Florida at the Precipice of Depression, by Mike Morgan, J.D., CRS, GRI

I was going to call this “Banks March Us Into Depression,” or maybe more fitting is . . . “Complete Collapse of US Banking System.” Folks, that is what we are looking at. I don’t see any way around it. What we’re seeing here in Florida, is your crystal ball. And what happens here, is coming to a town near you . . . soon.

This past week I didn’t write anything, because what I am seeing unravel is disturbing to the point I had to question what I was seeing and hearing. So I decided to take as much time as I needed to digest it all, and then put something together for you. So here goes . . .

I could prepare volumes of spread sheets with Bernankesque numbers. I could talk about commodity prices and oil and Third World politics and a dozen other metrics that all lead to the same conclusion. But let me give you a ground zero look. That’s what I do best. I will leave the manipulation of the numbers to the folks on Wall Street that do it best. The same folks that have created the precipice they will soon push us off.

I spend a great deal of time dealing with Asset Managers hired by banks stuck with REOs. So as not to re-hash the events leading to the housing crisis, I will not discuss the free-money policies of the past, and I will not discuss the absolute lack of accountability in making the bad loans of the past. Let’s just deal with how the banks are attempting to recover.

Unfortunately, banks are not making a realistic effort to address the crisis. That may be because they cannot. As the banks and builders have announced write down after write down, my mantra has been . . . and continues to be: not enough, not enough, not enough. I still believe that. The builders and the banks have underestimated the magnitude of the problem, and they continue to do so. Analysts continue to look at the rear-view mirror and attempt to manipulate numbers based misguided historical assumptions. The NAR and the economists continue to twist the numbers, lie and then slip in prior-month adjustments without actually comparing apples to apples. But that is another article. The bankers and the fat cats on Wall Street sit back and watch the carnival, collecting fees from everyone they can snooker.

I have recently started turning away REO properties from banks and asset managers, even though hundreds of thousands of real estate agents nationwide are lined up waiting for these listings. I made the decision because we have reached a point where these listings are costing us money, and the asset managers are squeezing harder and harder . . . because they can. There are great asset managers and there are incompetent ones. The majority fall into the incompetent bucket, but we eliminate them quickly. The banks, on the other hand, continue to throw away money with the bucket of incompetent managers. It seems like the mortgage brokers that pushed funny money for the last six years are now starting asset management companies. We still work with a number of asset managers and banks directly, but the list of asset managers is growing smaller as properties fail to sell. When that happens, properties are bundled up and sold in bulk or at auction. This puts further downward pressure on markets because of lower prices and the inventory was not absorbed . . . it just changed hands.

Banks cannot afford to take 50-75% hits on mortgages, and that is exactly what is happening. The precipice is here, and we are on it. Recent reports about home sales rebounding are insignificant, because no one is accurately describing the growing inventory build-up. Banks simply don’t have the margins to deal with this crisis. And for that reason, we will see massive bank failures and this will snowball into a complete economic meltdown. If you have an argument against this scenario, I’d love to debate you on a live conference call. We deal with the banks. We know what is going on before the numbers show up at the Fed or any analysts desks. We deal with the public, so we hear the desperation at all levels. I listen to grown men cry about how to explain to their families that they are losing everything. I listen to people that I fear are on the verge of suicide. I read about people committing crimes simply to put food on the table. Spend a week with me, and you’ll understand why there is no feasible way to avoid a Depression.

The banks will fail, just as they failed in 1929 . . . but worse because this time some of this leverage is as high as 40:1. Insurance? Where is that going to come from? There is no insurance that can cover the cost of the coming bank failure, unless we just print more money. We are two generations removed from 1929. I am talking about Biblical 40 year generations. And when you look at who we were in 1929 and who we are now, you’ll realize just how ugly it is going to be. In 1929 there was a stronger base of family values. There was a work ethic that we don’t see today. The generation from 1929 – 1969 grew up with a totally different set of values than the generation from 1969 – 2009. The first generation worked their way out of the Depression. Today’s generation doesn’t understand work. We only understand creative financing and how to live off the next generation. And sadly, that is where we are today. We are at the precipice, and we are going to push our children over the edge because we lived so far above our means and ignored all of the warning signs. We lived just like the Romans in their final days.

Harsh? Like I said, spend one week with me, and you will go home with a new outlook about life, people and the crisis that is unfolding. You will go home with a sick feeling in the pit of your stomach. Guaranteed.

