Deepcaster: Biggest Bubble About to Burst
Sending up the test balloon: The Cashless Society Arrives in Africa. The “Multipurpose” Biometric National Identity Smart Card
Doug Casey on Conspiracies, Gold and the Continuing 'Greater Depression' of the World's Economies
Items from The Economatrix:
Fed's Plosser: We've Dug Ourselves A Very Large Hole
The Slow, Agonizing Death Of The American Worker
IRS tax exemption/Obamacare exec got $103,390 in bonuses
Treasury Knew of I.R.S. Inquiry in 2012, Official Says
Items from The Economatrix:
These 20 Charts Show That The US Jobs Market Continue To Be A Huge Mess
The Price Of Copper And 11 Other Recession Indicators That Are Flashing Red
Michael W. sent the latest coin debasement news: Stivers losing patience with reluctance to change change
And speaking of nickels: The Nickel-Hoarding Billionaire. Here is a key quote: "'Not gold futures. You need physical gold,' Bass declared to Lewis. When the author asked Bass what investment advice he would offer to his mother, the reply was a blunt 'Guns and gold.' Want to invest like one of the most successful hedge fund managers of the 21st century? You might not be able to afford gold, but anyone who buys firearms, ammo and nickels at face value will be doing a dead-on Kyle Bass impersonation." (Thanks to Diana for the link.)
Reader Jim W. sent: Orders for gold go unfilled in Asia. Jim W.'s comment: Why is the [formally-published spot] price plummeting when there is so little for delivery?
J.B.G. sent: Feds Seize Bitcoin Account for 'Unlicensed Money Transferring'
As always, government-mandated price controls lead to shortages: Venezuela hopes to wipe out toilet paper shortage by importing 50m rolls. (Thanks to A.S. for the link.)
Items from The Economatrix:
Bernanke Sees Important Risks In Wholesale Funding
US Posts Widest Monthly Surplus Since 2008 On Revenue. [JWR's Comment: Gee... Could those trillions of dollars created out of thin air and pumped into the system via MBS derivatives to triple the money supply somehow be a factor?]
Derivatives warning from Bill Fleckenstein: Markets Could Be On The Verge Of A 'Blowup' Thanks To Japan. (Thanks to B.R.G. for the link.)
Andrew in England forwarded a link to some more claptrap from the Wall Street cheering section: Why Doomsters Who Predict The Collapse Of Money Are Wrong. These pundidiots see nothing wrong with tripling the money supply in less than three years. Someday they will wish they learned how to sprout beans.
And here is an opposing view: Author Dmitry Orlov on why he believes the U.S. is on the brink of collapse...and how to survive it. (SurvivalBlog's G.G. sent the link.)
The Horrible "Mileage Tax GPS Tracking Device" argument surfaces in Florida. (Thanks to F.G. for the link.)
Steve Forbes: Fed Sinking Real Economy; Calls QE's "Titanics"
Items from The Economatrix:
World Bank Whistle-blower: “Precious Metals To Serve As An Underpinning For Paper Currencies”
JPM Eligible Vault Gold Drops To Fresh Record Low. [JWR's Comment: Any futures contract buyers who believe that they will reliably be able to demand delivery in physical gold or silver are fools. Nothing trumps holding precious metals in your personal possession.]
JPMorgan Client's Demanding Their Gold...Endgame Near
On Monday (May 13, 2013) I did my best to intervene and help mediate between Chris Duane and the Mulligan Mint to get them back to the bargaining table. I even suggested some potential terms of agreement. But they are still deadlocked. I'm afraid that this won't be resolved until their controversy goes to formal mediation or to court. This is a very sad situation. I was hoping that they'd be willing to quickly settle this like gentlemen, but the rhetoric (at least on one side) has become so vitriolic that I don't foresee an amicable resolution anytime soon. The latest news is that today Mulligan Mint is pressing forward with the re-launch of the SBSS coins, without Chris Duane's involvement. (They are wisely setting aside 50% of the profits from current sales for Chris Duane in an escrow account.) Because Mulligan Mint is using Duane's SBSS name without his permission, I decided not to be involved in promoting the re-launch. I can sympathize with both parties, and I can see that they both have some valid arguments. Please pray that Chris Duane and the Mulligan Mint are able to mend fences and reach mutually agreeable terms to making a clean break.
Meanwhile, Mulligan Mint is still reliably producing and shipping the American Redoubt .999 silver coins. This is entirely detached from the much-publicized Duane/Mulligan Mint fray. (To explain: Chris Duane backed away from the Redoubt coin project a week before the launch, and at that time he was apologetic and encouraged me to contact Mulligan Mint, to go ahead get the coin into production quickly. Silver was under $23.10 per ounce, and there was no time to dawdle.) I'm pleased to report that the mint is in full production and fully caught up with orders. The biggest delay is just in waiting for customer checks to clear. I have been promised that shipping delays won't exceed four weeks, and presently the delay is much less than that. Rest assured that the American Redoubt coin project is not at all entangled with the legal battle between Chris Duane and Mulligan Mint. But again, please pray that an amicable resolution of their disagreement can be reached.
Next, I'd like to warn readers about getting overly idealistic when buying silver. I must remind you that privately-minted silver coins are not numismatic coins, and should never be considered a numismatic investment. With a few exceptions, low minting numbers, limited strikes, minting errors, obscure minting variations, and so forth are essentially meaningless in the world of bullion silver, in the long term. Yes, proof coins are pretty and make nice gifts. But when you are buying silver, I recommend that you simply buy genuine silver, and stack it deep. Ten years from now, when you go to trade or sell today's "rarity", it will probably be treated no differently than a battered "Christmas, 1987" Santa logo silver round from some no-name mint. So always consider that fact when shopping for silver bullion coins or bars. Never pay excessive premiums when your goal is to acquire bullion to preserve your net worth. Seeing the recent bids on the silver round auctions on eBay makes me scratch my head, and ask: "What herb have these auction bidders been smoking?"
Lastly, I need to reiterate the point that the published New York and London spot and futures prices for metals have become meaningless. Currently, most coin shops are charging $10 to $12 per ounce over spot on silver, and the premiums paid on eBay are even higher. The spot prices have become so grossly manipulated by short-selling investors that they no longer reflect reality. The real price of silver is what most dealers are actually willing to sell it for. And as I'm writing this, that is around $33 to $35 per ounce. So forget the "official" price of silver. So after you have stacked up your storage food and ammo, stack up some silver. Someday, you will be glad that you did!Reader F.G. sent: Ruger to Open Third Plant – Expansion for New Guns
B.B. mentioned this by Lord Monckton: The Dollar and the USA are Toast
Items from The Economatrix:
Over at Mac Slavo's excellent SHTFPlan blog: The Mathematical Reality Is We Are Losing Over 600,000 Jobs Per Month That Have Been Hidden From View
Generation J(obless): A Quarter Of The Planet's Youth Is Neither Working Nor Studying
Prof. Paul Caron: The Deepening IRS Scandal
Intrinsic Value and the Final Battle for Silver
H.L. suggested: Argentina's Modest Proposal: Buy Bonds or Go to Jail
Items from The Economatrix:
Where Is The Recovery? A Higher Percentage of Americans Had Jobs Three Years Ago
The latest talk on Wall Street is that the Federal Reserve, in coordination with the U.S. Treasury plans to "taper off" from their Quantitative Easing MBS derivatives purchases. But this chart tells the real story.: St. Louis Adjusted Monetary Base (AMBNS) Chart. Do you want the truth? The Fed is about as likely to successfully "taper off" of QE about as well as your local junkie is to "taper off" of crack cocaine.
David Roche: Another Crisis Coming, Worse Than the Last. (Thanks to M.E.W. for the link.)
B.B. sent this predictable news: Square Drops All Firearm and Ammunition Retailers. One good alternative: Platinum Payment System.
Items from The Economatrix:
What an Internet Sales Tax Will Cost You
New Rule Signals Kiss of Death for Pensions
IRS Admits, Apologizes For Targeting Conservatives During 2012 Election
Spain is officially insolvent: get your money out while you still can
Jeff H. sent: Not even good enough for dog food: Imported food from China loaded with chemicals, dyes, pesticides and fake ingredients
Items from The Economatrix:
Hoard Alternative Money & Reforming Banks
They Are Murdering Small Business: The Percentage Of Self-Employed Americans Is At An All-Time Low
Marc Faber On Gold, Terrorism & Democratic Wealth Confiscation
Bank of America to face $7 billion claim by AIG
H.L. sent: Feds Charge Eight in $45 Million Cyber Crime Scheme. The article begins: "In one of the biggest ever bank heists, a global cyber crime ring stole $45 million from two Middle Eastern banks by hacking into their credit card processing firms and withdrawing money from ATMs in 27 countries..."
The U.S. has Spent $8 Trillion Protecting the Straits of Hormuz
No "Peak Natural Gas" Anytime Soon
Jim W. sent a microcosm for the national mindset of borrowing money to pay for past promises as if there will be no consequences. Of course the "gimmie" crowd is all for it: Portsmouth council approves bond sale for pensions
Items from The Economatrix:
Schiff: 2/3 Of America To Lose Everything Because Of This Crisis
Reader B.B. sent: 10,962,532: U.S. Disability Beneficiaries Exceed Population of Greece
Record Number of Americans (Including Hamid Karzai's Brother) Renounce Their Citizenship
Frequent content contributor Jim W. sent: Bix Weir – You Can’t Trust The Paper Price Of Silver and Time is Running Out To Get Physical
Items from The Economatrix:
Robert Shiller: Home Prices To Remain Stagnant For The Next Ten Years
Gary Shilling: The Disconnect Between Weak Economies And Strong Markets Won't Continue
Reader R.B.S. sent some more coin debasement news: Stivers proposes using steel for all U.S. coins – not just pennies and nickels. The compromise that the Congresscritters reach might be just dropping the penny and switching the nickel to stainless steel. The days of nickel made of copper and nickel are numbered, so stock up!
Jim W. liked this: Gold - You Better Hold It
Also from Jim: How Your Purchasing Power Was And Is Destroyed. "The fraud you're being sold is exactly identical to going into a bakery and ordering a sheet cake. The baker asks you how many pieces you would like the cake cut into; your options are 2, 4, 8, 16 or 32. He then tells you that if you're really hungry you should choose 32, because that way you can eat more pieces."
Courtesy of H.L.: Largest Wholesaler in U.S. Sold Out of 100 Ounce Silver Bars
Items from The Economatrix:
Why The Jobs Outlook Just Got A Whole Lot Worse
The Global "Fractional" Paper Bullion Market Is Collapsing
Freely-Traded Markets Are An Anachronism: Fundamental Rules No Longer Apply
Jack Spirko (of The SurvivalPodcast) has produced a fascinating behind-the-scenes video tour: What's Going on at Mulligan Mint? Jack Spirko and I agree that Mulligan Mint is reputable. By setting up redundant manufacturing processes, they have overcome their production bottlenecks. They've also cleared the backlog of SBSS orders and they are about to release Jack's Sentinel coin. This is the same mint that is producing the American Redoubt silver coin.
Items from The Economatrix:
The Biggest Price-Fixing Scandal Ever
Mr. Rawles,
I have to believe that the precious metals markets are practicing their own sort of fractional reserve system. Does anyone doubt that the markets (dealers, banks, etc) keep a small quantity on hand for physical transactions, but trade paper claims on much greater quantities?
A growing concern of mine which I haven’t seen addressed elsewhere: What will happen when the holders of paper claims run to court because they cannot obtain the physical metals the claims represent? Significant numbers of these claim holders are politically powerful. Will the courts decree a clawback of the physical metals from their present holders, and a redistribution of the those physical metals amongst the paper claim holders? The similarity to the clawback forced upon the “lucky” few who withdrew profits from Madoff’s pyramid scheme is disconcerting.
People holding physical precious metals would resist any clawback. Physical metals can be changed in form, hidden, traded or sold such as not be recognizable from when they were purchased. The tools to enforce the clawback would have to be truly menacing for most people to comply.
Please consider addressing the likelihood of a court ordered clawback of physical precious metals, and your evaluation on the lengths to which the system would go to enforce such a decree.
Thanks for your previous commentaries and time in evaluating this as a topic. - Andrew H. in Washington State
A revenue-versus-spending chart recently posted by the editors of Zero Hedge shows just how deep a hole our legislators have dug for successive generations. The U.S. Dollar is doomed, folks. It is wise to diversify into practical, durable, and barterable tangibles!
At Zero Hedge: "The Captain" Says Goodbye: The Full Final Edition Of The Privateer. (Thanks to B.B. for the lnk.)
Staples Starts Selling 3D Printers
Items from The Economatrix:
Overhyped Q1 GDP Grows By Only 2.5%, Biggest Miss To Expectations Since 9-1-1
Record 1 Out Of 5 American Households On Food Stamps
Mints, Refineries, Brokerages Out Of Stock – COMEX Gold Inventories Plummet
"QE to Infinity, and Beyond!" Here are two interesting articles: Fed Keeps Interest Rates Low, Continues Bond Buying Program and How long will interest rates stay low? JWR's Comments: The risk of rising interest rates represents a huge unknown. The Federal debt is now just barely manageable only because of artificially low interest rates. If interest rates begin to rise before the public debt is reduced to less than 60% of GDP, then the game is over. At that juncture the debt will be unserviceable and the only means of escape for our government and the Fed banking cartel will be mass inflation. So get out of Dollars and into tangibles (guns, ammunition, silver, et cetera), soon.
Ditch Basel Bank Rules, Just Raise Capital, Vitter Says
Some trivia: The Wikipedia page on The American Redoubt has been updated with a picture of The American Redoubt silver coin. Looks nice.
Items from The Economatrix:
Jim Rogers: 'Race To Insanity' Producing 'Artificial' Market Gains
Child Hunger Is Exploding In Greece...And 14 Signs That It Is Starting To Happen In America Too
Larry Edelson: Why Gold’s Historic Collapse is Not Over
G.G. suggested: this over at Zero Hedge: Treasury Issues Draft Floating Rate Note Term Sheet
Incredible! Social Security comes after man for $895 overpayment they made to his mom, 42 Year Later.
Items from The Economatrix:
12 Signs The Economy Is Weaker Than You Think
Peter Schiff: A Collapse Happened In 2008, But The Real Collapse Is Still Ahead
Andre D. sent: Gold buyers forced to go on waiting list
Items from The Economatrix:
Ron Paul On Bitcoin: If I Can't Put It In My Pocket, I Have Reservations"
ObamaCare Is A "Neutron Bomb" That Will "Decimate" Jobs In America
Sir,
I often received assorted mail in flat rate VHS videotape-size USPS Priority Mail Flat Rate boxes. I found that these will hold 27 rolls of nickels.
Not near as heavy as a .30 caliber ammo can when full.
Folks (like me, over 60 and female) that find the .30 cal ammo cans a bit heavy might like to use these boxes. I just use strapping tape and run a band around the box horizontally, fill it with the nickels and then run two bands of tape around it to seal it. They stack nicely and I can move them with ease. - P.W.
The perception of currency inflation is derived through the contextual prism of our daily lives. For my neighbors who burn a lot of gasoline commuting more than 40 miles each way every work day, the perceived inflation rate is more than 30%, per annum. And for my #1 Daughter, who's main commercial interaction involves .22 cartridges, the perceived inflation rate is more than 200%, per annum. And for almost everyone, the fact that 32GB iPods are deflating in price because of economies of scale is a meaningless abstraction, when groceries have risen around 20% since last year. We don't buy an iPod every week. But we do buy bread, milk, eggs, and 89 octane.
Jim W. recommended: Hoarding Alternative Money & Reforming Banks. The article begins: "Argentina is going through the classic stages of economic collapse. The government seized all pensions. They are destroying everything that gives the people incentive to be a society that emerges from the cooperation of everyone. When government turns against its own people, even as the USA is currently doing, you end up with deflation insofar as the economy collapses and wages are not available, while hoarding emerges as does barter."
Gee, this was inevitable: Canada to tax Bitcoin transactions. Of course it is mainly the cash-outs and other transactions with the mainstream banking and credit system that can be tracked. Private (peer-to-peer) transactions are still invisible. (Thanks to B.B. for the link.)
Items from The Economatrix:
Economy Showing Signs of "Spring Slowdown"
A New Report From Wells Fargo Reveals A Scary Fact About The Economy
One doesn't have to look far in the news today to catch a conundrum in any article talking about precious metals. If you read the news shops you will have noticed articles crowing titles like "Silver and Gold Have Lost Their Shine!" and "The Precious Metals Market Tanks!". The strange thing is if you are to walk into any coin or jewelry shop tomorrow and ask to buy a few coins, you will most likely be told the wait time is several weeks, and you'll be paying prices above the current silver price. While the news outlets are singing the death knell of precious metals, truth is the demand for physical is higher than it has ever been, and is far outstripping the market prices. This happens when people remember their history lessons from school and determine to not get Weimared into trading a wheelbarrow of greenbacks for a sack of 'taters. My article hopes to inspire you be a canny investor, and buy on the dips to create a shield for yourself.
Well, perhaps I am getting ahead of myself. I will reel things back a bit and go over a some goodies I have leveraged in order to stack a little more argentum, and to be a little more prepared in the task of saving a portion of my family's hard earned money.
First of all, the web is your best friend. What better resource available to you, short of the library, where you may research any given topic and educate yourself. You are on the right path in checking out Survival Blog. In addition to Survival Blog, there exists a ton (troy, not avoirdupois; ha-ha) of other resources out there, so much so that it all can be a bit intimidating. Before one simply throws their hands up in frustration, or is afraid to start something new, I'd like to flatten out some of the bell in your learning curve and link you up by and by to a few resources (as well as offer a few 'why's').
First things first. Let's turn to the Good Book:
I take great comfort in Luke 12:32: "Fear not, little flock; for it is your Father's good pleasure to give you the kingdom."
And in 2 Timothy 1:7: "For God hath not given us the spirit of fear; but of power, and of love, and of a sound mind."
Acknowledging God, I believe we should move forward in faith.
Here are those web sites I mentioned earlier. I check these on a daily basis:
The first resource I check is one called Coinflation. It is an easy-to-read site which strictly talks coin values. They have an up to the minute feed on US coins, and you will see later why this comes in handy. They list each denomination, list it's face value, it's silver value, and the silver % against face value. Right here you need to know a couple of things; these coins are called 'junk silver', not because they are junk, but because they aren't desirable from a collectable aspect. The 'junk coins' are the normal run of the mill coins our grandfathers used to to pay the shoe shine guy, to buy a slice of pie and a cup of coffee, and to lend to the fella who asked "Hey brother can you spare a dime?" This old pocket change was in circulation before someone set it aside realizing the silver content made it worth more than the .05/.10/.25/.50/1.00 stamped on the reverse. You see, in the US, nearly all minted coins (except for pennies and nickels) prior to 1965 had silver content in them. Congress in 1964 passed an act taking silver out of all the coins except for a few. We'll get to that in a wee bit. If you'd like to do a bit of light reading, you can read the address from President Johnson. (Please note he calls the material 'valuable' in his address).
As you can imagine the value of these pre-1965 coins far exceeds their face value, meaning that a 1964 quarter is worth far more than the .25 marked on it. These coins are made of 90% silver. The other key date to keep in mind here relates to half-dollars (a.k.a. fifty cent pieces). The next time you are in line at the grocery store, ask for your change in any 'odd coins' if they've got them. The cashiers count their till before and after their shifts, and know when they get a 'weird one'. In looking at halves, certainly look for pre-1964 dates, but don't forget the 1965 to 1970 dates either. Those years of Kennedy's are 40% silver and still fetch far more than fifty cents at the coin shop (presently the 40% ones are going for $3.58). Now, armed with the numbers from the Conflation calculations, it is easy to do a little math in your head before you go into your brick and mortar coin shop. If you have a cell phone with a data plan, check it right before going in; as silver and gold are a commodity and can fluctuate. If you are still a bit nervous, ask for a print out of current prices. The good shops will accommodate you, because they want your business. The shady ones will pan out real quick; they want to turn a quick buck on the desperate folks. They don't typically stick to current market prices, or accommodate you in a printout of current prices. Spend your hard earned federal reserve notes at the place that wants your business.
The next web site falls in the category of 'read up, student'. It is Zero Hedge. The comments section can be quite coarse and rough in language, but the owner (Tyler Durden, an obvious nom de plume) will publish stories and guest posts with a bent to telling the truth. They speak heavily of the markets. Go, read, and educate yourself.
The third recommendation I make is for you to find the web site of your local coin shop – The ones who do a lot of business will also have an up-to-date price list. This comes handy to see what they are charging over spot, if they have a lag to the current market, and what their inventory is; saving you gas money before you drive over there. My local coin shop even lists the past several years worth of their auctions on their more rare/collectable stuff; helping me further by building my case history on my next purchases. If your local shop has such a resource, use it and arm yourself with knowledge. In my experience, fair business means letting your customer know what the current prices are, by providing a safe place to buy and sell, and by running an honest shop. The coin community will quickly oust unjust or dishonest businesses (and FYI, the 'We Buy Gold" places do not sell, they only buy, and only at reduced prices). If you have a friend who collects coins, ask them what stores they go to, I guarantee they will have an opinion on the shops in your area.
My next web site recommendation is to point you to a forum for numismatists (in simple terms, numismatists are folks who collect coins.) If you get into the collectible aspect of things (called numismatics), you will want to know more about grades, dates, mint marks, fakes, if one cleans a coin versus not cleaning it, coins in holders (called 'slabbed') or coins loose (called 'raw'). Once you sign up to participate in the web site, don't be afraid to ask questions; I recommend the CoinCommunity site due to the culture of courtesy and sharing there. I further recommend it as the site has a whole passel of folks who are the real deal. Not only will you see some beautiful coins, but exonumia (items other than coins; the medals, tokens, and scrip) and also ephemera (the boxes, holders, news ads and other various 'throw away' stuffs the coins came with way back when). Some of these folks just have to be of the museum curator ilk.
The final recommendation I will make is for you to buy yourself a Red Book. This spiral bound yearly publication talks about history, rarity, collectibility, and mintages of coins. Start with a section you are interested in (say Morgan dollars) and read it. Mark the interesting bits. Refer back to it. If you are truly abstemious in spending any money on printed materials (my father comes to mind here), or simply want to start this on the cheap, Whitman has a web site with an electronic edition.
I am in no way associated with any of these companies, and stand in no way of profiting from these recommendations. I instead pen this article in hopes of reaching the reader who is much like the very kind/very confused approximately 80 year old lady I met last week at my local coin store. Her husband had cashed out a sizable chunk of their retirement to take delivery on a 'monster box' (a 500-count case of 1 oz silver coins, a.k.a. American Silver Eagles, .999 pure silver rounds) and some fractional gold coins (called fractional because they come in various denominations; $50/$25/$10/$5, effectively a tenth oz, fifth oz, half oz and 1 oz coin; a.k.a. Gold American Eagles, .916 pure gold rounds). She was supportive of her husband, but had a bunch of questions, and was too timid to ask the sales guy. I struck up a conversation with her and talked about what I was looking at that day (so happened to be looking at commemorative slabbed coins; I saw an amazing MS65 Lafayette dollar!). Her interest was piqued, she was polite, and though I may sound like an apologist here, the people behind the counter were way too busy to do anything but fill orders (the line was something like four people deep when I was there). My only regret, looking back, is I never got to tell her how impressed I was was that she and her husband were trying to hedge themselves against the craziness in the investment markets.
Okay, lets shift gears here a bit. If you, as a potential silver stacker, have stuck with me this far, perhaps I am almost convincing you to try some of these suggestions. Read on then, and lets talk a bit more about some helps.
Before you rush off to the coin store, begin to keep a close eye on silver spot price against what your local coin shops are asking per/oz. As of about 13:00 central time, when I began this article, there is a lot of stuff going for 'over spot' depending on what you are trying to buy. When I started stacking coin (at Mr Rawles' suggestion), prices were a bit lower than now, and the 'over spot' margin was significantly smaller. The huge surge in demand of physical (instead of paper; like all the other physical commodity markets from pork bellies to sweet light crude oil), has combined with the present lower prices, and the resulting action is that dealers have raised their prices.
As of today, according to my local coin shop's web site, ASEs (American Silver Eagles) are about $5.80/oz over spot, "About Good" condition Morgan or Peace dollars (.773 pure silver) are $4.22/coin over spot, and 'junk silver' is going for $4.34 over spot/for $1.00 worth of 'face value'. The smallest 'over spot' margins (on coins minted by the United States mint) I have found are the 5 oz America The Beautiful bullion coins. Bullion, for simplicity of explanation, is for precious metal content, and is not typically collected for numismatic factor. There are however some limited strike, proof strike, or limited release bullion coins. I state this as it can be confusing to see a bullion America The Beautiful coin and a slabbed America The Beautiful coin. The slabbed one will cost more because it is graded, and collectible. Yes, we numismatists can be a wee bit zany. s
I am not even going to start into Canadian, Mexican, Australian, Chinese, or other mintage coins, be they bullion (.91 and higher) or even numismatic. This article today is just for US Mint products to help the starting investor, as they are recognizable by everyone in the event of a Schumer/Oscillation Device occurrence. Ideally you can position yourself to not have to explain to your neighbor why your Peso from 1943 is 90% silver. As my late grandmother use to say,"K.I.S.S. stands for 'Keep It Simple, Son'".
I also tend to shy away from the odd weight/off-brand/hand poured stuff due to the influence of Chinese fakes out in the market. Fears over fakes is an entire other conversation (there is at present some noise out across the wire that regular 'junk silver' is the next target; Morgan and Peace dollars have been faked for years), but to arm yourself against them keep three 'M's' in mind. Measurements: the weight, thickness, diameter of coins (there are accepted dimensions), Magnetism: a silver coin when held at an angle will let a small strong rare earth magnet slide slowly across it's face, and Melody: when you flip a silver coin on a hard surface , it should 'sing' or ring.
The only other thing I can suggest with regards to fakes is to buy from a reputable dealer. Craigslist may have some mighty tempting ads, but you are truly on your own, and if you are just starting out, Caveat Emptor, buyer beware! Learn what to look for before you spend a passel on comparatively worthless plated copper fakes.
In closing, let me reassure the folks who feel like they are 'too late' to start. Fear not! I started in 2010 (as I mentioned, at the recommendation of Mr. Rawles), and have taken many small steps since then. While it is true that many people started pulling silver coins out of circulation back in 1965 (45 years before I started, mind you), I am still moving forward with my plan. Stock up on beans, bullets, and Band-Aids, and then (only after all the other bills are paid) pick up any bullion in small denominations. For the folks who feel it is too late, don't let hindsight poison your faith. Take the small steps and God will bless you.
I hope these thoughts help. In parting, I quote Mother Theresa; "We can do no great things, only small things with great love." God Bless, - Jay in Missouri
Check Out These Insane Levels of Youth Unemployment In Europe
Fed Money Printing Games Out of Gas - Karl Denninger. (Thanks to Jim W. for the link.)
Bob in Virginia recommended this by Bill Gross: Here Are The Four Big Ways That The Government Will Steal Money From Bondholders
While the paper market is in the doldrums, the physical metals market is searing hot: U.S. Mint Sales of Gold Coins Jump to Highest in Three Years. (Thanks to G.G. for the link.)
Items from The Economatrix:
Internet Sales Tax: What You Need to Know
Online Sales Tax Overwhelming Passes Cloture Vote
Reader Joe K. sent this news link: Bill Seeks Steel Cents, Nickels, Dimes, and Quarters. Note that the bill's main sponsors are from Ohio, which is a steel manufacturing state. But this legislation is more than just grandstanding. Unlike similar legislation in previous sessions of congress, this new bill will probably gain traction in the current congress, since the government has now been losing money with the seigniorage costs of pennies and nickels for many years. Well, I've been warning you since 2009, folks. While this bill is still in committee, I suspect that a coinage composition change will take place before the end of 2013. The ravages of inflation made the change inevitable. The Coinflation web site presently lists the scrap value of the base metal content of the current U.S. zinc penny at $0.021192 (211.92% of face value) and the cupronickel five cent piece at $0.045671 (91.34% of face value), and their actual minting and distribution costs are actually much higher. According to Coin Update, it cost the US Mint $0.1009 to produce and distribute each nickel, as of fiscal year 2013. They can't go on spending 10 cents producing each five cent coin much longer.
You gave been warned. I strongly urge you to go to your local bank or credit union and ask them to order you some $200 U.S. Mint Boxes of nickels. In just a few years, after the debasement is completed and the rational self interest of Gresham's Law psychology purges all of the real cupronickel nickels from circulation, rolls of pre-2013 nickels will sell at a substantial premium. Because nickel is a base metal, this premium will never be as high as that for silver coins, but at least you'll know that you possess some genuine money that will hold its value, even if the Quantitative Easing monetization process continues indefinitely. (Quantitative Easing is debasement of the dollar, writ large.)
In addition to hedging against gradual inflation, holding nickels will also provide you insurance against the less likely sudden revaluation of the Dollar. As I've explained previously, if a zero is ever lopped off the Dollar, new paper currency will be issued, but the old coinage will probably still circulate. (Since it would be too expensive to replace.) This will make anyone holding coins the beneficiaries of an overnight 10X gain.
This may be your last chance to stock up on nickels at face value, and without any sorting, folks! If you don't already have four or five .30 caliber ammo cans full of rolls of nickels, then you are behind the power curve. Don't dawdle any longer. - J.W.R.
Reader C.D.V. suggested this article: Spain Is Beyond Doomed: The Two Scariest Unemployment Charts Ever
M.E.W. sent: Run on Guns: AR-15s Sales Soar. JWR's Comment: A modern battle rifle is a great example of a practical, barterable tangible investment. You can only shoot a bad guy with a Krugerrand with the aid of a sling shot, and that constitutes a very inefficient use of resources.
M.M. sent this ominous news from Canada: Conservative 2013 Budget May Allow Banks to Confiscate Customer's Deposits
Items from The Economatrix:
Jim Rogers: Every Government Debasing Their Currency, Gold Going Much Higher
The Global Economy Is Losing Steam
This confirms my assertion: The Spot Price of Precious Metals Is Becoming Irrelevant
Pete H. sent this from Paul Farrell: 10 investing rules for the coming bond crash
The drawn out impact of quantitative easing on real estate: Japanese real estate continues to struggle while Bank of Japan expands monetary base. JWR's Comment: Back in the 1930s, folk comedian Will Rogers was famous for saying: "Buy land: They ain't making any more of it." The modern-day corollary is: "Avoid Dollars: They can make as many of them as they want to."
Items from The Economatrix:
World Finance Leaders Issue Somber Assessment
SurvivalBlog's G.G. sent: Douglas County Bank, Georgia, Biggest Bank Failure of 2013.
Gold Forecast 2013: On the Verge of a New Monetary Order and Gold’s Rise
H.L. sent: Syrians Turn to Backyard Refining as War Reaches Oil
Gold & Silver – War Unofficially Declared on 12 April 2013
Items from The Economatrix:
David Woo Warns Of Major Market Re-alignment
Jim Sinclair: Swiss Bank Just Refused To Give My Friend His Gold
Physical Gold & Silver Shortages Are Accelerating; Premiums Exploding
Unprecedented Shortages of Ammunition, Physical Gold and Silver
New standard for loan loss reserves triggers controversy
A useful primer video: I Am Gold
Items from The Economatrix:
Fed Governor Stein Warns When A TBTF Bank Fails, Depositors Will Be Cyprus'd
Americans Grow More Pessimistic On The Economy
History Tells Us That A Gold Crash + An Oil Crash = Guaranteed Recession
Burke C. suggested: America The Fallen: 24 Signs That Our Once Proud Cities Are Turning Into Poverty-Stricken Hellholes
Jim Rogers: It Pays To Be Worried, and To Be Skeptical
Albert Edwards: Stocks Will Crash, Hyperinflation Will Come, And Gold Will Go Above $10,000. (Thanks to Jim W. for the link.)
Items from The Economatrix:
Prof. William Black: Felons in Charge of Financial Institutions - Banking System Meltdown Coming?
Many (if not most) people seek wealth, yet few can define it. There are many practical definitions. One author defines wealth as having sufficient assets to provide the cash flow necessary to meet your monthly living expenses. That’s a great definition for normal times, but having a bunch of rental houses when the dollar is worthless and the hungering hoards are loose upon society won’t do you much good.
If you are at all familiar with the concepts promoted in this blog you know what you need to have for basic survival. I will not spend space and electrons reviewing what we already know. But what do you do after you have the basics? Do you continue to accumulate more of the basics until you need a multilevel secret subterranean warehouse to house your supplies?
When you have your basics squared away you need to look to the concept of vertical integration. Vertical integration was used by the so-called robber barons of the late 19th and early 20th century. The man that owned the steel mill also owned an iron mine, a coal mine, a limestone quarry, and the transportation capability to move the raw materials in and the finished product out. Now before you start giving me that funny look I do know that most prepper budgets would not support the purchase of mines and mills. But the ability to go from raw material to finished product is the definition of wealth for a prepper in a post-TEOTWAWKI situation.
This concept applies to every element of your preparations. Food, defense, medicine, etc. And it not just about tools but knowledge also. Let’s look at food as an example. The first step is to store food. You start small, maybe a month’s worth at first. You build up to a year then two years. You purchase a grain mill to turn your stored wheat into flour. This is as it should be, but what is next.
Now, you look to food production. After all, you can’t practically store a lifetime’s worth of food. Gardening is a great place to start. You read and research different techniques. You develop a place for the garden, starting small so you don’t overwhelm yourself. You acquire the tools necessary for a small garden and learn how to use them. You put this knowledge into practice and learn from your failures and build on your successes.
As your successes increase and your failures become rare your confidence increases, and so does the size of your garden. You acquire the tools necessary for a bigger garden. You start using open pollinated seeds and learn how to save seeds for future years. You learn how to start bedding plants. After a few years your small garden that produced a few salads and tomatoes is now producing a tremendous excess of a large variety of vegetables.
Now you turn your attention to food preservation. You learn pressure canning, pickling, and dehydrating to preserve your excess harvest for the winter months and the lean years. You have vertically integrated your food production. You can take seeds and produce finished storable food and produce seeds for future years. You can expand your garden to produce far in excess of your needs. The ability to sustainably produce food in a world of hungry people is wealth. You can now take your basic skill set and expand laterally to small-scale grain production, herb production, and/or animal feed production.
Along the way you have learned associated skills such as how to repair and maintain your gardening tools, how to produce the power necessary to run your food processing tools, how to keep the pests out of your garden, and how to produce natural fertilizers for your garden. You cannot focus on a specific area and learn in a vacuum. There are always associated skills to learn.
This same principle can now be applied to animal production. Start with chickens and build from there. Add goats then cows or pigs or both. Continue to grow and expand your capabilities adding skills and tools, as you are ready for them. Many people, especially those new to the preparedness mindset, will see the enormity of the task and panic. They will try to do it all at once and set themselves up for failure. Proper preparation is like eating an elephant, you have to do it one bite at a time.
This process happens in measured steps and assumes that you have taken care of the basics first. You have your “beans, bullets, and bandages” stored away and you have a place to work that you can call your own.
Start at the end. Identify how the end result will look. List the capabilities that you want to have when you reach your final goal. Be specific and detailed. You cannot start a successful project if you do not know what the finished result will be. You need to know when you have reached the end.
Next, go back to the beginning. Determine when, how, and at what level you are going to start your project. The chances are good that you have some basic knowledge to start with, knowledge that will allow you to begin the project at a level within your comfort zone. This point will vary from person to person. Some will start with no knowledge at all on the subject, some will start with knowledge that they haven’t used for years, and yet others will start with a firm grasp of the basics.
Now that you have identified the starting point and the finishing point, you can determine the actual size of the project. You can now accurately identify what tools you need to acquire and what skills you need to learn. You can divide the project into manageable bites or phases and set goals to be accomplished at each phase. The beauty is that you can make each phase as big or as small as you like. You can customize each phase to your time and resource availability.
You can use this method to focus on a single project or to steadily advance on multiple projects simultaneously. This method will work no matter where you start or where you want to end up, whether you have many resources or few to devote to your projects. You can make this system fit your needs. This is how you develop your assets to produce the kind of wealth that will benefit you in difficult times.
Allow yourself the time that you need. It is easy to look around us at the negative indicators and panic, thinking that you need to do everything now. That type of thinking will only lead to failure. You must lay a solid foundation of knowledge to build on, a process that takes time. You should develop at least a degree of confidence at each phase before moving to the next. Otherwise, it is easy to overwhelm yourself. Should the world go to Schumer sooner than expected you can be confident in what you know and take comfort in the fact that you are far better prepared than well over ninety percent of the rest of the people.
"A man has got to know his limitations." (Harry Callahan). The technology exists to do many things on a small scale. You can produce energy from wind, water, and sun. You can produce fuel from grains and oil seeds. You can produce your own food, grow your own medicines, produce your own transportation, and many other things too numerous to mention. However, even with all of these possibilities there are still some things that you will need to store. While you can cast or swage your own bullets you will be hard pressed to make primers or powder to match what is commercially available today. The same applies to lubricants, matches, canning lids, and a large variety of other vital supplies. Be realistic in your expectations and don’t plan to do more than you are capable of.
"Specialization is for insects." (Robert Heinlein). If you have a group it is tempting to divide workload and then stay with your assigned tasks only. This type of thinking is a key ingredient in the recipe for disaster. The loss of one specialized individual can greatly harm the overall effectiveness of a group. Cross training avoids this. You should learn as much as you can about as much as you can. Additionally, should you find yourself on your own, a broad base of generalized knowledge could make you a valuable asset to a group.
When the day comes that the paper dollar is little more than mediocre tinder, wealth will be the ability to sustainably produce a finished product in excess of your immediate need. The knowledge and tools that you need produce that product are the assets that will generate that wealth. Develop a plan that will take you from where you are to where you want to be and then act on that plan. The most important step that you can take is to start.
TPC: Distribution of the Tax Burden in Obama's 2014 Budget
H.L. sent: Putin Demands Proposals to Stem ‘Alarming’ Economic Slowdown
B.B. suggested: These are Perilous Times Jim Rogers
Items from The Economatrix:
Tyler Durden reports: Gold And Silver Physical Market And Inventory Update From The Source: "In A Word, Ugly."
The Silver Market: An ‘Operation’, Not A Liquidation
Sinclair - Swiss Bank Just Refused To Give My Friend His Gold
Items from The Economatrix:
No Food Inflation? Take A Look At Lettuce
The new American Redoubt .999 fine silver coin has been launched! These very attractive coins are produced by Mulligan Mint. They are one Troy ounce weight, and are being sold at a very competitive market price. (Spot silver was advantageously below $23.10 per ounce, when I last checked, and many dealers are charging a premium of $9 per ounce over spot!) Lord willing, this release will be followed in a few months by fractional 1/2 ounce, 1/4 ounce, and possibly 1/10th ounce coins of the same design. Note that we will earn a modest commission from each sale, to help support SurvivalBlog.
In addition to being useful for barter, carrying a Redoubt coin might be an important identifier that someday might be your ticket past a roadblock. (This is roughly analogous to the "challenge" coins carried by some current and former Special Forces Group members.)
Ken J. sent me a troubling piece that was published three years ago: The Just-in-Time Consumer
Merkel To Europe: "Prepare To Cede Sovereignty"
Ronald Stoeferle: “Last Week We Were Really Close To A Default of The 130-to-1 Paper Gold Market”
Items from The Economatrix:
The Terrifying Reality Of Long-Term Unemployment
Inflation, Factory Data Favor Continued Fed Easing
Arizona Becomes Second State To Approve Gold And Silver As Legal Tender
Switzerland Revises 1934 Banking- Act to Allow Bail In Deposit Confiscations
Getting physical: Refiners Can’t Keep Up With Massive Global Gold Demand. (Thanks to Jim W. for the link.)
Gold Price Attack First US Response In Currency War Escalation
Items from The Economatrix:
For Every Job Opening, There Are Three Unemployed Americans
There has been a suggestion for a May 1st strike on the banks. Withdraw your extra cash and buy silver!
G.G. flagged this: FDIC closes two banks in Florida, one in Kentucky
Items from The Economatrix:
Global Physical Gold & Silver Demand On Fire Amid Price Drop
Paper-Gold Holders Flee To Real Metal
Why a Dollar & Euro Collapse Is Guaranteed
The European Commission Lays Out The True Blueprint For The Future Of Every European Country
Items from The Economatrix:
Is Bernanke's Worst Nightmare Just Around The Corner?
Is The Takedown Of Gold A Sign That The Entire Global Financial System Is About To Crash?
Fewer Americans Now View Their Income Taxes as Fair. The 55% who say their taxes are fair is lowest since 2001. (Not mentioned here is the fact that 47% of American adults pay NO Federal income tax!) So next we must ask the more apropos question: What percentage of actual TAX PAYERS consider their taxes "fair"?
Jim Rogers Cites Four Key Forces Fueling The Current Gold Sell-Off
U.S. Economy Fundamentally Tormented; No Amount of Money Printing Can Fix It
Precious Metals Retailer Says They Have Been Experiencing Astounding Volume.
US Mint Sells Record 63,500 Ounces Of Gold In One Day
Items from The Economatrix:
Rising Costs Hammer Builder Confidence
JPMorgan Being Investigated By 8 Federal Agencies. Something tells me they'll just get a slap on the wrist.
Tax Freedom Day 2013 is April 18 -- Five Days Later than Last Year
Jim W. sent: 16% of Annual Silver Supply Just Vaporized
Items from The Economatrix:
Massive $20 Billion Paper Gold Sell Orders Trigger Stop Loss Selling and Unfounded Panic
Extreme Nervousness in Regards To Collapse -- Gold Silver a Must Rule
A Tale of Two Markets: At the same time that the speculative COMEX spot and futures market for silver has been slammed down hard, the physical market for silver has been so frantically bought that it hard to find any pre-1965 "junk" silver or 1-ounce silver rounds for sale. Nearly all of the wholesalers are reportedly sold out of bullion coins! They've all been snatched up by eager buyers. Reader Diana V. wrote to mention: " The local shop I use sells any face amount of junk silver. Up until about two weeks ago [they charged a premium of] 3 percent over spot for dimes, quarters or halves. Last week the premium was 5 percent for dimes and quarters and 10 percent for halves. Well, today it is a 15 percent for dimes and quarters, and they had no halves available... It is scary that the spot prices really don't have anything to do with actual supply and demand." JWR Adds: This leads me to ask: If silver is presently such trash in the eyes of the big investors then why can't I find any for sale at a decent price? Clearly there is a huge disconnect between the spot/futures market and the real world.
Items from The Economatrix:
Lengthy but worth reading: US Treasury vs. Federal Reserve Financial War Escalates And The Countdown Starts
I heard that some precious metals investors have felt panicky, in the recent sell-off. Don't panic. The current sell-off was manipulated. The thing to keep in mind is that the U.S. Treasury and Federal Reserve have nearly tripled the money supply in the past four years. So the long term prospects for the metals remain strong. Look at big dips such as these at buying opportunities. The bull will resume his charge. DO NOT sell into the falling market. I recommend buying physical silver right now.
Remington Sells Out To NY For $80 Million “Sniper” Rifles Government Contract. Granted, they probably bid on that contract more than a year ago. But if they had real backbone, they would have already announced a move out of the People's Republic of New York.
H.L. sent this from Zero Hedge: Germany's 'Five-Wise-Men' Confirm Wealth Tax Is Coming
Peak Prosperity: What Smarter Minds Than Mine Think About Gold
Items from The Economatrix:
El-Erian: Cyprus Rescue Goes From Bad To Worse
Reader Joe K. sent: Obama’s 2014 Budget Proposal Addresses Coin Composition Changes
Damon sent: Railcar Loadings Drop Most Year-To-Date Since Crisis
Items from The Economatrix:
Deflationary Fears The Main Reason For Commodities Selloff?
Ambrose Evans-Pritchard: EMU Plot Curdles As Creditors Seize Cyprus Gold Reserves
James,
Many reader may be stunned by the drop in COMEX silver prices. However, holders of physical silver need not despair. The price to obtain actual coins has hardly been affected at all.
Both Kitco and eBay testify to this:
On Kitco, single silver eagles are now $29.10, or $4.15 over the Friday silver Comex close of $25.95 and a monster box of 500 eagles at $14,300 is still $28.60 each.
Kitco at present is not even listing "junk silver bags", they're just not available through them (sometimes this happens), but others are selling the $1,000 face value bags of 715 ounces for $21,403, or $29.93 per ounce. Wow! That is about $4.00 per ounce over spot! (Just before year's-end, Camino Coin was selling junk silver at $0.50 over! And that was at just a minimum purchase of $1,500 to avoid California sales tax!)
