Letter Re: Advice for City Folks on a Budget?

Dear Mr. Rawles,
I read the two letters that were posted on September 27, “Advice for City Folks on a Budget”. What struck me was how similar Mike H.’s situation is to mine. I too have a wife similar to the Mike H’s.
At first my wife thought I was out of my tree when I began preparing years ago. After the 1989 Loma Prieta earthquake, she came to believe that what I was doing was prudent, but somewhat overkill. Now that we have entered this period in history, she’s starting to pay attention, and has become a participant. I empathize with people in Mike’s predicament, and I have several suggestions to add to yours:

Before one starts with your recommended “List of Lists”, I would encourage everyone to do a complete inventory of what is currently in one’s household. I understand that sounds overwhelming, but it can be accomplished within a week or two, if one room or closet is done every evening. I’d leave the larger spaces such as attics, garages, and basements for a Saturday or Sunday. I would encourage people to do this as a family group so that people will have an idea where things are when all is said and done.
I’m going to make some suggestions of things to add to one’s preparedness supplies as I go along.

Start by going through your clothing closets with prejudice. Do the same with your children’s closets. Set aside the clothing in a pile that is no longer worn or that is out of fashion. Heavy coats, jackets, etc should be checked for fit. If they don’t fit, place them in the pile. If they do fit, even if you or your kids hate the way they look, put them back into your closet. If you are unable to heat your home, you won’t care what you look like when you’re cold. Keep in mind layering and hand-me-downs [for younger children] when checking fit.

Next, do the same with shoes. Fashion footwear that is little more than eye candy, if it is no longer being used, it should be placed in the pile. Go through your dressers and chests of drawers as well.

Now that you know what you have in your closets, and they’re cleaned out, this makes room for your needed additions. Depending on your climate, you may find that you will need to add things like sweatshirts, sweat pants, gloves, scarves, hats, long underwear, wool socks, heavy boots or more rugged shoes, etc. I live in sunny Central California, and during the winter, it can frequently still fall into the single digits overnight. Most people never notice it because of modern conveniences like central heat. That will change if things really get bad.

Keep in mind your bedding and bath towels. Extra towels, blankets and sheets are good to have if everything has to be washed manually and hung to dry. Make sure you have a way to string a clothesline, even if it’s just above the bathtub.

Now is the time to buy. Many retailers are having sales as their revenues continue to fall, and others declare bankruptcy. Keep an eye out for sales, and don’t be afraid to visit the Goodwill or Salvation Army thrift stores. If you’re worried about fallout from mortified spouses or kids, do it alone, pack it up, and label it. I sincerely doubt that you’ll hear any complaints from people who are cold and miserable.

Next, go through your clothing discard pile. Donate things that obviously will serve no practical purpose in a survival situation. Polyester skirts and pair of pumps that were in fashion in the 1980s really won’t help much. The rest box up and label. There may be neighbors or others who can benefit from your charity if things really get bad.

If you are like I was, you probably had eight pairs of old jeans that had holes in the seat and the like. Save several pairs to cut patches out of to repair the one’s you have now, and to help filter coarse debris from water. Discard the rest. Get a sewing kit capable of handling heavy fabrics. Buy some glue for your shoes, like Shoe Goop.

Next stop is the kitchen and pantry. Go through all your cabinets and drawers. Pull out everything that is food. Go through it. Check the date codes. Things that are way out of date, use or discard. Just because something is past the date code, doesn’t mean it is bad. A little time spent on the web will show you how to interpret date codes and their meanings for various foods.
Set aside things that you know you will never eat. You may have received a Christmas basket that had pickled pig’s feet in it, and you know that even if someone held a gun to your head, you wouldn’t eat it.

Put everything you will eat back, and make a list of things to add to your larder. Buy them as finances permit. When adding to your larder, remember to [FIFO] rotate your stock.
The things you won’t eat, put them in a box to use as charity, or donate them to a food bank now.

Next go through your cooking utensils. The non-stick Wolfgang Puck Bistro set isn’t going to hold up if you’re forced to cook in your fireplace, so you’d better lay in some cast iron or at bare minimum plain stainless steel. If you can only afford one piece of cast iron, then get a Dutch oven with an iron lid. Some are available with a glass lid. If the lid breaks, you’re SOL. Try to purchase brands such as Lodge. There are a lot of inexpensive pieces out there that come from China, and I’ve heard that they warp and sometimes shatter. Check garage sales, and the Goodwill etc. Even if they’re rusty, as long as there aren’t huge pits in the iron, they will clean up and re-season well.

