Letter Re: Comments on Farm Land Versus Coastal Land

Regarding the recent comments in SurvivalBlog, I have no experience with coastal land. I do have experience with farm / rural land.

In my part of the Midwest, "junk" land (rough land not really fit for farming or pasture…and not holding valuable timber) could be purchased all day long 10-12 years ago for $500-$750 per acre. I recently attended a sale of several parcels good only for hunting and the price was $3,000+ per acre. Top quality tillable land—great for corn, soybeans, wheat? Within the last 90 days a 1,500 acre parcel sold for $6,500 per acre. 10-12 years ago, I have no doubt it would have brought $2,500 if the right bidders wanted it. Five years ago? Maybe $3,000 per acre.

I personally believe we may be seeing a bubble developing in farm ground—but if commodity prices stay on the trend they are on now? We have a lot further to go in price increase.
Thanks, – Straightblast



Letter Re: Inflation in Zimbabwe Approaches the Wheelbarrow Stage

Greetings!
It’s not quite a wheelbarrow full of money yet, but check out accompanying the photo in this news story.

I guess that I should invest in a separate ALICE pack, for when ‘Helicopter Ben’ starts dropping off my paycheck – that way I can at least schlep it all to the grocery store, and keep my hands free to operate small arms.
Check out the slide show imbedded in the article as well – shows just how far Rhodesia/Zimbabwe has fallen. – Bob in Pittsburgh



Two Letters Re: 21st Century Property Squatters

Dear Jim:
< Sarcasm On > Your disappearing home equity got you down? Behind on your mortgage? What if you could live payment free for up to 8 months or more and walk away without owing a penny?
See: You Walk Away < Sarcasm Off >

The foregoing is a real solicitation to delay the foreclosure process. When real estate parasites like this have a business helping deadbeats game the foreclosure process, you know the Schumer is starting to really hit. Not that I have much sympathy for the crooked bankers and lenders being taken advantage of here (just wait till we get hit up for the upcoming Federal banking bailout…)
Regards, – OSOM

 

Jim:
>Here’s the scene on that waterfront Florida property that you mentioned, as shown in a Seeking Alpha article by Barry Ritholtz: Foreclosure-Proof Homeowners
Regards, – KBF



Odds ‘n Sods:

From Bloomberg: Fed Boosts Lending to Banks as Credit Rout Continues. Bloomberg also reports: Bernanke Policy to `Destroy’ U.S. Dollar, Faber Says. It sounds like there are some perilous times ahead!

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Mark in Idaho mentioned: that he spoke recently with a good friend who lives in Southwestern Utah. Mark said that his friend went to his local LDS cannery over the weekend and was told to “hurry up and buy what he could since the cannery prices were going to increase, as of the 22nd of March.” That leaves just a short time before the price increase. I just heard from another reader that the LDS cannery wheat price is set to double. If you have been dawdling, then get busy, folks!

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Another news tip from Eric: Non-resident Indians in Bahrain urged to avoid US Dollar and Indian stocks: “invest in gold or British pound”

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Our friend Chad mentioned the plethora of information on the upcoming D.C. v. Heller US Supreme Court decision available over at The SCOTUS Wiki.



Jim’s Quote of the Day:

"We have the illusion of freedom only because so few ever try to exercise it. Try it sometime. Try to save your home from the highway crowd, or to work a trade without the approval of the goons, or to open a little business without a permit, or to grow a crop without a quota, or educate your child the way you want to, or to not have a child. We all have the freedom of a balloon floating in a pin factory." – Karl Hess



Note from JWR:

The high bid in the current SurvivalBlog Benefit Auction lot is now at $110. The auction is for a combined lot of five items: a 120 VAC/12 VDC BedFan Personal Cooling System (a $99 retail value), kindly donated by the manufacturer, a Thieves Oil Start Living Kit (a $161 retail value), the book Healing Oils of the Bible by David Stewart, Phd. (a $19 retail value) the book When Technology Fails, by Matthew Stein (a $29 retail value)–all donated by Ready Made Resources, and a copy of the latest edition of “The Encyclopedia of Country Living” by the late Carla Emery (a $32 retail value). The auction ends on March 15th. Please e-mail us your bids, in $10 increments.



