Odds ‘n Sods:

Several readers sent us this article, suggesting a correlation with my recent Pre-Crash Checklist: China banks told to halt lending to US banks

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Cheryl found this for us: Shipping Container Homes

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Rod McG. sent us this: In Israel, Kibbutz Life Makes a Surprising Comeback

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Dan and Becky flagged this: confirmation that the growth of the Mother of All Bailouts is not slowing: House clears $25 billion for car makers

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Some news and commentary gleanings from our Economic Editor: WaMu’s Hopes For Capital Drying Up — Deal Near On Bailout Plan — Buffet Says Act or Face “Financial Pearl Harbor” — Buffet Favors Bailout: Here’s Why — US Faces “One H*ll of a Deep Downturn” — Ron Paul’s Federal Reserve Abolition Act — One of Biggest Car Dealerships Closing — Congress Reaches “Agreement in Principal” on $700 Billion Bailout — Asia Needs Deal To Prevent Panic Selling Of US Debt — FDIC May Need $150 Billion By End Of 2009 — Barrick Sees Large-Scale Gold Buying On Bailout — US Federal Reserve Funnels $30 Billion Into Overseas Money Markets — Credit Stress Intermarket Money Market Freeze Evident in TAF, TED Spread Everywhere

Jim’s Quote of the Day:

"During the hyperinflation in post WWI Germany, what used to be a comfortable nest egg was suddenly the value of a postage stamp. If one held just a portion of their savings in precious metals, the crisis was greatly softened. Gold will never be worth nothing, even if the exact price fluctuates. There is a famous photograph, however, of a German woman during this time period burning piles of tightly bound banknotes to keep warm." – Congressman Ron Paul

Letter Re: What Are the Economic Collapse Indicators to Watch For?

Jim,
Some of us may be stuck within the city limits until ‘the last possible moment’ before an event such as WTSHTF. Can you suggest a day-to-day procedure or strategy to now follow for monitoring specific and reliable news outlets or information sources in determining when our G.O.O.D. action plan should be initiated? . Obviously, many people such as myself, have all the ‘other’ recommended Rawles preparations in place but are still at a disadvantage from those that were able to set up their retreat ahead of time and to have evacuated from a city. It’s the best that I can do, at this point.

Additionally, the economic news events these days are so wild and crazy that it’s hard to discern what main event, ‘red flag’ or ‘markers’ should precipitate an exit out of the city without further doubt or hesitation. Brushing up on ‘common sense and logic’ doesn’t hurt here, but it’s the expectation that some specific chain-of-events will take place that categorically shout now that I’m speaking of. Can you give us your personal view on what these catalyst events could be? Thank you, – Ken R. (A 10 Cent Challenge subscriber)

JWR Replies: There are far too many variables in the current situation for me to be able point to just one key “trigger” or “gating” indicator.

Be ready, but don’t panic. I must caution SurvivalBlog readers: “Don’t give up your day job.” Unless you are retired, or have a stable and substantial secondary cash flow from investments or a home-based business, it would be highly imprudent to quit your job (or start burning vacation hours) and move to your retreat. My advice: Watch the news carefully and be ready to leave on short notice. As I’ve previously mentioned, it is very important to pre-position the vast majority of your key logistics at your retreat, under the watchful eye of a caretaker or a trusted neighbor. When the time comes, you may only have the opportunity to make one trip to your retreat before highways become impassable.

