Economics and Investing:

[UPDATED] Silver investors: Here is one of those dips that I mentioned! Silver at under $35 per ounce is a definite buying opportunity. $35 per ounce equates to around 25 times face value (wholesale), for pre-1965 “junk” silver coins. They were a whopping 37 times face just six days ago. Buy now!

C.D.V. send this: Underwater Mortgages a Threat to Recovery; Expect No More Than 3% Growth Until Housing Recovers

Portugal becomes third euro country to get bailout. (Thanks to G.P. for the link.)

Also from G.P.: About 1 in 7 in U.S. Receive Food Stamps

Former Comptroller David Walker: Restoring Fiscal Sanity in the United States: A Way Forward

Items from The Economatrix

Why People Are Buying Silver Now

Manufacturing Index Rises, Construction Spending Rebounds Breathe in deeply and smell the landluft— the barnyard scent of hundreds of billions of magically-created stimulus dollars.

Gas Prices And Debt To Dominate Congress In May

China To Purchase $1 Trillion In Gold; Price May Reach $2,000/oz This Year

Businesses Ordered More Factory Goods In March

The Slowing Global Economy

Odds ‘n Sods:

Beneath the Thin Veneer: Four looting suspects arrested in Pleasant Grove posing as relief workers. (Thanks to Wade C. for sending the link.)

   o o o

Selena S. recommended: How to Turn a Pallet into a Garden. (For preppers, this is most suitable for an herb garden.)

   o o o

Chris over at the ZeroGov Forums recommended this 10 minute YouTube video on the historical foundation of taxation: I’m Allowed to Rob You!

   o o o

My wife Avalanche Lily spotted this: On Small Farms, Hoof Power Returns

Jim’s Quote of the Day:

"Be not intimidated… nor suffer yourselves to be wheedled out of your liberties by any pretense of politeness, delicacy, or decency. These, as they are often used, are but three different names for hypocrisy, chicanery and cowardice." – John Adams

Note from JWR:

I’m pleased to report that SurvivalBlog is rapidly approaching the 30 Million Unique Visits milestone. We now have more than one million unique visitors per month. It is gratifying to see to SurvivalBlog readers in so many countries.

Please keep spreading the word about SurvivalBlog, to family, friends, co-workers, and a fellow church congregants. Adding a link to SurvivalBlog in your mail footer “.sig” or on your web page just takes a minute. Thanks!

Pat’s Product Reviews: AK-47 vs. AK-47 vs. AK-47

I’ve received quite a few e-mails from SurvivalBlog readers, asking me to write an article on AK-47s. Well, here’s my take on the AK line-up. First of all, I only write about guns I actually own or have personally tested. I don’t take a press release and write an article based on that, like some writers (that I’ve heard have done.) There are so many different variations of “AK-47s” out there these days, it would cost me a fortune and a lot of time, to obtain samples of ’em all to test and evaluation.

The question always arises, which is better, the AK-47 or the AR-15? Well, as I’ve mentioned before, there is no “better” when it comes to guns and knives, it’s all in the perspective and intended uses of these tools. So, if you’re looking for a debate as to which gun is better, this isn’t the article. I will say, that without a doubt, under extremely adverse conditions, where regular maintenance is far and few between, the AK-47 is more reliable than the AR-15. However, I’ve yet to see an AK-47 that can hold a candle to an AR-15 when it comes to accuracy.

For this article, I tested the NoDak Spud, two Century Arms and the new ATI AKs. The Century Arms line of AK-47s have really gotten a bad reputation, and most of it, I honestly believe, is undeserved. I don’t know anyone at Century Arms, and my samples of their products were purchased out-of-pocket, so I don’t have a dog in this fight. I will say though, that for a short time, those workers at Century Arms who were assembling and modifying imported AK-47s, weren’t paying close attention to some of the details, And to be honest, the AK-47 is really hard to screw-up when you are putting ’em together or modifying ’em.  I’ve owned more than my share of Century Arms AK-47s over the years, and I’ve only had an issue with one of ’em – the gas piston was ever so slightly bent, causing it to bind inside the gas tube, which didn’t allow for 100% reliability. It took only a few minutes to correct the problem.

My local gun shop sells a lot of AK-47s, and there’s a good reason for it – they are affordable and reliable. Most of the AKs they sell are from Century Arms, in one of the many configurations that Century produces. One of the problems they have observed over the years is that the front sight is canted and not in-line with the rear sight. There is no reason for this, other than a failure of quality control on the part of Century Arms. The problem is usually easily corrected if you have a bench vise and a little bit of knowledge. Still, there is no excuse for this sort of sloppiness, if you ask me. Another common complaint about Century AKs is that, the forearms and stocks are usually sanded (to take the dings out – these are military surplus stocks) – and Century doesn’t take a few extra minutes to spray on a coat of lacquer on the wooden stock or forearm. Again, this can be easily corrected by the purchaser at home.  