Characteristics of a General Purpose Survival Flashlight by W. in Washington

Let there be light. We take it for granted these days, but in the woods on a dark night, during a power outage, or–most importantly–in a long-term survival situation, you’ll quickly learn just how important light is, and how important it is to choose your illumination tools wisely.

My purpose here is not to recommend specific lights. There are web sites that can better help you make that decision. I’ll include a few links at the end to get you started. What I want to do is offer my opinions about what I think makes for a good survival light. Other people will have other opinions. While I don’t consider myself a flashlight expert, I own over 20 of them and have put a lot of thought into using flashlights in long-term survival scenarios. Following are what I consider the most important criteria in evaluating a survival flashlight (not necessarily in order of importance).
1. Small and lightweight is better
Bigger flashlights are usually bigger (or longer) because they hold more or larger batteries than smaller flashlights, which usually translates into increased light output. On the other hand, they’re also heavier and more unwieldy than their smaller cousins, and do not necessarily enjoy a longer runtime than lights using fewer or smaller batteries. Ideally, a survival light uses just one or two batteries, and is small and lightweight enough comfortably carry in your shirt or front pants pocket. This gives you more carry options and makes carrying the light for long periods of time more comfortable.
2. Uses a common battery size
Currently, the most common flashlight battery sizes are AAA, AA, and D cells. Very few lights use 9-volt batteries (though there are some that would make decent back-ups, such as the PALight or PakLite), while most D-cell lights are too big and/or heavy for consistent, comfortable carry. That leaves AA- or AAA-cell lights as the most logical choices. Using a common battery size is important for obvious reasons. Many new battery types and sizes have hit the market in the last few years, and while these are (slowly) gaining in popularity, they’re still not as common as AAs and AAAs. They also tend to be more expensive. Remember, we’re talking about serious, long-term, dedicated survival lights, not the fancy whiz-bang or cheap-o flashlight you keep by your bedside, in your glove box, or take car camping. Depending on the severity and duration of the survival scenario, it will probably be easier to either purchase or barter for AA and AAA batteries than the newer, more exotic sizes. In fact, if possible, it might be wise to standardize all your survival-related electronics so that they use AA and/or AAA batteries.
3. Uses a variety of battery types
It’s important that survival flashlights be able to function whether using alkaline, lithium, or rechargeable batteries–especially rechargeables (along with a portable solar recharging system), since you could be facing a long-term survival situation. Each type has its own particular advantages and disadvantages. Most lights will function using all three types, though some manufacturers don’t include lithium primaries in their list of recommendations. That doesn’t mean lithium batteries will harm your light, but don’t assume there won’t be a problem using any type of battery that the manufacturer doesn’t specifically recommend. Find out exactly what batteries your survival light can tolerate before you purchase it, or test the batteries in your light before you have to rely on them.
4. Fewer batteries is better
Obviously, the fewer the batteries needed to operate the light . . . the fewer batteries you’ll need to operate the light. This is a good thing in a survival situation, even better in a long-term survival situation. Your two-cell light may get a total runtime of 60 hours compared to just 40 hours for my one-cell light. But I’ll get a total of 80 hours using two batteries compared to your 60 hours. Of course, comparisons like this don’t always apply: run times vary greatly between different manufacturers and models depending on the type of light source and the electronics employed. Still, as a rule, a survival light should use no more than two batteries, preferably just one. Currently, there are many one-cell AA lights on the market that not only produce a lot of light (for their size), but also enjoy excellent run times. Twenty-plus hours of usable light is not uncommon, and even longer run times can be found. There are also a few 1xAAA lights available that might make adequate primary or excellent back-up survival lights.
5. Simple to operate
There are lots of fancy lights out there that sport multiple output levels, including SOS and strobe modes. Some are even computer-programmable. While that’s not a bad thing in itself, when it comes to survival lights (as with most survival gear), simple is usually better. A light with just one medium-intensity level will usually suffice, or perhaps a two-level light with low and high output levels. In
the end, it doesn’t matter how many light levels or modes your light offers, just so that it’s dirt simple and intuitive to operate.
6. Reliable operation mechanism