More telling however are eBay actual completed auctions:
Rolls of 20 Eagles are going for at least $645, and often over $650 or $660 a roll. At $650 that is $32.50 each.
And individual coins are even selling for up to $36.00 each. ($10 over spot!)
The divergence between the paper and physical markets is here and we can expect it to remain, and even widen.
No one who holds physical needs despair. The optics of the COMEX are for the sheeple.
Maybe a far-fetched notion, but with the bank raids on deposits in Cyprus as a precedent for the future of all, and PMs beat down on the COMEX, but the DJIA at record highs (nominal) a slightly paranoid outlook may be the central bankers are herding the sheeple of means from off the sidelines and back into the stock market. Meanwhile central banks stock up on gold and billionaires and corporations are quietly divesting of the market. Caveat Emptor.
Respectfully, - Douglas C.
JWR Replies: I still remember the angst that my friends and readers expressed back in October of 2008, when spot silver briefly dropped below $9.00 per troy ounce. (It had been over $19, in July of that year.) One SurvivalBlog reader even demanded an apology. But I held fast to my prediction, and time proved me right. Later that same month I observed that the COMEX market and the physical market had become disconnected. Some folks laughed at my "buy" advice, but thankfully most others heeded it.
Silver had slumped to $25.85, when I last checked. (Saturday, April 13, 2013.) Yes, that is down substantially from the high of $33.23, back on January 23rd. But look at the big picture-- look at the ten year chart. The current sell-off is another buying opportunity in a long term bull market. I've said it before and I'll say it again: Buy on the dips! In the long run, the U.S. Dollar is doomed. Invest accordingly.
Mark my words: In ten years we'll look back and laugh about the current metals market slump, and wish that we'd stacked more silver.
US Shale Industry Set for a Second Boom with Waterflood Technology
Governor Paul LePage: Beretta, Colt and Magpul—Come to Maine. The Texas Governor says Ditto!
Portugal’s elder statesman calls for 'Argentine-style' default. (Thanks to Andre D. for the link.)
Items from The Economatrix:
More Than 101 Million Working-Age Americans Do Not Have A Job
Authorities Seize $50M In Gold From Private Owner
Why Are The Banksters Telling Us To Sell Our Gold When They Are Hoarding Gold?
The future and spot prices of precious metals took another dip on Friday, but the supplies remain tight in the physical market. Bottom line: The COMEX may be rigged but the physical market price doesn't lie. Buy on the dips!
Silver Prices, Inflation and Living With the Long Term
EMU plot curdles as creditors seize Cyprus gold reserves
Now He's After Your 401(k): The White House pulls a switcheroo on retirement savings accounts.
Items from The Economatrix:
If Bullion Were Not A Threat Government Would Not Attack It
You may be reading this and have not made the decision to get started. You may be facing some of the same challenges I had or you may have your own. I want to encourage you to find ways to overcome your obstacles. Getting started is the biggest step.
My family and I have always led a very frugal life. My wife and I both work, and I have a second job as well. The grocery bill stays under $30 per week through couponing and eating-in. Money has gone into savings in case of emergency and we finally have a few months saved up. Any extra at the end of the month is put towards a quickly dwindling mortgage. The only expense we do not continually try to find new ways to lower is the tithe.
This was our lifestyle before I started ‘hearing’ the news last summer. I had been reading and listening to the news, but I had not been hearing it (my ‘White Men Can’t Jump’ reference). I quickly realized I needed more information. With a Google search I found SurvivalBlog and started reading the main page… then the archives… then looked for other resources. I promptly realized I needed to stop reading and get started. I also realized I had two major hurdles before I could even start.
Hurdle number one was my wife’s fears. Like most people, we were sheeple, making our way through life in the blessed assurance that the security blanket we had been given would always be there to keep us safe and warm. Fortunately, we communicate about everything (we don’t always see eye to eye, but we do talk). At first, the news scared her. She could only handle a few minutes of my questions at a time a couple of days a week. I just had to slowly feed her information. I asked questions when making meal plans like, “What would we do if the food we needed for the week was not available at the stores?” It is 10 months later and I am still asking questions. She is involved now, but not as much as I would like her to be, or as much as she really needs to be if something happens. It is an ongoing process, but isn’t everything about getting prepared?
At some point she conceded we had to do something, and trusted me to start. She was okay with being prepared, but she is still not interested in imagining her life after TSHTF. She helps by buying more at the store than we need when there are deals on goods with a long shelf life. She also created storage options under the beds and set up a system to track the expiration dates on these purchases.
In opposition to some of the advice we see, we do not always buy food we will eat if we still have it in two years from now. We understand much of it will need to be donated and replaced at that time. I have asked her to start with an easy goal of accumulating three months worth of food and water at the most economical price possible. Sometimes this means purchasing things we have coupons for that we would not normally buy. If TSHTF and I am hungry, am I really going to care that the food available consists of chopped tomatoes instead of Campbell’s soup, or am I just going to be thankful to have something to eat? After we have three months stocked, I will explain the need for six months to her… or more likely, introduce the idea that we may need to have enough food for any loved ones who are not stocking up as well.
On a slightly out of context note: An unlucky squirrel blew a transformer in the middle of town here a few months ago, causing power to go out throughout the area in the middle of the day. I attempted to buy from the local Wal-Mart, Publix and Kroger. None of them would sell me anything because their computers were down. They had the doors locked. The stores are dependant on the barcodes to get prices for the products, and their inventory systems communicate with their corporate offices to reorder items. In addition, they won’t be taking any credit or debit cards without their machines to approve the sales. I often hear we should get to the grocery stores with our cash as soon as we see there is an issue, but if the power is out due to an EMP or natural disaster, it is probably be too late, even with cash. Waiting to buy food at the first sign of trouble is not a viable option.
The second hurdle was finances. As I mentioned, we are both conscious of our money and live a thrifty lifestyle. Where was the additional money going to come from to buy supplies and additional groceries? How would I start buying some silver coins? For me, the answer was in something I had already been doing every week… yard sales.
I had been spending every Saturday morning in search of yard sale stuff already. All of a sudden my list got longer. I found two military issued backpacks just back from Afghanistan for less than $10 total. I bought fishing gear, boots, warm clothing, storage containers, cabinets, five gallon gas cans, propane tanks, knives, two multi-tools, ropes, tarps, a canteen, and a second first aid kit. Silver jewelry bought for dollars often finds a home in my new safe (also bought at a yard sale). In addition, www.Craigslist.com is a virtual 24 hour yard sale. I have picked up all sorts of useful things, from 55 gallon drums to a new firearm, on there.
I also started looking at the stuff at yard sales as a way to make more money I could use to buy other things I needed. This takes some research and I had to choose a few things I would specialize in. The pair of silver plated candelabra’s bought for $5 sold at the local coin shop for $35. A practically new 8-man Tent bought for $10 was sold for $50 on Craigslist. I have learned to avoid certain things like watches which I can’t authenticate, vinyl albums which I do not know enough about to make money, and old cameras which are a pain to sell. Selling the items is the hard part and it is work. It may sound like buying something for $1 and selling it for $5 is a 500% profit, but with the cost of gas I use driving around and the time I need to put into selling things, I typically shoot for larger profits.
A cell phone is an invaluable tool while at a sale. Want to know how much an item is worth? Check it out at www.eBay.com before buying it. Ebay is the ultimate source to find out what an item is worth since it tells you the true value people are willing to pay. Remember to look at the Sold listings. Just because an item is actively listed for $50 does not mean it has sold in the past for more than $25.
This work resulted in enough money to start buying the things I could not find locally. The essentials, such as a solar powered battery charger, a hand-cranked emergency radio and water purifying equipment I still had to get from Amazon. Ammo still had to come from the store. A small silver coin collection is financed from the yard sale profits and continues to be added to. Watch sites such as www.Slickdeals.net for discounts on everything from flashlights to pistols.
You literally never know what you are going to find for sale. One of my most surprising finds was ten AR-15 thirty round magazines for $1 each. My advice if you want to give this a try is to get started early, and plan your route. Craigslist and your local newspaper are good places to look for upcoming sales in your area. I like to get a list of the ones starting at 7:00 AM or earlier and head that direction first. I recommend getting there 30 minutes early (unless they specifically request that you do not in their ad). Most people are setting up and do not mind you looking. After those, choose a route going by as many populated areas as possible. You have to get out early because by about 8:00 AM all of the valuable items, such as jewelry and collectibles, are gone. There are lots of yard sale pickers out there searching for these.
Be prepared when you arrive. Do you know how to tell gold and silver jewelry from the costume jewelry? Have you written a list of the main items you are looking for? If your spouse is not with you, bring a list of items he or she are looking for. Be prepared to ask for a discount, even if the price being asked for an item is reasonable. People expect to bargain at yard sales and every dollar saved helps. More than half of the time they will discount their price for you.
Lastly, ask for anything specific you are looking for, even if you do not see it. Sometimes people have things in the house or garage they did not consider selling at first, but are willing to part with. I picked up a five gallon gas can last week just by asking.
I still have a lot more to search for, but I have the essentials and each week I become more prepared than the week before.
FHA may need $943-million bailout
Less and less privacy, as time goes on: UK signs tax deal with France, Germany, Italy and Spain
Items from The Economatrix:
Class Of 2013 Faces Grim Job Prospects
Daniel Fisher of Forbes reports: The Bullet Bubble: Is Ammo The Next Bitcoin, Or Gold In The 1970s? Recognizing Ballistic Wampum for what it is: An almost perfect barterable tangible. (Thanks to Glenn M. for the link.)
Comex Gold Inventories Collapse By Largest Amount Ever On Record
BitCrash: Down 50% In Massive Sell Off: Over $1 Billion Vaporized In a Few Hours
AmEx (American Expat) sent: Marc Faber: Now Is Not a ‘Very Good Time to Buy Stocks,’ Crash Coming
Jim K. recommended an article from earlier this week: Kyle Bass: On Friday, The Market Gave Us The First Glimpse Of The Japan Blowup
Items from The Economatrix:
Desperate Countries To Accelerate Private Wealth Destruction
Dallas Fed President warns about the consequences of Too Big to Fail policies.
Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash
New Trouble for Euro in Portugal
H.L. sent: 30,000 Greek Households Lose Electricity Each Month.
Items from The Economatrix:
Jim Willie: Economy Will Implode
Get Prepared For Economic Catastrophe: You Are Being Sacrificed To Save The Too-Big-To-Fail Banks
Reader Andre D. sent us this: Rehn: big bank depositors could bear cost of bank failure: People with big deposits could suffer a ‘haircut’ under planned European Union law if a bank fails, the EU's economic affairs chief Olli Rehn said.
Reader H.L. sent this: Obama Proposes Retirement Account Limit In First "Wealth Tax" Salvo
Rhode Island's tallest building will soon go dark.
Dirty Harry to World Savers “You’ve Got To Ask Yourself… – Do You Feel Lucky?
Items from The Economatrix:
Sinclair: This Will Create The Mother Of All Financial Crises
Global Deposit Confiscation Called For By Influential CEO Of Italy's Largest Bank
The State Of Silver Bullion and Other Anomalous Events
Pierre M. sent: Numbness gives way to anger in Cyprus over bailout.
G.G. flagged this warning sign: Obama administration pushes banks to make home loans to people with weaker credit
Voting With their Feet: Beretta Leaves Maryland Because Of Stricter Gun Laws
Items from The Economatrix:
Former US Treasury Official: Fed Desperate To Save System
The Chart That Will Crash The Market
Familiar imagery? If The Fed Loses Money, It Can Just Print More
Tungsten Silver? Or More Salt in the Open Wound? (Thanks to Jeff L. for the link.)
Kevin S. sent: Instawallet Hacked: The company is suspending its services indefinitely, and will be refunding all balances of 50 Bitcoins or less.
Items from The Economatrix:
State auditor: California's net worth at negative $127.2 billion
Mt. Gox under largest DDoS attack as bitcoin price surges
A Tipping Point In The Financial System
Reader Lance in Michigan wrote to chime in with this sign of the times: "Yesterday I went to our bank here to begin withdrawing excess reserves and was told to come back today. While there, a woman queued up at the teller window next to me was upset that they wanted to know what she was planning to do with the $20,000 she was withdrawing. My mere $7,500 didn't solicit the same question. My teller commented: 'Everyone seems to be taking large amounts all of a sudden.' All the employee's there seemed bewildered as to why this is happening."
Speaking of preparedness for bank runs, I quizzed my own dear mother and learned that she never requested an ATM card for her largest account, at a her local bank. She plans to remedy that, post haste. Be ready, folks!
Items from The Economatrix:
Central Banks Gone Wild: Japan Raises Stakes In Losing Battle
Where US Economy Has, And Hasn't, Recovered. [JWR's Comment: Don't let these platitudes fool you. The only reason that "Household Net Worth" has recovered is because the Fed has re-inflated the housing bubble by pushing interest rates down to absurd levels and more than tripled the monetary base since 2009. The Quantitative Easing monetization scheme is now directed at buying up Mortgaged Backed Securities. This is false prosperity, folks. The end game will be ugly. Inflation is a hidden form of taxation. In real terms, we are worse off than in 2009, and we now face the prospect of an enormous financial tsunami.
The Great Disconnect Between Paper & Physical Silver
Never one to mince words, Ambrose Evans-Pritchard declares: Helicopter QE will never be reversed
BOJ to pump $1.4 trillion into economy in unprecedented stimulus
Also from G.G.: Special Report: How the Fed fueled an explosion in subprime auto loans
G.G. suggested this by Graeme Wood: My Hyperinflation Vacation
Also from G.G.: Thanks, World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency Convertibility
Reader Craig R. suggested this Op-Ed piece by David Stockman: State-Wrecked: The Corruption of Capitalism in America
Items from The Economatrix:
Peter Schiff: Why Leave Extra Money In A Bank?
Sir:
We have had cash on hand since Y2K, which became 9/11 cash, then 2008 crash cash. I agree with the author to be careful, because depositing/withdrawing or spending large amounts of cash can trigger a report to the authorities due to the Patriot Act, or cause other problems.
My own example is: In 2008 I withdrew $7,500 and closed an account at a failing bank. This money sat "under the mattress" so to speak, until just a few months ago when I decided to purchase a small second home, using this cash as part of the down payment. I had about $5,000 left of the cash and put it in my current bank account so the mortgage company could "see" the money to be used for the down payment. (The teller indicated that $10,000 was the reportable level.)
However, since my cash deposit was within three months of its planned use for the down payment, the mortgage company would not let me use it! All funds must be completely trackable, not cash, due to the Patriot Act. Even though I had banking records documenting my old bank closure and withdrawal, they would not accept this money in down payment. I was forced to obtain a money gift (completely documented as to the bank it came from,etc.) from a relative to get approved for my mortgage.
I don't know what would happen if I tried to buy a vehicle from a dealer with cash over $10,000 - it likely would be reportable.
Cash purchases, even smaller amounts, are becoming more restricted in Europe. And the Cyprus great depositor rip-off increases the risks of banking your money. Credit card purchases are set to be mined and monitored by the US government, I have read. We are between a rock and a hard place.
Here is some of what I have done for financial preparedness:
1. Transferred all of my IRA in 2009 from a big institution to a Self-Directed IRA (Unless you are very savvy, you must get a custodian - Entrust is a well-known one.) This enabled me to put my IRA into rental real estate, with an associated small bank account to receive rents and pay for expenses. I have chosen not to have precious metals in this IRA, because you cannot have custody. There are many other investments you can make through a self-directed IRA.
2. Junk silver. I do not trust that any recent purchases of gold will not be reported and later confiscated ala FDR in 1931.
3. Small amounts of money in my bank account, and small amounts of cash secured outside of the bank.
4. Purchase tangibles when I can. Next purchase is a truck. I have a whole list of things such as water storage, to spend any extra money on. Nothing is going to get cheaper in the future. I am a physician, so when I can I am also stocking up on medications.
Thank you for your great blog. - Colorado Doc
Mr. Rawles,
The other day I visited my local bank. I asked what the rate was for a certificate of Deposit (CD) or their various interest-bearing [passbook or checking] accounts. I was told the best rate they offered was .7% (Seven-tenths of one percent!) That surprised me. Then it got me to thinking: What is the advantage of keeping my currency in the bank? There, it is subject to being stolen by an identity thief or withdrawn from my account using fraudulent means. It is also within reach of the government (Think: Cyprus.) If, for some reason, the bank fails my currency will be tied up for months as the FDIC pays the claim. So I reasoned it would serve me best if I withdrew my currency and kept it hidden on my property. I have a retreat of 80 acres that we now live full time on. I have over 850 [1-ounce] Silver Eagles and I may buy more. I don't feel comfortable putting all my eggs in one basket. What do you think of my reasoning? - Tim P. in Oklahoma
JWR Replies: Your reasoning is sound. I recommend that folks keep just the minimum that they need in the bank for their monthly expenses. Cash and precious metals kept at home should be in a fire-resistant box that is hidden in a well-camouflaged wall or floor cache, or better yet in a concealed vault room.
Several readers sent this, and I also saw it linked at The Drudge Report: Stockton bankruptcy can move forward, judge rules. This sets a precedent,so other large cities may follow suit. How are those muni bonds doing for your?
Storing Silver for the Next Generation
File Under "No Great Surprise Dept.": New Yorkers Enjoy Less Freedom Than Residents In Any Other State In U.S.
Cyberattacks Seem Meant to Destroy, Not Just Disrupt
Items from The Economatrix:
Top Banks Investigated On Collusion In Derivatives
Cyprus Controls Expected To Hit Foreign Markets
Marc Faber Fears Systemic Crisis, Stock Collapse
B.B. sent: Marc Faber Spells it all out in 6 minutes
Karl Denninger warns against adopting the Bitcoin currency: BitCon: Don't. JWR's Comments: I use Bitcoin strictly for privacy, convenience, and as an alternative to PayPal, which has anti-gun management. (We accept Bitcoins for Ten Cent Challenge subscriptions.) I never let more than 15 BTC accumulate in my wallet. Bitcoins are not an "investment." Since they have no tangible backing whatsoever, there is a potential for a Bitcoin crash. And, of course, if the Internet ever goes "poof", then so will your BTC balance. If you want to invest your extra funds in something after you have your guns and grub squared away, then I recommend investing in silver coins, and keeping them in your personal possession. If your BTC wallet gets too fat, then you should translate the excess into tangibles, like field gear, from a company that accepts Bitcoins, such as Lighthound, Firesteel, Midwest Cord, or Survival Camping Store. Just be sure to avoid buying Chinese junk items.
Items from The Economatrix:
Pending Sales of US Existing Homes Decline 0.4%
Pipelines Can't Handle North American Oil Boom
Russia to ban cash transactions over $10,000
Jim Rogers: Put Your Money In Hard Assets, Especially Farmland and Agriculture
Items from The Economatrix:
Cyprus Bail-Out: Savers Will Be Raided To Save Euro In Future Crises, Says Eurozone Chief
Necultchurny! The haircut news from Cyprus just got worse: "This morning Sky [News] reported that the levy on balances over €100,000 had now increased to 60%..." This now qualifies as full scale bank robbery.
Ricky L. sent a link with some disturbing news: Fake 90% Silver U.S. Coins. Silver dollars are most often faked, but even smaller dominations should now be scrutinized.
Bill Whittle: Canaries in Coal Mines
You Will NEVER Look At MONEY The Same AGAIN.
Items from The Economatrix:
No Matter Outcome, Cyprus Crisis Is Blow To Business (And To Bank Customer Confidence Worldwide)
International Monetary Fund (IMF) Policy Paper Urges Higher Fuel Taxes to Offset Post-Tax Subsidies and "Externalities" Like Global CO2 Emissions. These Pigouvian ("Corrective") taxes might push the price of gasoline to $4.67 per gallon in the U.S.! (Scroll down to "Appendix Table 1. Corrective Motor Fuel Taxes, Selected Countries". Note that the suggested tax increase is 36 cents is per liter, not per gallon!)
Have The Russians Already Quietly Withdrawn Their Cash From Cyprus?
Eurogroup President Spooks Market By Saying Cyprus Deal Is A Template
Say Goodbye to the Purchasing Power of the Dollar -- Mr. Bernanke goes to Crazytown
Reader L.C.A. sent a link to some alarming charts on food an oil prices. Following the global credit collapse of 2008, inflation has returned with a vengeance.
Peter Schiff explains how a US depression can cause a global 'death spiral'
Too big to fail or ignore: How the US went from over 13,000 banks in 1987 to 6,000 today. $7.4 trillion in deposits backed by $32 billion dollars. (It is high time that we pull our money out of this high stakes casino. Build up a month to two month supply of cash at home. Get out of US Dollar-denominated investments and diversify into barterable tangibles. For example buy guns, ammunition, and full capacity magazines if you can find them at pre-panic prices. (Don't buy during the current market peak for those items. Wait until prices moderate.)
Items from The Economatrix:
Steve Forbes: Cyprus Isn't Over, It's Still A "Disaster For Us All"
As I compose this essay the news of the proposed “taxation” of the depositors of the banks in Cypress via a confiscation of up to 9.9% of the balance from all savings accounts (and then the decision to not take that step) is rocking the financial world. The government of Cypress expressed the need for this measure in order to meet their obligation to the European Union. They called it a “tax on deposits” and “giving depositors a haircut”. I think a better term would be “stealing depositors’ money”. So go to Plan B….seizing funds in pension accounts and turning them into government bonds to pay for the bailout? Plan C?
Of course that could never happen here in America. Right ?
Don’t think that for a moment. First of all, put aside any preconceived notion that the markets are honest and fair to all participants. The multi-trillion dollar printing by the runaway Federal Reserve that is controlled by the mega-sized private banks is nothing more than another engineered plan to acquire your assets. Artificially suppressing interest rates is essentially robbing blind every person who has money invested in a savings account, checking account, money market, or CD. The next step will be to orchestrate a plan to grab every last dollar held in IRAs, 401ks, pension accounts, etc. by those who control the money supply and have the mechanisms in place to manipulate the markets. The game is rigged…and you don’t stand a chance of surviving without implementing a plan of your own.
I have been a Certified Financial Planner for almost two decades and in the financial services industry as a stock broker with both a regional and wirehouse brokerage for a good number of years before that. In 2005 I became an independent advisor because I could no longer stomach the corporate environment and how customers were forced into packaged products. I have seen complete economic cycles over that period of time….falling and rising interest rates….business expansions and contractions….periods of relative peace as well as war…..boom and bust. I have always been able to tell my clients that they could count upon the strength of American Industry, the American Workforce, the American Taxpayer, and the American Consumer to provide stability and steady growth to the American Economy.
I have also been a prepper since the late 1970s. After returning from my wartime military service in Southeast Asia in early 1974, I watched the economy stagnate and then evolve into a chaotic jumble of escalating interest rates and soaring precious metals prices. Americans contended with rising gasoline prices, shortages of heating oil as well as regulated natural gas supplies, a hostage crisis in Iran, and the “general malaise” that Jimmy Carter told us was to blame for all our woes. It wasn’t until the election of Ronald Reagan and some new economic policies that we were able to recover as a nation. Things improved, then got better. The 80’s and 90’s were good and productive years for America.
But the differences between yesterday and today are truly jaw-dropping. Back then the U.S. was economically sound despite the expense of the Viet Nam War financed with newly printed dollars that were not backed by gold (Nixon closed the window in 1971) and the growing (but manageable) social welfare programs. Tax revenues back then essentially covered and met the government’s expenditures. One just knew that every economic downturn would be followed by recovery ….because that’s just the way things worked.
Today the U.S. has spent the nation’s blood and treasure as well as our emotional capital on the conflicts in Iraq and Afghanistan. We have become involved in Libya, Egypt, and Syria. Potential issues with Iran and North Korea loom large. There are 47 million people on food stamps. Unreported millions are unemployed. Spending on social programs has exploded. The housing market collapsed and has never fully recovered. The banking system is on life support. The Federal Reserve is purchasing $85 billion dollars each month (a trillion dollars a year) in U.S. Treasury issues because no one else is willing to do so. Despite government statistics and reports Inflation has driven prices on energy, food, clothing, health insurance, and everyday items beyond reason. Expenditures outstrip tax revenues. Government spending is out of control and we are approaching $17 trillion dollars in national debt with untold (and unfathomable) amounts in promised future benefits, entitlements, mandates, and promissory notes. By some estimates the U.S. has 238 TRILLION DOLLARS in unfunded liabilities. We can’t cover it. We are flat busted. And if our leadership refuses to address and fix the problem, the rest of the world will fix it for us.
People are genuinely concerned and are looking for answers. Yet they are also experiencing cognitive dissonance as well as normalcy bias. They are fearful at what might happen and fearful of taking steps towards addressing that fear because doing so conflicts with their ingrained belief system. They want to believe that an economic collapse could never happen in America. Life continues to be pretty good for most Americans….we shop, vacation, purchase luxury items, and enjoy eating in restaurants. Life appears pretty normal.
But perceptive Americans have an intuitive feeling that something is really wrong. Despite the message spread by the talking heads on NBC, CBS, ABC, CNBC, and MSNBC that the nation is in “recovery” or “the employment picture is improving” or “corporate earnings are growing” these savvy folks dismiss the messages as much akin to the old Soviet press releases back during the Cold War. The mass media has refused to acknowledge that the Federal Reserve’s continued money printing is a complete disconnect from the reported “improving” economy.
I am assuming that since you are reading the “SurvivalBlog “ that you have made plans for your basic needs for the other aspects of survival. My focus is on the financial aspect….protecting the value of what you have worked so hard to put away. Again, set aside all preconceived notions that the marketplace is honest and fair to all participants. What’s the difference between loss of purchasing power via paying depositors low interest rates or stealing the money outright. Depositors will lose money one way or another…thru actual loss (theft) or loss of purchasing power (inflation). And the FDIC doesn’t really exist for the protection of depositors….it exists to protect the banks who operate on a fractional reserve system from bank runs. A perception by the public that their deposits are somehow covered from all risk prevents those runs. If you think your money in the bank is safe, you better grow up. There is also a concerted effort to grab every last dollar held in IRA’s, 401k’s, pension accounts, etc. by those who control the money supply and markets. Americans will find the funds they worked so hard to save for their retirement years raided and invested into government securities. The American people will essentially be forced into placing their retirement dollars into financing the country’s debt. An outright theft. The game is rigged against all of us. If you think your money in the bank or in that 401k, IRA, or pension account is safe, you better wake up and smell the coffee.
So what is a prudent and careful person to do?
First of all, commit this mantra to memory:
BET AGAINST THE DEBT….BECOME YOUR OWN CENTRAL BANKER
I am suggesting that you take the following steps to have control of your funds, maintain purchasing power, and protect those assets from confiscation:
The U.S. dollar is just the latest in a long line of currencies that have had their value stolen due to decisions made by politicians and central bankers. Taking a valuable commodity like paper and reducing its value by printing numbers, images, promissory verbiage, and fancy artwork is a criminal act. Currency backed by gold and silver will eventually return. But until then it is wise to convert the existing currency to the real thing. Fight the debt….become your own central banker.
The recent experience in Cyprus set a dangerous precedent. With similar debt levels in Portugal, Italy, Ireland, Greece, Slovenia, and Spain, the European Banksters are likely to stage more heists. I suspect that there will be bank runs and some draconian withdrawal limits will be imposed. And FWIW, I'm not the only one predicting this. Oh, and I should also mention the Debt to GDP levels are even worse in the U.S. and Japan than they are in Europe's southern tier. The bank runs could quickly spread from Europe. Be ready for them. Keep plenty of cash at home, and diversify out of dollars and into tangibles that can readily be bartered.
Egon warns about derivatives, over at Gold-Eagle: The Reality Is The Financial System Could Fail At Any Time
World's First Bitcoin ATM is Announced, First Location Cyprus. (JWR's Comment: The Bitcoin to US Dollar exchange rate was a whopping 93.6-to-1, the last time I checked. I've been using and advocating Bitcoin since May of 2011. Since it has recently become a popular alternative currency, I expect to see an all-out demonization of Bitcoin in the Mainstream Media, shortly.)Guns and ammo sales spark jobs boom. (Thanks to H.L. for the link.)
Rocketman suggested: Unbanking vs. Underbanking: How to Break Up with the Financial System
Items from The Economatrix:
Cyprus Banks Reopen With Capital Restrictions. €300 withdrawal limit, €1,000 limit for travelers, wire transfer controls...
Another Gold Shortage? Dutch ABN Amro To Halt Physical Gold Delivery. I assume that they are settling in cash. Oh well, that beats Pork Bellies. But this underscores the fact that there is no substitute for holding precious metals in your own possession.
Fears Grow as Banks Reveal Exposure to Cyprus Euro Crisis
The Coming Derivatives Panic That Will Destroy The Global Markets
Toby Connor: The Dollar and the Real Inflation Story
Stanford University Kills Popular Course on Free Market. (Thanks to F.G. for the link.)
Dr. Gary North: Housing: Addicted to Fiat Money
Banks criticized for moving into payday loans
Items from The Economatrix:
Cyprus Shows Your Savings Will Be Stolen! UK Theft Will Be By Means of High Inflation
Sinclair: Cyprus, Gold, Russia and a New Monetary System
Reader B.B. suggested: Paul Craig Roberts: Triple Bubble Implosion Coming
I Moved my Money Out of the Stock Market-Laurence Kotlikoff
F.G. suggested: NPR's 'This American Life' spotlights Hale County, where 1 in 4 are on disability.
Steve Saville: The Fed Continues To Pump Aggressively
Items from The Economatrix:
Americans Still Doubtful About Stock Market, Economy
Bernanke Fails To Answer Concerns About A Cyprus-Style Seizure Of American Bank Deposits
Cyprus Salvaged After EU Deal Shuts Bank to Get $13 Billion. (A 40% higher haircut for large depositors! The Russians are fuming.)
Rick Rule: Gold Fear Trade, Silver Greed Trade, Platinum Math Trade
NY Times: Younger Generations Lag Parents in Wealth-Building
Silver Prices Before the Monetary Collapse
Michael Pollaro: Cyprus, Anything But Unique and Why to Worry
Items from The Economatrix:
Federal Reserve Sees Slow Recovery For Years To Come
Veteran Unemployment Dropped To 9.9% In 2012, Though Still Higher Than Non-Vets
Swiss To Vote On Gold Repatriation
UK faces Fitch downgrade over debt levels
H.M. suggested: The Lessons of Cyprus: NRD’s Asset Seizure Risk Cube
Charley S. sent: As Cyprus Implodes, Bitcoin Interest Explodes
Senate Passes $3.7 Trillion Budget, Its First in Four Years
Cyprus tax mess: If 6.7 billion euros is needed to secure the bailout, as it is the latest, that means a taxation of 19.1%.
Items from The Economatrix:
Sinclair: Lagarde's IMF Disaster Forces Bernanke Out Of Fed
Cyprus To Keep Banks Shut Into Next Week As It Seeks Deal To Avert Disaster
Forget Cyprus, Nobody is Stealing From Depositors More than Bernanke
A new "Let's Rip Off The Russians" plan? Cyprus weighs big bank levy; bailout goes down to wire.
Tarrant lawmaker seeks to create Texas Bullion Depository
Cyprus Says It's Close to Bailout Deal as Bank-Deposit Tax Back 'on the Table'
Is Cyprus deposit levy the first sign of widespread wealth tax?
What You Think Is True Might Be False and Costly!
Items from The Economatrix:
Pictures From a Cyprus ATM Line [Cheryl's Comment: Imagine if this were Los Angeles, San Francisco, Chicago, or New York, where there are quite a few more people...]
If the US markets are considered the "safe haven" amidst all the recent EU turmoil, then why isn't the US Dollar Index skyrocketing? (Mr. Market has some foresight.)
And if the global economy is in "recovery", then why is the Baltic Dry Index for shipping rates back in the dumpster? (JWR's Comment: Sounds like more like a "Lohan" recovery to me, to wit: she's checked into rehab, but there is no willingness to actually change.)
US Begins Regulating BitCoin, Will Apply "Money Laundering" Rules To Virtual Transactions
I found this linked over at Gold-Eagle: The Dark Truth About The Safety Of Your 'Savings'
Reuters reports: Euro zone call notes reveal extent of alarm over Cyprus
Items from The Economatrix:
A 900 Million Euro Trade Rocked The London Options Market This Morning [Cheryl's Comment: Hmm... Sounds like someone is betting against the Euro?]
Cyprus banks shut until Tuesday [March 26th] amid scramble for Plan B
EU gives Cyprus bailout ultimatum, risks euro exit
British Politician's Warning to Europeans With Cash in the Bank: 'Get Your Money Out While You Can'
Diana V. sent: For Jittery Spaniards, Bitcoin Is Looking Better and Better
The Revenue Deficit From Progressive Tax Rates
Items from The Economatrix:
Inflation Picks Up, But Still Hovers In The Fed's Comfort Zone
Jobless Claims Fall Again As Labor Market Improves
Americans Spent More On Gas, Less At The Mall
A new record: 13 Million Silver American Eagles Sold in First Three Months of 2013. (Thanks to Doug C. for the link.)
Reader Mark in Rochester wrote this reminder to Americans: "With all this talk of Cyprus and the sovereign debt levels in Europe's southern tier, we shouldn't got forget that our debt-versus-GNP rate is higher. (See this article from last November.) And remember that Bernanke is still creating $85,000,000,000 per month ($272 per person, per month) via Quantitative Easing monetization to bail out his buddies in the banking industry."
G.G. flagged this from Bill Freeza in Forbes: How To Protect Your Retirement Assets From The Coming Crash
Items from The Economatrix:
Will Cyprus Turn The Tide For Gold?
Future Of The Housing Market "A Great Unknown"
Ex-Chancellor Warns Of Bank Runs Across Europe
California Businesses Fuming Over Retroactive $120M Tax Grab
Jim,
Unfortunately, it has become common for preppers to express outrage at the exorbitant post-Newtown pricing of ammo and certain magazines and firearms. Frequently, the complaints are accompanied by vows and pleas for others not to patronize certain offending retailers after things return to "normal." Apart from the implicit assumption that things will return to "normal," I think that this sentiment is way off base. Although I like paying "reasonable" prices as much (and probably more) than the next guy, I find the notion that retailers should not raise prices to meet increased demand both fundamentally flawed, and ultimately dangerous for preppers.
First, we have to be true to our principles. Either we believe in free markets where supply and demand sets prices, or we do not. And if we do not, Heaven help us. If we admit that free market principles really are not truly important, we open the door to all kinds of unsavory alternatives, including both "voluntary" and mandatory government-sanctioned price and wage controls. (I, and perhaps you, are old enough to remember our country's last attempt at wage and price controls, to "Whip Inflation Now (WIN)." Younger readers can either take my word for it or do the research: the government's efforts to control the markets did not work.)
Second, why do consumers think high prices are unfair, but have no compunction about buying at "below market" prices? No one who snags a good deal at a gun show thinks that it is unfair to the seller. Rather, we all instinctively understand that the seller wouldn't sell at that price if he did not want to. If he wants to sell "below market," we assume that he has a reason (maybe he doesn't want to carry it home, he needs the money right away, his wife is impatient and wants to leave, or his feet are tired). But it is his decision. So why should our attitude change when the seller is demanding a price that we think is too high? I think that most of the reason is bias in favor of self interest; most preppers currently see themselves as primarily buyers, not sellers. That motivates a lot of complaining about "price gouging." But those that are preparing for TEOTWAWKI presumably will be net sellers when the big day comes. In other words, it will likely be those who have prepared (and set aside items for barter) who will be trading a couple jugs of clean water for a box of ammo, a box of ammo for a FN-FAL, or a FN-FAL for a cabin, a cow and ten acres. We should be very reluctant to stake out the idea that the fair value of an item is what it sold at for years, months or even days earlier. The fair value of an item is the price that a willing buyer agrees to pay now and a willing seller agrees to accept now--not a penny more or a penny less.
Third, although the retailers that raised their prices post-Newtown are motivated by self-interest, they are performing a critically important public service, by keeping scarce items available. For example, although I thought that I was pretty prepared pre-Newtown, I took to heart your admonition to make sure that my family's future generational needs were satisfied, especially with respect to certain magazines. So within days of Newtown, I purchased some used, high quality steel AK-47 mags, at the still pre-Newtown price of $15. I was equally successful in buying some other mags at pre-Newtown prices. But I dallied, and did not fare nearly as well with respect to Glock mags. So I hedged my bets. I placed one order with an authorized distributor at "reasonable" prices. (That retailer recently informed me that I am still at least four months away from receiving my mags.) And I simultaneously went on Gunbroker and bought some others at the then-market price (which was about three times their MSRP). The mags arrived the next week. Did I make a good decision? It is too soon to tell. If transfers of the backordered mags are outlawed before I receive them from the authorized distributor, then I was a genius to buy on Gunbroker.com. On the other hand, if I receive the mags from the distributor before I actually want to use them, then I wasted my money on the Gunbroker.com mags. But the important thing is that I had a choice. Because sellers in the marketplace were willing to "gouge" people like me, I had the freedom to get my mags when I wanted them.
Similarly, within days of your recommending the Mako Group E-Lander AR-15 magazines in early January, I placed an order at "reasonable" prices. I am still waiting for mine (and have heard nothing from the supplier, despite my e-mails). Nevertheless, based on your experience and others', I expect to receive them any day now, in which case I will be happy with my decision. But irrespective of whether it was a good or bad decision, the important thing is that it was my choice. I could have bought similar magazines from another vendor at maybe double the price (or more), and received them months ago. Although I chose to wait, the freedom to do what I think is best is of great value to me. In the future, I want to continue to have options.
I came across a recent example of what can happen when consumers intimidate vendors into not raising prices during a shortage. I sometimes patronize an Internet retailer, Classic Firearms.com, which is physically located in Monroe, North Carolina. I do not know anyone there, but have been very satisfied with their merchandise quality and customer service, and especially their candor. (And, as their web site makes clear, they are owned by Believers.) I also think that they tried hard to keep prices down the last couple months. (For example, shortly after Newtown, I bought 40 round Bulgarian AK mags at $19.99 each. When I decided to buy more the next day, the price had gone up to a still "reasonable" $22.99. Subsequently, they went to $24.99 and then were quickly out-of-stock, which is their current status.) In any event, Classic Firearms recently advertised on their web site that they would soon have corrosive milsurp 7.62x25 ammo available after a period of unavailability, at a price of $499.99 per case of 1260. Although this price is less than many other calibers, it is about three times the price that this stuff was selling for a few months ago, when supplies were plentiful. (Although I did not spend a lot of time looking, I cannot find anyone that has milsurp 7.62x25 ammo available now.) But according to the Classic Firearms web site, their announcement generated a lot of negative feedback from their customers about the new price, though they were merely planning to pass along their own high wholesale cost with a "very small profit margin." So they decided not to offer the ammo at all, out of concern that it "would reflect badly on us as the seller." Although I am not in the market for 7.62x25 ammo (and certainly not at $499.99 per case), this is a crazy result. Having the option of buying 7.62x25 ammo at $499.99 a case is infinitely preferable to not being able to buy it at all.
In fact, history teaches that attempts to persuade/coerce sellers into keeping prices below that which they can sell to others never works. That is why black markets exist. As anyone who has ever been a visitor in a country with currency controls knows, you can always find a burly guy on a street corner who is willing to give you more of the local currency in exchange for your dollars than will the government-owned bank. And here is an example closer to home: in December, the operator of a classified ad web site specializing in certain firearms was dismayed that sellers had jacked up prices. He therefore decreed that ads for exorbitantly-priced firearms would no longer be accepted. Presumably, he thought that the sellers would lower their prices for the privilege of listing on his web site. Guess what--they didn't. As could have been predicted, they simply stop listing on his web site. The sellers didn't care that the bump in prices might be temporary, or that market prices were higher than what the operator deemed reasonable; they weren't going to voluntarily sell below the market that then existed. And anyone who has read through this lengthy posting can probably guess how this story ends: the operator's policy lasted only a few days. Rather than become irrelevant, he relented and let sellers post their ads at the prices that they thought appropriate.
In short, the law of supply and demand is as immutable as the laws of physics. Attempts to ignore either one do not end prettily.
Keep up the good work. - A Consumer Who Likes Choices
JWR Replies: I concur. As a believer in free markets I am of the opinion that "price gouging" is a myth. This is a fiction perpetuated by Keynesians, societal malcontents, and people who don't take the time to fully observe free market forces. The fact is that there are buyers and sellers in every market, and that supply and demand do indeed drive pricing. The few price disappointments that we encounter in our daily lives are more than offset by the successful gains made when we are simply observant. In a free and fair market, intelligent people who are forward thinking generally win. But, in contrast, those who are unobservant and stupid generally lose.
I liken all this to the inherent difference between those who are math and market astute and those who are math and market illiterate. The former do things like:
But he latter (the market illiterate) do things like:
Since 2005, I have consistently urged SurvivalBlog readers to invest in tangibles like common caliber ammunition, full capacity magazines and guns. Those who took that advice up to December 13, 2012 (the day before the Newtown Massacre) are presently sitting very pretty. Many of these tangibles have doubled or tripled in price. Not wishing to gloat or to sound trite, but I told you so. Oh, and FWIW, I still stand by my often-maligned advice on stockpiling nickels. (In a couple of years, I can foresee again being able to say "I told you so.")
The Cyprus Depositor Legalized Ripoff saga unfolds: Only for the "Rich Ones" with €20,000 in Savings
National planning Cyprus-style solution for New Zealand
After Cyprus Vote, ECB Says Ready to Offer Liquidity Within Rules
Items from The Economatrix:
The Young Are Going To Get Screwed-Part 1
Cyprus "Bail-In" Is Rattling Markets Everywhere; Coffee Bean Jitters
U.S. Game Changing Renewable - Geothermal Power. Note that the preponderance of the nation's geothermal potential is in the Rocky Mountain States and the Intermountain West. The American Redoubt just keeps looking better....
Signs of the Times: Food stamps put Rhode Island town on monthly boom-and-bust cycle
Could The "Cyprus Fiasco" Occur In The U.S.?
Brian S. like this piece by Charles Hugh Smith: The Deeper Meanings of Cyprus
A 15% Haircut for Italian depositors? Tyler Durden of Zero Hedge mentioned this quote in a Handelsblatt newspaper article from Commerzbank chief economist Jörg Krämer: "'So it would make sense, in Italy a one-time property tax levy.' suggested the Bank economist. 'A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product.'" See the original Handelsblatt article here and an automated translation here.
Items from The Economatrix:
Jim Sinclair: Gold Is Going To Take Out $1,600
Former US Treasury Official - US Financial System To Collapse
Forced Loans They Can Take Your Money Giving You {Worthless} Government BondsDenouement of the "austerity" measures in Euope's southern tier: The planned seizure of of up to 9.9% of bank account holdings in Cyprus (and the revelation that Germany and IMF's initially demanded 40%) revealed a paradigm shift: banksters and bureaucrats are no longer bound by a core tenet of the Social Contract. While for years most of us meekly went along with gradually increasing taxes, we had the solace that one thing was sacrosanct: We only pay taxes on our earnings ONCE. Apparently, this is no longer true. (Yes, Mojo Nixon was right, albeit crude and premature.) My oft-repeated advice: Get out of Dollar-denominated investments and into practical, barterable tangibles. These are our only true safe havens in the era of inflation, over-taxation, and now double-taxation. The advent of double taxation makes it clear that the gloves are off. But so brazenly revealing their true role as plunderers may come back to bite them.
Here is some commentary on the Cyprus situation, over at Zero Hedge: JPMorgan Asks "Has Europe Bazookaed Itself In The Foot", Answers "Yes"
Speaking of involuntary short-cropped haircuts: Tennessee Legislature Set To Talk About Police Piracy Of Motorists
Items from The Economatrix:
Sinclair: One Of The Most Important Events In History & Gold (Regarding the Cyprus bank account tax situation. Some claim that 80% of those deposits are Russian "black money.")
Deutsche Bank: Only Jesus Can Save The Euro Area
Ryan warns of financial collapse over debt, urges Congress to avert ‘moral failure’
Cypriot bank customers get fleeced: Europe Announces Stunning Bailout For Cyprus — Bank Depositors To Get Instant 10% Tax Before Banks Reopen This Week. (Beware, this could happen in other countries--even our own! Thanks to Andre D. and the other readers that sent this link.)
And, inevitably, we read: Cash machines emptied across Cyprus after savers learn 10 billion euro bailout agreement includes levy on all bank accounts. (Thanks to Tim R. for the link.)
Items from The Economatrix:
Housing Foreclosures Start To "Flare Up" Again
Private Equity Crash Could Trigger Next Wave Of Financial Crisis, Bank Warns
China Just Sounded The Warning Bell For What's Coming Our Way
Jim,
How many times has the President said that we need to raise taxes on those making more than $1 million per annum?