One must keep in mind, that the Century Arms line-up of AKs, are very affordable for the most part – they have a few that are a bit more spendy than the others, but most of the Century AKs are made from Romanian parts. Some gun snobs will turn their noses up at a Century AK that has the “Made In Romania” stamp on the receiver. Truth be told, these are parts guns, assembled and fitted here by Century, using the correct number of US-made parts, to make them legal. I’m not going to get into the 922(r) compliance thing, you can look it up on the ATF web site if you want – the law is stupid, plain and simple!

I tested two Century AKs, one was the WASR-10 with a full wooden stock, and the other was the WASR -10 with the under-fold stock. Both guns were great shooters, simple as that. I did have two failures to feed on the first magazine through the under-fold stock, and I expected that – there were some burrs on the bolt or receiver rails. After the first two failures to fully feed, the under-fold version just plugged along without any problems. The full wooden stock WASR-10, it never missed a beat from beginning to end. Accuracy with both of these Century AKs was running around 4″ at 100-yards – that’s about as good as I can get with most AKs. There’s a trade-off when you want more reliability – you lose some accuracy potential. I understand that the AKs that are coming off the Century Arms assembly line these days have USA-made barrels, and I would expect slightly better accuracy with these new barrels. Again, this is another stupid ruling from the folks at the BATF: AK parts sets can no longer be imported with the barrels. So they’ve resorted to using US-made barrels on the guns. On both of the Century samples I tested, and on many other Century AKs, I’ve found really great trigger pulls – most around 3-1/2 pounds. I believe this is due to the Tapco trigger and sear that Century uses. Again, certain parts on imported AKs have to contain a certain number of US-made parts – like a Romanian trigger and sear somehow makes an AK a “bad” gun, and a US-made trigger and sear make it a “good” gun.

I also picked-up a well-used AK-47 that had “NoDak Spud” marked on the receiver. Near as I can tell, NoDak Spud only makes the receivers and other folks assemble them into AKs of some type. Whoever did the work on this gun – didn’t know quite what they were doing, in my humble opinion. First of all, the attempt to parkerize the gun wasn’t successful – the gun easily picked-up rust in our damp climate of Western Oregon – even though I had sprayed Birchwood Casey Barricade on the entire gun. The NoDak Spud sample was very rough, to say the least. Whoever assembled it, also forgot the retaining spring, that is used to keep the trigger pin in place, and the pin would work itself out, binding the action up, until I could break it down, and get the pin back in place. I corrected the problem with an e-clip and the pin never worked itself loose again. (A 7 cent fix!)   The wood on the forearm and the stock were rough, and I cleaned ’em up with some sandpaper and steel wool. I then prepped the wood with some primer and spray painted the stock and forearm in a flat back – the gun was looking better at this point. Aside from the aforementioned trigger pin working loose, there were no malfunctions of any type during my testing. Accuracy was what you’d expect – in the 4″ range at 100-yards, if I did my part. I used a variety of Wolf and Brown Bear Russian-made noncorrosive ammo in my testing. It is inexpensive and it always goes “bang.”

The last AK I tested is from ATI, and it is quite a step up from the Century Arms AK. Only slightly more in cost, too. The ATI version of the AK has a milled receiver, the NoDak Spud and Century Arms versions have stamped receivers. The obvious quality in workmanship is there on the ATI AK, you can see it and feel it. The ATI weighs in at about 3/4 of a pound more than the stamped receiver AKs. The ATI also comes in a nice hard plastic carrying case with two magazines, instruction, cleaning equipment, etc.   The ATI AK was nicely blued, and there were no sharp machining marks on the gun – and it’s marked “Made In The USA” too – that means a lot to some folks – me included. The ATI was a much tighter gun than any of the other AKs I’ve owned over the years, and I expected some malfunction because of this. I tested the gun dry – no lube – and it never missed a beat. Then again, it’s an AK – they can take all kinds of use and abuse, and keep on going. The forearm and stock are made of wood, and it appears that the forearm is from Russia – both the forearm and stock were nicely finished and covered in a clean lacquer for weather-proofing the wood – nice!   I expected the ATI to shoot better than the Century Arms and the NoDak Spud – well, it did, but only by a little bit. If I did my part, I could get groups at 3 1/2 inches at 100-yards, but not all the time. Still, the quality is there in this ATI version of the AK…my local gun shop has another ATI AK sitting there, and I’m thinking real hard about getting it, too – just takes money.

