Note from JWR:

Today we are pleased to present a guest editorial, from precious metals market analyst Oliver Velasquez:

The Game, by Oliver Velasquez

In the past 25 years interest rates have fallen from as high as 15% to as low as 1.25%. During this time our economy has gone through different cycles, everything from stagflation, recession, to historic bull markets, and real estate booms. Today, in my opinion, we are living one recession away from a massive depression which can be credited to the Federal Reserve’s monetary policy. Historically, it’s never been a good sign to have both gold prices and the stock market trade at such peak levels like we have today. During the past ten years we have gone through a huge stock market bubble, and today we’re in the midst of a housing bubble that has only just begun to burst. All of these shifts in our economy can be traced back to the Federal Reserve and their manipulation of interest rates.

In order to understand the Fed game we must first understand how the Fed works. Let’s look for example at our current mess. Housing boomed over the past six years as the Fed lowered rates to historic lows, more real estate was purchased as mortgage rates fell. This created a soaring number of new homeowners, as well as drove up home prices across the nation, creating an unrealistic economy that is now entering the stage of foreclosures and declining prices in many markets across the country. Although home ownership maybe at a record high, this is starting to change. Unfortunately, too many of these homeowners in the US have become in reality lessees. As long as a person has income, he can use debt to live very well. But as soon as things change and get tight like today, many opt to letting their assets go instead of paying them off. Many of these new homeowners aren’t able to pay the monthly payment and suddenly they’re out of a house. Any equity is transient, and if the house is foreclosed, they will most likely lose that too. But that doesn’t matter because so many are using their home as an ATM anyway, and there is a big problem with that. Massive debt is created throughout our economy and any assets left are sold in a declining market. This is exactly where we are today because of the Fed’s monetary policy. So, how can the average investor then protect their assets from such a tragic game?

There are a couple of ways one may hedge against a weakening dollar and the current housing crisis we’re facing. This would be to diversify your portfolio with gold and maybe hedge real estate through the use of the new CME housing futures. Believe it or not, there is a market for housing futures as many are turning to ways to hedge against the declining housing market. Through housing futures, one can actually shift the risk from an individual homeowner with a huge mortgage, to a speculator trying to cash in. If there is a housing bubble and it does burst, housing futures and investing in gold may be able to provide a cushion of support to the savvy investor. This is why I’m writing this article to give the average investor more arsenals in their investment strategies. The Fed for too long has been following a consistent policy of flooding the economy with easy money, leading to an artificial boom followed by a recession or depression when that bubble does burst. Just as it provides an infusion of liquidity into the economy by cutting rates, the Federal Reserve has become the chief instrument in contracting the nation’s money supply by increasing interest rates. This type of manipulation has created abrupt fluctuations in our economy that date way back to the great depression of 1929, to the recession of the 1970s, Black Monday in 1987, the stock market bubble of the late 1990s, to recent inflationary policies that have crippled the dollars purchasing power. Today rates are at a low as the Federal Reserve Bank, headed by Chairman Ben Bernanke, have shifted from focusing on inflation as its main concern to tackling the credit crisis facing the economy due to the bubble in the housing market. Certainly there is a relationship that is easy to comprehend. Those affected by the credit crunch are being thrown a line as rates are falling. Stocks, on the other hand, are closing at record highs as they are picking up more investment capital because of the rate cut. The monetary policy has gone from consistent rate hikes to an abrupt rate cut on Sept 18 of 50 basis points. This monetary policy has hurt the dollar tremendously and has given way to commodities such as gold to rally. So, if you’re wondering what economic sector will mostly benefit from all this, I believe it has to be commodities, especially gold. Historically, in these cycles precious metals have exploded. In fact, gold rose from a low of $35 to over $850 an ounce in the last commodities boom back in the 1970s. History seems to be repeating itself as gold prices are soaring. The precious metal is up 20% just this year. Even at today’s levels, I believe there is still enormous opportunity as gold is still undervalued and is one of the cheapest assets you can buy.

It’s only common sense. At some point in the future, I believe interest rates will be moving up from today’s artificially low levels. When the economy does start to recover, the Fed has to raise rates to slow the flood of cheap money and the inflation they have created. But, even without raising rates in the short term, world tensions, the global energy crisis, and a weak economy have already pushed gold higher. There is also increasing continued demand for gold worldwide, coming from China, India, and Russia, as they have all been raking in profits from the rise in the price of precious metals. As the commodity bull-market gathers more steam, gold will undoubtedly continue to shine.