Here are some important indicators to watch for, in my humble estimation. (Witnessing just one of these won’t be surely indicative, but if we see several of these…) :

A sharp spike in the Federal Funds Rate
News of a failed Treasury auction, or news that Treasury rates have spiked
Overt talk of a US default by Asian or European bankers
Multiple (8+) simultaneous US bank failures on one Friday
Any large Northern Rock style bank runs in the US (with customers lined up on the streets)
A stock market drop of more than 1,200 points in one day
A large and sudden spike in inflation
Any suspension of US stock trading
Draconian new stock trading limits (for example any new “circuit breaker” rules, followed by news that the trading was halted because of the limits)
New restrictions on precious metals purchasing or new reporting requirements
New limits on moving funds outside the US
Any large derivatives trading collapses.(Because of disappearing counterparties or illiquidity.)
News that hundreds of hedge funds are suspending redemptions
News that many Money Market funds are dropping below $1.00 Net Asset Value (NAV)
The US Dollar Index (USDI) dropping below 68 for more than one full week of trading.
Any sudden large interest rate moves by the FOMC. (Up or down.)
Rioting in several metropolitan centers simultaneously.
Gold spiking past $1,500 per ounce
News that any major western power is no longer accepting US Dollars in payment for key commodities
News that any major trading partners are no longer rolling over the majority of their US Treasury paper
A closed session of the full congress that lasts a full day or longer.
The Treasury starts to extensively monetize debt.
The resignation of either the Treasury Secretary or the Federal Reserve Chairman.
Mel Gibson moves to Fiji 😉

Letter Re: Yoder’s Canned Bacon and Canned Meats?

Mr. Rawles;

Thanks for the time and effort you put into SurvivalBlog.com. It is a truly valuable and unique resource.

Working on my lists of supplies and equipment, I’m wondering about Yoder’s canned bacon and other canned meats, beef, chicken, turkey, pork, sausage, etc. They advertise [an up to] 10 year shelf life (depending on storage conditions of course) and the price isn’t unreasonable. Too heavy for much mobility but for home base they appear to me to be an attractive way to store some meat products without refrigeration. Any info or thoughts on this? Thanks, – Gatekeeper

JWR Replies: The Yoder’s canned cooked bacon product is a new offering, but it is actually an old concept. Given the time and energy required to cook and can it, the price per can is fairly reasonable. OBTW, canned bacon, butter, and cheese are also sold by a number of Internet vendors, including several of our advertisers: Safecastle, Best Prices Storable Foods, and Ready Made Resources. These canned foods make good supplements to round out a diet and break up the monotony of eating bland storage foods such as wheat, rice, and beans.

Letter Re: Gauging Bank and Thrift Safety

James,
I wrote you a month or two ago regarding a post of yours that was concerned about failing banks. I commented that I thought the worries were overblown – there was no reason to think that FDIC wouldn’t pay off the claims, just as FSLIC paid off the claims in the 1980s. I still think that’s true, but I have had a personal cautionary experience that has moved me much closer to your way of thinking.

I had a brokered Certificate of Deposit (CD) issued by IndyMac. (In case you post this, for readers unfamiliar with the term, “brokered” mean I bought it through a broker, like a bond or stock. Banks that want to raise a lot of money aggressively issue brokered CDs to attract “hot” money, money that flows in quickly and can flow out just as quickly; FDIC doesn’t much like such CDs, for obvious reasons.) It had a few months to go when IndyMac failed. FDIC announced that they would honor the terms and rates for non-brokered CDs, but would simply terminate brokered CDs and return principal and interest up to the day the bank failed to the owners.

So that’s problem #1: FDIC just made up the rules as it went along. Why was my CD different from others? Because they said so, pure and simple. They would claim it’s for the overall good, because it discourages brokered CDs, which can make banks more prone to runs, but that doesn’t help me, does it? And it’s not like they had announced this ahead of time. So I lose money, and there’s no way I could have known to avoid it. (IndyMac wasn’t on their trouble list when I bought the CD.)

Problem #2: not only didn’t the money show up in my brokerage account right away, I couldn’t even find out when it would show up. It was more than two weeks before it appeared, and I got no interest for that time.

Neither problem was significant in this instance; it wasn’t a big CD and it didn’t have much longer to maturity, and the delay wasn’t very long. But it was a powerful experience in terms of opening my eyes to what might happen under greater financial stress. If FDIC can delay returning the money for two weeks with no interest, they can do it for two months, or however long they need to. Clearly, beyond the basic insurance act of eventually returning money earned up to the date of bank failure, everything else is up to the FDIC’s whim. That doesn’t give me a good feeling.