Some believe that the government will also confiscate gold and silver.
As many know, our government already confiscated gold in America, circa 1933.
Even so, collectable coins were exempt, which is reason enough to own gold/silver coins that have value beyond the base metal – a discussion topic for another day.
Many of us at retirement age receive some form of retirement income from the federal government.
Some receive disability pay as well, but the feds would take a massive hit for even thinking about taxing or reducing disability pay.
But in that same vein, our government has NEVER met a tax they dislike.
If any of the foregoing is true, or even close, congratulate yourself – you just might be a millionaire!
If you can work backwards for a moment (something left handed people have always done) consider this:
A federal retirement paying you $33,000/year would require a private sector principle of $1,100,000, and paying 3% annually to maintain the principle.
Finding a safe 3% annual yield in this economy is just about impossible, excluding 30 year bonds and junk paper.
If my left handed calculator is correct, that is more than a million dollars – congrats, you are a millionaire.
Even though you may not feel like a millionaire, but you sure look like one on paper.
Remember – this is the same government that tells you that social security is sound.
Bernie Madoff would be pleased.
For those of us that are or will be “quintuple dippers” (military, civilian retirement, disability, TSP/401 K plans, and Social Security) we look like fat on paper.
Nationalizing not just federal retirements, but all retirements would be far easier than confiscating gold or silver.
Of course, the program would be couched as a measure to ensure that everyone receives a fair share – But you’re a millionaire, quit complaining.
Food for thought.
- Dan X. (A retired U.S. Navy Commander.)
H.L. sent this Reuters article: More US States Weigh Gasoline Taxes. Unfortunately this superficial article failed to detail the aggregate gas taxes--it only talks about the recent and planned increases, such as Wyoming's 10 cent cent rate "leap." But this map from 2012 gives a more complete picture. In fact, Wyoming merely normalized its gas tax rate with its seven contiguous neighboring states. It is noteworthy that the Northern Rocky Mountain states have taxes that range from 40 to 46 cents per gallon, which is well below the national average of 48.8 cent and far below the west coast states which range from 49 to 67 cents per gallon. It also failed to mention that Wyoming has no personal income tax. Also, keep in mind that gas taxes are road use taxes. Data from the Census Bureau shows that the average American has a 25.1 minute commute to work. Most Wyoming workers would consider that a dream job. A 45 minute commute (at 70 miles per hour) is not unusual in Wyoming.
Jim. W. sent: The National Debt to the Penny and Who Holds It. (These are truly frightening numbers when you consider that the only way that this debt could ever be repaid is via The Weimar Solution--mass inflation.)
Physical Silver – Record Industrial & Investment Demand
Items from The Economatrix:
The Federal Reserve May Be Responsible For The Biggest Financial Meltdown Yet To Come
17 Signs That A Full-Blown Economic Depression Is Raging In Southern Europe
Dr. Gary North: A Civil War Inside Austrian Economics
G.H. flagged this over at Time: If There’s No Inflation, Why Are Prices Up So Much?
Kyle Bass Warns "The 'AIG' Of The World Is Back"
Items from The Economatrix:
Kyle Bass: Yen could hit 200 Vs. US Dollar
Eric Sprott: Is the West Dishoarding Its Sovereign Treasure
I missed this when it was posted last August: The Two Things Your Broker Doesn't Know About Silver
Items from The Economatrix:
What A Difference For Jobs $1.2 Trillion In Debt Makes
Bitcoin Reaches Half Billion Dollar Market Capitalization
B.B. sent: Jim Rogers: We're Wiping Out The Savings Class Globally, To Terrible Consequence
And A.K.H. suggested this (also at Zero Hedge): Fed Injects Record $100 Billion Cash Into Foreign Banks Operating In The US In Past Week
Items from The Economatrix:
A Year Of Improving Payroll Growth Starts Tomorrow
ECRI Still Insists We're In A Recession--We Just Don't Know It Yet
ECRI's Achuthan: US Recession Began In Mid-2012
John Michael Greer: The Hard Road Ahead. (A piece recommended by Jeremy M. in New Zealand.)
The new Dodd-Frank rules on collateral requirements for derivatives were scheduled begin in January, 2013. This legislation was passed in 2010, in reaction the 2008 Mortgaged Backed Securities (MBS) fiasco that had triggered the global credit market collapse of 2008. Perhaps this in part explains why the U.S. Treasury and the Federal Reserve selected MBSes as their junque de jour for Quantitative Easing Round 3 (QE3) "out of thin air" purchases. MBSes will remain solid as long as Uncle Sugar keeps buying them, month in, and month out. I have some suspicions about the quality of the MBSes that are being bought up. So QE3 is propping up three sectors: the bond market (directly), the stock market (indirectly), and the real estate market (indirectly), and the derivatives casino (directly). How incredibly convenient for the folks on Wall Street. Your (inflated) tax dollars at work: boosting the bottom line at the brokerage houses. OBTW, any bets on the collateral level of the MBS paper that is being bought up? Hmmmmm? The Fed plans to buy up $40 billion worth of MBSes per month, indefinitely. OBTW, the derivatives collateral requirements are briefly explained in a Business Week article: A Shortage of Bonds to Back Derivatives Bets.
Items from The Economatrix:
Average Americans Are Feeling Pain of US Debt
Business Spending Improves as US Profits Grow
January Factory Orders Confirm Manufacturing Slump Continues
The Ten Worst States for Taxes (Nine Are Blue States) And it is no great surprise that none of them are American Redoubt States.
Items from The Economatrix:
Spending Cuts: It's About To Get Weird
Bernanke: Spending Cuts Add "Significant" Burden To Recovery
For The Middle Class, Expenses Grow Faster Than PaychecksBack on January 13, 2013 I mentioned the availability of steel AR-15/M16-compatible Tavor magazines, made in Israel, being sold by a company in the U.S. called The Mako Group. These were priced at $18.70 each. I personally ordered more than 100 of them on January 11th. My order just arrived on March 7th.
I was very pleased with the fit and finish of the magazines. Mine came with white followers. Their finish was glossy black and quite slick feeling. They have gave reinforced magazine retainer tabs. The E-Lander company maintains stringent military specifications and they have ISO certified and NQA certified (TS16949) processes.
I test fit several 30 round E-Lander magazines (both loaded and unloaded) in the magazine wells of six ARs here at the Rawles Ranch. I should mention that their lower receivers on these ARs came from four different makers. The magazines went into all six lowers with no difficulty whatsoever, and they dropped free with a touch of the magazine release. I also test fired one full magazine, and it fed wonderfully. Since they are steel, these magazines should give a lifetime of reliable service.
So the good news is that they ARE shipping, but they are obviously deluged with orders and that is causing long delays. Be patient, folks! We can safely assume that Mako Group is shipping orders sequentially from the date that orders are placed. So anyone who ordered their magazines from Mako during the week of January 13th should be seeing the Big Brown Truck of Joy fairly soon. And for anyone who orders any henceforth, you can expect at least a two month delay.
One odd thing that I noticed was that the magazines that I received were all marked "M.D. 02.13" So with a February manufacture date, these would have had to have been shipped to New York via air freight. This leaves me convinced that The Mako Group is doing their best to fill orders in a timely manner. But they obviously have a LOT of orders, and have developed a two month+ backlog.
Delayed orders are just part of life in the era of BHO, Dianne Feinstein, and Piers Morgan. Get used it. There will be continuing shortages, delays, and deep back-orders. I expect this situation to continue for at least a year. It will take that long for the manufacturers and importers to catch up. BTW, America's gun hating television talking heads all deserve awards for boosting gun, ammunition, and magazine sales to all-time highs. Because of those oh-so-vocal gun grabbers there will be an extra two million AR-15s produced in the U.S. this year, and untold millions of full capacity magazines made or imported. That just warms my heart.
To their credit, The Mako Group did not raise their prices after the Sandy Hook massacre. They could have easily cashed in on the crisis and doubled their prices, but they left them right at $18.70 each. That tells me a lot of about the company's management. Bottom line: The E-Lander magazines are worth the long wait. - J.W.R.
Analyst: Bitcoin Took A Key Step Towards Going Mainstream, And That's Why It's Been Going Crazy The Last Two Day . Wow!: I just checked at CoinMill and the BTC to USD ratio was at 40.91 to one! (Almost $41 to buy one BitCoin.)
Gold Core reports: Russia, Korea And Central Banks Accumulate Gold On Dip Below $1,600/oz
Items from The Economatrix:
Service Industries In US Grow At Fastest Pace In A Year
Just as I predicted: E-mail tells feds to make sequester as painful as promised
G.G. suggested: The Pentagon's Metals Gap
Keep Your (Milk) Powder Dry!: Milk Powder Surges Most in 2 1/2 Years on New Zealand Drought. (Thanks to Eric G. in New Hampshire for the link.)
Items from The Economatrix:
US Economic Growth Basically Flat
G.G. flagged this: Is the dollar as good as gold?
Life After QE: The Fed Is Starting To Prepare For A Future PR Nightmare
The Daily Bell reports: The New Era in Gold Repatriation Will Affect Everything
Items from The Economatrix:
Dow Surges To New Closing High On Economy, Fed's Help
Dow Breaks Record, But Party Unlikely To Last [JWR's Comment: The Fed's addiction to Quantitative Easing has created this bubble. As with other severe addictions, this won't end well.]
Notice the lack of large bumps in the American Redoubt on this zoomable population density map? (Thanks to Craig S. for the link.)
o o o
Wyoming legislators lay down welcoming mat for Colorado gun-accessory maker.
o o o
In his characteristic writing style, Montana veterinarian and state legislator Krayton Kerns bemoans the nationwide .22 LR ammo drought: Without a Shot
o o o
Some Idaho legislative news, courtesy of reader RBS: Idaho Lawmakers Want More Information Before Exempting Pocket Knives as Concealed Weapons. And: Ada County Sheriff Raney's Idaho gun legislation forum. Also in Idaho: Lawmaker: Make all Idaho adults militia members. And: Senate panel to weigh bill on gun silencers
o o o
Montana Anti-NDAA Bill Moves to Senate With 98-0 Vote. (Thanks to James C. for the link.)
Mayor Bloomberg: Don’t Panic About the Sequester. "Mr. Bloomberg argued the United States could owe “'an infinite amount of money' and there is no specific amount that would cause the country to default."Yeah, right. (I think he's been sneaking a few 32-ounce Mega Big Gulps of Mountain Dew, in violation of his own decree.)
In Debt We Trust America Before the Bubble Bursts. (Thanks to R.B.S. for the link.)
Items from The Economatrix:
Wal-Mart Situation "Getting Worse" New Leaks Reveal
Some Daily Bell analysis: Italy Founders While Greece Subsides: Is Austerity Over? Not So Fast ...
Bitcoin deflation! It is interesting to note that One Bitcoin ("BTC") is now worth around $34 USD. OBTW, my sincere thanks to the several SurvivalBlog readers who have made their 10 Cent Challenge voluntary subscription payments via Bitcoin. (Our Bitcoin address is: 1K7Gk6kqX6psSWDJaRV6pyDH7dwZuvqtUB.) Please support the Bitcoin movement. If we can use mechanisms like Bitcoin and traditional barter instead of the banking system, then we will starve the banksters and regain some of our economic freedom and our privacy.
'Dilbert' Creator Alleges Vast Conspiracy — Predicts 20% Market Collapse
Items from The Economatrix:
Sound Money Campaign: "Economists Love To Hate Gold"
The Tooth Fairy: Double-Digit Growth A Good Sign For The Economy
A Recipe For Massive Hyperinflation or Bankruptcy: ProShares UltraShort 20+ Year Treasury, iShares Barclays 20+ Year Treasury Bond
Michael Pollaro: Chairman Bernanke, Price Inflation is the Least of Your Problems
Over at Lew Rockwell's page, Peter Schiff predicts: US Debt Crisis Will Be Worse Than Europe’s
Items from The Economatrix:
Housing To Drive Growth (Finally!)
Jim W. was the first of several readers to point me to this piece at Zero Hedge: Silver Demand Surges To Record For February. Jim W. correctly observed that the paper markets for precious metals are increasingly irrelevant. The true relevance in the grand scheme of things can be found in the fact that the supply of paper is limitless and he supply of silver is fixed. Don't be frightened by short term swings in the market. Just be thankful for the dips--our opportunities to buy in in the midst of a long term bull market. Buy tangibles, not conceptuals.
Read Max W. sent this quip: "The good news is that with Sequestration, the gubmint will stop buying up so many billions of rounds of ammo, so prices may come back down to normal."
Consumer Spending in U.S. Climbs Even as Taxes Hurt Incomes
Items from The Economatrix:
WH Releases State-By-State Breakdown Of Sequester's Effects
Panic in Greek pharmacies as hundreds of medicines run short
H.L. sent this, also from The Guardian: We're so well educated - but we're useless (Also true in much of America)
Aaron H. suggested: If inflation is zero, why does my paycheck feel like it's shrinking?
Items from The Economatrix:
Eurozone Crisis As It Happened: Italian Political Deadlock Sends Markets Tumbling
Will Italy Be The Spark That Sets Off Financial Armageddon In Europe?
I Hope You're Ready: "The Selloff Today Is The Start, Not The End
20 States With the Most and Least Mortgage Debt (With the exception of Washington, the American Redoubt States are looking good.)
Reader B.F. recommended a reputable and well-established supplier of gold and silver bullion: OnlyGold.com.
Michael C. mentioned this about coupon clipping: Why Consumers May Be on a Crash Course
Items from The Economatrix:
If Masses Lose Confidence In The Currency...
US Stocks Slide As Italy, Sequestration Hit
US Dollar Collapse? Here Are 9 Ways It Could Happen
Half of Detroit property owners don't pay taxes. (Thanks to J.B.G. for the link.)
Meanwhile, in Stockton, California: Some residents struggle to pay property taxes
Items from The Economatrix:
IMF: World Economy Could End As We Know It ... Christine Lagarde: "2013 Will Be Make Or Break"
Captain Rawles,
The inflation calculator that you linked to is way off. If you punch in five cents it returns $1.16. [JWR Adds: This is because their calculator uses "official" CPI data, which is badly skewed.]
In 1913 it cost five cents for a loaf of bread. I would love to find a store that sells a loaf of bread for $1.16 today.
Being a master of Excel, I played around with this a few months ago. It turns out that a loaf of bread costs about $4.00. An increase from five cents to four dollars is an increase of 7,900%. The 2,226.1% increase claimed on the inflation calculator is too low by nearly a factor of 4.
An ounce of gold in 1913 cost $20.68. When I did these calculations gold cost $1677 per ounce. That is an increase of 8,009%. So I think it much more accurate to say that inflation since 1913 is roughly 8,000%.
Another point that might be interesting to those who are not aware: the value of gold does not change. The number of fake reserve notes it takes to buy gold keeps going up but the value doesn’t change. The evidence: Take the cost of a loaf of bread in 1913, five cents, and divide it by the cost of one ounce of gold in 1913, $20.68, and you get 0.24%. Then take the cost of a loaf of bread today, $4.00 and divide it buy the cost of one ounce of gold today, $1677 and you get 0.24%. It costs exactly the same amount of gold today to buy a loaf of bread as it did in 1913!
So if you leave the fake money out of the equation and only calculate with bread and gold, you find that there has been no inflation at all. I think this proves that inflation is a construct of the criminals in the Federal Reserve along with their fake money. - Maddog
The High Burden of State and Federal Capital Gains Taxes. (California's new combined rate us a whopping 33%. Ouch!)
Report: United States lost 11,630 farms in 2012
Items from The Economatrix:
The Trigger Has Been Pulled, The Crash Has Begun, How Are Things Going To Play Out
Are We Headed Toward An Economic Collapse? Preparing For A Financial Armageddon
Moody's Cuts UK Credit Rating One Notch To Aa1
US Consumers Hit By Payroll Taxes, Rising Gas Prices: Up Next, Government Austerity!
The year 2013 marks one significant anniversary that will probably be soft-pedaled by the mass media: December 23, 2013 will be the 100th anniversary of the exclusive private banking cartel known as The Federal Reserve--America's central bank. I detest this organization. It isn't Federal (not any more "Federal" than Federal Express), and it has no real Reserves.
Lex Mala, Lex Nulla
The Federal Reserve Act was improperly implemented as an act of congress. Properly, it should have been promulgated as a Constitutional amendment. Article 1, Section 10 of the U.S. Constitution dictates: "No state shall make anything but gold and silver coin a tender in payments of debts." And Article 1, Section 8 dictates: "Congress shall have power to coin money." Neither of those clauses can be nullified without a Constitutional amendment. Rather than fitting in with the letter or intent of our Constitution, the Federal Reserve better matches the fifth plank (or "demand") of the Communist Manifesto: "Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly." (Das Kommunistische Manifest, by Karl Marx and Friedrich Engels, published in 1848.)
Dollar Destruction
Per Title 12 U.S.C. § 225, the Federal Reserve had three chartered objectives: creating maximum employment, assuring stable prices, and moderate long-term interest rates. But the Fed has pursued policies that are diametrically opposed to those chartered objectives. Rather than assuring stable prices they have consistently engaged in monetary policies that have gradually destroyed the purchasing power of the dollar, though currency inflation. The U.S. Inflation Calculator illustrates this gradual, insidious process.
Here is the long term effect of inflationist policies, in a nutshell: $1 worth of goods in 1913 terms now costs us $23.26 (based on official CPI data, rather than real world inflation.) Or, better put: A Dollar in silver coinage (four well-worn silver quarters with no collector's value) now costs around $34 at your local coin shop. The Federal Reserve Note is funny money, plain and simple. Don't expect stable prices. rather, expect the continuing destruction of the Dollar.
I've said it before: The Federal Reserve should be re-named the Feral Reserve. Their unconstitutional cartel is a wild beast that should be put down.
For further reading, I recommend the book The Creature from Jekyll Island: A Second Look at the Federal Reserve. - J.W.R.
Mr. Rawles,
Thank you for your site and all that you do. I haven't seen anyone mention on Survivalblog the recent price rise in Bitcoin. It is a good time to turn any coins into tangible items. I would like to recommend Fastcash4bitcoins.com
I used the service for the first time about two weeks ago just to see if it was for real I selected the pay me with a check option and was paid out on 5 bitcoins. I can happily say I received and cashed the check three days later. Now that I had some more confidence in the service I used the pay by Silver option(they will payout in Silver Maple Leafs). Just yesterday I received my full mint tube 25 oz of silver. They also offer the option to be paid in gold, via ACH to your bank account, and I think a few other options. They have overall good reviews on Bitcointalk.org and only allow you to be paid out if they already have the cash/silver/gold on hand.
Since Bitcoins are currently at a level of parity with silver I will be turning virtual to physical as much as possible. (Or virtual to lead...)
Regards, - Michael X.
G.G. sent us a link to some clueless punditry from The Economist crowd: More Inflation Is the Cure for the Fed’s Impotence. The Fed is locked in to ZIRP and endless monetization ("Quantitative Easing") because the service cost on the Treasury debt would be unsustainable if interest rates were to rise. When inflation resumes and interest rates do jump, it will be Game Over. The Dollar will crash, interest rates will run up past 15%, and the economy will stagnate. Be careful what you wish for, Mr. Avent. At this point the Fed is irretrievably stuck until Der Tag, when the Dollar will be destroyed. Prepare for that day, folks. Get out of Dollar-denominated assets, and into tangibles like productive farm land, guns, ammunition, full capacity magazines, and precious metals. I've been advocating this hedging strategy since 2007. Those investments have all yielded quite well (and in fact amazingly well, in recent months), while also providing insurance against the inevitable Dollar collapse. Are you listening now?
Get ready for a meat shortage (Thanks to Lydia M. for the link.)
Items from The Economatrix:
The $995 Billion Sequester Cut Is Actually A $110 Billion Spending Increase
Wal-Mart Suppliers Could Be Hit With Payroll Taxes And Gas Prices
Roubini: Don't Underestimate The Economic And Financial Impacts Of The Sequester
Graham Summers: The Fed is Now the Fifth Largest Country in the World
B.B. recommended this at Zero Hedge: Stanley Druckenmiller: "We Have An Entitlement Problem" And One Day The Fed's Hamster Wheel Will Stop
America's Most Miserable Cities 2013
Items from The Economatrix:
Why Trouble's Brewing For The Euro
Wal-Mart's "Atrocious" Quarter Reveals A Faltering Economic Recovery
Reader B.B. suggested this: Killing the Dollar: G20 & IMF Push for Global Fed, Global Currency
The Wal-Mart Indicator: We’re Heading for a Stagflationary Disaster
Jeff R. mentioned this story about modern-day alchemy, with folks treating lead like gold: Oklahoma City business offering ‘Cash for Bullets’ amid gun craze
Items from The Economatrix:
20 Signs that the US Economy is Heading For Big Trouble in the Months Ahead
Michael W. sent:In hard-hit Spain, bartering becomes means of getting by
G.G. sent this: World's top economies shrink for first time in four years
Ask Russ: How Bad is the Sequester? Is Hyperinflation A Certainty?
Items from The Economatrix:
Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?
Currency War Has Started. International Monetary System To Destabilize And Collapse
Peter Schiff: America is Becoming the United States of Britain
The dip in spot silver is continuing. Silver was down to just $28.54 per troy ounce, the last time I checked. This is a great buying opportunity. Buy on the dips!
The handwriting is on the wall for the U.S. penny and nickel: Minting Coins Cost U.S. Taxpayers $436 Million: Chart of the Day
Reader Joe B. sent this: If the Euro Collapses, the Swiss Army Is Ready
B.B. sent this: Peter Schiff: It's Going To Hit The Fan During Obama's Second Term
Items from The Economatrix:
Will We See $5 Gasoline This Year?
The latest scary chart, over at Jesse's blog: The Fed is increasing its monetary base aggressively again.
G.G. flagged this: Fiscal trouble ahead for most future retirees
Manny Pacquiao KO'd by 39.6% Tax Rate, Refuses to Fight in U.S.
US Jobless Rate One Of The Worst In Industrialized World (Thanks to C.N. for the link.)
Mainstream media pundit Mark Levin talks serious societal collapse gloom and doom. (In his February 15th show, scroll forward to the 10 minute mark.)
A consideration in choosing your locale: State and Local Sales Tax Rates
Left In The Dark: Copper Thieves Rob Detroit Freeways Of Light
H.L. sent: Texas Prepares to Go it Alone
Capitalism works: Private navy goes to war on Somali pirates. (Thanks to KAF for the link.)
Items from The Economatrix:
Ron Paul: Trade War & Economic Collapse Coming
Gas Prices Hit An Historic High: What's Driving Them Up?
Fed Joining In Alarm Over Distortion It Enabled: Credit Markets
More gloomage coming from a mainstream outlet: Is the Dollar Dying? Why US Currency Is in Danger
Gold & Silver Price Takedown February 15th: Noise vs Facts
A hard money investing blog worth reading: Deviant Investor
Items from The Economatrix:
Recovery Sign: More People Quitting Their Jobs
Mortgage Mess Still Mires Housing Recovery
DIP! Spot silver closed at $29.80 on Friday. It may yet go a bit lower in this swing, but anywhere under $30 per Troy ounce is a bargain.
Are US Retirement Accounts at Risk?
Items from The Economatrix:
Retail Sales Up Despite Payroll Tax Hike
The Number One Reason To Invest In Gold
The End Of The Current Fiat Monetary System Is Coming, And A Gold-Backed Currency Will Replace It
"When You Have Fiat Currency, What Level Of Value Is Real", Santelli Asks. (Thanks to B.B. for the link.)
Another from B.B.: Schiff: Sequester is 'Best Thing We Could Have'
Items from The Economatrix:
Eric Sprott: Expect $200 Silver As The Financial System Implodes
Top Economic Advisors Forecast War And Unrest
Our story begins enslaved to a job in a middle-class suburb and ends mortgage-free in the Missouri Ozarks with us making ambitious strides toward off-grid living and growing all we eat. Unlike Jed Clampett’s kinfolk who urged luxurious city life, ours would have warned us to stay put, keep our jobs and fit in – if only they had known what we were up to.
If you dream of “someday” leaving your weekly paycheck for a more rewarding, self-reliant country life, but think you must wait (because of your “secure” job, societal expectations or whatever else is holding you), consider how we did it. With one $12 an hour job and no savings, we bought a sturdy old house on 30 acres in the woods, now work from home and have no mortgage. Today, begin your dream, even if you only sketch a rough draft. Truly decide and visualize what you want. By continuously meditating on them, dreams become reality. Ours did. Yours can, too.
After attending a free local preparedness class in 2009 and reading James Howard Kunstler’s “The Long Emergency,” my husband and I decided our rural subdivision was dangerously close to 200,000 potentially starving, looting inhabitants. We discussed moving further into the country, but weren’t sure how to do it. At the end of any week, we didn’t have two extra nickels to rub together. Or, as my mother would say, “What are you going to buy it with? Buttons?” Well, that’s precisely what we did.
Reasons to leave
Despite our humble financial situation, we decided to seek more secluded property. First, in a worst-case scenario, at 25 miles from Missouri’s third-largest city, we were within realistic walking distance of thousands of people who had not prepared for disaster of any sort. Although generous, especially my husband, who is happiest helping others attain self-sufficiency, we feared our 5-gallon buckets of dried beans, rice and oatmeal would vanish overnight in a catastrophe.
Equally important, we dreamed of a meaningful life away from traffic, toxins, cell towers, TV, Wi-Fi and electronic everything. Because we enjoy planting, tending, harvesting and eating organic food, we wanted more space to do so. We wanted clean air and water, plenty of firewood to cut and chemical-free wild edibles. Nearing our 50s, we wanted simply to enjoy life, strengthening our relationship as we worked side by side to sustain ourselves.
Once content on our fenced, three-acre paradise with wind- and solar-energy systems, greenhouse, raised-bed gardens galore, fruit and nut trees, berry bushes and a disaster-resistant home, our serenity faded as the economy plummeted. Our fence did well to prohibit rabbits and deer from ravaging our gardens, but could not keep out the most lethal invaders – cold, desperate and hungry humans.
Deciding to leave was easy. Without any savings or potential income in a remote area, however, crafting a plan took ingenuity. In the face of criticism, skepticism and rejection, we proved it is possible. We hope to inspire others to find their way, too, out of Dodge – or Detroit, Dallas and Denver.
Where does the money go?
Although always living modestly, shopping in thrift stores, buying used vehicles instead of new, and making or restoring most of our needs, we were like many Americans working to work. We had no debt, just typical utility bills, insurance, gasoline, taxes and grocery costs. Since we grew much of our own food, had no mortgage and generated a portion of our electricity, our expenses were considerably less than most. Yet, we had absolutely no savings.
It seems, no matter what a family’s income is, living expenses equal that amount with nothing left over. Throughout my own lifetime, if I made $10 and hour, I spent $10 an hour. If I earned $20 an hour, I spent $20 an hour, and so on. Working away from home often demands so much energy and absence that it seems grueling to ponder an alternative. Eventually, I recognized how my desk job exhausted me, yet, I came alive clearing brush or planting potatoes. We had to find a way out of the trap.
We wanted 20-50 wooded acres with a small fixer-upper house, but how could we afford that? Online real estate searches revealed the remote property we sought required at least $100,000. Thus began a tumultuous roller coaster ride. Following the trodden path, we went to the local bank to inquire about a short-term mortgage. Our home and property surely had as much value as what we sought, right?
Unfortunately, we could not sell our property first. We still needed a place to sleep, store things and grow food. In our view, the super-efficient home my husband built seven years earlier would sell for the same as what we hoped to find. Banks, however, prefer a sure thing. There was no guarantee our property would sell as quickly as we thought. (It ended up taking two years to sell our home.) We also learned banks lend only a portion of a property’s value, not the entire amount.
Despite facing many obstacles, producing reams of evidential documents (some a decade old) and being turned down by several lenders, we persisted. Not everyone denied us, as abundant crooks agreed to finance our mortgage with inflated rates and nonsensical fees. Finally, we found a reasonable financier three counties away willing to work with us.
Searching for property
With approval for $120,000, we eagerly began hunting for our dream property. Like greenhorns, we started by viewing multi-listings on the Internet. Online searches now are easy, as buyers can sort properties according to price, size, location, acreage and more. However, as we learned later, web listings don’t include the best deals, such as foreclosures or “absolute” auctions, where sellers will accept any bid, no matter how outrageous.
Often, banks or realtors will hold huge auctions, selling possibly 100 parcels in a single day. At a recent local auction, a lakeside lot sold for a few hundred dollars and a former auto repair shop with some tools and equipment netted $5,000. Buyers may visit the properties a few days before the auction. Still, such purchases are riskier and may even sell at higher prices than traditional sales. For more information on finding foreclosures, visit http://homebuying.about.com, which has links to many sites to get you started.
Attending a county sale on the courthouse steps for a property being auctioned for unpaid taxes is another way to nab inexpensive land, but not a good choice if you immediately want to occupy it. Many times, the owner has a year or two to make good on the tax debt to regain the property, in which case the buyer is out all sweat equity invested. Check with the county clerk before bidding.
Since I worked full-time, my husband assumed the tedium of searching online and calling about properties. We visited the first four properties together on a sunny Saturday in September 2009. The sites were vastly different and spread over a 100-mile radius. We met up with one agent to tour a two-story, rundown home with moldy walls and saggy floors that was filled from basement to roof with garbage. Funny, it looked charming in the photos.
Next, we met another agent in a coffee shop who must have been late for an appointment, as he led us on a harrowing ride to see three other homes. We hit a buzzard, breaking a fog-light bracket, as we tried to keep up with the speedy agent on winding county roads. Something didn’t suit us with each of the properties – too open, dilapidated, populated, expensive, big, or whatever.
The land that I love
The next day, yet another agent showed us MY dream property. (Pay attention, ladies. This section is important.) Actually, my husband liked the property, too, and we made the 350-mile round trip to see it three times. Even though the 30-acre, $130,000 property had some issues (a water well shared with a neighboring cattle farm, freshly timbered woods, too close to the road, truckloads of junk to haul, and the house needed a new roof), we made an offer of $115,000 that was begrudgingly accepted by all parties.
The comfy two-bedroom 1960s ranch house had a full, finished basement and reminded me so much of the house I grew up in. There were several outbuildings including a large barn, mature fruit trees, vegetable gardens, a cistern and root cellar. Oh, the fun I’d have storing our produce. The picturesque property was on a dead-end gravel road, surrounded by neighboring woods, and had a creek running through one corner.
I absolutely adored the house and took pictures and measurements of every room, closet and hallway. I used graph paper to sketch our furniture placement in the house I was sure was ours. I printed photos of the house and land from every angle and taped them up everywhere so I could see them as I cooked supper, brushed my teeth and dressed for work. I even penciled us in arm-in-arm on the photos and sketches. I visualized us already there. I thought about it constantly and was positive the house was ours. More than once, I headed the wrong way down our hallway toward the bathroom at night, thinking I was in that house, the only house I would ever want, the only house I could ever love.
Gathering down-payment money
While we waited for the roof inspection, water test, termite inspection, employment verification, loan approval, land appraisal, insurance estimates and a host of other boring paperwork necessities before closing, we set out to raise our down-payment money. Since we couldn’t increase our wages, we tried selling unneeded items. I easily sold an ugly peach-colored 1986 pickup for $600 and an old car for another $500. We also cashed in our IRA for a whopping $350. It seemed galaxies from our $115,000 goal, but we opened a savings account and faithfully put every extra cent there. We rolled up our pennies and deposited them, too.
We sold my husband’s fancy Trek bike on Craig’s List for $300 and a small motorized cement mixer for$ 100. We even sold our kitchen clock on Craig’s List for $10. I actually did miss that after selling it, but only because I still needed to know the time.
Next, I suggested eBay as another selling source. My only experience there was buying a used camera five years earlier. Since I already had an eBay account, away we went. It took time to comprehend the listing rules, methods and fees, and how to calculate shipping, choose auction styles, upload photos and so on. We started with a pair of trendy walking shoes that were a gift to my husband. We acknowledged the shoes had been worn twice and didn’t expect to get much for them. Imagine our excitement as we watched the seconds tick away on the auction, netting us a dumbfounding $260 for used shoes! And, the buyer was pleased.
Cleaning out the closets
After that, our daily routine included exhuming stuff from closets, drawers and the shed to take pleasing photos of, vividly describe and then post, package and ship all over the country. We sent a few items to Canada and one to Australia, but learned international shipping is expensive. Another nuisance was writing feedback, but it’s intended to keep buyers and sellers honest. In all of our transactions, we received only one negative comment, which was for a Mexican peso made into a necklace. I had the necklace since 1974 and sold it for 99 cents, yet the buyer complained that it looked darker (or was it lighter?) in the photo.
Living simply, we had no electronics, video games or gadgets, so we weren’t sure how much we could assemble for eBay. It astounded us. After one particularly busy weekend, I counted $2,000 worth of goods piled on the couch, ready to ship. Many sales shocked us — $100 for a glass coffee percolator, $17.50 for a fishing lure, $450 for an antique jug that I’d been dusting for 20 years. Some sales made us laugh — $36 for a postcard I found tucked inside a used book, $5 for an antique no-name motel key and an average of $20 each for a dozen used industrial laser lenses. Another we still chuckle about is a broken pocketknife that looked something like a woman’s leg in a cowboy boot. We zoomed in on the cracked knife handle, described its imperfections and watched in amazement as bids reached $30.
This next admission may seem horrid, but here goes: I broke apart the coin collection I started as a child in 1970 and sold each coin (hundreds of them), while my husband cut the stones from his late mother’s jewelry and sold the gold. We sold my grandfather’s World War I army medals, wooden shorebirds my late father carved 30 years ago and family antiques. My husband removed the 1940’s studio portrait of his mother and aunts, and then sold the fancy, convex oval frame for $86 to an eBay shopper who collects frames. She even sent an extra $25 for us to have the frame professionally packaged. Grandpa’s medals sold for $200 and went to his hometown where they are now proudly displayed. Strangers reprimanded us by posting harsh comments on eBay, but we kept focused on our goal.
When our stash depleted, we stopped at an estate auction one cold, rainy day just to see if that would be profitable. We spent $8 and earned $250, but learned auctions consume too much time for our tastes, especially during gardening season. We paid $1 for a quart jar of old buttons that I sorted to sell. All over the living room, I set categorized bowls of sorted glass buttons, shell buttons, wooden buttons, military buttons, pearl buttons and colorful plastic buttons. I’d lay them out individually for the photo shoot (front, back and sideways), and then write tantalizing descriptions. “This lavender shell button would look especially lovely on a silk blouse” and “this sparkly faux silver button would be adorable on a jean jacket,” etc. Like most of the artifacts we sold, we didn’t know a thing about their value – and didn’t care. Our philosophy was: If we could not eat it, wear it or use is as a tool, we sold it.
Mistakes happen
We made blunders along the way as we learned the art of online selling. We hoped to save shipping costs on a heavy antique wall-mount telephone, so we sent it via U.S. Postal Service ground transport. It arrived broken. Insurance covered the buyer’s loss, but we were out shipping expenses. It was a shame the beautiful telephone lasted 100 years until we got hold of it.
Once, I forgot to check the correct shipping amount on a leather coat. It sold for 99 cents (minus eBay fees), but cost us $10 to mail. I also sent a carved wooden cow to the wrong customer and didn’t notice until the buyer inquired about the cow’s delayed arrival. I refunded the buyer and learned who mistakenly received the cow, but left it at that. In our experience, most buyers were courteous and honest. But, whew, was I ever happy when all our sales finally ended.
A year later, I hoped to meet like minded preparedness folks online and thought I’d start a thread (a first-time forum viewer or poster anywhere). I figured others would relate to how we parted with mawkish family trinkets to buy our homestead. Instead, I was scolded for admitting what we sold. The so-called survivalists called me “sick” and “immoral.” I made one reader “utterly sad.” I assumed I’d be among friends, but instead was called a freak living an 1800’s minimalist lifestyle of toil and discomfort. In my opinion, those “survivalists” placed too much value on sentimental possessions. Still, they made me feel awful for weeks. My advice here is to avoid those who do not agree with your dream.
I recently came across a photo file of our eBay items, and you know what? I did not wish for a single item back. We made our first eBay sale in late October 2009. By April 2010, pooled with our other gleanings, we amassed $10,000 in our savings account, a feat which later required explaining to our lender.
If I had known sooner, I’d have kept better records, but among the mountain of documents our lender required, I also had to clarify how our savings grew from $0 to $10,200 in five months. We sold more than 400 eBay items, some for merely 59 cents, so the itemization was quite lengthy. The bank needed assurance we were not depositing borrowed money (a few dollars at a time). It took days, but I finished the list in time to close on my dream property in mid-May. I withdrew $450 to appraise the property as the lender required. We also spent $600 on a homemade trailer to begin moving. I was ecstatic.
Talking it over
As the closing date neared, my husband began seriously reconsidering the purchase. While I was blind to the flaws with the house, barn, land, mortgage, water, creek, road, insurance and location, my husband was practical. I begged and whined; he pointed out the property’s drawbacks.
But, I love that basement, I said.
The well is across the road, watering a neighbor’s cattle, he said.
The area is beautiful, I said.
It’s too expensive, he said.
I’ll work two jobs to pay for it, I said.
I mailed off $450 for the appraisal. Days later, my husband called to cancel the deal.
That was it. We lost our appraisal fee and some earnest money, but I didn’t care about that. I was heartbroken. I took down the pictures I had taped everywhere. I told my husband to sell the trailer (he didn’t). I pouted and wouldn’t look at other properties or even talk about them. I accepted we would never leave the subdivision. So, listening to the neighbors argue, I planted the garden and moped. My husband resumed looking for our dream house. While I brooded at work, he searched, researched, made calls and visited properties. He placed a newspaper ad, seeking to trade our property for one in the woods. (The effort failed, but was worth a try.) Next, he called banks and realtors for foreclosures. He intended to spend half of what we were approved to borrow.
They’re all junk, I said.
He looked away.
I said: "We’re never going to find a decent place for less than $50,000."
He ignored me.
Just three weeks after canceling the contract on my dream home, my husband happened to reach a realtor getting ready to list a foreclosure for $44,000. My husband went to see the neglected little house (four years’ abandoned) and then learned another buyer also was interested. The bank asked each to submit a bid. After my husband described the property to me (I was speaking to him by then), I recommended he bid $54,000. He didn’t listen to me (again!) and bid something lower.
I still had not seen the property when my husband called me at work and said, “Well, we could have gotten that place for $54,000 … (my heart sank) … but … we … got it for $48,000!” Now, that’s just not funny.
The house is solid, custom built in 1966 with hardwood floors and a good basement, large shop, shed and woods. The first time I saw it, there were rats on the porch (which sent the realtor screaming), molted snake skins near the house and billions of ticks in the yard. I thanked them all for keeping the place safe for us.
A month later, it was ours. I still thank my stubborn husband for finding our dream house. Leaving the bank with our contract for deed, I drove through the area of my former dream property and discovered it was not the remote wilderness I envisioned, but a popular recreation area. For 40 miles, I was wedged in a river of boats and campers as I drove past canoe rental sites, campgrounds and liquor stores. Among other sad realities, the neighboring trees that I had loved were being logged.
We would need to work three jobs to pay for what I declared was the only place in the world I wanted. I believed we’d pay off that dream-home mortgage in a few months when we sold our house. I couldn’t have been more wrong. Selling the subdivision house took 18 months longer than we estimated and netted half of what we anticipated. After paying closing costs, we’d have made only a dent in the $115,000 mortgage I reasoned we could easily afford. Instead, we have a perfectly cozy house with no mortgage.
After almost three years, we fix things as we go and both love our little piece of the Ozarks. I left my arduous desk job and now help my husband at our home-based business. Our income is less, but we have more money. I don’t fret all night worried about my job, nor do I spend three hours a day in the car.
Perhaps, we were just lucky. I don’t know. But, I believe dreams do come true if one is willing to work for them. Looking back, it all seems so easy. Below is my elementary guide for finding your dream property.
So, you want to Get out of Dodge?
By way of Investment Watch blog:comes this video: Currency War: U.S. Cannot Absorb a Deflationary Spiral - Yra Harris
Terry in Florida suggested this by Charles Biderman: Fed Creating $4 Billion in New Money Each Day, Helping to Rig Stock Market
Charles Hugh-Smith, over at Zero Hedge: Don't Worry; Be Resilient. (Thanks to Geoff B. for the link.)
Items from The Economatrix:
Schiff: US To Win Currency Wars, Then Implode
Some more "Voting with our feet" news: State taxes and the Great Income Migration. The Kindle book cited in the article (How Money Walks - How $2 Trillion Moved Between the States, and Why It Matters
Prosecuting the Messenger: Chief Greek Statistician Threatened with Jail. (Thanks to Peter S. for the link.)
And speaking of "slaying the messenger": Federal, State Governments to Sue S&P Over Mortgage-Bond Ratings
Items from The Economatrix:
The Economy Is Much Worse Than The Data Show
Central Bankers One Wild: What Can Investors Do?
Marc Faber: Stocks Are Set For A Possible Repeat Of 1987!
James,
The recent letter from a reader about about the gun show had some comments about pricing so I thought it would be helpful to remind readers some basic economic principles. Prices are a natural function of supply and demand and higher prices, especially during periods of high demand, perform the needed function of allocating scarce resources to the optimum number of customers.
For example, a dealer at a gun show receives a limited number of cases of ammo. If he were to sell it at historical prices people would buy 2-3 cases each. Now we have higher prices due to limited supply forcing consumers to limit themselves to what they can afford/feel comfortable buying at that price. This allows more buyers to access these scarce resources. Eventually, the demand curve will shift back to the left and automatically shift pricing down. As long as we are all chasing ammo the supplies will be limited and the price will continue to climb.
Important note: It is a red herring from the progressives to squeal "Price Gouging!!!" when prices naturally move higher do to demand. $1,000 for a case of .45 Automatic would be gouging but ask yourself this question when the "gouging" thought comes to mind: Do I yell for fairness when prices quickly drop and I get a good deal on a product? How come you don't take the moral high ground and demand to pay more when prices fall due to oversupply or price deflation?
A resource I recommend is the book Basic Economics: A Common Sense Guide to the Economy
B.B. suggested an excellent presentation by Stefan Molyneux: There Will Be No Economic Recovery. Prepare Yourself Accordingly. The charts he shows and the statistics he cites are staggering!
Show This To Anyone Who Believes That "Things Are Getting Better" In America
Biggest Bubbles In History-Stocks, Bonds, Dollars-Paul Craig Roberts
Items from The Economatrix:
Watch The Financial Markets In Europe
Do Wall Street Insiders Expect Something Really BIG To Happen Soon?
John Williams of Shadowstats: How To Survive The Illusion Of Recovery
Putin Turns Black Gold to Bullion as Russia Outbuys World
Reader Jim W. sent: Silver Coin Dealers and the New Premium Paradigm
G.G. sent: Americans Are Tapping Into Home Equity Again
Venezuelan Devaluation Sparks Panic. (Thanks to R.C. for the link.)
This afternoon I went to the 3 day gun show (Friday 3-8 and all day Sat, Sun) which began on Friday at 3PM. Being retired it was easy for me to go but clearly a very large number of people left work early to get ahead of the Saturday morning crowds.
So we all got the Friday afternoon crowd instead!
Parking in a disabled slot, a gentleman in security noted that I was a 100 percent disabled Veteran and allowed me to walk straight in rather than wait in either of the two lines which went at least 500 meters in either direction. The line was far bigger than I've ever seen. It was astonishing!
Once in the door the line went straight to the back where the ammo dealers were. The dealers were advising people to not even shop for themselves but to simply line up for the cash register and tell their staff what ammo they wanted and it would be handed to them as they waited for their turn to pay. No mention of brands, just calibers and quantities.
It reminded e of the old Soviet Union and people lining up to buy shoes. "I'll take a case of .223, five boxes of .45 ACP and three boxes of 9mm and a box of .38 Special if you have it. They would move along the line and await their ration and turn to pay.
Everyone bitched about the prices and the profiteering but few left the line. They just adjusted what they were willing to buy or what they were willing to spend to match the new reality.
Shooter grade ammo in .223 and.308 was a buck a round! AK ammo was only slightly less. And that was the price by the case! A 1,000 round case was $1,000. No negotiation. No discount.
I bought two ammo cans of Lake City GI issue M2 ball .30-06 in en bloc clips to feed my M1 Garand rifles for a comparative bargain price as most people were in a feeding frenzy for the modern stuff. Luckily I had stocked up before the election so I just shook my head and figured I'd wait for the furor to die down in a year or so.