If you would like a free brochure explaining Housing Futures from the Chicago Mercantile Exchange and more information on the strategies we’re using to protect against a market downturn, please request the information here or contact me directly at oliver@wisdomfinancialinc.com Phone: 1-888-397-9184.
Oliver Velasquez, Metals Market Strategist, Wisdom Financial Inc.
Disclaimer: Futures and options trading can involve substantial risk. Past Performance is not indicative of future results.

Letter Re: Phases of the Moon and Deer Hunting

James,
Ungulates (cattle, deer, antelopes, camels, deer, goats, pigs, sheep, as so forth) daily routines are keyed to the moon. People’s routines are keyed to the Sun. The moon cycles each 28 days, the sun in 30 or so days.

Each day, the sun is always somewhere near high noon, i.e. 50% past sun-up, at 12:00 sun time (duh). However, the moon can be at ‘high noon’ in moon time at any given hour, i.e. at 9:00 a.m./3:00 p.m., etc.—because the moon has a shorter cycle.

Recent satellite telemetry studies on collared white tail does and bucks across North America established hard scientific proof of deer movement. Each morning, deer will move from low ground to the highest grounds and hide during daylight in the highest and densest locations. Each night fall, the deer will move to the lowest and most open areas. That is an established scientific fact, as gleaned from the telemetry studies. The scientists surmise the basis for such movements is that deer see exceptionally well at night, i.e. they enjoy a visual edge over the predators on the dark nights. However, during day time hours, both predator and prey see equally well; therefore, deer hide in the dense stuff in daylight. Additionally, deer have a keen sense of smell and because warm air rises, at day break deer go high and hide, thus accomplishing concealment and the ability to sniff out on the rising thermals any potential predatory threats.

Now, because deer are ungulates, i.e. cud chewers, they must chew their cud ‘X’ number of hours a day or they die. Most of this is done while bedded down (not sleeping though). They cannot chew their cud while in transit though. The telemetry studies confirmed that for 18 hours a day, deer are bedded down, i.e. the net sum of the time the deer are either up high on the ridges during daylight or in the open flats down low at night.

The telemetry studies established also that the deer ‘feed’ actively, i.e. their breakfast time/dinner time/ lunch time, when the mood is directly over head (i.e. when it is high noon in moon time) or when the moon is directly underfoot, (i.e. midnight in moon time).

This ‘active feed time’ is only about two hours each day, i.e. they fill their bellies twice daily and chew their cud the rest of the time, allowing of course the time it takes them to move to and from feeding areas and the time they actually ‘sleep’. Unlike people though, deer snooze about 3-4 hours, chew their cud at regular intervals when awake, take time to travel at daylight to higher ground, and take time to travel to lower ground at dark—-depending on the ‘moon-time’, the deer will ‘actively feed’ along their given travel routes.

Interestingly, and keeping the theory and scientific fact in mind, with a ‘full moon’, deer move less at daylight and stay in dense cover, especially when it is at night or the early a.m. hours. So to all who hunt with gun/camera, knowing the forces of nature that dictate animal travel patterns, one can surmise when and where animals, both predator and prey, can be found. Yes, predators’ travel patterns can be determined by tracking ‘their’ dinner plates as they move around the landscape!

There is an excellent book that goes through all of the above, titled Moon Struck; Hunting Strategies That Revolve Around the Moon, by Jim Murray. BassProShops sells this book. Tell your hunting buddies about this and they will thank you beyond words! It is the ultimate resource for tracking the moon phases for the very short interval of deer season. Thanks! – Matt B.

Odds ‘n Sods:

Eric Fry from The Rude Awakening penned this about Citigroup’s recent SIV accounting shenanigans: SIV Positive.

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Hawaiian K. and The Army Aviator both recommended an alarming piece of commentary on silver storage from Ted Butler: Money for Nothing. My favorite quote from the article: “I found it appalling that Morgan Stanley would claim to store silver that didn’t exist and even have the chutzpah to charge for the storage.” As I’ve often written: there is no safe and sure substitute for in-home storage of precious metals . Any other method–be it shares, or certificates, or “bonded storage”, bank safe deposit boxes, or anyone else–relies on trusting in the honesty and integrity of men and the constance of constitutionally-sound government. And living in these days, we all know about both. Sadly, we live in a wicked, fallen, sinful world.

