Economics and Investing:

Jason G. suggested this XtraNormal You Tube clip: Confiscation Through Inflation.

Best-selling investing author, former Marine (and prepper) Richard Kiyosaki talks some gloom and doom.

C.D.V. sent this: Gold for Oil: India and Iran Ditch Dollar. (Does this sound familiar?)

The Great Economic Storm: We Are Living In The Greatest Debt Bubble The World Has Ever Seen

Items from The Economatrix:

Existing Home Sales Hit 11-Month High In December

One Million Homeowners May Get Mortgage Writedowns

Refinery Shutdown Could Push Gas Prices To $4

Sell Treasuries, Buy Gold



Odds ‘n Sods:

Mary F. sent the link to this sobering video, that has a quite post-apocalyptic vibe: Dismantling Detroit. The accompanying article states: “The past is achingly present in Detroit, and the way its citizens interact with the hulking physical remnants of yesterday is striking… The young men… were the cleanup crew in a shaky empire.”

   o o o

Reader David A. wrote to note that restaurants buy salt in bulk, so if you visit a restaurant supply store or a mailorder outlet or a web site like TheRestaurantStore.com you can purchase 25 pound bags of salt for less than $5 per bag.

   o o o

Alan L. mentioned a free U.S. Army Survival manual, available as an Android Phone app.

   o o o

Mike S. flagged this piece from a Seattle news broadcast: After icy week, volunteers create survival kits for kids

   o o o

K.S. spotted this piece over at Packing Pretty: How to Pack a Conceal Handgun Under a Dress



Jim’s Quote of the Day:

"Expecting the world to treat you fairly because you are a good person is a little like expecting the bull not to attack you because you are a vegetarian." – Dennis Wholey



Notes From JWR:

There are now so many articles in the queue for the SurvivalBlog non-fiction writing contest that any submitted between now and the end of the month will probably run in the next round. (And of course eligible for the same prizes.) Thanks for your patience!

Today we present another two entries for Round 39 of the contest. The prizes for this round include:

First Prize: A.) A gift certificate worth $1,000, courtesy of Spec Ops Brand, B.) A course certificate from onPoint Tactical. This certificate will be for the prize winner’s choice of three-day civilian courses. (Excluding those restricted for military or government teams.) Three day onPoint courses normally cost $795, and C.) Two cases of Mountain House freeze dried assorted entrees in #10 cans, courtesy of Ready Made Resources. (A $350 value.) D.) A 9-Tray Excalibur Food Dehydrator from Safecastle.com (a $275 value), and E.) A $250 gift certificate from Sunflower Ammo.

Second Prize: A.) A Glock form factor SIRT laser training pistol. It is a $439 value courtesy of Next Level Training. B.) A FloJak F-50 hand well pump (a $349 value), courtesy of FloJak.com. C.) A “grab bag” of preparedness gear and books from Jim’s Amazing Secret Bunker of Redundant Redundancy (JASBORR) with a retail value of at least $300, D.) A $250 gift card from Emergency Essentials, and E.) two cases of Meals, Ready to Eat (MREs), courtesy of CampingSurvival.com (a $180 value) and F.) A Tactical Trauma Bag #3 from JRH Enterprises (a $200 value).

Third Prize: A.) A Royal Berkey water filter, courtesy of Directive 21. (This filter system is a $275 value.), B.) Expanded sets of both washable feminine pads and liners, donated by Naturally Cozy. This is a $185 retail value, C.) A Commence Fire! emergency stove with three tinder refill kits. (A $160 value.), and D.) Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security.

Round 39 ends on January 31st, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and articles that relate practical “how to” skills for survival have an advantage in the judging.



Profitable Homesteading: How to Thrive in a TEOTWAWKI World, by Dusty

The idea of homesteading is not a new one.  As a species, we humans have mastered the art of living off the land better than any other species, learning along the way to capture fire, clothe ourselves and even preserve food that we grew to later nourish us. We weren’t content to stop there though.  Mankind “evolved” to reassemble natural materials into unnatural materials such as plastic and combine countless ingredients produced or grown by man into processed foods such as Twinkies, which we figured we might as well wrap in plastic.  Although the modern age has brought many possibilities, many fear that we have gone too far.
We now find ourselves, as a species, barley able to live on our own in the natural world, as we’ve accumulated too many allergies, too many dependencies on modern conveniences, too much dependence on government assistance and, let’s not forget, too many pounds to make it on our own.  Now, Mother Nature is calling many of her children home.
Modern homesteading is alluring to many but let’s face it, even (especially!) in a TEOTWAWKI world taxes still have to be paid, fuel needs to be bought and most of us want health care.  And so we find that the living off the land begins with considering how we will generate personal income.  As a new and modern homesteader, you will get to (have to) create your own job description and set your own priorities with the goal of earning sufficient income to afford you the lifestyle you want off the land. In other words, your first step as a homesteader is, ironically, to think like an entrepreneur.
This essay is designed to help you to develop your own plan to do just that so that you can make the transition from traffic to tractor. While it was tempting to write a quick, one-page article about “how to make money as a homesteader”, it requires much more effort to do the concept justice.  Therefore, this essay will be organized as follows:

  • Part One includes this introduction and the steps you’ll need to take before you being homesteading to give yourself the best chance for success.
  • Part Two will provide ideas for Generating Income With Your Land
  • Part Three will focus on Using Your Skills to Make Money
  • Part Four will discuss ways to Generate Income With your Farmstead Products

Of course, while this essay is detailed and specific in many ways, it must be viewed as a starting point for each individual reader.  With so many specifics unique to each reader such as level of debt, skills, cash, health, knowledge and countless other factors, no article can inform a reader of exactly how to go about homesteading. Rather, the intent of this essay is to get each reader thinking about what they want, what they’re capable of and showing just some of what is possible so that they can develop their own plan.
The good news is this. There are tons of ways to generate dependable, steady income from homesteading! This essay will list dozens of them but that represents just the tip of the iceberg. Viewed all at once, it may seem overwhelming, dangerous and best to just stay put in the safety of your cubicle.  However, as Winston Churchill said, “The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity.” And you, my prepared friend, are an optimist!
So, are you ready? Let’s get back to the land!

Part One – You’re Not Ready to Farmstead…Yet!
The ideal situation is that you’re thinking of becoming a homesteader but haven’t transitioned yet.  You may make the leap down the road…say, in a year or two, unless TEOTWAWKI forces your hand sooner! 
Here are the priorities and actions as I see them to help you to get ready to homestead.

  • Get Some Land.  I realize that sounds obvious. I mean, after all, it’s hard to really homestead without at least a little land.  You don’t need too much but you do need some.  If you’re one of the lucky ones who has inherited land, fantastic and congratulations!  But most of us have to find and buy our own land.  For a couple of reasons I believe the time to do that is now.  First, I believe that rural/farm land prices will only escalate over time as more and more food will need to be produced to feed a rapidly expanding global population.  Second, if you need to finance the land as many people do, interest rates are at absurdly (and artificially) low levels.  Getting land is an undertaking in and of itself though.  Consideration must be given to the region and climate since so much of homesteading depends on what Mother Nature decides to do. There is also that tiny problem of how to pay for land.  Consider making a trade. You may be able to find cheaper land in a more remote area that is equal to what you could sell your suburban home for.  If you are not already a homeowner, then your main focus will have to be how to save for land.  No matter what your situation, the next priority on the list is probably the most important.
  • Get Out of Debt. If you’re an American, you’re almost certainly in debt. Almost all of us are…the entire country is.  We use credit for mortgages, furniture, automobiles, appliances, school, health care, home improvement and, of course, for consolidating other debts we owe!  Our society seems to collectively embrace using debt to enjoy today what virtually none of us saved for yesterday. Whereas we once left college with degrees in hand and went straight to a waiting job, today we leave laden with tons of debt and, with no jobs waiting, leave to occupy city parks instead.  Debt becomes part of our life and few of us are ever able to jump off the treadmill that propels us to chase always more income to pay it off.  Of course if you’ve amassed a lot of debt it is easier said than done to get out of debt. It begins with a change in mindset.  Rather than dreaming of what we want in the moment and seeking immediate gratification, we must keep our focus on the ultimate goal of homesteading.  The best way to get there is to pay down the debt.  Make your homesteading dream so real that you can almost taste it and it will become easier to forgo the taste of that morning cafe latte because it means you are one dollar closer to your dream.  The purpose of this article is not to give debt management advice, but rather to underscore the importance of doing everything you can to eliminate the debt you have.  Society has conditioned us to believe we’re entitled to conveniences and luxuries, whereas the mentality of homesteading is about living on what we can produce and do ourselves and not borrowing. Get into the homestead mentality, now.  For every dollar that goes out ask yourself, do I need to spend this now or should this be saved? The less debt you have as a homesteader then the less income you’ll need to realize.  
  • What Do You Really Need? In the homesteader mentality you will likely find that you don’t have a lot of time or interest in those things that occupy so much of your mind-share (and wallet) as an urbanite.  This makes the transition easier once you’ve made it.  Urban life seems to require many non-essential expenses and distractions such as cable/satellite television, lattes, newspaper and magazine subscriptions, dining out, gym memberships, furniture, clothes, tobacco, alcohol, movies/sports/concerts, HOA fees, lodging/vacations, pet care, shiny appliances, repairs to shiny appliances, pest control, lawn services, water bills, and so on. You’ll find as a homesteader that you’ll incur very few of these expenses.  Take whatever steps you can to start practicing this now. Instead of missing television, homesteaders will become distracted by nature and the pleasures of growing their own food. You can too! While the Internet may be seen as a very real necessity for homesteaders, particularly given their isolation and need to connect with customers, that one expense can consolidate to give you access to most news, information and even free video programs on Hulu, YouTube, iTunes and elsewhere.  All of these expenses seem “necessary” to us as urbanites, but viewed through the lens of a homesteader they are quite unnecessary indeed. If you can’t cut the cord and do without them where you are now, TEOTWAWKI homesteading may be very trying for you.
  • Learn to Garden. Now! Regardless of which income producing paths you choose one thing is constant among all homesteaders; they ALL garden and grow at least some of their own food.  No matter where you are currently living you should be able to practice some gardening skills.  Learn to plan your garden, plant and germinate your own seeds indoors, transplant into small raised beds or container gardens, learn how to improve soil, how to identify and manage pests, study companion planting and square foot gardening if you are keen on a small parcel or raised beds if room allows and so on.  And you don’t just have to focus on your veggies.  Practice with small fruits such as strawberries, raspberries and even blueberries.  By the time you get to your ideal homestead you’ll be comforted by the hands-on gardening skills you have practiced and the knowledge you have gained through reading. 
  • Get in Shape. I don’t mean do more push ups, squats and more crunches. Sure, those are great if you’re trying to look good on club night but the cows and sows on the homestead won’t give you a second glance.  Farmsteading takes a toll on the body.  Your tasks could include bending and kneeling to weed and plant, hoisting 50 pound or more bags of feed and balancing them over a feeder, carrying crates of chickens, shoveling compost or wet snow, bending over cheese vats, lifting heavy wet trays of veggies out of the sink to prepare for the market and so on.  To make matters worse, if you get injured while on the job you’ll have no one to call to inform you can’t make it in that day, so you better get your body ready. How?  Focus on flexibility and tone.  To my way of thinking, this means yoga and pilates more than dumbbells and pull up bars.  It also means getting your weight down to the right target level for your age and height, so walking, hiking, swimming or climbing may help. Whatever it takes, get your body in farmstead shape!
  • Read – For millennia knowledge was passed from elders to juniors in social circles so that succeeding generations understood important food production, preservation and survival skills. Unfortunately, most of us missed out on that transfer of knowledge as our parents and grandparents instead were part of the convenience generation that food marketers cultivated.  So how do we regain those lost skills?  Start by reading as much as you can.  The problem is sifting through all the sources of information available such as books, blogs, articles and magazines.  Your study assignments go even beyond reading to watching movies, videos and listening to podcasts.  The choices are many and it can be hard to find exactly what you want, so I suggest finding topics that intrigue you and then learning everything you can.  Once you find something, get involved with a forum or group and start talking with your virtual buddies.
  • Find Like Minded Souls – Get off of Facebook and get onto sites such as SurvivalBlog.com or Farm-dreams.com that can give you practical knowledge and encouragement.  Seriously.  Find people who share your ideals and who are searching for the same answers.  Networking will get you there much faster and you eyes will be opened to new possibilities.  Talk to people who have taken a similar journey and ask them to share their story.  Find people who have learned the skills you are seeking and reach out to them.  Ask them for resources or see if they would be willing to let you watch a homestead activity the next time they do one, like making soap or collecting honey for instance!  And seek out and attend all of the free farm tours and events you can find.
  • Focus on Lasting Investments – There are many things you may want to acquire before becoming a homesteader that will help you once you’re on the land. There may also be items you want to trade in for something more practical.  For example, how about trading your shiny compact car for a good, solid used diesel truck that you can ultimately drive into the ground.  In addition to saving money when buying and insuring this truck, it will be useful for hauling animals, seed, feed, fertilizer, tools…you name it, and being an older model it will be easy for your rural friends to repair and keep running.  If there are any new items you are considering buying between the time you read this sentence and the time you move to the land, ask yourself this question: is this item essential to my homesteading dream?  If not, then you don’t need it.  If you can afford it then the choice is yours, but make sure it will be a lasting investment well worth the expense.  After all, homesteading is not about deprivation. But if you’re not sure how to afford living off the land then perhaps you should consider postponing any discretionary expenses until you figure it out.
  • How Much Do You Need? – Finally, you should calculate how much money you really need to make. And, while your first thought as you contemplate becoming a homesteader may be “how will I make money” remember this: Saving Money = Making Money!  By lowering your expenses and producing much of what you’ll consume when you homestead, you’ll find that you don’t need to make nearly as much as you think you do.  After all, how much of your current paycheck goes to food that you’ll produce on your own?  How much goes to nice clothes, dining out, fuel and simple luxuries that you’ll want to do without?