Just Florida? No, but Florida is your crystal ball.

The next generation? I would like to think we will eventually build ourselves out of this Depression with nuclear plants, solar and wind farms, seawater desalinization plants new roads and bridges and state of the art cars and trucks. Unfortunately, who is going to get their hands dirty? For those that study history, how would we manage a WPA with today’s generation? It will be a much tougher recovery, because we have lost the fundamentals that made us the greatest country in the world.

Conference Call: I am going to hold a conference call on June 26th. If you would like to join the call, please e-mail me.

Note: If interested in additional information, visit my institutional web site at www.Morgan-Florida.org or my institutional blog or our consumer web site. If you would like to be added to our distribution list, please e-mail me. Since I originally wrote this piece, I have received hundreds of e-mails and comments. Unfortunately, I can’t possibly respond to all of them. If you would like to receive my articles, I can add you to my Quick Notes distribution list. Just e-mail me. You can also read prior articles at my web site and on the left hand side you can sort through prior posts by title and date. Thank You all for the nice comments and e-mails. I encourage everyone to email this piece to your Congressman and Senators. The links for e-mailing them are here: House and Senate.

Letter Re: E85 Ethanol Compatible Vehicles

Sir;
I saw 85% Ethanol (E85) for the first time around me at a gas station for $3.49. Plus or minus the lost gas mileage, I will still be paying the same per mile. If I should choose to equip my vehicles with something like FlexTek, which is an electronic module that changes how long the fuel injectors fire, do you think it would be worth it? In other words, do you think ethanol will go up or down compared to gasoline? If the gap continues to separate to more than 50 cents difference, E85 becomes a real option, do you think this is possible?

You are about the only person I can think of with a broad enough spectrum of knowledge to even make an educated guess. Thanks, Andrew D.

JWR Replies: In the new fuel price paradigm, having at least one E85-compatible vehicle is certainly wise. These “Flex Fuel” Vehicles (FFVs) have fuel tanks and fuel lines designed to handle alcohol as well as ignition systems that automatically sense the flash point of the fuel, and compensate accordingly. (Hence, they can run on unleaded gasoline, E85, or any mixture of the two.) I have been recommending buying E85-compatible vehicles in SurvivalBlog since September of 2005. Rather than doing a conversion, which will void most manufacturer’s engine warranties and can even require a gas tank replacement for older vehicles, I generally recommend simply waiting until the next time you replace a vehicle. Finding a FFV is getting easier with each passing year, since they are getting produced in greater numbers by nearly all of the major car and truck makers. The best way to find one is to do a used vehicle search at Edmunds.com, and include the phrase “Flex Fuel” or “FFV”.

It is difficult to predict what will happen with fuel prices. Even given general trends, taxation is a “wild card” that is impossible to predict. But it is just plain common sense to buy the most flexible vehicles and and generators available, especially when getting that flexibility doesn’t cost much more than buying standard single-fuel engines.

If the price of regular gas rises above $4.50 per gallon (and it likely will), I suspect that E85 ethanol will remain under $3.60 per gallon in the Midwest, making it quite cost effective. (Although E85 has a 100 to 105 octane rating, a FFV burning E85 gets 28% fewer miles per gallon than when burning unleaded gasoline.)

As always, regardless of the make and model you choose, I am not in favor of buying factory new cars and trucks. There are huge cost savings in buying a vehicle with 20,000 to 35,000 miles on the odometer.

Odds ‘n Sods:

RBS sent us the link to an editorial posted at Numismaster: U.S. May Be on Brink of Financial Crisis

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There are just two weeks left in BulletProofME.com’s special sale on Interceptor Body Armor and Kevlar helmets, just for SurvivalBlog readers. They only rarely offer prices this low, so don’t miss out!

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Mary R. mentioned this news story from New Zealand: Four weeks until power cuts

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“If Americans feel they are being pick-pocketed by inflation, they should take a look overseas” writes Richard Benson in With Inflation There’s No Free Lunch. His chart comparing this past year’s inflation rate for 24 nations is informative. (A hat tip to Kevin A. for the link.)