” Twisty” or “clickie,” that is the question. Which is more reliable? There is no definitive answer, because operation reliability depends more on the quality of the light (and its constituent parts) than on the particular mode of operation. And even a good company can turn out the occasional bad light. I’ve heard of $200+ Surefire lights having clickie malfunctions. I’ve also heard of twisty lights failing because the circuit board was displaced after repeated use, or by using too much torque while tightening the bezel. Most clickies have the on-off mechanism on the rear of the light, while some have it on the side (e.g., Maglite). Most twisties are operated by turning the bezel (head) or tail cap. And there are also hybrid models utilizing both twisty and clickie operations. If at all possible, obtain spare clickie mechanisms and/or twisty bezels (depending on the type of light) to use as replacement parts. [JWR Adds: Changing a MagLite “clickie” switch assembly require the use of an Allen (hex) wrench. Thankfully, MagLite sells large maintenance & repair spare parts sets at a very low price, considering the number of parts included in the sets. I have been told that they sell these parts sets at near their cost, to keep their biggest customers (such as police and fire departments) happy and loyal to the brand.]
7. Well constructed
Look for lights where the bulb is reasonably protected within the bezel, that are shock resistant and water resistant/proof, and that won’t accidentally turn on while in your pocket or backpack. Clickies are most prone to accidental activation. This can usually be prevented by rotating the bezel or tail cap (depending on which end the batteries are inserted into) counterclockwise while the light is on until the power cuts out, then clicking the clickie button off.
8. LED versus incandescent
No contest here. A flashlight that uses an incandescent (or similar type) bulb is simply not a primary survival light. Period. If the bulb itself can burn out or malfunction due to shock (broken element), then you don’t want to trust your life to its operation. While light emitting diode (LED) “bulbs” technically don’t last forever, a 5,000- to 10,000-hour use life is close enough to “forever” for survival purposes. And no, LED bulbs are not impervious to shock, but they’re a heck of a lot tougher than other bulb types. Over the last few years LED technology has improved exponentially, to the point where they now favorably compare to or out-perform most other lights in almost every category, including output (brightness). There are still brighter bulb types out there, but the newest and brightest LEDs are more than bright enough to meet virtually every basic need you’ll have for a flashlight. The older Nichia brand LEDs, still commonly found on store racks (it takes time for new technology to trickle down to the retail level) emit a slightly bluish tint. Many people find this tint objectionable, though it’s really a matter of aesthetics. I still rely on a relatively dim Nichia LED as my primary survival light (a CMG Infinity Ultra, now redesigned and marketed under the Gerber name), and am more than willing to put up with the bluish tint due to its superb runtime (80+ hours of usable light on just 1 AA battery). My current back-up survival light (an old Arc-P 1xAAA) is also a Nichia. Other people are not so forgiving of the tint. Not to worry. The newer generation LEDs (e.g., the so-called Cree lights, and others are on the way) boast a lily white tint–or maybe even whiter than lilies. The bottom line is, go with LED technology.
9. Good compromise between output and run time
Other than the “LED versus incandescent” issue (which is actually a non-issue), this is arguably the most important criterion, and it’s what separates most lights from true survival lights. Look for a run time of at least seven hours to 50% output (which would probably translate into 8-12 total hours of usable light). This is the minimum that you should settle for. The longer the run time, the better. Let’s make sure you understand that last point. The longer the run time, the better. Don’t get hung up on the whole output (i.e., how bright it is) thing. Super-bright “tactical” lights are great for impressing your friends, but will usually suck batteries dry much more quickly than less powerful lights (although improving LED technology continues to give us brighter lights and better run times.). Also, the darker your environment, the less light you need to see well enough. Brighter lights can actually be a disadvantage, because they more readily attract unwanted attention, and can also impair your night vision more than moderate-output lights. These are important considerations in a survival scenario. Again, we’re talking about survival lights here, not tactical (super bright) lights. While it might make sense to also take along a super-bright light for “tactical” use (e.g., disorienting or disrupting the night vision of a potential threat), in most cases these lights will not meet the necessary criteria to qualify as true survival lights. And to repeat: the darker your environment, the less light you’ll need to perform most essential tasks.
11. Quality of light beam
What this refers to is the illumination pattern, or beam characteristic, of the light. It’s sometimes referred to as “spill.” For survival lights, a wide spill beam is usually preferable to a tight, bright spot beam.
While the former won’t illuminate specific objects as well, it provides illumination to a wider area, facilitating a broader picture and better peripheral vision. The latter will illuminate specific objects or smaller areas much better, and will have greater (longer) “throw,” but will also tend to draw your line of sight inward, so that you focus more on what’s illuminated in the spot beam than on what may be around it. Tight, bright beams are also more detrimental to night vision than wider, dimmer spill beams. A few lights seek a compromise between the two, claiming to offer both a bright center beam as well as decent spill. Some are more successful at accomplishing this than others. Personally, I prefer lights that do one thing or the other over those that take a “Swiss Army Knife” approach to illumination, though you may feel otherwise.