One thing that I have found common in most AKs is that, the magazine usually have to be fitted slightly. Keep in mind, AK magazines are made in a lot of different countries, by different tooling, and some makers don’t take the care we take in the USA to make sure things are nice and tight. The two mags that came with the ATI would lock in the mag well, but it took two men and a small boy to get the mags out. A couple minutes with a file took a small amount of material off the mag stud (lower portion) to make the mags fit properly. The same was done with the NoDak Spud and Century Arms AKs. I like my mags to snap in and out without a lot of effort, and once the mags were fitted, I sanded down the lower portion on each mag stud so it was nice and smooth. The mags – all that I have – and it’s a lot – will lock-up and come out of all my AKs without any problems.

There’s a lot to be said for the 7.62×39 round. It can reach out there and touch someone a little harder than the .223/5.56mm rounds can. However, the .223/5.56mm rounds do more damage – at least when used within the limitations of the distance involved. The .223/5.56mm rounds do more tissue and organ damage than the 7.62×39 rounds, when up and close and personal distances are involved. So, we have longer range possibilities with an AK because of the round – it’s heavier and a bigger caliber and had greater retained energy, at range. However, with the AR, and the 5.56mm round, does more damage and the ARs are more accurate. You can also carry more 5.56 ammo than you can 7.62×39 ammo – if that’s a concern. [JWR Adds: The AK-74 is chambered in 5.45×39, which has similar weight and size characteristics to 5.56mm NATO.] AK magazines are also more rugged than the standard alloy AR magazines.

Honestly, you can’t lose if you pick an AK-47 of just about any type for your survival purposes. If looking into a Century Arms AK, I’d take a close look at the front sight, and make sure it’s not canted from dead center. And, work the action – make sure it doesn’t bind before you buy the gun. I know, Century Arms backs-up their guns, but it’s a pain-in-the-butt to have to send back a brand-new gun for repairs.

The Century Arms AKs I tested, run in the $500 price range. The NoDak Spud – about the same. The ATI I purchased was $569 and it honestly was worth the little bit of extra over the Century Arms version, in my opinion. The quality and workmanship were “there” with the ATI version. Some of you asked me to review the Arsenal line of AKs – I’ve only handled them, and couldn’t bring myself to pay the extra money over a lesser AK version. If I’m gonna be spending $800 – $1,000, you’d better believe I’m gonna be looking at an AR of some type.

So, don’t believe all the horror stories you’ve read on the ‘net about Century Arms AKs – for the most part, they are putting out some really good AKs, for a good price. However, if your budget will allow it, take a look at the ATI AK – I think it’s worth the extra money. In any case, it’s hard to beat an AK-47, no matter who makes it, it’ll save your bacon, when the chips are down.  – SurvivalBlog Field Gear Editor Pat Cascio

JWR Adds: Let’s face it: Most folks do not have the cash for a “Cadillac” solution like a Valmet M62 or one of the new SIG 556R rifles. (The latter outwardly looks like a SIG 556 but it is chambered in 7.62 x39 and uses standard AK magazines.) Rather, I recommend a “Chevy” solution, like the Bulgarian AK or the Russian Saiga AK. They are relatively inexpensive, but very reliable. The “Chinese Bicycle” solution is to find a used SKS carbine. These use a 10-round fixed magazine, but these can legally be replaced with a 30 round “semi-detachable” magazine in most jurisdictions.

Letter Re: Observations on the Recent Tornadoes

Dear James,
As most of your readers know, on Wednesday, April 27, 2011, one of the worst tornado outbreaks in history hit the Tennessee River Valley area of northern Alabama, northern Georgia and south central Tennessee as well as parts of north central Alabama such as Birmingham and Tuscaloosa. Over 140 people were killed in northern Alabama alone and the final death toll from these storms will probably exceed 350. Hundreds of people in these areas lost their homes and are suffering greatly as a result. Please pray for these families as they cope with the loss of property and, mostly sadly, the loss of loved ones. The storm also affected the lives of most inhabitants as all of the main transmission lines from the Tennessee Valley Authority in northern Alabama were damaged or destroyed by tornadoes and high winds, leaving almost half a million people without electric power. This included those from the Brown’s Ferry nuclear plant (whose three operating reactors all went into emergency shutdown). Our power was out for more than four days.

As a resident of these parts, I have some preparedness observations! On our community’s level, most gasoline stations lost their power, and therefore their ability to pump gas. The same was also true of grocery stores. About two days passed before generators were brought in to power some gas stations and food stores, and the first stores to open quickly had long lines of people. Fortunately, some grocery stores opened even before they had power – but they would not allow people inside the stores as they were too dark. Why are grocery stores not made with windows all around the building to allow some light in? One had to give an order of desired non-perishable items to a store employee, who then would proceed into the store with a flashlight to find and bring them! It underlined to me that most people do not seem to even have a few days of food or gas stocked up to meet even a short term crisis as this. We were very fortunate that this was basically a widespread local event and not a national event, as trucks still brought in supplies, food and gas. The main problem was the lack of electricity to pump the available gas or to preserve frozen and refrigerated food and power the stores’ lights and payment processing systems. Now on a personal level, we did fairly well but there were a few things we could have done better. I will list categories of items and what we did in each category. My hope is that this will be beneficial to most of you to hear about real life preparedness and how it played out in this admittedly not totally TSHTF event.

