with. There would also be a photographer. He’s looking for someone who lives somewhere remote, hopefully in a survivalist community. The idea is to sample life as a survivalist. It is a serious piece coming on the back of much Peak Oil debate in the UK. If anyone could help – it would need to happen sometime in early August. lease contact him via e-mail.

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Cheryl N. flagged this from The Telegraph: Bigger Than Roosevelt’s New Deal: The Fannie and Freddie Bailout, as well as this from The Mogambo Guru: The Problems-Solving Paulson Package

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Reader KT mentioned a mobile “under the hood” arc welding generator made by Zena Corporation.

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D.A.B. found this article about DARPA’s Big Dog robotics program.

Note from JWR:

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The high bid in the current SurvivalBlog Benefit Auction is $500. This auction is for a big mixed lot: a NukAlert radiation detector, donated by KI4U–a $160 value), a DVD of 480 E-books on Alternative Energy (donated by WK Books–a $25 value), and the following package of survival gear all kindly donated by CampingSurvival.com: One case of MREs, one pack of water purifications tablets, a bottle of colloidal silver, a fire starter, a bottle of potassium iodate tablets, an emergency dental kit, a pack of “Shower in a bag” bath wipes, and one messenger bag to pack it in. The auction ends on August 15, 2008. Please e-mail us your bid.

Letter Re: Advice on Versatile Pasture Fencing

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Mr. & Mrs. Rawles,
Following the guidance in your “Rawles on Retreats and Relocation” book, I. recently bought a 20 acre retreat in southeastern Oregon that backs up to BLM land, with some good ground for pasturing [livestock].(But most [of it] is too rocky for cutting hay.) There is an old fruit/nut orchard with some amazing big trees. (It is half of what was originally an 1880s homestead.) There is both a well and spring. The spring only puts out 1.3 gallons per minute, but I plan to have it fill a big cistern that I’m soon to be building. We might be able to get a [grazing] permit on the [adjoining] BLM land. I’m not sure what sort of animals we will be getting (sheep, cattle, or whatnot). We might also get a horse.

The property has some old falling-down fences (three strands of old rusty barbed wire). I’m planning to rip that out and start fresh. What would you recommend for fencing that’ll “do it all”? What kind of posts, and [at] what spacing? What is the best way to stretch a fence [to proper tension]? Do you like tube-type gates?

Thanks for your blog and books. They’ve put me on the true path to self-sufficient style living. Enough skating, on my part: My 10 Cent Challenge [voluntary subscription] payment for three years will be arriving soon, in silver coins. You’ve earned it! Thx and God Bless You and Your Family, – Phil in Oregon

JWR Replies: My personal favorite for versatility is 47″ tall variable mesh woven field fencing, tensioned on six foot heavy duty studded T-posts that are spaced 10 to12 feet apart. This will give you a fence that will hold sheep, some breeds of goats, most cattle, llamas, alpacas, donkeys, horses, mules, and more.

In my experience, used, creosote-soaked railroad ties work fine for H-braces, anchor braces, and corner braces. To tension the diagonal wires for the H-braces, I prefer to use ratchet tensioners, rather than the traditional”twisting stick” windlass arrangement. Be sure to wear gloves to avoid skin contact with the creosote, which is toxic

When building a fence in rocky soil, a seven foot long plain digging bar with hardened tips will be indispensable.

If you get into an extremely rocky portion of ground along the intended fence line, you can construct above-ground “rock boxes”–the type that you’ve probably seen in eastern Oregon. These are cylinders of woven wire between 30 and 40 inches in diameter and four feet tall that you will fill with rocks anywhere from fist-size to bowling ball-size. Because the fence will have to be tensioned, make sure that side of the rock box that will contact the main fence wire has no rock tips projecting through the wire mesh that might hang up the main fence wire as it slides by, during tensioning.