So there you have it, a few things to get you thinking before you put the shovel in the ground and start digging the homestead garden.  Let’s move on to Part Two.

Part Two – Making Money With Your Land
Let’s not think of living off the land, but rather “thriving” off the land.  You’ll probably be able to figure out how to produce your own food so that your health and nutrition thrives, but what about income?

Homesteading is all about multiple streams of income…the old “don’t put all your eggs in one basket” concept. There are almost countless opportunities for income generation but of course there is no one “right” answer given the differences in personal situations, markets, climates, inherent skills and so on.  What I will attempt to do for you is to categorize the three main income areas, and then break those categories down into specific ways you can sell something to earn money.

The three categories of earning money off the land are, 1) using your land to make money, 2) using your skills to make money and 3) selling products that come from your land and/or skills.  This section will focus on using your land to generate income.
Thinking Like a Homesteader
Before we get to the actual ways to make money it’s appropriate to spend a moment discussing mindset. As you contemplate each of the income generators in this and later sections, attempt to evaluate them from multiple perspectives.  For instance:

  • Is the income opportunity one-time, seasonal or continuous? Raising heritage turkeys can be fun but you’ll likely only get paid at Thanksgiving, whereas consumers buy pork year round.
  • Can the income opportunity be scaled (if there is a lot of demand can you expand to meet it) if you want to?
  • Can you overlap operational/income producing areas to increase efficiency? For example, If you raise a hog then you need either a large garden (scraps) or local cheese operation (whey) or brewery (spent grain) to make raising the hogs essentially free.
  • Does the income opportunity allow you to differentiate yourself or are there lots of people who can offer the same thing?
  • What are you good at now and can that be transferred to income opportunities on the homestead (accounting, writing, woodworking, etc.)?

Play the Big Stock Market
No, not the NYSE big board but the big time live(stock) market.  For most homesteaders this means cows, but could mean bison, water buffalo, large flocks of sheep and I’ll put pigs in there as well.  It goes without saying that you’ll need an adequate amount of pasture land to accommodate these voracious grazers and there are many benefits to raising them.  For example, if you were to purchase a young bull for $1,000 or so and five ready to breed heifers for the same price, you’d likely end up with 5 calves produced and fed for free (by their mothers and your pastures) each year for 12-15 years. 
What will you do with those calves?  Maybe sell them as stockers when they’re weaned, maybe raise grass fed beef, which we’ll discuss in part four.  However, to give you a sneak preview, if you did raise them as grass fed beef it’s quite likely that each calf would become worth about $1,500 each for you (net) in about 2 years if you can get them to urban markets. Clearly there’s a ramp-up period of a couple of years before this produces income for you, but starting in year 3 those 5 heifers will be throwing off about $7,500 per year in profit ($1,500 per calf x 5 per year).  If they do this for 10 years then your initial investment of $6,000 for the bull and heifers will return $75,000.
Of course you’ll have to consider any expenses you may have, such as hay when grass isn’t growing, vet bills if you plan to use vets and of course taxes on the land they graze, but the income will drastically exceed the expenses…IF…you can market the product successfully.
I would caution you to avoid exotic animals unless economic times are very good or are likely to be. In poor economic times people want basic foodstuffs and materials, and your attempt to market grass fed zebra may turn out harder than you anticipated. 
You can do similar calculations with other species such as pigs, bison and so on, but the point is this; putting the animals to work allows you to generate a stream of future income, improve your soil and create wealth.  The wealth is held not necessarily in fiat currency but in the value of your fertile soil and livestock.

Play the Penny Stock Market

I’m not talking about you becoming the Gordon Gekko of the pink sheets but rather raising rabbits, goats, chickens, turkeys, eggs, bees, and the like on a limited scale.  These species are much more common on the homestead than water buffalo and herds of grass fed cattle, and for good reason.  They’re smaller, easier to handle in small areas, diversified and in many cases you can even process (slaughter) them right on your farm or homestead and sell to consumers, which you cannot legally do with red meat (lamb, pork, beef).

No doubt that many if not most of these small livestock belong on every homestead, but keep in mind there’s a difference between you raising rabbits for your own table and you raising meat rabbits to generate income. Unlike the example with the cows, you’ll likely need to continually purchase feed for your rabbits (and especially chickens) and feed costs seem to perpetually escalate.  The amount of income you can generate may be rather limited for a farmer, but may easily help to sustain a homesteader.  For instance, if a doe produces 4 litters per year of 8 kits each, we’ll assume you may have 30 fryers to sell (losing two to mortality) each year at a weight of 3 pounds each.  If you could charge $6 per pound then each doe would generate $540 in sales of rabbit meat before backing out feed costs.  Alas, you’d better be prepared to butcher them yourself as your beef processor might be a bit perplexed if you hauled in a load of rabbits for slaughter.

Small stock could also include honeybees, which may be particularly attractive with all the concern about colony collapse disorder.  With bees you can sell nucs, full hives, 2 or 3 pound bags of bees or just queens.  For many commercial beekeepers, this is quite a lucrative endeavor!
Bottom line?  Small is beautiful, but smaller the livestock, the smaller the absolute income potential.

Farm Stays & Events
Agritourism is a growth area and I expect this to continue even if economic conditions remain soft.  It’s not just you who is being called to the land.  We are all becoming more aware of how disconnected we are from our natural world.  Can you not imagine a soon to be married couple wanting to have their wedding overlooking your beautiful pastures, ponds and happy animals?  I can, and they’ll pay well for it because competitive alternatives also charge good money for the service.  But ask yourself if this is a one-time, seasonal or continuous opportunity?  Likely seasonal at best depending on how well you market it, but getting back to re-purposing all your investments and efforts, you could use the same facilities for corporate retreats and other events.
What about a farmstay bed and breakfast in your home or in a refurbished barn?  Sounds quaint, romantic and what a lot of people would be in the mood for.  And it doesn’t have to be a normal house. It could be a yurt, tipi or the wall tents that they do at MaryJane’s Farm bed and breakfast, for $240 per night.
If you don’t want guests staying over night then you could consider farm dinners. These outings normally feature local chefs and offer the advantage of introducing paying customers to other products or services you have available.
Variations  – A hunting preserve, guided hunting/fishing excursions, RV/tent farm camping, summer youth farm camps, pond fishing, corn mazes, haunted woods…

Skills Classes
This is a variation of the above but the emphasis is on teaching skills to consumers.  What kind of skills?  How about cheese making, butchering classes, hide tanning and earth skills, foraging, soap making…you name it. Butchering classes can run the gamut from this $50 hog butchering class on a Wisconsin farm all the way to Fleisher’s $10,000 Level 3 butchering class that takes 6-8 weeks!
This seems to be an area that many homesteaders and farms ignore. Perhaps they don’t feel they have the patience or demeanor to meet the consumer expectations.  If you’re comfortable with students or people in general then I encourage you to consider offering skills classes. It will do far more than generate seasonal or continual income for you; it will forge a bond with many of your visitors that will motivate them to become loyal supporters of your farmstead.

Become a Grower
This is one reason why you want to become a homesteader, right?  To put your hands in fluffy soil, tug gorgeous carrots right out of the ground, cut fresh flowers that you planted, snip asparagus in early April…  If these iconic images of homesteading inspire you then it’s reasonable to expect consumers will want the same.  Retreating to our earlier discussion of one-time, seasonal or continual income opportunities, “growing” is one income area that can absolutely be as year-round as you want it to be.   And, unlike farm stays or classes, eating is not normally viewed as a discretionary expense. After all, people gotta eat.  In a TEOTWAWKI world, focus on the essential organic foodstuffs!
There are lots of great books on growing including several by Elliot Coleman that I’d recommend.  Just remember that if you’re new to gardening and if you’re garden plot is new, you should expect it to take at least 3-5 years before your soil tilth and fertility catches up with your expectations of light and fluffy soil.
Variations – Mushroom cultivation, live plants, greenhouse transplants, heirloom seeds…

Hays Sales and Grazing
If you find yourself with some decent pasture acreage you can use it in many ways to create a “cash crop”: grazing or selling organic hay.

Custom grazing is a contractual arrangement where you provide the pastures, fencing, water and grazing management for others who place their animals on your land.  You can charge either by the day, by the pounds gained or both.  If you’re short on cash but long on time and enthusiasm this may be a good option for you.

Let’s say you had 40 acres and you wanted to improve the fertility anyway.  You may strike a deal to graze 40 cows, stockers or cow/calf pairs and someone else would provide the animals that you wouldn’t have to pay for. Be careful if you take in bulls as they’ll eat 50% more, on average, than cows so you’re stocking rates (and prices you charge) need to reflect this. 

In a stocking scenario you may have 40 weaned calves that are dropped off in April that you graze until October. Let’s assume they arrive weighing 550 pounds each and your pastures could allow them to gain 2 pounds per day on average for 180 days.  By the end of October each stocker would weigh 910 pounds, having gained 360 pounds (180 days x 2/lb/day). In total you would have added 14,400 pounds of beef (180 days X 2/lb/day X 40 head).  If you charged a rate of $.60 per pound of gain then your income for the six month grazing contract would be $8,640.  Rates vary of course and you could charge much more in drought/dry areas than you could in lush areas, but then again you’d achieve more weight gain in lush areas than you would in dry.  Then again, you don’t even need to own land to custom graze for others. You can lease it as Greg Judy explains here if you have a smaller homestead and don’t have the room yourself.

Another alternative for some income is to simply produce organic hay, either for the grass-fed beef or horse quality market.  Organic doesn’t just mean letting your pastures go…it means having quality forages that are non-GMO and are managed organically with no chemicals at all.  You’ll get more per ton for square bales than round, but those in the cattle market will very likely not want to fool with square bales, so you should choose your market first.  If you don’t own hay equipment then you can hire out the job, but this is often challenging since all hay tends to come in around the same time and those with hay equipment are in pretty good demand during those times.

Variations: Blending tree plantings into grazing areas for a silvopasture, thereby generating both current and long-term income from timber

Breed and Board
Do you love animals and want to become a breeder?  There are many ways you can do this on your homestead.  Of course you can use the large or small livestock mentioned above and become a breeder of rabbits, sheep, goats, pigs, cows or any combination.  There’s always ads in Craigslist and in local ag publications for these and many people looking to buy weaned piglets, 4H rabbits and calves, and so on.
Another idea is to breed and train livestock handling or guardian dogs, such as shepherds or collies to herd sheep and cows or great Pyrenees to protect livestock. I expect both of these to be in constant demand as more and more preppers and homesteaders emerge and need proven genetics to help with their animals.
If you love horses and your new homestead has a barn of sorts, offering boarding and grazing for horses may be just the thing for you.  You may be able to charge $150-250 per month or trade in value for full 24/7 pasture turn out…the more you can offer the more you can charge but of course rates vary from region to region. It’s yet another way you can generate income from a homestead parcel that you couldn’t from a city apartment. 