If you happen to choose to also carry a more powerful “tactical” light, just in case it’s needed, you’ll probably prefer that it have a bright, fairly narrow beam. But for a general purpose survival light, you want a wider, more diffuse beam, allowing you take in more visual information at one time.
12. Lanyard hole
The lanyard hole is just that–a hole [or loop] in the light [body or tail cap] through which you can attach a lanyard (cord) or a split ring, to which the lanyard can be attached (I prefer this setup). The lanyard can then be tied around your wrist, for example, or through a belt loop to prevent the loss of your light. Instead of a hole, some lights employ other means for lanyard attachment, and some have no dedicated lanyard attachment at all–except, perhaps, a (removable or screwed-into-place) pocket clip under which you could thread a cord. Unless you choose to forgo the lanyard and attach your light to a key ring along with other needed items (which I advise against, though that might be a viable option for a small back-up light), Always use a lanyard and secure it to your person, your clothing, or your gear, even when not in use. Your survival light is an essential, life-saving, possibly irreplaceable tool, but it will do you no good if you lose it. To be honest, I don’t think I’d buy a light for serious survival that did not feature a dedicated, foolproof lanyard attachment, preferably a hole through some portion of the body.
13. Pocket clip
Most smaller lights these days come with pocket clips. They are usually detachable (slide-on, slide-off), and are useful for securing the light to the inside of a pocket, or for clipping it to your clothes, gear, or hat brim while performing tasks that require both hands. (I would always use a lanyard in addition to the clip). Pocket clips are nice to have. If your light doesn’t come with one, it would be worthwhile to find a clip from some other source (such as another light of the same diameter) that fits snugly around your survival flashlight.
14. Can stand on its tail
This is not an essential criterion, and I certainly wouldn’t reject a light simply because it isn’t designed to stand upright on its tail end (and FWIW, my current primary survival light doesn’t), but lights that can do so add an additional level of functionality. They are especially useful when you desire ambient (rather than direct) light, such as when reading or dressing in your tent. Of course, you can always prop your light up or clip it to something to get the same effect, but it’s not quite as handy.
15. Caring for your light
Other than lubing the bezel and/or tail cap threads with an appropriate wet or dry lubricant, and avoiding cross-threading when attaching the bezel and/or tail cap, flashlight maintenance is pretty simple. Don’t put the battery(ies) in backwards, keep it dry, don’t drop it, etc. I’d suggest keeping your survival light empty of batteries until needed. Otherwise, keep lithiums in there. Alkalines can leak and ruin your light.
Q: What about headlamps? Can these be used as survival lights?
A: Very handy items to have. The light shines right where you look. Including smack dab into the face of the person you’re looking at. Maybe it’s just me, but I don’t much care for light in my eyes when I’m trying to preserve my night vision. They might also make a handy head-shot target for hostiles. Let’s put it this way. While most small flashlights can usually be rigged to serve as makeshift headlamps (with the aid of a pocket clip or headband, for example), most headlamps cannot readily be used in the same manner as one might use a flashlight. Headlamps could possibly serve as back-up survival lights (if they use only one or two batteries), but I would not recommend them as primary survival lights. A flashlight will, in most instances, prove more versatile.
Resources
1. The best flashlight resource on the Web is Candle Power Forums
. Lots of traffic and more info about flashlights than most people would ever need to know. Also a good source for obtaining custom lights.
2. One of the better flashlight review sites is FlashlightReviews.com. It’s no longer updated regularly, but many of the lights still being sold are reviewed at the site.

