Odds ‘n Sods:

Chris T. recommended this Time magazine article by Amanda Ripley: How to Survive A Disaster

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BulletProofME.com (one our loyal advertisers with a great reputation) has just started a one-month special sale on Interceptor Body Armor and Kevlar helmets. The sale price is just for SurvivalBlog readers: $500 for a mil-spec Interceptor vest in Woodland Camouflage or 3-Color Desert Camouflage. (That is below wholesale – only possible because of a military contact overrun in these colors. So te special sale price only applies to those colors. (They do offer a 15% discount on other colors.) They are also offering a a 20% off special on military surplus Kevlar helmets: A Military Surplus PASGT helmet, in almost new condition $96, complete with a 4-Point Helmet Suspension, or $109 with a Foam Impact Liner which gives about 70% of the Blunt Trauma protection of the state of the art MICH / Advanced Combat Helmet system, or $175 with the full MICH / ACH blunt trauma pad system retrofitted. This SurvivalBlog special ends on July 3rd, or when stock on hand is exhausted, so don’t hesitate!

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Who says that you can’t live a “low-profile” life? Hidden tribe outed ‘to prove they exist’.

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Jack in Texas sent us an article that illustrates one of the implications of sky-high feed prices: An Epidemic of Abandoned Horses



Jim’s Quote of the Day:

"Probably all laws are useless; for good men do not want laws at all, and bad men are made no better by them." – Demonax – (Roman philosopher, circa 150 A.D.)



Notes from JWR:

I got the following note from a reporter named Alison, at one of the big “Three Letter Acronym” television networks: “I”m a reporter a looking to do a story about how some people are becoming “survivalists” as our energy prices skyrocket. I am looking to profile someone, or a family, in the New York region, preferably in the New York Metro area, including the tri-state region. If they wish to remain anonymous, we can also call them different names and not give away where they live.” If any SurvivalBlog readers are interested, send me an e-mail, and I will forward your e-mail to her.

The following is the first article sent to us for Round 17 of the SurvivalBlog non-fiction writing contest. The writer of the best non-fiction article will win two valuable four day “gray” transferable Front Sight course certificates. (Worth up to $4,000!) Second prize is a copy of my “Rawles Gets You Ready” preparedness course, generously donated by Jake Stafford of Arbogast Publishing. Round 17 ends on July 31st, so get busy writing and e-mail us your entries. Remember that articles that relate practical “how to” skills for survival will have an advantage in the judging.



A Citizen’s Band (CB) Radio Installation Primer, by C.G.

Citizen Band (CB) radio requires no FCC license to operate so it is a good choice for local communication. If cell phones fail to work for whatever reason, it may be the best method for remote communication since its range is better than FRS and GMRS. When I installed my first CB in a vehicle, I was happy just to get it in and be able to transmit to my buddy who lived the next block over. I’ve matured since then and my tolerance for white noise is less than what it used to be. I’ve learned over the years how to properly set up a radio system and I’m normally left with a CB that has few problems. So, I’m writing this to help those of you that use Citizen’s Band radio in your vehicles, but may be plagued with noise, weak signals, or are just generally unhappy with your radios performance. At worst, this article should give you a jumpstart in your quest for a 1:1 standing wave ratio.

The basic components of a radio system are simple: power, radio, antenna feed line, and antenna. If all function properly, the radio shouldn’t give you any problems. But for vehicle use, with all those wires and working parts, problems do arise. I’ll talk about each of the above mentioned components and other aspects of radio communication you may need to know for a proper set up. Please keep in mind, these pages are not entirely comprehensive about CB installation or uses and may not answer all your questions… it’s written based upon my experiences in radio communication and quite frankly, I haven’t experienced it all, yet. But with that said, here goes:

Antenna
The two most important things to consider when mounting an antenna are grounding and positioning; when both of these things are considered and handled properly, you should receive a decent Standing Wave Ratio (SWR) reading (more about that, later). The best way to ground an antenna is to drill holes for the mounting bracket into a metal portion of your vehicle. If you’re concerned about resale value and don’t want to drill, look into mobile mounting units that require no drilling from a supplier like HRO (Ham Radio Outlet); they sell units for doors, trunks, rain channels, etc.
An antenna mounted in the middle of a metal roof will get the best signal because it is surrounded by a reflective surface. However, you may have a problem grounding the antenna without causing a leaking problem in your roof (but that would of course mean you won’t be asked to drive that often so it has its upside). You should mount the antenna where you will get the best SWR without sacrificing clearance or risking damage to the antenna or mount… or getting while driving in a rainstorm. I recommend a pickup bed immediately behind the cab, a lower quarter panel, or the lid of a trunk. If you mount your antenna in any of these locations, you should get be able to clear the roof line of your vehicle by about 6” to 1’ with a 36” antenna and transmit decently.

Two other things to consider are antenna quality and length. First, quality. Simply put, the two best brands of antenna on the market are Firestick and K40; I would recommend both of these two brands for a mobile unit. Second, the length of your antenna is a matter of preference quite honestly, although I will admit that longer antennas generally transmit and receive better. The reason it is more a matter of preference than performance is clearance. A 6-foot antenna mounted on a roof is going to have some clearance issues with your garage, trees, etc.; but if you choose to mount your antenna on a bumper, then a 6-foot model would probably be fine. I use a three foot antenna on my pickup and can transmit about five miles on the regular 40 CB channels. Just another issue to keep in mind when you purchase your setup.

Feed line
The Feed line is the length of coaxial (“coax”) cable from the radio to the antenna. There are subtle differences in coax Feed line based upon insulation, grade of cable, etc. Generally speaking, the better the Feed line, the better it will transmit your signal, so buy quality coaxial cable. When buying the necessary mounting supplies, you need to make sure it is all matched for impedance. Almost all CB radios will have a 50 ohm impedance jack for the antenna input and most coax sold for CB radios is as well–but it doesn’t hurt to ask before you buy.

Much has been said about the length of the Feed line for a CB radio. Some people say that 18’ is the proper length, some people say 17’ is the proper length. To be honest, impedance match is the most important thing. But I cut my coax to 17’4” staying in practice with radio theory that the Feed line should be a factor of the wavelength that you will transmit on (I won’t bore you with the calculation with MHz and inches). 17’4” is probably much more than you will need, but will allow for an antenna choke if you need it. Be sure to buy Feed line that already has PL259 connectors already installed if you’re not familiar with the installation process. But FYI, it’s not difficult to learn if you’re familiar with soldering; any radio technician at Ham radio Outlet (HRO) can explain the process.

Radio and Installation
First, let me bash on the handheld units a bit. CB transmission is essentially line of sight transmission and anything that blocks the line of sight is going to weaken the signal. A handheld CB is for use outside of a vehicle… using it inside a vehicle you get minimal transmission distance because the signal bounces off the metal components of the vehicle, and even with a soft top jeep, the signal still needs to pass through a barrier and as a result it’s weakened. So if you’re using a handheld and wonder why you can’t hear much, there’s the reason. I will admit that I have a portable unit, a Midland 75-820, that is a handheld unit with a separate magnetic base antenna for use while in a vehicle. It’s performance is adequate but not optimal. Frankly, the Midland setup has two major problems, 1) engine noise which can be caused by the rotation of the alternator feeding back through the electrical system (a problem more prevalent on older vehicles but still present on many today) because the ground for everything is through the cigarette lighter… and 2) the limited volume the unit puts out with such a small speaker (an operator in a loud truck or topless jeep may have problems using this CB when driving on the highway). I use this unit only as a backup unit or in a second vehicle that doesn’t have a hard wired setup.

I currently use a Cobra 18WXST II. It is a reasonably priced unit from a quality manufacturer. Regardless of what you buy, most quality units will have an internal noise filter, scanning feature, and NOAA weather bands, but be sure to buy the unit best suited for your needs. If you’re interested in SSB transmitting or extended range, you may want to get a better unit; I recommend the Cobra 148GTL. [JWR Adds: That is also one of my favorite models. Its proven design remained essentially unchanged for many years, making it readily adaptable for out-of-band transmission by licensed ham radio operators that can transmit in the 10 Meter band (which is adjacent to Citizens Band.)]

