Note from JWR:

Last day of bidding!

The current high bid in the SurvivalBlog Benefit Auction is at $1,725. This auction ends at midnight (Eastern time) tonight–Sunday, February 15th. This auction is for a large mixed lot, which includes:

1.) A “be ready to barter” box of 36 full-capacity gun magazines, from my personal collection in JASBORR. This box includes: 12 – Used original Bundeswehr contract HK91 (G3) steel 20 round magazines, 6 – Used original Austrian FN-FAL steel 20 round magazines, with cartridge counter holes, 10 – Used AR-15/M16 USGI (all Colt made!) alloy 20 round magazines, 6 – Excellent condition original Glock Model 19 9mm 15 round pistol magazines (early type, with “U” notch), and 2 – New and very scarce original FN (Belgian-made) US M1/M2 Carbine blued steel 30 round magazines (marked “AYP”) . All of these magazines are of pre-1994 manufacture (and hence legal to possess in New York.) These magazines have a combined value of approximately $710, in today’s market. Note: If you live in a state where full capacity magazines are banned, then you must choose to: refrain from bidding, or designate a recipient in an unrestricted state, or re-donate the magazines for a subsequent auction.

2. ) A brand new-in-box Hot Jaw Bag Sealer and a box of 10 Mylar bags . (Every retreat group should have one these, since they are a tremendous labor saver!) This is a $200 retail value, courtesy of Ready Made Resources.

3.) A huge lot of DVDs, CD-ROMs and hard copy nuclear survival/self-sufficiency references (a $300+ value) donated by Richard Fleetwood of www.SurvivalCD.com

4.) A NukAlert compact radiation detector donated by at KI4U.com (a $160 retail value). 

5.) A gift certificate for $100 worth of books, courtesy of Back 40 Books.

6.) A case of 12 cans of recent production nitrogen-packed storage granola (mixed varieties) This is a $96 retail value, courtesy of CampingSurvival.com.

Thus, this auction has a combined value in excess of $1,565.

Again, this auction ends at midnight (Eastern time) on February 15th. Please e-mail us your bid. Your bid will be for the entire mixed lot.

Letter Re: Some Thoughts on Economic Stimulus, From a Macroeconomic Perspective

Jim:

I sent the following letter to my legislative representatives:

Here is macroeconomics as I see it:
Wealth comes from commodities, manufacturing (improving commodities), and agriculture (same principle).
Service industries do not create wealth, they distribute it. This includes financial industries.
Government consumes wealth as it re-distributes it. Even in the admittedly vital services such as protection of its citizens.

Fact:
There are already (pre-”stimulus”) more government employees than there are employees in manufacturing and agriculture in the US.

Observation:
The aforementioned being true, increasing the size of government is like a snake thinking it can sustain itself by eating its own tail. Three things will happen. 1) It will taste bad. 2) It will hurt. 3) Ultimately the snake will die.
Another way to look at it is to acknowledge that if government spending produced prosperity, the US would be at its most prosperous.
This proves the common wisdom of the advice to those who find themselves trapped in a deep hole. The first thing to do is to stop digging.

Strategies:
Consume less. The only credit problem we have is that too many (individuals, businesses, financial institutions, and governments) have used too much credit and amassed too much debt. This means you. When you have to incur debt to pay the interest on your prior debt, you are running a Ponzi scheme. Does this sound familiar?

Reduce taxes and simplify laws to give incentives to wealth creation. 1) Oil (or any energy production scheme that investors will back) will stem the flow of hundreds of billions of dollars out of our country. We have a lot of potential energy sources. These dollars can be used for further investment and job creation in our country. 2) Agriculture – Our country is blessed with the ability to efficiently produce food for our people and others throughout the world.

Reform the financial industry. Their accounting books should have all their assets and liabilities on them. Acknowledge that derivatives are a form of gambling (though even in Las Vegas the house makes you buy chips up front to show you are good for the debt).

Allow institutions that have made bad gambles to fail. If you want to finance something, help small and solvent banks that have made prudent business decisions to buy (or assume) the assets of the insolvent institutions at fire sale prices. So what if we have to learn the names of the new big (only) players in finance.

Stop demonizing the rich who have come to their wealth honestly. There are only three things they can do to prevent their wealth from helping the economy. 1) Burning it. 2) Burying it in the back yard in a (really big) cigar box. There it cannot help finance jobs or investment. They are not likely to do this anyway since this strategy cannot make them more money. 3) Investing it in financial instruments that are the (so far) legal equivalent of gambling. As noted previously, regular gambling is safer for the economy.