Basic Materials

Finally, you’re sitting on a gold mine of sorts with your new piece of land.  You’ll likely have some woods that could offer rough timber, firewood and pine straw among other things.  If you’re handy with a chain saw or if you want to invest a few thousand dollars in a portable saw mill, you could be producing lots of custom cut lumber in no time.
Understandably, many people look upon all the rocks on their land disapprovingly, but perhaps those rocks and boulders could become landscape rocks for someone else?  Although this falls more into the category of one-time income streams than continual income, it could be a good way to clean up your land while beautifying another person’s property at the same time!

While some of these ideas touch on product offerings, the above represents just some of the ways you can use your land to generate income.  Some techniques are quite passive and very long term (silvopasture) while others are very labor intensive and offer immediate income gratification (transplants).  Of course there are more ideas and perhaps you’ll share some below, but this is enough to get you thinking. 
If you know how much money you need to make, how much capital you’re comfortable risking and, most importantly, what you are passionate about, then I’m sure you’ll find some ideas that sound right to you.  But I’ll repeat something I said in the first post to be sure it sinks in: Saving Money = Making Money!
To a homesteader’s way of thinking you not only save money and therefore need to earn less (and therefore pay less in taxes) by producing so much yourself, you also lock in prices and create a personal buffer from inflation.  Milk prices may go through the roof for everyone else, but yours will always be the same.

Part Three – Making Money With Your Skills

Regardless of who you are, I’m confident in assuming one thing about you; you have at least one or more skills.  Everyone does.  And your roster of skills and capabilities will only expand when you move to the homestead as you learn all sorts of new gardening, farming, mechanical, crafting and other talents that others need, and are willing to pay for.  The trick for you will be to market those skills into income generating assignments that will allow you to comfortably live your dream life off the land.
Hopefully part two of this four-part series gave you ideas to think about how your land could work to generate income for you, and tomorrow’s part four will give you numerous ideas for products you can sell. This third portion of the series will be a rapid fire listing of money making ideas that bridge the gap between your current/future skills and market opportunities.
In this section we’ll focus on skills and services that you can sell from your homestead and I’ll divide the list into two macro categories. The first will be physical skills that you can perform for your local community.  You need to be in close proximity to make money with the ideas on this list.  The second will be virtual/online skills you can easily sell to anyone around the world and collect money via PayPal, check or wire-transfer.  As always, these ideas just scratch the surface so please share your ideas and comments. If you’re interested in some of these ideas but don’t have the skills yet, just remember that it’s not too late. You’ll be learning lots of new skills as a homesteader.   Get the knowledge and training you need and start earning income with it.
Ready?  Let’s begin!

Physical/Local Services to Make Money as a Homesteader


General Services
– There are lots of “general” needs that many folks in rural areas need.  By the way, just because you’re moving “out there” to become more self-sufficient doesn’t mean that the people already there think that way. You may be surprised to learn that they value the convenience of grocery stores and having hired help to do things for them.  What kind of things?  Fence installation and repair, automatic gate installation and repair, painting, household repair and so on.  If you’re interested in or handy with any of these then put the word out by printing a business card and pinning it at the local feed store and elsewhere where people congregate.

Tractor Work
– One way to really justify (or rationalize) the purchase of a tractor and implements is to use it not only for your property, but to hire it out for local projects.  The jobs you can hire it for depend on the features of the tractor (does it have a front-end loader, for example) and the attachments you have. Depending on what you have you could earn good money by cutting/baling hay, mowing large fields, disking, tilling, seeding/planting, maintaining long gravel driveways, bush hogging, moving piles of dirt/gravel/debris, snow plowing, and more. Advertise yourself.

Gardening Work
– You’ll become expert at organic gardening and growing food in no time, and you’ll likely become the best in your area as others are happy to let the grocery chains feed them or, if they have their own garden, rely on chemical controls.   I expect that more and more people will become interested in organic methods of growing food and you can avail from this trend by “marketing” your expertise to others.  What can you do?  Teach them how to install raised beds or drip irrigation lines, how to build soil with manure/leaves/grass clippings, how to garden without tilling, how to schedule successive plantings and winter gardens, protecting plants from frost, how to set up compost bins, how to capture rain water for the garden, how to companion plant or how to trap plant for pests, etc.  Get the idea?  There’s lots you’ll be learning that others won’t know but will want to know.  Yes my dear reader, you can become THE Plant Whisperer!

RV Repair
– Repairing recreational vehicles isn’t necessarily difficult, but it is specialized. Given the concerns about the economy, jobs and so on, it’s reasonable that there will be more and more people taking economical RV getaways or simply living in their RV’s.  This means more and more will need repairs and, let’s face it, how many RV repair people do you see on the side of the road?  It’s an opportunity to specialize and become “the” RV repair person for your area.

Mechanic
– If you are good at mechanical repair then you’ll be in need.  It’s always hard to find a good mechanic.  If you are also good at small engine repair and farm equipment repair (tractors, RVs) then you’ll be even more in demand.

Welding
– Many people in rural areas know how to weld but most do it for themselves or their farm.  The opportunity is there to offer welding and small fabrication for hire, if you have the skill.

Sheep Shearing
– If you have sheep on your homestead you could shear them yourself and then hire this service out to others.  Most sheep owners don’t shear themselves and it’s always hard to find someone local who does.

AI
– Artificial insemination (AI).  With more and more homesteaders and small farmers starting up with smaller herds of animals, many don’t want the danger or cost of having bulls, boars and rams on their property.  Or perhaps they simply want to add genetic diversity to their herd by using AI.  Either way, if you learn this skill and make the modest investments in equipment, then you will be in demand for sure.

Boarding
– I mentioned how boarding could be an offering that your land could enable, but you could expand this if you’re skilled with horses by offering riding lessons and horse training.  There are horse people in every neck of the woods, so you’d likely find a waiting clientele.

Get Sharp!
– Perhaps you could become expert as sharpening knives, chainsaws and tools.  You’ll likely need this for yourself anyway so why not make some extra bucks by offering it to others?

Equipment Operator
– Perhaps you don’t have the equipment to hire out but you know how to operate a tractor, bobcat, bulldozer, track loader, excavator, ditch witch, backhoe or the like. There’s always a need for this in the country.

Carpentry
– If you like to build then you’re in luck as this is a skill that most people either don’t have, or don’t have time for.  From repairing buildings to constructing sheds, additions, barns and so on, you’ll probably find more work than you can handle as fewer new homes are built and more repairs/add-ons are in demand.  And, to broaden your offering even more money, learn and then teach cob building techniques!

Electrician, Plumber
– Not much I can add to this. If you can do these, people will need them, especially if you develop skills with alternative energy and plumbing techniques!

Hauling Animals– You may have a truck and purchased a livestock trailer when you moved to the country. Guess what, not everyone has one.  Let locals know that you can haul livestock for them or post your skill on Craigslist.

Photography
– With fancy new phones anyone can take a picture.  However, only skilled photographers can compose and create an emotive work of art worthy of celebration…and compensation. If this is a talent of yours then you’ll have a unique income stream.

Workshops
– I’ll probably include workshops and classes both as a skill and a product, but with your new skills why not offer mobile city/suburban workshops on creating raised bed gardens, chicken and rabbit tractors, etc.  If the money is back in suburbia, go get it and bring it home!

Computer Repair
– Are you good with computers and Internet issues?  Many people, if not most, are not.  If people know you’re around and that you’re good with eradicating viruses, freeing up memory, recovering files, providing Internet access alternatives and the like, then you’re in luck…and in demand!

House Cleaning
– Yea, you know what this means. Just clean your own house first! 🙂

Meat Processing
– Now, you can’t do this as an inspected processor unless you want to go through the red tape process, but since you’ll likely learn how to skin rabbits, eviscerate chickens and maybe even slaughter sheep and goats, you could offer this as a service for others who want to butcher their own animals. Just be very careful how you position this; you are selling only your knowledge and service and in no way are you selling meat, since the animals already belong to the customer.

Bridge the Gap
– Some farmers struggle with marketing and distribution but perhaps that’s an area you’re good at.  Consider becoming a distributor for local farmers and getting their products to retailers, restaurants, resorts and other stores.  It will be good for the producer, good for the buyer, good for the local community and you won’t have to produce anything yourself!

Online/Virtual Services to Make Money as a Homesteader

Broker Deals – Basically buy something for $.25 and sell for $5.  How?  Farm auctions have lots of valuable and often new items that can go for very little money.  If you can create a market for it via Craigslist, eBay, Facebook or your own community contacts, here’s your chance.  My advice is to consider useful items that are harder to find and are easy to ship.   A wood stove may be cheap but you’ll need to sell it locally which will limit your market reach. [JWR Adds: I recommend gathering references on collectibles. See our Bookshelf page for some coin, gun and antique book links. Study and then bring those reference books with you when you go on farm auction trips. If you become a subject matter expert, then you can turn that into a money-making venture. Many people make a good living as “pickers”. (See the television shows “American Pickers” and “Antiques Roadshow“, for some examples of collectible items that are sought after.] I concur about only buying only small and lightweight collectibles that can be mailed.]

Consulting – What do you do today?  Is it something in business, academia, law, medicine, technology, etc. that you could offer as a distant consulting service?  Can you package it into an online or remote training offering?  Perhaps you’re an accountant and setting up and managing Quickbooks is easy for you, but challenging for folks around you. Or maybe you’re a business hot shot with expertise in logistics, marketing, human resources or strategic planning.  With all those skills I bet you can figure out how to offer business coaching, life coaching or consulting online.

Making Money Online
– As I said, I don’t know you or what specific skills you have. That said, there are lots of ways to make money online using skills you probably already have. I don’t want to define each of these here, so let me just list a few ideas for you to think about or research:

  • Copy editing
  • Free-lance and content writing of e-books, articles, blog post, press releases, product reviews, proof reading, forum posts…
  • Illustrating for authors, web designers, etc.
  • Become a Virtual Assistant (VA)
  • Offer research assistance to authors, editors and writers
  • Web or graphic design
  • Web security consulting
  • Voice-overs or record your own ad-supported podcast
  • Language translation

Note: Not sure how to find these opportunities or how to market yourself?  Try eLance, Guru, SideskillsFreelance Jobs or iFreelance.  You’ll probably be surprised how many opportunities there are. Just be sure to specialize and differentiate yourself, otherwise you’ll likely get lost among the other freelancers.

Authoring
– Authors such as James Rawles, Wendell Berry, Gene Logsdon and Joel Salatin have been able to make a living off the land with publishing being a primary source of income. Could you be the next one?  Why not!  If you have good writing skills and can identify the right topic for right audience, it’s easier than ever to get published and, more importantly, distributed with print on demand (POD) offerings from Createspace by Amazon, Lightning SourceDog Ear and others.  Just take a page out of Salatin’s and Rawles’ book and remember the importance of “branding” yourself and your expertise.  If you create a following as they have, followers will eagerly await your next book and you’ll be on your way to a passive income stream.
There you have it, just a sampling of ways that you can use your skills to get money from the farm fairy, often very good money, while living your dream life off the land.  For modern homesteaders the Internet creates a global market and, unlike with physical products, it doesn’t matter where you are geographically located if you’re offering virtual/online/writing services.

Part Four – Making Money Selling Farm and Homestead Products


Farmstead Meats
– Organic, grass fed, sustainably raised, pastured, heritage…what have you, there is a growing market of consumers looking to connect with and support farmers who are tending the earth ethically.  These consumers are just as anxious to support the local community as they are to tell Monsanto and concentrated animal feeding operations (CAFOs) to take a flying leap. 