Now, it sounds as though it should be common sense but be sure to mount the unit where it will be easy to use and not an obstruction while using the vehicle (the dash board is probably a bad choice as is the foot well near the pedals). I recommend bolting the unit to the center console or using a RAM mount somewhere on the transmission hump.

Cleanliness of installation should be considered too. Do you want coax cable on the floor of your back seat or run under the carpet? Do you want to run the wires out an existing hole in the chassis or drill a new one? I normally run the power line through the dash and directly to the battery; this eliminates some noise you can receive when tapping into an existing hot [12 VDC energized] line or fuse (more on that later). Be sure to use a fuse for your radio before hooking it up or you may soon be buying a new radio. The coaxial cable I normally run under the carpet or floor mats to the rear of the cabin and drill a small hole (if necessary) near the mount.

SWR
Now that the system is set up, lets learn how to optimize its transmission capability. The first thing we need to address is SWR. Essentially, a SWR meter measures how well your equipment will transmit and receive on the specific frequency you intend to use. If you have everything grounded properly, your equipment is impedance matched, and you have a decent antenna mounted in the correct location, the SWR should be ok. An SWR reading of 1:1 is optimal but a reading of 1.5:1 is excellent, a reading of 2:1 is considered good (actually great for most applications), but anything higher than 3:1, well, you pretty much wasted your time with the installation. Getting the best SWR on your specific rig is a matter of trial and error… in my experience, you can’t go wrong if you ground everything well and place the antenna on top of a metal roof or mount it where at least a portion of the antenna clears the roof line.

An SWR meter can be purchased at any Radio Shack or electronic supply house. Most come complete with directions and are pretty easy to use, even for a novice. If you’re unhappy with the SWR you get from your setup initially, don’t worry, you can improve it by tuning your antenna. All antennas are tunable, but some are tuned easier than others. Some need to be cut and some need to be bent to retard the oscillation on the part past the bend. The K40, for example, is one of the easier ones; it has a small whip that sticks out the top on the antenna and is moved up and down using a supplied Allen key; by adjusting the length of the whip, you can receive a better SWR reading.

Noise Elimination
Even if you are happy with the SWR you get on your system, you may still have problems with noise (one doesn’t necessarily effect the other) so lets learn how to eliminate that noise.
Most radios come with an internal noise filter… a button or toggle switch on the face of the radio that eliminates much of the squelch noise from the radio output. The problem with this feature is that it also makes distant transmissions difficult to hear. If you want to (or need to) address the problem further, know that noise on a CB unit (while the engine is running) is normally caused by two things… 1) noise coming through the hotline of the radio or 2) noise being picked up by the antenna.
(Note: You need to remember, a CB picks up 27 MHz radio waves and an engine or other vibrations can cause interference and distortion of those radio waves. Power windows or seats can cause feedback… that’s normally caused by the electrical motor. An older engine can create oscillation heard on a CB… chances are it’s the points spinning in the distributor. So noise isn’t necessarily just an electrical hotline problem… you need to eliminate both possibilities mentioned above.)

A few simple tests can isolate the source of the noise.
1. Hook the radio up to the battery directly or better yet, a separate battery not hooked into the truck’s electrical system. This will bypass and eliminate any noise caused by the alternator or firing of the cylinders. If you still get noise, it’s coming in through the antenna.
2. Disconnect the Feed line from the antenna or the Feed line from the radio. This will eliminate any noise being received on the antenna. If you still get the noise, it’s coming from the power/ground lines.
I’ve had both types of problems (both on the same rig once)… so here are the fixes I used to eliminate most (not all) of the noise.

Antenna Noise
To eliminate noise caused by the antenna receiving unwanted signals, put in an “antenna choke.” Disclaimer time: I have an idea why this fix works but I’m not sure and I haven’t gotten a straight answer from anyone on the matter… so do me a favor and don’t ask because all I can tell you is that it does work to eliminate noise coming in through the antenna. Take about 6 feet of the Feed line and wrap it into 6 or 8 loops (kind of like wrapping up an electrical cord or piece of rope but about the diameter of a coffee can) then tape the loops together.
If an antenna choke doesn’t successfully eliminate all noise, there are other methods to try. Try changing the location of your antenna to a spot on the vehicle where it is shielded from the engine. Radio waves are line of sight reception and sometimes simply hiding the antenna from the constant oscillation of the engine can do the trick. Another method is to try using shorter or longer lengths of coax… but that is an expensive exercise in trial and error… try the other methods first.