Magpul PMAGs were averaging $50 to $60 each. As low as $45 if you bought in quantity or were a regular customer of the dealer. [JWR Adds: These magazines were selling for as little as $11 wholesale and $16 retail, just before the frenzy.]
Genuine AK mags were $60 bucks each. Perhaps somebody had them at a better price but I never saw them except for the cheap plastic junk.
Cruddy old metric FN FAL mags that had sold for $4 each were $20 each.
I brought along a marginal quality Vulcan flat top AR and it was quickly snatched up for $1,600 within minutes of my walking in the door. Most people were asking $2,000 for ARs but mine was an off-brand and a plain Jane version which I didn't really like. Besides, I have a half dozen better ones at home so I was happy to unload it for a hefty profit.
Oh, just so you understand, people were BUYING. Why?
Because they knew that on Saturday most dealers would be sold out and there would be nothing at any price. It reminded me of the panic before a blizzard hits when people strip the stores.
Most buyers said they believed there would be a ban and or confiscation. Some said they were expecting an economic and society collapse. A few said they believed we were about to have all of the above and it would cause a civil war between the Constitutionalists and the Federalists.
Best Regards, - Gunwriter
JWR Replies: Reader K.A.F. recently sent me the link to article that dovetails with comments, nicely: SITREP.
Top Marginal Tax Rate Now Exceeds 50% in California, New York, and Hawaii
Venezuela Sharply Devalues Its Currency
Jim W. sent this: Days After Freezing Prices, Argentina Bans All Advertising
By way of Professor Paul Caron's TaxProf blog: Tax Hikes Backfire, Greece’s Revenues Plummet
Items from The Economatrix:
US Postal Service Ends Saturday Delivery In August To Save Itself
Are Junk Bonds Warning Stocks Are About To Fall?
Chris Duane has expanded his Silver Bullet - Silver Shield video channel page. Check it out.
Jim Rogers on Fed Easing? 'This is going to end very very badly'
Items from The Economatrix:
Nearly Half Of American Families Live On Edge Of Financial Ruin
The Real Story Behind JPMorgan Chase & Co.’s (JPM) Infamous Whale-Sized Trade In Credit Derivatives
Kevin S. suggested this "must watch"interview of Jeff Berwick: Get Far Away From USA...Its Collapse Will Be Messy. In this interview, Berwick aptly says: "We are in the last days of this financial system in the United States. This is Zimbabwe." Berwick is starting a "Galt's Gulch" ex-pat community in Cafayate, Argentina. JWR's Comment: I believe that Chile would have been a better choice than Argentina, which has a socialist government and a currency with frequent bouts of inflation.
Mac Slavo of the excellent SHTFPlan blog reports: Unprecedented Demand: Americans Purchase a Gun Every 1.5 Seconds
Items from The Economatrix:
"Brace For A Stock Market Accident" GLG CIO Warns
16 Reasons Why David Rosenberg's Not Buying Employment Report
Forbes: Where Not to Die in 2013
Diana sent this from Coin World: Fake American Eagle silver coins surface. So henceforth, if you want to stack Silver Eagles, I'd recommend buying only sealed Monster Boxes, from a reputable dealer.
Dr. Gary North: The Luddites Among Us
Items from The Economatrix:
"Severe" Danger Looming In Corporate Bonds
Jim Rogers: Don't Sell Your Gold And Silver Coins
Beware "Credit Supernova" Looming Ahead: Pimco's Bill Gross
Just as I anticipated: Platinum Climbs to a 16-Month High, Extending Premium Over Gold. (I hope that some of you took my advice last October and bought platinum when it dipped below the price of gold.)
Bob Bauman of The Sovereign Investor recently reported some "voting with their feet" news: "In 2009, when the Labor Party in the U.K. raised the top income tax rate to 50%, two-thirds of the country’s 16,000 £1 million earners disappeared from British tax rolls. In 2010, HM Revenue and Customs reported only 6,000 remained. Rather than increasing revenue, the tax actually cost the U.K. £7 billion ($11 billion) in lost tax revenue."
Chris Martenson: QE for Dummies
Items from The Economatrix:
Global Economy Living Off Fed's Gravy Train
Peter Schiff: Economy "Stuck In Serious Recession"
CIA Advisor Warns of "Financial Weapons of Mass Destruction"
Gasoline costs take biggest share of household income in three decades. (Thanks to G.G. for the link.)
Is a global LIBOR settlement coming?
Central Bank Snuffs Out Vietnam’s Thriving Gold Market
Items from The Economatrix:
January Auto Sales Indicate Strong Start to 2013.
Own Physical Gold & Silver As Currency Wars Will Destroy Our Money
G.G. sent: Argentina freezes prices to break inflation spiral. JWR's Comment: Wage and price controls never work. I explained why, back in 2007.
Greek Isles Cut Off From Mainland For Sixth Day As Strikes Return With A Vengeance
Why has US Oil Consumption Steadily Fallen since 2004?
"Slay the messenger!" S&P says U.S. to file civil lawsuit over ratings
Items from The Economatrix:
Gold Run? 43 Tonnes of Gold Stand Ready for February Delivery on 1st Notice Day
Schiff Report: Dow 14,000, GDP, Jobs, Fed, inflation, treasuries, & gold. Peter Schiff observes: "All of this is an illusion created by inflation."
Gold Leasing: The Case Of The Disappearing Gold. (Thanks to G.G. for the link.)
Americans Rip Up Retirement Plans
Items from The Economatrix:
Gasoline At Highest Price Ever For This Time Of Year
Fed Officials See Brighter Global Economic Outlook
2014: Too Late to Leave The United States?
G.G. suggested this over at Zero Hedge: Friday Tragicomedy: Former Fed Advisor Urges Fed To Buy More, "A Lot More" ... $30 Trillion More
Items from The Economatrix:
Goldman Sachs Braces For Bond Market Blowup
Rush To Safety: Americans Buy Nearly Half Billion Dollars Of Gold And Silver In January
Economic meltdown insurance: Virginia alternative currency plan moves forward
Peter Schiff & Doug Casey On Gold, Investor Cluelessness, And The "Escape From America" Plan
Items from The Economatrix:
Unemployment Rates Fall In Most Large US Cities
2013: We are Witnesses to a Grand Disconnect of Hope/Perception from Reality AGAIN Like 2007
Dear Mr. Rawles,
I have read Patriots and am working on (from the library) your three other books. I have a great group I am connected with and all are reading your material. Also, I have the book Strategic Relocation--North American Guide to Safe Places by Joel and Andrew Skousen. I really appreciate all your advice and tips and have been working as best I can to prepare. My question revolves around how crucial you think it would be for me to pay off as much debt as possible before the coming collapse or whatever comes?
I am struggling with balancing paying a credit card debt and mortgage while keeping my decent paying job, but this and some other bills that can't go away quickly enough (student loans for example) are in the way of me doing other things to prepare. I don't expect you to have the "magic answer" but was wondering your opinion of how important paying debt is as opposed to preparing? I don't mean getting a loan to prep or a new credit card, but is paying off a mortgage or a VISA card really that important WTSHTF?
I ask this as one who has always paid my bills and am never late. I did, however, charge some food and prepping supplies as I felt I was behind on that.
I am open to brutal honesty of course. If you have time I would appreciate your input.
Thank you very much. Your brother in Christ, - Gregg in Central Washington
JWR Replies: We are possibly facing several more years of deflation before mass inflation kicks in. Deflation makes consumer debt devastating in the event of a layoff or a substantial pay cut.
I highly recommend Dave Ramsey's books. He has many proven solutions to personal indebtedness.
Don't hesitate to team up with neighbors, relatives and like-minded friends. By picking specialties, pooling some resources and doing "group buys" you can get your key preparations squared away much less expensively.
Reader Michael W. sent this: Zimbabwe Is Down to Its Last $217. Comrade Mugabe and his cronies have absolutely destroyed and looted their nation which once had a vibrant economy. They must be overthrown!
The destruction of the US Dollar continues: Bernanke Seen Buying $1.14 Trillion in Assets in 2014
Items from The Economatrix:
Economists Growing More Upbeat About Year Ahead [JWR's Comment: Well, golly gee, with the Federal Reserve and Treasury conspiring to soon double the money supply AGAIN, so stocks must go up, and we'll all be "millionaires" soon, right? Given their monetary policies in recent years, I propose that the Federal Reserve shorten their name to Feral Reserve. That would be more accurate, since they are a private banking cartel has truly gone wild, and after all they never were a Federal agency. They are no more "Federal" than Federal Express.]
SBSS has launched a new "Liberty Girl" one-ounce .999 silver coin.
‘Wall St.’ flees NY for tax-free Florida
The Disappearing Gold
Dr. Gary North: Fed Will Buy $1.1 Trillion in Bonds. Then It Will Buy More.
Items from The Economatrix:
Mr. Rawles,
The window is closing to pick up Canadian pennies is quickly closing.
The Royal Canadian Mint will no longer ship pennies to banks on February 4, 2013 and at the same time, banks will no longer "sell" pennies to their customers. I did a run on about a dozen banks today, and some already out right refused to sell them to me.
It's worth noting that unlike the American government who debased their pennies in 1982, the Canadian government fully debased the Canadian from 95% copper to copper washed zinc in 1996, so a circulated box of Canadian pennies has between 30-40%, high copper pennies with a melt value ranging from 1.96 - 2.56x face value. http://www.coinflation.com/canada/
Even if it's not worth your time to sort them now, these boxes are quite handy for weighing down gun safes or creating a plain view hiding spot. I have stack of 40 boxes of pennies and I doubt a thief in a hurry would ever bother looking at the boxes on the very bottom, considering the other, more convenient, higher value goods I store them with.
Already on eBay there are ridiculous auctions for uncirculated, 2012 Canadian pennies (2012 being the year last year the penny was minted), even though these pennies are just copper washed steel, with buyers actually buying 50 cent rolls for $5-to-$15 (shipping included). - N.L.
You read about this first in SurvivalBlog: Shale gas boom now visible from space
The Real Story Of How 'Untouchable' Wall Street Execs Avoided Prosecution. (Thanks to Jim W. for the link.)
Scam complete: the US government takes a page from Diocletian’s book…
Items from The Economatrix:
Gold Bank Run Accelerating In Europe
US expatriates urged to seek tax advice
At Zero Hedge: Chinese Politicians Are Buying Billions In U.S. Real Estate
Couple goes off grid, on to savings
Items from The Economatrix:
It's Official. Worst. Recovery. EVER.
Gallup Poll: Americans Most Negative On Nation And Economy In 30 Years
Cities Short On Pension, Health Care Funds
Canada's Economic Outlook Dims
G.G. sent this: Money printing 'amounts to theft from our children'
From reader C.D.V.: Food prices on the rise, could triple
Auntie Entity votes with her feet: Tina Turner 'to become Swiss, give up US passport'
Items from The Economatrix:
Silver Bars Being Secured By HSBC--Buys $876 Million From Poland
Food prices on the rise, could triple
H.D. sent: Bank of America issues `bond crash' alert on Fed tightening fear
Michael Pollaro: U.S. Government Finances
People do vote with their feet, to avoid high taxes: HowMoneyWalks.com/
Items from The Economatrix:
Obama's Second Term: Is the Economy Still Important?
Charitable Giving: These Are Most and Least Generous States. But Why?
Hugh D. sent: Bank of America issues `bond crash' alert on Fed tightening fears
Items from The Economatrix:
H.H. suggested this over at Zero Hedge: Oldest Bank In The World Plunges, Halted As Chairman Resigns In Aftermath Of Latest Derivatives Fiasco
The Government Debt Bubble Will Eventually Burst
Chinese Politicians Are Buying Billions In U.S. Real Estate
Items from The Economatrix:
The Sovereign Debt Bubble Will Continue To Expand Until -- BANG -- The System Implodes
Ben Stein on money, gridlock & more. Stein says the budget deficit will continue to grow "...until it eats us all alive."
Whither Japan Stocks and Bonds: Are Kyle Bass and Martin Feldstein Right? Is Market Collapse Ahead?
Items from The Economatrix:
Karl Denninger: US Credit Rating Downgrade 2013
As 2013 Begins, Global Economy Still At Risk Of Collapse And The Downside Risks Are Gathering Force
37 Statistics Which Show How Four Years Of Obama Have Wrecked The US Economy
Blog reader Paul C. sent: Mickelson plans 'drastic changes' in response to tax hikes. (Effectively a 63% tax rate, for high income earners, in California.)
Pacific Group to Convert 1/3 of Hedge-Fund Assets to Gold
Obama's New 'Pay as You Earn' Plan a Windfall for MBAs.
Items from The Economatrix:
G.G. flagged this item: First Term: Americans Collecting Disability Increased 1,385,418—Now 1 for Each 13 Full-Time Workers
US Mint Out Of Silver Coins - Suspends Sales (A hat tip to Rory for spotting that article.)
Bill O'Reilly: Obama's Economic Collapse. (Thanks to B.B. for the link.)
Items from The Economatrix:
Expect Stunning $233 Silver As It Begins To Soar
Bernanke Playing with Fire-Laurence Kotlikoff
Peter Schiff: Congress Can't Fix The Post Office, How Will They The Fix Deficit?
Reader H.L. sent: Hotel Mama: Bad Economy Has Young Europeans at Home
Items from The Economatrix:
Gold & Silver Set Up For Explosive 2013
Peter Schiff Reveals CPI Propaganda By Calculating Real Price Inflation
Fool me once, shame on you. Fool me twice, shame on me: US taps pension fund to avoid passing debt limit
Why The Entire Bond Universe Looks Toxic In 2013
Items from The Economatrix:
Moody's Threatens To Downgrade US AAA Rating
20 Facts About The Collapse Of Europe Everyone Should Know
Economic Collapse! A Leading Indicator Of Better Times To Come
G.G. suggested this New York Times article: Life in the Red
Items from The Economatrix:
128 Million Americans Are Now On Government Programs-Can America Survive As The World's Superpower?
Brussels Fears "Poverty Trap" For Half Of Europe As North-South Gap Widens
A transcription of my recent Silver Vigilante interview is now available.
Federal Reserve Bank President Says, “We Must Inflate 24 x 7.”
A surprising map of the best and worst countries to be born into today
Items from The Economatrix:
Why Job Numbers Mean Lower Rates For Years
H.L. sent a video from Belarus that was apparently shot just after a currency revaluation. It illustrates what life can be like during a mass inflation: The Most Tolerant Cashier
John Rubino: We Created The Conditions For Catastrophic Failure
It Begins: Bundesbank To Commence Repatriating Gold From New York Fed
California’s “Prevailing Wage” – Floor Vacuuming At $45.93/Hour
Items from The Economatrix:
Washington state bank closes; first failure of 2013
H.G. flagged this: New data show 1 in 4 children on food stamps in FY 2011
Greeks Raid Forests in Search of Wood to Heat Homes. (Thanks to H.L. for the link.)
Items from The Economatrix:
Powerful “Indicators” Suggest A Stock Market Sell-Off And Inflation Could Be Just Around The Corner
Beware The Bond Bubble In 2013
US May Default On Its Debt A Half-Month Earlier Than Expected, New Analysis Shows
An excellent piece by Dr. Gary North that gets to the heart of the preparedness mindset, even when disasters are personal rather than national: Budgeting for a Lifestyle Contraction
Anthony Wile of The Daily Bell: The Trillion Dollar Coin Is a Great Idea!
Items from The Economatrix:
The Economic Implosion Of Europe Is Accelerating
Economic Forecaster: US Has Gone Over The "Demographic Cliff." Market Crash Will Start In Summer
A major theorem of cryptography is that anything that be done with a trusted authority can be done without1 a trusted authority. This theorem can be applied to currencies, too. Anything that can be done by a central bank can be done without a central bank . The central bank for the United States of America, as you probably already know, is the US Federal Reserve. The stated dual mandate of the US Federal Reserve System is:
"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."
To state this in other words, the dual mandate is:
1. Stable prices
2. Maximum employment
However, the real dual mandate for the US Federal Reserve during the past five years has been :
1. Bail out the US Government.
2. Bail out the Big Banks.
The US Federal Reserve System is the trusted authority that is now losing the trust of the average American and people worldwide. The US Federal Reserve System has been monetizing the debt of the US Federal Government and buying the toxic mortgages being held by major US banks. Debt monetization, quantitative easing, discount window lending, or whatever new name that the Federal Reserve comes up with, it simply means more money printing. This results in price inflation for real things, such as food and gas. Debt monetization is advanced warning that a fiat currency is about to die or a government is about to go bankrupt and renege on its obligations. The US Dollar is a fiat currency just like all the other worldwide central reserve currencies. Fiat currencies have no intrinsic value except the value that is forced by the government upon the people. Sooner or later, all fiat currencies revert to their true value of zero.
Now, because of the Internet, there is an alternative currency called Bitcoin. Bitcoin takes the basic theorem that anything that be done with a trusted authority can be done without a trusted authority and applies the theorem to the combined fields of cryptography and currency, which is now known as cryptocurrency. Bitcoin is the most popular cryptocurrency that exists today. The best way to start learning about Bitcoin is to download the free application at the following link:
http://bitcoin.org/
A good definition of Bitcoin can be found in the Intro part of the readme file in the download.
Bitcoin is a free open source peer-to-peer electronic cash system that is completely decentralized, without the need for a central server or trusted parties. Users hold the crypto keys to their own money and transact directly with each other, with the help of a P2P network to check for double-spending.
The application costs nothing to download and it is available for the major operating systems (OS): Linux, Windows, and Mac OS. The download takes a short time depending on the Internet connection speed. However, it may take over a day for the application to fully sync up with the Bitcoin system. Bitcoin is a peer-to-peer application. There is no central infrastructure, server, or database. Each user is both the client and server.
In Bitcoin, blocks are the files that contain all the transactions. The first time a user downloads the app there will be tens of thousands of blocks to load. However, once these blocks are loaded, a user just has to load the recent transactions. On a average day, there are about 200 blocks to load. The app is fully synched when all blocks have been loaded. The green check mark reflects the app is in sync.
The units of currency are called bitcoins (BTC). Bitcoins have value because work is needed for its creation. Bitcoins are mined. The mining is done virtually by miners throughout the world with computers that have fast central processing units (CPU) and powerful graphics processing units (GPU). However, the average users can just buy bitcoins through various exchanges and sites located on the web just as one would buy gold or silver coins. One of the main benefits of Bitcoin is that a user can transfer cash from one user to another user. A user can buy things from various vendors located anywhere in the world by way of the Internet. All of this can be done without using a bank, money order, Western Union, or even PayPal. The file that holds the bitcoins is called wallet.dat in Windows. The wallet.dat file is just like a real wallet. If a user loses the wallet or the wallet is stolen, then the cash is gone, too. Multiple backup wallets can be created and stored; however, Bitcoin prevents double spending. In Windows, as seen in the screenshots below, wallet.dat is located under Users ->Username -> AppData ->Roaming ->Bitcoin. The backup copies of the wallet should be stored at various locations, such as on a secured cloud server or a on a flash drive. The wallet.dat file should be encrypted before its stored. Bitcoin advises that encryption passwords and the wallet passwords should be at least 20 characters long containing uppercase letters, lowercase letters, numbers, and special characters.
"Your Bitcoin Address" that reflects the unique identifier for each Bitcoin owner. Each wallet can have multiple addresses. The benefit of anonymity is that a person can buy things or send money to people or organizations without anyone knowing their identity. Just for practice or as a learning experience, you can send bitcoins between two addresses on the same computer. Or download Bitcoin on two computers, and send money between the two addresses. Also, you will see that bitcoin transactions usually takes seconds to occur between the sender and receiver.
Bitcoin has now adapted to furnishing the app for Android cell phones. Now, users can transfer and make transactions with bitcoin using Quick Response (QR) codes. As seen below, QR codes are the checker board barcodes that also represent the Bitcoin address in a different format than the alpha-numeric format. An Android handset with the Bitcoin app can scan QR codes.
Bitcoin is not just for computer nerds and crypto-geeks. Survivalists apply the basic cryptography theorem that anything that be done with a trusted authority can be done without a trusted authority to many aspects of daily living. Unfortunately, the US Dollar and the Federal Reserve System penetrate all areas of life for the average American. The average American struggles paycheck to paycheck, year after year, due to the actions of the US Federal Reserve System, which is creating more and more US Dollars every year. Bitcoin provides a viable alternative to the US Dollar and the US Federal Reserve Banking System. Year to date, Bitcoin has gained over 100% in value versus the US Dollar and the other major world currencies. Bitcoin was launched back in January 2009 by a person or persons named Satoshi Nakamoto. At this time, the total market value of all bitcoins is approximately $125 million. There are over 10 million bitcoins in circulation with each worth at around $12.25. The total amount of bitcoins that will be mined is 21 million and the mining operations will stop in the year 2140 by designed. Anyone can be a miner or a person can be a member of a mining pool like Bitminter. There are many mining pools on the Internet. Mining pools combine the computing power of individual miners in order to mine more efficiently. Mining can be costly due to the mining rig that a user may have to set up as well as the electricity to power the rig. So, each user will have determine if its cost effective to become a miner.
YouTube is a good source of information and education about Bitcoin from users around the world. Most of the content is very informative and straightforward. Be careful if a video, or some company, states that it can double your bitcoins if you just send your bitcoins to them. This is the equivalent of someone saying, "Send me an ounce of silver and I will send you back two ounces of silver the next day." This is a common scheme which appeals to the greedy as well as the naive user of Bitcoin. Please remember, there is no chargeback system with Bitcoin as there is with debit and credit cards. Once the bitcoin is sent, then its gone. The below video is a good start for a beginner. There are more detailed videos at YouTube as you become more comfortable with Bitcoin and have more questions that need to be answered.
Cited Works:
Dan Boneh, Stanford Online Cryptography Course: Introduction-Course Overview (Stanford University)
Federal Reserve Bank of Chicago, The Federal Reserve's Dual Mandate, (October 2012)
Real estate horror continues with 'zombie foreclosures'
Peter Schiff: 'The Dollar Is Not The King Of Anything, Except Maybe Depreciation
Zero Hedge reports of the bigger, deeper crater that once was Greece: Greek Unemployment Soars To New Record, 56.6% Of 15-24 Year Olds Without Job
Items from The Economatrix:
Highest Ever One-Day Sales For American Silver Eagles?
After the Fall: What Do You Do When You Conclude America Is (Temporarily or Permanently) Kaput?(Thanks to Linda U. for the link.)
Carney on coin gambit: 'There is no backup plan'. [JWR's Comment: This is beyond bizarre. It is now obvious that we are entering the fiscal Twilight Zone.]
Items from The Economatrix:
Peter Schiff: Even if you raise taxes to 100%, we couldn’t pay it off. We’re going to default.
Dr. Gary North details the latest legislative travesty in Illinois, the Land of Lincoln Obama: A Bill to Register Buyers of Gold and Silver Coins. Just as with guns, they have it down to a science: they register, they tax, and then they confiscate.
Federal Reserve May Pause Quantitative Easing. JWR's Comment: Yes, and your local crack head may try to kick his habit by going cold turkey. They'll both have about the same chance of success.
Hedge funds face suspicious activity reporting requirement
Items from The Economatrix:
Gold and Silver Prices Are Down - So What, Buy More: Peter Schiff
H.L. sent: Silver Prices in the Event of a Comex Default
Jim W. suggested this article about the underground economy: My Name is Cash
A Graphic View of How Shale Gas Could Change the Future
Obamacare Guarantees Higher Health Insurance Premiums -- $3,000+ Higher
Items from The Economatrix:
It's Not Too Early To Worry About The End Of Fed Easing
Economy Adds 155,000 Jobs In December: "It's A Slow And Steady Recovery"
Social Security: It’s Worse Than You Think
Tiny gold bars latest rage for jittery investors
G.G. mentioned this at Zero Hedge: Here Comes The Student Loan Bailout
Also from G.G.: Spain Drains Fund Backing Pensions
WSJ: Who Pays More Tax in 2013?
Items from The Economatrix:
The Middle Class In America Is Being Wiped Out -- Here Are 60 Facts To Prove It
Max Keiser & Jim Sinclair & Bill Gross: USD Will Collapse In 2013
Housing A Sweet Spot For US Economy As Recovery Expands
After The Fiscal Cliff, Challenges To Economic Growth Remain
©2012 Senator Tom Coburn with John Hart
Published by Thomas Nelson, Nashville Tennessee
349 pages with numerous charts, graphs, index, and list of official reports available to the public.
ISBN: 978-1-59555-467-3
I recently read The Debt Bomb: A Bold Plan to Stop Washington from Bankrupting America. The title tells us exactly what this well-written book is about. Our national debt is a bomb more dangerous than any nuke or chemical weapon known to man. While we spend billions chasing a few terrorists around the world, our politicians are killing our economy, and our freedoms, with rampant, unfunded spending.
Senator Coburn lays out the facts and history of our debt problem in thirteen chapters and three appendixes with a summary of his thoughts in the final seventeen pages. A Republican from Oklahoma, the author castigates members of both major political parties for what they have done to help bring our economy to the edge of chaos. The book is full of stories of politician’s gone loony with our money, and ways to prevent their excesses in the future.
As I prepare this review, the news media is full of ‘fiscal cliff’ reports, name-calling, the sky is falling, and assigning of blame for our economic woes. The US Senate is debating legislation to send financial aid to victims of Hurricane Sandy with numerous unrelated earmarks attached to increase our deficit. Obviously, it is still business as usual. At a time of what I consider a national emergency, our elected officials should be lined up with ideas and proposals to get us out of debt, not pile on more.
We have just that in this book full of specific proposals to solve a specific problem. There are also reports on the author’s web site addressing the problem of our debt. Some folks believe the debt bomb will cause the collapse of our economy and our nation. As individuals, we can address our concerns to our elected officials. If they are unresponsive, we can fire them.
On a personal level for preppers, this book is a good case for eliminating our household debt. A lack of debt makes your home, vehicles, and possessions yours, not the bank. You have no worry of foreclosure or repossession. The money you save in interest payments can be used for supplies.
During the Great Depression, farmers in the Dust Bowl lost their family farms over small mortgages they could not pay because of one failed crop. Because of the recent housing bubble collapse, tens of thousands of families have been evicted for failure to pay their mortgages. Thousands of properties are mortgaged for more than they are worth and the owners are stuck in a financial nightmare. Some people believe it is un-American to not have a mortgage and car payments. Wrong. Do everything you can to eliminate your family debt and you increase the security of your entire family more than a full pantry or a well stocked gun locker.
I recommend this book for preppers because it is so readable and full of common sense.
Tom Cloud: How to Sell Gold Without Reporting It. (Thanks to H.L. for the link.)
The Political Implications of America's Oil & Gas Boom - James Kwak Interview
Euros discarded as impoverished Greeks resort to bartering
Forget discouraged, 3 million workers hopelessly unemployed
Items from The Economatrix:
Fed Becoming Worried About Stimulus Side Effects
Private Sector Job Gains Offer Hope for Labor Market
65 Percent Of Americans Believe That 2013 Will Be A Year Of Economic Difficulty
75 Economic Numbers From 2012 That Are Almost Too Crazy To Believe
Reader "Rock Farm" recommended a piece by Victor Davis Hanson: Very Scary Times
Putin Saves French Actor From Tax Slavery With Russian Citizenship
Items from The Economatrix:
New Gold for a Scary New World
Moody's Says "Fiscal Cliff" Deal Doesn't End Credit Downgrade Risk
2013 Predictions: S&P 500 Plunges, Gold Soars
"Panic Buying" In Gold, Just Four Days Into 2013, A New Gold Milestone Has Already Been Passed
News from Greece: Communities set up local currencies and exchange networks in attempt to beat the economic crisis
Jim W. recommended: The Dow to Silver Ratio
By way of Tyler at Zero Hedge: Why Did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?
Items from The Economatrix:
Billionaires Dumping Stocks, Economist Knows Why
Steve B. suggested: Analysis: After "fiscal cliff" dive, more battles, new cliffs
Peter Schiff: US Economy Living On Borrowed Time
Jim W. suggested this from Sovereign Man: When Priced in Gold, the US economy is at Depression-Era Levels
Items from The Economatrix:
Peter Schiff: Congress Sells America Down The River to Avoid the Fiscal Cliff
Roubini: The Longer-Term Picture is Bleaker and the Next Crisis Could be Just Two Months Away
Diana V.: suggested: Storing Nickels by David Hathaway
Rick in New York recommended a 46-minute documentary: Overdose: The Next Financial Crisis
Fiscal Cliff: The U.S. Debt Ceiling Is The Real Issue Still Ahead
Venezuela's Inflation Rate Hit 19.9%
Items from The Economatrix:
A Massive EMP Blast Could Collapse The Economy In A Single Moment
Happy New Year Middle Class: The Fiscal Cliff Is Going To Rip You To Shreds
Michael Pento: It Would Be More Surprising If Gold Didn't Go To $10,000. s(Thanks to B.B. for the link.)
Anthony Wile: The Invisible Hand Strikes Back
Items from The Economatrix:
Economy Weighs On Shoppers In Final Holiday Weekend Dash To The Mall
If you're a long-time reader of this blog you know what to do to get prepared. Stock up on food for short and near term survival, find a location where like minded people live. Become physically fit and active, and train in self defense. But all of these things cost money. My article goes towards moving to an asset orientated lifestyle to achieve your goals.
When you're cash poor, it is tough to even think about planning. If you read these articles about guns and survival food, and retreat locations and wonder, while the dispute between .223 and .308 is interesting, or the decision to buy a retreat in Idaho County, Idaho versus somewhere in Eastern Oregon is interesting – the more practical and immediate matter is how to pay your current bills. Trying to focus on these long-term goals can be stressful if you are cash-poor or have lots of debt. But by readjusting your every-day purchases to be asset orientated, everything you buy or own can be a step towards your preparation goals.
Consumerism is America. We are inundated from the moment we turn on the computer, television, or radio with ads for something. We are told that the newer product is a must have, and is definitely worth buying. As we know, it usually isn't.
Most of us have bought a car, and are familiar with automobile depreciation. The car, from the moment it rolls off of the dealer’s lot, is worth less than when purchased. Magazines like Consumer Reports emphasize buying cars, if you buy them new or used, with resale values closest to the purchase price. This way you can recoup most of your purchase price when you sell or trade the car in. This mindset of asset orientated purchasing can be applied to everything you buy.
The first step towards becoming asset orientated is to view everything you own as having resale value, and everything you plan to buy as having future resale value. Marketplaces like Amazon, eBay, and Craigslist have revolutionized the marketplace for your possessions, and created a global instant market for them. In a pinch, you can sell most things in a matter of days for partial value on any of these sites. While in the past you were limited by who could come to your garage sale, or what you could sell or trade with your friends and neighbors, this is no longer the case.
So what stuff of yours has this resale value? Literally everything. Clothes, shoes, books, food, electronics, dishes. Anything. Now as you might imagine this resale value varies. Let’s use a purchase of a pair of jeans as an example.
Suppose you’re somewhat fashion conscious and have worn holes in your jeans that you wear everyday in the office. After staring at the jeans in disgust, you decide that you want to spend no more than seventy dollars for a new replacement pair. What do you buy? Do you go to department store A to buy Levis for $50 and keep $20, or do you go into debt using the store credit card at department store B to buy the Sevens for All Mankind you really want for $159?
As Margaret Thatcher would say, No. No. No. Debt is evil.
The first think you do for your jeans purchase, or the purchase of any item is to see what your purchase is selling for on Ebay or Craigslist. This will give you a base value for your purchase, or what you could get for it in a pinch if you needed the money you spent for it for other things. Suppose the average resale price of Levi's on eBay is $9.99, and the average resale price for the pair of Sevens you want are $65.
The next decision for you to make is to see if you could do with buying a used pair of jeans. This would be the cheapest and most efficient purchase, since your base purchase price would equal your resale price. Thus, the $9.99 or $65 investment you make into the pair of jeans could be almost fully recouped (assuming your treat your clothes carefully) upon resale. It is like getting free use of a pair of jeans for as long as you need. In realizing this, I do not buy new clothes or other items if used ones are available. But what about sizes or fitting you ask? You may be scared to buy an item online if you are unable to return it and it does not fit. So here is what you do. Go to wherever the item is sold, and try on the article. After trying it on, write down or record the the item details on your phone, and see if the item is being sold by a trusted seller on eBay or craigslist. That way you've “tried on” the clothes without having to buy
them, and can purchase them cheaply used online.
Now it is worth mentioning that eBay does take about 10% cut of the item should you list it for resale, but even still, a $1 loss on a $10 item or $6.50 loss on a $65 item is much better than the $40 loss you would take on the new Levis or the $84 loss you would take on the Sevens. Ouch. So by doing this, you learn to take care of your clothes and start thinking about resale value. Also, by routinely churning through your belongings you also lose attachment to material things – which is a good thing since they don't matter spiritually in the end.
Full Exchange Stores
One way to ensure a high resale value for your purchases is to shop at stores that offer 100% return policies - even if they are more expensive. If something were to go wrong or not work with an item you buy, you rest assured that it is exchangeable or returnable. Or if you need the money you spent for the item in a pinch, your purchases are easily returned if in saleable condition. Its the ultimate willing buyer, willing seller exchange. Now are these returns moral? Remember, the stores with more lenient return policies often have higher prices and build into their prices that people will return their items. Thus, the consumer is paying a premium for the cost to the store of returned items up front. So if the store offers the policy, use it if you have to, since it is included in the price. Some stores even recoup their returns by reselling the returned items – REI’s gear sales are great example of a resale of returned outdoor equipment and
clothing, especially barely-worn boots, for clearance prices. Find and use these sales where you can. Thus, it is my belief that if a store offers seemingly lenient return policies, they want consumers to use them. So keep those receipts and take advantage. But be aware that stores can change their policies at any time, so only buy necessary items with a resale value close to the purchase price to protect yourself should the store policies change. And if you don’t believe this to be morally correct, don’t do it.
Food
You can use the asset approach approach for food purchases as well. Make a list of food that you would like to stock up on. As other writers have suggested, try to mimic your usual diet in your preparedness food. So if you normally eat frozen pizza rolls, a preparation purchase at Costco for 50# of wheat germ probably would not be a wise choice for a smooth diet transition WSHTF. But then or now, you probably should not keep eating the processed frozen pizza either. Others have written about the diets you can plan, and how you can improve your diet. I offer nothing new here, except on how to buy the food you need.
When you buy the food, think of each purchase as the purchase of assets. Get the lowest price you can. Figure out the items you want and look at couponing sites to see if and when any coupons exist or the items. Coupons are money given from the manufacturer to you to entice you to buy their products.
The manufacturers print coupons every week to entice new buyers. Take them up on their offers. Say you really like Ocean Spray Cranberry Juice drink and would like to stock up on ten two-quart bottles for your provisions. Many people have gotten into the couponing craze, and there are coupon blogs for all parts of the United States that show when coupons are printed in the newspapers, and how to combine them with store advertised and unadvertised specials to stock up on really cheap food. Take advantage of them and clip them for the juice if they are available.
Because many of the stores in the blog are in my area, if I was purchasing the Ocean Spray drink, I would review www.frugallivingnw.com, to see if coupons for the drink are coming up for print. If they are, I would either buy the newspapers where the coupons are printed, and cut the coupons out of the papers myself, or buy already-cut ones on eBay., Then, I would use the coupons and combine them with any deals indicated in www.frugallivingnw.com to obtain the best deal.
Why pay $4.29 a bottle for the juice when, after couponing, you pay $1.99 - or sometimes if its a really heavily promoted by Ocean Spray, nothing at all. And if you “overbuy” or you don't use it, keep your receipts and return the food, again if it is in saleable condition. If you itemize your taxes, you can also donate to charity to recoup your unused food purchases this way as well. YMMV.
Preparation is achievable for anyone who becomes asset orientated. To avoid being overwhelmed, make a list of all the things you want to buy or need to get prepared. Only buy necessary things with high resale value. And shop, where possible in stores with 100 percent return policy. And help your neighbors with your “overbuys” when you can. Good luck.
What Happens When the Bond Markets Turn Against the US?
A Brief 2,000-Year History of Silver Prices (Thanks to Terry F. for the link.)
C.D.V. sent: Kyle Bass: “This Ends in War; The Government’s Never Going to Tell You That It’s Going To Happen.”
Items from The Economatrix:
Fiscal Cliff Could Put Your Tax Refund On Hold
Buried in Bloomberg: “Why A Single Leveraged Speculator Can Trigger An Entire Clearinghouse System Default” (Thanks to G.G. for the link.)
This Chilling Economic Report Is Getting Passed Around By CEOs
Items from The Economatrix:
Jobless Claims Fell By 12,000 Last Week
Social Security Ran $47.8 Billion Deficit in FY 2012; Disabled Workers Hit. (Thanks to SurvivalBlog's G.G. for the link.)
Items from The Economatrix:
It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness
Post-Hyperinflationary Zimbabwe Welcomes The Holidays With 80% Unemployment, Empty ATMs And Paralyzed Transport. (Thanks to Jim W for the link.)
American Vehicle Miles Driven Haven't Been This Low Since The 1990s
Items from The Economatrix:
Chinese Rating Agency Puts US On Negative Watch
I am a widow of over three years whose youngest son was serving our country in the Middle East when my husband’s death happened. My husband lost his job and was forced into early retirement before his death. I will not go into the details of all the turmoil then and of having a child home with injuries of war. In a SHTF situation there will be many people with war injuries in our own neighborhoods. My other children and I are so glad he is still alive. My income dropped further not long after this. It was the end of the world as I knew it mixed in the downward spiraling economy. I cannot move from this area. I live in the country near cities. I have grandchildren and children who will no doubt come here if cities rapidly become uninhabitable. For several it is within walking distance if they must walk, about 13 miles. I can only think of how living in a heavily populated area can work to my advantage. Buying and storing bulk foods is not an option. Here is how I am surviving and preparing for a future on a fixed income.
I will be doubling the size of my garden this coming spring. Weather from the drought literally scorched the ground this past summer. I planted lettuce over and over never to see it raise from the ground. That is just one example of what the drought did to my garden. I am sixty years old today and have never seen anything like the weather this past summer. Horrible and truly scary but now I only see it as a lesson for future gardening and for the times when my garden may be raided. I have to think outside the box. I now have a simple irrigation system to help through another drought. My garden is located on the back of my property so I may plow for another garden closer to my house. Two better than one. Though I have plenty of seed for my garden needs, I will be buying extra seed for barter and trying to save more heirloom seeds than I do now. I am using a hoe for weeding instead of a tiller. I can plant more this way and keep in shape at the same time. Gardening is the best summer gym! I can barter fresh produce. For now, winter is just a stone’s throw away yet I can walk to my garden and pick greens I planted late in summer when the drought was over. Asian greens, an onion, pepper, mushrooms with other vegetables and a chicken breast cooked in a stir fry over organic brown rice is a cheap and healthy meal, especially if the veggies come from the garden. A chicken breast from the grocer can be replaced by a squirrel.
I have two grain mills I purchased since my husband’s passing. One mill is a used hand mill I paid ten dollars for and the other a small electric Blendtec I purchased from Amazon.com. Since I live in an area of corn, grain and soybean fields I hope I will be able to bargain {barter} with local farmers for grains to use in my mills. I ordered a large bag of organic wheat from a local health food store a while back and the bread is delicious made with fresh milled grain. Trading fresh bread or produce for grains will be an option.
I have two woodstoves. I heat my home with the one in the basement and the other is in my garage/workshop. Most of my 8 acres is wooded so I will not be cold in winter. I could barter extra wood for food, gas etc. I pile brush from cut trees to attract quail that are coming back into this area.
I can cook over a fire when I run out of fuel for Coleman Cook Stove during blackouts. I keep two Coleman outdoor stoves plus one of their ovens to place on top the burners for baking. Coleman ovens can be purchased for around forty bucks. Once I thought of outdoor stoves only for camping. Several years ago the tail winds of Hurricane Ike helped me prepare for days of no electric. That hurricane was a true wake up call!
Many homeowners in my area have ponds. I can barter for fresh fish. I really need to have a pond built on my place. That is something to think about for the future. I advise anyone with the acreage to build a pond. There will be no fresh or frozen fish if electric is out for weeks. A pond will provide fresh bluegill, bass, crappie, catfish etc.
I do not have chickens. I buy eggs from a couple neighbors when they have extra eggs. Again, I can barter for eggs.
This area is abundant with deer. I have deer in the freezer. Deer would be scarce in a collapsed society but I would still have a few around my property plus other wildlife. Again, think barter.
Double coupon for groceries and other products. It is a pain to categorize coupons cut from newspapers but it is a must when economizing. I use envelopes for coupons in a small folder. My canned section of the folder has envelopes for canned soup, veggies, condiments, meats, salad dressings etc. The health section has individual envelopes for cold medicines, band aids and salve section of drug store, shampoos, etc. The list goes on for dairy products, frozen foods, cereal brands, ethic foods such as Italian, Chinese etc. Sometimes you can buy food for little or it may be free after couponing.
Catch the sales. Since most of the garden burned this summer I purchased canned veggies at 25 cents per can early this fall. There was no limit so was I able to store over 200 cans in my basement until the garden comes in next summer. By Thanksgiving canned vegetables were more than twice that price when on sale. A vegetable stand in a nearby city sells 50 pound boxes of potatoes at half the price of 10 pound bags in the local produce section of big chain grocers. They will store well in the garage until zero weather hits then I will bring them into the basement.
I have a lot of designer clothes in my closet from Goodwill [thrift] stores. I constantly receive compliments on clothes I pay little for. I try to buy when there is a half price sale. My hiking boots are a name brand I purchased at a Goodwill Store still in their box. I have a juicer, DVD/VHS player, steam canner, cook books and much more at a fraction of the new price purchased from Goodwill, Salvation Army and other second hand stores. I do not make special trips to town for shopping. When I go to work in town I always run several errands to keep from wasting gas. An extra trip to town for a single item is unaffordable.
Eating out is a definite no, if possible. If I do, I use coupons or use the dollar menu at a drive-thru. I keep snacks in my desk at work. I make 24 pizzas at a time using a #12 can of pizza sauce, bread flour from a 25 lb bag from GFS, two 5 lb. bags of cheese, salt, yeast purchased in bulk at GFS and olive oil. I mix the dough in four used bread machines purchased for few dollars each. Add ingredients such as pepperoni on top before placing in oven. Grandkids and guests love the pizzas made for less than two bucks. It is hard work for one half day but worth it. Three pizzas can be made with one small jar of pizza sauce if you are not up to making 24 at one time. Beats paying fifteen bucks for a single deluxe pizza.
One of the grocers where I shop gives discounts on gas at the pump. Some months I can save up to 30 cents per gallon. I sold a vehicle I loved for one that is more economical to drive. The increase in mileage per gallon has saved me. I paid cash $3,500 for the vehicle. This way I will not have to make payments that would amount to several hundred dollars per month for a vehicle to drive. If I have to sell my present vehicle and drop down to a $1,000 vehicle it can be done if need be. There are good deals out there for good used cars that have former owners with a good track record taking care of their vehicles. It took a while for me to find one and drove my granddaughter’s car a couple weeks before finding my deal. I borrowed her car before she got her license.
Most important are personal relationships. My neighbors and I have never held a meeting as a survival group. I have been lucky through our conversations that many of us are like minded and we will be there for one another when needed. I am a private person for the most part and so are my neighbors or we would not be living where we live. I know by their lifestyles I can barter with them. I have skills, they have skills. We can complement each other. Further on relationships, as a widow I chose not to pursue a relationship with a man. I decided if God chose to send someone my way it would happen. I went about my life with all its problems and I have had many the past years. Well, God did send someone in my life most unexpectedly. He is a widower who hunts, can fix nearly anything, has grandchildren and has not run when problems in my family have seemed overwhelming for me as when two of my children were sick. That is important. When a person’s world falls apart, patience for any type situation must be in order or a relationship will not survive. I was not progressing past my husband’s death as I should have. I am healing and the new man in my life has been a big part of that process. Again, if you find yourself single for any reason please take your time getting into a new relationship with one of the opposite sex. You need the breathing time to catch up with knowing yourself again as single and go from there. I would certainly have sabotaged a relationship had I started dating too soon after losing my spouse.
I also want to point out that we live in a society that falls apart after a few days without electricity. Other traumatic events will spur post-traumatic stress disorder (PTSD )in the best of us. Part of my survival experience the past three years is with a person with PTSD in my life. In a world spinning out of control all of us need to become well read understanding what war and a society falling apart does to the human psyche. Please read and find out all you can about the emotional fallouts caused against individuals before, during and after war and societal unrest. It may mean the survival of a child, grandchild or a dear friend.