Final thought:
Government did not make our country great. Our Constitution made it great by freeing people from tyranny (be it from cheats, liars, bullies, or government) to become the best they can be by depending upon themselves. Please read the book “The 5,000 Year Leap” authored by Cleon Skousen.

Regards, – Kris N.

Letter Re: Getting the Right Training and Preparing Methodically

Dear Mr. Rawles,
I wanted to thank you for what you are doing and your work. I think that the reality is that you are saving a lot of people’s lives in addition to helping people to continue to be “in” the world but less and less “of” the world. I have been able, in turn, to pass along to other people a lot of things that I have learned from you and your readers, and I hope help them to focus and remain calm in their preparations. (I have also pointed them all to your web site).

Now three things that I have done/learned that I would pass along to your readers:

1) I did get some guns and ammunition recently following the information I learned from your web site and novel. Then I found a man that would teach me basic marksmanship – again as your advice suggested, learn the tools you could be relying on. After just one day of proper training I was shooting better than 90% of the yahoos at the range that had far better gear than I have. It cost me a little money But I am better equipped, more confident, and have a foundation to build upon – add each day I am at the range I am better and better. So I would tell your readers that if they just “think” they know what they are doing, then spend a little money and really learn what you are doing.

2) I bought and read “Patriots“. It was a good read, but sobering. At the same time, it helped me frame better the “problem” I am trying to solve. And while I hope it never gets that bad, it sure allowed me to get some perspective and begin to work things out in a way that fits my scenario. My advice would be for others to get your book and read it.

3) I purchased the “Rawles Gets You Ready” preparedness course. When I first started this process a few months ago, I was very overwhelmed. I noticed your course and its price and I thought – “Too much.” However, after reading the blog for a month or so and after reading your your book, I felt you could be trusted and that your course was not “hokey.” I have been very, very pleased. It is practical, well organized, and adaptable. There is a saying “How do you eat an elephant? – One bite at a time.” And your course helped me to get things aligned so that I could eat things “One bite at a time.”

I have been working on a one year preparedness program since the week after Christmas. I am probably 75% of the way toward where I want to be. The remaining 25% is probably one-half just finishing purchasing and storing some things and one-half understanding if my retreat location can handle some of my “plans” and if not, [then determining] what is Plan B.

My family and I would not be nearly so far along without your help. I wish we had started this process long, long ago, but c’est la vie. We are on our way now!
May God bless you and your family, Kind Regards, – Jay

An Invitation to the Baen’s Bar Forums, by Michael Z. Williamson

I’d like to extend an invitation to SurvivalBlog readers to visit the Baen’s Bar Forums, hosted by the sci-fi publisher Baen Books. My forum there has ongoing, detailed discussions of ARs, Mausers, handgun choices, and preparedness, mostly for natural disasters. There are also shameless plugging of my books (since it’s my forum). Be forewarned that there is some off-color language–PG-13, not R, and the religion and politics of members varies greatly, though there are other fora we send them to for those arguments. Registration is free, private and not shared.

My subforum is “Mike’s Madhouse,” and there are a variety of other fora of interest on the site. – Michael Z. Williamson

Economics and Investing:

G.G. sent this: Rogers Renews Bets U.S. Stocks Will Slump on Rescue.

From Brian F.: 25 People to Blame for the Financial Crisis:

Bill N. set a link to a speech transcript where a US Senator has the guts to point out the pork in the Stimulus Bill. OBTW, it is no wonder that the omnibus spending package is now widely referred to as The Porkulus Bill.

Items from The Economatrix:

FDIC Shutters Four Banks in One Day

Home Prices in Record Plunge in Q4

Economic and Financial Systems Deliberately Destabilized. A key quote: “There probably won’t be bank runs as in the 1930s. You will wake up one morning and find you are going to receive one new dollar for 10 old dollars and that new dollar will be for all nations, as they all devalue and default.”

Bank of England Says UK Economy Could Fall 6%— just three months after Alistair Darling predicted a fall of 1.25%

Could Obama Turn into a Zombie President? Here is a choice quote: “They have a plan for a plan, but they don’t really have a plan. The whole proposal is so vague as to create new uncertainty, and maybe the problem is really so bad that they haven’t worked out how to solve it.”

“People Really Hate You” US Bankers Told

US Retail Sales Unexpectedly Halt Six-Month Slide (JWR’s comment: I attribute this to all the ongoing frantic gun, ammunition, and full capacity magazine purchasing. Have you been to a gun show recently?)

UK Bank Regulator Resigns Amid Furor

Odds ‘n Sods:

KAF mentioned this post over at the Xavier Thoughts blog: The Sad Necessity of Anonymity

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Ebola Marburg Case in US Traveler to Uganda (A hat tip to FFF for the link.)