Hot Wire Noise
First off, try attaching the hot wire(s) for the radio directly to the battery of the vehicle. Much of the noise picked up through the hot wire comes from the alternator feeding current into the system.
This method should work, but if not, try installing an external noise filter onto the hot wire and ground wire of your CB. They are small cylinders (about the size of a bicycle handle) and can be picked up at Radio Shack or other electronics stores. Simply attach the hot wire(s) from the radio to the red wire of the filter, then the red wire on the other side of the filter to a power source. Attach the ground wire from the radio to the black wire on the filter, then the black wire on the other side of the filter to a chassis ground.

These techniques should help you set up a radio properly, even if you run into difficulties. It may take some time and trouble shooting on your part but you’ll be left with minimal noise and decent reception/transmission capabilities. The cost shouldn’t be too bad either. It all can be done for under $150 with new equipment. But if your budget allows, spend more [for the best equipment available].



Letter Re: An Inexpensive Source for Bulk Silica Gel Desiccant

Hi, James
There is always a need for desiccants for various uses, be it food storage, caching, or other projects. Most who need such things already have a favorite supplier, but I’ll make another recommendation for the sake of saving a few bucks. Any local grocer, pet supply dealer or Big Box store carries silica-gel cat litter in amounts from 3 to 30 pounds: Tidy Cats Crystals is one such product, though there are many. A rounded tablespoon place in a square of mesh fabric purchased in a craft/hobby department (where it can be bought by the yard–think about the bird seed packets at weddings) and securely tied [or sewn shut] will work well when placed in the desired container; depending on the need, they can also be spooned directly into the bottom of the vessel. Note that I’m suggesting the clear-blue “Crystals-only” type which are pure silica; one doesn’t want the silicate-clay “Blend” which is also offered.

Being silicate, they have the potential for re-use by oven drying. Compared to the cost of individual commercial [silica gel] packets, this is a bargain. Regards, – Billfour

JWR Replies: That is a great suggestion. Just beware of any desiccant that has any additives, dyes, or scents. A perfumed desiccant would be fine for tool storage, but potentially a disaster for food storage.



Letter Re: Can I Burn Home Heating Oil or Kerosene in a Diesel Engine?

Hello Jim,
This is in response to the gentleman’s question about using kerosene in diesel engines. Yes, it can be done. I had two 55 gallon drums of kerosene that were reaching the end of their storage life. I also have an old Mercedes diesel car and ran the kerosene with some added lubrication in the vehicle and it worked very well. You are correct that kerosene doesn’t have the same lubrication values of diesel but that is solved by simply adding vegetable oil or biodiesel to to the fuel. I used a 10-to-1 ratio as recommended by another poster on the blog. As far as kerosene burning hotter, it has fewer BTUs per gallon than diesel so I doubt this is a problem.

This discussion brings up another advantage of diesel engines and it’s a big one. That is the variety of fuels they can run on including kerosene, home heating oil and vegetable oil-new and used. Some people over at Mercedesshop.com have even used automatic transmission fluid and lightweight motor oil in their cars as well. I would only do that for a short period of time and if I were truly desperate. Several caveats apply here also. Used vegetable oil must be filtered very well or you will have serious problems. To run 100% vegetable oil (“straight vegetable oil”) in cars it must have a two-tank system that heats the oil first and flushes the fuel lines with diesel when shut off or the oil will solidify in the fuel lines the car won’t restart. However I would not hesitate to use 50% diesel/kerosene with 50% new vegetable oil in warm weather. All this gives you have several options if you need them. Scenario 1: There is a major fuel shortage with low supplies and long lines at the pump. With a diesel engine you can simply go to the kerosene pump and fill your cans up while everybody else waits in line. Scenario 2: You are evacuating from a [Hurricane] Katrina-like situation and begin to run low on fuel. Simply go to any grocery store and pick up several gallons of vegetable oil and dump it in. Then go to the auto parts store and grab a few quarts of ATF and motor oil and dump it in if your really low.

