Odds ‘n Sods:

Cheryl, our Economic Editor, sent us these: Congress Restarts Troubled Bailout Talks — Stocks Mostly Decline As Investors Remain Tense Over Bailout — WaMu Becomes Biggest Bank To Fail In US History — Wachovia In Huge Mortgage Mess — UK Banks May Get $180bn From US Bailout — Wachovia Shares Begin Dive After WaMu Death — JPMorgan Buys WaMu For A Mere $1.9 Billion (“To put the size of WaMu in context, its assets are equal to about two-thirds of the combined book value assets of all 747 failed thrifts that were sold off by the Resolution Trust Corp. – the former government body that handled the S&L crisis from 1989 through 1995.”) — Wall Street Should Be Looking For Bail, Not A Bailout — Risk Of Paulson Failing Has Markets Frozen In Fear — Money Market Conditions Deteriorate Further — Central Banks Take Action. — Withdrawals by customers ultimately sank WaMu . And here is one more from Jonathan Prynn, of England’s Evening Standard, courtesy of Dan S.: Stand by for Black Monday

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Et tu, WaMu? WaMu Failed, Seized By FDIC, Bought By JPMorgan.”The Army Aviator” notes: “That was a good call that Jim Sinclair made as to how it’s amazing that the largest bank failure (WaMu) [occurred on a Thursday] just when they are trying to get that bailout Schumer passed–instead of announcing it at the usual Friday after the market closings. Gosh, the crooks aren’t even good crooks. Sloppy, sloppy, sloppy.”

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Budget crunch: Palm Bay, Florida Police May Stop Responding To Some Crimes. (A hat tip to Eric for the link.)

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More about the gasoline shortage in the southeast: Tempers flare at pumps and Gas Shortage In the South Creates Panic, Long Lines

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Katya was the first of several readers that sent us this: Gold coin sales halted after retail rush

Jim’s Quote of the Day:

"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else." – Frederic Bastiat, Essays on Political Economy, 1872

Note from JWR:

Based on the tone of many recent e-mails, I can see that the anxiety level of SurvivalBlog readers has definitely gone up a notch. With headlines like these, it is no wonder.

Again, the present circumstances do not dictate doing anything drastic. Wait, watch, and above all be ready. This would be a good time to top off your storage food and fuel reserves. Don’t quit your day job!

From The Memsahib: Saving Your Life and Saving Your Relationships–Don’t Drive Your Loved Ones Away

We received the following sad letter from an anonymous SurvivalBlog reader that illustrates how women can be driven away by men that are insensitive to the emotional differences between men and women.

Hello Jim,
I especially enjoyed The Memsahib’s article directed towards single people needing to get out there and volunteer / network, and the article regarding balancing prepping with continuing to enjoy life. I think it’s a good idea to pay especially close attention to the articles she writes as I find that I’ve not had balance over the last few years as I’ve become more aware of the need to become self sufficient and the challenges that goal presents for a city slicker. I’ve managed to get caught up in scurrying around to prepare and cutting corners on all types of expenses (vacations, toys, fancy dinners, and even cable television) and I’ve managed to row myself right up “single creek” and lose a good fiance by forgetting to enjoy life in the here and now. Looking back, with a little balance, and teamwork things might have been different, but in my rush to prepare I lost track of everything else. That may sound extreme, but it’s easy to do with the current state of affairs. To many of us reading SurvivalBlog preparing is a means to a self-evident end and it inherently makes sense given the hard facts, but a touch of balance is also equally as important.

With the torrent of bad economic news being shouted from the headlines, many SurvivalBlog readers have consciously or subconsciously increased their state of readiness. I’m writing this as a reminder. Husbands, please be aware that your wives might be having difficulty dealing with your ratcheting-up of readiness. When you mention a news item, you will likely hear your wife saying “I don’t want to hear about this!”, or “I can’t handle hearing about that right now”, especially if she has other pressing concerns such as pregnancy, aged parents to care for, health issues, or stress at her work. If she is able to communicate this to you, then you need to respect her boundaries. Hopefully you are a united team and you can explain to her that you will continue to prepare but spare her all the incessant doom and gloom talk . Husbands who have blown the budget with survival gear in the past are going have a much more difficult time in this situation. Your wife might have difficulty trusting you. We know a husband who spent thousands of dollars (all their savings) on preps pre-Y2K without saying anything to his wife. If his wife had not been a Christian who believed divorce is never an option, the marriage would have been over.