JWR Adds: I agree with W’s recommendation to get white LED flashlights. Here at Rawles Ranch, we mainly use the older late 1990s-vintage C. Crane Company blue-white LED lights that are compatible with NiMH rechargeable AA batteries. I realize that many SurvivalBlog readers have a lot invested in incandescent bulb flashlights. Rather than selling them at a loss, keep in mind that LED replacement heads now available for most or the major brands including MagLite and SureFire. OBTW, if you decide to transition to LEDs, save those original incandescent light bulb components. You never know when someday you may need a lot of light–for example for impromptu surgery out in the field. The other exception is truly SHTF tactical use. While I do not advocate using a visible light flashlight or rail-mounted weapon light where you are up against and armed opponent. (Since they provide your opponent with a convenient point of aim.) They are fine for shooting marauding bears, but almost suicidal when confronting two-legged predators. However, I do advocate using the same lights with an infrared (IR) filter installed, in situations where you have night vision goggles (or a Starlight scope) and you have a high level of confidence that your opponent does not. This will give you a tremendous tactical advantage in low-light fighting. In these circumstances, for short periods of time you will want all the light that you can get! For this purpose, I keep the original incandescent light heads for my Surefire lights handy. I also keep a 50 piece box of the standard Panasonic brand CR-123 lithium batteries in my refrigerator, as a “tactical reserve.” These have a 10+ year shelf life. Our current box, (which, BTW, was generously donated by a reader in lieu of a 10 Cent Challenge subscription payment), won’t expire until 2018.

Regarding lanyards, I recommend using a long, stout lanyard that is a full loop, preferably with a ball-shaped spring button slider. I mainly use olive drab paracord. The longer the better, for the sake of versatility. If the lanyard is too short, then there is not enough slack to loop the flashlight through (in a Girth Hitch–a.k.a. Lanyard Knot) to be able to hang a light from a branch, belt loop, tent d-ring, or other object.



Letter Re: The AR-10 as a Primary Rifle for a Retreat?

Dear Jim:
I have read time and again about .308 rifles on SurvivalBlog, and how you often steer people towards the HK and FN brands. What do you think about the Armalite AR-10 I have two, and like them very much, and have extensive spare parts and magazines. BTW, you won’t hurt my feelings if you do not like them, I just wonder why you [don’t often] mention them.
Sincerely, Mark in Albuquerque, New Mexico

JWR Replies: I have a personal preference for L1A1s, FALs, and HK91s, but I hardly rule out functionally equivalent rifles such as M1As and AR-10s. I only de-emphasize the latter because of the relatively high cost of extra magazines and spare parts. I particularly recommend AR-10s for readers that are prior US or Canadian military service–those that already have a lot of muscle memory invested in the AR platform–namely the US M16 series and the Canadian C7 series. (The sights and controls will seem familiar and “right” to them.) I also appreciate the light weight of AR-10s. (They weigh more than a pound less than most other .308 semi-auto battle rifles.) The only major drawback is that the AR-10 has the same dirty gas tube action as an AR-15. Just be sure to clean your rifles frequently and scrupulously.

OBTW, I strongly prefer the varieties of AR-10s that can use standard FN-FAL magazines. Specifically, I recommend the Bushmaster AR-10 (now out of production) and the RRA (Rock River Arms) LAR-8 . Standard metric FAL magazines can be found for as little as $7 each, versus up to $60 each for some of the proprietary AR-10 magazines. That may not be much of an issue to casual shooters, but it is is a big issue for well-prepared folks that want to salt away 25 or more spare magazines for a “lifetime supply.” At $40 each, a supply of 25 spare magazines would cost nearly as much as the rifle itself! If properly cared for, rifles using noncorrosive ammunition may last for three generations of regular use. But magazines are the most fragile part, and cannot be expected to put up with the vigors of regular field use. They are after all, very vulnerable when one drops to a prone position. Another factor to consider is the prospect of another Federal magazine ban. Based on the experience of the ill-conceived 1994-to-2004 ban, I anticipate that a new ban will probably bump the prices of FAL magazines to $20+ each, and AR-10 magazines to $120 each, or more. If the anticipated new law is permanent (with no sunset clause) then magazine prices might reach absurd heights.



Odds ‘n Sods:

Patrick sent us a link to a promising new steam engine design. (I mentioned it once before in the blog, but their web site has recently been expanded, so it is worth another look.)

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Steve sent this: Citi Falls on Worries About Cash Levels. Steve’s comment: “The largest banks are in trouble and main stream media is reporting it.” Meanwhile, we read: Wall Street to Citigroup: Come clean

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Two more links from Eric, with more cheery news from abroad: International experts foresee collapse of U.S. economy and, Already we have riots, hoarding, panic: the sign of things to come?