Horses, in particular, tend to be hard on woven wire fences. Especially in small pastures, they’ll often lean their necks over them, reaching for grass on the other side. You can add a “hot” wire at the top of the fence that is energized with a DC charger. (Such as those made by Parmak–like we use here at the Rawles Ranch.) In anticipation of grid-down situations, a solar-powered fence charger is best.

I do like steel tube gates. If you strap on (or weld/braze on) some woven wire or a hog panel, the gate will become “sheep tight.”

For the best security, you should mount the hinge pins with at least one pointing upward and one pointing downward. Otherwise, an intruder can simply lift a locked gate off of its hinge pins. You can also tack weld the nuts onto both the bolt threads and the gate’s hinge sleeve assemblies to prevent them from being disassembled.

Tensioning a woven wire fence can best be accomplished with a 48″ “toothed” bar to hold the woven wire. These can either be bought factory made, or custom fabricated in your home welding shop. But for those without welding equipment, here is a simple expedient that can be made with wood, carriage bolts, and chain: Cut a 52-inch long pair of 2x4s, and install a row of protruding screws down the length of one of the wide sides. Drill a row of shallow holes in the other board, to accept the screw heads from the other board. (Like the teeth on a commercially-made bar, these screws will evenly distribute the stress on the full height of the woven wire.) Drill through holes and position 6″ long 3/8″-inch carriage bolts through both boards at both ends. Sandwich the woven wire between the two boards. Attach chains to the carriage bolts, and then connect the chains to a “come-along” (ratchet cable hoist). If no large trees are available as an anchor for the tensioning, then the towing hitch receiver on a parked large pickup truck will suffice. Proviso: All of the usual safety rules when working with come-alongs apply!

I am confident that most SurvivalBlog readers heeded the advice that I gave on May 19th. Pardon me for being repetitious, but this is important:

“Of immediate concern is that the increased wholesale price of steel will soon work its way down to the consumer level. So if you are certain about any fencing projects at your retreat in the next two or three years, then buy the materials in advance. (Rolls of woven wire, rolls of barbed wire, smooth wire, T-posts, staples, et cetera.) Consider it part of your Alpha Strategy.”

This same advice or course applies to tube gates and modular steel stock panels. The increased cost of diesel fuel for trucking and galloping steel prices may soon work together to double or triple the retail price of heavy and bulky steel items such as tube gates and stock panels. (And, as I mentioned before, gun vaults.) If you find that you have “missed the boat” on price increases in your local area, then shop for a used gates and panels, by placing a newspaper or Craigslist want ad. As I’ve written before, the clock is ticking.

Letter Re: Opening a Non-Dollar Denominated Offshore Bank Account

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Mr. Rawles,
My wife and I have a Certificate of Deposit (CD) at 5.25% of $425,000 that will be maturing in December. She is all fired-up to travel to Canada in September, and with an interest-only withdrawal using $20, 000 to open bank account using converted US Dollars [(USDs) to another currency] as a hedge against the falling value of the USD.

I have a bad feeling about this.

From reading your site for several months, I suspect that you would suggest buying tangibles but, I fear that my wife will not agree to spending that kind of money on tangibles.

What are your comments regarding direct investment in foreign currency?

JWR Replies: Since you have that much money to shelter, an offshore account has some merit. Just make sure the grand total that you are carrying is less than $10,000 each and wearing or carrying no jewelry (aside from wedding bands) or other items such as optics, collectibles, gemstones, or flash memory cards that could be deemed “liquid/cash equivalent” assets. (The $10,000 reporting limit for Currency Transaction Reports (CTRs), I’ve been told, is practically sacrosanct, and the IRS has no sense of humor.) Also, be advised that multiple trips abroad carrying cash might be deemed to be “structuring.”

Try to find a bank that will open accounts denominated in a variety of foreign currencies. In my opinion, in the long run Swiss Francs will beat Euros and Canadian dollars by a huge margin.