Two of my grandchildren cannot play outside their condo in a nearby city because of crime. Crime is everywhere, even in the countryside where I live but children can play on my land. I keep a swing set, plenty of toys, bikes, games, a pool table in my basement, scissors, paper and more for children. If I can eventually afford an above ground pool I will have one for grandchildren to enjoy. Such things relieve stress in children and is good exercise. There is always a small pile of brush needed burning for marshmallow roasting on my place. I have been purchasing VHS tape movies for 50 cents to a dollar and stocking up. Games for children help too. I dedicated a room in my basement to sewing and crafts. Small things costing little mean a lot to small children during times as these.
I have guns and ammo in a safe. My family has lived in this area a long time and most around here know I have guns. I am left alone as far as thefts go, so far. My safe is tied into the floor joists of my house. Presently it would take a chain saw to remove it in less than an hour’s time, not within the five or so minute time frame of local thieves. At my husband’s death my oldest son drove in from Colorado and picked up my youngest son at the airport. They bought the safe on their way home from the airport and installed it. My own sons and daughters have helped me make it to today. I do not know what I would have done without them. Sure, we have our problems and disagreements from time to time but we are tight, regardless.
As you can see my preparedness is quite cheap and simple. I would love to have solar panels for electric and more for the future but economics limits the extremes I would love to go with. My small generator would run my freezer long enough to can frozen meat over a gas grill burner. Would not want to do that but I could if need be. Boundaries as lack of funds keep me thinking outside the box.
The best preparing is letting God be in control. It is unbelievable at the situations I have found myself in to come up with funds to pay bills. One time a check came in the mail within minutes I urgently needed to pay bill. I have been humbled many times by the grace of God these past years. No one is perfect and all of us make mistakes, some quite terrible but God is there regardless if we let him in our lives. He helps us prepare if we let him.
Years before my husband’s death we took an extreme cut in income. I was upset and could not understand why God was letting this happen to us. Little did I know we were being prepared for a further loss of income. When an economic fire storm hit the area we lived in we were a great deal more prepared to face the music than most because we had already had to live through that loss. So the problems you have today may be God’s way of preparing you for the future.
I have been watching the evening news more often as of late. It is unbelievable the amount of shootings, stabbings, robberies and home invasions taking place in the area I live. It will continue in this direction for many years to come. I cannot move as I stated once before. For economic and family reasons I will remain here and sit it out. I search the web and stores like Goodwill for items that can be purchased at prices I can afford to make life more comfortable the coming years. I know the fire storm is coming. One of my grandfathers of many generations past was one of the first white men to come down the Ohio River to the lands of Kentucky. I love reading the history of our country and I know we are headed for rough waters. It cannot be stopped at this point regardless of who is in charge in Washington. It is too late. We may remain the United States of America but it will be an entirely different landscape. Practice preparing. Prepare as best possible with what you have, even if it is only a tomato plant in an Earth Box on your condo patio.
Reader "Swampfox" recommended a lecture by hedge fund manager (and fellow nickel coin hoarder) Kyle Bass.
We Are Witnessing The Death Of Small Business In America
The Real Reasons the Fed Announced QE 4
Demand For Gold "Combiners" Soaring
Items from the Economatrix:
The Last Christmas In America?
New York Stock Exchange Sold To Derivatives Company In $8 Billion Takeover
Jobless Claims Fall: A Bright Spot In The Fiscal Cliff Gloom
Sound familiar? Cash Is King: Printing of $100 Bills Soars
With Farm Bill Stalled, Consumers May Face Soaring Milk Prices. (Thanks to Michael W. for the link.)
K.A.F. sent: Hungary bars foreigners from buying farmland
Items from The Economatrix:
20 Signs That The US Poverty Explosion Is Hitting Children And Young People The Hardest, etc.
The End Of US Dominance In 2013
Federal Spending, Rising Inventories Mask Much Weaker Economy
The Current "Fiscal Cliff" Situation Is A "Worst Case Scenario"
ICE to Buy NYSE for $8.2 Billion, Ending Era of Independence
Jim W. sent: Putting It In Perspective: In 2013 The Fed Will Conjure Enough Paper Money To Buy 11% Of All Existing Gold
Top 10 Things To Worry About In 2013
Items from The Economatrix:
The Real Killer Will Be The Next Recession And There Will Be One
Chart Of The Day: The Death of America's Middle Class
Fed Asset Buying Won't Speed Growth Above 2%
What Inflation Means For You: Inside The Consumer Price Index (CPI)
Guns Out of Stock at Wal-Mart as Magazine Prices Surge on
Teacher sole heir of $7.4 Million gold coin fortune
Why Reported Inflation Seems Different Than Reality
Items from The Economatrix:
Silver dip! (Buy on the dips.)
Please Prepare Well In Advance: What's Coming Next Year Will Be Worse Than 2008
This does not bode well: SEC Ruling: Active ETFs Now Allowed To Use Derivatives
Jim W. recommended this "must read" piece: The Fiscal Cliff Is A Diversion: The Derivatives Tsunami and the Dollar Bubble (Paul Craig Roberts)
Items from The Economatrix:
The Most Critical 48 Hours In The Fiscal Cliff Melodrama Have Begun
Without Deal, Unemployment Checks Stop December 29th
US Secret Service Bans Sale Of Silver And Gold Liberty Dollars On Ebay
Silver Prices About To Implode: Chinese Demand For Silver Has Exploded
From Chris P.: Food and fuel shortages in war-torn Syria. Regime targeting bakeries and farmers.
"Twist" Redux: Fed to Launch New Bond Buying Program to Ease Fiscal Cliff Fears
B.B. liked this Peter Schiff interview: Majority Doesn't "Have A Right To Steal My Money Just Because They Voted For It"
Why The Fiscal Cliff Is Set To Crush The Middle Class With 50% Tax Rates
FEMA trailers to the rescue! (a month or two late): U.S. Rep. Pallone: post-Sandy temporary housing plans in N.J. to start following talk with FEMA director
Items from The Economatrix:
New Fed Metrics, QE4 Won't Cure What Ails the US Economy
Thirteen American Cities Going Broke
I've been warning SurvivalBlog readers about the debasement of the nickel for several years. It now costs the U.S. Mint 11.2 cents to produce each nickel, so debasement seems inevitable.
After a two-year study, testing 80 different alloys, the United States Mint's findings on alternative metals were announced on December 14, 2012. In essence they've said: "We need more time." Here is the key line from the report summary: "The Mint has made significant progress and, at this time, has concluded that additional R&D is necessary before it can recommend any changes to the current coin composition." Here is a link to the full report.
Based on the biennial R&D report, the U.S. Congress will probably either delay making changes to the penny and nickel, or they may just suspend further production. (Following Canada's lead, with pennies.)
Hopefully the Mint's dawdling will give us another year or two to stack up our boxes of nickels. (Once a composition change takes place, we will have to laboriously sort nickels.) If you read the contractor's report, you'll see that one of the goals of the planned debasement is that is be "seamless", meaning: "Differences and abilities to recognize or process incumbent coins and coins produced from alternative material candidates cannot be distinguished through normal coin processing." That is bureaucratic doublespeak for "Let's make our new worthless tokens look like real coins, even to vending machines."
I found the following buried in the contractor's report:
"Stainless steels, despite the having an electrical conductivity that is about half that of cupronickel, were recommended for testing for the 5-cent coin. The ideal stainless steel for coinage would be non-ferromagnetic (so it would not be mistaken for a steel slug), have low flow stress (i.e., result in low striking loads), have excellent corrosion resistance and be comprised to the greatest extent practical of elements that are not as expensive as nickel. Nickel and molybdenum contents should be low to reduce costs. Austenitic stainless steels (3xx series) are preferred because they are non-ferromagnetic and thereby are more likely to be accepted by a majority of fielded coin-processing equipment."
So I stand by my assertion that unless this denomination is dropped altogether, the cupronickel five cent piece will be replaced by a stainless steel token. It now appears that the 301, 302, 302HQ, or 304 stainless steel alloys are the most likely choices. Perhaps they'll lean toward choosing 302HQ or 304, since they both include some nickel for Austenitizing. Hence, the bureaucrats could save face (partially) by being able to claim that the new stainless steel slugs are still "nickels." But they'll still be just about worthless, compared to a real cupronickel nickel which contains more than five cents of base metal value. (See the details at the Coinflation web site.) The report cited a fully burden production cost (including base metal, tooling, labor and transportation) of 6.77 cents to produce each nickel out of stainless steel, but that is certainly an improvement over the current cost of 11.2 cents. To the citizenry at large, the real consequence of the debasement is this: The melt value of a stainless steel nickel will be less than half a cent. We will be robbed again folks, just like our parents were, in 1964. Let's not lose sight of the real underlying crime: general currency inflation. There would be no need to debase coins except for continuing, insidious inflation.
The goal of all government mints is to maintain seigniorage --which is making a profit on the coins that they produce. (Where their cost to produce each coin is less than its face value.) The U.S. Mint's current champion of positive seigniorage is the much-maligned Sacagawea/Presidential "golden" dollar coin, which is a Manganese-Brass token with a base metal value of just 6.22 cents--just one cent more then the base metal value of a nickel. No wonder people instinctively hate them. (By the way, I consider putting a "gold" finish on those coins the most heinous bit of legerdemain in the history of the U.S. Mint.)
Governments don't put up with negative seigniorage for very long. Debasement of nickels and pennies is coming, but thankfully the wheels of bureaucracy turn slowly. Let's just be thankful that we'll have a some more time to keep stacking up our nickels.
Okay, the Fed's recent decision to boost its monetary stimulus (a.k.a. "money printing," "quantitative easing," or simply "QE") by another $45 billion a month to a combined $85 billion per month demonstrates an almost complete departure from what a normal person might consider sensible.
To borrow a phrase from Joel Salatin: Folks, this ain't normal. To this I will add ...and it will end badly.
If you had stopped me on the street a few years ago and asked me what I thought would have happened in the stock, bond, foreign currency, and commodity markets on the day the Fed announced an $85 billion per month thin-air money printing program directed at government bonds, I never would have predicted what has actually come to pass.
I would have predicted soaring stock prices on the expectation that all this money would have to end up in the stock market eventually. I would have predicted the dollar to fall because who in their right mind would want to hold the currency of a country that is borrowing 46 cents (!) out of every dollar that it is spending while its central bank monetizes 100% of that craziness?
Further, I would have expected additional strength in the government bond market, because $85 billion pretty much covers all of the expected new issuance going forward, plus many entities still need to buy U.S. bonds for a variety of fiduciary reasons. With little product for sale and lots of bids by various players, one of which – the Fed – has a magic printing press and is not just price insensitive but actually seeking to drive prices higher (and yields lower), that's a recipe for rising prices.
Then I would have called for sharply rising commodity markets because nothing correlates quite so well with thin-air money printing as commodities.
That's what should have happened. But it's not what we're seeing.
Instead, stocks initially climbed but then closed red. Gold was mysteriously sold in the thinly-traded overnight markets and again right after the announcement in large, rapid HFT blocks that swamped the bids. U.S. Treasury bonds actually sold off on the news. The dollar hardly budged. Commodities were mixed across the board but more or less flat on the day, with the exception of the metals, and especially the precious metals, which were sold vigorously.
The markets are now well and truly broken. Not because they don't conform to my predictions, but because they are no longer sending useful price signals. Instead, my hypothesis here is that the markets are now just a giant and rigged casino, where a relative handful of big firms and other tightly coupled players are gaming their orders to take advantage of this flood of money.
When your central bank badly misprices money and then bids up everything related to bonds, nothing can be reasonably priced. Risk is mispriced; the few remaining investors (as distinct from speculators, which are now the majority) are forced to accept both poor yields and higher risk – so we know the price of everything, but the value of nothing.
QE4So what exactly is this new thin-air money printing program all about? Well, unlike any prior Quantitative Easing (QE) announcement, this one was tied to a fuzzy and quirky government statistic: the unemployment rate.
QE4 is Just-In-Time Fed Policy to Avoid Calamity
Dec 13, 2012
We got the most thunderous Just-In-Time monetary policy today that is a substitute for the absence of any degree of stimulative fiscal policy.
You might say that QE4 is now going to act as both monetary and fiscal stimulus– another $85 billion worth of Fed accumulations of Treasury bonds and mortgages- that is meant to keep stock prices moving higher and residential home sales climbing briskly.
The goal is to drive economic activity, especially residential home building, so that unemployment drops from 7.7% to 6.5%. The surprise move is meant to signal the Fed’s awareness of the softening economy; it sees the gritty numbers before we do.
Getting unemployment down to 6.5% without inflation rising to a level higher than 2.5% is not expected to happen until 2014 at the earliest. And it could go longer if there is no deal and we go over the cliff.
But, you should know that the only reason unemployment is 7.7% is because hundreds of thousands of males have dropped out of the search for regular work. A very depressing tale.
The key point here is that the Fed is now actively running both monetary and fiscal policy because it will now be in the business of funding nearly 100% of all the new government deficit spending in 2013. And it is pumping a bit more than $1 trillion of hot, thin-air money into the economy as it does so.
The odd thing here is that by tying their policy to the unemployment rate, we could be in for a very long wait for the stimulus to end. The reason is that the unemployment rate has a couple of moving pieces, one being the number of people who are unemployed, and the second consisting of people who have given up looking for work, which is tracked in something called the 'participation rate.'
As more people leave the labor force and the participation rate goes down, the unemployment rate goes down, too. Somewhat confusingly, as more jobs are created, the unemployment rate goes down, too. As you can see, these numbers work in opposition to each other because as more jobs become available, more people re-enter the work force.
Before the crisis struck, the participation rate was around 66.5%. But now it sits at just 63.6%, meaning that, at roughly 1.4 million jobs for each percent, a bit more than 4 million jobs would have to be created just to absorb the folks who left the labor force but presumably would like to work again. As those 4 million folks come back to work, the unemployment rate will not budge at all.
It will require two full years of 150,000 jobs per month just to absorb the 4 million missing workers, which means that this QE effort will be with us for a very long time. Three to four years is my best guess, and that's only if the economy magically recovers. And I have very strong doubts about that.
This means that the Fed is most likely on track to increase its balance sheet by another $3-4 trillion. Ugh. That's 300% to 400% more money created in the next year than was created than during the entire 200 years following the signing of the Declaration of Independence.
The other part of this new QE policy is that they will continue this as long as inflation remains below 2.5%. Again, this is a very fuzzy government statistic subject compared to the usual massaging and political biases, but it has top billing as the one that is most likely to force an early termination of the thin-air money printing efforts.
However, I remain convinced that the Fed will change any rules and move any goalposts it needs to in order to continue its mad money printing experiment. Because there really isn't any other alternative at this point.
Secretly in the OpenOnce upon a time, it would have been considered in bad taste to suggest that the world was being centrally managed in secret by a small-ish cabal of bankers whose actions served to either prop up the excessive spending habits of the very governments that conferred upon them the power to print money, or to bolster the health and profits of the banks they mainly serve.
That was then. Today you can just read about it in the Wall Street Journal:
Inside the Risky Bets of Central Banks
Dec 12, 2012BASEL, Switzerland—Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.
The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world's biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world's economic output.
Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.
Their monetary strategy isn't found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.
While many national governments, including the U.S., have failed to agree on fiscal policy—how best to balance tax revenues with spending during slow growth—the central bankers have forged their own path, independent of voters and politicians, bound by frequent conversations and relationships stretching back to university days.
If the central bankers are correct, they will help the world economy avoid prolonged stagnation and a repeat of central banking mistakes in the 1930s. If they are wrong, they could kindle inflation or sow the seeds of another financial crisis.
If it feels like you are part of a very grand, high-stakes experiment, congratulations! You're exactly right. We are all collectively prisoner to whatever outcomes are in store.
The rather politely ignored truth right now, at least by most news outlets and politicians, is that the world's central banks have wandered very far off the reservation and are running an experiment that really has only two possible outcomes. One is a return to what we all might call 'normal and stable' economic growth. The second is the complete collapse of the fiat money and their attendant financial systems and markets.
While it is technically possible to achieve some other middling outcome, that possibility has been receding to ever more remote territory with every passing month and new round of money printing.
The basic predicament here is that more and more money is being printed while the world economy, predictably for those who follow the net energy story, has been entirely stagnant and constantly threatening to slip back into economic retreat. Of course, more money + the same amount of (or even less) hard assets = the perfect recipe for inflation.
So the rise of inflation will signal the beginning of the end of this slow-motion tragedy. I use the term 'tragedy' here because it doesn't have to end this way. We have other options; we could make other choices and use our time and resources to try and do something other than maintain a broken financial system that desperately needs to be changed.
In Part II: It's Better to Be a Year Early Than a Day Late, I explain the facts behind why I am more convinced than ever that this all ends in one of the most disruptive financial and currency events ever seen on this planet. And while the repercussions will be felt by all, taking prudent action while there is still time can greatly improve our individual odds of weathering them safely.
(Part II has a free executive summary, but enrollment is required for full access).
B.B. suggested some recent commentary from Peter Schiff: No Way Out
More socialist buffoonery: France's Jean-Marc Ayrault slams flight of the 'greedy rich' (JWR's Comment: Gee, and they wonder why they are leaving. I suppose that wife-beaters wonder the same thing.)
Items from The Economatrix:
Job Openings in US Rose in October to Four-Month High
Denninger: The Real Problem With America: Morality
Baltic Dry Plunges By Over 8% Overnight, Most Since 2008. (Thanks to Stephen M. for the link.)
Items from The Economatrix:
Roubini: Bernanke Just Launched QE5
Will the Real Federal Deficit Please Stand Up? $222 Trillion!
KAF sent: 526,421 family farms threatened by new death tax
Items from The Economatrix:
Gold is a Leading Indicator of Monetary Distress
Sales of American Gold Eagles Soar
15 Signs That The Economy Is Rapidly Getting Worse As We Head Into 2013
Over at Zero Hedge: Art Cashin Previews Our $202 Trillion Destiny
Reader Andre D. recommended this essay: The West is signing its own death sentence
Pam C. wrote mention: "In most banks, the bulk teller is the person in charge of the ordering of currency and the vault. The bulk teller is normally stationed nearest the vault and handles the commercial deposits. This is the bank employee that you should contact about bulk ordering nickels."
Items from The Economatrix:
US Stocks Rise With Metals On China; Italy Bond Plunge
The Coming Derivatives Panic That Will Destroy Global Financial Markets
Bernanke's Eternal ZIRP of Bliss: Fed Says It Will Keep Key Interest Rate Near Zero Until Jobs Come Back. [JWR's Comment: That may be the goal, but if Uncle Sugar keeps on prodigiously buying its own bonds, then the global market may have other ideas about the direction of American interest rates.]
And QE-4-Ever: The Federal Reserve on Wednesday announced that it will launch a fourth round of quantitative easing (“QE4”)
Foodstamps Soar By Most In 16 Months: Over 1 Million Americans Enter Poverty In Last Two Months
Items from The Economatrix:
Startling Look At US Job Demographics By Age
The Fed Is Killing The US Economy
Most of us are aware that the world is full of “WHAT Ifs.”
“What if… my house catches fire, and I have to get out quickly?”
“What if… my purse or wallet is stolen?”
“What if… my family is separated, and I need help finding them?”
One of the most useful items in a well-prepared survivalist’s inventory can help in almost any disaster scenario… and is simple and inexpensive to acquire. We call ours the “Bug-Out Binder,” but you can give yours any name you choose. The best part of an Emergency Binder is that it is completely customizable, and easy to assemble.
We started out by purchasing the following items:
1. A ziploc, cloth-covered, three ring binder. Ours has four interior files, an interior pocket, several exterior pockets and pouches, and a “headphone access” slit. We bought our binder for $13.00 at a popular department store, but prices range from $9-$20.
2. Two packs of 8-count tabbed dividers (These came from the local dollar store). You may need more, or less, depending on how many sections you want to include.
3. Two three-packs of waterproof, zip seal document covers (These also came from the local dollar store).
4. A pack of the binder inserts that hold baseball cards (you will probably only use a couple).
5. A printer, paper, and a hole-punch. Alternatively, you can use notebook paper, if you are willing to do your note taking by hand.
Once you have gathered the necessary items, you are ready to start putting your binder together.
Step one: Decide, on a piece of notepaper, what categories you wish to use to organize your binder. Make your list. Afterwards, reread it. You may find that some of your categories can be put together. Others may be too expansive, and you might want to separate those into individual sections. Underneath each category, you may wish to jot notes on the types of subjects each category may cover.
As an example, here are the sections we chose to include in our binder, with examples of the contents of each one:
The first section is dedicated to our home files.
1. PRIORITY-
Emergency contact numbers (including work, school, neighbors, poison control, gas leak hotline, power outage hotline, and so on)
Family emergency plans
Shut-off instructions for utilities
Operating/maintenance directions for well pump, generator, back-up heaters and oil lamps, etc.
Wallet contents, with bank and insurance information and contact numbers
2. STOCKED FOOD-
Inventories for pantry, freezers, icehouse/root cellar, and food stockrooms (with exp. dates)
Shelf life/Expiration chart for food items
Dietary guidelines
Recipes/Menu
Shopping list
3. STOCKED NONFOOD-
Inventory of first aid supplies, by location (with expiration dates of medicines)
Inventory of hygiene supplies
Inventory of firearms and ammo, cleaning supplies, and repair supplies
Inventory of tools and gear, by location
Contents lists for EDC, BOBs, INCH bags, etc.
Shopping list
4. GARDEN-
Planting and harvesting charts
Propagation and seed collection/storage
Preservation guidelines (canning, freezing, drying/dehydrating, etc.)
Yield guides and conversion charts
5. HERBS-
Planting and harvesting charts
Propagation and seed collection/storage
Preservation (drying/dehydrating, oils, freezing, etc.)
Culinary/medical/personal care usages, dosages, indications
Recipes for teas, tisanes, salves, etc.
6. POULTRY/LIVESTOCK-
(sorted by type of animal)
Care guides... feeding, breeding, shelter, etc.
Recognizing/treating injuries and ailments
Charts for each animal (birth date, health history, breeding record, date and cause of death OR slaughter date and yield)
7. HOME-
Maps of each room, indicating measurements of room, windows, doors... location of outlets/plugs/vents... fabric and paint swatches
Maintenance/repair records
Fuse/Circuit Breaker box chart
Cleaning supply inventory
List of various info (like the bag and belt sizes for the vacuum, household chore lists...daily, weekly, monthly, and seasonal/annual, etc.)
Directions for completing common housecleaning chores, without electricity/running water
Cleaning supply recipes
Stain removal guide
Inventory list of all valuables, with serial numbers, etc.
8. VEHICLE-
Maintenance records
Info on replacement parts (bulb sizes, tire sizes, etc.)
Fuse chart
Auto emergency kit inventory, and expiration dates of any perishable items
The second section is more "survival-oriented." It includes:
1. FIRST AID-
First aid guide (with emergency pages on neon paper)
Dental guide
2. SHELTER-
Several shelter types
"Camping furniture" instructions
3. WATER-
Collecting
Purifying and filtering
Storing/transporting
4. FIRE-
Firestarting (several methods)
Burn index of wood types
Tinder chart
5. HUNTING/TRAPPING-
Tracking
Traps and snares
Processing meat
Preserving meat
Tanning hides/fur
Other uses for body parts (bones, organs, etc.)
6. FISHING-
Bait suggestions and recipes
Water temperature chart for various fish
Fishing knots
Making flies/lures
Line fishing tips
Fly fishing tips
Other fishing tips (nets, fish traps, etc.)
Cleaning and preserving fish
7. FORAGING-
Plant identification and usage guide
Mushroom identification guide
Tree identification and usage guide
8. NAVIGATION-
Compass and map
Celestial
Other
9. WEATHER-
Cloud reading
Weather prediction guide
Cold weather survival
Hot weather survival
Storm/flood survival
10. CORDAGE AND KNOTS
Tensile chart
Making cordage
Tying knots and lashes
11. CRAFTING
Weaving (basketry, etc.)
Pottery
Woodcraft
Blacksmithing/metallurgy
Clothing patterns, sewing stitches
Leathercrafting
Crochet stitch guide
12. TOOLS AND WEAPONS-
Firearm manuals
Making primitive tools
Ax, knife, archery, and sling manuals
13. COOKING-
Constructing ovens, stoves, etc.
Recipes
14. SIGNALS/SIGNS-
Glossaries of codes, signals, etc. (Morse, phonetic alphabets, and such)
Trailblazing
15. HYGIENE-
Soapmaking and saponin chart
Basic hygiene (latrines, bathing/showers, dishwashing, laundry, etc.)
Recipes for toothpaste, deodorant, shampoo, lotion, etc.
Lice treatment
Communicable disease prevention
Trash and sewage disposal
Burial/cremation
16. SELF-DEFENSE-
Evasion techniques
Hand-to-hand combat
Caching
Some of these categories may not be practical for your particular plans. Eliminate those, or replace them with topics that suit you and your lifestyle better. Some suggestions might be Pets (Pet supply inventory, pet care routines, pet food recipes, first aid and medicine, etc.), Childcare (Activity ideas, baby food recipes, infant supply inventory, home schooling curriculum outlines), Religious (favorite Bible verses, prayer journal), Sewing (patterns, fabric charts, techniques), Internet (favorite web sites, user names and passwords, Microsoft and Windows certificate numbers), or anything else you find suitable.
Step two: Label each of your dividers, according to the topics you want to include (and in the order you wish to include them).
Step three: Now, it’s time to compile your information.
For the home sections, this will include taking inventory of supplies, measuring rooms, noting what each of the circuits in your house and vehicle fuse boxes operates, copying contact numbers, listing family emergency plans, documenting the numbers of bank accounts and insurance policies (as well as contact numbers, in case the cards are stolen or a claim needs to be filed), writing down the locations of utility shutoffs (and how to shut each off),documenting the identifying information for household valuables (for instance, the Makes, models, and serial numbers for electronic goods… plus the date of purchase, store, and cost), guidelines for household chores, and so forth.
You may want to print off copies of food storage guideline pages, stain charts, and so forth, to finish this section of the binder.
Step four: For the “survival section,” remember that most articles and books on these subjects contain information you may already know, or that is repetitive of other articles, or paragraphs that are better placed in a separate category. If you include all of the material you compile from the wealth of pdfs, online pages, or books out there, you will have a mess. It will be disorganized, and far too bulky. Your mission, here, is to sort through it all and pull out the most important details for your notes. Use your word processing program, and collect these notes (and any relevant diagrams or illustrations). Keep your notes concise, but helpful. When you are satisfied with your material, print it out and include it in your notebook in the appropriate section.
Step five: Print a current photo for each family member, trimmed or sized to fit into the baseball card page’s slots. On the back of each, list the medical and identifying information for that family member. Birthdate, height, weight, hair and eye color, identifying marks, piercings or tattoos, allergies, medical conditions and current medications, blood type, shot records, dates of illnesses/hospitalizations, etc. may seem like a chore to document, but it could make all the difference in the event that one of your family members is missing, or injured in an accident.
Put each photo into a slot of the baseball card sheet, and insert this in the front of the binder.
Step six: Separate your important documents into the waterproof document holders. Since we have four folders, we divided ours in the following manner-
FILE ONE… LEGAL
Family (marriage certificates, divorce records, custody and child support papers, protection orders, current grade cards and school schedules, diplomas, military discharge/I.D.s, etc.)
Property (Deeds/leases, vehicle titles, and so forth)
FILE TWO… FINANCIAL
W2’s, copy of prior year’s tax form, banking account information, retirement/pension information, and other related papers.
FILE THREE…MEDICAL
Health (For each member, I included shots records, eye prescriptions, dental records, copies of current prescriptions (if any), and health insurance information)
Death (information on organ donation wishes, Living Will, Last Will and Testament, life insurance information, letters I’ve written to each family member, etc.)
FILE FOUR… IDENTITY
Social security cards, birth certificates, passports
Again, customize your folders in a manner that suits you.
Step seven: If you wish, download your favorite files in their entirety to a disk or flash drive. You can do the same thing for favorite movies, books, photographs, pictures of the items in your home inventory list, computer games, music, or anything else you’d like to preserve. Jot the contents of each media storage item on an index card or print the list out, and store these in your binder. Many flash drives, today, come with a keychain attachment which you can attach to one of the concealed key rings, in these binders. Alternatively, you can store the flash drives or disks in a binder pocket, and use the key ring for duplicate keys to your home, car, business, safe, etc.
Step eight: Complete your binder, by adding whatever additional items you desire. You can tuck maps into the back interior pocket. The pouch with the headphone slot can store an E-reader and charger. Another pouch (or, if you have the space, a pencil case made for a binder) can store items like a multitool, firestarter/lighter, compass, first aid items, a mini fishing kit, or anything else you wish to store!
Step nine: A lot of people express concern, at having this much security information in one place. They are justified in their concerns. Consider a safe spot where you can keep your finished binder. It should be secure from theft or snooping eyes, but it should also be easily accessible to other family members. A fireproof safe is an expensive, but excellent, solution. Alternatively, you might want to keep your binder with your Bug-Out Bags. Whatever you decide, make sure that it is easy to grab (or retrieve) in the event a sudden evacuation is needed, but that it is also protected from theft.
Step ten: Update your binder, regularly. Update inventories, replace family photos, add to medical histories, add new notes, reorganize as desired… this is your binder. Practice your family emergency plans, and take notes on what worked and didn’t. You can use these notes to reformat your plan, for the next practice run. Practice the skills, in your survival notes. If something you took notes on doesn’t work, get rid of it! If something works well, highlight it or add a foil star sticker beside it. If you make changes or adaptations, write them down! Before you know it, you will have… the Ultimate Emergency Binder.
Peter Schiff: Many Other Cliffs Await the US Economy
Jim W. suggested this from Alasdair MacLeod: Short squeeze ahead? Gold futures market heading for crisis.
Yishai sent this:Insane: Liberals Contemplate $1 Trillion Platinum Coin to "Solve" Debt Limit Issue
R.B.S. sent this from Oregon: Overdue Portland sewer bills to become property tax bills
The World's Strangest Currencies
Items from The Economatrix:
The Straw That Breaks The Euro's Back: Euro Crash Imminent?
US citizens leaving the country to avoid stiff tax bills
Euro Area Pushed Into Recession as Trade Slows, Spending Drops
Jim W. suggested this: Research Shows ALL Paper Money Systems Failed
Items from The Economatrix:
How To Prepare For The Coming Gold Crunch
Oil Trades Near Three-Week Low as ECB Cuts Europe Growth Outlook
G.G. flagged this: Why Are People Hoarding Coins?
Reader Steve L. sent: Cost to Make Penny and Nickel Rises, Annual Loss Reaches $116.7 Million. When seigniorage goes negative, modern era governments almost always move to debase their coinage. The window of of opportunity to acquire nickels without sorting will be closing soon!
Drought expands, concerns mount about wheat and rivers
G.G. flagged this: Government borrows 46 cents of every dollar it spends. And meanwhile, we read: Federal Budget Deficit 24% Higher Over Same Time Period Last Year. How long can this go on? Protect yourself by diversifying out of Dollars and into practical, barterable tangibles.
Items from The Economatrix:
Central Bank Gold Purchases To Top 500 Tons This Year In A New Record Supporting Prices
H.L. suggested this at Zero Hedge: Charts Of The Day: Greek Unemployment Hits Escape Velocity
Yishai sent: Oklahomans can Buy Gold and Silver Coins and Bars without Paying Sales Tax
When The “PRICE” of Gold or Silver Means Nothing? [JWR Adds: FWIW, I can remember Howard J. Ruff foreseeing this situation. He described it in his Ruff House television show, back in the late 1970s.]
Items from The Economatrix:
Service Industries In US Unexpectedly Rose In November
Confiscation, Price Suppression And The True Gold & Silver Price
Income tax will exceed 50% in California, Hawaii, and New York City
R.B.S. sent: Why You Might Only Be Able to Get Part-Time Work in 2013
Kevin A. sent: Double Your Money Selling Old Pennies by the Pound
109-Million Private Sector Jobs Paying for 88-Million Government Jobs/Welfare
Items from The Economatrix:
The European Threat To The US Recovery
The Coming Derivatives Panic That Will Destroy Global Financial Markets. [JWR Adds: I've been warning you about derivatives since 2006.]
R.B.S. sent: Obama Slaps States That Don't Comply With Obamacare
Also from R.B.S.: More Signs of Silver Shortage
Items from The Economatrix:
Shopper "Fatigue" Hurt Retails Sales Last Week
Home Prices Up 6.3% In October From Last Year. [JWR's Comment: It is remarkable what hundreds of billions of Dollars created out of thin air and the fantasy land ZIRP can create, in the short term. ]
Over at Guerillamerica: The American Redoubt: New Byzantium
Some ominous news, from England: Tax hitmen to track your spending: Up to two million people are to have their credit files secretly checked under a crackdown on tax evasion to be unveiled by George Osborne to help raise another £10 billion. (Thanks to Greg C. for the link.)
James K. sent this from McNewspaper: Invest in gold bullion or gold-mining companies?
Yishai sent this news from the small island nation of Curacao: Police Baffled: $11.5M in Gold Bars Burgled in Bold Boat Heist
Items from The Economatrix:
Even Without U.S. Cliff, World Economy Teeters
Manufacturing Shrinks To Lowest Level Since July 2009
M.E.W. mentioned this New York Sun editorial: After The Dollar.
15 countries with no personal income tax. (Thanks to H.L. for the link.)
David W. spotted this: Post-US world born in Phnom Penh. (15 Asian nations forman economic partnership that excludes the USA)
Items from The Economatrix:
Our Collapsing Economy And Currency
Next Up For A "Recovering" Europe: A 30% to 50% Collapse In Wages In Spain, Italy And France
The Past 30 Days Have Seen The Largest Physical Gold Sales On Record
Next Up For A "Recovering" Europe: A 30-50% Collapse In Wages In Spain, Italy And... France
Dr. Gary North: $1 Trillion Bailout: Student Loans
Items from The Economatrix:
B.B. sent: $80 Trillion In Unfunded Liabilities The True Noose Around Our Necks
The folks at Agora Financial are currently hawking a report (that only comes "free" with a paid subscription to their newsletter) via an online slide show presentation that remarkably parallels all of the major points in my truly free 2009 article on Nickels. It is downright agonizing listening to this presentation wherein the narrator talks around the real topic (which is nickels) for nearly half an hour. By the way, the "hedge fund manager Kyle B." that is mentioned is of course Kyle Bass, who acquired $1 million worth of nickels in 2010. I have a lot of respect for the folks at Agora Financial, but not for the hard sell marketing approach that they chose to employ this time.
Dollar-Less Iranians Discover Virtual Currency. (Thanks to R.B.S. for the link.)
How not to spend taxpayer funds: Navy purchaser diverted $74,000 for his private kit plane and gadgets
Items from The Economatrix:
Good-bye 401K, Good-bye IRA, Hello Argentina
Consumer Spending in U.S. Declines as Sandy Reduces Wages
11 Facts that Show That Europe is Heading Into an Economic Depression
Reader G.B. from Texas sent: Congress looks at doing away with the $1 bill [and new coin compositions]. Meanwhile, we read about more congressional action. New coin compositions are coming soon! The window of opportunity to stock up on real nickels will soon close. If you haven't yet stocked up, then do so NOW!
Grain prices to surge in early 2013, then retreat
Items from The Economatrix:
Jim Willie: Immutable Golden Laws, Central Bank Extremes, Gold Standard Recall
Consumer spending In US Grows Less Than Forecast
Sandy Slows Retail Spending, Factory Output, And Home Sales In Late October And Early November
Extending Long-Term Unemployment Benefits Would Create 300,000 Jobs
Curtis R. sent this: Why $16 Trillion Only Hints at the True U.S. Debt
Fiscal Cliff: Why The Government Is Gambling With Our Economy
Reader B. B. sent this: Those Fleeing Obama’s America: Prepare to be taxed
Also from B.B.: When Work Is Punished: The Tragedy Of America's Welfare State (Don't miss reading the comments, but be forewarned that there is some foul language.)
Items from The Economatrix:
Sales of US New Homes Fell 0.3% in October
Spain Now Faces a Systemic, Societal, and Sovereign Collapse
Warren Buffet: Fed has no more bullets left to stimulate US economy
Senator Blasts 'Secret' Fiscal Cliff Negotiations
Items from The Economatrix:
We Are About to Crush 15 Years of Resistance in Gold & Silver
The Giant Currency Superstorm that is Coming to the Shores of America
Feud At The Fed: "Horrific Consequences" For Unlimited Easing
CME Declares Force Majeure at Manhattan Gold Depository. JWR's Comment: This could have been--and eventually may be--much worse. When will people ever learn? There is no proper substitute for holding precious metals in your own possession.
J.B.G. sent this news from England: People who eat doughnuts for breakfast should be charged for prescriptions, says Tory MP
Stocks dead, bonds deader till 2022: Pimco
US Power Grid Vulnerable to Just About Everything
Ten Reasons to be Wary of US Energy Independence Claims
Gun Shoppers Joined Other Black Friday Shoppers In Record Numbers
Items from The Economatrix:
Morgan Stanley's Doom Scenario: Major Recession In 2013
Morgan Stanley’s Doom Scenario: Major Recession in 2013
Jim W. sent this: Iran Accepts Payment in Gold to Get Around Sanctions
Marc Faber - Before The Collapse US Will Go To War. (Thanks to B.B. for the link.)
R.B.S. sent: There Is Only One Thing That Can Save Japan Now: Inflation
Items from The Economatrix:
Unemployment Benefits, Payroll Tax Cut Really At Risk Of Going Over The Cliff
Stock Market Set To Sell-Off This Week; Argentina Nearing Technical Default, Etc.
G.G. mentioned: Fed Bought 77% of Federal Debt Increase in 2011: The Data Source
Food scarcity: the timebomb setting nation against nation. (Thanks to Jim W. for the link.)
Items from The Economatrix:
Sandy Seen Boosting US With As Much As $240 Billion Rebuilding
Why Changes In Tax Law Will Devastate Our Economy
Enslave a Nation with Debt: Marc ‘Dr. Doom’ Faber’s 50 Economic Charts. (Thanks to B.B. for the link.)
Steven M. sent: Food Stamp Recipients Outnumber Populations of 24 States Combined
Items from The Economatrix:
Billionaire Investors George Soros And John Paulson Load Up On Gold
More Americans Will Use Food Stamps For Thanksgiving This Year Than Ever Before
Hyperinflation and Complete Collapse – Nick Barisheff
AmEx (American Expat) sent: Morgan Stanley’s Doom Scenario: Major Recession in 2013
Items from The Economatrix:
Standby for "Currency Induced Cost Pushed Inflation" to Take Gold to $3,500, Predicts Jim Sinclair
Another US Credit Downgrade Is Coming--And It Doesn't Matter
Reader M.E.W. sent: House Prices Are Nowhere Near A Bottom Says Analyst
Items from The Economatrix:
Eric Sprott: Centrals Banks' Gold Likely Gone
Sales Of Existing US Homes Unexpectedly Rises
An interesting perspective on calculating life insurance coverage or retirement savings: How long do you expect to be dead?
We Have a Shortage of Gold - Eric Sprott
Items from The Economatrix:
The Twinkie That Broke The Economy's Back: Just Two Weeks Since The Election And 100,000+ Jobs Lost
US Treasury Secretary Geithner: Lift Debt Ceiling To Infinity
Greenspan On The Cliff: This Leveraged Economy Was No Accident~Take The Deal~Recession Is Guaranteed
Dollar Collapse Update: 7 of 10 Asian Countries Move From Dollars To Yuans
Some stunning charts: Quantitative addiction and the allure of low interest rates – US paid $454 billion in interest payments alone in 2011. Equity in real estate for households cut in half.
Negative Real Interest Rates Continue To Drive The Gold Price
Miles in Indiana sent this from Ahead of the Herd: Nickel Mining Like its 1864--Nickel Sulphide Project Pipeline Empty
Billions in bearer bonds could be lost due to Hurricane Sandy. (A hat tip to to Linda U. for the link.)
Items from The Economatrix:
Greenspan Warns Financial Markets Will Crash If US Can't Solve Fiscal Cliff Problem
Paul Krugman suggests a 91% top income tax rate. (If this happens, the congresscritters will see a million or more Americans go Galt.)
R.M. sent a link to article that serves as a word of warning for those who run businesses that have large cash customers: Williamsburg gun business, owner, punished by feds. R.M.'s Comment: "This is a fine shop, with great husband and wife owners. The shop is in the lower floor of their home in tiny Williamsburg, Iowa. Great people getting trampled by the government."
The System Will Collapse, It Must Collapse
FHA Red Ink May Be $32.8 Billion, Double Official Audit. (Thanks to G.G. for the link.)
Items from The Economatrix:
Banks Told By Feds To Test For 12% Unemployment (See next article which contemplates a 9.1% unemployment rate just from the fiscal cliff. It's probably going to be worse than that.)
James Wesley:
Can you provide any insight on the banking services and the Lakota [copper, silver and gold] coins from the Lakota Bank? Thanks, - Bryan E.
JWR Replies:
They are to be commended for their pluck, but their fees are high. More importantly, their arbitrary Cu/Ag/Au ratios (2/50/5,000) will certainly come back to bite them. (Fixed ratios are a bad idea! The silver-to-gold ratio is constantly changing. I expect to see a 10-to-1 ratio by the middle of this Century. Anyone that locks themselves into a fixed bimetallic ratio is sowing the seeds of their own downfall. The Liberty Dollar folks made the same mistake. (But they were shut down by the Feds long before the fixed exchange bimetallic ratio caught up with them. In their case, it was their use of the word "Dollar" and the Dollar sign ($) that cost them.)
The concept of selling a 1-ounce .999-fine copper coin for several dollars is laughable for anything other than perhaps a collector's piece. Copper is a base metal (not a precious metal), and its price ratio to silver is FAR, FAR, FAR from 50 to one! (Copper is priced on the futures market by the TON, rather than by the Troy ounce.)
Sadly, they will likely to get shut down by the IRS, for money laundering and/or constructive tax evasion. The same thing has happened again and again to other warehouse banks inside the United States. See, for example the sad story of Richard Flowers and the Christian Patriot Association.
For the present time, it is far better to anonymously buy one ounce silver rounds at just over spot on the open market and store them at home.
And you thought the upcoming 39.8% Federal tax rate sounded bad... Did you see this cliff coming? Ranchers, farmers brace for 'death tax' impact. The exemption drops from $3.5 million $1 million, and the rate jumps to a confiscatory 55%.
B.B. sent: Peter Schiff: Dollar Collapse Before Obama's Out
I missed this when it aired last June: CNBC pundits admit we're all slaves to the central bankers.
Items from The Economatrix:
No Surprise! Jobless Claims Up 78,000 Week After Election; Pennsylvania, Ohio Worst Hit
2.5 million jobless adults living with their parents
G.G. sent: U.S. Postal Service on a ‘Tightrope’ Lost $15.9 Billion
Items from The Economatrix:
Wholesale Prices, Retail Sales Fall In October
US Bank Run Imminent As FDIC Expanded Deposit Insurance Ends December 31st. (The 100% coverage expiring, it goes back to the limit.)
I’ve always been a “glass is half full…when life hands you lemons you make lemonade…” kind of person. So despite a divided nation after this recent election, geopolitical unrest, and our nation on the brink of financial collapse, I still see the silver lining.
My husband and I purchased a small 900 square foot home, because it was all we could afford. It was near the height of the housing bubble so we bought high. We then spent the next four years, remodeling the one bathroom the tiny kitchen and living room to suit our needs. After investing tens of thousands of dollars of our hard earned money, blood, sweat and tears we were feeling good about our sweat equity. Then the market crashed and I got pregnant. Deciding not to pour any more money into the pit, and deciding to take control of the financial situation we decided to sell our home and purchase a new one. By that time the real estate market seemed to have no bottom and loans were nigh on impossible to secure from lending institutions. We staged the little house perfectly and lived in that staged house for several months, evacuating every time a potential buyer came by, because an extra body in the house made it feel so much smaller. Fortunately we were able to find a larger home that was more suitable for our expanding family and were able to purchase it at a 30% discount, however we finally sold our first home at a significant loss. Investment guidelines for the early 2000s had become: “Buy high and sell LOW.” But not paying two mortgages was nearly “priceless.”
The Tale of Two Mortgages
It was the tale of two mortgages that was the spark that initiated this whole journey. My husband and I carefully assessed our financial situation and eliminated all “non-essential” expenses. Those things included:
-Some expensive vitamins that were being shipped automatically and payments were automatically being submitted to our credit card. This was something we weren’t paying attention to until then.