Note from JWR:

The SurvivalBlog Benefit Auction ends tomorrow (Sunday, June 15th.) The high bid is now at $920. This big auction is for any of you that are gun enthusiasts. It includes 17 items: A four day “gray” transferable Front Sight course certificate, which was kindly donated by Naish Piazza of Front Sight (worth up to $2,000), a $200 gift certificate from Choate Machine and Tool Company (the makers of excellent fiberglass stocks, folding stocks, and shotgun magazine extensions), $450+ worth of full capacity magazines from my personal collection including five scarce original Ruger-made 20 round Mini-14 magazines and five scarce 20 round Beretta M92 magazines, and an autographed copy of the book “Boston’s Gun Bible.” The total value of this 17 item auction lot is $2,700! (See the SurvivalBlog Benefit Auction page for details on exactly what is included.) Note: Because this auction includes full capacity magazines, no bids will be accepted from outside of the US or from a resident of any state with magazine restrictions. Please e-mail us your bids, in $10 increments. Place your bid soon!

Two Letters Re: Some Observations on Recent Flooding in the US Midwest

James,
I got this from a friend in Indiana:
All is well at our house but the town is suffering. Here are a few comments for your edification.
– Small rivers come up fast with 10 inches of rainfall. Unknown to me, but if I had delayed another 30 minutes in going home, I would not have been with my family where I was needed.
– This was the first time other than snow events when I could not leave town. All roads underwater, including interstates and state highways.
– My Chevy 4WD pickup will go through deeper water than most cars. Don’t purchase any used cars from Indiana for awhile.
– The portable generator worked great. With smart load management I could essentially run the entire house including frig, freezer, microwave, geothermal air conditioning, and lights. Total power off time was 12 hours with less that 6 hours of generator run time. Now I want to have more fuel on hand. A quieter generator would have been a plus.
– When the power went off and it was expected to be off for the duration of this emergency, we all immediately took showers to use the available hot water. Sometime later the city water pressure went way down but not completely off. Toilets remained operational.
– The hospital was flooded and will be closed for an indeterminate length of time. All patients were evacuated. Plan your medical emergencies accordingly.
– I’m in the market for a battery powered AM/FM radio with headphone jack so I can listen to local news without disturbing others during the night. Local radio seems to be the best source of information. Cable went off line. The weather band radio was useful as they routinely give river level conditions.
– The middle school and later the high school were opened for those seeking shelter. I’d rather sleep in the woods.
– My brother lives 30 miles away but works here. He was stranded and spent the night with us. He appreciated the hot shower, clean bed, dinner, etc. He’s now thinking that a bug out kit would be a good thing. He would have slept in his truck rather than go to the shelter. Drinking water would have been his first issue.
– Cell phone communications stayed up but were overloaded. Too many folks use them for non-essential communications. Same for 911 calls. I don’t have a good work around but will give this some thought.
– There was no car or pedestrian traffic in our subdivision during the night. I anticipate this would change if the situation had stretched for several days. With no street lights or city ambient lighting, night vision [equipment] would have been helpful.
– The headlamp on a headband really makes the odd jobs in the dark much easier to manage. LED flashlights are a good thing. Surefire [flashlight]s were kept in reserve.
The town is in clean up mode now. Thanks and Best Wishes, – Bill N.

Mr. Rawles

Hello from a long time reader. Thanks for all the info. I thought I could give everyone a heads up on what is happening in the new Wisconsin wetlands. First off it is amazing how foolish people act when a disaster strikes. There a literally hundreds of people walking around in backed up sewer water which is waist deep. Without even shoes? People think that if they drive their sports car fast enough through the water they can make it. People who live within sight of a river are on television saying how shocked they are. Didn’t it ever occur to anyone that if you live within 20 feet of a body of water it might rise someday?

My house is fine, on a hill in the higher part of town. Our Bug Out Location (B.O.L.) is fine too, just called and got the”okay” word. It is nice to know which ways to take out of town in the event of a flood for next time. Make a note of this it might come in handy. People are helping each other sand bag their homes and businesses. I wonder how long people will work together if food were to not be trucked in. It was funny to watch my neighbors load groceries into their house in the pouring rain. Preps come in handy on a rainy day, literally.

There has been lots of damage around all of Wisconsin, I had to take an alternate route to work as they shutdown a few of the lower roads. Seeing the damage first hand is sad and at the same time I think is good for people because it makes them realize how quickly everything can be lost. Coming home from my in-laws’ house, I had a man hole cover blow off two feet from my truck, due to the water pressure. The next day there was an article in the local paper on how one woman’s SUV was totaled because she wasn’t so lucky.