The best way to avoid this is to choose strong banks. One resource I’ve found useful in the past is thestreet.com ratings. This used to be called Weiss Research, and they are clearly an independent source of analysis of bank strength and safety. Their home page says: “We don’t accept compensation from the companies we rate for issuing the rating. Nor do we give the companies an opportunity to preview the ratings or suppress their publication if they’re unfavorable. We are totally independent and unbiased because our loyalty is to you — the customer.”

If you go to The Street.com’s Rating Page and select Banks and Thrifts, you can then type in the name of a bank you want to check, and click Go. They will list the matches, with letter grades from A+ on down. You can then click on a bank name and download a more detailed report, but for my purposes the letter grade has been enough to tell me whether I’m about to make a mistake. Keep up the good work! – Michael A. in Seattle

Jim’s Quote of the Day:

“How fabulous,” writes Brian Reade in the British tabloid The Mirror. “Thanks to the way it props up the USA’s two biggest mortgage firms, more than half of American homes are now effectively owned by the state… Who’d have imagined that when the most right-wing of neo-cons leaves office 50% of the Land of the Free will effectively be [public housing]”? – Bill Bonner

Letter Re: My Preparedness Measures Pay Off During Fuel Shortage

Mr Rawles
You mentioned the current gasoline shortage in the southeast. The local news media reported that 70% of the gas stations are empty and have been for three days. To me it seems closer to 95%. Here is example: In south Nashville, there is a major road called Nolensville Road. In a five mile mile stretch from Thompson Lane to Old Hickory Boulevard there are 26 gas stations. Not one of them has had gas for several days. Within a two mile radius of that stretch of road there are 55,000 residents. That is a lot of people without gas. There have been fistfights at some of the gas stations that have gas, but that is not being reported on the local news.

As an enthusiastic SurvivalBlog reader for the past two years, I am not worried because I am very prepared. For example, I keep 100 gallons as my bug out supply to reach my retreat. In fact, I only need 10 gallons to get both of my cars to the retreat. I think my wife finally seen the light about being prepared. She had always looked a little strange at me when I would rotate my gas supply every six months. There have been times that she thought I was a little nuts. But there was a big smile on her face when I drug out those 5 gallon cans to filled her tank up yesterday. I was also able to give 10 gallons to my neighbor–who is a single mother and a school teacher–so she could go to work. Thank You, – Mike M. in Tennessee

Letter Re: Home Canning and Stocking Up

Dear Sir,
I would like to thank you for your time and effort in providing a “one stop shop” for such a large volume of information.

Principally due to your site, my family and I have begun to increase the size of our pantry with both purchased food/supplies and other materials as well as increase the amount of food we are home canning. One observation I have made in all our preparations is the amount of food (from local gardens, backyard fruit trees, farmyard orchards) that goes to waste in our area. It is amazing the amount of produce on local backyard fruit trees and in gardens that either because of a lack of time or lack of knowledge, people allow to spoil. We have “put the word out” that we are interested in any fresh fruit/vegetables that people have and due to that, we now have more fruit and vegetables than we have canning jars and freezer space.

We have begun to shop around at local farm auctions and garage sales for canning jars and have enlisted several other family members in our endeavor. My father-in-law is preparing his garden ~ 2 acres, for the addition of our own fruit trees, berry bushes, asparagus and other vegetables. We have also begun to make contacts with others who are interested in bartering for materials. This has greatly increased the number of relationships with other folks in our area and has resulted in a much closer feeling of community between us and our neighbors. We live on the edge of a fairly small agricultural town in southeast Nebraska .

The biggest potential downfall is we do not have a retreat in the boonies. We do have a fairly close neighborhood that “could” be isolated (bridges over a creek and river) from some traffic. In the mean time, we continue to stock food and other materials you have suggested and prepare our property in the event of a meltdown.