-A wine club gift that we had gifted to our neighbors. We didn’t read the fine print that after the $60 intro offer, you’d be billed quarterly for $200.
-No non-essential food items. Only buy what’s on the list and only if we really need it.
-The Cable Television – Gasp. horror! What will you do without television? This is the key to us developing our survival plan.
Life Without Television
We did keep Internet, as this was our means for paying bills, e-mail communication, web surfing and phone connectivity. We began to read, a lot. In fact, we can’t wait to crawl in to bed, early, once the kids are sleeping and read the news. The mass media has become such a biased and agenda-driven source of misrepresentation, it is no longer reliable. It has become a vehicle for propaganda. The children absolutely did not miss television. Though we’re not purists, we do have Netflix and Amazon video, so the young one loves the educational shows and the older one loves Mythbusters. But as a parent I now have total control over what they watch and this includes, not exposing them to the early sexualization of children, the “new normal” of a “modern family” the extols the virtues of a non- mother, father, and God-centered family.
My Favorite Web Sites
I truly admire those talented individuals who are able to organize and centralize great information into a user friendly web site. I wish I could do it because I occasionally get some good ideas, but I don’t have the time. My "go to" favorites include:
-The Drudge Report
-Redstate.com
-SurvivalBlog.com, of course
-Thedailysheeple.com… “Wake the flock up” one of my favorite new quotes!!!
-Dailymail.co.uk (my ultimate gossip go to site for pure entertainment)
-Happyherbivore.com (because after watching Forks over Knives I freaked out and went plant based for six weeks)
My Eyes Open
When you begin to piece together the unprecedented power grabbing, freedom-reducing moves our own government is doing and put it in the frame of reference of what is happening geopolitically; it’s enough to lose lots of sleep. The Middle East is destabilizing and essentially is one misunderstanding or missile away from full out war. There has been an increasing frequency of climate change that has unleashed massive power outages, gas rationing, and Martial law – as evidenced by Hurricane Katrina, Fukushima, Haiti, Irene, Sandy, and the recent Nor’easter.
So We Became SLOW Preppers
I believe that these patterns are an excellent opportunity to learn “real time” about how people and governments react in times of duress. We’ve all seen how the grocery shelves are wiped out within 48 hours of the weather channel predicting a storm.
When we lost power with Irene then the Nor’easter, we decided the first order of business was to install a generator. That project was eight months in undertaking. There were no generators to be had, as a freak windstorm affected the western half of the US knocking out power to 3 million people in the southwest. Once we got the generator, there were no transfer switches to be had. The demand was high. We finally got the transfer switch. It took another three months to get a propane tank and service, again because of the backlog, but we stuck to our guns and finally got it all put in. This time around, Hurricane Sandy left us without communication by phone but we had power thanks to the generator.
2nd Amendment
Speaking of guns. Living in the Northeast makes obtaining a firearm difficult. It took about 8 months. First to find a class, then get signed up – another backlog there. Then permits at the police station, state processing, temporary permit, and official permit, followed by my favorite part, shopping. We started slow, read a lot and made one purchase at a time. Now whenever we go to Wal-Mart we buy essentials and a box of ammo. Say it with me now: milk, bread, eggs, toilet paper and ammo. Try it again, diapers, wipes, and ammo. See how easy it is?
The Mormons are on to something. I like their idea of food storage and rotation. We should get into the practice of that. I’m still working on it. Christmas = family gift of a case of MREs. When Mountain House backpacking pouch freeze dried food goes on sale at Wally world I pick up a bag or two. It doesn’t have to be in bulk, but building it slowly is cheaper and you incorporate it into your lifestyle. The kids love the camping section of the stores. Then once in a while we pretend to camp in the basement and “sample” the food stores that are about to expire and rotate fresh stuff in.
Bug Out Tins
There are so many good Bug Out ideas on the web. I came across “survival in an Altoid tin.” It’s good to keep a few bucks in the car, some analgesics, band-aids, floss, matches a mini mag lite etc. It’s always a good idea to carry a case of water in the car, you never know. Making the tins was a fun weekend afternoon activity for the kids and we may turn this into a Christmas gift idea.
Livestock
Our new home has a little more land and I grew up with chickens as pets. My husband loved the idea as we often romanticize “living off the grid.” Easter came around and we bought three chicks and the kids loved playing with them and caring for them. My husband is pretty crafty and good with tools. We purchased a scuffed up Rubbermaid tool shed from the local home improvement store. He cut some windows and a trap door out. He installed a 2x4 beam for the roosting bar and because of the shape of the interior, was able to put two nesting boxes in there. My husband thought that pets that give back in the form of food were so cool. We eat beautiful omelets with tasty eggs that truly are antibiotic-free and hormone-free. I reduce my garbage by putting kitchen scraps into a bucket and the chickens are so happy to get stale bread, pancakes, and bok choy stems. The chickens think left-over spaghetti = worms and go nuts! When we can’t keep up the 15-20 eggs per week, we again make good neighbors by giving away farm fresh eggs.
Gardening
My parents always made it look easy. Let me tell you, if you can grow a successful tomato plant from seed, you are waaay ahead of the game. Gardening is a major skill. Start by trying to grow anything. I love perennials. I have peonies, lilies and some other flowering bushes that come back every year. Collards and Kale are almost year round depending on how harsh the weather is. Herbs like rosemary, lavender, thyme, chives, mint, come back every year and are low maintenance. I just put in some asparagus; we’ll see how it does. I also am trialing cranberries as a ground cover and purchased a really great book on edible weeds, so I can increase my foraging knowledge. This really makes you think twice about using poisons in your yard when you free range the chickens and want to forage weeds.
Conclusion
It takes time to build up your stores. I think you should store things you like to eat because then you use it up and aren’t throwing away expired “survival rations.” Pick up new skills, whether that’s gardening, weed identification, how to camp or build a fire, start small, make it a hobby. When a disaster hits your area, open your eyes and perform your own mini SWOT analysis: S – Strengths, W-weaknesses, O- opportunities, T- Threats.
This is a very individualized thing. But I can tell you when gas cans become available again at the local store, I’ll be stocking up on a few. While it’s nice to have a stockpile of gold and silver coins, it can be expensive. Buy an extra roll of aluminum foil or duct tape the next time you are out shopping. When you’ve been sitting in a dark cold house for a week, it can be demoralizing; you’d love some hot cocoa with a splash of brandy. Stock up on cocoa, liquor, comfort foods and items. Some of these have a very long shelf life and will probably be easier to trade or barter than a precious metal that has precious few calories. Good luck with your slow and systematic prepping!
Mac Slavo: There Is A Financial Disaster Coming; Are You Ready For An Absolute Credit Freeze?
Credit And Derivatives Are Decreasing At An Alarming Rate!! Market Crash Inevitable?
FHA Nears Need for Taxpayer Funds (More Bailouts!)
Items from The Economatrix:
Food Stamp Aid To Be Reduced In Ohio
Economy Stinks For Many, But Crushing For Millenials
Jim T. spotted this over at Zero Hedge: Q2 Total Gross Notional Derivatives Outstanding: $639 Trillion. (Don't miss reading the comments.)
O.T. sent: Regulators Destroying Your Home Appliances
Peter Schiff: Thanks To Federal Reserve Policies Like QE3; We’re All Scr%#ed
Items from The Economatrix:
Gold And Silver Prices Set To Explode
Obama Win Means Big Inflation Is Coming, Investor Refuge In Gold And Silver
How do you manage the extra expense of prepping when you are already cash strapped? After all, it is like buying for two households. When you are cost conscious you are able to purchase more. I am going to share my experience with you.
I am a single Mom of three and started prepping about a year ago. I would clip coupons and pick up extra cans of veggies a couple of times a month. When I started looking a sites on the internet that listed all the items to have on hand, I became concerned that my cans of veggies were not going to last all that long. Not to mention my kids are picky eaters and feeding them peas and corn every day was a recipe for disaster.
I made lists of food items that added variety, fruit snacks, raisins, cookies, cheese and cracker packs. Individual juice boxes, tuna, Spam (of course.) Soups, canned and dehydrated, beef stew, tortillas, and lots of peanut butter. Individual serving size apple sauce and fruit cups are healthy and convenient. I buy jars of nuts when they are on sale because I have found nuts can fill you up really quickly. We have cereal bars and small boxes of cereal. I have been buying cans of evaporated milk and recently discovered a boxed milk (non soy) because I know powdered milk won’t get drank, not even by me! I felt comfortable when we had about a six month supply on hand. Most stores have their own brand instead of name brand items that can be purchased less expensively and when you are prepping every dime counts.
I have always been a bargain shopper. I love to snoop in second hand shops and garage sales. I made a separate list for tents, camp stoves, canning equipment, hand tools, etc. Every weekend I planned my garage sale route with the items that were listed in the paper. I have recently noticed a number of “man sales” and even though I was the only woman there I found items to stash just in case. Lanterns, radios, flash lights. When I buy these items I try to keep all with the same battery size. Saws, even a brand new packaged solar shower. I found an old cooking device that uses newspaper. Now granted I’m not putting steak on this unit but to use it to heat a can of soup on, this just might be the ticket. I found storage tubs to keep the mice out of the sugar and snacks. I found shelf units and always came home smiling at my good luck, crossing out my items from the list. It’s like God was personally delivering to me what written on my lists.
Wal-Mart is always a place to hunt for bargains, but use a list. The store is designed to make you buy and get distracted by all the latest and greatest. This is where I buy my small bottles of propane much cheaper than I have found at other stores. Also medical supplies we might need. Triple antibiotic, hydrogen peroxide, ibuprofen. Check out the end caps and clearance areas, sometimes you get lucky. I have gotten used to buying on the internet and found I don’t like paying tax, I also search for free shipping or combined shipping with the same seller. Ebay is one of my favorite sites. Recently I noticed some of the sellers are just getting plain greedy though. For example I had a bottle of 50 water purifying tablets on my watch list, when I put them on my list they were $ 8.99 with free shipping. Yesterday as I was going through my watch list they are now listed for $58.10! Really? That listing got deleted and I found another seller for $8.99 and bought right away, lesson learned. I purchased non GMO seeds last spring on Ebay for much less than the seed sites are selling for. They are also listed under the category of heirloom seeds. Left in the freezer, they are good for ten years. I can also collect the seeds from the veggies I grow. Last year was the first year I attempted growing vegetables by seed. I found a small but sturdy green house on closeout at my local hardware store. Our spring in Northern Minnesota was really wet so we set the green house up inside on the three season porch and used a grow light until the seeds were established enough to be put in the ground. A lot died, but this coming spring I intend to direct sow and put the green house over the garden plot. We had an okay harvest and this gave me the opportunity to use the canning equipment I found at an abandoned storage unit sale. I also found a security system on Ebay for like thirty bucks with free shipping. The cameras face the front and back of the property and we watch from a small black and white monitor.
I know all the horror stories about Craigslist, but I have found numerous items there. I always bring someone with me (and my trustee stun gun). A month ago I bought a chest freezer for $100.00 and even found a farmer selling beef. My son and I recently took a road trip and stocked the freezer with a ½ beef. Last week I purchased a generator found on this site. Another item crossed off the list. The free listings are an excellent source of possible supplies.
Harbor Freight has some good bargains as does Fleet Farm a favorite of mine for batteries and pet supplies. I also like to look in Cabela's bargain cave. Then of course I compare prices on other sites just to make sure I am getting the best price. Don’t rule out Goodwill or The Salvation Army stores, they can be a treasure trove. Dollar stores are filled with items that might be helpful, like toothbrushes, razors, plastic silverware, disposable cups, etc.
I also buy the vitamins and herbs we need from a site called Swanson's, they have a great selection and flat rate shipping is $4.99. I am a firm believer in all natural healing. Also use the email sign up on sites for extra savings.
My kids all work so I have delegated some of these items to them. My daughter is in charge of pet supplies. My son went through a catalog and bought ammo and guns, knives, swords, small shovels and solar blankets from Cheaper Than Dirt, online and catalog available. The things I would not think of because I haven’t been a boy scout.
I’ve been able to find some excellent books on living in the wild. Just in case we have to leave the safety of our property.
At some point you have to feel secure with what you’ve accumulated. When I began, I wondered how much is enough? I am finding over time that voice had quieted down and I’m not going about this with a fearful attitude. I feel more empowered. I have not found everything, I am still working down my list. I know I have to start filling gas cans for the generator, not found a decent size tent or two way radios. But I know we have enough food and water to get us through. I still fill empty milk jugs, because my kids keep drinking them!
I have also been known to check out construction sites. It is a great place to get wood scraps for fires or even plywood to cover windows and securing doors. Many of these items are tossed aside.
As you buy consider the items might be used in barter situations. Coins, ammo, seeds, water, food, tobacco, just about anything. I know that I would not turn away from others who need help. I would not actively seek them out, but if they show up cold and hungry I will help. We still have to be human and live by the Golden Rule.
Watching the news the last few days has me in awe of the devastation of Hurricane Sandy. So many people expect help in these situations and complain that it does not arrive instantly. All of us can be our own rescuer. We heard the warning. We have to make time to prepare for any emergency. Plan ahead! Being prepared not just for storms or the end of the world scenarios, but because food prices are on the verge of sky rocketing.
Lastly I would like to put in my two cents. I thought I lived on the greatest nation on Earth. I am angry that I have to plan for the end of the world scenario. That preppers are considered dangerous people. That we are considered terrorists. How did it get to this point? I am upset that this is my childrens’ reality. That they can not be as carefree as they should be. That America used to be the nation all others strived to be. But secretly there has been a plot against us. That the powers that be (are) want us wiped off the planet. That is the part I have a hard time with. This is just plain wrong, and I know the strong shall survive, being prepared makes you strong. So quietly go about preparing. We have an obligation to survive and take care of our loved ones, no matter what may come.
Marc Faber: Market To Drop 20% Now, 50% Later, Complete Global Societal Collapse In Five Years
“NO BID” Threat Looming: When The Computers Stop Trading…Any Tradable Funds May Drop To Zero! [JWR Adds: An old Austrian School of Economics saying is: "There are buyers and sellers in every market"--but in a market where nearly all the trading is program trading, this may no longer hold true.]
Moody's says would maintain US rating, outlook in event of fiscal cliff, await further cues
Items from The Economatrix:
CBO: "Fiscal Cliff" Could Trigger Recession
G.G. sent this: Record 70.4 Million Enrolled in Medicaid in 2011: 1 Out of Every 5 Americans
Hurricane Sandy and the Disaster-Preparedness Economy
The Tragedy Of The Euro! What About Germany?
Items from The Economatrix:
Record Overseas Sales Boost US Growth
Why US May Be Headed For Another Recession
The Mass Firings Begin
Expect A Recession In 2013 Without A Quick Fix To The Fiscal Cliff
Tossing a bone: Boehner Would Accept 'New Revenue' Under ’Right Conditions’. (But soon after, Senate Minority Leader Mitch McConnell (Republican of Kentucky) put his foot down adamantly: no tax hikes.
Some news from Greece: Sharp rise in overdue debts to the State
Jim Rogers: Money Printing Will Run Amok.
Obama 2.0 & the Fiscal Cliff: Implications for America, the Markets, the Dollar, and Gold
Items from The Economatrix:
Wage Costs Rise More Slowly As US Employers Hold The Line
US Home Sales Dip 1.7% On Tight Inventory
Can Asia Demand Help Gold Break $1,800 Barrier?
Doug Casey: There's Going To Be A Huge Change Of Ownership Over Global Resources
New coinage composition: Cents action or delay? (Note that December 13, 2012 is the deadline for the report on the new minting recommendations.)
Schrader: Farmland Values Remain Strong Across Spectrum of Quality and Location
Argentines Prepare for Huge Anti-Government March
Some interesting reading on legal tender paper currencies versus the Constitution: The Dollar, Revisited.
Items from The Economatrix:
German Calls For Gold Repatriation Intensify As Fed Refuses To Allow Inspection
Hathaway: Gold Set Up To Super-Surge To New All-Time Highs
Yishai spotted this: Congratulations, Democrats: More Than 45 Companies Go Galt, Announce Mass Layoffs
More charming news: Obama May Levy Carbon Tax to Cut U.S. Deficit, HSBC Says
Items from The Economatrix:
"Massive" Surge in Retail Purchases of Silver and Gold
Gold Set for Longest Winning Run in Two Months on Obama Win
Upbeat Consumers To Sustain U.S. as Companies Hesitate
US Treasury Warns "Expect Debt Limit to be Reached Near End of 2012
Simon Black concludes that the 2012 Election doesn't matter: I apologize for what you’re about to read. (Thanks to Steven F. for the link.)
Items from The Economatrix:
Wall Street Drops For Second Day On Fiscal Worries
US "Fiscal Cliff" Biggest Risk For Canada, G20
Job Openings In US Decreased By 100,000 In September
Employers Post Fewest Job Ads In Five Months
Compared To Other Countries, US Job Market Looks Pretty Good
Reader R.B.S. sent some more proof that if you cannot touch it, then you probably don't truly own it: Stock certificates feared damaged by Sandy
(Doom and Doomer?) Marc Faber & Jim Rogers: Obama Is A Disaster, The Stock Market Should Have Fallen 50%, And You Should Buy Yourself A Machine Gun. I Need To Buy A Tank... It’s Going To Be More Inflation, More Money Printing, More Debt, More Spending...
Federal Reserve Report: 100% Chance of Recession
B.B. sent: When Infinite Inflation Isn't Enough
James C. suggested this: UK facing middle-class brain drain as professionals seek better lives abroad
Items from The Economatrix:
Post-Election Sell-Off: "It's All About Obama," Says Peter Schiff
Grid-Down Collapse: Hard Assets Soar In Value
Turmoil in Greece escalates as unions strike. JWR Adds: The strike by doctors won't mean any loss of income to them since most of them have been paid in several months, anyway.
Toilet Paper as currency, post Sandy.
Items from The Economatrix:
Mining, Ski Slopes and Condos: Buying Real Estate in the US with Silver in Mind
Why Thanksgiving Will Cost More This Year
What The Jobs Report Says About Housing
Why Economic Shock From Fiscal Cliff Will Last Over A Decade
Reader H.L. mentioned another good reason to keep plenty of greenback cash on hand, for emergencies: Sandy Price Gouging Probed: $7 Loaf of Bread, $10 Box of Matches. [JWR Adds: The truth is that in a free market there is no such thing as "gouging"--just willing sellers, willing buyers and a floating free market price. Large demand, short supply, and minimal opportunities to restock necessitate higher prices. The state Attorney General might just as well attempt to hand out speeding tickets at the Indy 500. But of course, be charitable in disasters.]
At Fierce Finance: New York's Financial district creaks back to life
Cash-free Greek communities take off while economy collapses
Last Jobs Report Before Election Shows Economy In Virtual Standstill
Items from The Economatrix:
Consumer Spending Picks Up, But Savings A Worry
Why Germany Wants To See Its US Gold
News Not Revealing Real Reasons For Economic Collapse
Global Economic Crisis: EU's Jobless Rate Hits New High Of 11.6%
The Scariest Jobs Chart Ever. (Thanks to R.D.F. for the link.)
Over at The Motley Fool: Three Facts About the Economy That Should Freak You Out
Items from The Economatrix:
Labor Department "Working Hard" To Ensure Jobs Report Released On Time
Firings Highest Since 2010 As Ford To Dow Face Slump
Russian Ship Missing With 700 Tons Of Gold Ore
Real Fiscal Cliff--Currency And Bond Collapse
Food Stamp Creation 75X Greater Than Job Creation
Economists Say Jobs Data To Have Little Impact On US Elections: Reuters Poll
Obama's 2008 campaign rhetoric on deficit reduction, versus reality: Conservatism Is Calling
U.S. Winter-Wheat Condition Worst in 27 Years as Drought Lingers . (Thanks to B.B. for the link.)
Biggest NY harbor oil terminal resumes partial operations
Items from The Economatrix:
More Tungsten-Core Gold Bars Are Turning Up
Consumer Spending In US Increases 0.8% As Incomes Climb
State Budgets In Jeopardy As Nation Nears "Fiscal Cliff"
The $100 Billion Storm: 17 Things You Need To Know About Hurricane Sandy
Without Electricity, New Yorkers on Food Stamps Can’t Pay for Food. (JWR Adds: "Food Stamps" are no longer stamps--they are EBT cards. Part of the House Of Cards that we are building for future societal collapse.)
Real Economy Still Sliding As 'Eating Out' Continues to Go Down
G.G. sent: Japanese city with huge debts puts its name up for sale.
Maryland Woman Has Kept Track of Every Tax on Her In 2012--$26,000 So Far
Items from The Economatrix:
Celente - It's Not Just Germany's Gold That's Missing
Netherlands Citizens Group Demands Central Bank Reveal Location Of Country's Gold Reserve
Consumers Drive Growth As Businesses Hold Back
Why The Real Earnings Cliff Is Bad And Getting Worse
Vietnamese Banks Who Paid Dividends On Stored Gold Were Quietly Selling It To Appear Solvent
Over at Zero Hedge: It Begins: Ecuador Demands Repatriation Of One Third Of Its Gold Holdings
Sweden pays jobless youth to move to Norway
Hit By Crisis, Greek Society in Free-Fall
Items from The Economatrix:
Sandy Total Loss Estimate Up To $100 Billion
German Finance Minister Warns Worst Is Yet To Come In Euro Crisis
CNBC: David Einhorn Blasts Bernanke's "Never-Ending QE"
Hints Of Consumer Confidence Emerge, But Finances Still Shaky For Many
G.G. sent: One More Thing to Worry About: Underfunded Public Pensions
A provocative video "what if?": The First 12 Hours of a US Dollar Collapse. (While their premise is sound, I must alert readers about a warning from Peter Schiff about the NIA.)
B.B. mentioned: Euro-Zone Unemployment Strikes Record
European Commission Single Supervisory Mechanism
Items from The Economatrix:
As Earnings Falter, Prospects For Q4 Grow Worse
High-Level JPMorgan Executives Suddenly Dumping JPMorgan Stock En Masse
Forget The Election And Get Ready For Another Year Of Slow Growth
Sure we’ve watched the new television series Revolution, with their heroine and her post-SHTF world amazingly perfectly coifed hair-do. The series based loosely on an end of the world scenario built around a “Sudden” abrupt change” a la the Dies the Fire
On the other hand, there’s the somewhat realistic TEOTWAWKI scenarios that revolve around, pick one: A comet, asteroid or other huge space body smashing into the earth, an EMP or thermonuclear exchange, explosively fast spreading viral pandemic, or some mysterious alien military force attacking the planet, or the simple world economic currency meltdown.
These all propose, and assume, a sudden, rapid world-wide calamity rendering large cities places of mob rule, fire-ravaged, food-looted wastelands of desolation, forcing us who’ve prepared ourselves and our homes, into hunkering down to await hordes of refugees ascending upon our rural retreats like a Biblical plaque of locusts. The local law enforcement authorities, and maybe the federal military and Homeland Security goons absent, or forcing us to live under an imposed version “Martial Law”.
What if the end of the world as we know it, arrives like the proverbial frog getting slowly boil to death in a pot of water-scenario? What if we see the currency, over a period of weeks, months, or even years, slowly erode, inflate, deflate, or simply disappear, and be replaced once, twice, or three or more times, with other currencies, like in post-WWI Weimar Germany?
What if, God help us, Obama gets re-elected, maybe by hook, or by crook, and our Constitutional rights are taken away one by one, or all at once. Cities, counties, and/or individual states can’t maintain their basic road, public work, water, electricity ,or other technology that powers our infrastructure. Things stop working, break down, employees quit because they don’t get paychecks anymore, or their paydays shrink, and they all decide, one by one, to go home, plant a garden, fish or otherwise feed themselves and their families by themselves.
What if, and just maybe, things take a slow spiral regardless of the scenario, down into an abyss of one of the afore-mentioned scenarios, and not an abrupt calendar-marks-the-day event?
I believe that we can carefully observe just what is happening in the EU countries, and draw information, knowledge, and even hope from what those countries are going through right now, to guide our preparations on an adjustable basis.
We need to scour news sources for Intel, and plan for contingencies here in America, as they inevitably follow, in some ways closely, in some ways not very similarly, what is occurring in Greece, Spain, Italy and the Irish Republic.
I see in the United States, a pattern of behavior, brought, and almost bred into our culture some differences that set ourselves apart from what may occur in Europe and other second and third world countries. However better organized, culturally superior, or due to the same spirit (2)
that allowed America to gear up, build up, and suit up, and win WWII, we stand a way better chance of applying knowledge from observing the inevitable mistakes, or tragic errors the EU governments make to keep our country from the same fate.
Say for instance, Romney gets elected President, the economy stops the slide down hill, some manufacturing coughs to a slow forward push, the dollar is stabilized by reverting partially, or by a full reversion, to the gold standard, and American finds some small reserve of braking power in our countries slide towards that economic “cliff.“
Further speculation might be that the economy continues plodding along, joblessness slows,
gas and food prices fluctuate, but still continue to plummet. States and municipalities see a worsening of their infrastructures, and power supplies fluctuate, becoming more and more unreliable. Some folks see the water quality of public utilities eroding, and many drill wells on their property and yards. Chickens and goats start becoming the standard homesteads’ yard fixtures. Maybe, we all start turning our yards into gardens, relying less and less on the supermarkets and grocery stores. The dollar continues to lose its value, and barter, and hard currency, silver, and to some extent gold, become the mode of payment.
We all stop the annual huge Christmas gift buying sprees, and even birthdays and anniversary gift-giving becomes a thing of the past. The police departments, and sheriffs offices responses become sporadic, and people start going “heeled”, and taking a more pro-active vigilant look at their neighborhoods safety. Gangs do become an issue, and Homeland Security does man checkpoints across the country, maybe to quell the movements of these organizations, and we like that.
My point is, that given the observable course, and actions that the citizens of Greece are taking, sans the rioting, we might just find the end to morph into that scenario. Speaking of civil unrest, aside from some nasty potentialities in most of our urban cities, I don’t think that Americans will tolerate, or allow the kind of rampant rioting and disorder one saw in Greece. That’s just not how our culture acts as a whole. We’re not the kinds of folks one see’s in footage in the middle-east, after an IED or car bomb goes off. There we see hordes of wide-eyed screaming people jumping atop the car parts, and running crazily through the crimes scenes willy-nilly.
I still see folks in the post office, standing well back of the counters, observing an imaginary line painted on the floor, not wanting to appear rude to the folks ahead of them buying stamps. I see our local volunteer fire departments organizing CERT teams and training like crazy across the country, planning to help in the event of an unforeseen natural, or whatever, type of emergency.
I read, and pour over news accounts every day dealing with the European monetary, and banking crisis, and I haven’t seen yet, the total rapid TEOTWAWKI slide into cannibalistic, zombie over-run catastrophe that we’ve all read about being a surety.
I firmly believe that we can take a measure, however small, and optimistic, of comfort from watching the EU meltdown, and steering our plans accordingly. Call me a skeptical optimist, but I am garnering a bit of hope from observing what the common citizenry are doing in those countries, where the cliff edge has zipped by, and are dealing with the food, fuel, and other shortages.
I would like to see the readers of SurvivalBlog in the EU countries affected, start posting their own personal accounts so we can plan our own strategies her in the United States. I hope that measures can be taken by folks here, who read this blog, to keep the information highway from those regions flowing.
Clearly, even though we might all agree that the pessimistic timeline of End Time prophecy is probably correct as it relates to the economy, that Gods’ providential working in our countries affairs can spread out the inevitable end-time scenario into many more months, and maybe years.
Hopefully we all can read, research, and gather information from news sources, friends and family living abroad, in order to more effectively prepare for hard times, and even the worst-case scenario of TEOTWAWKI.
I believe that our Heavenly father has, and is providing a way through the Internet, and it’s sources, of sparing us some measure of downright hopelessness, and giving us tools to both save our friends, family and ultimately our nation, from Satan’s’ evil plans. This provision is the ability we have of watching Europe, and making better plans for our families safety.
H.L. sent this bit of news from England that illustrates the Green crowd's disconnect from reality: Street lights turned off in their thousands to meet carbon emission targets--Huge swathes of Britain are being plunged into darkness as more and more streetlights are switched off by councils and roads authorities.
Economist Michael Pento Warns of Inevitable Financial Collapse: “The Real ‘Fiscal Cliff’ Is The Coming Currency And Bond Market Collapse.”
Where Should Gold Be Based On Inflation?
Items from The Economatrix:
The One Headwind That Could Stymie The US Economy Recovery
Schiff: Think Gold's Pricey? Wait 'Til It Hits $5,000
Will The Bottom Fall Out? 15 Signs That Layoffs And Job Losses Are Skyrocketing
I believe the global economy stands on the brink of meltdown. The immediate trigger of this collapse is the European Debt Crisis, but the build up to this catastrophe has been building for years and decades.
Three of the major drivers of Global economic growth: the US, Europe, and mainland China , are all on the verge of economic slowdown, if not outright collapse. Usually, if one region of the globe is contracting other regions are growing and able to take up the economic 'slack'. For the first time in modern history, all regions are slowing at once. This is uncharted economic territory.
I will look individually at how each region got into the economic malaise it is in and what some consequences may be.
EUROPE
Greece is the poster child for Europe's economic problems, but they are not alone. Europeans have lived beyond their financial means for decades and now the bill is coming due.
A immediate result will be Greece getting ejected from the Euro Currency group of nations-- or they leave on their own. Greece will be plunged in economic chaos. I do not believe a Greek exit can be "managed" by the rest of the Euro Zone. A Greek exit will result in the eventual death of the Euro Currency and a return to national currencies. It will be a hot, ugly fall and a very cold and bleak winter in Europe.
The death of the Euro Currency will plunge all of Europe into economic turmoil. This turmoil could possibly last for years as all the financial, legal, political and other questions regarding a break up get worked out. I believe the break up of the USSR gives some ideas about Europe's future. I think that a return to military governments in some European countries that have undergone it in the past (Spain and Portugal) are possible.
About the only good news is that European defense spending is low. Unlike the 1930s , there is a slim possibility of open military conflict breaking out across Europe. However, when the BEST outcome is a low chance of nation-state warfare this shows what a mess Europe could become.
CHINA
China sits on the edge of a housing bubble that will make the US housing bubble of a few years ago seem tiny.
China has grown into a global economic power by becoming a factory to the world. When the US went into recession in 2008, China kept their factories humming by launching a stimulus program costing trillions of Yuan.
This stimulus led to massive government waste (think "bridges to nowhere" on a massive scale) Entire CITIES were built just to keep workers employed. All that spending during those years led to high rates of inflation across the board.
The one thing that keeps the Chinese communist leadership awake at night is the thought of the Chinese people standing up against them and questioning their authority (Tiananmen Square is a a perfect example of this). Domestic stability is the first, second , and third priorities of the communist leadership. High inflation can and does cause instability (look at 1920s Weimar Germany and modern Zimbabwe as examples) Add high inflation with a bursting housing bubble and it leads up to economic disaster on a epic scale.
This could get ugly because Communists (regardless of nationality) have never been shy about spilling the blood of any opponents who get in their way. The PRC leadership will do whatever it takes to stay on top and in charge. I believe that "whatever it takes" could include invasions of Russian Siberia and\or Taiwan-Republic of China. Citizens tend to overlook economic problems when their country is at war. If China were to engage in a invasion of Siberia, this could result in the potential loss of tens of millions of lives since the Russian Federation does not possess the conventional military means to stop a invasion (not enough well trained infantry with substandard equipment having to cover too large a land area). They would be forced to rely on nuclear weapons to stop Chinese aggression.
Look at the recent rise in nationalistic sentiment spurred by the central government over the Diaoyu/Senkaku islands issue with Japan. I believe this is a better indicator of the true state of the mainland Chinese economy, regardless of whatever their 'Official' economic statistics say
UNITED STATES
The US economy still hasn't fully recovered from the housing crisis that started in 2008. Like Europe, The US has lived beyond it's financial means for decades. Government spending (at all levels) is out of control.
I believe that America's future hangs in the balance. we will not know which path we will head down until the November 2012 election. I think that if President Obama wins a second term, America can forget about being the world's sole superpower. It will mean political death to the Democratic Party to engage in any entitlement reform/cutbacks, so I believe that issue is off the table if the Democrats win on Election Day
Even if Mitt Romney is our next President, America's economic future still has plenty of potholes ahead. Entitlement spending (Social Security & Medicare/Medicaid) are consuming larger and larger amounts of all federal government spending with no end in sight. These entitlements need to be bought under control if America is to have any chance in the future. Like Europe, America needs to have a cultural shift.The mentality of dependency on the government to provide one with a certain standard of life needs to end. Every individual, and the individual alone, should determine a person's economic success. It must not be the role of government to determine this.
Social Security was never intended (even at it's inception) to be a American's primary money source in retirement. It was viewed as 'one leg of a retirement stool' with the other 'legs' being a company pension and a individual's personal savings/investments. However, today, Social Security is the primary source of income during a person's retirement.
The Social Security trust fund is heading towards collapse. This will mean many retirees will have a GREATLY diminished lifestyle going forward.
Like Europe, the time for easy painless solutions to these looming financial problems has come to a end. Either entitlement spending gets reformed or we all go off the fiscal cliff together.
The level of governmental spending needed to support the huge increase in the size of government over the last few years is also something that cannot continue at it's present rate. Government faces the prospect of collapsing under the weight of spending needed to prop it up.
Consequences
Some of the consequences that will result from all of this will come in many forms. Here are some possibilities I see:
* Self-sufficiency will be a ever growing trend as people realize that government can't afford to support them anymore. The Federal government needs to get out of a lot of things. For example, the Feds need to get out of financing home mortgages. The quasi-governmental agencies 'Freddie Mac' (FHLMC) and 'Fannie Mae' (FNMA) need to be wound down and killed. Their backstopping of sub-prime mortgages is the main reason for the housing crash of 2008. I work part time in a Real Estate office. I know that killing off these entities will destroy the housing market, but they have become bottomless money pits loaded with unrecoverable toxic assets and I see no other choice.
* Brain drain and capital flight from weaker European nations to financially stronger ones. This is already happening as people pull their savings out of banks in Greece, Spain, Portugal and move it to German banks,
Funds may even totally leave all European financial institutions and go overseas to less risky parts of the globe. Right now, pretty much any Greek with the means to do so is packing up and moving out of Greece, Some Irish and Spanish are not far behind in doing the same.
* An increase in desire for regional government and in nationalism. In the last couple months the Catalans are increasingly wanting to get away from Madrid. The Venetians don't want to pay taxes to Rome anymore, and the Scots would rather answer to Edinburgh instead of London.
This can also be seen in a rise of nationalistic political parties, such as Golden Dawn and Syriza in Greece, the True Finns in Finland, Jobbik in Hungary, and Front National in France, among others. There is even a possibility of the military seizing control, maybe in Spain and Greece, which have both known military rule in modern times. It looks like the Swiss are preparing for some major economic and political pain across Europe.
* Here in the USA, government at all levels (federal, state, local) will have to be cut dramatically. Excessive and unaffordable public pension obligations at the state level are killing some states (California and my Illinois are prime examples). Going ahead, these states will only have two options: cut their public employees pensions, or cut other state spending to free up the pension money. This will involve pain either way, but the time for painless options went out the door a while ago. I think Marc Faber's ideas on cutting government a minimum of 50% is a good idea (however, I would do it over months, not in three days!)
I also believe there will be a wave of municipal defaults. Several cities in California have already filed for 'Chapter 9' bankruptcy protection. Filing for bankruptcy can lead to a variety of problems.
There will be more of this across the nation.
The path ahead for the global economy is shaky. Decades of over promising and overspending has bought all of us to the edge of the precipice. The needed cuts and changes will be painful, possibly even leading to outbreaks of violence, and even war. However, no changes in policy will lead to outright economic collapse. About the only certainty will be a decrease in lifestyle and a increase in hardship. Living could become a even greater struggle for a lot of people globally.
I truly wish the economic picture wasn't so bleak, but I see limited options ahead for us. I can be reached at chicagodudewhotrades@gmail.com if you wish to contact me. Thank You for your time.
Part I: The Road To Bullion Default, and Part II.
R.C. sent:
Thirteen American Cities Going Broke
Reader Jim W. sent: Switzerland Prepares Army for Euro Zone Fallout
Items from The Economatrix:
The Next Stock Market Crash Will Be Bigger Than "Black Monday"
Orders For US Capital Goods Stagnate As Spending Slumps
230 Hedge Funds Suddenly Cried Out In Terror And Were Suddenly Silenced
Is The World Abandoning The U.S. Economy?
Phoenix Capital Research outlines why Spain is Totally 100% Beyond Saving
G.G. flagged this: Over $60,000 in Welfare Spent Per Household in Poverty
Items from The Economatrix:
Marc Faber: US Stocks Could Fall 20%
Buffett: "No Question" Global Economy is Slowing
James,
So I found a reputable dealer here in town, went to the store, He asked what can I do for you? I said how many pre-'65 silver coins do you have? A big smile on the owners face and he gets up from his desk walks behind a partition, and comes back with three boxes of loose coins. Half dollars, quarters and dimes. I ask what is the going rate and he told me 23.25 times face value. I asked how much $2,000 would buy me. He calculated $86.80 in silver coin. He asked me why I was buying, and I told him I didn't trust the economy to make it to Christmas, so its always handy to have some coin. Silver is something that anyone will accept [if Federal Reserve Notes become hyperinflated to the point of worthlessness].
I have to ask, was the price I paid worth the silver's value? If I needed to pay $2,000 to someone would they accept $86 and change? Thanks for all you do, Peace, - Michael T.
JWR Replies: I can assure you that 23 times face is a very fair retail rate, at present. Here is why: When I last checked, spot silver was at $32.09 per ounce. (Close of market on 26 October, 2012.) The key number to remember is 715. It is generally agreed that there are 715 Troy ounces of silver in a $1,000 face value bag of circulated pre-1965 half dollars, quarters and dimes. (Given typical wear.) So we would calculate $32.09 x 715 = $22944.35. That is the "melt" value of a $1,000 valve value bag. Hence, by shifting the decimal three places from the "Thousands" place to the "Ones" place, we'd get 22.94435 times face. So your dealer was not cheating you. He generously gave you the same premium that most dealers charge for a full bag. (Smaller increments generally sell at a higher premium.)
And don't feel bad that $2,000 in FRNs only buys you $86.80 face value of coins. This isn't the coin dealer's fault. The robbery was committed the U.S. Congress and Lyndon Baines Johnson, back in 1965--when they started passing off silver-plated copper slugs as genuine coinage. It is no wonder that the American people quickly scooped up all of the silver coins they could find in 1965 and 1966. As I've mentioned before, an analogous situation now exists for nickels (U.S. five cent pieces), which will soon be similarly debased. Stock up!
Rampant Recycling Fraud is Draining California Cash
C.D.V. suggested: FAQ for Hyperinflation Skeptics
Food Stamp Nation: What a Modern Day Bread Line Looks Like (Infographic)
Items from The Economatrix:
DeMark Sees S&P 500 Index Peaking ~1,480 Before Tumble
Fed Calls Economic Growth "Moderate" While Maintaining Bond Buying
Homes Sales Rising to Two-Year High Spur U.S. Growth
Euro-Area Recession Deepens as Manufacturing Shrinks Economy
G.G. suggested this: Fed considers upping QE3 size and language
The ultimate tangible? Here is an asset that isn't "created" by a Federal Reserve and US Treasury collusion: Iowa Farmland Sets Sales Price Record. (Thanks to Dan T. for the link.)
Jim Rickards - Currency Wars Simulation. (Thanks to Rick A. for the link.)
J.B.G. sent this news item: Bundesbank slashed London gold holdings in mystery move
Items from The Economatrix:
Fabian Calvo: Massive Foreclosures After Election
R.B.S. sent: Across Corn Belt, Farmland Prices Keep Soaring
Brad in Texas spotted this: US may soon become world's top oil producer
The Next Stock Market Crash Will Be Bigger Than “Black Monday”
PIMCO Recommends Hard Commodities To Weather Inflation
Items from The Economatrix:
Highest (and Lowest) State & Local Tax Burdens
Bank of Canada Fires Shot Across Bow, Says "Withdrawal of Stimulus Will Likely be Required"
Hot Off the Press: Fed to Print $470 Billion in 2013. Note the mention of increased demand for $100 bills, going overseas.
Items from The Economatrix:
Jim Sinclair: Change In Spread Management By Bullion Banks Will Send Gold Prices $3,500-$12,400
Weimar: Here's What We Know About The Hyperinflation Horror That Haunts Europe Today
Suddenly, Everyone on Wall Street is Taking the "Red Pill" of Economics
As a single mother of two I know and live the word budget all to well. My income is limited and I have wasted a lot of time and money because I was too focused on getting ‘only the best.’ I quickly realized that the path I was on was getting me nowhere. I began to look at past purchases and realized that a lot of my purchases were unnecessary and quite frankly irresponsible. If I wanted to better guarantee the safety and sanity of myself and my young children, I needed to take a different path to self-sufficiency and quickly. In addition, this may all be common sense ideas but I know all too well that in the beginning it is extremely overwhelming and sometimes you may get caught up in all the fancy gadgets and lose sight of what truly matters.
Let’s face it not everyone can afford a retreat, with the nice solar panels’ and armored windows. However, everyone can afford a library book that will increase their skill set making them more valuable to those that can afford a retreat. If you put the effort forth there is tons of literature on tool making, canning, operating ham radios, farming, first aid, animal husbandry, firearms repair, and reloading. Pay close attention to animal husbandry, farming, and try your hand at blacksmithing (start with wrought iron then move to steel). It is critical to know what crop to plant in a certain part of the year along with knowing how to do it. You will also need to look at how you will harvest your crops without a tractor. If you do not have the money to invest in horses and the simple machines that would allow you to plant and harvest your crops via original horse power than you will need to purchase and know how to effectively use the simple hand tools. Buy a scythe to harvest cereal and practice with it. Also, invest in a few spades, pitchforks, garden forks, and some hoes. Owning simple tools and having the know how to use them will make you a great asset. In addition to your non formal training do your best to obtain certified skills, First Responder courses and to become a EMT do not take too long to complete. Even a basic Wilderness First Responder course can save someone’s life, I know because my training saved my three month old. Can’t find a group that is right for you? Plan B: Find others that are in your situation and group purchase land. Some advise against that but I have seen it work. If neither of these are options pre-position several caches in several locations as temporary retreats. Place them on land far from major cities and densely populated areas. Again it doesn’t have to be fancy. It is there to give you additional time and safety for the time being. There are bound to be retreat groups that realize that their six group members are not capable of handling the larger gangs and that they lack certain specialties. At that point if you can offer a valuable skill set and provide additional food that you pre cached away they will be more willing to accept you into their retreat group. However, you can never be too sure so the caches should be set up to enable you to set up a retreat once there is no land surveyor to come a knocking. Remember this is not the time to be picky, that apartment or home you have in the city will not suffice in a WROL situation.
When you’re prepping to bug out and/ or funding is lacking your best friend is going to be caches. Clearly you cannot fit all the gear you need in a backpack. However, you can have a years’ worth of food and additional ammo if you take the time to bury caches. If you have joined a group that is even better. The caches should be on several different routes to the retreat location and you have the option of pre-positioning gear at the retreat. In addition, remember when I said you can cache items to build upon later? I wasn’t kidding. It may sound absurd but let’s take a minute and discuss this. Lets’ say before the collapse you made valid efforts to secure four acres of land but did not have the funding to build yet nor could you finically afford to move to the middle of nowhere. But you did take the time to cache tools, nails, food, piping to outfit a gravity fed water system and generator (watch Yukon Men -- it is possible) among various other items. (Even better if you were able to secure a shed [at very low cost or free] from CraigsList. Now your family has a temporary shelter you can build upon instead of remaining out in the weather.) Once you arrive at your retreat location you can begin the feverish task of building up a retreat. It is not the ideal scenario to begin building after things have SHTF but again it is playing the hand you have been dealt. The retreat won’t be fancy, but it could sustain you & yours more comfortably with the items you cached. Now let’s say you buried caches but you did not bury to rebuild you just buried to sustain. You are left trying to figure out how to chop down lumber for a shelter without an axe because the survival axe in your bug out bag quickly failed you, and no nails to build (safe to say you probably didn‘t cache a book on how to build a log cabin primitive style either). Now you are stuck carrying five gallon buckets up from the stream several times a day not only for the family but for the garden that you had to dig up with sticks because you didn’t cache garden tools. See where I’m going with this? The minor preps can make all the difference and these preps do not have to break the bank. Nor does your retreat have to mimic a five star hotel to ensure your survival (in fact that would probably get you killed).
Network, network, network. Did I mention to network? The prepping community is a library in itself. Meet, talk, sit down and strategize. Not only are you learning you are establishing a relationship that could pay off in the future.