Now I’m just waiting wondering if I will have a job, if the d**n on Phantom Lake goes, so does the building that I work at. – Bill C. in Wisconsin

From David in Israel Re: Some Preparedness Implications of Rapidly Escalating Fuel Prices

James
We are all seeing the rise in fuel prices affecting food prices. I would like the readers to do a acres of farm to miles traveled evaluation of their plans when planning for a world with sparse petro-fuels.
The current option is to ignore the prices and continue to fuel large SUVs and pickup trucks even for for “pick me up milk” runs.
A fuel efficient car or motorcycle makes more sense depending on the number of passengers travelling.

Bio-diesel or ethanol from your field rarely makes sense for anything other than a few very important drives per year or towing a harvester, the effort to farm these crops are better fed to work animals and
human workers. Although if you really only make these few drives it might even out considering you make one or two batches of fuel and garage the truck the rest of the year, no daily feeding of a huge hungry beast.

Horses and oxen are very useful on a large post-petroleum farm, replacing the tractor and truck, but you need to feed that large living muscle mass even in the dead of winter when there is little
important(to your survival bottom line) travel or work. It is important to remember that even into the steam age before bicycles and automobiles reduced the number of work animals around half of the US farm output went into the mouths of work and transportation animals. Even if you are able to graze in the fair months of the year most Americans in the northern
states need to have plans to safely mow and store large amounts of hay and grains to feed your livestock. A donkey or mule is smaller and must pull a smaller plow or load but in the off months they are
a smaller idle eater and need less exercise to stay healthy and content .

The last stop in labor is the human body, around the world many poorer peoples use themselves as farming machines. You will see a man pulling a plow with his wife or child steering. A bicycle converts muscle energy many times over saving calories and time for longer range travel, as long as the bicycle can be maintained. The trick with human energy is we don’t slaughter ourselves if times get tight, and we can still do useful work even in winter when most work animals are idle eaters. This is why the farm family has always rejoiced in another new baby, not only was it filling the command to be fruitful and multiply but it was another helping hand.(Have you ever noticed that the more religious families even in urban areas often have many children?)

On the plus calorie side chickens, goats, sheep and larger free grazed food animals add calories to your bottom line by metabolizing insects, kitchen scraps, and cellulose like grass into food that humans can easily consume. We need not say that the beast deal is gathered fruits, honey, netted fish, and hunted or tapped nutrition which require tiny amounts of exertion compared to the calories obtained.
Shalom, – David in Israel

Odds ‘n Sods:

Eric sent us this one: Man Retrofits Freezer to Make an Ultra-Efficient Fridge

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Courtesy of Bob from Minnesota: BIO5 Researcher Identifies Cities at Risk for Bioterrorism. Generally, this is yet another piece of confirmation for my preferences in the SurvivalBlog Recommended Retreat Areas page.

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Frank S. flagged this: Too Much Money: Inflation Goes Global

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Carl H. found this MakerFaire video on making crystal iodine from potassium iodide. This, BTW, ties in to the DEA restrictions on Polar Pure crystals–previously mentioned in SurvivalBlog

Jim’s Quote of the Day:

I remember hearing:

How high’s the water, mama?
Two feet high and risin’
How high’s the water, papa?
Two feet high and risin’

We can make it to the road in a homemade boat
That’s the only thing we got left that’ll float
It’s already over all the wheat and the oats,
Two feet high and risin’

How high’s the water, mama?
Three feet high and risin’
How high’s the water, papa?
Three feet high and risin’

Well, the hives are gone,
I’ve lost my bees
The chickens are sleepin’
In the willow trees
Cow’s in water up past her knees,
Three feet high and risin’

How high’s the water, mama?
Four feet high and risin’
How high’s the water, papa?
Four feet high and risin’

Hey, come look through the window pane,
The bus is comin’, gonna take us to the train
Looks like we’ll be blessed with a little more rain,
Four feet high and risin’

How high’s the water, mama?
Five feet high and risin’
How high’s the water, papa?
Five feet high and risin’

Well, the rails are washed out north of town
We gotta head for higher ground
We can’t come back till the water comes down,
Five feet high and risin’

Well, it’s five feet high and risin’

– Johnny Cash, Five Feet High and Rising

Note from JWR:

Please mention SurvivalBlog whenever you call in to a talk radio show or a podcast where they are discussing preparedness. Thanks!