Again some of this I would not do unless I was truly hard pressed, but desperate times call for thinking outside the box. FYI, the drums of kerosene mentioned above are nine years old and were not stabilized (I didn’t know any better at the time. However, it was in very good condition and ran well in my car. I hope that this helps someone. – Jeff in Ohio



Odds ‘n Sods:

Kirk flagged this Business Week piece: Bad Omens for Banks?–News from KeyCorp suggests U.S. banks’ loan losses may worsen. Is the credit crisis hitting a second, even scarier phase? The global credit crisis is worsening. Take steps to protect yourself.

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Thanks to Dave S. for sending this: US rail network facing congestion ‘calamity’

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My recent mention of health concerns about synthetic sweeteners (such as Nutrasweet and Splenda) prompted readers Chris D., Kim, and EMW to all remind me to mention the herbal sweetener, Stevia rebaudiana. It is a safe, natural sweetener derived from a plant that is native to Paraguay. Following enactment of the Dietary Supplement Health and Education Act (DSHEA), Stevia can be sold legally in the United States only as a “dietary supplement.” Ironically, even though ounce-for-ounce Stevia extracts can be up to 300 times more sweet than sugar, they cannot be sold as “sweeteners.” OBTW, reader Rick C. mentioned that “Splenda is not aspartame-based [like Nutrasweet]. It consists of sucralose and maltodextrin.” But I should add that Splenda has its own set of health concerns.

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Frequent news tip contributor RBS sent us this: George Soros: ‘We face the most serious recession of our lifetime’



Jim’s Quote of the Day:

"Regardless of the size or quality of defensive forces, the defender usually extracts large costs from the attacker in time, resources, and casualties." – Military Operations on Urbanized Terrain (MOUT) MCWP 3-35.3



Note from JWR:

The judging was difficult because we had so many great entries. But after much deliberation we decided that the first place winner of Round 16 of the SurvivalBlog non-fiction writing contest is KLK for her article “How To Prepare for Radiation Emergencies”. She has won two valuable four day “gray” transferable Front Sight course certificates. (Worth up to $4,000!)

Second place goes to B.H. for his article “Safe Food Handling”. He will receive a copy of my “Rawles Gets You Ready” preparedness course, generously donated by Jake Stafford of Arbogast Publishing

Three Honorable Mention prizes go to NC Bluedog for “Homestead Fuel Storage and Rotation”, JLG in Texas for “Technology After TEOTWAWKI”., and to Gospel Guy for “Lacto-Fermentation–Enlisting Trillions of Microscopic Allies in Your Fight for Survival.” They each get their choice of autographed copies of either my books “Rawles on Retreats and Relocation” or “SurvivalBlog: The Best of the Blog”

Note to the prize winners: E-mail me and let me know the snail mail address where you’d like you prizes sent. Congratulations to the talented prize-winning writers!

Round 17 of the SurvivalBlog non-fiction writing contest is now open. Round 17 ends on July 31st, so get busy writing and e-mail us your entries. Remember that articles that relate practical “how to” skills for survival will have an advantage in the judging.



Letter Re: An Importer’s Insights on the Canned Tuna Market

Hi James
I am in the import food business and one of the products that I sell is canned tuna. I know that a lot of survivalists have canned tuna in their larder and thought I might be able to provide some useful information. There are four species of tuna that are sold in cans; skipjack, tongol, yellowfin and albacore. Skipjack is the cheapest and Albacore the most expensive.

I have been selling tuna for about 20 years and over the last two years, have seen the raw material prices double. Normally, prices go up and then back down, as the catch decreases and then increases. However, since there are really no controls on the amount of tuna that are caught, I have been concerned about over fishing, especially with skipjack as it is the every day item that supermarkets sell as chunk light tuna. Given that the frozen fish price has increased from about $1,000 per metric ton to just under $2,000 per metric ton, I think that we may
have hit the point where demand will outpace a diminishing supply. I expect retail prices to continue increasing.