When selling meats directly from the farm you’ll have lots of choices to navigate. The first choice may be if you want to sell bulk (whole/half/quarter) animal or small retail packages.  If you sell bulk then you can avoid the hassles of becoming licensed to store packaged meats in your farm freezers by technically selling a “live” animal to the consumer. You then deliver the animal to the processor and the consumer determines how they want the animal butchered, pays the processor directly and picks up their cuts.  The consumer saves money or a per pound basis and you save headaches.
Alternatively, you can sell individual packaged cuts such as roasts, ground beef, pork chops, rack of lamb and so on to consumers.  This requires you to have meats processed by a state or USDA inspected facility and you’ll have to follow regulations for storing and transporting your labeled products.  The regulations aren’t that burdensome in most places, but the costs for freezers, utilities and transportation must be considered. Of course, when you sell this way you offer products to a much larger market. After all, there’s more people able to buy a pack of ground beef than there are those interested in half a cow!
Other options for selling meats are wholesale, retail and restaurants.  The above options that sell directly to customers constitute direct marketing. You’ll get the highest price selling that way for sure, but you’ll also expend the most effort and need the most marketing savvy…for sure.  Selling to wholesalers or distributors could put your products on retail shelves and it takes time and effort to set up these relationships (you can also sell your other farm products ((below)) this way).  Many farmsteaders want to sell to restaurants and for good reason. If you’re near the right markets there are many fine chefs who value delicious and local ingredients, and you want to sell to people who value what you produce.  Some chefs want smaller portions and packaged cuts that you are selling directly to customers.  If that’s the case you probably won’t have much room to discount prices unless the chefs commit to larger bulk quantities or weekly deliveries since your costs won’t be any lower.
Of course a lot more could be said on this topic but the point of this essay is to give you ideas and to get you thinking of what works for you.  For many farmsteaders, selling farm raised meats will be the heart of their income generating engine.
Variations – In many states you may be able to process poultry (which includes rabbit) on your farm and not use an inspected processor by using a P.L. 90-492 exemption. Read carefully and check with your state regulators before proceeding.

Farm Fresh Milk
– Admit it…the phrase kind of conjures the image of the old milk truck, glass bottles being dropped on your doorstep and old fashioned wholesomeness. Consumers today have become so disconnected with their food that many don’t even realize that they’re drinking ultra-pasteurized “formerly” milk until they read an article about it or hear mentioned on the news. When many do they go looking for real milk, usually raw, from a local farmer.  And they’re willing to pay anywhere from $6 – $12 per gallon for it depending on where they are in the country and if the cow was fed grain (least expensive) or if it was purely grass fed (most expensive).  Be sure to operate within the implicit and explicit laws of your state.  Also check out the Weston A. Price campaign for real milk and if you decide to sell milk, list yourself there.
Variation – butter, buttermilk, yogurt, etc. if you want to pasteurize. [JWR Adds: Be sure to check all the legalities first, particularly at the State level.]

Farmstead or Artisanal Cheese
– If you’re milking cows, sheep or goats anyway, why not turn the milk into delicious farmstead cheese?  Farmstead cheese is cheese that you produce from the milk of YOUR animals, where as artisanal cheese is cheese that you produce from milk that you buy from another dairy.  Either way, you’ll need a state approved and inspected cheese operation and anywhere from a modest investment (several thousand dollars) to a major investment (over $100,000) to set up your make room, ripening room, cheese cave, equipment and so on.  There’s no denying that it takes an investment to become a cheese maker, particularly a farmstead cheese maker where you have to invest in animals and milking facilities, but for many the lifestyle and payoff is undeniably alluring.

Farm Fresh Eggs
– If you raise your hens on pasture then you’ll be producing the most beautiful and nutritious eggs available anywhere.  Just check out the chart to the right.  And keep in mind that not all egg varieties are the same.  Many consumers will pay much more for duck eggs than chicken eggs, and you can also sell hatching eggs (turkey, geese, ducks, chicken, guinea, etc.) instead of eating eggs.

Vegetables and Herbs
– There’s not much limit to what you can grow for consumers and restaurants.  Warm and cool season vegetables, fresh flowers, herbs, you name it. You’ll have the same choices to make regarding selling (direct, restaurants, retail, wholesale) as you do with meats but there’s one big difference. Whereas meats can be stored frozen for months the value in vegetables is to be sold fresh, often the day they’re harvested.  So you’ll want to line up your customers first either by having a solid relationship with restaurants or by operating a CSA for individual customers.

Fruits
– Strawberries, blueberries, blackberries, cranberries, peaches, apples, figs, melons…get the idea?  Almost everyone has a sweet tooth and these can be harvested, sold and delivered directly to farmers markets, restaurants or consumers, or you can offer pick-your-own options.

Sweeteners
– Maple syrup, honey and sorghum syrup all come to mind. With concerns about allergies I would expect a continued rise in the demand for local honey.  All you need is to make or buy some bee boxes, get a bag of bees and a queen or a nuc and let them pollinate your garden. Then you’re on your way to the sweet life!

Craft Supplies
– You’ll likely find countless supplies on your farmstead that can be marketed and sold to crafters, such as rabbit pelts, turkey and peacock feathers, wood cuttings, wool and more.  Take a look on eBay to see what’s selling and then see what you have.

Jewelry
– Rather than selling craft supplies from the farm why not make your own jewelry!  Think of using feathers from peacocks, turkeys, guineas or geese. Or, perhaps you have a large deer population and you’ll find lots of shed antlers in late winter. These and more can be used to make unique (one-of-a-kind) pieces of jewelry. [JWR Adds: The Etsy web site is a good place to retail your wares online.]
Variation – Instead of jewelry, make rustic woodworking gifts from your downed trees.  Think of tables, willow furniture, log furniture, kitchen utensils…whatever you can dream up..

Wine and Beer
– Due to stringent regulations you may not want to produce wine and beer, but what about becoming an accomplice?  Could you grow local hops for the beer market or grapes for local wineries using your land? I bet you could and that few people are!

Value-Added Products
– I won’t attempt to count all the ways you could add value to products that you could produce on the farm, and most would require some regulatory approval.  But imagine farm fresh baby food, dog treats, lard, jams, salsa, grains, cured meats, pickles, sauerkraut…the list goes on.  Don’t be afraid of seeking regulatory approval as it’s not as hard as you think. Just call the health department or your state department of agriculture and find out what you need to do to comply.  Others do it and so can you.

Mushrooms
– Cultivate mushrooms for consumers or restaurants and if you live among chanterelles, morels, etc., learn to hunt and sell these delicacies at farmers markets and to restaurants!

Photography
– I mentioned photography yesterday as a skill and it certainly is that, but your rare breed animals and quaint rural landscape offer you unique resources to create poetic imagery.  You could add value by printing and creating frames from your woodlot and selling through various resorts and stores in your state, or license use of your high-resolution images through various providers.

Make Custom Knives, Tools
– Necessity is the mother of all invention, they say, and farmers are an inventive group.  Perhaps you’ll come up with tools you need to tend your garden such as the wheel hoe to the right. Or you could offer plans on how to build them yourself like the the folks at WhizBang
Perhaps you know how or want to learn to make knives from rustic materials such as spent saw blades, antlers, wood, etc.  It’s not too late and it would be unique and functional.

Building Chicken/Rabbit Tractors
– When folks, particularly urban folks, see your fancy chicken coops and tractors they’ll likely want one of their own. They won’t have the time or skill to make it, but they’ll have the money to buy it. Market directly to them through local organics associations, conferences, publications and online groups.

Manure
– Put your marketing hat on now. You’re not selling a load of smelly waste, you’re selling organic fertility! Better yet, nutrients!  From worm castings to rabbit pellets and, yes, horse manure, you’re selling what everyone needs for healthy plants and topsoil. Variation: Compost

Artisan Meat Products
– You don’t see many people doing this because, as with cheese making, there is skill, investment and regulatory compliance required. And therein lies the opportunity!  Imagine making pancetta, pepperoni, saucisson sec, salami or Iberico style long-aged cured ham from your rare-breed pigs that consumed acorns and whey.  Know anyone else in your state doing this?  In your entire region? Is that sausage I smell or is it opportunity?

Tractor Dealer, Feed Dealer
– Perhaps you’d like to sell a small amount of farm equipment or feed in your area.  If it’s under-serviced then you’ll find opportunities to do so. This will be especially true with feed as you’ll likely find organic feeds, fertilizers and nutritional stuffs hard to come by unless you have them shipped in. Is it possible that others can’t find these as well and you could become the supplier?

Homemade Lotions, Soaps, Candles
– You’ll no doubt learn to make all of these things anyway for your homestead. If you have the raw materials, such as lard, goat milk, etc., then you may want to make artisan soaps for customers.  You can sell to local markets or sell online. There may even be more of an opportunity with making lotions, shampoos and creams that are all natural and free of chemicals.

Sewing/Knitting
– You could sell supplies such as wool or yarn, or you could add value by sewing bags, aprons, cloth diapers and more.

Hopefully some of these ideas got you thinking about how you can sell products and make a good living off your farm or homestead, but I bet you know of even more ways!  Many of the products and skills I’ve discussed are small scale and tug more at the homesteader’s heart. Some, such as retail meats, cured meats and commercial cheese making speak more to those interested in farming as a business.  What’s right for you?  It depends greatly on how you answer the questions in part one of this essay, namely how much money do you need to make.  But also how ambitious you are and how much energy you have.  Those are issues for you to ponder. 

One thing is certain; there are lots of ways to earn income from your farm or homestead. I don’t know about you, but I take a lot of comfort in that.

People who are new to farmsteading or entrepreneurial life in general are often nervous, if not downright scared, about the prospects of not having a comfortable and secure paycheck coming in each week.  What I will say is that when you do make that transition and learn how to generate income for yourself that you will never again worry about whether you may get laid off, how your employer is doing or if you’ll have money in retirement.  You’ll make the life that you want for yourself and no one will be there to deny you the pay raise, if you want it, or more time off, if you want that, although getting both would be the ultimate triumph!
TEOTWAWKI will be present a scary new reality for most people. But you can begin to position yourself now to not only thrive financially in a TEOTWAWKI world but to help others to adapt and enjoy their new world.



Preparing for Inclement Weather, by Russ X.

I am not trying to offend anyone or represent myself as an expert. I know there are many preppers on this forum that will see none of what I am writing here as new. However, some people may need this information or have not thought of it. As for me a lot of this was learned over 13 years in the active Army and seven years as a policeman. I was placed working and living in some of the most inhospitable weather situations someone could find themselves in. Enough of my ranting and I will get to the point.

As I was finishing my final preparing for winter and watching the news about the storm hitting the plains states I realized that I should call my family to make sure they were ready for bad weather. This caused me to get a migraine real quick. Then I thought that I should put this all in writing so I could send it to them every winter and make my life easier. With that I figured why not share this information to everyone who reads this forum.

The first thing you should consider is weatherproofing your winter gear and camping gear just in case you actually need it. For my Goretex jackets (Yes even Goretex gets soaked thru eventually) and my canvas work jackets I waterproof them using Camp Dry (you can use any commercial waterproofing spray but I prefer this one). I recommend doing this outside if possible due to the fumes or in a well-ventilated area. It can also contaminate the area where you are working, due to silicone overspray. Also test the fabric of what you are about to weatherproof to make sure it doesn’t stain or ruin it. If you decided to use this product or others inside put something on the floor under the work area to protect it from staining.

For Bivvy Sacks for sleeping bags also use a product like Camp Dry to keep your sleeping bag dry. Also use a seam sealing product to make sure the seams are extra protected. You don’t want water just pouring in at the material seem and causing you to get soaked. Now I know they say the seams are already sealed, but do you trust them with your warmth and safety?

Now on to the topic of weatherproofing your boots. If they are leather boots use a product like Snow Seal and liberally coat the boots and then put them in the oven at 180 degrees for 1 hour (yes I said oven, by doing this you open the pores of the leather and allow it to absorb the Snow Seal. If your boots are made of something other than leather, then use Camp Dry, of course test the boots first to make sure it doesn’t ruin them. Wet feet can make you miserable real quick along with being a deciding factor in if you survive or not. Now to socks, cotton socks are evil! They will cause you to lose toes or worse. The reason for this is cotton doesn’t wick moisture away from the skin very well, but it is great at wicking away the heat from your feet causing your feet to stay cold and end up freezing. So get wool socks or advanced fabric socks as they are the best choice. They wick moisture away from the skin and will still keep your feet warm even when wet.  Always remember warm feet are happy feet and will help you survive.

Now your vehicle as you will most likely depend on this greatly in bad weather. Make sure your headlights are working properly and are bright after a few years they start to get dim and should be replaced. Also if you have the type of headlights that have a clear plastic cover you will probably notice that they are milky white. You need to fix this with a commercially available headlight polishing kit and follow the directions. I found one at a local auto parts store for fewer than thirty dollars. It made my headlights like new.

Windshield wipers should be in good working order and of a good quality that won’t clog with ice and stop working properly. If they are bad replace them before you need them. Not seeing and driving are not a good combination, with that also make sure that you have a winter grade windshield wash as if it freezes up then it won’t help you.
Next is your battery and alternator, the two things that almost always fail when bad weather hits. Go to an auto parts store and have them put the tester on them to make sure they are okay. This will go a long way in easing worries about your vehicle not starting when you need it most.