If you can’t convince your wife to buy practical tangibles (guns, tools, etc.) then at least try to get her to see the wisdom of buying either A.) Productive farm land, at a distressed price, or B.) Gold during a dip in what is an otherwise a secular bull market.

I must admit that the intricacies of this subject go far beyond my own expertise. For details on the wide variety of offshore accounts available, refer to the Sovereign Society’s Offshore A-Letter.

Odds ‘n Sods:

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JT found us this: Bad News and Bank Runs. Talk about more “stimulus checks”, and blaming “blogs” for “misinformation” that fed people’s fears. And reader Cheryl N. found two articles that tie in nicely: FDIC Smoke & Mirrors and US National Debt Limit Raised Ahead of Budget Busting Bailout Legislation. (Cheryl’s comment: “Paulson’s Bazooka will be locked and loaded with enough firepower to blow what’s left of our economy into the dustbin of history. “)

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The WRSA has another “Grid-Down Medical Course” scheduled soon. This one will be in Everett, Washington, September 12-14. Their training is inexpensive, and highly recommended. This is also a great way to bump into fellow SurvivalBlog readers. (Wear your SurvivalBlog hat or t-shirt!) For those of you living in the Eastern United States, Medical Corps has a “Medical Response in a Hostile Environment” course scheduled for that same weekend, and they may still have a few seats available.

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Reader Michael H. recommended some economic commentary from Bob Chapman: Paper Sold To Pools Of Liquidity

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Just in time for the Olympics, Recombinomics reports an outbreak of an unidentified hemorrhagic fever in China’s Shandong Province. After reading the summary, click on the ProMED link in the article for more information. (A hat tip to “Cyberiot”)

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JT also spotted this: Merrill to Sell $8.5 Billion of Stock, Unload CDOs. The article describes the shell game the banksters are playing with their worthless CDOs.

Letter Re: More Observations on the Aftermath of Hurricane Dolly

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Dear JWR and Memsahib,
On June 30, in a response to “Help with a Non-Preparedness Minded Spouse”, I shared the thoughts of like-minded men in a group meeting regularly with my husband to prepare for survival needs. Due to the lack of female companionship I was experiencing, and the frustration my husband’s buddies were experiencing, I offered to start a “Ladies Auxiliary” group to motivate the wives to see the value of preparing for emergency survival. Living near the coast of Texas provides us with the challenge of hurricanes each summer, so that became the topic for personal and immediate preparedness.

We had NOAA hurricane tracking maps, National Hurricane Center Weather Service information, hurricane terminology lists, emergency preparedness time lines, steps for a family plan, lists for emergency/bug out kits and first aid kits, what to do before, during and after the storm, links to pet plans, and how to secure your home, help for the elderly, online vulnerability awareness of communities, plans for escape routes, and the Contraflow Plan for one way traffic during evacuation, all in binders with appropriate tabs. At the back of each binder, I placed a print out from the well-known Red Cross web site which showed kits for general emergency equipment such as three day pack, AM/FM shortwave radios with flashlights, and cell phone chargers. There was an article on how to put together a 72 hour kit and another on clarifying and purifying water. The final article was on dangers in the world right now. (The Internet is an invaluable source of information.)

I sent out invitations, planned snacks, set out chairs, provided TV trays to set binders on for note taking, sent out my husband for hi-liters, then waited in hopes of an hour or so of introductions and preparedness discussion. About half of my ladies came and they stayed for four hours of in-depth planning!! The ladies who couldn’t come that day came the following week and also stayed for four hours, with the same results!

The short story is that three days after meeting with my latest group of ladies, the coast of Texas was visited by Hurricane Dolly. Like everyone else in the area, we were busy boarding up windows, filling the bathtub with water, bringing out the flashlights, batteries and radios. The lights went out and we were off the grid for about 22 hours. We got our generator to working for a window AC unit and refrigerator and were able to connect a neighbor’s fridge until the lights were back on. We lost one tree branch and developed a small ceiling leak. A neighbor came by and prayed with my husband for protection before the storm. We were spared from local flooding but have seen piles of branches all over town. Unfortunately, other towns have had serious flooding and property damage.