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In the “There’s No Need for Panic” Department: The Federal Reserve has posted some Foreclosure Resources for Consumers. OBTW, I shoulsd mention: how did they qualify for a “.gov” domain name? The Federal Reserve is a private banking cartel, not a government agency. They are no more “Federal” than either Federal Express or Federal Cartridge Company. If you look in your phone book, you’ll see that the Federal Reserve is correctly listed in the “F” alphabetical section of the White Pages, not in the US Government Agencies section.

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Chester suggested this AP story: Much of U.S. Could See a Water Shortage

Notes from JWR:

A reminder that the special “six pack sale” for autographed copies of the latest 33 chapter edition of my novel “Patriots: Surviving the Coming Collapse” will end in just five days. The sale price of a box of six books is still just $90, postage paid. (Normally they are $24 per copy, but during this sale you get six autographed copies for $90, mailed in a Priority Mail Flat Rate box, sent to anywhere in the United States, including APO/FPO addresses.) This sale ends on October 31st. This is your chance to buy some extra copies for Christmas presents. Note that immediate deliveries are limited to supplies on hand. I presently have just a few six packs left on hand. Once those have been expended, there will be a delay for re-stocking until mid-November, when the last of the October six pack orders will be shipped. Orders will be shipped in the sequence that payments are received. Do not order from me unless you are willing to wait until the third week of November for your six pack of books to arrive! (If you are in a hurry, you can order from Fred’s M14 Stocks.)

That reminds me: I owe special thanks to Fred’s M14 Stocks. They recently bought 1,000 autographed copies of my novel “Patriots: Surviving the Coming Collapse” for resale. (This was the single largest order for autographed copies that I’ve ever received. My hand is still sore from autographing!) Take the time to visit their web site. In addition to the world’s best selection of M14 rifle stocks, they carry M14 and M1 Garand parts, AQT type targets, bandoleers and repack kits with stripper clips (many different types), shooting jackets, and a great assortment of books. Fred’s M14 Stocks is also a major supporter of The Appleseed Project.

Letter Re: Advice on Private Party Gun Purchases

Mr. Rawles:

We have a few guns that were passed down from my father, father-in-law, and grandparents. But after reading SurvivalBlog, I’ve determined that its wise to buying a few more, ahem, “capable” defensive guns. (Like an M1A and a scoped Remington 700 Sendero or maybe a Remington 700 PSS .308.) I would rather not buy them from a [Federally licensed] dealer, so I can avoid that whole paperwork trail. My difficulty here is that I live out in cow country where guns shows are infrequent. And the few we do have, have a poor assortment of guns to choose from. What do you suggest ? Thank You Sir, – Ray, Somewhere in Wyoming

JWR Replies: I recommend that you make all of your gun purchases from private parties, through GunBroker.com (on-line auctions) or GunsAmerica.com (fixed price sales–usually more expensive). Both of these web sites have search features that allow you to search for private party sellers, by State. Search only for sellers from your own state. That way, you won’t run afoul of the Federal law that prohibits the transfer of a modern (post-1898) gun across state lines, except through a FFL dealer. It might also be worth your time to drive long distances to some of the larger gun shows in your state. There, you should of course buy only from private parties.

Another option that you should pursue is buying cartridge guns from the 1890s. Under the Federal, law, any gun or receiver/frame that was made in or before 1898 is not considered a “firearm”. Rather, it is classed as a Federally exempt antique, regardless of the cartridge chambering. These guns can be purchased privately across state lines without any paperwork. There are quite a few models such as the Finnish M39 Mosin Nagant and the Mauser Model 1893, 1894 and 1895 that are available with receivers from the antique years, yet are available in modern, smokeless cartridge chamberings. Two antique gun dealers that I recommend are: The Pre-1899 Specialist (one of our loyal advertisers) and Empire Arms. If you end up buying a Mauser and plan to have it rebuilt as a .308 sporting or counter-sniper rifle, I recommend Scott Molnar of Valier, Montana, who does business under the name “Coyote Commander.” Phone: (406) 279-3797.