You’ll also need a manual can opener, a “church key” [beer can opener], a manual bottle opener and corkscrew. If you can, get an extra or two of each because sometimes they break or wear out. Your neighbor may not have one, come the time [of need]. Good will between neighbors goes a long way when things are difficult. Extra pot holders and kitchen towels are good too.

Get a set of real knives. Those fancy ceramic ones are awesome, I know, I have a set. They won’t hold up if you have to carve up game, such as a rabbit or duck. Don’t forget a whetstone or some way to manually sharpen your knives. A dull knife is far more dangerous than a sharp one.

As you continue through the garage and attic, use the same critical eye. Discard things that you won’t use to make room for things that you will.
When you finish you’ll have a good idea of what you do have, and can accurately gauge yourself against the “List of lists”.

Here are some additional thoughts:
If you should find yourself with a collection of things that can generate some cash after going through your house, consider a garage sale, and use the proceeds to buy needed supplies.

If you have the time,storage space, and finances, then add hand crank drills, hammers, a “Yankee Screwdriver” and other manual tools to a small kit. Get some nails, wood screws, and a couple of sheets of plywood, a few 2x4s, and heavy poly sheeting. This will help you contend with broken windows and doors. If civil unrest becomes a problem, the 2x4s can be used to reinforce exterior doors. Make sure you have appropriate fasteners such as lag screws or nails between 40d and 100d. (The “d” means penny.) A 40d is about 5 inches in length and 100d is about 10 inches in length.

Buy several large fire extinguishers and position them through the house. Make sure everyone knows where they are and how to use them. Best Regards, – J.H.

Letter Re: Questions on Short Term Survival in an Urban Office Building

JWR,
To follow up on Flora in New York City’s “Questions on Short Term Survival in an Urban Office Building”, here is a link to Aton Edward’s highly recommended book Preparedness Now! which also contains a link to the April 2008 New York Times article that allowed me (thankfully) to find Survivalblog.com for the first time.

Additionally, here is a video interview with Mr. Edwards recorded in New York City and addressing exactly the kind of equipment/tools and awareness/preparedness issues that an office-bound urbanite like Flora needs to survive.

Since April, I ordered and read “Patriots“, the Rawles Get’s You Ready course, and “Rawles On Retreats and Relocation“. Thank you for your informative, easy-to-navigate, and comprehensive blog! This weekend I finally finished reading every page and every day’s worth of SurvivalBlog archive posts from the last three+ years (it took more than six weeks and I now have a big “To Do” list). – Lee in Hurricane Alley

Odds ‘n Sods:

Rourke flagged this article from Marysville, California: Preparing for financial apocalypse: Wall Street scare has some thinking chaos coming

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Commander Zero posted some interesting commentary in his blog about why people don’t prepare, even in the face of immediate and overwhelming threats like the current economic meltdown.

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The gasoline shortage in the southeast has intensified.

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The latest news is that the banking crisis isn’t any better in Europe: France seeks €300 billion rescue fund for Europe. And meanwhile, Senator Harry Reid drops a bombshell: Another major insurance company is on the brink, and Jim Willie has this must-read commentary: Breakdown Approaches Climax. Now on to the chunk-‘o-gloom from Cheryl, our Economic Editor: Central Banks Starting To Buy Gold? — US Auto Sales Plunge — Wachovia Faced A Silent Bank Run — Stocks Buckle On Recession Fears — House Holds Fate Of Bailout Plan — Financial Crisis Investing: The Big Picture — Insurance Companies Earnings Plunge 53% — LIBOR Soars, Commercial Paper Slumps As Credit Freeze Deepens Across The Globe, and from Russia, this commentary: Bailout Fraud (“This is a default crisis. Banks and large corporations are going to default. The banks know that. The public does not yet.”)

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The folks at Front Sight have just posted their 2009 course schedule. Because of the hot desert climate at Pahrump, Nevada, I generally recommend taking courses at Front Sight between mid-October and Mid-April, when the weather is pleasant. OBTW, don’t miss out on their “Get a Gun” training and gear package offer. This offer will probably end soon. Don’t hesitate any longer, or you’ll regret it!