Again, thank you for your time. – Brad E.

Letter Re: My Hurricane Ike Experience

Dear Mr. Rawles,
First of all, my heart goes out to all those who truly suffered with loss of life or property as a result of Hurricane Ike. I only had the minor inconvenience of being without electricity in Houston for five days. (There are still over one million in Houston and the surrounding area without power.) So I had a taste of what it is like to be off-grid and learned a few things to share with your readers. It seems a lot of people here had generators which burn lots of precious gasoline. But after a few days the gasoline runs out. We toughed it out. I did have small camping-type battery powered fans and several flashlights but can’t imagine what we’d do in a situation without power for the long term. You can have only so many batteries and then what? We had water drawn in bath tub to use for flushing toilet, as water plants use electricity to pump water. Also had many frozen plastic milk jugs in freezer and big igloo to keep some things cold for a couple of days. Ice was very hard to come by. Grocery stores were closed for a couple of days and there were lines just to get into the stores when they did open. They let in a few people at a time for crowd control. I was lucky to have my nonperishable food stockpile. Remember to have extras for relatives. Gas stations were slow to reopen and had hours to wait when they did open. (Many buying gas for their generators). We had full tanks in advance of the storm. One important item we used was the car charger for the cell phone. Be sure to have one that fits your current phone model. Also, many don’t realize that cordless land line phones use electricity so you need to have a standard corded phone (which I had) if you want to even find out if your land-line works. To heat water for coffee we used sterno called Canned Heat and it worked very well. I know this is merely a temporary solution to heating. I told my husband recently that I wanted to buy a camp stove and now he may agree with me. And of course no television or computer which is really tough. I used my television band radio a lot to get information.

I am now more afraid than ever of what it is going to be like if the power goes off frequently or stays off in a worse-case scenario. Luckily I didn’t see civil unrest, but what if power stayed off longer? If there was any way, I would move out of the city. Since I can’t leave, I will continue to prepare the best I can. Please continue to remember the trapped-in-the-city dwellers when you post ideas for survival. I think we need the most help. Thanks for all you do, – Nancy B.

A Girl Scout Troop Leader Wants to Get Her Girls Prepared

We recently got an e-mail from a Girl Scout troop leader, describing how she wants to start a project making 72-hour “bug out” bags for the troop members. Her goal is to get her troop members better prepared, yet not tip-off their parents to her own level of preparedness. She wants to avoid making herself look like some sort of “preparedness nut” or “whacko”.

The important thing to keep in mind is that terminology and phrasing are crucial to how people form opinions. Do not use terms such as “Bug Out Bag” or “Get Out of Dodge Kit” or “Survival Kit.” It is much better to use the term Disaster Preparedness Kit, or even better yet to phrase the title to match the locally expected disaster. (Such as “Earthquake preparedness kit” or “Hurricane preparedness kit”. You get the idea….Our scouting friends in California made earthquake kits for their cars which they keep in a large Tupperware bin in the trunk. They contain bottled water, canned tuna, a can opener, granola bars, space blankets, knit hats, matches, and so forth. Suggested packing lists are available in PDF from the FEMA web site.

Letter Re: A Suggested Reading List

James:

Thank you for all of the work that you put into your web site. I have been reading your site and preparing for the last couple of years. I thought you might be interested in the Bibliography to my [retreat] group’s operations guide.