Some Preparedness Implications of Rapidly Escalating Fuel Prices

The recent jump in fuel prices are going to have some far reaching effects on our economy. There is speculation that crude oil may soon spike to $150 to $170 per barrel. As prepared individuals, we need to adapt our plans, accordingly. It is noteworthy that many of us long hence foresaw these dark days, and installed underground fuel tanks, bought alternate fuel vehicles, multi-fuel generators, and at least one vehicle just for the sake of fuel economy. (If you look at the Retreat Owner Profiles–most of which were written in late 2005 and early 2006–you will see a remarkable number of fuel-efficient “secondary” vehicles.) SurvivalBlog readers plan ahead, and it shows.

In a recent issue of The Daily Reckoning, Bill Bonner wrote: “Just on Thursday and Friday of last week, wholesale gasoline prices went up 33 cents. No typo. That’s 33 cents, in two days. So let’s round it out and add another $500 to the annual gasoline bill to operate one average automobile in the US of A. If you are a two-car household, make that number $1,000. Just from a two-day spike. And that does not count the impact on diesel (killing trucking and agriculture) and jet fuel (killing airlines).”

Effectively, the recent price jumps will be like inflationary snorts of cocaine. Sooner or later, the higher cost of fuel will be “passed through” to consumers. Can you imagine what will happen to the retail price of just about everything if and when the price of gas tops $5.50 per gallon? Transportation cost increases are significant, but will impact some product prices more than others. The heavier and bulkier the item, or the farther it must travel (all the way from raw material to your doorstep) the greater the impact of the fuel price jumps. (One hint: If you’ve been planning to buy a gun vault, then buy it soon, and do so locally, from inventory that your dealer already has on hand. If you delay, it will likely cost $200 more, this time next year.) What will happen to Fed-Ex , UPS, and US Postal Service rates next year? It won’t be pretty. OBTW, if you are thinking about setting up a home-based mail order business, then you’d had better consider focusing on small and lightweight products, such as used DVDs.

Think through what the fuel prices will do for various product prices and availability (think: spot shortages), and who they will affect life at your retreat.

I predict that there will be a long lag time while the price of propane catches up to the prices of other fuels. The cost of electricity will also lag behind, especially in regions that have predominately hydroelectric power. In the long run, however, prices will undoubtedly catch up. Exploit this lag time to build up the alternative energy potential of your retreat. Think through you options, do some comparison pricing, and then get busy. (Consider the merits and drawbacks of photovoltaics, wind, micro-hydro, bio-gas, biodiesel, geothermal, wood-fired steam/co-generation, and so forth.)

Vehicles

If you are planning to buy additional vehicles for your retreat, consider the following:

One of your vehicles should be a very fuel-efficient runabout. (Something like a used Geo Metro or Toyota Corolla–but for serious preparedness planning avoid the high cost and complexity of a hybrid.) If you need four wheel drive, consider buying a used Subaru. Notably, Subaru all-wheel-drive cars are the most popular cars with America’s contract rural mail carriers. Also consider getting a mo-ped or motorcycle for handling some of your errands in the current pre-Schumeresque times.

Look for a fleet surplus propane-powered pickup. (Utility companies often use these. Watch for auction announcements.) If you could get one that is 4WD, that would be ideal. But even if you can’t find one that is 4WD, one option is finding a 4WD of the same year and the same maker as your 2WD propane-engine truck, and then combining parts to create a “Frankentruck.” Not only would this be great mechanical experience, but it will leave you with another nearly complete vehicle to cannibalize for spare parts. Another option, albeit more expensive, is converting an existing 4WD to propane. Because Propane tanks are large, this is best accomplished with a 4WD pickup. (I have seen pairs of 47-gallon capacity “torpedo tanks” installed above the wheel wells in a pickup box. This allows nearly full use of the pickup bed space.) Since a propane conversion will likely void a warranty, it is best done with an older vehicle that is “out of warranty”. Speaking of propane, don’t miss the recent piece by FerFAL, (SurvivalBlog’s correspondent in Argentina), posted at his personal blog site: Alternative fuel for your car. It describes a gaz naturel comprimé (GNC) conversion done on his Korean import car.

Own at least one E85-compatible “Flex Fuel” vehicle (FFV).

If your budget allows it, consider getting an electric vehicle. (Several times in SurvivalBlog, I’ve mentioned Bad Boy Buggy electric ATVs as well as ATV suspension conversions for electric golf carts.) An electric ATV makes an ideal “at the retreat ” utility vehicle, particularly for someone that has a large alternate power system with a battery bank.