I was able to disperse additional booklets to half of my ladies to file in a front pocket of their binders before Dolly hit. The new booklets are sealed in waterproof Ziploc bags and have charts that I wish I had when I was first married. The charts provide space for valuable information on certificates for births, marriage, insurance, important phone numbers, emergency items, banking, safe deposit box, investments, medical info, property inventory, Social Security, military, adoptions, etc.

I have been able to speak to one of my ladies who couldn’t be thankful enough for the planning we did. She stockpiled water in her home and tried to spread the word in advance to everyone she knew. Unfortunately, she told me that some did not prepare and now have serious flooding problems, and have limited drinking water. Hurricane Dolly came upon us very quickly and those who did not prepare early are having serious problems. FEMA is waiting until cities can finish local evaluations before they move in for assistance.

So [ladies and] gentlemen, don’t give up if you or your friends have a “Non-preparedness Minded Spouse”! Consider the natural hazards your area is prone to experience, such as: earthquakes, tornadoes, floods, winter storms, volcanoes, landslides, fires, wildfires, hurricanes, thunderstorms and lightning, hazardous materials, etc. Begin collecting information addressing safety needs in your own locale and gently take your spouse and family on a fact sharing mission to prepare in a very real, practical way to protect your loved ones if a natural disaster should hit your area. From there you may be able to move on to even greater plans before something permanent hits the fan. Good Luck! – Charlotte R.

Four Letters Re: Questions from A Not-Quite Convinced Reader

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Jim,

I was intrigued by Robert C.’s recent letter which questions why we should prepare. I think he has a great question there, and one which deserves further discussion.

I put together a personal ‘Top Five’ I’d like to share: Top Five Reasons To Be Preparedness Oriented:

5) It’s simply a natural extension of growing up — understanding and fulfilling our responsibilities. As babies we have all of our basic needs provided for us by our parents. As we mature, we all begin to take some responsibility for our own needs by doing things like getting an education; learning how to cook; learning a trade; working for money which we trade for food, shelter, and other needs; etc.

Lots of people stop in their development when they get to a point where their current personal activities interface with their current societal and cultural infrastructure in a way that meets their current needs. Part of this is their current revenue supports desired ‘quality of life’, but it’s really more than that. The problem is that current personal activities (including but not limited to career); the interface to society (including but not limited to economy, government, and society); and current needs (including but not limited to shelter, water and food) are all dynamic.

Some people experience a moment of insight during their development that says, “Hey, if xyz changes I’m going to be in trouble. I won’t be able to <fill-in-the-blank> so I had better be ready, just in case!” there this person realizes, “Wow, what else have I been taking for granted in a way that might adversely affect my ability to achieve my responsibilities?”

Preparedness living in this context is the realization that as adults, and in particular as heads of households, we must be able to provide for all the basic needs of our families without relying on preconceived assumptions about what others will provide for us.

4) Because we’re not mentally ill. We have uncontrolled wildfires at times that threaten life and property, right? Sometimes we have earthquakes, right? sometimes have tornados, right? Hurricanes? Flooding? Hard Winters? Crop failures? Food contamination? Do heavy winds sometimes knock-down power lines? Do heavy snows sometimes preclude me from driving into town to get a pizza? Do we ever have banking failures? Do we sometimes experience economic recession? Do some entire industries (like manufacturing) get ‘outsourced’ threatening job security? If I’m not mistaken we’ve had all these in the USA in just the last 10 years, right?

On a less frequent basis do cultures experience wars? Pandemics? Great Depressions? Government collapse/restructuring? Genocide? Haven’t all these happened on a world scale in the last 50 years?