When I was at a Costco [warehouse store] a couple of weeks ago, I noticed that they are still selling 6 ounce albacore for around $1.00 per can. This is a very good price and I don’t expect it to
last for long.

The other thing that has been happening is that many of our overseas suppliers are having trouble getting empty cans. We have had many shipments of fruits and vegetables delayed because the packers have the raw material, but no cans to pack the product in. I know that there have been increases in tinplate costs, but do not know why some of our suppliers are unable to get cans. It could be that they don’t want to pay the higher prices.

Given the decline of the [purchasing power of the] dollar, increases in freight rates, as well as inflation in other countries, I see many food prices continuing to climb indefinitely. All the best, – Kurt P.

JWR Replies: Thanks for the update. SurvivalBlog readers should plan accordingly. If you haven’t done so already, buy a three year supply of canned tuna for your family, post haste!



Letter Re: Physical Gold Versus Electronic Gold

Mr Rawles,
The letter from the gent who recommends investing in synthetic gold startled me. Prior to the Great Depression my family was very wealthy. My great-great grandfather, was an assemblyman from New York State who [had] moved to the backwoods of Pennsylvania and built what was at one time the largest tannery on the east coast. The family also owned a large hotel, at least two other tanneries, a general store and a gristmill. When his son took over the reins of the family wealth he invested the bulk of it in silver stock. When the stock market crashed the family was plunged into stark poverty. My great grandfather had to build a home for his family out of the packing crates that the produce for the store was shipped in. Stock [or shares] of any kind are dangerous if that is where the bulk of a person’s wealth is invested.

Make your readers aware of how dangerous the financial situation is at this time and to steer clear of investing in anything that you cannot hold in your hands, or eat or walk on or wear. Thank you. – DM from the Mountains of Northwest Pennsylvania



Letter Re: A Combustion Temperature Reference

Hello James:
I came across these ignition temperatures in a reference book and thought they might be of use to others,. This may be useful for whatever folks may be doing with flammable materials or fuels at their retreat or at home. All ignition temperatures noted are in Fahrenheit:

Cut Newspaper 446 degrees
Cut filter paper 450 degrees
Straw and sawdust 450 to 500 degrees
Gasoline 536 to 800 degrees depending on octane rating
Kerosene 480 degrees
Natural Gas 1,000 to 1,200 degrees
Propane 871 degrees
Butane 806 degrees
Paints and Lacquers (the flammable part isn’t the pigment, although the metallic chromate pigments are flammable) 475 to 1,000 degrees
Amyl Acetate 715 degrees
Acetone 1,000 degrees
Linseed Oil 650 degrees
Mineral Spirits 473 degrees
Turpentine 464 degrees
Alcohols 750 to 900 degrees
Petroleum Naptha 475 degrees
Magnesium 1,204 degrees, but if material is finely ground then as low as 900 degrees

Regards, – Mikael

JWR Adds this Strong Proviso: Reader Jim. H. in Colorado has pointed out that the full potential fire hazards of stored materials should not be evaluated according to the preceding chart. The chart was based on direct contact of a solid material with a heat source. The true measurement of the volatility of a stored material is its “flash point”, which in most cases is considerably lower than the figures noted. It is explained at this Wikipedia page. Essentially, Mikael’s chart was correct. Any of those material that are heated to those temperatures will combust (without the presence of any flame). However, the essential definition is: “The flash point of a material is the point at which the material will give off gasses that, when mixed with oxygen, can support combustion if exposed to an outside heat source.”

Also note that combustible gasses, dusts, and vapors (such as gasoline vapors) can sometimes travel long distances and still be combustible or explosive. Over the years, SurvivalBlog has stressed safety, particularly with stored fuels. I’ve written this a dozen times, but this bears repeating: Stored liquid fuels should never be stored in a typical attached garage. Most suburban garages also have a natural gas-fired or propane-fired hot water heater with a continuous pilot flame. That is a very dangerous combination of a vapor source and vapor ignition. Read: Kaboom!

Also beware of any processing operation that produces combustible dust, such as grain milling or even metal grinding. There have been countless news stories over the years about grain mill explosions. As I illustrated my novel “Patriots: Surviving the Coming Collapse”, ounce-for-ounce, fuel-air mixtures can be some of the most potent explosives imaginable.