For many years, Jim and I have had the “No Gloom and Doom Talk After 8 p.m.” rule. We all need a good night’s sleep, and having conversations about TEOTWAWKI close to bedtime can be troubling. This rule helps me sleep better because there is then plenty of time before bed to focus on our blessings.

If you want to better understand this psychology, then refer to these archived SurvivalBlog articles:

Letter Re: Help With a Non-Preparedness Minded Spouse

Ten Letters Re: Help With a Non-Preparedness Minded Spouse (follow-up e-mails)

Letter Re: My Wife Ignores My Preparedness Goals

Letter Re: Advice for an Unprepared Greenhorn

Hello Mr. Rawles!
I love your blog, and visit at least weekly, more often daily.
The current economic situation is sickening. I mean, actually making my stomach hurt, as I am not prepared. I just recently was hit on the head with the motivation to get prepared. The only problem with that is that I don’t even know where to start. Food? Weapons and Ammunition? Medical supplies? I am the patriarch of a family of 4. My wife and I, and our two children, both 10 and under. What I could use your advice on is just what I mentioned before, where does someone like me start. We have very little money, we live in the city, and we have no supplies except a Remington 870 Express [12 gauge shotgun] with a couple boxes of ammunition and food from the grocery store for a couple weeks and our camping supplies which amount to a couple days in the woods. I’m extremely worried that I simply won’t be able to help my family survive the coming collapse. I want to be prepared, and I’m motivated.
Thank you for any time you could donate with your advice! – MWS

JWR Replies: Start out by getting a good quality water filter such as the Katadyn VARIO currently on sale at Ready Made Resources and stocking up on canned foods.
If you don’t yet already have one, buy a spare riot “Police” length 20″ barrel with rifle-type iron sights for your Model 870, with “IC” (improved cylinder) choke, or better yet the “Rem Choke” removable choke tubes. These barrels are available with a durable finish to match your “Express” variant.

Buy at least 200 rounds of #4 buckshot, 25 rounds (five boxes of 5) of rifled slugs, and when you can budget for it, a case of #6 birdshot shells for bird hunting and small game hunting

Since your resources are limited, your greatest opportunity to increase your chances of survival will be teaming up with like-minded folks in your area. For some suggestions, see my static page on Finding Like-Minded People in Your Area.

Be sure to take advantage of low cost training through the American Red Cross, the Appleseed Program, and the WRSA.

Pray hard, study hard, and train hard.

Letter Re: Making Alternatives to Commercial Chemical Light Sticks

Hi Jim,
I just read your novel “Patriots” and studied the Rawles Gets You Ready” preparedness course, and both are excellent. [In them,] you talk about chem lights (otherwise known as glow sticks) for in your car for changing tires, handy around campsites, and what not. The shelf life on these, as you mentioned, is very short (couple of months in a car [in a hot climate]) and they are not cheap (or maybe just I am cheap). I found this video on making an LED version of them that is reusable.

Seems to me like a good idea for recycling the older ones that are now dead. You can buy LED glow sticks as well which may be cheaper and easier from places like this. I have no affiliation with them and have never bought from them, but just wanted to show an example.
Thanks, – Rutger (Temporarily in Costa Rica)

JWR Replies: Perhaps the easiest method for creating a glowing wand was suggested by The Gun Plumber over at The FALFiles: “After the light stick is expended, cut the end off, dump the liquid and glass ampoule [and discard safely], then tape the plastic tube to your Mini MagLite flashlight to make an IR wand–the plastic tube is the IR filter! As previously mentioned in SurvivalBlog, there are some huge tactical advantages to using infrared light sticks if you own any Starlight-type (light amplification) night vision gear.

Odds ‘n Sods:

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

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Cheryl found this for us: Shipping Container Homes

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

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

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

Jim’s Quote of the Day:

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

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

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

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

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

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

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

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

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

Mr. Rawles;

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

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

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

Letter Re: Gauging Bank and Thrift Safety

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

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

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

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

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

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

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

Jim’s Quote of the Day:

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

Letter Re: My Preparedness Measures Pay Off During Fuel Shortage

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

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

Letter Re: Home Canning and Stocking Up

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

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

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

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

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