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Scientists Make First Map of Emerging Disease Hotspots. Out of curiosity, I’d like to see a version of that map “normed” to a population density map. I would guess that it would still show some relatively hot spots in east Asia. But undoubtedly, latitude and population density play key roles.



Jim’s Quote of the Day:

"We have staked the whole of all our political institutions upon the capacity of mankind for self-government, upon the capacity of each and all of us to govern ourselves, to control ourselves, to sustain ourselves according to the Ten Commandments of God." – James Madison



Note from JWR:

You may have noticed some all-time highs were just reached in the commodities markets. Spot gold briefly reached $991 per ounce yesterday morning (intraday). It settled substantially by the closing bell, but the bull market in commodities is far from over. Meanwhile, crude oil futures spiked to nearly $106 per barrel. And the futures market for wheat was recently bid up to an unprecedented $25 per bushel. When I last checked, the US Dollar Index had sagged down to an alarming 72.66! Spot silver, while not at an all-time high (because of the extraordinary highs set during the Hunt Brothers-inspired silver boom of the late 1970s), touched $21.10 per ounce yesterday morning. I have been urging my readers to buy silver since February of 2001, when spot silver was $4.55 per ounce. Pardon me for saying this, but I told you so.



Letter Re: Credit Unions Versus Banks for Safety?

Good Morning Jim,
As I read today’s blog, I thought again about the safety of credit unions. As far as I have been able to discover, they have not jumped in to the derivatives like banks and mortgage companies did, and seem much safer than banks. Credit unions are mostly local and (though the requirements are often much less restrictive than they used to be) usually only have local residents as customers. Does anyone know any more on credit unions? I’ve long recommended credit unions to my friends and family in place of banks, since they usually offer lower loan, and higher savings rates than banks, with better service. Do you or any of my fellow SurvivalBlog readers have any input, or insight here? Thanks! God Bless, – R. in NH <><


JWR Replies:
In the event that panicked runs develop, most credit unions in general will be safer, on average, than banks. But rather than just assuming safety, you should investigate the reserve level and portfolio of your particular credit union. If any institution has a large exposure to derivatives trading or subprime real estate lending, then it should be avoided. And even if your credit union’s customers are for the most part credit worthy, you need to examine: A.) Is the credit union tied to one industry that will do poorly in an economic downturn? And, B.) If the credit union issues mortgages, then is the real estate in that community grossly over-inflated? If you live in an area where real estate prices have tripled or quadrupled recently, then beware!

Regardless of the risk level of your particular bank or credit union, don’t put all your eggs in one basket. Your money on deposit should be spread evenly between several institutions. Also, consciously differentiate between your short term cash requirements and longer term investments. In today’s volatile credit and currency environment, I advise keeping the majority of your long term investing assets in tangibles.



Letter Re: A Recipe for Hunza “No Hunger” Bread

Jim:

I found the following recipe for Hunza Bread at the You Q&A web site, in Canada. Because this is a very filling “no hunger” recipe, I have found it very useful in losing weight. (Obviously in a survival situation, my goal would be to maintain my body weight, so I would eat a lot more of it.) It is very easy to make.

Hunza Bread Recipe.
4 cups of water
3.5 (three & one half) to 4 pounds of natural buckwheat or millet flour
1.5 (one & one half) cups of olive oil
1.5 (one & one half) cups of natural unrefined sugar
16 ounces of honey
16 ounces of molasses
4 ounces of powdered soya milk (half cup)
1 teaspoon sea salt
1 teaspoon cinnamon
1 teaspoon ground nutmeg
2 teaspoons baking powder (non aluminum)
You may also add apricots, raisins, chopped walnuts, almonds, sliced dates to the above ingredients. Mix ingredients. Grease and lightly flour cooking pan(s). Ideally use baking trays with about 1 inch high sides. Pour batter in pan(s) half an inch thick over the base. Bake at about 300 degrees Fahrenheit (150 C.) for 1 hour. After cooking, dry the bread in the oven for two (2) hours at a very low heat – 90 degrees Fahrenheit (50 C). After it is cooled tip out and cut into approximately 2 inch x 2 inch squares. Store it [refrigerated], wrapped in cloth in a container. You may need to repeat the baking depending on the size of your baking pan, and oven, until all the mixture has been used.