Food: We were fortunate to have a decent quantity of high quality grains (including whole wheat, millet and oats). We were also fortunate to have a generator which we used to keep our refrigerator running and preserve the frozen and refrigerated food we had. To prepare grains, we have a hand-cranked Country Living Grain Mill which is awesome at preparing quality flour. For cooking, we used our Alpaca kerosene cookstove. We had plenty of kerosene for this (which we normally keep on hand to power the kerosene heater we would use if it were cold outside and a power outage occurred). Fortunately the temperatures were very nice (even if the volatility of the weather wasn’t!) and we only needed the kerosene for cooking purposes. We also have a Grover rocket wood cooking stove that we could use if needed, but the kerosene stove is a bit easier to control. We were a bit low on fresh fruit when the weather struck, and it would have been nice to have more on hand than we did. Fortunately, one of the grocery stores that opened the day after the storms had plenty of fruit and we were able to purchase some while only waiting 15 or 20 minutes in line. That was a real blessing!

The preceding reminds me of another point: Having cash! While some stores (such as Lowe’s and Home Depot) quickly activated backup power and were able to process credit/debit card transactions, most grocery stores could not. The store where we purchased our fruit was calculating prices the old fashioned way: calculators and pencils and open cash drawers! My advice is to have plenty of food that can be stored at room temperature! While we were able to keep our refrigerated food from spoiling with our generator, we still would have been fine without it (although our diet would have been a bit different!).

Water: Fortunately, we never lost water service during this event. Water was always available on tap whenever we needed it. However, I wasn’t sure that we would always have water, so I filled up a bathtub with water to use for flushing toilets and the like if needed, and filled up potable water containers for drinking water. We also have a Berkey Light water filter that we use on a regular basis already. I recommend having your water resources squared away before a crisis occurs!

Fuel: Within a day after the disaster, long lines formed at the few gas stations that were able to quickly get emergency power. While we were fortunate to have half a tank or better in our three vehicles, we did not have much gas in storage containers. It was one of those things that I had wanted to do but did not yet get around to doing. Most of you know how that goes! I had roughly a gallon and a half or so of gas to run our generator, which would only have given us at most two days of run time. I tried to siphon gas out of our vehicles but it seems that most newer vehicles these days have anti-siphoning systems. My advice would be to ensure that you have enough gas on hand to run your generator for a week. Fortunately, the son of our neighbors (who were out of town) had come by to check on their home and had power in his town (about 30 miles away). He was very kind and gave us gas on two occasions so that I did not have to stand in the long lines at the few pumps that were open. This was enough to see us through until power was restored. But my advice is not to be dependent on others’ charity if at all possible! Make sure you have enough fuel on hand to weather (pun intended!) the most likely crises you might face. Also, be sure to have plenty of fuel on hand for any non-electric cooking devices you plan to use in a crisis. In our case, this was kerosene and wood. We added PRI-D preservative to our kerosene, and our kerosene heater worked great on three year old kerosene that was so treated.

Lighting: It is amazing how dark it can be inside a home without power! Fortunately, we had plenty of flashlights and the batteries needed to power them. Most of our flashlights were LED and therefore put out a lot of light with minimal energy use. We also had some oil lamps that we had purchased back during the Y2K scare at the turn of the millennium, and we used one of these along with some candles during this time. We stationed flashlights in each bathroom to make it easy to use the facilities. I recommend everyone have plenty of LED flashlights and batteries on hand.

Security: Due to the widespread lack of power, the local authorities imposed a dusk-to-dawn curfew on the whole area. Reports so far seem to indicate that crime either remained the same or actually went down during this event. Our local police were very vigilant and I saw them stopping a curfew violator right in front of our home! We also had our own security implements (firearms) available and well stocked with ammunition. Fortunately there was no need to use them, at least so far, during this time.

Finances: As I alluded to earlier, many of the businesses that were open but had no power operated on a cash-only basis. We were fortunate to have some cash on hand to pay for goods. I was amazed that Lowe’s quickly had activated backup power and was actually processing credit card transactions (and I used the debit card when I could) but this was the exception rather than the rule in the first day or two after the widespread power outage occurred. When it comes to purchasing, cash is king in disasters. Keep plenty of cash on hand at all times!