Jim’s Quote of the Day:

“Fear, Mr. Bond, takes gold out of circulation and hoards it against the evil day. In a period of history when every tomorrow may be the evil day, it is fair to say that a fat proportion of the gold dug out of one corner of the earth is at once buried again in another corner…” – Ian Fleming, Goldfinger

Notes from JWR:

Now we’re a fashion trend! Details magazine just published a well-written and humorous article that features a SurvivalBlog reader, titled The Yuppie Survivalists. That’s not what I would have titled the article, but then I don’t publish a trendy men’s fashion magazine. And I’m no yuppie. I’m neither young nor urban, and I’ve never had that sort of shopping budget. (The Memsahib keeps me on a short leash.) OBTW, they included just one brief quote from yours truly and one from Jason over at SHTFblog.

Oh, and speaking of men’s fashion, another article on survivalism will appear in the upcoming issue of FHM magazine and it too will be quoting me. OBTW, the Memsahib and I recently were in The Big City and we dropped by a bookstore, hoping to take a glance at the FHM article. But we were shocked to find that there was no glancing allowed, because FHM is one of those magazines that comes wrapped in plastic. (I have been told that it has some pictures of scantily-clad models, but no nudity.) My apologies for directing any of you to contact the journalist at FHM. I should have checked first on what sort of magazine it was, before I agreed to an interview, or for promising to post the author’s contact information in SurvivalBlog. My humble and sincere apologies for not first investigating the magazine!

The high bid in the SurvivalBlog Benefit Auction is now at $770. The auction for a large mixed lot that includes: A Special Mixed Vegetable Case-Six #10 Dehydrated Food Cans (Retail Price $105.95) This special Mixed Vegetable Case contains six #10 (96-ounce) cans–one can of each of the following: Mixed Vegetable Blend, Green Beans, Sweet Garden Peas, Mixed Peppers, Potato Dices, and Sweet Potatoes and a EZ-Towels 10 Pack Combo (10 bags of 50 towels. Retail value: $99.95). These items were donated by Jan at Healthy Harvest Foods. An assortment of world class loose leaf teas, and a box of Bellagio hot chocolate (25 individual packs), with a combined value of approximately $100. These items were courtesy of Charlie at CMEBrew.com. A NukAlert radiation detector (a $160 value), donated by at KI4U.com. And, a Katadyn VARIO water filter, donated by Ready Made Resources. (An $89 retail value.) The auction ends on Monday October 15, 2008. Please e-mail us your bid.

Our Changing Times: The Advent of Rule 157 and Perhaps Rule 308

We are living in unprecedented times. The global economy is being asphyxiated for lack of credit, and we face the prospect of an economic depression that could be worse than the Great Depression of the1930s.

The Advent of Rule 157

One of the contributing factors in the unfolding banking debacle was the advent of Financial Accounting Standards Board (FASB) Rule 157, that went partially into effect on November 15, 2007. This was a financial accounting rule change that yanked the bankers back from the Fantasyland games that they had been playing with Collateralized Debt Obligations (CDOs), Credit Default Swaps (CDSs), Structured Investment Vehicles (SIVs), and others. Under Rule 157, banks got a strong, painful dose of reality. With Rule 157, balance sheets had to be “carried at fair value on a recurring basis in financial statements.” The end result was that Level 3 assets could no longer be concealed. After some foot-dragging deferments, the banksters were finally required to mark any illiquid investments to the most recent market price (“marked to market”) of a comparable security that actually traded. Pushed from what I called the “Marked to Mystery” realm into the light of day in “Marked to Market”, the accounting rule change has resulted in the banks writing off more than half a trillion dollars. The eventual writeoff total is expected to be as much as $1.5 trillion. (It is difficult to predict the eventual size of the writeoffs since real estate prices are still falling. This is the classic “moving target” dilemma. The writeoffs will continue to grow with each drop in real estate prices. As the writeoffs continue, the bankers will beg for more bailouts.

The current debate about the proposed $700 Billion Troubled Asset Relief Program (TARP)–also known as the Emergency Economic Stabilization Act of 2008 (EESA)–ignores two huge Troubles to come. You’ll note that those are Troubles with capital Ts, as in Trillions.