To deny these things happen would be diagnostic of a mental illness. They do happen. Preparedness orientation is simply the acknowledgement of this truth, coupled with the will to act.

3) For the same reasons we wear seat belts when we drive our cars; have fire extinguishers in our kitchens; carry health insurance for ourselves and our families; and buy life insurance. It’s not that we want to be involved in motor vehicle accidents; experience kitchen fires; have medical problems; nor die young leaving a wife and children behind — we just recognize that such things are possible and seek to mitigate these dangers.

2) In the end, we will either be right — there was a need for preparedness and we were ready to face all challenges; or we will be pleasantly surprised — there was no need to prepare and live through a time of hardship. Either way, we win!

1) In obedience to God who tells us that all things will not continue as they have in the past; and that we should: Provide for our families. Arm ourselves. Not be destroyed for lack of wisdom. Keep oil in our lamps. – Keith C.

 

Jim,
Please refer the reader back to the link you and others have posted on the Internet over the past year to “Topsoil and Civilization” : “Civilized man has marched across the face of the earth and left a desert in his footprints.” What more documented evidence should he need after that? Here’s my Cliff-notes version of the problem
and solution
(with some more useful links). – Thanks, – Chris

 

Hi Jim:
It seems an odd request from the poster today that he wants someone to convince him to prepare to take care of himself. He probably has never faced being unemployed? Never faced any family member of friend being unemployed? Too bad as that would have given him the understanding of how much on his own he can be. He likes to have his trash collected. In my community I have to pay the trash collection service to take away my trash. It doesn’t come for free. I have to pay for my water to come into my home. That water station uses energy and with energy costs rising — that water is going to cost more money.

Why prepare? Well, read what even the US government and the global governments are urging citizens to do to to help themselves. They are telling folks to prepare to help themselves. Hint: the government is not going to be their immediately on a white horse to bring you your groceries, haul away your trash, etc.

Any historic events to support a need for being prepared? Good grief! Has this person being residing in a cave all of his life? Where to begin — 1) The dot.com bust; 2) the current housing bust; 3) the financial bust globally in sub-primes; 4) the 1980s; 5) 1970s (stagflation); 6) WWII — goods were rationed and quality went down (read historic newspapers — you have to help educate yourself); 7) the Great Depression — shortages of food supplies (people hungry in some areas while farmers burned potatoes in other areas; droughts so bad that dust clouds rolled from Kansas all the way to Washington DC); 8) The Panic of 1907. Crawl out of under the rock and spend some time reading! – Cynthia W.

 

Dear Jim:
Reader Robert C. wrote: “There have been depressions before, and the fall of civilizations, but as far as I can tell, nothing on the scale of what you seem to talk about. Do you have any good historical examples I could look into?”

Well, we have been very fortunate in the US to have only experienced one “Great” Depression, and have kept all our recent wars overseas, but you don’t have to look too far abroad for examples of depressions and war that put the Four Horsemen of the Apocalypse back in the saddle.

Just a few highlights:
Try living in Germany 1914 to 1945: war, famine, hyperinflation, depression, Nazi takeover, war, concentration camps, urban saturation bombing… The Russians’ 20th century looks even worse… war, Communist coup, farm “collectivization”, the forced starvation of millions, Stalin’s purges/mass murder, war, German invasion… China 1920 to 1970: civil war, Japanese invasion, Communist takeover, starvation, Mao’s purges/mass murder…

Legendary Wall Street investor Barton Biggs has a new book Wealth, War and Wisdom that reviews the horrific 20th Century and recommends that wealthy folks put perhaps 5% of their net worth in a self-sufficient farm, and stock up.