I hope that my fellow readers find this useful. – Bob G.



Letter Re: Will US Banking Turmoil Depress the Price of Gold?

Good Morning,
I am a fairly new SurvivalBlog reader but like your range and depth of coverage in all things “survival”. I Hope you can help me with a metal question…
I have collected gold and silver coins for over 10 years now and have always assumed I could sell them when the time was right, but I recently had a conversation with a local coin dealer who indicated they were cutting back their hours and that there were several other shops that were closing down their retail operations because a lot of people were only wanting to sell precious metals not purchase them. Thus, the shop inventories were swelling and they could see no reason to buy more from their customers until their [coinage] stocks diminished. Did I understand this line of reasoning correctly? If the banks crash and people need cash will that not cause metal prices to plummet since there are so few places that will purchase gold and silver? Would this be a temporary condition as foreign buyers like India would swing into action? Your thoughts on this would be much appreciated. – Keith D. in Colorado

JWR Replies: You are correct. that the precious metals market is global. It is, however, a notably very “thin” market, compared to other investments like land, stock and bonds. Thin markets tend to be volatile. But every free market eventually finds equilibrium. In the short term, just the rumor of a Central Bank gold sale could push down the price of gold by as much as 30%. But that won’t change market fundamentals, and the metals will prices will eventually bounce back. The impact of a major bank run in the US is an imponderable. It could push metals down, briefly. But in the aftermath, when people see the continuing declining value of the US dollar (USD) in foreign exchange, the metals prices will resume their bull charge, fueled by foreign purchases.

I cannot predict a top, but my gut tells me that it is somewhere substantially above $1,500 per ounce gold. That equates to 1000 Euros per ounce, which might be seen as a magic number. (A “panic” number for the bankers.) Beyond that, there is a substantial risk of “intervention” that could run the gamut from government gold sales, to government gold leasing, to targeted “exceptional profit” taxes, to export and import controls, to even possibly another FDR-style gold ban. (Keep in mind that when I was describing natural equilibrium, I was talking about free markets. When market freedom is destroyed by legislation or executive orders, all bets are off. Free market fundamentals only apply to truly free markets.

When governments and their banking cartels feel the heat and recognize the risk of their magic money machine being revealed for what it is–essentially a fraud–then there is no limit to what they will do to protect their interests. Wit that said, I strongly recommend that once gold passes the $1,000 USD mark that you very gradually unwind your metals positions. You should divest perhaps 70% by the time gold passes $1,600 per ounce. Don’t try to time the peak. Experience has shown that this is almost impossible. My further advice for divestment is as follows: Sell off your foreign-minted bullion first, followed by your US commercially-minted gold, followed by your US Mint Eagles, and finally your pre-1933 numismatic gold. (The latter is the least likely to be confiscated.) I recommend that you maintain a core holding of pre-1965 sliver coins for barter, regardless of what price level the metals markets reach.

As you divest your gold in the bull market, put the proceeds immediately into other tangibles investments–as I’ve described at length in SurvivalBlog. Just don’t make the mistake of parlaying your precious metals profits into any dollar denominated investments. That would be foolish.



Odds ‘n Sods:

Don’t miss watching this brief video clip: John Williams of ShadowStats Warns: Economic Depression Ahead. (A hat tip to William D. for spotting that video link.)

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Jason B. sent us this: Gulf investors may not save Citigroup, Dubai executive says. Jason’s comment: “JWR’s prediction of bank runs may come sooner rather than later.” Meanwhile, we read: Banks’ Losses Could Put $900 Billion Squeeze on Consumers.

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In a recent issue of The Daily Reckoning, Bill Bonner commented: “Among the Fed’s efforts to relieve the bankers’ pain has been a new line of credit – the Term Auction Facility. What a handy tool! It allows the banks to borrow against the same infected collateral that caused them problems in the first place. Private lenders wouldn’t touch it; but the Fed…as chump of last resort, with the taxpayers’ credit card in hand …accepts it as if it were lost Rembrandts and uncirculated gold coins.”

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Ben. L. found this: Apple Farmer Finds Pigs Work Better Than Pesticides in Apple Orchard