As for vehicle maintenance not only does your oil need to be changed regularly but so does your antifreeze, power steering fluid, brake fluid, transmission fluid, differential and transfer case oil if you have them. With these an ounce of prevention is worth a pound of cure.

Now to your emergency kit for the car, in this should be a minimum of jumper cables (not everyone has them, but every care has a battery so if you have them you can get a jump), a set of work gloves (for changing tires and such) a knit cap or some other winter headgear, warm gloves, blanket’s, a few common tools (to tighten battery cables and such), emergency markers (I prefer flares and strobe lights over reflectors, as reflectors require headlights to hit them to be seen). Also having a days’ worth of food and water in the vehicle is nice in case you get stranded in your car. You can get emergency food rations and water from most survival or prepping web sites.  Having sand for traction and a compact shovel to dig out is a must also. You can also make traction ramps buy cutting heavy grate material about the width of 1 ½ the size of your tires and 3 feet long. Using this can also help you or someone else get unstuck in snow. Tire chains or snow tires are a must and if your tread is getting to the point of being only ¼ an inch deep get new tires. I know this seems a lot for your vehicle but when the worst case scenario that you never thought would happen to you does happen you will be better off for it. I know there is more for this topic but this is a good start. I also add my bug-out kit to my vehicle every time I get in it to drive. Also my bug-out kit and vehicle kit are one and the same. It makes it larger and heavier, but then I am never in the situation of saying why did I leave that at home

Now for the house besides back-up heating, food, water, lighting and the normal prepping stuff for bugging in there are a few items to consider. On backup heating you have to be careful due to carbon monoxide poisoning. I use the Mr. Heater MH18B Portable “Big Buddy” Heater by Mr. Heater as it has an automatic low oxygen shutoff system and tip-over safety shutoff.  If you don’t have something that senses when the oxygen is low or is made for indoor use then you need to have someone stay up preferably in shifts to watch the heater along with making sure there is enough ventilation in the room so there is not a build-up of Carbon Monoxide. This also goes for daytime heating and also for cooking. For lighting using low sulfur mineral instead of lamp oil in your oil lamps as it is cleaner and safer. Also it will keep you from having to repaint your house when everything is back to normal. This also goes for candles they will stain the pain in a house along with being a fire hazard. This is since we don’t run around using candles every day we will make mistakes that can and will be tragic. On that note with heating, cooking, and lighting you should have a couple a house-sized ABC fire extinguishers for emergencies.

You need one or two heavy tarps, parachute cord, and small sandbags so that you can put a temporary patch on your roof should a tree fall due to ice and snow and uses your house as a target. For windows having 2 inch wood screws, sheet plastic, and a couple of sheets of plywood to close up a broken window or door is a lifesaver. Also if you can precut the plywood for the windows it makes the repair a lot quicker.

A note on shoving snow, shoveling snow is considered heavy strenuous labor. It is also one of the leading causes of heart attacks in winter. So like any heavy workout take 15 minutes to warm up so your body realizes you are about to do something difficult. While working on removing the snow take many breaks. I normally only shovel snow for 15 minutes at a time then take a break so my heart rate can go back down. Also it may be cold but stay hydrated.

I hope everyone has a great winter, and hope that at least some of this information is helpful.



The Drug Seeker Threat in Disasters, by Dr. Bob

People in the general public have little to no idea just how bad the drug abuse of prescriptions medications is here in the US.  Our recent discussion with our church small group spurred us to write this review for your thoughtful review.  Some fun facts to start us off, courtesy of one of my reliable medical reference sites, UpToDate:
 
6.2 million Americans in 2008 admitted to non-medical use of prescription drugs, 2.5 % of the population.
The number of Americans who have abused prescription drugs exceeds those who have used cocaine, heroin, hallucinogens, ecstasy, and inhalants combined.
A 2005 survey of 50,000 US high school students found that while overall illicit drug use declined among adolescents over the prior decade, their non-medical use of prescription pain relievers and sedatives has increased.
Only marijuana use among illicit drugs (although becoming more “legal” everyday in some states) exceeds non-medical use of prescription drugs.
 
We start with those fun facts to shock you into reading further in addition to alerting you as to the depth and severity of the problem. WTSHTF, these 6 to 10 million seekers are going to be unhappy, withdrawing, and looking to score some pills.  They may be coming to your house, as 2.5% of the population is one out of 40 folks.  Most of us involved in primary care medicine would probably double that estimate, and in some areas of the country the rate will be much higher.  And this is just prescription medications, not to mention the illicit drug users that will become prescription seekers that will have to “make do” with pain pills or tranquilizers as a substitute for the drug that they are going without.
 
In our current, happy, open-pharmacy world, there are some risk factors that can identify those more likely to be abusing prescription medications, but there are many more folks abusing those drugs that don’t fit the profile at all.  Those found to be at increased likelihood of abusing prescription drugs include:
• Past or current substance abuse or addiction
• Use of controlled substances in non-prescribed doses and routes of administration
• Use of controlled substances for reasons other than indications for which they were prescribed
• Patients of younger age
• Patients who work in health care settings
 
From observational experience, drug abuse of prescription medications has certainly been on the rise since my initial start in the medical field 17 years ago.  It is one of the heartbreaking aspects of our day to day existence.  Almost every day in the clinics, urgent care facilities and ERs, all doctors and health professionals must deal with multiple drug seekers trying to get them to prescribe them a little “somethin’ somethin”.  These are first or second hand, real life excuses or behaviors that drug seekers have used in the ERs, Urgent Cares, and clinics to try to obtain drugs:
 
Death of a generic loved one (when they are not dead, Grandfathers the most common)
Death of a wife (usually a living wife, ex-wife, or common-law has no knowledge of their death)
Death of a child (particularly tough to resist urge to punch seeker in face, but hasn’t happened…yet)
Sexual assault
Domestic violence
Pricking finger with needle to put blood in urine sample (makes it look like kidney stone)
Using child’s pain to obtain meds (again, resolve fading…fist rising…must not punch)
Stealing dying relatives’ medications (Hospice patients, cancer patients especially.  One took the narcotic patch right off the dying relative for himself.)
 
These are just some of the more heinous examples above, the classic excuses are always still worth mentioning:  dog ate them, fell in toilet, fell in sink, fell in some wet area, fell in some dirty area, washed in the laundry, pharmacist is against me, wife/girlfriend/neighbor/mailman/etc is against me, lost it, was stolen, took too many because it wasn’t working, took too many because you are a terrible doctor and didn’t give me the medicine that works, another terrible doctor wouldn’t fill it because they are horrible and you are the greatest ever.  All of these are from personal examples.  All were confirmed to be fabrications.  90+ percent of these excuses are false, every time.  This is why it gets to be so heartbreaking.  It really takes your faith in humanity and grinds it up into bits.  And it’s getting worse.  Just yesterday from my writing of this, a gentleman told me that “it is your duty as a doctor to help people” when he was lying about his medication abuse.  They know the lines, and they use them.  It didn’t work by the way.
 
So, what to do in TEOTWAWKI.  Avoid.  Plain and simple.  Anyone on controlled substance meds should be weaned off immediately if they are in your group.  Off.  We will all have to figure out a way to live without them then, no time like the present.  Do NOT have any controlled substance medications in your possession.  If Ibuprofen and Acetaminophen don’t take the pain down, it will probably make you stronger.  Seriously, that is our advice.  The risk does not exceed the benefit in regard to these meds.  We don’t take them, we don’t have them…so why would we stock them?  Ask yourself the same question.
 
Okay, how do you spot the withdrawing seeker in a post-pharmacy world?  Withdrawal symptoms for the different medications are worth mentioning by category.  First, the pain medications.  Opiate withdrawal has the following classic symptoms:  in the hours after the last dose will come drug craving, anxiety, fear of withdrawal.  Then in a day to days will be:  anxiety, restlessness, insomnia, yawning, runny nose, watery eyes, sweating, stomach cramps, and small pupils.  In the days that follow to a week:  tremors, muscle spasms, vomiting, diarrhea, chills, goosebumps, and rapid heart beat.
 
Benzodiazepine withdrawal symptoms are similar, but different in some ways and timing:  rapid stopping of chronic benzo use can actually result in death.  Tremors, anxiety, hallucinations, negativity, psychosis and seizures can occur.  The scale and dependence of benzo use and abuse is truly staggering.  Many of these folks are your neighbors, relatives, and friends.  They have been taking Ativan, Xanax, Valium, Klonopin, Libruim, Tranxene, Restoril, Serax, ProSom, Dalmane, and Halcion for a long time now.  They are likely not abusing these drugs, but certainly are dependent and are not going to be happy and pleasant without these medications.  Anyone on more than 20 per month of these meds needs to wean down now and try to get off.  Again, Cognitive Behavioral Therapy (CBT) does work for people and is highly recommended.
 
Stimulant withdrawal, specifically cocaine and amphetamines, can show withdrawal symptoms in:  negativity, lack of pleasure in things, fatigue, sleepiness, vivid dreams, insomnia, agitation, anxiety, depression, suicidal thoughts and actions, drug craving, and hunger.  As a society, we also provide stimulants to people regularly for their ADD and ADHD diagnoses, and the symptoms of withdrawal will be very similar to those of the illicit stimulants above.  These stimulant-withdrawal symptoms usually peak by two days and then decrease within two weeks, but can be the most dramatic and therefore dangerous when loosed near you and yours.
 
Many of these withdrawal symptoms will also be experienced by many “non-addicts” who are unprepared for a disaster.  Isolating yourselves for the first few weeks after any major disaster is certainly the best policy.  By 14 days, almost all types of acute drug withdrawal have ended physically.   Seekers will be dangerous in those first days, but remember that most seekers have up to a month of medication that they have available before they run out, some dealers could have much more than that.  The first two months all of us will be at risk to encounter and possibly be harmed by the drug seeker.  I can’t emphasize enough how far people who are addicts will go to try to obtain even a small amount of their drug of choice or any type of substitute.  Many of these people will rob, lie, con, steal and kill for drugs if given the chance, so continue your vigilance.  But most importantly, heed our sound advice: To reduce your risk,  do not keep these medication stored on your property.

JWR Adds: Dr. Bob is is one of the few consulting physicians in the U.S. who prescribes antibiotics for disaster preparedness as part of his normal scope of practice. His web site is: SurvivingHealthy.com.



Letter Re: Some Thoughts on Burning Coal

Sir,
Probably the biggest gap in our survival preparations at present is having a good source of energy if we have to stay underground for an extended period. If surface conditions are such that we cannot venture outside, then most likely there will be problems with our photovoltaic panels, solar water heater and hydropower, all of which are above ground. With currently available technology, propane seems to be the only reasonable solution to support heat, hot water, and electricity. Propane can be stored indefinitely and furnaces, stoves and generators that run on propane are readily available. However, storing enough propane underground to support our group for several years would be impractical. I’m also uncomfortable storing large amounts of propane for many years, since it seems inevitable that it will leak eventually, presenting a safety issue as well as a loss of the resource. Most people, including serious preppers, don’t plan to rely on propane for more than a few days. For those with solar and hydro solutions that can work without pause for years, a 3-day backup system in the form of propane seems superfluous.

I keep coming back to coal. Like propane, it can be stored forever [if protected from weathering.] (Before it’s mined, it’s basically being stored indefinitely underground in a mine.) With existing, mature technology, coal can support all the things propane can be used for: heat, hot water and electricity. Unlike propane, there’s no danger of leaking, and it’s much more practical to store tons and tons of coal underground than it is to use buried propane tanks. There’s only one problem: unlike propane, electrical generators that run on coal are not readily available for individual household use. This seems strange, since coal is the number one energy source for electricity generation at the utility scale.

Are you or my fellow readers aware of any practical, reasonably efficient solutions for home electricity generation using coal as an energy source that don’t require an engineering degree to implement (if I had the skills I’d just build the generator from scratch myself)? I would be willing to pay a significant amount of money for such a system.

Thanks in advance, and best wishes. – Dale from Vermont

[JWR Replies: When ever wood heat or coal heat are mentioned in the blog, invariably someone will then Thermoelectric generation (TEG) technology . Unfortunately that technology hasn’t matured sufficiently to be reliable. Sadly, TEG circuits burn out with alarming regularity. So steam power–at least for now–seems to be the only reliable way to turn heat into electricity. Perhaps some readers would care to chime in with some alternatives.]