Fiction

Adams, John Joseph. Wastelands. San Francisco : Night Shade Books, 2008.
Alten, Steve. The Shell Game. Springville , Utah : Sweetwater Books, 2007.
Brin, David. The Postman. New York : Bantam Books, 1985.
Budrys, Algis. Some Will Not Die. New York : Dell Publishing Co., Inc., 1961.
Card, Orson Scott. The Folk of the Fringe. New York : Tom Doherty Associates, Inc., 1989.
Carlson, Jeff. Plague War. New York : The Penguin Group, 2008.
Frank, Pat. Alas, Babylon . New York : Harper Perennial, 1959.
Heinlein, Robert A. Farmer in the Sky. New York : Ballantine Books, 1950.
________. Time Enough For Love. New York : The Berkley Publishing Group, 1973.
________. Tunnel In The Sky. New York : Ballantine Books, 1955.
Ing, Dean. Pulling Through. New York : Charter Communications, Inc., 1983.
Kunstler, James Howard. World Made By Hand. New York : Atlantic Monthly Press, 2008.
McDevitt, Jack. Eternity Road. New York : Harper Collins Publishers, 1997.
Niven, Larry and Jerry Pournelle. Lucifer’s Hammer. New York : The Random House Publishing Group, 1977.
Party, Boston T. Molon Labé! Ignacio , Colorado : Javelin Press, 2004.
Rawles, James Wesley. Patriots: Surviving the Coming Collapse. The Clearwater Press, 2006.
Sheffield, Charles. Aftermath. New York : Bantam Books, 1998.
Stewart, George R. Earth Abides. New York : Del Rey Books, 1949.
Stirling , S.M. Dies The Fire. New York : New American Library, 2004.
________. The Protector’s War. New York : New American Library, 2005.
________. A Meeting at Corvallis . New York : New American Library, 2006.

Nonfiction
Food Storage
Layton, Peggy. Emergency Food Storage & Survival Handbook. New York : Three Rivers Press, 2002.
Stafford , Jake and Jim Rawles. Rawles Gets You Ready: The Ultimate Emergency Preparedness Course. Genoa , NV : Arbogast
Publishing, LLC, 2006.
General
Boy Scouts of America , Fieldbook, 4th Edition. Irving , TX : Boy Scouts of America , 2004.
Clayton, Bruce D. Life After Terrorism. Boulder , CO : Paladin Press, 2002.
Deyo, Holly Drennan. Dare to Prepare, 2nd Edition. Pueblo West, Colorado : Deyo Enterprises LLC, 2004
Diamond, Jared. Collapse, How Societies Choose to Fail or Succeed. New York : Penguin Books, 2005.
________. Guns, Germs, and Steel. New York : W.W. Norton & Company, 1997.
Emery, Carla. The Encyclopedia of Country Living, 9th Edition. Seattle : Sasquatch Books, 2003.
Kelly, Kate. Living Safe in an Unsafe World. New York : New American Library, 2000.
Kunstler, James Howard. The Geography of Nowhere. New York : Simon & Schuster, 1994.
________. The Long Emergency. New York : Atlantic Monthly Press, 2005.
McGlashan, Charles F. History of the Donner Party. Barnes & Noble Publishing, Inc., 2004.
Party, Boston T. Boston on Surviving Y2K and Other Lovely Disasters. Ignacio , CO : Javelin Press, 1998.
Rawles, James Wesley. Rawles on Retreats and Relocations. The Clearwater Press, 2007.
________. SurvivalBlog: The Best of the Blog Volume 1. Clearwater Press, 2007.
Ruff, Howard J. How To Prosper During The Coming Bad Years In The 21st Century. New York : The Penguin Group, 2008.
Starke, Linda. State of the World 2004. New York : W.W. Norton & Company, 2004.
United States Air Force. Search and Rescue Survival Training. New York : Barnes & Noble Publishing, Inc., 2003.
United States Army , US Army Survival Manual. New York : Dorset Press, 2001.
United States Marine Corps. Guidebook For Marines, 14th Revised Edition. Quantico , VA : The Marine Corps Association, 1982.