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Hawaiian K. sent us a link to a web site for a man dubbed “The Human Swiss Army Knife.” He regularly carries 1,300 compact survival items in his clothes.

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A follow-up to this article I mentioned yesterday: Congo town mounts own defense against rebels. Florida Guy sent us a link to a photo montage from the town.

Jim’s Quote of the Day:

“The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock. Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don’t think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes.

This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised. What happens if there is a meltdown in a country like Pakistan, which is a nuclear power? People react when they have their backs to the wall. We’re already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore.” – Tom Fitzpatrick, CitiBank’s chief technical strategist, as quoted by The London Telegraph in November 2008

Note from JWR:

This is last day! The big 25% off special on Mountain House and Alpine Aire freeze-dried foods in #10 cans, offered by Ready Made Resources ends tonight (Saturday, February 14th.) To do better than any competing offer, they are offering free shipping on case lots, and are including some free bonus items with each order. This sale ends at midnight tonight, so be sure to get your order in immediately!

Letter Re: Gold and Silver Coins as an Investment

JWR:
Christopher W. asks a very good question, “should you buy gold and silver coins as an investment?” I think this brings up the point that there are really two uses for gold and silver, as an investment and store of value and as a barter/trade item to facilitate commerce. Unless you want to overpay for an item, you will need change, which for every day purchases is provided by smaller silver coin. A friend on Wall Street put it this way “what are you going to do, chip a piece off a gold brick to buy some food?” Smaller coins can also be a good investment, in the sense that they hold their value better than paper money, but you will create more value faster with bars than coins, if it is return on investment you are after.

Countries with very limited or dysfunctional banking systems have this problem today. Any readers who have traveled to Third World countries know you have to keep your big bills (over $5) hidden away, the smaller bills are what you pull out to transact. Many vendors don’t have change — they are basically living hand to mouth and whatever they make is immediately consumed to feed their families. Also, in many of these countries, there is not a lot of coinage in circulation, hence the need for change. I’ve been in many situations where the item I want to buy costs the equivalent of $1, but I had to spend $5 to get it because I had no change. Fortunately, this was a tourism-travel situation and I viewed the extra cost as a kind of charity. In a SHTF scenario, charity might be limited to donations of items you could easily reproduce, like food from a garden. Coins will become much more precious.

Using gold and silver (and possibly platinum and other rare metals) as a form of investment implies a larger transaction size than those used for every day commerce. Maximizing your return on investment is the goal, not facilitating an efficient commercial transaction, so what is most important is to buy at the lowest cost possible. As an example, if the premium for an American Eagle [one ounce] silver coin is $4 per coin and the cost of silver is $13, you would pay $17 per ounce, a 31% premium. If you bought a large silver bar on the COMEX and paid for physical delivery, it would cost a little over $13, a few percentage points over the actual silver cost. So if you bought 5,000 ounces of silver in American Eagles, it would cost $85,000, while 5,000 ounces of silver in bars would cost $65,000. You could own another 1,500 ounces of silver bars for the same amount of money compared to coins, in this example. When it comes time to sell, silver bullion coins can be counted quickly (assuming they are still in their sealed U.S. Mint boxes, 500 per box), but they will not command the same premium paid when they were purchased. Bars, even though most dealers accept them as genuine as they are serialized by the manufacturer, could require an assay in some circumstances (up to $300 per bar). . Most investment metal traders will be set up for this occasion and in an investment scenario it shouldn’t be a big deal. In large volumes, the coin premium is a significant cost that cuts into investment profits.

The bottom line is you should start with coins, junk silver is very good, as well as some gold coins. If you are fortunate enough to have completed all your other preps and have money left over for “investment”, you will want to go with bars. – CK

Two Letters Re: Denominating in Time Versus Dollars

Sir:
I bought a cross cut saw on eBay and was wondering how one might sharpen and care for it. I was directed to a USDA Forest Service web site that has a 30 page downloadable document all about cross-cut saws, their use and care. And it is free! Supposedly it is one of the best resources around on this particular topic.
Kind Regards, – Jay

Jim,
The note from SF in Hawaii about the cost of barley versus the work to produce it made me think of one of my favorite tales from Laura Ingalls-Wilder’s book, “Farmer Boy“, about the boyhood experiences of her husband Almanzo. In this scene, Almanzo has been double-dared to ask his father for a nickel to buy lemonade. When he asks, his father gives him a lesson in the value of money that I have tried hard to instill in my children:

Father looked at him a long time. Then he took out his wallet and opened it, and slowly he took out a round, big silver half-dollar. He asked: “Almanzo, do you know what this is?”
“Half a dollar,” Almanzo answered.
“Yes. But do you know what half a dollar is?”
Almanzo didn’t know it was anything but half a dollar.
“It’s work, son,” Father said. “That’s what money is; it’s hard work. You know how to raise potatoes, Almanzo?”
“Yes,” Almanzo said.
“Say you have a seed potato in the spring, what do you do with it?”
“You cut it up,” Almanzo said.
“Go on, son.”
“Then you harrow – first you manure the field, and plow it. Then you harrow, and mark the ground. And plant the potatoes, and plow them, and hoe them. You plow and hoe them twice.”
“That’s right son, and then?”
“Then you dig them and put them down cellar.”
“Yes. Then you pick them over all winter; you throw out all the little ones and the rotten ones. Come spring, you load them up and haul them here to Malone, and you sell them. And if you get a good price, son, how much do you show for all that work? How much do you get for half a bushel of potatoes?”
“Half a dollar,” Almanzo said.
“Yes,” said Father. “That’s what’s in this half-dollar, Almanzo. The work that raised half a bushel of potatoes is in it.”
Almanzo looked at the round piece of money that Father held up. It looked small, compared with all that work.
“You can have it, Almanzo,” Father said. Almanzo could hardly believe his ears. Father gave him the heavy half-dollar.
“It’s yours,” said Father. “You could buy a suckling pig with it, if you want to. You could raise it and it would raise a litter of pigs, worth four, five dollars apiece. Or you can trade that half-dollar for lemonade, and drink it up. You do as you want, it’s your money.”

Regards, – Jason R.

Economics and Investing:

It is noteworthy that spot silver and gold prices have remained fairly solid near their six-month highs, despite the IMF’s saber rattling move of announcing 403 metric ton sale of gold.: This is evidence that wise investors have not been fooled by all the governmental and bankster blustering and that they will continue to shelter more of their assets in tangibles.

“The Other Jim R.”: flagged this must see: video link: ‘Worst economic collapse ever’. (Don’t hold back, Mr. Celente, tell us how you reallllly feel!) For those readers that don’t have a fast Internet connection, Matt B. mentioned that there is a transcript of the interview at the Russia Today web site

Thanks to G.G. for sending this from Wall Street Journal – Europe: We’re Heading Toward a Global Weimar; Things are grim, but he who masters green tech will be a superpower. A key quote: “The global banking system is thus on the brink of bankruptcy. So the worst-case scenario is the most likely scenario: a collapse of the banking system followed by world-wide inflation.”

E.L. suggested listening to An Interview with Ambrose Evans-Pritchard in Don McAlvany’s latest podcast.

MPS in Alabama flagged this New York Times editorial: The Worst-Case Scenario. MPS had this droll comment: “The plot summary of your novel has been appropriated.”

Courtesy of Jeff in Alaska: Large U.S. banks on brink of insolvency, experts say

Larry T. sent this: Revealed: The true horror of everyday life in Zimbabwe

Items from The Economatrix:

US Unemployment Climbs to 32-Year High

Where Do All the Gold ETFs Get Their Bullion?

A Pension Deficit Disorder

Banks Agree to Foreclosure Moratorium

Wave of Bad Debt Swamps Companies

Silence is Golden (The Mogambo Guru)

Doug Casey on 2009: Another Year of Shock and Awe

European Bank Bailout Could Push EU into Crisis

Ireland to Take Control of Banks, While Plans for Fortis are Rebuffed

As Vacant Office Space Grows, So Does Lender’s Crisis

Stimulus Still Can’t Help Wall Street

Stimulus Puts $13 in Weekly Paychecks

Caterpillar CEO Contradicts Obama on Stimulus

Europe’s Industrial Base May Never Recover from Crisis “European Commission warns EU states running out of money for rescue packages”

US Family Net Worth Down 20%

Senator Schumer’s “Pork” Comment Draws Ire

Odds ‘n Sods:

J.H.B. sent us the link to this update at the Gun Owners of America (GOA) web site: Firearms Legislation in the 111th Congress. (a good page to bookmark.) Readers should note that H.R. 45 currently has little support (it is not gathering co-sponsors) so at least for the present time please don’t expend too much time organizing and letter writing about this bill.

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John C. sent us this article, which has some implications for survivalists that foresee a breakdown in law and order, and large, organized gangs of looters: Congo town mounts own defense against rebels

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The WRSA has announced a couple of more sessions of their excellent “Grid Down” Medical course, in Peyton, Colorado, and Clackamas, Oregon. Not only is it excellent training, but you are also very likely to meet fellow SurvivalBlog readers. (Wear your SurvivalBlog hat or T-shirt!)