Letter Re: The Overnighters: Coming to a Neighborhood Near You

Hello Mr. Rawles, 
I felt compelled to write in regarding Frank C’s recent article, The Overnighters: Coming to a Neighborhood Near You, and share my experiences working in the non-profit world over the last four years.  While my experience is significantly different from Frank’s, he is in my opinion right on the money.
 
I live and work in a northeastern state.  The state has a low population, is very rural, but has a massive “public assistance” community within its borders. In other words, lots of “social programs.”  I am a die hard capitalist, gun-owner, conservative, Christian.  Not the best prepper, but I’m trying to change that.  About four years ago I began working for a non-profit, which was quite change from having been in the defense industry.  The operation is self-funded (operates as a business) so it fit with my personal beliefs.  The operation performs very basic services for area businesses, and pays people “piece rate” for each product produced.  In short, the harder they work, the more they make per hour.
 
How this relates to Frank’s article is this: we have a great many “Overnighters” that “work” for us.  It is the same crowd.  They have been given everything, and they cannot fathom a world that does not include a taxpayer-funded check every month.  Being independent is not on their radar screen. If you try to explain the concept and they  go completely blank.
 
Many business owners might be able to relate to this, but many who read this blog may be surprised how, even in this economy, it is very hard to get people to show up, work a full day, and then repeat that on a regular basis.  We give jobs to anyone who wants one, regardless of background, past indiscretions, etc.  We are here for everyone.  People don’t show up, barely give an excuse, and then expect to be put on the work schedule again, when it is convenient for them.
 
The smoke, drink, have fancy cell phones, and find it a major inconvenience to come to work occasionally, to fill in the gaps left by their “benefits.”  Many of them are completely without shame, and state emphatically that the only reason they are there is because, “the state cut my check.”  Many of them strategically work only the number of hours they can without upsetting the handouts.
 
These are the type of people who Frank mentions going door-to-door in his article.  When the checks and stamps dry up, these people will get ugly–very ugly.  What I have learned over the past four years is that this type of creature can exist anywhere. As I mentioned, this is a rural state, and the “city” I work in would not register as even a large town to most urbanites. But here they are.  The system has created them, and they have filled a massive population vacuum.  I live over an hour away, which is somewhat comforting, but these types of humans are even in the small towns of America, and they earnestly expect to be taken care of. Thanks, – Scott O.



Economics and Investing:

Ted B. sent this: European Union agrees on Iran oil embargo

The Economist reports on Romania: Anger management: The government struggles to contain a growing protest movement

Courtesy of Rex N. comes this link: Danger Ahead! Says the Bank of Canada

Over at KITCO: Comex Gold Ends Higher On Bullish “Outside Markets,” Positive Technicals

Items from The Economatrix:

Gold Bottom Targets Trend to $4,000

IMF in Need For $1 Trillion / The Private Greek Bond Fiasco

The Debt Supercycle Reaches its Final Chapter

Jim Sinclair:  There Will be a Run on Gold Stored in the US

On Banks Refusing Cash Withdrawals



Odds ‘n Sods:

H.D. in Ohio mentioned this fascinating paper in the medical journal Nature Neuroscience: How unrealistic optimism is maintained in the face of reality. In essence, some people’s brains aren’t wet-wired to accept the the prospect of calamity. This may explain why trying to convince some of your family members to prepare is like talking to a brick wall.

   o o o

Some good privacy news: High Court Rules Warrantless GPS Tracking Unconstitutional

   o o o

A new M9 solar flare has everyone’s attention. It is the biggest since 2005. BTW, I recommend signing up to receive free solar flare alerts.

   o o o

Going Back to the Future: Militia Model Could Cut U.S. Expenditures. (Thanks to Chris M. for the link.)

   o o o

My nonfiction book “How to Survive the End of the World as We Know It” just jumped back up to #50 in Amazon’s overall rankings. This was attributable to having the book proclaimed “the preppers’ Bible” in a recent Reuters news article, and a follow-up in Glenn Beck’s The Blaze.





Notes from JWR:

Welcome aboard, to the thousands of new SurvivalBlog that just heard about us for the first time in the recent Reuters news article. To come up to speed quickly, take a few minutes to read the About page, and then SurvivalBlog’s Quick-Start Guide for Preparedness Newbies.

Today we present another two entries for Round 39 of the SurvivalBlog non-fiction writing contest. The prizes for this round include:

First Prize: A.) A gift certificate worth $1,000, courtesy of Spec Ops Brand, B.) A course certificate from onPoint Tactical. This certificate will be for the prize winner’s choice of three-day civilian courses. (Excluding those restricted for military or government teams.) Three day onPoint courses normally cost $795, and C.) Two cases of Mountain House freeze dried assorted entrees in #10 cans, courtesy of Ready Made Resources. (A $350 value.) D.) A 9-Tray Excalibur Food Dehydrator from Safecastle.com (a $275 value), and E.) A $250 gift certificate from Sunflower Ammo.

Second Prize: A.) A Glock form factor SIRT laser training pistol. It is a $439 value courtesy of Next Level Training. B.) A FloJak F-50 hand well pump (a $349 value), courtesy of FloJak.com. C.) A “grab bag” of preparedness gear and books from Jim’s Amazing Secret Bunker of Redundant Redundancy (JASBORR) with a retail value of at least $300, D.) A $250 gift card from Emergency Essentials, and E.) two cases of Meals, Ready to Eat (MREs), courtesy of CampingSurvival.com (a $180 value) and F.) A Tactical Trauma Bag #3 from JRH Enterprises (a $200 value).

Third Prize: A.) A Royal Berkey water filter, courtesy of Directive 21. (This filter system is a $275 value.), B.) Expanded sets of both washable feminine pads and liners, donated by Naturally Cozy. This is a $185 retail value, C.) A Commence Fire! emergency stove with three tinder refill kits. (A $160 value.), and D.) Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security.

Round 39 ends on January 31st, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and articles that relate practical “how to” skills for survival have an advantage in the judging.



Recession and Black Swan Events, by Don M.

Financial calamity can take many different forms.  The Brazilian saga of hyperinflation / depression / recovery from the 1980s leading to one of today’s most robust economies is a classic tale of overcoming adversity.  Argentina’s economic collapse in 2000-2001 followed by hyperinflation in 2002, debt repudiation and seizing foreign deposits is another story with a solid recovery afterwards.  The disastrous 20-year Japanese experiment with deflation and negative growth is at the other end of the spectrum.
Which will the US experience first?  And, how quickly will we feel the scorching fire of hyperinflation or the freezing blast of deflation?
The short answer is that today we should be preparing for a recession in the near future with actual deflation in certain sectors.  We also need to anticipate the possibility of a deflationary spiral into the “Great Correction.”

As the economy struggles through the next recession, we need to be alert for signals that the Federal Reserve has screwed up and overshot its goal of controlling deflation.  A big miss with too much monetary expansion and the US economy could lurch into hyperinflation with very little warning.
In JWR’s novel Patriots, our heroes experience an occupation force of primarily European UN troops.  Today, that seems unlikely but only because the European countries are determined to make a bigger mess of their economies even more quickly than the US.  After all, politicians in Europe have over-promised for even longer than politicians in the US.  The cost of providing the European welfare state has proven far more expensive than forecast, and the bill is now past due.

Almost everybody watching the Euro crisis has concluded that Europe is headed straight into a major recession – regardless whether or how the Euro crisis is solved.  The recently mighty Euro has been steadily losing value to the US dollar and is no longer a candidate for a replacement reserve currency.  In fact, Euro-denominated assets, especially the government bonds of Greece, Italy, and Spain, are almost toxic.

Updated Collapse Scenario

Does that mean that the disaster scenario in Patriots needs to be updated?  No way.  In fact, all that matters is that Patriots provides a realistic scenario that could easily lead to the rapid collapse of infrastructure especially in large cities.  The story line makes the point that rational people need to be prepared for the worst and that working together is much better than going it alone.  The take-away message is about being prepared and not about the details of which camouflage pattern or what brand of battle rifles.  If those details stick in your mind, that’s great, but the real lesson is to think ahead and start planning before Schumer comes knocking.
In the meantime, we have to get on with our life in today’s real world.  The characters in Patriots had to deal with their particular environment; we have ours.  Each of us gets to deal with our jobs, our family and friends, and “our” government.
Keep in mind that how you define a problem can artificially constrain how you think about the solution.  If you imagine that the most likely problem is hyperinflation and soon, that framework might justify spending critical savings to stockpile supplies before prices skyrocketed.
But if, as I predict, the US will deal with several years of recession first, the heavy spender might use up critical savings needed to deal with an unexpected problem like major illness or loss of a job.  Also keep in mind that the frugal saver who does reasonably well in a recession may overlook or ignore the warning signals for hyperinflation and see the value of his savings evaporate in a few months or even weeks.

Being an International Banker

My first job out of business school was trading foreign currencies in Beirut for one of the largest American banks and then as branch manager in another Middle Eastern country. After several more job moves including working as the international treasurer for a Fortune 500 company, I was recruited to head up global treasury management for the largest bank in the US.  Eventually, I left the financial sector and got a real job running a company that manufactured products in the US.

Like many people I read the news headlines and generally ignore the daily ups and downs of the stock market.  Most of my attention goes to more technical articles following trends in currency swaps, forward currency transactions or futures, inter-bank lending rates, national bond offerings, and changes in credit default insurance rates.  Not very sexy stuff, but these details paint a clearer picture of world events than the sound bites carried on television news.

As a banker, I was paid to make bets on major currency movements and the direction of national economies.  Sometimes, I was just plain wrong and lost money.  Occasionally, I had the right trend or direction but was way off in the timing.  That also counted as a loss.  Fortunately enough of the bets paid off, and I kept my job.

Most of us may not recognize the reality, but today everyone in the United States is making a daily bet in the world’s foreign currency markets.  We are all international economic forecasters.  What happens in Greece or China or Japan has a direct impact on the US dollar, the US stock market, the rates on US savings accounts, the price we pay for bread, or the cost to fill up our Toyota, Hyundai, or Chevrolet.

Major Bets

You say, “Wait, I don’t even own stocks.  I’m sitting tight hoping that everything blows over.” My friend, that is a bet – a very big one.  You are betting on the status quo.  In fact, you are putting your livelihood and your savings on the line placing a number of bets at the casino every day.  By doing nothing, you are actually making the following very specific bets, for example:
a.)            The Euro-zone remains intact;
b.)            None of the European Club Med countries default;
c.)            Crude oil stays between $80 and $120/barrel, and the Middle East stays peaceful;
d.)            The Federal Reserve can and will keep interest rates between zero and 2% for at least two more years;
e.)            The Fed’s interventionist policies will keep the US from a recession in the next two years or at least until the presidential election is over;
f.)            The Muni bond crisis in the US will be postponed at least a year;
g.)            Obama will win his second term as President; and
h.)            Majority Leader Harry Reid and Speaker John Boehner will continue their ineffectual sparring with neither party making much ground in the 2012 elections.
The list could go on, but I think you see the point.  Taking no action is a gigantic sucker bet.
By the way, you also made the bet (correctly) that Obama would keep his word and that troop withdrawals from Iraq would proceed according to plan.  After all, everyone knows that Iraq and Afghanistan have been completely pacified and are capable of responsible self-rule without any assistance from the Evil Empire.  Further, there is absolutely nothing that could disrupt the steady supply of Middle Eastern oil to Europe and Asia – not even the Ayatollahs of Iran and the Straits of Hormuz.
When you placed those wagers, you were making the exact same bet that Federal Reserve Chairman Ben Bernanke is making, namely an ever-increasing federal deficit can be financed indefinitely by an ever-expanding supply of cheap credit.
Further, this surplus of credit, according to Keynes and all his disciples, will lead only to moderate but not excessive growth which will allow the US to solve all of its economic problems by the end of the second Obama administration. 

Bernanke is too old to have such faith in the Tooth Fairy, and so are you.

The European Mess

Each week for the last several months, the press has alternated with good news that the Euro crisis has been fixed once and for all with the following week’s announcement that some new catastrophe has derailed last week’s bailout plan or solution or new treaty or whatever.  My personal bet is that at least one of Club Med countries will default on its bonds in the next six months.  Frankly, it doesn’t matter whether the first to go is Greece, Italy or Spain.