The first Trouble is that–at least as I heard about one currently drafted version–the bailout bill will “cap” the Treasuries holdings of bad debt at $700 at any given time. But there is nothing to stop Treasury officials from marking down the value of those instruments to 30 cents on the dollars and re-selling them, and then buying hundreds of billions of additional toxic debt paper. This could go on and on until the total cost of the bailout runs into multiple trillion dollars! Note that the proposed bailout bill started out as a simple three page document that gave the Treasury Department carte blanche. But the bill blossomed to 130+ pages as the congressional debate continued. This first TARP bill was voted down, and a new bill with different terms is now in the works. The terms of the new bill have not yet been announced.

The second Trouble is that while the “contentious debate” is going on, on Capitol Hill, the Federal Reserve is busy handing out cash (electronically) by the dump truck load, to “pump” liquidity back into the banking system. In just the last 10 days, they’ve made “emergency loans” to American banks that have exceeded $1.2 Trillion, and there is no end in sight. The end result of all of this “bailing” and “pumping” will be the inevitable monetization of mountains of public debt. There is no way to generate tax revenues to cover even a fraction of it, so, the requisite “dollars” are being created out of thin air. (Read: monetization.) This will of course dilute the value of the dollars already in circulation. So, sooner or later, mass currency inflation will be the end result. I predict that if this monetization goes on unchecked for long enough, it will result in a hyperinflationary death spiral for the US Dollar. In our modern, technologically complex, and fragile society, hyperinflation will first result in a tragedy for pensioners and anyone else living on a fixed income. Then as time goes on, it will wipe out any and all holders of paper currency dollars and then the holders of virtually all investments that at denominated in dollars. The utter destruction of the US Dollar will at some point result in mass chaos in the streets. We can expect huge protests, riots, looting, arson, and a breakdown of law and order. It will be The End of the World as We Know It. (TEOTWAWKI).

The banks are under such duress from the “unprecedented market conditions” that they are now strongly pressuring the FASB to “temporarily” suspend Rule 157, so that their Level 3 trash paper can again escape being marked to market. (Effectively, this will be official sanction to cook their books.) We’ll stay tuned and see what happens.

The Possible Advent of Rule 308

So, let’s assume that hyperinflation does kick in sometime in the next few years, the economy falls apart, and there is anarchy in the streets. What will you do when there are not enough police to stem the swelling crowds of looters? What will you do when the power grid is down, burglar alarm systems no longer function, and even the telephone networks are down? Who will you call for help? How can you call for help, without phones? The simple answers are: nobody and no way. It will be “You’re On Your Own” (YOYO) time. In these circumstances your only logical choice will be to implement Rule 308. It will be up to you–just you and perhaps a group of trusted friends and neighbors–to provide for your own safety, security, and defense of life of property. Think of it as a neighborhood watch on steroids. The difference between life and death may come down to this: The rifle in your hands. This is why it’s called Rule 308–as in .308 Winchester. (Or, for our cousins in the British Commonwealth, it was originally called Rule 303. (As in, the .303 British caliber.)

Political action is great. It would be wonderful if legislation were to fix the economy and prevent an economic catastrophe. That is what I’m praying for. I strongly encourage people to write letters to the editor, write letters to your elected representatives, circulate petitions, take part in Town Hall forums, and vote in all of the elections. But at some point the political process and the rule of law may suddenly be overcome by events, and you will have to resort to Rule 308. I dread that day. But be ready for it, just in case.

Letter Re: Finding Archived SurvivalBlog Topics

Mister Rawles:
First off, I want to thank you for running SurvivalBlog. Its an awesome resource–sorta “one stop shopping” for folks like me that are getting prepared.

I first read your book three years ago, when I was on my second deployment in Iraq. Your novel [“Patriots“] was in a big pile of books in our unit’s MWR [Morale, Welfare and Recreation] room. They say you can’t judge a book by its cover, but I was following advice from my home-town librarian when I picked your book. She once advised me: “Look for books with ‘broken’ spines and that show lots of wear. Those are the ones that have been read a lot, and that ‘s usually for a good reason.” Well, your book looked like it was about ready to fall apart, it was so worn out! I gotta admit that the first time I read your book, I was saying to myself: “Suuuure. Like an economic collapse will ever happen. Not in my lifetime.” Well, the past three weeks of [reading the] newspapers have given me a whole new outlook on that subject. The first chapter of your book is practically prophecy. It is eerie how many things you got right. And you wrote it ten years ago? Word.