Here is one vehicle possibility that might at first seem counterintuitive: There will probably be thousands of used recreational vehicles (RVs) hitting the market in the next few years–some for pennies on the dollar. Budget-minded preppers might consider buying an older RV to live in, while building their retreats. Just keep in mind that the resale value will likely drop to nearly nothing if gas prices continue to escalate, so only buy one if you can truly get it dirt cheap.

Horse Power

For the really long term, learn as much as you can about horses, and change your purchasing plans is this approach matches your needs and the pasture carrying capacity of your retreat. There is a lot to this: horsemanship, hay cutting (preferably horse-powered), hay storage, pasture fencing, a barn, tack, veterinary supplies, and so forth. Here at the Rawles Ranch, our saddle horse Money Pit may soon have some new friends in the pasture.

Hay and grain prices have been sky high for a full year now, so this has pushed the price of horses down tremendously. At present, in much of the western US, good saddle saddle horses are literally being given away. Just ask around. If you are not yet an experienced rider, then limit your search to older, gentle “bomb proof” mares or geldings. If you have plenty of pasture and hay ground, take advantage of the current low prices for horses. Buy them while they’re cheap. Watch your newspaper classified ads and Craig’s List for horses as as well as tack, hay mowers, and a horse trailer. In addition to saddle horse, think in terms of working horses. So while you are searching for saddles, also look for wagons, buck boards, horse collars, long reins, log chains, and other work horse tack.

Fuel Storage

Storing extra fuel is a natural for family preparedness. If you use propane, consider buying a larger tank. That fuel will be like money in the bank. Ditto for gasoline and diesel fuel. (See the SurvivalBlog archives for details on fuel stabilizers and and antibacterial additives. (The latter is for diesel. Yes, bacteria will actually grow in diesel fuel.) What size tank(s)? The bigger, the better. That way you can buy during occasional dips in the market as well as have a reserve that will help ride through any spot shortages. Consult you local fire code for any limits where you live. I generally prefer underground tanks, for both OPSEC and fire safety.

Generators

Needless to say, flexibility will be your goal with your backup generator(s). Various diesel generator and tri-fuel generators have already been discussed at length in SurvivalBlog. Despite its current high price tag, diesel is still a viable fuel for standby generators. Keep in mind that you can legally burn less expensive off-road (untaxed) diesel, biodiesel, and even home heating oil in your diesel genset. (Of course consult your state and local laws before doing so.)

Retreat Locales

Higher fuel costs will likely change the way the at you look at your retreat, and where it is located. If you are retired, self-employed, or if you telecommute, the impact won’t be nearly so great. You can simply adapt your lifestyle to make trips into town less often. But if you have a daily job “in town”, then the impact could be substantial. The whole concept of “public transportation” is foreign to folks that live in places like Wyoming or the Dakotas. Even carpooling can be difficult for people that live in lightly populated areas. OBTW, speaking of carpooling, I predict that both carpooling and ride sharing will undergo a great resurgence in the next few years. The information networking power of the Internet will undoubtedly be put to full use in matching drivers/riders and destinations. The carpooling networking sites like SpaceShare and eRideShare will probably become very popular.

Remote properties will seem even more remote when gas tops $5 per gallon. This has both positive and negative implications. The good news is that it will make remote properties more affordable and will also make them less likely to fall prey to “commuter criminals” and looters. But the bad news is if you are trapped in a corporate job and must commute to work. Ditto for farmers and ranchers that must get what they produce to market.

If you have not yet bought a retreat, then you might want to make the new fuel cost paradigm a more important part of your locale selection process. As I’ve mentioned before in SurvivalBlog, if you do some concerted searching, you might be ale to find a piece of land with a low-volume natural gas well, or a surface coal seam. Another possibility is finding a property with a large year-round stream and sufficient change in elevation (“fall”) allowing installation of a micro-hydro system. If you are an adherent to Peak Oil theory, then you might consider buying a retreat that is close to a community in a truck farming region–someplace that can expected to be self-sufficient in the event of chronic gas and diesel shortages. There are of course security trade-offs, so such a decision might be a momentous one to make. (Since most survivalists value having “elbow room”.)

Letter Re: Neighbors and Friends are Failing to Adapt and Prepare for New Threats

Mr. Rawles:
I stumbled upon your blog site last month and it was the equivalent of a “reboot” in terms of my own thinking about how to adapt to the conditions surrounding “Peak Oil” and Global Warming. I’m grateful for your web site and efforts. I commend your honesty. I envy your faith.