Can’t afford a AR-15 or AK? Well great neither can I. Instead I put money into ammo, and lots of it. I know you’re going to say, “Save that money that you spend on ammo and put it towards that AR-15.” Well guess what time is running out and what I can afford at this time is one to two boxes of ammo a month.
Which leads me to, “Keeping up with the Joneses.” You are not prepping to impress the Joneses. You are prepping for you and yours. The needs and income of your family are different from the next. So who gives a rats butt if the prepper over there disagrees with your purchase? He/She is not the one paying for it! Instead of trying to keep up with the latest gadgets and freeze dried storage of Joe Schmo next door focus your attention on what you can do and become efficient at it. So yea you could spend that $200 on that cool knife your bud has or you could save it and put it towards a reliable firearm or crossbow. So get rid of the notion that because the next guy over has better gear that he is better equipped. Remember knowledge is your biggest asset in a survival situation. While you are out hunting and gathering he will be fumbling to open his latest gadget and scratching his head over the instructions.
You’re stuck on new. Folks that are so fixed on having the pretty aspect they forget that getting certain items second hand saves you a lot of money. Doing so you just might be able to afford that AR-15. Again when you’re in the field you will be kicking yourself in the hind end for only having that .22 because that is what you could afford at a retail price. Network; find an individual that knows guns. See if they are willing to look at a few used firearms in return for a service you specialize in. In certain disasters old is worth more than new. That Bugatti Veyron Super Sport is as good as scrap in an EMP situation. Garage selling is a great way to find preps for cheap. For example, I recently purchased a camo waterproof bib and jacket set for ten dollars at a garage sale, an insulated bib for five bucks, and camo pants for a dollar. With that said there are some items that deserve more of an investment.
Name brands….yes some items are worth their investment. For example if you are prepping to bug out an adequate sleeping bag is a must (if you live in a large populated area such as Denver let’s face it you have to leave). There is a huge difference in a Wiggy'sbrand sleeping bag versus a Wally World sleeping bag. Another area that should not be skimped on is boots. You will be doing a lot of walking/ running and the last thing you need is to be trying to do so barefoot. Trust me…those Wally World “waterproof” boots are only waterproof for the first few uses. However, do you really need that fancy $300 flashlight? Probably not. Buy two headlamps and put the rest aside for an adequate sleeping bag. When it comes down to it don’t get stuck on the latest fanciest gadgets with that expensive price tag due to the name. When deciding on a product you need to look at longevity and reliability and ask yourself can I get the same quality if I buy an off brand?
Priorities. You need to sit down with your partner (or a pen and piece of paper if you’re like me) and discuss what follows: water purification, shelter, food, and self-defense. Clearly you will have to set priorities within those categories’ to. A priority should not be fancy shelving if you are on a budget. “Sorry baby boy we can’t eat next month because I wanted my prepping closet to look nice.” That money you spend on those shelves could buy your family an additional month of food or even a firearm in some cases. Call the bakeries and ask for buckets, buy five dollar totes are even better go out on trash days…you will find a ton! People throw away the most useful and expensive items. I once went to the dumpster and found several books that retail well over $15 a piece and name brand clothing such as Under Armour with the tags still on!
She’d cook a dish and we’d go ‘Mama, w’ats this here, hanh?’ And she’d say, Children, that’s a mus-go. It mus’ go down yo’ throat.” - Justin Wilson
Adjust your skeptical eaters’ view of food now! My family began that at an early age.
Half of the time I did not know what type of meat I was eating…and for that fact if I’m eating at my fathers these days I still don‘t. If it was brown it was beef, if it was white it was chicken or turkey flavored differently. We raised rabbits and I never knew until I was older that I was eating my ‘pet’ rabbit. Dad would simply make sure that he replaced it with the same color rabbit which explains why I was only allowed to have one specific color….
Statistics show that you may have to offer a child the same food fifteen to sixteen times before they will accept it. So offer your local game now. Get a cookbook and learn how to work with it. If you have an infant and have the ability to breast feed, do so. Formula is expensive, it is easier to put aside some to supplement your child’s diet than to store one years’ worth. Can’t afford to stock up on freeze dried food items? For me that wasn’t a big deal. Down here it’s, “What would you like with your rice tonight?” You can pretty much guarantee that either rice or beans (or both) is in a dish from jambalaya to gumbo, to red beans and rice, all the way to black eyed peas & rice. And it is soooo good! These can be some of the simplest dishes to the most complex, figure out how you like them now.
Before you begin purchasing preps do a inventory of the items you have. Since my son has a skin disorder I already had a pretty decent stash of medical supplies. Far from enough but more than most. However, it will expire or run out no matter the amount I store. Knowing this I’m trying to find alternative ways to treat his skin with what nature provides. Doing this I have taken one step closer to the realization that the supply chain may not be reestablished before my stockpile has run out. Your preps should reflect that chance also. In each category you need to address the what if scenario of the grid being down for a decade or two. Yes you may have food and supplies to last for a few years but do you have the knowledge to live off the land once it runs out? Realize material items are just that…items. Knowledge and know how will outlast any material object.
Just a few additional tips to make your money go further. If I receive change I ask for it in nickels. Since nickels are 25% nickel and 75% cooper they are worth more than their face value yet you pay no more for it. It is real easy to get lost in the beans, bullets, and band aids prep list; however, there are plenty of other preps that are needed. Go to garage sales and pick up clothing for your children in every size you can. It is better to spend ten bucks on twenty outfits for the future now than having to barter precious ammo later. Also, tents, lighting, and shoes are a great addition to your preparations and are usually found cheaply at garage sales. I check CraigsList a lot and I can always find free firewood and pallets. Even if you just have land it would be wise to stockpile fire wood there. The McCormick brand seasoning packets are relatively cheap and are a great way to add flavor and calories to bland dishes. Even now my children and I enjoy rice and a beef burger smothered in brown gravy. In addition, I was unaware until I read a article that individuals on food stamps could purchase plants and seeds as long as they produce food. My local Wal-Mart sells a small variety of heirloom seeds and Whole Foods sales bulk wheat along with various other bulk items. Obviously, if you are on food stamps your budget is tight but try to set aside a few dollars in your budget to purchase some fruits for the future. Always look for multipurpose items to get more for your money. The WhisperLite International by MSR burns white gas, kerosene, unleaded gasoline and IsoPro Butane. It would make a great addition to your Bug Out Bag or even your retreat. With the bountiful of vehicles that will line the roads you could have fuel for a while. In addition, there are a few other common places that allow for cheaper purchases. Sam’s has great deals on long term food storage especially on wheat if you cannot get into a LDS cannery soon (ours has a nine to ten month waiting list). No the wheat is not organic and non-GMO but you won’t starve to death. Visit your local dollar stores. I purchased over twenty seed packets for under three dollars because it was the end of the season. Also, eBay is a great place to pick up items. For your bug out bag you can obtain a large Alice pack and frame for under thirty dollars, it is cheap and has proven its’ keep. There are great deals on everything from wool socks to boots to the military poncho and poncho liner.
It takes work, time, sweat, blood, and some tears occasionally. And a lot of prayer. But if you are willing to work overtime, pick up a second job, get up early and hit the flea market and garage sales. It is possible on a low income. Bartering, second hand, and education is going to be your Emancipation Proclamation or Thirteenth Amendment, whichever you see fit. What it boils down to is having the motivation to work towards becoming a asset without having a hefty wallet. An the willingness to look at alternative ways to prep without allowing others view to dictate your path to self sufficiency.
On a deeper note, I would love to keep my children’s lives normal after the SHTF but after realizing the harsh reality of my budget and knowing how the majority of the population will act I realized that I couldn’t. The reality was hard to swallow as much as I wanted to save for all the luxuries that a retreat offers. My fears of the chaos that will ensue after SHTF is justified, the nation witnessed that during and after Hurricane Katrina. So I regrouped, re-strategized and began thinking logically on how I could best keep food in my babies’ mouths and keep them safe, the best I could. No it is not glamorous nor will it be as comfortable as it would be if we had a retreat set up but at least I’m doing my best to prevent them from starving. So please don’t put off prepping because you can’t afford the best or you feel you just don’t have the money. Spend a few extra dollars and do your best to get your beans, bullets, and band aids in place prior to the coming collapse. Because in the end eating rice and beans is better than watching your children starve to death.
Lastly, I have a question. BriteLyt lanterns advertises the ability to burn a variety of fuels including kerosene, diesel, gasoline, white gas, biodiesel, paint thinner (not to sure how I feel about that one), mineral spirits, charcoal lighter fluid, lamp oils, Coleman fuel, and JP fuels. However, due to the price I have not had the ability to try one. My question to SurvivalBlog readers is, have you tried one and if so are they worth their investment (for me the price tag is a couple months of my prepping budget)?
When I last checked, spot platinum had plummeted to $1,569 per ounce, while gold was more resilient at $1,707. This disparity is attributable to the platinum price being driven by its industrial uses. (And the global industrial forecast presently looks grim.) But, as I've mentioned before: whenever you can buy platinum for less than the price of gold, it is a good time to diversify your holdings. (Geologically, platinum is 16 times more rare than gold, so in most years it sells for a 20% to 150% premium over gold. The times that platinum has sold for less than gold, such as 1991 and today only come rarely. A 2009 article by Eric Bolling is instructive.) We can count on the long term historic ratio being restored, eventually. The current price inversion (with platinum selling for $138 less per ounce than the price of gold) is unprecedented. My advice: If you are currently holding more than six ounces of gold, I recommend swapping half of it into 1/10th ounce or 1/4 ounce U.S. Mint-issued Statute of Liberty platinum coins that have been authenticated by PCGS or NGC. (Commonly called "slabbed" bullion coins.) If you shop around, you can probably find a coin dealer that is willing to trade straight across. (Or you can sell your gold to one dealer and immediately buy platinum Statute of Liberty coins from another.) At the far end of the global financial crisis, you'll be able to trade back into gold or silver, and make a handsome profit. Ratio trading isn't just for the gurus at the COMEX desks. In exceptional times like these, the little guys like us have a good opportunity. Oh, and if you plan to marry soon, buy platinum wedding bands.
Should Congress Avert the “Fiscal Cliff”?
SurvivalBlog's Poet Laureate G.G. sent: Pay gap between government, private sector widens to 34 percent
Believe the hype in hyperinflation
Items from The Economatrix:
Stock Market Suffers Worst Day In Months On Bernanke Separation Anxiety
FedEx Predicts Busiest Day With 10% Gain On Holiday Peak
Gold Slumps to 6-Week Low, But Should Hold at $1,700
FDIC Closes Bank In Florida Raising Total Number Of Bank Failures In 2012 To 44
Dear Editor:
In the 1880s milk sold for $0.56 per quart or $2.24 per gallon which at the time was 0.112 oz of gold per gallon of milk.
To put that in perspective today, it would cost $190 for a gallon of milk.
So if you had a cow producing 1 gallon per day 10 months out of the year, it would have been the equivalent of having $57,000 / year in revenue today. (You have significant capital and labor costs gathering hay and water for just one cow not to mention the distribution costs and short shelf life).
At that same point in time, rent would cost $16 per month (equal to $1,360 today) and you could have paid your rent with the equivalent of less than 2 gallons of milk per week.
With prices like these it is no wonder that every family had their own cow which would have cost $70 dollars or 4.3 months of rent or $6,000 in today's dollars.
So today a cow costs $2,000, raw milk costs $10 / gallon and industrial milk costs $4 / gallon. This shows you just how much our economy has grown in the past 130 years, the relative price of milk has fallen to 5% or less of what it use to cost.
This also shows you how valuable a cow and the milk it provides would be if the global food distribution system were to have any significant problems as a result of hyperinflation. - Daniel L.
JWR Replies: While a comparison of prices before the days of electric refrigeration might not be completely fair, your illustration at least shows the long term erosive effects of chronic currency inflation. It also gives a glimpse of what people might be willing to pay for milk in the event of a grid-down collapse--when reliable refrigeration will presumably once again be scarce.
Is A Debt Jubilee The Next Big Meme?
The World Is Moving Closer To A Full-Blown Currency War Just Like The Great Depression of The 1930s.
Repo Man Goes to Ghana to Tow Away Argentinean Navy's Flagship
Eric G. sent: 10 nations that control the world's gold
Unless We Act, High-Frequency Trading Will Crash The Stock Markets
Items from The Economatrix:
Existing U.S. Home Sales Decline As Supply Drops
Weekly Jobless Claims Drop Proves To Be Short-Lived
Morgan Stanley Posts Loss in Q3 on Debt Valuation Adjustment
Matt H. recommended this 4-minute video (auf Deutsche, but with English subtitles): A Grim But Realistic Prognosis Of What Lies Ahead For The European Union. (Dictatorship ahead?)
Items from The Economatrix:
Not Just Gas! Check Out The Drastic Price Increases On 21 Everyday Items
GE, McDonald's Give Wall Street A Black Eye On '87 Crash Date
Egon von Greyerz discusses the current economic situation and the possibility of a new Swiss-minted gold coin as a parallel currency. And here is a related essay by von Greterz, with a chart: Disregard current manipulation of precious metals.)
Pierre M. sent: Survey: 40 Percent Of Americans Have $500 Or Less In Savings
Milk Seen Surging 15% on Drought-Feed Costs Before Demand Slows. (Thanks to R.B.S. for the link.)
Items from The Economatrix:
Expect Severe Inflation, Time Is Running Short To Take Action
Kevin S. suggested this article: Concerned Roman Hoarded Gold to Protect Against Hyperinflation at the Outer Reaches of Roman Empire
The Washington Times reports: Welfare spending jumps 32% in four years. (Our thanks to B.B. and P.D. who both sent the link.) P.D.'s comment: "As you've written before, when the EBT cards stop working, there will be blood."
Items from The Economatrix:
Why Are Gasoline Prices Suddenly Falling?
Iran Renews Cyberattacks on US Banks
AmEx (American Expat) sent this: U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says
Reader A.T. suggested this essay by Martin Armstrong: What Destroyed Rome was its Unfunded Government Employee Pensions
The Daily Bell reports: Now Mexico Bans Cash. JWR's Comment: Don't mistake this new law as part of the so-called war on drugs or the war on terror. Rather, it is plainly a part of the war on privacy and individual liberty.
My husband and I are new to the concept of prepping and self-sufficient living, having just begun the process in the last 30 to 60 days. Our journey when world events began to heat up in the Middle East and we started asking “what if” questions. Our ignorance means that we have a lot of learning, practicing and catching up to do. I am fairly confident that we are not the only ones to slowly become aware of the necessity of preparing. I thought that I would share what we have done to get started in the hopes that this information will be helpful to anyone else that is new to prepping. So, how should one start if they have done absolutely nothing thus far?
God Prepares A Way Even though I titled this “Starting from Nothing”, that is not an entirely accurate phrase. God prepares a way for us, even when we are not fully aware of the long-term ramifications of His design. Our journey has been a gradual one, without us even realizing it. A few years ago I read a book titled Animal, Vegetable, Miracle which raised our awareness about where our food comes from. Then we watched the video Food, Inc.. and that really scared us! I began to cook from scratch as much as possible, buying what I could from butchers and farmers’ markets. Unfortunately, we lived in a large city with a tiny lot. Gardening was not an option and I felt limited in our choices. But, for some reason that I cannot really explain, I purchased two books: Back to Basics and The Self-Sufficient Life and How to Live It.
In June 2011, God opened a way for our family to move to a small community of less than 2,000 residents in northern Wisconsin. We were able to negotiate a 12-year fixed [interest rate] land contract for a good sized house on a larger than average city lot. It was too late to plant a garden, but I was able to negotiate for some fresh produce from neighbors, members of our church and the local Amish community. I learned how to can and borrowed a dehydrator and learned how to dehydrate our food. Granted, it was not enough to feed our family through the winter, but it was a start.
I feel that God was preparing us with this house! Not only is the house a good, sturdy home built in the 1920s, but we found a buried outhouse pit, a buried sand point well, and learned that the house originally had a rainwater cistern and root cellar in the basement. While we are not planning on constructing an outhouse anytime soon (we did dig it up once already and collected over 200 antique bottles) or repair the rainwater cistern (illegal in our state), it is reassuring to know that the house was once self-sustaining. In the meantime, I am working to get the well permitted so that we can install a hand pump, as well as researching ways to collect rainwater and build a root cellar.
During the cold winter months, I had begun reading various blogs on homesteading, mostly to learn more about canning and dehydrating. I came across a recommendation for a video on gardening titled Back to Eden. This video taught us how to garden without rototilling, irrigating, fertilizing and minimizing weeding. My husband and I were intrigued, especially since it emphasizes how to garden in a Biblical fashion. In 2012, we planted our first garden ever. For novice gardeners, God truly blessed our efforts. We also learned a lot! While we enjoyed some of the fruits of our labors fresh, I made an effort to can as much as possible. I was able to preserve almost 400 half-pints, pints and quarts of fresh produce, mostly harvested from our garden. And I learned that we need a much bigger garden to store enough food to feed our family through one winter!
It was while researching and reviewing this Biblical gardening method that I first began to come across various sites, blogs and videos that were written by other preparing families. At first, I admit to thinking it was just another method of hoarding, albeit one that was more politically correct! Once again, God began to work on me and show me in verse after verse how preparing is important. I purchased the one book that everyone seemed to refer to – the LDS Preparedness Manual. I started with the free downloadable version, but soon realized that I needed a printed version in order to share it with my husband. It was while reading the printed version that I first learned about SurvivalBlog. We are now learning and preparing in leaps and bounds.
We must also recognize that God has given us some talents naturally. We all have hobbies or activities that we enjoy doing. These same activities, depending on what they are, may stand you in good stead while preparing. For as long as I can remember I have been an avid reader. Until my mid-thirties, I read anything and everything regardless of content. Today I am a much more discriminating reader, but I still read a lot. I love books and absolutely hate returning them to the library or selling them. Because of this tendency, my husband likes to joke that we have our own personal library! This love of reading will be beneficial should we ever be in a grid down situation. I will have a plethora of entertainment and resources that I can turn to as needed. Since we are now focusing on preparing and self-sufficient living, the bookshelf will keep me supplied in new reading materials for at least a few months. (I confess I have already ordered seven of them!) I read three of Mr. Rawles’ books over the course of a few days and am anxiously waiting for the fourth to arrive. (As a side note, I highly recommend that any new preparer read them!)
I am also a crafty kind of person – I love to work with my hands to create things. I love to sew, crochet, cross-stitch and quilt. Some of these skills can be used to help keep my family clothed and warm; it can also be used to fill long, cold winter evenings. I currently have three traditional sewing machines, but I am looking for a good treadle machine. While I can sew by hand and like to hand quilt, I confess that sewing or mending clothes by hand is not my favorite activity! I would much rather use a sewing machine. In addition to keeping me busy now, these activities are also bringing us a small amount of income that can be dedicated to helping us prepare.
I love to cook and for years have been a very good customer of Pampered Chef! I just have to play with different tools and gadgets that help make cooking fun. Fortunately, most of the tools that I have purchased over the years do not require electricity to work and will also be helpful long into the future. I also enjoy trying out new recipes, modifying them so that I can make them from scratch as much as possible. Coupled with my love of books, this means that I have a lot of cookbooks. As we begin to build our food storage, I will be reviewing my cookbooks thoroughly to find those meals that would adapt to wood stove or campfire cooking using cast iron skillets and pots. Now, I am much more aware and selective in the tools that I buy for my kitchen and am slowly converting everything to cast iron cookware.
While some preparations fall along the lines of common sense, it is still important that to research before doing anything else. In our case, I watched a few videos on food storage, solar systems, end time prophecies, etc. Instantly, I realized that we are woefully unprepared should anything happen tomorrow. We needed to start making some changes right away. While the resources I discovered were very helpful, they all had one thing in common – lists of necessities – and some significant capital requirements.
It’s really easy to feel overwhelmed, especially when there are a lot of lists. SurvivalBlog’s list of lists is great because each list is broken out into different categories. While scanning each list, I was able to make notes on what things we already had and to start having discussions about what we needed with my husband. My husband and I tend to complement one another very well – I tend to think more of the day-to-day, as in, what tools would I need to do this task today if there was no electricity; my husband, on the other hand, is more big picture – what do we need to do to protect ourselves from nuclear fallout. By having the lists as a discussion point, we are able to prioritize based on our needs and concerns instead of scratching our head and trying to think of the “what ifs” and “what do we need” questions.
Very few things in this life are free, and unfortunately, everything is going up in price as the value of our dollar drops. Our family is larger than average – we have six children – and so our budget is fairly tight to begin with. With just enough funds to “make ends meet”, our first challenge was raising money to start purchasing things we would need. While the List of Lists is a great resource, I think we can all agree that it still requires some funding!
I began to systematically go through all of the boxes, cupboards, closets and storage to identify those items that would be good for future bartering (clothes, shoes, coats, snow pants, baby gear, furniture, etc.) and those that would require electricity to work or were not even being used. I think that it is safe to say that everyone has things hiding away that they only use rarely or that, in the event of a power grid outage, would never use again. Do we really need to keep these modern “conveniences”?
For example, my husband and I cleaned out the “storage” area in our basement. We temporarily boxed all the clothing items until we could obtain some plastic containers. Eventually, I sorted the clothes by gender and size and generated an inventory prior to relocating the bins to long-term storage in the garage.
We also identified the unused baby furniture and other “able to be traded” items and placed them into long-term storage in the garage. While we currently do not need these items, we felt it was best to save them for two reasons: (1) just in case we were blessed with another little one (which is entirely possible since our youngest just turned a year old) or (2) in the event we needed to barter in the future for something we do need.
We also assembled in a separate pile unneeded but potentially useful items such as crutches and canes. We do not have any first aid kits assembled yet, but we do have a wide range of mixed medical items all throughout the house. We are consolidating what we do have so that we can organize it into one area of the house and make wise choices in purchasing what we need – opposed to purchasing what we think we need and ending up with too much of something and not enough of another.
Finally, we put all the electric items, such as a countertop cookware and electric skillets in one pile and the items that we no longer use, such as a bill organizer and gold embossed stemware into a second pile. All of these items were cleaned; inspected for flaws; tested for condition; and photographed for sale placement.
Depending on the time of year, those items that are set aside to be sold can be managed in a variety of ways, whichever suits your particular family and timing. Because we did not start our prepping until early fall, when rummage sales are at a seasonal low, I opted to post many of our items on EBay for quick auction or sale. I took the time to research a little bit about each item that we were selling, looking at comparables already on the site. This helped me to price the “buy it now” slightly lower than our competitors. It is important to note here that timing is critical – we need to start preparing now and so I was not very concerned about “profit”. Remember, most of this stuff has simply been collecting dust in a cupboard, closet or other storage area so a quick infusion of cash was more important than getting the most profit. With that being said, I am not selling us short either. Researching the competition helps ensure the most “bang for your buck” is achieved.
As items were purchased, the funds became available in our PayPal account. I have opted to not transfer this money to our personal account just yet. Instead, I am using the funds to purchase things that we need, such as kerosene lamps and cast iron cookware, from eBay.
A word of caution when purchasing online – make sure you know what the going rate is for certain items so that you do not pay more than you would elsewhere and always keep shipping costs in mind as they can add up quickly! Resist the temptation to “buy it now” just to get the item quickly – you will most likely be able to get the item for less if you are patient and participate in the auction. For example, I got one cast iron pan for $6.38 plus shipping of $9.36. Had I opted to “buy it now” I would have paid $19.99 plus the shipping. This allowed me to have an additional $13.61 to purchase something else we needed.
Any items that did not sell the first time around were relisted. After a few attempts, if they still have not sold, I put a price sticker on it and set it aside for sale in the spring during the community wide rummage sale.
The lack of funds gave me a feeling of being overwhelmed. There was so much that we needed and the lists seemed to go on and on. By being proactive and conscientious, I have been able to start making the necessary purchases a little at a time. This helped me to feel a little less overwhelmed and to feel like we were at least making some progress.
I do our grocery shopping once each month, with only occasional trips for extra milk, bread and eggs. I have been shopping this way for almost three years and we usually have plenty of food when it is time for me to shop again each month. This enables me to feel confident that I have at least enough food to feed my family for about six weeks. Throw in all the food that I have canned and I could probably go two or three months longer, although I admit creativity would be required for meal planning. As I started preparing for my family this habit really helped me. I continue to shop once per month, but buy more than my standard maintained quantity. For example, I like to have at least 50 pounds of sugar on hand, especially during canning season. I will gradually increase that to 100 pounds by buying a bag or two extra each month.
For the long-term planning, I am keeping an eye out for an antique ice box to replace my refrigerator with. Unfortunately, the space is tiny for storage, so I am looking at ways to preserve my food while minimizing my dependency on freezer and refrigerator space. We are also researching how to construct a root cellar and have purchased the book Root Cellaring: Natural Cold Storage of Fruits & Vegetables. Our home had one at some point in the past, but a previous resident filled it in and cemented it over. We are also looking at doubling the size of our pantry (originally the fruit cellar of the home) so that I have more space to store my canned goods. Finally, I am going to start preparing five gallon food buckets with preplanned meals and recipes for long-term storage by taking advantage of bulk purchases from the local Amish.
Every living thing has core needs: shelter, food, water and clothing. As a new preparer, everything we look at and evaluate has to fall into one of these categories. Some are easier than others. Initially, we are preparing within our current residence. We don’t necessarily have time or money to buy a retreat elsewhere, so the first step is evaluating what we currently have and determining the best way to make it work for us. For example, shelter. Check. We live in a house that we are purchasing. But how livable would the house be if we did not have utilities? Here is a list of things that we are reviewing right now with this in mind:
The above are only a few examples. But how do you determine what you need and in what priority? For me, the best way to determine this has been fairly easy because I make lists of things that would not work as they are currently set up should TSHTF. As I do my daily chores, I am very conscientious of what would have to change for us to be more self-sufficient. For example, doing dishes made me aware that I need more large pots to heat water and a way to make homemade dish soap. I have discovered that once you start to have a mindset of preparing, God will open your eyes to what you are dependent on for “convenience”.
Finally, I just want to advise you to keep your chin up and take one day at a time. Try to do something that will help your preparedness level every day – no matter how small or insignificant it appears. Keep a small, portable notebook close by so that you can jot down any ideas or concerns right away. Pray and ask for guidance on which direction you should focus on next. You may just be surprised at the direction God will take you – I know I was!
Have you noticed that the spot price of platinum is now about $90 below the spot price of gold? This is a sign of major economic turmoil and is predictive of a very weak manufacturing sector in the year to come. This price inversion doesn't happen very often, so when it does, take advantage of it, just as I did. I was recently able to pick up some 1/10th-ounce and 1/4-ounce slabbed U.S. Mint Liberty bullion platinum coins for just under the spot price of gold! But beware of fake Chinese platinum and gold coins that are now becoming commonplace! When you buy platinum coins, buy only coins that are in PCGS or NGC encapsulated ("slabbed") holders. You don't need to be a genius economist to see the wisdom of exploiting this price inversion.
James Hall: Derivative Meltdown and Dollar Collapse
26 things to get done before the global debt collapse
Art Cashin: We’re Certainly At A Flashing Yellow Alert On Hyperinflation
Items from The Economatrix:
Been There, Done That Department: Reserve Bank of Zimbabwe report draws comparison between their hyperinflationary period and US QE3. ("These interventions which were exactly in the mould of bail out packages and quantitative easing measures currently instituted in the US and the EU, were geared at evoking a positive supply response and arrest further economic decline.") The report also documents the ongoing collapse of the Zimbabwean economy under the spectacularly bad leadership of Comrade Mugabe and his ZANU-PF cronies. Their systematic looting of the country makes America's corrupt big city mayors look like rank amateurs, by comparison.
Why doesn't this give me a warm, fuzzy feeling? Drone demand could be big boost to economy
Reader B.B. sent a link to this at the oft-quoted Zero Hedge: China Central Bank Refuses To Join Global Print Fest, Warns About Inflation Risks
Items from The Economatrix:
Alert: Highly Sophisticated Large-scale Cyberheist Targets Customer Funds At Major US Banks
Marc Faber: Market Setting Up For "Serious Setback"
The Real Fiscal Cliff Is Much Bigger Than You Think, Warns Peter Schiff
Panetta Sounds Alarm on Cyber-War Threat: "It is the kind of capability that can basically take down a power grid, take down a water system, take down a transportation system, take down a financial system."
Prosecutors seek criminal charges in London Whale fiasco.
Charles Hugh Smith: About That "No Recession" Call...
Items from The Economatrix:
Roubini Foresees Spain's Doomed Despite Bankia Nationalization
The Horrific, Worst-case Scenario for Spain
Reader P.D. sent: US Nears Fiscal Disaster: ‘Washington Doing Nothing’
Kurt sent this: No Currencies Will Survive What Lies Ahead, But That’s OK
Mac Slavo: Warning Signs: FedEx to Slash Thousands of Jobs Citing “Weak Global Economic Conditions”
Items from The Economatrix:
Confidence Among Small US Businesses Cooled in September
Price of Gold Could Reach $2,400/oz. By Next Summer
Peter Schiff: Riding Into the Sunset or a Brick Wall?
"Legalized Plunder of the American People" - G. Edward Griffin
Items from The Economatrix:
Fed's Fisher Says US "Drowning In Unemployment"
High Cost Of Energy Leading Economy Into Recession
Will The Chinese Remnibi Replace The US Dollar As The Primary Reserve Currency Of The World?
Reality: More People Requested Emergency Food Assistance Than Found Jobs
AmEx (American Expat) sent: IMF Sees ‘Alarmingly High’ Risk of Deeper Global Slump
Reader Pat S. recommended: Radical Simplicity, or Life after the Great Disruption
Those pesky derivatives again: Cynicism aside, why the NY AG's MBS suit vs JPMorgan matters
Items from The Economatrix:
16 Critical Economic Issues That Obama And Romney Avoided During The Debate
India's Stock Exchange "Closes" After State Bank "Flash-Crash"
Eric P. sent this from Der Spiegel: How Monetary Policy Threatens Savings A key quote: "Anyone who can afford it is seeking protection from inflation and fleeing to material assets."
G.G. flagged this: Nine in ten Scots 'living off state's patronage'
Also from G.G.: The dollar’s days as reserve currency are numbered
Decline, Decay, Denial, Delusion, And Despair (Thanks to R.B.S. for the link.)
Items from The Economatrix:
The Largest Economy In The World Is Imploding Right Before Our Eyes
Trivest, a private equity firm headquartered in Florida, has wisely acquired Wise Foods, a maker of long-term storage foods.
I found this over at Gold-Eagle: Unraveling Why A Fed President Just Suggested Doubling QE3
GammaRei sent: The Five Most Surreal Financial Apocalypses from History (Warning: Foul language.)
Rich businessmen pulling out of France as tax-hit looms. (A hat tip to K.A.F. for the link.)
Items from The Economatrix:
Faber Warns "Everything Will Collapse"
Hyperinflation Hits Iran Like Weapon Of Mass Destruction. The article begins: "'Better buy now,' advised the rice merchant in Tehran. The retired factory guard took him up on the advice, buying 900 pounds of the stuff to feed his extended family for the next 12 months."
G.G., SurvivalBlog's Poet Laureate, flagged this: Global Food Prices Set To Soar--Again. [JWR's Comment: We can expect to see more instability in Third World countries, just like the last time there was a big price shock in agricultural commodities.]
Also from G.G.: Big Bank Derivative Bets Nearly Double In Six Years
Items from The Economatrix:
Europe Stocks Down As Global Growth Woes Intensify
Do Western Central Banks Have Any Gold Left?
Portugal Announces Sweeping Tax Hikes
Cantor Cut to Junk By Moody's on Capital Markets Pressure
Wall Street's Grand Old Man, Richard Russell declares: The Only Way Out Is to Devalue. (Thanks to G.G. for the link.)
Reader H.L. sent word of some ill-advised State Level Cap and Trade. H.L. call it "...the final nail in the coffin of the once Golden State."
G.G. suggested this piece at Tyler Durden's oft-quoted Zero Hedge blog: Do the Swiss Know Something the Rest of Us Don't?
Also from G.G.: Greece ‘to run out of money’
Items from The Economatrix:
California Cities In Fiscal Trouble "Conga Line"
Warnings That A Massive Stock Market Crash Is Imminent
IMF Chief Economist Says World Economic Crisis To Last At Least 10 Years
Those pesky derivatives: Task force slaps MBS-related charges against more banks
The Other B.B. suggested this interview: Kyle Bass On The Federal Budget: "I Don't Know How To Fix This". Not surprisingly, Bass recommends getting out of dollars and into productive tangible assets.
At Forbes: Managing The Risks Of A Globalized Supply Chain
Items from The Economatrix:
Last Housing Crash Is Not Even Over But Bernanke As Set The Stage For The Next One
Bill Gross: Only Gold And Real Assets Will Thrive In Fiscal "Ring Of Fire"
California Gas Stations Begin To Shut On Record-high Spot Prices.
Gas Prices Suddenly Skyrocket In California
Why Ben Bernanke Is Setting The Stage For Another Housing Crash
How QE3 and Higher Inflation Are Part of The Fed’s Master Plan
15 minutes of fun: CNBC: Jim Rogers vs. Marc Faber
Items from The Economatrix:
Gold Hits Record High In Euros And It's Setting Up For Another Rally
Top CEOs: Fiscal Cliff Is Hurting Job Growth
Fiscal Cliff Could Cost US Households An Extra US $3,446 In Taxes
Barter, anyone? For Spain's Jobless, Time Equals Money. (Thanks to Kristina D. for the link.)
Rhonda T. sent: South African Economy Paralyzed As Miner Strike Spreads To Truck Drivers
Items from The Economatrix:
"You Better Look At Reality ... And Understand What's Coming Next
13 States Now Considering Gold And Silver As Money
Why Your Money May Be At Risk After Bank Cyberattacks
Water Prices Rise Sharply Across America; Double And Triple In Some Locales
Hyperinflation Has Arrived In Iran. Followed, not surprisingly, by riots in the streets.
G.G. flagged this: Living Through a Currency Devaluation. JWR's Comments: Norte Americanos are advised to learn from this preview of coming attractions.
Reader Jim W. suggested this at Zero Hedge: The ECB - EUR22 Trillion Is Missing
Items from The Economatrix:
Hedge Funds Lagging: Is "Enormous Unraveling" Near?
Manufacturing Snaps Back: Is It A Turning Point Or A False Positive?
US Banks Hit By More Than A Week Of Cyber Attacks
Analysis: As Fiscal Cliff Nears, Markets Ponder A Rougher Ride
Dear James,
I really enjoy your blog and try to read it every day. My husband and I live in New Jersey. We just sold our house in May and are renting for a year while we try to figure out where to move next. Unfortunately, our home lost a lot of equity so we only have $55,000 to use towards our next house. Do you believe it is better to pay cash for a house or is it wise to get a mortgage since interest rates are so low? Our original plan was to buy our next home with cash, but I doubt that we have enough money.
Thanks, - L.Z. in New Jersey
JWR Replies: While some investment advisors see inflation on the horizon and hence advise mortgaging to the hilt (using a minimal down payment), I recommend a more cautious approach. At present, since deflation is still with us, I recommend keeping mortgages as small as possible, and paying them off as quickly as possible. In a deflationary environment where cash is king, a layoff that lasts six months could be devastating and result in a foreclosure. Once inflation re-emerges, it will be another matter. At that point you'll be able to pay off your remaining mortgage balance with "cheaper dollars." But for now, play it safe.
W.C.P. suggested this video: Why the U.S. Federal Budget CANNOT be Balanced.
RBS sent another video link: America's Book of Secrets - Fort Knox
H.L. sent: Cronyism Is Destroying Spain's Future
Items from The Economatrix:
Deleveraging from One Bubble to Another
Bernanke is Now a Kamikaze Pilot
Panic Cash Withdrawals in Spain Drain Banks; Greece-style Economic Implosion Now Imminent
An update: A week ago I mentioned that the producers of the popular Silver Bullet, Silver Shield videos commissioned the minting one-ounce .999 fine silver medallions of their own design. They are being sold for as little as $2.99 over the spot price of silver. If you order yours using the link from SurvivalBlog, we will earn a small sales commission to help defray our considerable monthly bandwidth expenses. I've heard that they've now pre-sold more than half of their planned minting of 50,000 coins. Watch the spot price of silver carefully, and buy on the dip days!
AmEx (American Expat) sent: Roubini: Europe Situation May Turn Disorderly
G.G. sent this: California Is First to Offer Private-Pension Management. [JWR's Comment: Gee, wouldn't you like to come aboard our sinking ship?]
Items from The Economatrix:
Housing Is Back (Again). Or Is It?
More Americans Now Commit Suicide Than Are Killed In Car Crashes As Miserable Economy Takes Its Toll
The Greatest Trick The Devil Ever Pulled
JPMorgan Loss Could Be Next "Shock" Event
Eric Sprott talks precious metals on Squawk Box. Toward the end, he is asked about physical preparedness. Eric says: "Prudence is very much warranted." (Thanks to SurvivalBlog's G.G. for the link.)
Faber Warns “Everything Will Collapse”
G.G. sent this: USPS Prepares for Second Default in Two Months
Bram suggested some good monetary analysis by Charles Hugh Smith: Why QE Won't Create Inflation Quite as Expected
Items from The Economatrix:
The Truth About The Fiscal Cliff
New Home Sales Dip, But Prices Hit 5-Year High
Sir:
Anyone who spends any amount of time on survivalist and preparedness
oriented forums knows that a certain political worldview is the most
commonly encountered perspective, particularly with respect to
economic concerns. Particularly in the literary niche that is
survivalist/preparedness fiction, the protagonist is often identified
as a conservative critic of Keynesian economic thought and favors the
gold standard. Very often the plot presupposes a very right-wing
political orientation. Matthew Bracken (Enemies Foreign and
Domestic), Thomas Sherry (Deep Winter, Shatter), Glen Tate (299 Days),
and even James Wesley Rawles (Patriots) all share to some degree this
worldview. Some authors even make efforts to settle scores with
Democrats and liberals. I enjoyed all those books, and authors
certainly have the right to write whatever they want. However,
fiction serves a valuable role in outreach and education (not to
mention entertainment!), and I think that it may useful to remember
that being a card carrying member of the political right is not a
requirement to be a survivalist. There is nothing inherently
political about wanting to guarantee the health and safety of your
family. You don’t need to be a conservative in the Austrian school of economics to want to be prepared.
Government Might Not Help You
Both the Occupy Wall Street and Tea Party protest movements share a common jaundiced eye toward the motives of government. Whether the criticism comes from the right or the left, it is not unreasonable to worry that the most powerful people in this country, or the world, don’t necessarily have your best interests in mind.
There seems to be a perception that rich bankers and the political elite all seem to eventually hold some fraction of their wealth in precious minerals and mountain retreats. Perhaps they have peeled back the curtain and have seen the fragility of modern civilization. Or perhaps it is just prudent for the super wealthy to take some small percent of their vast wealth and put it to work as a hedge against the most extreme of dangers. After all, gold is pretty and so are the mountains of Montana and New Zealand. Either way, whether through special insight or just good planning, many powerful people are preparing for something. That just makes it all the more likely that if a true danger does appear, they have the ability to escape. That mere possibility of escape means that if comes time to navigate through rough seas, the normal captains at the helm may already be lowering their private life rafts.
Even If “They” Have Every Intention Of Preventing Collapse, They May Miscalculate
You don’t even need to be a cynic about government to want to prepare for trouble. Maybe the power brokers and elites that run the country do have the best interest of you in mind. After all, collapse and disorder are not the ideal methods to accumulating wealth and power. It would be far better to own a small slice of an enormous pie than control a larger slice of a shrinking post-collapse society. Even if the people who man the levers of the economy really are evil geniuses, it is probably in their best interest to keep the entire system perpetuating. But even evil geniuses are people, and people make mistakes.
Many survivalists and authors of survivalists worry about the fiat money system and favor the gold or silver standard. It is entirely plausible that the economic growth and innovation of the last 75 years is attributable to having abandoned the gold standard to the dustbin of history. Maybe fiat money and central banking is a bit like what Churchill said about democracy, it could be the worst form of economic underpinnings except for all those others that have been tried. Certainly inflation, disinflation, and jolting business cycles were well known when the world ran on specie.
The 2008/2009 banking crisis and resulting government intervention was a scary event. Yet some thousand plus days later the wheels of trade are again more or less functional. Nobody should ever wish for a collapse, even if it like the grasshopper, you may think eventually those unprepared are due a comeuppance. If Bernanke was able to patch things together and pull off a last second save of modern civilization, he should be hailed as a hero, not pilloried. However, the fact that a last second save was even necessary should give you pause.
Even if you favor central banking, government backing of the savings and loans industry, and quantitative easement, the fact that it is a human at the lever that makes sure these functions help the economy should give you pause. The most powerful could be evil geniuses plotting every move, or perhaps even scarier, they are just people. Keynes - whose economic ideas are so often the target of the right and many survivalists - was fearful of the impact that “animal spirits” could have on the economy. The spontaneous urge to action unchecked by quantitative benefits or probabilities will always be a core potential risk in society. Even those who politically view government as having an important role in curbing the animal spirits should not ignore the very threats that modern Keynesians argue justify the Federal Reserve.
Other Concerns
Certainly the left offers other justifications for preparedness. Many on the left are concerned about the environment and sustainable ecology. And of course, plagues, nuclear terrorism, meteors, super volcanoes, various peak theories, earthquakes, and weather crises are all apolitical. - Anonymous
Precious metals market analyst Ted Butler: Transparency
B.B. sent this: Estimate of California's real debt upped from $28 billion to... $335 billion
In Forbes: Run On The Banks Would Make Fiscal Cliff Look Like A Speed Bump
Items from The Economatrix:
US Bank Run Imminent As FDIC Expanded Deposit Insurance Ends December 31st
Spain Recoils As Its Hungry Forage Trash Bins For Food
Sue C. sent: Analysis: As worst euro fears fade, U.S. fiscal cliff looms
J. McC. sent: Corn and soybean supplies at an eight year low.
Jim Rogers on Quantitative Easing: "We're All Going To Pay A Horrible Price For This." (Thanks to Jim W. for the link.)
Items from The Economatrix:
G.G. flagged this: Household electricity bills skyrocket
Also from G.G.: The Great California Exodus: A Closer Look
In the red: From Stockton to Scranton, cities are going broke
Kevin S. sent: EU heavyweights call for radical foreign and defence policy overhaul
Items from The Economatrix:
Financial Markets Tumble On News Of Unrest In Greece And Spain
How High Oil Prices Will Permanently Cap Economic Growth
Inflation Boogeyman Is Becoming Germany's Worst Nightmare
Nobel Winner Stiglitz Says Time Running Out For Europe's Leaders
Gerald Celente-The First Great War of the 21st Century Has Begun
R.B.S. recommended this article: A trip back to 1964 proves Silver creates wealth. (BTW, this has a nice correlation with the current opportunity to acquire nickels at face value.)
Linda U. sent: World on track for record food prices 'within a year' due to US drought
13 States Now Considering Gold and Silver as Money. (Thanks to R.B.S. for the link.)
Where Does Money Come From? The Giant Federal Reserve Scam Americans Do Not Understand
Items from The Economatrix:
Deutsche Bank Issues A Terrible Warning on the Health of the Global Financial System
Unemployment Rates Rise in Half of US States
Those pesky derivatives again: Deriving the True Size of U.S. Megabanks Is Far From Simple
Items from The Economatrix:
Draghi And Bernanke's Worst Nightmares Are About To Unfold
Fed's Fisher Says U.S. Inflation Expectations Rising
The Trouble With Printing Money: QE3 Reflects A Colossal Failure To Address Our Predicament
James Wesley:
I read with interest your article on saving nickels. My question to you is why are nickels better than quarters? Is it not easier to store a larger sum of funds in the same physical space with quarters than nickels? If they do devalue the [printed] US Dollar by a factor of 10, then a nickel will [effectively] be worth 50 cents but a quarter will be worth $2.50.
Regards, - Richard F.
JWR Replies: As a hedge against a zero (or two) being dropped from the paper Dollar, nickels (the U.S. five cent piece) and clad quarters are indeed comparable. But from the perspective of base metal content value, consider:
A debased clad quarter (91.67% copper and 8.33% nickel) is actually worth $0.0516021. That base metal is only 20.64% of the coin's face value.
In contrast, a nickel (75% copper and 25% nickel) is actually worth $0.0536129. That base metal is 107.22% of the coin's face value.
So, by their base metal content, each nickel is worth slightly more than a quarter!
(Reference: Coinflation.com. Access date: 22 September, 2012.)