The most likely consequence of any major national default is that this will be the final trigger point for a long-term recession in Europe with repercussions in the US economy and the rest of the world.  Even without a specific trigger, Europe will slide inevitably into recession generally considered to be two consecutive quarters of declining GDP.
How likely is it that a major recession in Europe will lead to another recession here?  Most economists and central bankers think it will happen quickly once the house of cards called the European Union starts to tumble.  In fact, many of the most common measures used by the National Bureau of Economic Research already point to an extended decline here in the US in real income, actual vs. reported unemployment, retail sales, and industrial production as well as other key measures.
Bernanke and Treasury Secretary Timothy Geithner believe in the linkage, and the Federal Reserve has already taken extraordinary steps to delay the inevitable collapse in Europe just to postpone the recession here.

International Monetary “Easing”

On November 30, 2011, the Federal Reserve issued a press release announcing greater availability and lower pricing for “temporary U.S. dollar liquidity swap arrangements.”  What really happened is that Bernanke, without the approval of Congress, agreed to make the Federal Reserve a lender of last resort to the rapidly failing commercial banks in Europe.  These banks have enormous exposures to various European national bonds, and the Fed is effectively taking on that liability.  You read it correctly – the commercial banks.  The US taxpayer is now backstopping the shareholders of foreign banks.
A press release announcing a done deal means that there were weeks or months of intense, behind-the-scenes negotiations as well as position papers and PowerPoint presentations detailing the consequences of opening up that credit window.  These documents have not been and probably never will be released.  Where is Wikileaks when you really need it?
Will these new credit facilities change the outcome?  Not really.  Utilization of the credit facilities may slightly delay the starting date for the European recession, but the sad truth is that the US government and the US taxpayer is now much more exposed to a commercial banking collapse in Europe.
We thought that the Mother of All Bailouts (MOAB) had occurred here in 2008 and 2009 to avoid the bankruptcy of Bear Stearns and the collapse of the US banking system and AIG.  Not satisfied, Bernanke is now offering bail-out money to Europe’s banks.

The Euro Summit and the “New Treaty”

Clearly the 27 Euro-zone leaders believed that a major recession would be the best outcome they could expect from the spreading Euro crisis unless they took extraordinary action.  The 27 heads of state participated in an all-nighter in Brussels on December 8 and 9.  The result is that member states have been asked (blackmailed?) to ratify an amendment to the European Union treaty setting new mandatory economic guidelines.
The most important requirement is that each country must take active measures to reduce “structural” deficits to no more than 3% per year.  This means drastically reducing the maximum amount by which any country can outspend its net tax revenues.  This was the non-negotiable demand that German Chancellor Merkel imposed on all the member countries at the Euro Summit.
What the Germans wanted and got was agreement that member countries would reduce their deficits by immediately cutting government spending and simultaneously raising tax revenues.  “Cutting government spending” is Euro-speak for firing a significant number of government workers and reducing funding for government programs.

In addition to cutting public sector employment, these measures will lead to a further loss of jobs in the private sector.  The obvious consequence all across Europe is greater unemployment, a further loss of consumer confidence, a continuing reduction in consumer spending, and a corresponding decrease in capital expenditures by businesses.  To that recipe for economic disaster, stir in the simultaneous requirement to raise tax revenues.

Tie Your Hands

With this toxic combination how can the EU member countries avoid an outright recession?  Not possible.  This was the reality that every head of state knew in advance of the Brussels summit and had already accepted. Even more amazing is that all of these government leaders also agreed to keep from using the conventional Keynesian tools for fending off or turning around a recession including reducing taxes or increasing government spending.  They have tied their hands behind their backs even before the fight started.  You have to ask was this  the epitome of stupid politics, or were these leaders even more afraid of the inevitable economic catastrophe from a collapse of the Euro? How long before this new treaty is effective – if ever?  According to a Reuters article, French President Sarkozy admitted that the earliest expected ratification was June, 2012.  Obviously, the “big rescue” is not a “quick rescue.”  In the meantime both Moody’s and Standard & Poor’s have placed almost all European countries on credit watch, often the first step before a down-grade in credit rating and a major increase in borrowing costs.

Too Little and Too Late

Many commentators have opined that the simmering Euro crisis will boil over long before the new treaty can be approved.  The summit got great press coverage, and the Euro leaders got to pat themselves on the back.  But, an honest assessment has to be too little real substance and way too late to do any good.
Put the pieces together.  Europe’s leaders have basically given up and are reconciled to a large and extended recession beginning no later than the first half of 2012 along with a big jump in public and private sector unemployment plus major increases in national borrowing costs.  By accepting Germany’s terms, the members of the EU have also agreed in advance to a very slow recovery from the inevitable recession.  No reason for optimism here.

The Toilet Bowl Spiral

First, what is the practical definition of deflation?  Second, why is it such a big deal?
The official definition of deflation is a decrease in the general price level of goods and services typically measured by a decline in the Consumer Price Index.  In other words, real inflation drops below zero measured against the prices of a consumer basket of goods and services.  The major concern is that deflation can get out of hand and lead to a deflationary spiral.
In this type of downward spiral, the vicious circle starts as businesses try to maintain or increase demand by lowering prices (think Christmas sales).  If lower prices fail to stimulate demand, businesses have no choice except to lower production or reduce retail inventory depending on where they are in the delivery chain.  Manufacturers fire excess workers and cancel any plans to increase plant capacity.  Retailers place smaller than normal orders and leave empty shelf space.

Unemployment goes up, real income goes down, real estate prices continue to plummet, tax revenues at all levels go down, and the deficit gets even bigger.  City, state, and federal governments – especially since they have already borrowed too much money – are finally forced to cut non-essential services and begin reducing essential services such as fire and police.
And, the municipal bond market takes a big hit as several major cities and one or more states default on interest payments and fail to pay vendors.
Then, even more government entities are forced to cut more public employees but usually not near the top where it would help.  Unemployment goes up again; aggregate income goes down even further; consumer borrowing drops more; consumer demand drops faster and further; and prices drop yet again to chase decreasing demand.

The Spiral Continues

Businesses create no new jobs.  There are no new housing starts.  New automobile production gets cut again.  As the spiral continues, businesses have to reduce their payroll even more by firing the most recently hired, by eliminating all entry-level jobs, and by firing the most expensive hourly workers – usually the oldest ones.  They even start firing middle management.  Just for the record, the last thing they cut is executive compensation.
There are two really important reasons for understanding why deflation is such a big deal – especially right now.  The first is that once this vicious cycle gets a good start, it is really hard to stop until it bottoms out like it did in the Great Depression.  Second, and maybe even more important today is the realization that deflation is at the current intersection of a massive academic ego and partisan politics.

Bernanke’s Ego and Obama’s Political Ambitions

Assuming that the Republican Party can eventually nominate any plausible candidate, even Waffle House Romney, Obama knows that the most important issue in his re-election campaign will be the economy.  Unlike Europe’s leaders, Obama cannot afford to give up and accept the inevitable recession unless he is also willing to be a one-term president.  He will do everything he can and support any idea no matter how far-fetched that has the slimmest hope of injecting good news into the gloomy economic picture. But Bernanke’s motivation is even more dangerous.  Ben Bernanke graduated from Harvard College and earned his Ph.D. from MIT.  He taught at Stanford Business School and NYU before becoming a tenured professor at Princeton.  His entire academic career focused on the policy decisions leading to the Great Depression.  In numerous papers and articles, he has expounded his theory that uncontrolled deflation triggered the Great Depression and delayed recovery.

While at Princeton, he was appointed a Member of the Board of Governors of the Federal Reserve in 2002.  He became Chairman of President Bush’s Council of Economic Advisors in 2005.  Bush nominated him as Chairman of the Federal Reserve in 2006, and he was reappointed to that position by Obama in 2009.  He is now able to treat the US economy as one giant laboratory in which to test his academic theories.
Nine years ago, then-Fed Governor Bernanke gave a speech called “Deflation: Making Sure “It” Doesn’t Happen Here.”  Read Bernanke’s words and weep:

“Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it.  If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.”

The Magic Printing Presses
In fact, Bernanke has been pushing and pulling the economic policy levers in an unprecedented way since he became Fed Chairman under Bush.  Even with access through the Freedom of Information Act, the public may never know who really said what to whom as the federal government struggled with the bankruptcy of Lehman Brothers, the almost bankruptcy of Bear Stearns, the catastrophic melt-down of the sub-prime mortgage market, and the bailout of the banks that were “too big to fail.” What is clear is that the US tumbled into a recession, and the Fed under Bernanke’s direction did everything possible to contain it.  Some economists argue that it would have been better to allow capitalism to run its course, let the failures occur, and set the stage for a real recovery. The recession that started in 2008 continued in 2009, and true to his fervently held beliefs Bernanke injected massive amounts of money into the US economy, especially after Obama became President.  We can debate whether the bailouts were necessary or even beneficial, but for right now, that issue is irrelevant.  The world learned a crucial lesson about the way that Bernanke and Obama will handle any major economic crisis.

Avoid deflation at all costs!  Roll the presses!

The US Treasury has the national mints, but the Federal Reserve has printing presses.  Some of the presses are real intaglio printers used to print currency, and they are churning out new Federal Reserve funny money in larger denominations and greater quantities 24/7.  But the really dangerous ones are the virtual presses that put digital money on balance sheets without any intervening creation of goods or services.
One obvious example is “Quantitative Easing.”  This term deliberately obscures the real meaning.  Translated it means that the Federal Reserve purchases US government bonds from private holders (e.g., commercial banks) and pays for them by simply making digital entries in the selling bank’s account at the Fed.  No new goods or services.  No Congressional approval.  More money in the system.
Let’s admit that the whole world – China, Europe, the oil producing countries, and the US – face recession and possibly deflation.  We know for sure that Bernanke is self-righteous in his view that with enough money he will reverse deflation and avoid the deflationary spiral.  And, Bernanke believes that history will lavish great praise on the economist turned super-hero who saves the world.

Near-Term Forecast

Europe, will continue the inevitable slide into recession despite the best efforts of the European Central Bank (with no printing presses and no authority to manufacture money) and the Federal Reserve (with all printing presses working overtime).
On a slightly slower timetable, the US will slide back into recession as well.  Bleating like a lost little lamb, Obama will “encourage” the Democrats to create jobs, to tax the rich, to save the unions, to preserve jobs for public employees, to keep their pensions intact, and to preserve at all costs every single entitlement program, such as Social Security.
The Republicans will continue the full range of political brinkmanship.  Compromise is unlikely.  Nothing significant will happen to create jobs, reduce spending, or actually change the debt level for at least a decade.  In other words, same old stuff except that the government will officially acknowledge what we already knew in our pocketbooks.  The US is in another recession less than two years after the federal government declared a victory over the last one.

With the prospect that a back to back recession could easily lead to deflation and the dreaded spiral, Super-Hero Bernanke without any congressional oversight will be busy doing his magic.  The money supply will increase.  Interest rates will stay down.  Even so, commercial and consumer borrowing will drop.  Real estate will drop even further.  Frustrated because the story-book ending is not working out, Bernanke will pour even more money into the system.  After all, Ben runs the risk of losing his super-hero cape.
In summary, until this phase of Bernanke’s grand experiment with the American people runs its course in 24 to 36 months, you can count on three things:
1.)            Recession with a 30% or more chance of significant deflation.
2.)            Overcast conditions with no glimmer of sunshine from a grid-locked Congress.
3.)            Heavy precipitation in the form of money and credit raining down from the Federal Reserve.

This is the good news, and I fervently hope that we get a two-year run!