To quote “The trigger event could be a massive terrorist or nuclear attack that disrupts the economy for months and maybe for years. A power failure that lasted not a day but a month would paralyze a modern economy. Or it could be a plague, a massive SARS-like epidemic, in with hundreds of millions die, or an electronic explosion that cascades into a complete breakdown of the world’s financial accounting systems. Whatever happens, it most likely will be an event that is both unexpected and we will not be prepared for. The world is very good at locking the barn door after the horses have been stolen.”
Biggs left out EMP terrorist strikes! (By the way, read the e-novel Lights Out for a very entertaining and educational portrayal an EMP strike on the US.)

Dr Gary North’s “favorite” TEOTWAWKI disaster would be an NBC attack on banking centers designed to bring down our inherently unstable fractional reserve banking system, which would then shutdown the payment system for the division of labor that keeps us all fed. (Of course the way things are going, the terrorists might just decide that this is not really necessary, now that our political and financial elites have done such a good job of wrecking the economy…)

What are the odds? For any individual scenario, low. But as Nassim Nicholas Taleb argues persuasively, low probability statistical outlier events – “Black Swans” – are a lot more common than we think, as we are prone just extrapolate current trends ad infinitum.

Put it this way – if you were going to jump out of an airplane with just one parachute – what kind of reliability odds do you want? Is a 1% chance of a catastrophic failure
Okay? How many jumps would you make with a 1% chance of having a non-functioning parachute? None, for me! Metaphorically that’s what we do every day. or every year, our parachute being the complicated, interdependent, and fragile systems that keep us alive… until an unforeseen Black Swan event comes up.

My intuition tells me the ongoing increase in government taxation and regulation, the decline of moral standards, educational standards, and the increasing complexity and interdependency of the economy makes it even more likely that a disaster would cascade into chaos. Even “just” a rerun of the Great Depression would be likely to turn into something much more horrible with our current society…. Noted investor Doug Casey forecasts what he calls a “Greater Depression”.

It’s seems very prudent to me to have some catastrophe insurance. Don’t spend your whole life, or all your money on it. But do get some, because our Black Swan event is out there – we just don’t know when it’s going to show up. Regards, – OSOM

Odds ‘n Sods:

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I’m still predicting a dramatically weaker US Dollar in foreign exchange in the months to come. As I’ve mentioned before, you should watch the US Dollar Index (USDX) closely. If and when it dips decisively below 72, watch out. From there, we might see a precipitous drop! (Back in August of 2007, I first mentioned the “magic number ” 72. It is a sort of “line in the sand” number for currency traders in their assessment of the US Dollar. Anywhere south of 72 lies extreme peril–and below 55 perhaps the traders will start to question the very existence of the US Dollar as a viable currency unit. It is notable that the USDX has been bouncing off the new-found “floor” of 72 for the past three months. Continue to watch the USDX closely. It is an important barometer that may provide a brief warning of of a Dollar Collapse.

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Speaking of weaker currencies, Paul from Kentucky sent us this: Zimbabwe to remove [more] ‘zeros’ from currency.

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Jack B. mentioned this: Inflation dogs Russia’s booming economy. When inflation worsens, move even more of your assets to tangibles.

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Thanks to Cheryl N. for this article link: Costco to Raise Prices as much as 15%. If you haven’t done so already, it is time to implement an Alpha Strategy, in anticipation of mass inflation. The spiraling price of fuel, just by itself, is making significant inflation inevitable. If you need to exactly what to stock up on, see my “Rawles Gets You Ready” preparedness course. It is geared toward stocking up at “Big Box” stores such as Costco and Sam’s Club.

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It has been announced that Terminator: The Sarah Connor Chronicles (TSCC) will return to the small screen on September 8th. IMHO, it is the best quasi-survivalist show on television. (But I’m probably not the best judge of that, since I don’t get the chance to see much television. We don’t own a television set. The few shows that we do watch are either on DVD or via Internet streaming.) OBTW, this reminds me: One of the stars of TSCC is Summer Glau, who played River Tam in the outstanding television series Firefly, and in the subsequent Hollywood movie Serenity. A new Collector’s Edition of Serenity was recently released. Great stuff!