Charity: One way to emotionally deal with a disaster is to reach out to others. By God’s providence, I was able to help with some of the cleanup efforts in one of the towns that was devastated by the tornado outbreak. I realized how fortunate we were as most of the homes in the neighborhood I worked in were totally destroyed and unsalvageable. Carrying debris from devastated homes and yards to the curb is a sobering experience but was very helpful. Some of the residents of these homes were there helping to clean up as well and expressed great appreciation for the help. But in order to administer help to others, it is important to have one’s own house in order first! I am a follower of Jesus Christ, and reaching out to others is a desire all true believers have. So, I encourage all of you who know Him and accept Him as Lord of your life to cultivate your relationship with Him and your relationships with others who know Him. Part of the community of believers is reaching out to others in need.

My prayer is that our experience in the midst of the recent tragedy in northern Alabama would be helpful to the rest of you. Blessings, – R.A.

Economics and Investing:

I called this one right: Silver struggles again after futures market raises margin requirements. (Back on April 21st, I had written: “Also, be forewarned: The COMEX Governors are soon likely to slam on the brakes on the precious metals markets by changing their trading rules. (Most likely by raising margin requirements.) Prices will get very volatile. Be ready to take advantage of any steep sell-offs.”)

D.B. in Seattle suggested this piece by Niall Ferguson: Sticker Shock. It begins: “The Fed may deny it, but Americans know that prices are rising. In this week’s Newsweek, Niall Ferguson takes a look at the Great Inflation of the 2010s.”

Loyal contributor C.D.V. forwarded this: John Williams: Hyperinflation and Double-Dip Recession Ahead

David W. sent this: Detroit’s exodus will continue without a revival. A 25% loss of population in the past decade, and no end in sight!

Items from The Economatrix:

Weak Dollar Gives US Factories Strong Lift ’11

Bin Laden’s Death Lifts Dollar But Hits Gold, Silver, And Oil

Think or Swim Hikes Silver Margin to Double That of CME

Never-ending Money Printing

Stocks Wobble As Earnings Rally Slows

Oil Falls On Stronger Dollar And Supply Forecasts

Odds ‘n Sods:

Steve M. sent this interesting article link: Special report: As pirate attacks grow, shipowners take arms

   o o o

Humor Mode On: When planning your food storage program, don’t overlook your dog. (A special hat tip to B.B. for the link.)

   o o o

Greg N. suggested this: Thoughts after the devastation.

   o o o

K.A.F. mentioned that the American Prepper’s Network offers free downloads as well as “at cost” CD-ROMs of dozens of survival and self-sufficiency books.

Letter Re: Observations on the Recent Tornadoes

Mr. Rawles, I just finished reading the letter from R.A.  “Observations on the Recent Tornadoes”.  I live in the northern Alabama area also, less than five miles from the path of what has just been reclassified as an EF – 5 tornado. (For your readers in non-tornado prone areas, an EF – 5 is the most powerful category of tornadoes with winds in excess of 200 mph, completely tearing even substantial concrete and brick buildings from their foundations), and I can agree with the author’s points.  A few additional comments:

1)      Have a good radio handy that includes both a NOAA weather channel and normal AM/FM stations, and make sure it has multiple sources of power.  Alabama alone experienced over 20 tornadoes last Wednesday, and the stormy day began in the early morning, with multiple rounds of severe weather broken by short periods of calm until around 6:00 p.m. when the final tornadoes moved through.  Although I find that our local weather forecasters on television provide the most precise info as long as power is up, the NOAA weather radio is incredibly important once power goes out, but more rounds of bad weather are still expected.  And once the storms were over, the normal AM/FM stations were a lifeline to the world.  For five days we had no power, land-line phone, or internet, and only spotty cell service.  My radio, with those wonderful Eneloop batteries and a hand-crank back-up, provided all our sources of information. 

2)      It’s very helpful to have FRS or GMRS radios to communicate with trusted neighbors.  I had saved back an old-fashioned phone that requires no electricity for use, knowing that in a lack of electricity most land-line phones used these days won’t work.  I still think that’s a good idea to have one of those .  But when the phone lines are taken out too, it doesn’t matter what type of phone you have – it’s not going to work – and relying on a cellular network is taking quite a chance.

3)      I had no refrigeration capability, and decided to try an old method of keeping some juices, water, sodas, etc. cool.  I watered down several small towels, wrapped each bottle in one, and set them in areas where they would receive a slight breeze.  I re-wet a couple of times each day.  Even though our daytime temps were in the 70s, I managed to have cool drinks due to the evaporation/wind effect of the wet towels.  I don’t suggest trying this with milk or other products that are more easily spoiled, just items that taste better when cool.

4)      Support local law enforcement efforts, and work to elect common-sense officials.  When up to half a million people are without power ( the Huntsville metro area had NO power coming in to the utility grid for several days), some places would be making headlines for the crime and looting.  The night of the tornadoes, we had a looting attempt in which someone tried to break into a gas station.  To head off crime waves, our city police and county sheriffs worked together to implement a dusk-to-dawn curfew that was unilaterally enforced, and as R.A. commented, completely minimized crime for the duration .  It allowed the police to focus on dealing with true emergencies resulting from the lack of power rather than on looters and traffic accidents resulting from a lack of lights at night.   