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My friend Bob in Tennessee sent this article from Jihad Watch: 35 Jihad Training Compounds on American Soil. Not only is the terrorist threat significant in itself, but so is the possibility of government reaction casting a wide net, perhaps making anyone doing tactical training out in the woods a “terrorist”, and possibly arrested for “paramilitary activities.”

Jim’s Quote of the Day:

“It will not be enemies at the gates who overwhelm the American empire. It will be the army of politically armed economic dependents inside the gates. Granny will bring it down. If you want a mental picture image of the end of American empire, imagine a man dressed in uniform, holding an automatic rifle, being pelted mercilessly by an old lady who is beating him over the head with her handbag.” – Dr. Gary North

Notes from JWR:

The economic news has been so copious for so many months that I’ve decided to create a new daily Economics and Investing section, to divide those items from the extant Odds ‘n Sods section. My heartfelt thanks to The Economatrix (our volunteer Economic Editor) and to the many SurvivalBlog readers that have sent such a deluge of economic news and commentary links. Please keep them coming, via e-mail. Thanks!

—

Just two days left to bid! The current high bid in the SurvivalBlog Benefit Auction is at $1,650. This auction ends at midnight (Eastern time) on Sunday, February 15th. This auction is for a large mixed lot, which includes::

1.) A “be ready to barter” box of 36 full-capacity gun magazines, from my personal collection in JASBORR. This box includes: 12 – Used original Bundeswehr contract HK91 (G3) steel 20 round magazines, 6 – Used original Austrian FN-FAL steel 20 round magazines, with cartridge counter holes, 10 – Used AR-15/M16 USGI (all Colt made!) alloy 20 round magazines, 6 – Excellent condition original Glock Model 19 9mm 15 round pistol magazines (early type, with “U” notch), and 2 – New and very scarce original FN (Belgian-made) US M1/M2 Carbine blued steel 30 round magazines (marked “AYP”) . All of these magazines are of pre-1994 manufacture (and hence legal to possess in New York.) These magazines have a combined value of approximately $710, in today’s market. Note: If you live in a state where full capacity magazines are banned, then you must choose to: refrain from bidding, or designate a recipient in an unrestricted state, or re-donate the magazines for a subsequent auction.

2. ) A brand new-in-box Hot Jaw Bag Sealer and a box of 10 Mylar bags . (Every retreat group should have one these, since they are a tremendous labor saver!) This is a $200 retail value, courtesy of Ready Made Resources.

3.) A huge lot of DVDs, CD-ROMs and hard copy nuclear survival/self-sufficiency references (a $300+ value) donated by Richard Fleetwood of www.SurvivalCD.com

4.) A NukAlert compact radiation detector donated by at KI4U.com (a $160 retail value). 

5.) A gift certificate for $100 worth of books, courtesy of Back 40 Books.

6.) A case of 12 cans of recent production nitrogen-packed storage granola (mixed varieties) This is a $96 retail value, courtesy of CampingSurvival.com.

Thus, this auction has a combined value in excess of $1,565.

Again, this auction ends at midnight (Eastern time) on February 15th. Please e-mail us your bid. Your bid will be for the entire mixed lot.

Letter Re: Gold and Silver Coins as an Investment

James Wesley,
I’d like your input regarding the purchase of gold and silver coins from third party vendors. Instead of paying $1,000+ for a single gold coin of one troy ounce. I’d like to buy ten 1/10th troy ounce gold (or silver) coins. I feel smaller denominations of “hard” currency promote better trade/purchase power. I have noticed in a multitude of Gun/Survival forums/magazines various companies that offer coins that are not directly from the U.S. mint but are [in smaller fractional sizes] than what you normally purchase from the US Mint.

I can foresee having a handful of one troy ounce gold coins [when] all you need is a dozen chickens. Any thoughts? – Christopher W.

JWR Replies: The situation that you describe is precisely what I showed in the Barter Faire (“For an Ounce of Gold”) chapter of my novel “Patriots“. A full ounce of gold is far too compact a form of wealth to be practical for day-to-day barter transactions. That is why I recommend that readers here in the US invest in small-denomination US pre-1965 silver dimes, quarters, and half-dollars, for barter. (Or get their equivalents, if you live elsewhere, such as pre-1948 (pre-decimal ) silver English coinage, or decimal or pre-decimal 1964 or earlier silver coinage in Australia.) The prospect of making “change” from gold coin transactions with a cold chisel is neither practical nor aesthetically appealing.