Global Warming
Gore, Al. An Inconvenient Truth. New York : Rodale, 2006.
Knauer, Kelly. Global Warming. New York : Time Books, 2007.
Lynas, Mark. Six Degrees, Our Future on a Hotter Planet. London : Harper Perennial, 2007.
JWR Adds: For a contrapuntal viewpoint, see: Meltdown: The Predictable Distortion of Global Warming by Scientists, Politicians, and the Media, by Patrick J. Michaels

Mechanical
Bealer, Alex W. The Art of Blacksmithing. Edison , NJ : Castle Books, 1995.
Burbank , Nelson L. et al. House Construction Details, 7th Edition. New York : McGraw-Hill Book Company, 1986.
Davis , Thomas Bieber and Carl A. Nelson Sr. Audel Mechanical Trades Pocket Manual, 4th Edition. Wiley Publishing, Inc., 2004.
Finch, Richard. Welder’s Handbook, revised edition. New York : The Berkley Publishing Group, 1997.
Hauser, Walter. Introduction to the Principles of Mechanics. Reading , MA : Addison-Wesley Publishing Company, Inc., 1965.
Graf, Rudolf F. The Modern Power Supply and Battery Charger Circuit. New York : TAB Books, 1992.
Harper, Gavin D.J. Solar Energy Projects for the Evil Genius. New York : McGraw-Hill Companies, Inc., 2007.
Hornung, William J. Builders Vest Pocket Reference Book. New York : Prentice Hall Press, 1955.
Macauly, David. The Way Things Work. Boston : Houghton Mifflin Company, 1988.
Oberg, Erik et al. 27th Edition Machinery’s Handbook. New York : Industrial Press, Inc., 2004.
Parmley, Robert O., P.E. Field Engineer’s Manual. New York : McGraw-Hill Book Company, 1981.
Peters, Rick. Plumbing Basics. New York : Sterling Publishing Company, Inc., 2000.
Proulx, Danny. The Pocket Hole Drilling Jig Project Book. Cincinnati , OH : Popular Woodworking Books, 2004.
Richter, H.P. et al. Wiring Simplified. Minneapolis : Park Publishing, Inc., 2002.
Schwarz, Max. Basic Engineering For Builders. Carlsbad , CA : Craftsman Book Company, 1993.
United States Navy. Basic Machines and How They Work. New York : Dover Publications, Inc., 1971.
Wing, Charlie. How Your House Works. Kingston , MA : Reed Construction Data, Inc., 2007.

Medical
Burns, A. August et al. Where Women Have No Doctor. Berkeley , CA : Hesperian, 1997.
Carline, Jan D., Ph.D. et al. Mountaineering First Aid, 4th Edition. Seattle , WA : The Mountaineers, 1996.
Dickson, Murray. Where There Is No Dentist. Berkeley , CA : Hesperian, 1983.
Forgey, William W., M.D. Wilderness Medicine, 5th Edition. Guilford , CT : The Globe Pequot Press, 2000.
Nato Handbook. Emergency War Surgery. El Dorado , AR : Desert Publications, 1988.
Werner, David et al. Where There Is No Doctor, revised edition. Berkeley , CA : Hesperian, 1992.

Peak Oil
Simmons, Matthew R. Twilight in the Desert. Hoboken , NJ : John Wiley & Sons, Inc., 2005.
Tertzakian, Peter. A Thousand Barrels A Second. New York : McGraw-Hill, 2006.

Weapons and Combat
Ayoob, Massad. The Gun Digest Book of Combat Handgunnery 6th Edition. Iola , WI : F + W Publications, 2007.
Clausewitz, Carl Von. On War. London : Penguin Books, 1968.
Cooper, Jeff. Principles of Personal Defense. Boulder , CO : Paladin Press, 2006.
________. To Ride, Shoot Straight, and Speak the Truth. Boulder , CO : Paladin Press, 1998.
Party, Boston T. Boston’s Gun Bible. Ignacio , CO : Javelin Press, 2002.
Perkins, John et al. Attack Proof. Champaign , IL : Human Kinetics, 2000.
Plaster, Maj. John L., USAR (Ret.). The Ultimate Sniper. Boulder , CO : Paladin Press, 2006.
United States Marine Corps. Essential Subjects. Arlington , VA : Marine Corps Institute, 1986.