In summary, the U.S. Nickel is the ONLY instantly-recognizable coin in common circulation that is worth more than its face value. Granted, the pre-1981 U.S. pennies are presently worth 248% of their face value, but those require sorting--either time-consuming sorting by eye or electronically with a $500 Ryedale coin sorting machine.
Though I stocked up substantially in 2006 and 2007, I still ask for a $20 tray of nickels each time that I visit the bank. Someday my children will thank me for that.
Back in 1963, you could walk into a bank and walk out with all the 90% silver quarters you could carry. Each silver quarter is now worth $6.24. That is 2,496.42% of face value. (Again, according to Coinflation.com.) I see nickels as a similar opportunity for our generation. The composition of the U.S. nickel has been the same since 1946. But once it is inevitably debased (most likely to a stainless steel slug with a base metal value of less than 1/10th of a cent), our window of opportunity will close. Stock up!
Jim W. suggested this: The Next Panic: Europe’s crisis will be followed by a more devastating one, likely beginning in Japan.
Andre sent us this: Concerted QE – The Beginning of Hyperinflation
G.G. suggested: Fed Wants Inflation Now, Will Clean Up 'Mess' Later: El-Erian
More Americans Added to Food Stamps Than Find Jobs
Readers recommended two interesting essays over at Zero Hedge: Bank Of America to Fire 16,000 by Year End and What Mitt Romney Also Said: A Glimpse Of The Endgame?
Items from The Economatrix:
Household Worth in US Fell in 2Q as Stocks Dropped
Dollar Index Headed For Rapid Collapse
Peter Schiff-Dollar Vulnerable to a Massive Collapse, Buy Gold and Silver
By way of Tam at the View From The Porch blog comes this account of multiple mass inflations in Argentina: “¡Qué Quilombo!” Here is a key quote: "What seems peculiar about Argentina’s case is the government’s Herculean effort to ignore the immutable laws of economics in their pursuit of grand larceny. The country has seen five currencies in just the past century, averaging a collapse every twenty years or so. In 1970, the peso ley replaced the peso moneda nacional at a rate of 100 to 1. The peso ley was in turn replaced by the peso Argentino in 1983 at a rate of 10,000 to 1. That lasted a couple of years, and was then replaced by the Austral, again at a rate of 1,000 to 1. To nobody’s surprise, the Austral was itself replaced by the peso convertible at a rate of 10,000 to 1 in 1992. During the past four decades, when all was said and done, after the various changes of currency and slicing of zeroes, one peso convertible was equivalent to 10,000,000,000,000 pesos moneda nacional."
Some commentary from George Schultz, et al: The Magnitude of the Mess We're In
Athens Municipality Runs Out Of Cash; Suspends All Operations
F.G. sent: Gary Schilling: Why There's No Housing Recovery And Prices Will Collapse Another 20%
Items from The Economatrix:
Stagflation in Extremis and the Explosive Rise in Gold
Former Goldman Sachs Analyst: War to Erupt In 2012, Dow to Fall to 5,000
Green Acres: The Case for Investing in Farmland Now
Jim W. mentioned some commentary on empty retail store parking lots, over at The Burning Platform: Are You Seeing What I'm Seeing?
QE3's looming flaw: Big banks' mortgage operations
Marc Faber Warning: Store Your Gold Overseas
Items from The Economatrix:
Fed's "QE-Infinity" Will Push Gold to $2,400
Deposit Flight From Europe Banks Eroding Common Currency
Jim W. sent: CITI: When Gold Hits $1790, Silver Will Go Bonkers
G.G. flagged this: Tungsten-Filled 10 Oz Gold Bar Found In The Middle Of Manhattan's Jewelry District
Glenn Beck Uses Pies as an Illustration When Discussing Inflation and Tangible Hard Assets
The latest from the LEAP think tank in France: GEAB N°67 is available! Global systemic crisis/October 2012 -The global economy sucked into a black hole and world geopolitics heated to white-hot: The seven key factors of an unprecedented double shock
Items from The Economatrix:
Dear Editor:
The monetization dubbed Quantitative Easing (QE) Round 3 ("QE3") is very confusing, and there is a lot of mystery attached to the confusion. To fully understand what just happened to us I find it useful to frame the scenario in this why, and this maybe a better way to understand it for some. When I put currency somewhere(make a purchase or invest it) it is currency that I worked to obtain and represents an exchange of my labor for a specific amount of currency. This currency is representative (if I negotiate the salary correctly) of the value of the work I preformed or the risks I took to obtain it. So when you or I put money somewhere it is a transfer of value that we obtained from our labor or risk from somewhere to somewhere.
When congress decides to put currency somewhere it can be from tax payers in the form of taxes or from IOUs (Treasury notes) that the treasury department sold to investors or to the Fed. When the Treasury sells these IOUs to investors, again the investors are taking the value of their labor or risk and trading it for the chance to to make a return in essence renting their currency to the Treasury for a fee. Taxes are the same way, it is part of the value of our labor that we are willing to trade for services, but the value came from our labor.
However, and this is where it gets interesting, when the Fed purchases these IOUs (Treasury Notes) from the Treasury, they have not traded any of their labor or risk for the currency that they are handing to the Treasury Department. So the big question is where does the value of that currency that the Fed gave the treasury come from? The answer is pretty simple it comes from you and me, it devalues the currency that we hold.
The same is true when the Fed is buying the mortgage backed securities, they are not trading anything that they have for these worthless investments, they are trading the value that we create through our labor and risk for these. The only reason that they are willing to trade the currency they create for these worthless investments is because they don't actually have to give up anything for them. They just take the value from us, and 99% of the population is completely naive to this fact, and this is the reason that I wanted to post this. People are being robbed, hard working people that have no idea that the value of the dollars they have toiled to earn are being funneled into investment banks that made really stupid decisions, and into Government spending that is way out of control. To me this is a hidden tax that is right under our nose, that we have absolutely no say in, and no control over.
That in itself is pretty bad in my opinion. And in the past the fed at least had the decency to put finite terms around it, all be it very large terms. So in the past when they said in essence that we are going to take X% of the value of your dollars and hand it to our cronies on wall street and the bumbling mass we call congress at least it was only part of the value. This time it is the whole enchilada, and in essence they are going to take all the value of the dollars that we hold and transfer it to their cronies on wall street, and the bumbling fools in congress on both sides of the isle. They may say that they will stop at some point but we all know that once the congress sees that they have more money to spend they will spend it in a way that requires it to keep coming. So the way I see it, the value of the dollar is on a downhill slide from here on out, and the reason I am choosing to get out of Dollars and into [tangibles which are] something from which the Fed cannot magically remove value. - Jacob R.
G.G. flagged this headline: 8,786,049: Yet Another Record for Americans Collecting Disability
Also from G.G.: Moody's: More California cities at risk of bankruptcy--Credit agency sees greater chance of municipal bankruptcies, bond defaults in California
Paypal suspends domestic transactions in Argentina
From reader B.B.: For Every $1 Added to the Economy, Obama Added More Than $3 in Debt
Peter S. sent: FedEx says economy is stalling, cuts outlook
Bond Wars: Chinese Advisor Calls For Japanese Bond Dump
Items from The Economatrix:
Ron Paul: "Country Should Panic Over Fed's Decision"
QE3: Helicopter Ben Bernanke Unleashes An All-out Attack On The US Dollar
R.C. sent this: Nevada man dies with $200 in bank, $7M in gold hidden inside home. I thought Nevada was the Silver State... But of course $7 million in silver would be too bulky.
R.B.S. pointed me to a fairly well-balanced British documentary: The Great Euro Crash - 2012. (If you jump 25 minutes forward, you'll see described the sneaky role that derivatives played in this debacle.)
Items from The Economatrix:
America Is Facing A Lost Generation: Jim Rogers
Breaking: Historic Silver Panic In Progress, Says GATA Sources
Get Ready For An Epic Fiat Currency Avalanche
QE Infinity: Fed Buying More Toxic Assets From Banks Will NOT Help Main Street
Does anyone really believe this Pollyanna pie-in-the-sky nonsense now coming from the mainstream media? With QE3, We All Win -- Poor and Rich Alike. What balderdash! Let's face facts, folks: The Federal Reserve has backed itself into a corner. They can't do anything that will trigger higher interest rates. So the only arrow left in their quiver is monetization ("quantitative easing" is the gentler, sugar-coated name.) Their brilliant plan is to re-inflate the housing bubble by buying up $40 billion per month, indefinitely, in mortgage derivatives using make-believe money. This pure fiat "money" is coming from their Sunshine Pump. I can only ask: How long can that continue? And how long will it be until our foreign creditors demand a higher rate of return to roll over their Treasury paper? Once interest rates rise, the party will be over. We will see a credit collapse and then a collapse of the US Dollar.
The producers of the popular Silver Bullet, Silver Shield videos have begun minting their own one-ounce .999 fine silver medallions. They are being sold for as little as $2.99 over the spot price of Silver. If you orders yours using the link from SurvivalBlog, we will earn a small sales commission to help defray our considerable monthly bandwidth expenses.
Over at Dr. Housing Bubble: Betting the house with the Fed – Stock market at levels last seen in December of 2007 – Examining what has changed and impact of Federal Reserve on housing. QE3 preemptive strike on fiscal cliff?
At OilPrice.com: Libya - Doomed from Day One
Seeking Alpha's analysis: 324 Years Of The Gold-To-Silver Ratio And $195 Silver
Items from The Economatrix:
Gold & Silver Prices Today On Fire!
How The Financial Collapse Would Happen In An Obama Second Term
Unlimited monetization: Get Ready For An Epic Fiat Currency Avalanche
First corn and now wheat: Weather Woes Sow Worry on Wheat. Stock up your larder before prices gallop! (Thanks to U.E. for the link.)
John Embry Expects a Silver Price Explosion Driven by Physical Shortage
Items from The Economatrix:
German Court's Backing Bailout Fund to Test EU Resolve on Crisis
Fed Seen Starting QE3 While Extending Rate Pledge to 2015
Gary North: Gold Bugs and Anti-Gold Bugs, It's a Fight for Civilization
The inevitable credit downgrades begin: Egan-Jones downgrades U.S. rating on QE3 move
Greg C. sent: More Americans opting out of banking system
Reader K.P. sent: Understand the Rules Before You Transport Precious Metals Overseas
Hyperinflation Is Virtually Assured – John Williams. (Thanks to H.L. for the link.)
Items from The Economatrix:
Five Years Since The Great Financial Crisis: "No Growth, No Deleveraging"
Preppers get painted is crazy doomsday people, sitting around waiting for the world to end, disappointed when it doesn't. I think National Geographic has done a disservice to prepping with their show. The people on the show explain "what" they are preparing for. To many, their reasons are crazy. To me, some of the reasons are crazy. I think it's important to make it clear that it's not about a specific event or cause. It's about planning for the future and protecting yourself. Does it really matter if an EMP, financial collapse, or natural disaster disrupts your basic necessities? What it comes down to is that you need to provide for your own essentials and survival.
Being a prepper is planning for your future, just like investing. When you invest for your retirement, you know you need to diversify your portfolio. You buy stocks, bonds, mutual funds, and gold. You do this because you need to spread your risk. You buy some things that are risky, that you hope will rise in value (stocks), and you buy things with certain intrinsic value that will not decrease (gold). Prepping should be added to your retirement portfolio too.
If you look at the big picture of the economy and the world, you invest your money in the stock market and retirement funds hoping they gain value, and now, hoping they will still be there when you retire. I think it is safe to say there is no guarantee that these assets will be there in the future. With the state of our entitlement programs and Social Security, they will run out of money. What then? Could the government take private assets such as investments? I think there is a chance. It would be easy for the government to say, "We are confiscating everyone's investments and savings to fund Social Security, Medicare, and Medicaid. In doing this, everyone will now be eligible for these benefits." The things that you have based your future security and comfort on, have just been taken. Now you are waiting in lines to get your rations because you didn't prepare. Like any investment you need to evaluate it based on your situation and beliefs. Maybe you are an optimist and only want to store enough for a short term emergency and wait until the government is able to come in to help. This would be like a Hurricane Katrina situation. Just enough to survive the rough period, then get help from the government.
Now there is some risk that if it gets that bad, the government could say, "You are only allowed to have 1 month of food and 20 gallons of water saved. Give me your extra 3 months of food and 100 gallons of water." But this is much more difficult than just confiscating your money. So look at prepping as part of your retirement portfolio, and start investing in it.
Just as you would set aside a certain percentage of your income for retirement, choose an amount to set aside for prepping. It doesn't have to be a lot, just prioritize your spending. Food and water first, then purchase the items appropriate for you. But also think about what others might want; such as alcohol and tobacco. Maybe you have moral objections to either, but there are many who don't, and many who will want those items. Think about the Great Depression and Prohibition. Those with alcohol did pretty well.
The physical items you buy to be prepared can also be handed down from generation to generation. Now, I know that not everything will last. But if that can of green beans has been in your basement for 25 years, are you going to throw it away? Probably not. You will keep it and eat it when the times comes. It may not taste the best, but it probably won't kill you. Your guns, tools, certain foods, bags, tents, etc. can be handed down from too. There is the potential for them to greatly increase in value as well. What if the sale of certain guns becomes prohibited? What could your gun be worth then? It can be left to your kids, like your investments could, but it would be tax free and provide for their future better than money. It is also important to teach your kids the importance of prepping. If they don't value it and invest their own time in it, what you leave to them could be wasted.
Just like your finances and investments, your preps need to be protected. Where do you keep your supplies? Are they where guests can see them? What would happen if your house was lost? The FDIC insures your assets at a bank up to $250,000, so you shouldn't keep more money in one bank than that limit, or it could be lost. The same is true for your supplies. This is where your network could be a great advantage. Try to diversify your supplies and don't put all your eggs in one basket.
I'm a 30-something civil engineer. Like many, I've never needed to survive "on my own." I'm not a survivalist. I don't go out into the woods for weeks and live alone and practice. I have a family; I don't have time for those things. So my prepping portfolio is different than someone in a different situation.
Once your start prepping, it becomes its own portfolio. You have:
Take a look at your prepping portfolio and evaluate it. Could you buy more supplies to compensate for a lack of skills? Could you study and read more to invest more in your knowledge?
Think back to when you teachers or parents said "everyone has something they are good at." Find that thing, and make it an asset. You may not think it's important, but I guarantee someone will find it important. For an example, I've designed water treatment systems. I can determine alum dosing, settlement time, and contact time for disinfection. I've designed septic systems. I've designed dams. That knowledge may seem trivial when everything is fine, but when TSHTF, they could be pretty valuable. So I would rate the knowledge section of my portfolio pretty high. But I'm lacking in some of the skills. I've never had to build those things. I've never been in a survival situation. I don't know how to farm. Objectively evaluate your portfolio.
I've read a lot of disparaging comments about "armchair preppers." "They just go online, buy some dehydrated food, and say they are preppers." So what? Maybe that's all they can do. I think that should be encouraged. Those people, "armchair preppers," have many more supplies in their portfolio. Someone who has skills, but limited money, should include this armchair prepper in their network of resources. There are factors which will affect your ability to prepare:
Get creative. Look at canning food, for instance. You don't have to have a garden to can food. One weekend, prepare a lot of frozen green beans. Then can them. It may seem a little pointless, but you've just learned how to can your own food. A hobby like home beer brewing is a great example. Many do it and the skills could be very useful.
The point is don't underestimate yourself. Look at your talents and knowledge differently. Don't get discouraged by an elitist prepper who rants on a web site about "armchair preppers." They could be the MacGyver of prepping, but they won't have all the skills, supplies, and knowledge needed to accomplish all that is necessary.
Editor's Note: This article first appeared at the Georgia Preppers blog site.
Here comes more monetization: Fed Undertakes QE3 With $40 Billion Monthly MBS Purchases. JWR's Comment: Oh great, Mortgage Backed Securities derivatives. Your tax dollars at work, buying up dodgy debt.
Reader G.A.H. was the first of several readers to mention an interesting parallel to the opening chapter of my first novel, Patriots: Germany Says ‘Great Uncertainty’ About US Debt. Here is the proverbial "life imitates art" quote: "German Finance Minister Wolfgang Schaeuble questioned on Tuesday how the United States could deal with its high levels of government debt after November's presidential election. In private, German officials often express concern about U.S. debt levels and the inability of politicians there to reach a consensus on how to reduce it, but Schaeuble's public remarks underscore the extent of the worries in Germany."
RBS sent: Metal theft suspect caught after truck is stuck
Items from The Economatrix:
US Stock Market Investors Set Up To Be Fleeced, Triple Top?
Oil Drops From 3-Week High On US Fed Meeting, Saudi Arabia
Reader and loyal content contributor F.J. recommended this: When, Not If, Inflation Returns
K.P. liked this article: Real Wealth, Gold, and Why Government May Want You on Food Stamps
Peter Schiff: The Only Way To Fix The Economy Is To Let It Fail
Items from The Economatrix:
The Canadian Housing Bubble Nears Implosion
Jobs Data Show US Factories Bearing Brunt of Slowdown
The Secret Panic of European Banks
G.G. flagged this: Government officially tops $1 trillion in deficits
Reader H.L. sent: As the Euro Tumbles, Spaniards Look to Gold
Pierre M. was the first of several readers to mention this: Pig farmers quit as feed prices soar
Items from The Economatrix:
Job Growth Cools, Posing Challenge for Obama, Fed
Smith & Wesson Posts Huge Earnings
G.G. flagged this: To Save Money, Americans Buy Expired Food at Auctions
Also from G.G.: More older workers making up labor force
More monetization is in the works: Jim Rogers and Marc Faber Agree, Bombs Away
Items from The Economatrix:
Lackluster Economy Shows Stronger Pulse
US Job Cuts Hit 20-month Low, But Layoffs Heavy Overseas
Are You Better Off? 40 Statistics That Will Absolutely Shock You!
84 Statistics Showing The Collapse Of The Middle Class Is Real
Jim W. recommended this "must watch" interview that mentions the coming derivatives implosion: Greg Mannarino – People Are Going to Suffer on a Biblical Scale
Marc Faber - The Most Dangerous Trend Facing The World Today. (Thanks to H.L. for the link.)
G.G. flagged this: Regulators close small bank in Minnesota for total of 41 US failures so far this year
Items from The Economatrix:
8 Reasons Why No One Should Ignore The Coming Economic Collapse
When Working Until 70 Isn’t Enough
Rex spotted this: Richard Russell: The World Can Fix Its Debt Problem By Raising The Value Of Gold To $10,000
Items from The Economatrix:
Catherine Austin Fitts: They're Going to Depopulate or Bankrupt the Rest of Us
Wall Street Treads Water, Stays on ECB Watch
Record 46 Million Americans on Food Stamps
Rough Road Ahead? September is Dow's Worst Month
JWR:
To make the most sense of this note, please refer to the SurvivalBlog archives for the December 22, 2011 original post with an update March 29, 2012.
The range of feedback to the post and update ranged from supportive to beyond hostile--which was more or less what I expected. Those critical to the "Barter Store" concept mostly missed the premises--that at least in some smaller, conservative towns/cities, small-scale commerce will help preserve order and civilization; security is handled and will not be a driving issue; that "preppers" have stocked up on and will be willing to sell/trade/barter some small/compact, useful, in-demand items to others who need or want them in exchange for either silver coin or similar items they forgot; and that your leadership could make a difference.
The suggested stocking list is relatively unrelated to your personal prepping list. For example, you don't have to be a coffee drinker to realize others who are will be anxious to trade for it, if you have it available. So, we are speculating on those tradable and useful little things others have forgotten. And, even you--dedicated planner and prepper that you are--will forget an item or two you might need or want that you might be able to trade for (or barter or purchase) if you have a reasonable inventory.
Here are a few additions and modifications to our working list, with rationale (the numbers refer to the sequence we used on the previous posts)--
1. Alcohol. The original recommendation was to purchase a couple of cases of miniatures (airline-style bottles). These could probably be used as money as well as consumed, bartered, sold, or traded. I have noticed that the liquor stores sell these as multi-packs of ten (10) bottles as well as loose bottles. Instead of buying cases (too much $ to be spent for many preppers), you might consider keeping the cost down by putting away a few of the multi-packs. That way, you could also stock several different "flavors" without breaking the bank. You are not limited to hard liquor, BTW. Just about every supermarket or liquor store that sells wine also sells multi-packs of inexpensive red and white wines in single drink (one glass) bottles.
3. Tobacco. My US Army LTC son (who has just returned from his umpty-umpth trip to that nasty hole in the map) has pointed out to me that the troops will want snuff, not cigarettes. If there will be young men around (especially military, but not limited to them), add several dozen cans to your stock. These are also available (multi-packs of 12) in the "cage" at the wholesale clubs (too expensive to buy individually at the C-store).
4. Ammo. Do you remember I said this was mostly out of my lane? Plenty has been written elsewhere on SB about what you should stock, but I have a couple more thoughts: Put away some ammo (cans of .175 "field loads") and CO2 cartridges for the pellet guns--useful for plinking doves, squirrels, ...and rats.
Here's one so easy/cheap I'm surprised no one else has suggested it. I have a couple of inexpensive slingshots and extra rubbers I picked up at Wal-Mart, but you don't need to purchase these. The Post Office (yes, the P.O.) uses big rubber bands by the ton to bundle mail. Next trip to the P.O., take a plastic grocery bag with you. Hand the bag to the friendly clerk and politely ask for some rubber bands for a "project." They have a full mail cart of these somewhere in the back and you'll probably get a bag full back. You can repackage these in Zip-locs for DIY slingshot construction. When I was a kid, we tried to make slingshots out of cut up inner tubes (remember those?). These never worked very well, but big rubber bands do.
21. Bikes. I thought of these as I was inventorying my Y2K leftovers (used almost everything over the years, but had some miscellany in a couple of boxes)--bike locks. When I was in basic training (BCT) a million years ago, someone asked the drill sergeant why we needed to secure (put locks on) our foot lockers. He answered instantly--"So we do not make thieves out of honest men." After TEOTWAWKI, it would be a shame to lose a bike ...just because it wasn't locked. I have a couple of "Kryptonite" locks left in stock. There are plenty of combination lock cheapies out there to do the job--Ask any college student.
32. ED meds. Condoms--another wholesale club purchase. Wasn't sure where to put this; this is as good a place as any.
Thanks, James, for the opportunity to continue to build our "stocking list." All reader suggestions welcome - A.A.A.
Some of the Really Bad Things That Could Happen if You Do Not Prepare tor the Coming Economic Collapse. (Thanks to Lee M. for the link.)
Reader H.L. suggested this piece over at Zero Hedge: In Greece, It's The Police Vs The Riot Police
Mark I. sent: The 29 Ugliest Charts In The World
The printing press is running hot, but where is inflation and how will it affect gold?
Items from The Economatrix:
Bernanke Says Fed Ready to Act But Short on Specifics
"The Economy Stole My Retirement"
Oil Has Peaked But No Relief at Pump Likely Soon
James:
Reader "X." wrote an article Re: State Government Debt Levels, in which the author makes the case that the US income to debt ratio is approximately 1:1. I think the author mixed facts to come up with a mathematical equality where none exists. I repeat in totality the paragraph where this is stated:
"The trepidation most of us feel when thinking of the current level of debt (not to be confused with deficit) is likely well-founded. Individuals tend to think of things in relation to themselves; in other words, I earn $56,000 yearly, and I owe $212,000 on my home, and perhaps $12,000 on a car loan. So my yearly income relative to my total debt (good/bad/ugly) is 1:4. So we tend to use a similar ratio when thinking of national debt. As such, we would look at the yearly salary of our State (U.S. GDP $15 trillion (CIA World Factbook 2011)) and a debt of $15.9 trillion (http://www.usdebtclock.org/ ), rendering a ration of 1:1."
The yearly salary of the United States Federal Government ('the State' as the author rightfully labels) is not the GDP but the tax receipts that it imposes (takes by force) from the citizens and companies that it maintains a direct taxing authority).
Not to get entangled in an argument of where the numbers come from (because there are so many sources that do not "match up"), in rough terms the federal government has collected in taxes the past few years about $2.3 trillion dollars per year. Certainly a lot of money, but when matched against what the government is spending each year, about $3.7 trillion dollars, one can see that the debt of the US is not decreasing but that it is increasing. In the current administration, the published debt has increase over $5 trillion dollars to where it stands somewhere near $16 trillion dollars. (This of course does not address the shadowy 'unfunded liabilities' that are estimated between $61 trillion (USA Today) to $84 trillion (National Center for Policy Analysis). Who knows where the number truly lies? It is certainly a big number. I digress.)
I suggest it is the tax "revenue" of the government which should be used in the income to debt ratio. Taking the $2.3 trillion in "salary" that US Federal Government has at it's disposal, and the $16 trillion of "public" liabilities, I would suggest that the income to debt ration of the country is not 1:1 but 1:6.95.
And then of course is the original subject of the article the author was referring too, many of the individual states and commonwealths have their own additional problems. Using the author's example of California with a $16,000 per capita "obligation" then the families liabilities would not be $224,000 (house) and $12,000 (car loan) but an additional $64,000 (state of California) raising their ratio from 1:4 to 1:5+, and if we really look at this and make a generous assumption that the household gets to keep 70% of its income (the rest of course is tax paid to various taxing authorities) the ratio now becomes 1:7.1. And because I don't have the time to figure it out, what is the ratio when factoring in the federal indebtedness?
Now the 1:6.9 matches up with the 1:7.1, but not really in anyone's favor. Hah, I am mixing my own results to create an "equality" where none exists.
Okay, I took the time. $16 trillion divided by every man, woman, and child (315 million rounding up) is almost $51,000 per person worth of "federal obligations".
The family of four from California really (using gross and not net) $56,000 per year match up against $504,000 in indebtedness for a ration of 1:9.
And to think in states like California the debt burden will only increase, and in the US unless something changes the debt will only increase.
Who wants to do the math on a welfare mother with 6 children and no income? No mortgage or car, that is easy: zero. But $16,000 x 7 plus $51,000 x 7 and now you are talking real money:
$469,000 of public obligation with no money to pay. Oh, that's right, you and I get to pay for those people as well. There is no ratio with no income. Just an infinite debt in that instance. So, to truly determine a families income to debt ratio, it has to be determined if they are a "maker" or a "taker". Makers have income, so a ratio can be calculated, takers do not. Suffice to say the money will have to come from somewhere.
Thanks for listening, sorry for the rambling. Do we have to wonder why a lot of the articles in the Economics and Investing section are so downbeat? - Old Dog, Wisconsin
Peter Schiff: The real fiscal cliff.
Bloomberg reports from Japan: The End of a 1,400-Year-Old Business. (Thanks to R.N. and G.G. for the link.)
B.B. sent: $16,015,769,788,215.80 - $5.4 trillion added under Obama. JWR's Comment: Don't just blame Obama. It is Congress that holds the purse strings!
Also from B.B.: Supermarkets being looted in Spain
Items from The Economatrix:
S&P 500 Trims Loss Amid Speculation Europe to Take Steps
Manufacturing in US Shrank in August for Third Month
Over at Zero Hedge: Chart of the Day: 803 Years of Global Inflation
A good illustrated presentation on the economy, in light of Peak Oil: What the Economic Crisis Really Means - and what we can do about it
James K. was the first of several readers to send this: Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain
Moody’s Changes Euro Zone Rating Outlook to ‘Negative’
Items from The Economatrix:
Economic Shock: Global Food Prices Jump 10%
Federal Reserve has already started QE3, says investor Jim Rogers
H.L. sent: Higher CAFE Standards: "There’s No Such Thing as a Free Lunch"
A surprisingly good article, considering that it is coming from McNewspaper: Vanguard's Jack Bogle: Financial 'train wreck' looms
Steve F. recommended: Why Billionaire Frank Giustra Is Making A Massive Bet On Inflation
Items from The Economatrix:
Gasoline Rising to Holiday High as Storm Surge Presses Obama
Consumer Confidence in U.S. Declines Most Since October
The Three Frontrunners for Fed Chairman in Romney Administration (Hint: It's not Ben)
Chipotle Ends the Penny Before U.S. Mint Does. (Thanks to Gregg P. for the link.)
Food prices jump will hit poor, World Bank warns. Global food prices have leapt by 10% in the month of July
More Monetization: Debt crisis: ECB should launch 'unlimited' bond buying, says OECD. Somehow, I don't think that a country buying their own bonds is what Bing Crosby had in mind. (Thanks to G.G. for the link.)
Items from The Economatrix:
Charlie McGrath: Collapse, Civil Unrest are Unavoidable
The "Euphoric" Economy and Why "They" Didn't See it Coming
Into The Meat Grinder: A "Market Meltdown the Likes of Which We've Never Seen is Upon Us"
The problem so much of this country faces can be sourced back to one common practice that many of us cannot bring ourselves to face. Unrealistic promises. The world is full of risks, in fact life could be described as nothing but a massive risk management exercise. Will my paychecks be enough to cover my bills this month? Will I have any unexpected expenses this month? Will a plane fall out of the sky on to me? Will my business be adversely affected by Obamacare? Will the price of oil rise so high I can’t afford my commute? Will the value of stocks, bonds, gold, land, or whatever I use to hold and grow value over time crash? Will those investments go through the roof and I will have missed the opportunity to invest more?
Many people in business spend a lot of time trying to quantify and figure out manage risks but the important thing to remember is that risk never goes away. It can be diced up, spread around, shared, concentrated, traded, bought, and sold but it never goes away. Just because you bought an insurance policy or a derivative to offset your risk doesn’t mean the risk went away. You just replaced it with a different risk. You got rid your basic risk and replaced it with the risk the insurer or derivative originator won’t be able to pay out according to the policy or contract. You had better know how much in reserve your partner has to cover these risks and what their total exposure is. AIG sold contracts with 72 trillion dollars’ worth of exposure with almost no reserves and zero visibility to their clients or regulators. Let’s put that in perspective, global economic output in 2011 was just under 70 trillion dollars. Lesson learned should be lack of regulation may allow for business innovation but that innovation may not be good thing for the unwise. Always know your business partners. Don’t accept what they say on its face. Dig deep, analyze, if they have a problem disclosing information you need to be a wise investor, walk away.
That’s not to say that risk is a bad thing. Risk is simply a fact of life. Let’s define risk. Risk can be defined as a noun meaning “a situation involving exposure to danger” or as a verb meaning “expose to danger, harm, or loss” Taking risks can result in a reward if the expectations are met or exceeded but result in loss if expectations are not met. In business we often express risk in terms of probability such as 1/3 chance upside risk outcome, 1/3 chance of expected outcome, and 1/3 chance of downside outcome. Equations are developed for each of these three scenarios and a weighted outcome is calculated usually expressed as a return on investment.
Strangely one of the best expressions of the benefits of risk was not expressed by a capitalist but a communist and not just anyone but The Communist Karl Marx. He advocated that the flaw in Capitalism was that in any capitalist endeavor workers must be paid less than what the contributed to the bottom line in order for the Capitalist (entrepreneur or investor in modern usage) to make a profit. By this definition even athletes or actors making millions of dollars per year are “exploited” because their employer is still making money. By Marx’s definition only co-ops and not for profit organizations could ever be considered non-exploitive. What Marx didn’t understand is this is the ultimate thing right about Capitalism. Business owners put their capital on the line when they start the business, when they take a premium on what the workers contribute to the organization they are reaping the reward from their risk.
The worker on the other hand is taking a discount on what his labor is truly worth because he is not taking as much risk. He is the first one paid if a business fails, is usually paid sooner and more often than vendors, and he does not invest his own capital. The employee is not without any risk as his employment is not guaranteed nor is his wages fixed. These all have to be determined by supply and demand in a free and open market place. Just as consumers and suppliers must assign a value to the utility they get from a purchase, employees and employers must assign values to the time, effort, and wages exchanged in the labor market. Both sides must be free to change those values as their needs change.
Many conservatives express a lot of anger at unions for the contracts they sign with management. Some of the worst of these contracts promise unrealistic continuation of benefits such as minimum number of workers, fixed wage rates, and benefits regardless of the financial health of the organization. The thing to remember here is that management agreed to this. They agreed to offload all the risk of the employee and take it on themselves. Lots of reasons for this come to mind but the simplest are that times were good and they were short sighted enough to believe good times would last longer than the contract. This is one of those unrealistic promises people make. Simply put even unions shouldn’t seek contracts that promise too much for too long with too little flexibility. The company just won’t be able to keep their unrealistic promises.
A second form of unrealistic promise we buy into are pensions. Pensions are usually classified as guaranteed benefit or guaranteed contribution. Let’s look at the guaranteed benefit first. Everyone needs a certain amount of money to stop working and retire. Hence we have a risk situation: upside we have more money than needed to retire, expected situation we have enough to retire, and downside we have too little to retire. In a defined benefit plan, the company promises to provide a certain level of retirement income based on some formula usually centered on your wages. They calculated the amount of money they will need at your retirement time. Then they discount this (the opposite of compounding interest) by some interest rate back to today’s dollars to determine how much they need to fund in the current period so that investment can grow until you reach retirement. The defined contribution plan varies because they instead guarantee they will contribute so much each year towards your retirement but do not guarantee how much in benefits you will get out of the plan at retirement. The main difference is who will accept the risk that the investment won’t grow according to plan. In a defined benefits plan if the rate of growth on the plan’s investments doesn’t meet or exceed the rate used to discount the amount needed to fund the benefits then the company must contribute more in the current period. In a defined contribution plan, the employee accepts the risk of the plan not having enough to fund their retirement. Currently most retirement plans are defined benefit plans but companies have made ridiculous assumptions about growth rates or other variables in the calculations to allow them to underfund these pensions. The lesson learned is to check what promises your company has made and see if they are making the contributions and using realistic calculations. If not don’t expect your retirement to be comfortable.
The way we chose to deal with many of our largest risks in the last century has largely been through government. “The problem is we have socialized risk and privatized reward.”-(Sen. Christopher Dodd) What do Social Security, Medicare, Medicaid, and virtually all other “entitlement” programs have in common? They all involve socializing risk and privatizing reward. This also includes tax breaks for specific industries, bail outs, and preferential regulations for specific industries. “We the people” are expected to bear the burden to make sure private citizens and corporations get to succeed regardless of what risks they took but they got to keep the rewards of taking those risks. Government has told the poor “you can’t afford healthcare?” That’s okay, we will take care of that. Didn’t save enough for retirement? We got your back. You don’t produce an airplane anyone wants to buy? Don’t worry we’ll lease them for more than what you want to sell them for. Your competitor makes more than you? We’ll agree to additional regulations that benefit you! (Most regulations don’t come out of thin air or from citizen special interests, they come from rival businesses or industries seeking to straddle rivals with additional costs. If you don’t believe me, then look at who pays the lobbyists.)
The worst part of this is that many of these programs are essentially defined benefit programs. Congress, in their infinite wisdom, wrote the laws creating Social Security, Medicare, and Medicaid as guaranteeing benefits rather than levels of funding. Hence it isn’t as simple as they stop cutting checks to the beneficiaries. Those beneficiaries are legally entitled to those benefits and if the US Treasury doesn’t fund them then it will just turn into a huge legal mess with the Supreme Court eventually citing the 14th amendment not allowing the government to repudiate its debts.
Reforming the programs to fit our current funding the is simplest fix but trying to cut these programs down to size is politically unlikely as most benefit senior citizens who reliably vote as a block against any attempt to cut their benefits. Requiring a balanced budget might work. Since these programs often require funding this would force massive tax increases. That might produce consensus on how to reform these programs but would rob the government of short term funding needed for things like fighting wars or dealing with a large crisis. No solution is easy or someone would have already implemented it.
Another important thing to think about is that people bought into these promises and are depending on them. If you think a Crunch is coming, then think about the situation if Medicare, Medicaid, and Social Security suddenly ended (this is essentially what would have to happen to balance our federal budget). How many people would die? How many elderly would starve as their only source of income dried up? How many children would go without any sort of medical care? How many elderly would die without their medications?
We can say that this should be left up to private charity but lack of private charity is what led to Federal Government taking up these obligations that are now strangling the country! Remember Christ commanded love of your neighbor. Ayn Rand extolled reason over faith and self over others. Gordon Gecko said “Greed, for lack of a better word, is good”. Christ said “…You cannot serve both God and money.” (Mathew 6:24).
Simply put, we can’t continue to make unrealistic promises and not deal with the risks of life. It leads down a path of self-deception and folly. We have to find ways to make this world hospitable to all in a way that doesn’t destroy our urge to better ourselves.
James,
I just finished reading one of the financial articles you linked in yesterday’s post. The topic of the article was debt levels of U.S. states. In it, the author broke down the debt burden of each state citizen; for example, a Californians’ per capita obligation is just over $16,000, while Texans are at a lower level of around $11,000.
So: Two things.
First: I think in doing this we are perpetuating the concept of the State’s (used here in the sense of a nation-state/political entity) authority to impose the public debt burden on non-sovereign individuals. While I know that the sovereignty concept is hotly debated in many circles, for the purposes of this discussion I am strictly limiting that definition to one’s ability to create currency, conduct foreign policy, wage war, etc… A sovereign entity may indeed, through processes (or around them….) encumber itself with debt. In this regard a State is no different than an individual. We see the same principal demonstrated in corporate activity: a corporation (literally-body: individual) conducts business in a manner that seeks to maximize shareholder value. When things go well, shareholder value increases and dividends are distributed. Conversely, corporate actions leading to losses, whether through market forces, loss of comparative or competitive advance or, in some cases, malfeasance, ultimately reduce the value of each share. At this point the shareholders have various remedies available to them: they may sit tight and ride it out, they may express individual dissent by selling their shares, or they may choose to change management so as to correct the course of the fiscal ship.
The value of the corporation is decreased, or increased, by several factors as we see above: consumers can choose (or not) to purchase goods from the corporation, management can change strategy, or shareholders can move to change leadership. The political analogies to these three are as follows:
· Consumer choice = any international interactions with the State. Those interactions run the gamut from mutual aid and trade agreements to belligerency and armed aggression
· Management strategy shifts = internal and external policy changes. An example of internal policy change would be a requirement for voter identification, and an external policy change would be adoption of an international standard or treaty
· Change of management = elections, where the polity (authorized voters) take legal action to affirm or negate the candidate, or coups de etat, whereby the leadership of the polity is forcibly removed
So here we see the three methods by which change is affected. In the case of the State encumbering (lawfully or unlawfully-not under review here) the citizens recourse is expanded by one further item, that of disassociation with the State (for the purposes of this discussion this option remains tabled). The citizen, lawfully or unlawfully encumbered by the state, may choose the options listed above in order to remedy the condition with which the State has burdened her.
The question on which this issue turns is as follows: does the citizen bear personal fiduciary liability for the encumbrances of the State? If we can agree that the above-listed methods of redress are valid, and that, further, that just as the corporation is fiscally whole and separate from the fiscal wholeness and separateness of the shareholder, so too is the State fiscally whole and separate from the polity. The natural course of events, then, flowing from fiscal dissolution of the State, does not in and of itself mean the fiscal dissolution of the polity. We can, however, easily discern that due to the dependencies between citizen and State, the dissolution of the State will most certainly result in some degree of degradation of the individual (and this is the premise behind JWR's novel, Survivors).
So yes, the State can encumber itself, and yes, the reduction of the State’s performance (in the contractual sense, performance means adhering to the terms of the contract) translates into a reduction of the State’s international and domestic relations. And it may indeed result in the dissolution of the State. But in and of itself, Statal (‘of’ the State) dissolution does not equal individual dissolution.
Second: notwithstanding the arguments re. ‘who owns our national debt’ and ‘the Chinese’ (insert raised fist here), not all sovereign and/or public debt is bad. See this link for a viewpoint contrarian to the ‘all public debt is bad’ argument: http://www.multiplier-effect.org/?p=3192
The issue we are all dancing around/thinking of/writing about is balance. What is the proper (a subjective term) level of debt to benefit? In the life of an individual, perhaps mortgage debt is seen as ‘good’ and credit card debt is seen as ‘bad’. Well, perhaps. This is subjective territory. So a little explanation is called for:
I tell my students (civil-military operations) that the way to think about subjectivity v. objectivity is this: an ‘objective’ utterance is one made in reference to an observable, measurable, mutually recognized ‘thing’. The physical. A ‘subjective’ utterance is ‘subject to debate’: in other words, open to more than one interpretation.
So when someone says that public debt is ‘bad’, we need to be rigorous in our assessment of the term. Bad with regard to degradation of national security? National security as measured how? By whom? Over what time period? In relation to which set of potential negative influencers?
The trepidation most of us feel when thinking of the current level of debt (not to be confused with deficit) is likely well-founded. Individuals tend to think of things in relation to themselves; in other words, I earn $56,000 yearly, and I owe $212,000 on my home, and perhaps $12,000 on a car loan. So my yearly income relative to my total debt (good/bad/ugly) is 1:4. So we tend to use a similar ratio when thinking of national debt. As such, we would look at the yearly salary of our State (U.S. GDP $15 trillion (CIA World Factbook 2011)) and a debt of $15.9 trillion (http://www.usdebtclock.org/ ), rendering a ration of 1:1.
So from a purely mathematical standpoint, why worry? If the average U.S. citizen earns $49,000 (ibid) and has a personal obligation in excess of 1:1, that means the State is actually behaving in a more conservative manner than the individual.
Here, then, is the reason I spoke earlier of the subjective v. objective: I don’t earn $56,000, and I don’t owe $224,000. I earn more, and owe less. So my objective condition informs my subjective opinion, and both of those items are substantially different than yours, or his, or hers. The reasons I earn my own level of income and owe my own level of debt are my reasons, not yours. Hence, the importance discerning the subjective from the objective.
Now, back to the lead paragraph of this rant: California v. Texas. Objectively, California may have a larger debt than Texas. Further, California may have a larger state GDP than Texas, rendering a different (perhaps better, perhaps worse) income to debt ratio. That is a state problem. If, however, the state’s fiscal performance incurs remedy from its creditors, the polity suffers. And this is the heart of the matter: when governments opt to use the GDP to debt ratio as it relates to individual earnings v. individual debts, the state surrenders the protections offered by it to the polity.
So what does all this mean? It means that each time the state incurs additional debt, our fiscal lives are encumbered, and our liberties are further constrained. So why can’t we, as citizens, stand together and demand that the state no longer have the power to financially encumber the polity? We can.
Vote conservative.
Jim W. recommended this over at International Man: After The Storm: The 11stages of an Economic Crash
Also from Jim W.: Breakout Move in Silver Forecasting Global Hyper-Inflation.
H.L. sent: The Biggest Reason Why California is Bankrupt
Libertarian billionaire warns of 'financial Armageddon' after U.S. election
Items from The Economatrix:
Jim Rogers: The Agriculture Industry Is Doomed
By way of our friend Remus at The Woodpile Report, a link to an eye-opening piece on the velocity of money by Mark McHugh: Shhhh…It’s Even Worse Than The Great Depression. (Warning: Includes some foul language.)
H.L. sent: More Bad News Imminent: August US Auto Production Set To Plunge By Most In 16 Months
I'm sure that many of you noticed that gold and silver ended the week with bang.
Items from The Economatrix:
Debt Crisis: Italian Cash-For-Gold Shops Quadruple As Financial Crisis Deepens
Eric Sprott: We are Staring at Chaos and Collapse in Front of Us
We Will Be Destroyed By The Inflation That Paralyzes The Economy
G.G. flagged this frightening news: Study: States over $4 trillion in debt
Items from The Economatrix:
Yuan Tipped to Replace US Dollar, Euro in Southeast Asia
Get Your Money Out of Morgan Stanley Fast
Ron Hera: We're at 2008 Crash Levels
Economic Crisis: Riots, Food Raids, and the Collapse of Spain
Some elements in this piece by Monty Pelerin will sound familiar to SurvivalBlog readers: The Role of The Government in The Economic Crisis
G.G. sent this: Household income is below recession levels, report says.
Also from G.G.: Unilever sees 'return to poverty' in Europe
Items from The Economatrix:
Why We Are on the Brink of the Greatest Depression of all Time
The Truth About Gasoline Price Volatility
James,
I'd like to respond to our friend who asked if refinancing from 5.2% down to 3.88% is a good idea. To answer that, consider what we just did. We refinanced our house from 4.5% down to 3.75% and borrowed a further $40,000, from equity. The result is that we still pay $100 less each month in mortgage payments. While we have more debt, now we also have more equity in the house in the form of $33,000 worth of solar panels and battery backup that we had installed. We also squared away most of our remaining important preparations and paid off some credit cards to boot. It is a very, very good idea to refinance even without taking out any equity because you will end up paying tens of thousands of dollars less through the life of a 30-year loan, assuming you have that much left to go. - Geoff S.