Thanks to you, I recently cashed out of my West Valley National Bank [of Arizona] savings account and will lose my checking account once the last few checks clear. That will save me some sleepless nights, I’m sure. Thank you for your repeated warnings to people about getting out of banks that are “under-capitalized” (broke)! I used the bank safety rating service that you recommended, and found out that my bank had a “D” rating! Well, I definitely now owe you a [10 Cent Challenge voluntary] subscription, and I’ll do so A-SAP.

Next, I have a nit-picky complaint: There is way too much in the [SurvivalBlog] archives to be able to read through it all. Do you have any ideas on how I can access it better, to research [particular topics]? Oh, one funny thing I gotta mention: Whenever I start to research prep[aredness] things with Google, almost always it is SurvivalBlog posts that end up in the top 10 or 20 items found, whether is its “HK91 alloy magazines” or “paracord and LC-2 harness'”, or “infrared cyalume trip flare”. I can’t think of a compliment better than being waaay “up there” in the Google rankings. SurvivalBlog is the Hotel Sierra blog!

Up until last week, I also had one other complaint, but I solved that one myself. It was distracting to have all the advertisements crawl by while I was reading the blog. But then I realized that all that I had to do was leave my [browser] cursor arrow on top of any ad, and they stopped moving. Simple, and it stops the eye strain. Thanks and Lord Bless You! – Ray V. in Arizona

JWR Replies: Thanks for your kind letter. There are now more than 5,300 archived SurvivalBlog articles, letters, and quotations. You are correct that there it is too much for the average reader to read through sequentially. To research particular topics, I recommend that you take full advantage of the article categories and blog database search feature available at the SurvivalBlog site. Say, for example, you want to learn more about how to secure your home. In the right hand bar, down below the scrolling advertisements there is a list of topic categories. By clicking on the “Retreat Security” category, only the articles and letters tagged with that topic will be displayed. Or, you can do a more detailed search, using the Search box at the top of the right hand bar. For example, if you enter “Security AND Infrared AND Starlight” only those posts that include all three of those words will be displayed.

Odds ‘n Sods:

Back in 2005, I began warning SurvivalBlog readers that derivatives were a much larger threat than the housing bubble. Now we read in the mainstream media: The $55 trillion question. The article begins: “The financial crisis has put a spotlight on the obscure world of credit default swaps – which trade in a vast, unregulated market that most people haven’t heard of and even fewer understand. Will this be the next disaster?”

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Safecastle just a started an unusual 25%-off Mountain House sale. The sale ends on October 14th. Get your order in immediately for the best selection!

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The latest slug of bad news from our Economic Editor, who is recovering from a recent surgery (please keep Cheryl in your prayers): USA 2008: The Great Depression — The Day Main Street Struck Back At Wall Street — Credit Markets Frozen As Banks Hoard Cash — Western World Will Become Significantly Less Wealthy — (“Corporate America has just lost a chunk of its value the size of the Indian economy.”) — Greenspan: “Gold Is The Ultimate Form of Payment In The World” — The Truth About The Bailout (“‘Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it, and the bill has been carefully written to make sure that can happen.” – Brad Sherman , D-California.’ That’s right folks. You are going to have $700 billion – about 25% of the total Federal budget – put on your personal credit card (via taxes forever) in order to bail out foreign investors.”) — Marc Faber: Bailout Won’t Stop Depression; Buy Gold (“A stock rally in the event that a [bailout] package is approved will be temporary and should be used as ‘an opportunity’ to sell, said [Marc] Faber.”) — Inflation In Stereo (The Mogambo Guru) — $1 Quadrillion of Unregulated Debt at Core of Coming Derivatives Crisis — Credit Cards To Implode 1Q 2009: Analyst — You Won’t Believe Where The $700bn Bailout Figure Came From (“Do you know where that very important $700-billion figure came from? Here’s a quote from that Forbes story: “It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.” They made it up to be sufficiently ginormous to frighten everyone into rapid action. And it worked.”) — Interbank Dollar Rate Hits 8% (“That high of around 8 percent is four times the Federal Reserve’s 2 percent target rate and more than double the cost of borrowing dollars for three months as indicated by Thursday’s London interbank offered rate (LIBOR) fixing.”) — Derivatives Deleveraging II, Debt Deflation, Gold & Bailout II — Bailout with ‘sweeteners’ heads toward Senate win — Bailout with ‘sweeteners’ heads toward Senate win — And to cap all that from Cheryl, here are two items that I found linked at The Drudge Report: Clinton: ‘It Sounds Dire, But Commerce Could Stop’ and Why propping up banks will not rescue a debauched financial system