It was a temporary public safety restriction, but a very practical one that was supported by even my most libertarian friends, and it was lifted as soon as the majority of the power was reestablished .  And lest you think that our sheriff is a liberal, eliminate your rights individual, in his same announcement about the curfew, he made it quite clear that “you have the right to protect your property”.   That looting attempt I mentioned?  The alleged offender was shot and killed by the gas station owner.  No charges were filed against the gas station owner, and it was made quite clear where law enforcement sympathies would be.  Given the number of gun owners around here, looting never got off the ground after that and we remained crime-free during a week of the worst natural disaster this part of Alabama has ever experienced.

I encourage your readers to pray for the 250+ families who have lost loved ones and the thousands of families in this state who now have either no home or a home too damaged to live in .

Thanks for all you do, – C.K.

Note from JWR:

Today we present another entry for Round 34 of the SurvivalBlog non-fiction writing contest. The prizes for this round include:

First Prize: A.) 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 B.) Two cases of Alpine Aire freeze dried assorted entrees in #10 cans, courtesy of Ready Made Resources. (A $400 value.) C.) A 9-Tray Excalibur Food Dehydrator from Safecastle.com (a $275 value), D.) A $250 gift certificate from Sunflower Ammo , and E.) An M17 medical kit from JRH Enterprises (a $179.95 value).

Second Prize: A.) A Glock form factor SIRT laser training pistol. It is a $439 value courtesy of Next Level Training. B.) 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, C.) A $250 gift card from Emergency Essentials, and D.) two cases of Meals, Ready to Eat (MREs), courtesy of CampingSurvival.com (a $180 value).

Third Prize: A.) A Royal Berkey water filter, courtesy of Directive 21. (This filter system is a $275 value.) , and B.) Expanded sets of both washable feminine pads and liners, donated by Naturally Cozy. This is a $185 retail value.

Round 34 ends on May 31st, so get busy writing and e-mail us your entry. Remember that articles that relate practical “how to” skills for survival have an advantage in the judging.

Surviving Foreclosure, by Cindy D.

I know there are a lot of intense feelings out there about people who have had a foreclosure.  I wanted to write about my experience to help others that may be facing the same situation. Even though I may write this very simply and factually, it was a very emotional and devastating time in my life. I learned a great deal but don’t want to ever go through it again.

I want to preface my story with a little background. My husband and I have been married for 28 years and have always been fortunate enough to pay our bills on time. We also had very excellent credit. We were like so many others-ill prepared for the economic “downturn”.  Yes, we spent almost every dollar we had and even those we didn’t have. We owed lots of money on credit cards, PLUS school loans and a car; we even had a mortgage on a home we couldn’t really afford. We made a lot of bad choices! My husband and I both had good paying jobs but never could get ahead or stay out of debt.  My husband had transferred with his job twice since 2000. We moved to another state and then back into our home state. Each time we were fortunate to make money on the sale of our home. We’d take the money to pay off our credit cards, and roll the rest of the cash into a down payment on the next home.  The home that we purchased (that was foreclosed on Sept 2010) was the most expensive. We just assumed we would continue making money when we sold it too.  The plan was to sell this house in 3 years at the same time my husband would retire and we would then move near our families (both of us have mothers that aren’t in the best of health and live five hours away) and use the “gain” to buy a small inexpensive home we could afford on our reduced income.

The problem with our plan was unexpected income reduction. While we didn’t lose our jobs, many were laid off in both of our companies.  Job security began to be a major concern for both of us as each week and month more were being laid off. My husband’s company needed further measures to stay competitive and remain in business so they cut his salary.  I made the adjustment in our Money program and made changes to stay in the black with our budget.   

Our number two daughter came home one weekend to have her father help her to find a good used car. We did not feel we could co-sign for her loan like we did for our number one daughter as finances were much tighter. We did give her a down payment courtesy of our credit card. She went back to work on Monday and was laid off.  She had recently graduated from college and wasn’t in her job long enough to qualify for unemployment benefits. She now had rent, a car loan, car insurance, expenses and health insurance needs. We helped with what we could and advised her she needed to move back home as we couldn’t afford to continue to pay her rent and expenses.  She came home to look for work but couldn’t find anything. She needed to go back to the larger city to look for employment.  We sent money and I made adjustments to our Money program and adjusted expenses in our budget to stay in the black.

Our number one daughter was laid off her job a month later and began looking for another one without success (she lived with us but there were no jobs in our town. The job hunt spread to the large city 1 hour away then the even larger city five hours away).  She had an auto loan that we had co-signed for, auto insurance, a chronic health problem that required regular medical attention thereby requiring she keep COBRA health insurance, and school loans. She had been in her job for two years since graduating from college so she did receive unemployment benefits but not enough to cover all her expenses. I made adjustments to our Money program and budget and began to get concerned. 