Odds ‘n Sods:

Norman in England suggested a piece of commentary about the Mother of All Bailouts: The Rescue of the Wealthy

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Brad E. and Kevin A. both forwarded some bad news from Forbes, that confirms what the Peak Oil crowd has been telling us: Here comes $500 oil. The law of supply and demand is inescapable. I do, however, have my doubts about the supply side of the equation. (See, for example, the arguments presented by the Abiotic Oil proponents.)

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More Odds ‘n Sods gathered by Cheryl N., our Economic Editor: Dow Down 373 Points On Spiking Oil Price, Investor Unease Over Bailout — Morgan Stanley To Sell 20% to Mitsubishi UFJ — G7 Declines US Bailout Scheme — Dollar May Be ‘Crushed” As Investors Weigh Bailout — WaMu Under Pressure — Dire Warnings Fail To Sway Senators On Big Bailout; Dow Down Another 161 — Holiday Sales Expected To Be Weak — Morgan, Goldman Seek Deposits; Regional Banks To Become ‘Lunch’ For Larger Banks — US Dollar Set To Be Major Casualty of Bailout — Credit Crisis Analysis and Conclusion — Berkshire (Warren Buffet) To Invest $5bn In Goldman, Sachs — Funds Get Freer Hand In Buying Bank Stakes “The Federal Reserve, unleashing its latest attempt to inject more cash into the nation’s ailing banks, loosened longstanding rules that had limited the ability of buyout firms and private investors to take big stakes in banks.” [Cheryl’s Comment: Loosening rules adopted after the Great Depression is what caused this…how can loosening more rules be good?] — Hedge Fund Paulson Discloses Short Sales On UK Banks — and, Baby Boomers Delay Retirement.

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Flora recommended a TED Video: Irwin Redlener: How to survive a nuclear attack

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Eric flagged this: Housing crisis has spread to well-to-do

Jim’s Quote of the Day:

Every economy in the world has experienced booms and busts, but somewhere along the line someone came up with the bright idea of eliminating the busts. Throughout the 1990s the world experienced a series of economic crisis in Asia, Mexico, Russia, and even in the US markets that would have been enough to cleanse the system and restore equilibrium. On each and every occasion the Fed met the problem head on with the printing press, so a full blown reaction was avoided thereby creating what I call a “distortion” in the financial system that would eventually have to be sanitized. What any normal country would have done after a capital injection is withdraw that capital once things got better, but the US never did that. They just kept right on printing much like a drug addict keeps increasing the dosage because the old amount has less and less affect. Unfortunately, like a drug addict the economy eventually dies from an overdose, and that’s where we are today. – Enrico Orlandini

The MOAB Accelerates the Inevitable Destruction of the US Dollar

Back in March, I coined the acronym MOAB (for Mother Of All Bailouts), to describe the Federal government’s continuously-expanding response to the global credit collapse. My family has been getting great chuckles mentioning each time that commentators and legislators start using the term. These have included Michelle Malkin, Congressman Ron Paul, Senator Richard Shelby, and Joel Skousen. So now we are waiting for a pronouncement for Al Gore, that he invented both the term and the acronym.

The government’s virtually uncontrolled bailout spree has now expanded to more than 1.5 trillion dollars, and there is no end in sight. At best, this “buy your way out of the problem” approach–via government spending–will result in a decade or more of economic stagnation. This is what has happened in Japan for 15+ years. But at worst, the MOAB will result in the utter destruction of the US Dollar, through hyperinflation. Unless our trading partners continue to go along with the convenient fiction that the US Dollar has meaningful substance, then it is all over. I predict that within the next year, the US Treasury auctions will turn into a farcical comedy . Foreign investors will start to demand higher and higher yields in order to buy any US Treasury paper. Once that cycle begins, the handwriting will be on the wall for the US Dollar.