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Josh H. mentioned that there is a compatibility glitch in the Internet Explorer 8 Beta 2 browser that prevents it from displaying some web pages, including SurvivalBlog. But Josh quickly found a “fix” for the problem. If you install I.E. 8 Beta 2, then follow-up the installation with these simple “fix” steps:

Go to “Tools”
Go to “Compatibility View Settings”
Check the box “Display all websites in Compatibility View”
Click “Close”

This setting should be a “global” setting that “sticks” so that SurvivalBlog will display properly during all subsequent visits.

Jim’s Quote of the Day:

“The money markets have completely broken down, with no trading taking place at all. There is no market any more. Central banks are the only providers of cash to the market, no-one else is lending.” – Christoph Rieger, fixed-income strategist with Dresdner Kleinwort.

Notes from JWR:

We had an amazing 17,945 unique visits yesterday, gobbling up almost 17 gigabytes of traffic. Those are both new records for SurvivalBlog. Thanks for continuing to spread the word about SurvivalBlog and making it such a success. It is not too late for your “head in the sand” relatives, friends, and co-workers to get themselves prepared. Spread the word! Even just a one line mention in your-e-mail footer would be a huge help. Here is what reader Paul G. uses in his footer: survivalblog.com — Bookmark it. It may save your life!

We’ve completed the judging for Round 18 of the SurvivalBlog non-fiction writing contest. First prize goes to Terry B., for his article “How To Make Den-Type Game Traps” that was posted on August 27th. He’ll receive two valuable four day “gray” transferable Front Sight course certificates. (Together, they are worth up to $4,000!) Special thanks to Naish Piazza–Front Sight’s founder and director–for his generosity. Be sure to check out their web site and class calendar. The Memsahib and I can both vouch for the quality of their training, from personal experience. It is amazing!

Second prize goes to Woodsman, for his article “What Will You Do When Your Stored Food Runs Out?” He will receive a course certificate from OnPoint Tactical. This certificate will be for the prize winner’s choice of three-day civilian courses. (Excluding those restricted for military or government teams)

Third prize goes to E.I.D. for “On Rural Retreat Safety and Secrecy“. He will receive a copy of my “Rawles Gets You Ready” preparedness course, generously donated by Jake Stafford of Arbogast Publishing.

Honorable mention prize goes to Josh in Montana for “Survival Medicine and Ditch Medicine“. He will receive autographed copy of my novel “Patriots: Surviving the Coming Collapse”.

Note to the prize winners: Please e-mail us to let us know your snail mail addresses, so we can mail you the prizes.

Round 19 of the writing contest begins today, and will run for two months. It feature the same great prizes. So get busy writing and e-mail us your entries, folks! Remember that articles that relate practical “how to” skills for survival will have an advantage in the judging.

Letter Re: Some Practical Notes on Third World Living

Jim,
As this is not a competition entry, it has not been reviewed by an outside set of eyes yet, and I’m sure its kind of disorganized, but this is some info about third world life, as I can see it here, after things stabilize.

My wife is from Peru. She was born during the Peruvian hyperinflation and transition to its next fiat currency, the Nuevo Sol. (Yeah, we’re young whippersnappers) She recently started to help out in getting ready. What helped her was comparing the current economic climate here to Peru. This allowed her to correlate things that occur in her former patria with our situation. She is a source of info on the Third world medium sized city way of life.

In Third world Peru, everyone cooks with propane camp stoves, with big seven gallon bottles. There is no space built for an American style range, even in nice houses. All water is boiled before ingestion, except [commercially] bottled water. Trucks come with semi-clean water and people line up to fill up their buckets for washing and drinking. (after boiling) Hopefully you have a big tank on your roof to gravity feed it through your pipes, as the power goes out regularly, and your personal well and pump wont work.