Our only son was one semester away from graduating at the state university five hours away. We told him we could not afford to send him that semester and he needed to find full-time employment to pay for school or come home. He looked for a couple of months and moved in with daughter number two but could not find even part time work for more than 10 hours a week.  He was using the 10 year old family minivan for transportation when the transmission broke and he came home. 

A month after our son came home he received an offer for a non-paying internship position with our state government, a five hour drive away. This was one of the many applications he had filled out while looking for work.  My son, husband and I were very hopeful that this might lead to a job offer when the internship was over.  But again it was a five hour drive away. He couldn’t commute.  I looked at our Money program and instead of the brief dip into red and then back into the black, the red continued down, down with no end.  Our son would need a place to stay, transportation, money for food, gas, and a new wardrobe (the job required business attire and our son had a college wardrobe with 1 suit for interviewing).

This is when I realized that we needed to make some big changes.  This is probably where my decision to have our home voluntarily foreclosed has some people going ballistic. We had listed our house for sale and had three or four people look at it – one for every month it was on the market. We also had lowered the price to rock bottom. We had put $85,000 down on it three years ago but were asking less then we owed on it. We weren’t trying to make money or even break even- we just wanted out and an opportunity to help our children and give ourselves a chance to get out from our enormous debt.  No one even made an offer. The Money program was telling us a very bad thing was just down the road.  My husband didn’t want to believe we were just months away from being unable to meet our obligations. He didn’t believe until I showed him all the red. One event, an unplanned expense could ruin our excellent credit rating and make us delinquent on our mortgage. Eventually we were going to reach the point of not being able to pay all of our bills when due anyway and lose our house. 

The first thing I felt we needed to do was secure another place to live.  I had recently come across SurvivalBlog and was a ready believer in preparing for tough times ahead. I only wish I had known things were going to get bad financially sooner or that I had paid attention to all the signs that were out there.  After much debate, we decided to try and get pre-approval for a home loan and we were accepted by two lenders – go figure.  We drew up our want list and what we could afford to pay. (This time is was what we thought we could afford not a percentage of our income. We also figured how much cash we could come up with for a down payment). My husband had more vacation time (as he was with his company for 27 years) so he took off on Fridays to look for a new home.  We were looking in the Southeast (sorry Jim, this was a compromise as we felt we weren’t ever going to move again and we wanted to be near our mothers and our children- within two hours of family). We didn’t want to be any closer then that to the large city.  We felt if worse came to worse all the kids could live with us and still commute to work when they found a job.  Also on the wish list was room for a large garden.  My husband looked all around the state within two hours of the state capital.  He liked the mountains the best but needed to find a home with a suitable spot for a garden. 

Finally after nearly giving up he found our home.  We’re in a small town (outside town limits) in the mountains.  We have a small two bedroom cabin with a loft and full basement.  We cashed in my retirement account (it was small) and a Roth IRA that we managed to put some money into before things started crashing down. We went through the most intense final loan approval we have ever dealt with for our “retirement” home.  This is where 28 years of excellent credit worked in our favor. As this is the last time we will have excellent credit for a long time.  

We closed on our new home in April 2010. We were foreclosed on our old home in September, 2010 after missing four mortgage payments. It is scary to think how close we were to losing everything and being out on the street.  The home we bought was also a foreclosure and had been empty for about 18 months.  It needed some work and TLC.   In summary we have turned over a new leaf financially and are very grateful for our second chance.  Since we have reduced our housing expense we were able to:

  1. Pay off our credit cards (except what we just borrowed to pay the IRS – it’s expensive cashing out retirement accounts early)
  2. Pay off the PLUS loans for our children’s education
  3. Have our son take over the car payment for our newest and only unpaid for car (he got the job after the internship and needed transportation)
  4. Make repairs and upgrades to the house paid in cash – finished two rooms in the basement for laundry and home office. (I’m able to telecommute in my job.)
  5. Fenced in the property and garden with help from our son and our future son-in-law.
  6. Begin self sufficiency prepping: We cut down trees and graded for a garden.  My husband built 13 raised beds measuring 4×10 for this year’s garden and he plans on building seven more, next year.  Bought a dump truck of organic growing mix to fill the beds. The beds are planted with potatoes, peas, tomatoes, squash, eggplant, cucumber, cabbage, peppers, onions and broccoli. I still need to plant melons, winter squash and beans.
  7. Planted grapes, raspberries, blackberries, blueberries, peach and apple trees to be as self-sustaining as possible.
  8. Bought five day old chicks that are now ready to go out into their chicken coop and moveable (think chicken tractor) run in the garden.
  9. Begin self defense prepping: Purchased a shotgun and handgun.  Have several months supply of food, first aid supplies and several cases of canning jars in anticipation of the harvest.