Jim’s Quote of the Day:

“JP Morgan has assets of $1.6 trillion and equity of $126 billion. They seem reasonably well-capitalized at 7.6%. We just hope that there’s no problems in their almost $92 trillion derivative exposure that is more than 50 times their assets and, more importantly, greater than 700 times their equity. We hope them to be well-matched, but if they are even the tiniest bit wrong, their equity could be wiped out as their equity represents just 0.13% of their gross derivative exposure.” – Steven Romick, writing in Agora Financial’s Rude Awakening e-newsletter, May, 2008



Letter Re: Physical Gold Versus Electronic Gold

Dear Mr. Rawles:
You are clearly (and presciently) on the record as recommending the purchase of precious metals, ahead of the current inflationary cycle. Congratulations on that excellent macro call. But I believe you also recommend holding the physical commodity rather than synthetic ownership through an exchange traded fund/note. This makes less sense to me.

As an economic hedge against fiat currency deflation, synthetic gold has lower transaction costs since you don’t have to pay for the transport of the gold, the retail broker markup, or the non-gold coinage aspects of value that are embedded into Krugerrand, Maple Leaf, and American Eagle. Gold Exchange Traded Funds (ETFs) like the iShares Comex Trust typically charge a modest expense ratio of 0.4% per year to pay for storage and other fund costs, and gold ETFs are backed dollar-for-dollar by physical gold. Synthetic gold can be instantaneously bought and sold, and easily transferred into different currencies or across borders, with a few keystrokes.

Synthetic gold is also safer. If you own physical gold, you have to guard against theft and other loss. You could insure against this risk, but then the cost of insurance (which is quite high for precious metals) will be a material drag on your returns. I suppose one could argue that synthetic gold is exposed to extraordinarily unlikely events such as a nuclear exchange with a resulting EMP that wipes the digital record of your ownership—although I am not even sure that is correct because of redundant, multi-location data backup—but if that is the principal risk you’re trying to guard against, relocation to the Australian outback would seem more sensible (i.e., you have bigger worries than inflation).

It is true that physical gold, in a SHTF situation, would have value as an instrument of barter, whereas synthetic gold would not. However as an instrument of barter, physical gold has tremendous limitations. First, the instrument is not easily divisible, and if you were trying to barter with 1 ounce coins, it could be a bit like trying to buy things with a $100 bill and nobody being able to make change. Second, in a SHTF situation, because your barter counterparty would likely have problems establishing authenticity and weight, you would be charged a discount to value by him/her. In a nutshell, if physical gold’s bartering qualities are what attract you, I would propose that owning other commodities like coffee, cartridges, salt, etc. would be more effective.

My own view is that physical gold combines the worst of all worlds, given the risks that a reasonably prudent (but less than apocalyptic) survivalist should be considering. I’m curious about your view. – DC

JWR Replies: In precious metals investing, there is a continuum of risk that ranges from negligible risk to maximum risk. To my way of thinking, the “near end” of this continuum starts with the gold in your teeth and it terminates with highly leveraged futures contracts at the far end. Electronic gold is somewhere in between, and probably closer to the “safe” end, in normal times. However, since much of my thinking is geared toward some unpleasant “what ifs”, I err on the side of caution. I realize that I’m foregoing the convenience of electronic gold, but being a survivalist dinosaur, I want my metals in hand, if at all possible.

As a preparedness-minded individual, I am relatively risk adverse, and I suspect that the majority of SurvivalBlog readers share my outlook. I recommend buying physical silver, stored very well hidden at home. See the SurvivalBlog archives for some recommendations on wall caches and other secret hiding places.

There are indeed limitations of physical gold in barter as you mentioned (and as I illustrated in the “For An Ounce of Gold” chapter of my novel “Patriots: Surviving the Coming Collapse”). Recognizing that, my approach has been to encourage my readers to buy and hold a core holding of silver coins, for barter. Pre-1965 mint date US circulated 90% silver coins are widely recognized and have small unit values that makes them ideal for barter transactions.