Everyone had bars on every window and door. Houses not made of cement block are broken into through the walls. They’re also too cheap/poor to put enough steel in the buildings, so they fall down easily in earthquakes. Re-bar is [used] only in the corners. Nobody has an exposed to the street yard. A courtyard inside larger places is the norm, off street parking, if you can afford a vehicle, is a must, or you wont be parking anything soon. Inyokern told me this concept: When things go really sour, everyone steals everything so often that everyone ends up with the same trash that nobody wants to steal anymore. e.g. I have a nice bike, it gets stolen, I get a new bike but not as nice as the first, it gets stolen, I buy the worst looking bike I can find. It stays. This is very true. People with nice hats walk around with a hand on their head. Political corruption is the norm. Most any government official can be bought for a couple hundred nuevo sols. Farmers carry guns. People walk on your roof at night.

Just about everyone is self employed. Selling food in the streets, tricycle and moto-taxis, home based Liquor stores, etc. Often if you sell higher “dollar” stuff, your customers don’t even come in your building, money and product are exchanged though the door bars. Keyed locks on both sides. There is no such thing as a big box store. Even disposable diapers are bought one at a time.
People wear sandals called yanki. These are said to be made out of used car tires, but most tires I know of are steel belted, and you can’t cut that with a knife. My two pair are made from rubber mining belt I think, as the tread pattern is cut by hand. The poor wear them, and they supposedly last a loooooong time.

In Peru, the power goes out all the time. Candles are common. People don’t stock up there, the stores I guess have sufficient on hand to handle the outages and subsequent candle runs. The stores here are obviously not prepared for that.

Traffic in her small town is nearly non existent, but traffic in Lima is suicidal. Regards, – Tantalum Tom

From FerFAL in Argentina: A US Crash that Will Parallel Argentina’s?

Hi James,

These are hard times, indeed.
The parallels between the days before our own economy [in Argentina] collapsed and what’s going on today in America today are very hard to ignore.
Our local television seems to be getting some kind of sick kick out of all this.
They showing the comparisons, even editing politicians and economists speeches showing how similar they were to the ones the American politicians and economists are using right now. In some cases, they even said the exact same line, the only difference being the language.
About the article “Letter Re: What Are the Economic Collapse Indicators to Watch For?” I’d like to make a few comments.
Some of the signs we could actually verify during our own 2001 crisis;
*Limits to withdraw amounts per day. This happened just one or two days before banks actually closed.
*Sudden inflation. A few weeks before, but careful, it only turned into hyper after banks closed.
*Rumors of default. Those had been going on for a while and that’s when we slowly started investing elsewhere and slowly moving the money out of the accounts.
*Limits to moving fund out of the country
*Limits to the transactions. At the end you could just withdraw like $250 per week, if you found an ATM with money. Otherwise you had to suffer the terrible lines at he bank.
It’s just impossible to know exactly when it will hit, when banks will say bye bye, but careful, timing is everything.
In my case, we had dropped by the French Bank and asked for $2,000 USD.
The employee talked to the manager and the manager came to us looking nervous and said they didn’t have that kind of money right now, to come back tomorrow.
“Wait a minute.. you’re telling me you don’t have 2,000 lousy dollars, in the entire bank?”
”No.”
That same day we went down town to other banks, closed the couple accounts left and one or two days later the crash hit and banks closed their doors.
Just a few days later, my wife’s father lost a 6 digit figure, their fallback life savings.
He was an elderly man, but the bank didn’t care at all of course. He died without seeing that money returned to him.
Do not expect any kind of mercy or sympathy from banks. You wont be getting any.
People needing medical treatment have died in this country before court orders came out demanding the bank to give the money to the person because of life or death situations.
Some people have died of heart attacks at the bank’s closed doors, hitting them with pans and fists.
Not trying to be dramatic here, but it did happen that way, and it’s important for people to understand how serious this is.
I know a run in the banks is something you’d like to avoid. But remember, that money is yours, and banks won’t be giving it back to you if they close, you’ll loose a rather big percentage, and if the economy goes down, it will only be returned to you after months, even years.
Maybe it would be a good idea to take another look at the Wikipedia page that summarizes our 2001 economic crisis.