Update on our children [– Omitted by JWR for brevity and to protect the author’s privacy.]

I am very content now knowing that we have a safe and secure place to live close to our family. I would not have chosen this way to get here. I wish I had made better decisions with money.  I have learned many important lessons this year. We did survive foreclosure. It was a very hard decision we made to stop paying our mortgage. We did it to survive financially, to assist our children and to have the opportunity for a better life if the SHTF. It cost us money, our financial reputation and anguish. I don’t suggest it if there are any other options. I don’t expect others to go down with a sinking ship why should I expect it of myself.  Everyone has to make decisions based on what is best for them. If you’re facing the inevitable foreclosure, do something offensive, don’t wait until you are dragged from your home to make plans for housing.  I hope that my experience helps someone else survive foreclosure.

Letter Re: Corn Burning Stoves

Sir,

Just wanted to thank you for your blog and all the good information available through it.  Several times in the section on selecting the midwest for a retreat, you mention the lack of available fuel sources.  Corn burning stoves are fairly common in this part of the country.  They tend to be in the hands of those who don’t pay retail for corn at this time, and certainly given modern means of agriculture the Midwest (Kansas, Iowa, South Dakota, Nebraska) can produce enough corn for its people and corn stoves.  Who knows if this would hold true in a disruption that moved agricultural production back a century;  on the plus side, the appetite of the ethanol refiners for the stuff would be quenched. – M.L. in Iowa

JWR Replies: Pellet and corn stoves require electricity. They are also more complicated to maintain than a traditional wood or coal stove. If either motor in the stove fails, then you have no heat. As I’ve mentioned before in SurvivalBlog, I do not recommend them.

Further, you have to consider the Energy Return on Energy Invested (EROEI) for burning dry harvested corn kernels, including the costs of the initial seed corn, fertilizer, pesticides, milling, transportation fuel, and finally the elctricity to run the pellet stove’s motors. Even if you have a plentiful supply of corn and a reliable off-grid power system (to provide power for your stove’s fan and auger), will all of your neighbors be comparably self-sufficient? If not, then you may be surrounded by folks that are both hungry and freezing.

I recommend that you move to a region where you can find a property with plenty of trees, or with a natural gas well, or with a surface coal seam in your back yard. Another consideration is the variety of crops where you live. If you live in a monoculture farming region, then chances are that it is a poor choice for self-sufficiency, post TEOTWAWKI. Truck farming regions make more sense.

Letter Re: Why Store Wheat?

Sir:
In response to the “Why Store Wheat?” letter, most people don’t realize that you can easily make your own sourdough culture, from scratch. The air is full of yeasts (most not as quick-acting as the brewer’s yeast used in most bread), and it’s easily captured. Make a ball of wet flour, and leave it on the counter. Better, leave it in a clean bowl with a mesh cloth or something on top to keep insects out, sitting in a warm place. The next day, add more flour and water and make a bigger ball. Do that for a few days, and eventually you’ll see it growing and bubbling thanks to wild yeasts. Voila, one sourdough starter.

Some people keep the flour much wetter, or don’t add new flour, and there are some people with specific recommendations for the time it should take (maybe a week or two), but in general, the idea is to get flour wet and leave it out a while. Some people will suggest you use rye flour instead of wheat, as rye has less of various substances that inhibit yeast growth; if you do that, introduce wheat flour to the culture slowly, so it has time to adapt. You’ll know your culture is healthy when you feed it new flour and water in the morning and find it’s nice and bubbly when that night; if you change flour quickly, like from rye to wheat, or even between different varieties of wheat or methods of grinding, you may find it doesn’t get as bubbly as quickly.

Sometimes (lots of the time, even), your new starter won’t taste terribly good, or the culture won’t be terribly healthy. If that happens, throw it away and try again. Perhaps leave your new flour ball in a different spot, or start it at a different time of year, in hopes of catching different kinds of yeast. Above all, find ways to use sourdough. If it’s not used regularly, the culture gets lazy and doesn’t behave nicely. I recommend regular use in sourdough pancakes, as well as the occasional (or frequent) batch of bread. – Josh T.

Economics and Investing:

Housing Crash 2.0 Is Accelerating

Jim Willie: Currency Dead End Paradoxes

Banksters Covered 26 Million Silver Oz Short Position. (Thanks to Chris D. for the link.)

Tyrone W. wrote to mention a Glenn Beck interview with G. Edward Griffin about the history of the Federal Reserve.

Items from The Economatrix:

Economy Slowed By High Gas Prices, Bad Weather

More People Applied For Unemployment Benefits

Currency Dead-end Paradoxes, The Besieged US Dollar