Black Swan Theory

The bad news is that the economic environment could go from recession to much worse very quickly if any one of several unexpected events occurred.  The “Black Swan Theory” holds that highly unpredictable events with low probability have a major impact often because we have overlooked such events and have ignored the huge impact of these supposedly rare occurrences.
For example, we can see that the list of possible disasters might include a spike in energy prices, another major terrorist attack on US soil, North Korea flexing its nuclear arsenal, the bankruptcy of the US Postal Service, or another major conflict in the Middle East.
Precisely because these events seem possible or even likely, they are not Black Swans.  But, if we think outside the box, we can speculate on events that might change everything – at least in their immediate sphere.  For example:
1.)            President Obama decides not to run for a second term, and Hillary Clinton becomes the 45th President.
2.)            North Korea offers to reunite with South Korea, and South Korea destroys its own economy in the process.  This leads to a collapse of the Asian “Tigers” in a mirror of the Euro crisis.
3.)            Iranian Hezbollah agents from Lebanon set off a small-scale nuclear device in Tel Aviv.  Israel retaliates against Syria and Iran.
4.)            The housing bubble in China explodes leading to full scale riots in six to ten cities that are quelled only with massive military force.  Chinese exports decline; imports, especially of raw materials, stop almost completely.
5.)            The national referendums on the new EU treaty trigger bloody rioting in Greece followed by popular uprisings in Spain and Portugal reminiscent of the Arab Spring in Egypt and Libya.  The Euro dies a painful death bringing down major commercial banks and private sector companies.
6.)            King Abdullah is assassinated, the Allegiance Council of the House of Saud is unable to name a successor, warring factions take over the Ministry of Defense and the Ministry of the Interior, and oil shipments stop.
These ugly events almost qualify as Black Swans, but the fact that we can conceive of them and have some idea of their impact might take them out of the category.  You have to imagine something even more unpredictable and more capable of sweeping change.  You will know it when you see it.

Near-Term Conclusions

Increased self-reliance is the best plan to get you and your family through the next two to three years.  For that short period, the US dollar will be the safe haven currency – not gold or silver.  Individuals, corporations, and governments around the world will decide to hold greenbacks and not local currencies or hard assets.
In fact, one possible explanation for the huge drop in gold in the last several months despite the Euro-crisis on the front pages is that major gold investors have already concluded that recession is the near-term problem not hyperinflation.

Study the SurvivalBlog “List of Lists,” and plan your expenditures carefully.  Look for sales and discounts.  Smart retailers have already figured out that consumers have become deal conscious and realize that retail prices have to drop to get customers in the door.
If at all possible, avoid taking on more debt other than student loans (just the opposite advice if hyperinflation were on the immediate horizon).

Given any reasonable opportunity, get out of an urban or suburban mortgage.  Even on an after-tax basis, renting makes more sense than owning.  Commercial and residential real estate will take another big drop in the next two years.
Before signing any contract extending more than 60 to 90 days, make sure that you are protected against wild price swings and unusual government delays of any sort.
Be prepared to dump digital cash and digital assets, i.e., bank deposits and brokerage accounts, on very short notice.
Have you been putting off a decision about relocation?  If you already live in a major urban area in the West like Denver, Phoenix, or Cheyenne, you are much better off than if your job keeps you in Cleveland or Harrisburg.  Use this window to visit some of the best candidates on your list.
If you decide to purchase silver dimes and take possession, don’t be surprised to see silver drop even lower before gold and silver surge past their previous highs.
Now is the time to develop additional skills that might be marketable in tough times and to look for financially secure employers.  Plan ahead for the consequences if one of the major bread winners in your family were to lose their job.
Even in the middle of the recession, keep a vigilant eye on the early symptoms of hyperinflation.  Anticipate a Black Swan event.  Be prepared to implement Plan B instantly.

Make a Plan B

Let’s assume that my conclusion regarding the near future is a good working forecast and that the next two years are bad but not ugly.  Even so, each of us has to be prepared to change our direction and actions on the spot.  In my experience, the best way to do this is to have a genuine contingency plan or “Plan B” worked out in advance.
Start with the assumption that some aspects of your plan will not work or will be just plain wrong.  Once you have developed a plan and worked out the implementation, changing that plan to fit the circumstances that unfold is much easier and quicker than doing a Plan B from scratch.  Unless you need to plan only for yourself, the other great benefit is that family or friends or members of your prep group are all on the same page.  Do the discussion before the crisis.
Although it may not be a part of your action steps, I recommend that your Plan B specifically address possible trigger points and that you get buy-in to take action as soon as certain trigger points are reached.  Even during the next two years of recession, an abrupt turn to hyperinflation is a real possibility.

  • Be alert to the early warning signs of hyperinflation.
  • Have your money out of the banks before the lines of angry depositors form.
  • Buy gas or diesel and storage containers before prices take off.
  • Practice packing and know how long it will take and what you really can carry.
  • Get home or bring family home while airlines are still flying.
  • Be prepared to leave Dodge City near the front of the convoy.

 



Six Daughters in Camouflage: A Father’s Legacy by Michelle S.

From all appearances we are a typical family in our white trash, low rent neighborhood in the suburbs. Normal for our family of 9 has been living the last twenty-odd years on much more love than money. Scraping by, scrounging, bartering, repairing and repurposing things constantly in order to keep the home fires burning, gas in the tank, peanut butter and jelly on the table. Good times were relishing the pure gold of fat laughing babies, silly kids, and slow paced days when everyone was reasonably content at the same time.
What even our blatant survivalist solar panel/gun collecting/FedEx-bringing-cases-of- MREs- neighbor doesn’t even know is…

Ten years ago we found a parcel of raw land for sale in Central Oregon, in a heavily forested area of lodge pole pine trees, and purchased it at 100 dollars a month on a 10 year land sale contract. Near, but not on, a major highway that could be accessed by six routes from our hometown. Untamed, untouched, unimproved, 200 long miles away, worth every kid whimper and dog sick hour to get us there to pure freedom. The off-grid land is totally secluded, with a nearby canal that supplies sand and recreation, and at the business end, sports an artesian well with fresh drinking water. A place where seven kids and any size dog could run and play and scream and bark as loud as they wanted, without fear of the neighbors complaining or threatening our loud but harmless tribe of six daughters and one very active son.

Over the next few summers our little campground gained a driveway (Each tree pulled out with the truck and a chain or cut down and the roots painstakingly dug up with a discount-store shovel. We gathered huge pumice rocks and mortared them together into an outdoor oven. Handmade log benches ring the fire pit, and a distant forest neighbor sold us a tiny (18 ft.)  Travel trailer for $250. Garage sales and off-price surplus stores made it possible to outfit our camp on a free-school-lunch-eligible salary.
 Though summer was the busy season for his boat repair job, my husband joined us on the weekends and used a small chainsaw to cut a supply of 12 and 14 ft. poles that kept the kids and I busy making tipis and a very interesting outdoor kitchen shelter. This all happened mostly before I discovered the internet, so I patterned things after what I had seen on Gilligan’s Island and read about in The Mother Earth News back in the 1970s. It was a labor of love and a comedy of errors, but all ours.

Sadly, my husband passed away five years ago and with him the security of having a mechanic and someone to teach the kids more about hunting, fishing and driving. Lessons that began when they were small have prompted a competition between us to gather information and test our survival skills in real life scenarios on many occasions. The world has become a place where even a self-absorbed teenage girl can see the future need for a safe sustainable place away from the city. During our trips to the property, we have become familiar with the lay of the land, exploring all the forest service and BLM roads and trails with in a 20 mile radius. We know the locations of the nearest hiking/ATV/snowmobile trails, truck stops, restrooms, outhouses, creeks, lakes, wells, wetlands, ranches,  orchards, trailers, campgrounds, cabins, farms, hunting blinds, country stores, boat landings, public dumpsites, quarries, sawmills, railroad sidings, caves, ghost towns, mining camps and resorts. Escape routes and secure hiding places are entered in our handheld GPS. A mental list is forming of places we may be able to barter our winter salad greens and summer vegetable crops.

Driving into the mountains on our spring and summer vacations has not always been easy. One year an early snowstorm delayed us a week before I could dig the car out enough to get us back to school and work. The master cylinder in our old truck went out one trip while I was driving with 4 of the kids over the Cascade mountain pass, leaving me with no brakes in the middle of nowhere, (no cell phone signal). I coasted to the nearest town, not taking a breath, and thankfully we lived to tell the tale. Reliable, safe transport will always be our biggest hurdle if we need to get to our location in a hurry. We are also all aware of the route from the nearest Amtrak station within a day’s walk of the property. Aside from car repair issues, we have overcome many of the obstacles to living off the grid.
We have discovered that the batteries in our cheap solar garden lights can power our FRS radios and GPS. A bouquet of solar lights in a vase makes a perfect off-grid reading lamp. Our 1,000 watt Honda generator is used only for recharging 18 volt tool batteries and while that is happening, we can enjoy a DVD, crank up some tunes or play on the computer. For emergency backup we have a small inverter I can use with the car battery.
 
To amuse ourselves without wattage, along with reading, we use the bounty of branches and small trees to carve walking sticks, make log benches, small chairs and plant stands, and log furniture for dolls. We have discovered volcanic pumice rocks carve easily into self-watering planters, ashtrays and candle lanterns. These are used as gifts and/or for Saturday market sales whenever we have a good selection.
For heat we have a tiny wood stove in one of the tipis. We have always been able to keep warm even when night temps have been below freezing. The tipi frame is covered with chicken wire and stucco (ferro cement). Everyone sleeps with a down comforter. Washable duvet covers make everything easier to keep clean. These were purchased for a few dollars each at a Goodwill Outlet store, where clothing and most merchandise is sold by weight.
 
We have mastered the art of baking awesome biscuits, cupcakes and muffins at high altitude with a solar oven made of Mylar emergency blankets and an old storm window. Yeast bread gets baked (occasionally, as it’s a day-long task) in the outdoor stone oven, after a fire has been built in it. The sun tea jar is always brewing with a tea ball full of home grown Stevia leaves for sweetening. We can covertly cook baked beans and soups in a fire pit underground, and hot rocks cook foil wrapped chicken in our backpack while we work or explore. We also have a couple of propane backpack stoves and the adapter fitting to enable us to re-fill the small green canisters from a larger 20 pound cylinder.

For hygiene, we decided (after trying several options) five-gallon bucket toilets with cheap snap on seats are easier to maintain than the expensive flushable chemical camping toilets; as long as you have a supply of peat moss, saw dust, pine needles, sand or soil to bury waste in the bucket. For washing up, two milk jugs of warm water make a quick easy shower, one for washing, one for rinsing. We leave a line of filled jugs to warm on the sunny side of the gravel floor shower hut, or simmer a few minutes in the big pot while the dish washing water is warming. A fancier shower can be enjoyed with an air pump type garden sprayer tank. We have one handy for guests.   Obviously, you will want to use one that has not ever had any chemicals, fertilizer or pesticides in it.
 
During the school year in suburbia I teach indoor gardening classes, the kids attend school and in our spare time we do our research. We experiment with new Survival Log recipes (a high calorie/protein packed candy/cereal dough we invented made with storage foods that have a hundred delicious variations. (See my master recipe below). We plan new experiments and projects, plant seedlings, dehydrate foods and pack useful items that will be taken on our next trip. I read SurvivalBlog faithfully now and take notes from all the wonderful knowledge shared. We watch Survivor Man type man shows and laugh until we cry as they dramatize the obvious and almost die of hypothermia each day. If we are lucky we pick up a few useful hints that will be tried until true. We wrestle with our conscience whether or not to buy real rabbit fur hats and mittens, because someday our summer at the campground could last into the snowy days of winter. We decided the rabbits would be honored to save us from hypothermia.
 We have practiced and studied and experimented and now have the campground well supplied with caches of food, a well hidden root cellar/panic room, durable clothing, weapons, survival tools and gardening, medical and veterinary supplies.  Instead of being scared of an uncertain future we are continuing to prepare.

For now, my daughters (now high school and college girls) wear camouflage just for fashion. Not many people outside our family know that each and every one of them can make their own snowshoes, siphon gas, transform volcanic rock into a hydroponic garden, repair a bike, bake bread, shoot a wild turkey, sprout a salad, make a duct tape hammock, milk a goat, service a generator, purify water three different ways, catch fish with a bed sheet, navigate by the sun, disable an intruder, and start a fire 14 ways without a match.
Their Dad would have been so proud…

Addenda: Survival Logs Recipe
1 cup peanut, almond, cashew or other “nut butter”
1/2 to 3/4 cup honey, corn syrup, maple syrup, or homemade sugar syrup
2-3 cups crushed corn flakes, granola, crispy rice cereal, cookie, dry bread, pretzel, cracker or cake crumbs
Optional flavorings—dried milk powder, chopped dried fruits, sunflower seeds, chocolate chips, gumdrops, m&ms, candy sprinkles, chopped nuts, coconut

1 .In a saucepan, heat syrup to boiling, remove from heat.
2. Add nut butter, stir until melted and blend well.
3. Stir in enough cereal or crumbs to form a stiff dry dough
4. Knead in optional flavorings; form into candy bar size logs.
5. Roll in additional crumbs, coconut or sprinkles as desired. Wrap individually in wax paper or foil for travel or hiking food. Makes 10 logs.