People should try to remain clam, but take the necessary precautions given the circumstances.
Take care James. God bless you and all the readers, grant them the peace of mind needed in these trying times. – FerFAL

Letter Re: AVGAS as an Alternative Source of Gasoline During Spot Shortages

James,
I’m sort of reluctant to share this because, well, I might need to do it someday and its value is in the fact that most people don’t know it.

During Hurricane Ike my uncle, who lives in Houston, acquired use of a generator. That’s an interesting story in itself so I’ll divert for a second and elaborate: He didn’t own a generator but his next door neighbor did. Unfortunately, the neighbor had never run the generator and when they needed it, it wouldn’t start. My uncle is a trained mechanic (former career) and was able to fix it. In return for his help, the neighbor allowed my uncle to run an extension cord over to his house to keep the fridge and freezer going. This underscores the importance of having practical skills. Even if you can’t afford to store a lot of tangibles, having valuable skills can allow you to barter work for the things you need. I know you’ve said that a million times. Well there’s a shining example of the truth in it.

Back to the point I wanted to make: They didn’t have enough gas for the generator and quickly ran out. The stations were out, and even if they had gas, there was no power to pump it. So… My uncle is also a private pilot and flies out of a local general aviation airport. Almost all public airports sell AVGAS, [(aviation gasoline), one grade of] which is just highly refined 100 octane gasoline. It works fine in both cars and equipment [such as generators]. Nobody was flying in or out, which left the airport well stocked with gas and apparently, they also had a way to pump it. He drove up there and bought all he wanted. The only people who thought to buy avgas were other pilots. They bought all they could use. No lines, no competition, no fighting.

I’m not suggesting this as an alternative to keep a sufficient supply of fuel on hand. But it’s an additional resource if your supply runs out. As I read about the gas shortages in the southeast (right now), all I can think is that there are probably dozens if not hundreds of pilots gassing their cars up with avgas… and doing it very quietly. Best, – Matt R.

JWR Replies: Thanks for that reminder. (Using AVGAS in ground vehicles has been mentioned a few times in the blog.) Just keep in mind that there could be road tax issues, at least in most English-speaking countries. Also, most AVGAS (such as 100LL), is made in leaded formulations and those are not compatible for use with many of the newer vehicles that have catalytic converters. (Since leaded formulations quickly degrade catalytic converters.)

Odds ‘n Sods:

I noticed that spot silver dropped a full dollar per ounce on Tuesday, and spot gold was down about $30 per ounce–both moved by short term gains by the US dollar in international trade. Buy on “dip” days like these! As I’ve said before, I think that gold will outperform silver in the next run-up. Get out of dollars and into tangibles. But remember what Doc Sweeny calls The Five Gs. (GGGGG.) Get right with God and then acquire your guns, groceries, and ground before you buy any gold. Be advised: You can’t eat gold, and Krugerrands make very expensive projectiles for a Wrist Rocket.

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We just got alarming news that the London Interbank Offered Rate (LIBOR) rate spiked this week, tripling to an all-time high of 6.875%. The LIBOR is the benchmark rate at which banks loan money to other banks. The spikes illustrates the absolute peril that the credit collapse has created, and the unprecedented level of distrust between banks. It will be interesting to see what this higher cost of inter-bank borrowing has as it trickles down to credit card interest rates and Adjustable Rate Mortgages (ARMs). It is conceivable that monthly ARM payments could double. The global credit market has just suffered the equivalent of a massive myocardial infraction. Dr. Bernanke is greasing up the defibrillator paddles now…

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Eric found this at The Globe and Mail: Credit cards to ‘implode:’ analyst

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Gary flagged this Time magazine op-ed piece: Let Risk-Taking Financial Institutions Fail. Gary’s comment: The derivative threat has finally hit the [mainstream] news. I thought that you wouldn’t be surprised, since you saw it coming.

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Reader “Stamps” mentioned a nonprofit organization that will send you free seeds with just a self addressed stamped envelope. They pick randomly from what they have available. Most are seeds that people harvest and donate to this project.

Jim’s Quote of the Day:

“The financial meltdown the economists of the Austrian School predicted has arrived. We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy – all the capital misallocation, all the malinvestment – and prevent the market’s attempt to re-establish rational pricing of houses and other assets.” – Congressman Ron Paul, My Answer to The President. (See also the short video clip of Ron Paul’s address before congress on corporatism and the destruction of the dollar.)