In the past months local and national events highlight the scope of the trouble we now all face. I’m afraid the direction is irreversible. To list a few, gasoline and diesel prices have climbed to new heights, both global and local weather conditions indicate a promise of drought and large scale crop collapse, and our infantile and narcissistic population is in grave denial. I would add this denial is paired with ignorance – as most people in American are unfamiliar with grave or harsh living conditions, nor do they care to learn about adapting to them. “Oh, that’s not going to happen here.”

As I urge those in my closest circle to begin to prepare for a number of increasingly bad scenarios – I am met with interest, curiosity, indifference and some ridicule. I am the family “kook”. My wife reminds me; “Jeremiah.” (This was discussed in the book, “Night” by Elie Weisel.)

People are not ready to think about what is coming. For example, in response to a Craig’s List ad I posted for a car pool rider (to share my commute.) I’ve received zero interest. A local news channel did a story on my ad and interviewed me for the story. The article included my comments about “Peak” and a “Long Emergency.” No takers. At the YMCA, where I train regularly, most men I speak to feel there is no global warming and either don’t know what Peak Oil is or feel the best solution is to bomb another country that has oil. I think to myself: these are the folks I’ll be defending my home against. Finally, when I suggested to my parents the need for spare supplies in their vacation house – my suggested list brought denials, anger and ridicule. They can’t even begin to think of survival scenarios or WTSHTF. (Their home is a McMansion built on some nice farmland – which I see has having great agricultural value in the future, provided there is adequate rain.)

James H. Kunstler, who wrote the book “The Long Emergency” recently spoke at our school auditorium. Only 20 or so people attended, and few had questions indicating any understanding of how violent these events may actually become. Another professor recently lectured at an area college on the same topic – and spelled it all out. He planned to bug out in advance. A local news paper carried the story. Perhaps this shows some progress? I commended the writer by e-mail.

To adapt, I began to prepare for the worst; I’m reading more about the subject, making no assumptions, stocking food, water and key equipment. I intend to train my 12 year-old to soon have familiarity with all weapons in our home (.22 rimfires, 12 gauge, and 9mm pistols.) Given our home location, its defensibility, and our firepower – I’m unsure as to how long we can make it – especially if civil unrest or military response is too strong, but I’m committed to dedicating resources to the cause – to do what I can for as long as I can and to educating those around me who will listen (this is tricky.)

From speaking with others on the same page, many are overwhelmed. I am too, but I always remind them that they can do a little every week. Underscored here also is that resources such as the bogus tax stimulus checks can be used to build food and supply stocks. I keep a purchase list ready – which will go against my fake tax give back. Grocery runs always include “extras” that will store well.

On a final note, although I’m dedicated to “hoping for the best and preparing for the worst,” I find it very difficult to bring my wife and only child into some of these scenarios. My wife is a great life partner and understands this situation very well – but some of this remains unspeakable. Further, I caution great care as to how to work with children on these matters. It is worse than the movie, “I Am Legend” because the “infected” will be real and much more plentiful, and the survival resources few. Camping and “activities” build the skill sets and offer the instructional opportunities, as someone already posted.

Thanks again for what you do, – Jon

JWR Replies: You are correct. Pollyanna denial is rampant. You aren’t the only one that encounters it.

Don’t worry about ridicule. Noah was considered a “kook”. So were the Jews that emigrated from Germany in the mid-1930s. Most of them survived, while those that didn’t ended up in the camps and many of them were subsequently victims of Nazi genocide.

Odds ‘n Sods:

Matt in Texas suggested this piece: Kobyashi Maru. Matt’s comment: “This should help make it clear that the Federal Reserve is between a rock and a hard place. No matter what decision is made on the discount rate…we are toast.”

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Thanks to David F for sending this: Two dead in Europe fuel protests. David notes: “For those who think food riots and fuel shortages are limited to the Third World, I think this article might bring things home a bit. This is hoarding, boycotts, people dying, [all] because of oil. Could the US be next?”

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Flood news from the Midwest: Downtown flooding ‘devastating and unbelievable’ say onlookers. And meanwhile we read: Corn hits record, soy rallies as floods expand

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I just noticed that following news of some short term “strength” in the US Dollar, the spot price of silver has been pushed down below $16.40 per ounce. Dips like these are a great buying opportunity!