Letter Re: Reverse Osmosis Water Purification for Urbanites

Dear Jim,
Concerning Justin B.’s letter on reverse osmosis: Why go to all the trouble of using a reverse osmosis system and having to Jerry-rig a way to use it if the electrical system goes on the blink? Use a non-electric, non-water wasting, gravity-based water filtration system like the Big Berkey (30,000 gallons on one set of filters!) and get used to using it for your drinking water every day. It’s a great way to develop a habit and a mind set of preparedness.

Every time I fill my Berkey (once or twice a day) I think about my preps while I am filling/draining water. It is a constant reminder of the commitment I have made to myself and my family to do all I can to be prepared for whatever may come our way. Reverse osmosis filters waste 2 gallons of water for every 1 gallon filtered. That’s not exactly what you want to be doing in an emergency. A Berkey is fill it and forget it! No pumps, no waste, no mess! Replacement filters are easy and compact to store and take under two minutes to remove the old ones and put in the new ones. Part of surviving is the KISS principle. (Keep It Simple, Stupid.) I remind myself of this at every opportunity when I am tempted to get too gadgety or “Ooh, wouldn’t it be cool if…” starts to creep in. – Lee

Weekly Survival Real Estate Market Update

Thanks to all of you for your patience as I dealt with some important family issues, several visiting SurvivalBlog real estate clients, and the opening of Idaho’s Deer and Elk season, all in the past two weeks. Sometimes there is no such thing as the slower-paced life at a higher altitude!

Well the financial news these days just keeps getting darker and for those of you who are actively searching for your retreat, just press on, you’ll make it. As we get back into reviewing actual retreat locales (next week) it’s important to have a solid standard operating procedure (SOP). to identify, review and finally purchase your retreat. Although JWR does an outstanding job outlining characteristics and tactics to find and purchase your retreat in his book Rawles on Retreats and Relocation, I want to bring another perspective from an agent ‘on scene’ and allow you to benefit from my experience watching clients from all over the nation go through what at times may be a physically and mentally exhausting experience.

First and foremost, the best advice for those of you that dream of being at your retreat in the hinterboonies one day is that the locale and property you have chosen to focus on after searching the web for countless hours is never what your mind has made it out to be. The second tidbit of advice I can pass along is that the one property that looks like a shack in the middle of a swamp will actually turn out to be the one you buy. It never fails, a client contacts me regarding the ‘ultimate retreat’ they saw on a web site and once I go visit the property for them it fails inspection miserably against the clients’ criteria.

Keep your expectations as low as possible and focus on the acronym W.A.L.L.S., which stands for: Water, Access, Location, Light and Security. Focus on building strong W.A.L.L.S. around you as you search your prospective locales. Obviously, you’ll need a never ending source of water, preferably gravity fed from a spring or shallow well. The access to the property must be manageable year round, remember, what you see in July will not be the road conditions in December! This is a mistake that is easy to make if you get tunnel vision during your search or have your dream property goggles on, be careful! The location of the locale and property should be well within your defined limits of travel time to whatever major metropolitan area you may have to work in until either you retire or TSHTF, as not all of us can quite our jobs and pack it into the hills! Be realistic about your views of the locale before you arrive for your first visit and be prepared to make radical changes to your shopping list as the days go by. You’ll need plenty of light, Sunlight that is, and Southern exposure in order to keep your garden happy. Last and actually least would be the security of the locale and the property. Why last? Well, if you lack any of the aforementioned, then what’s the point of a retreat? I’d rather live out a socioeconomic storm in a retreat that had less than desirable defensibility than to be on the North face of a tall ridge where I could not grow my garden, with a 400 foot well and snowmobile access only in the winter. Trust me, almost any property can be defended, it just might take more personnel and logistics to do so. Now that you understand the W.A.L.L.S. theory we can jump back to the basics of finding your retreat.

As most of you know my family and I fled the People’s Republic of Kalifornia about a year ago and after spending the past year with many clients on their search for Heaven on earth (it does not exist in case anyone wants to know). One of the first mistakes that most people do is fly right in and want to see a bunch approved retreat properties with the properties spread out over a 200 mile radius. Stop. This is a waste of your time and everyone else’s time. The correct process would be to do the reverse of the standard learning curve and run, walk, and then crawl around your retreat locale. Let me explain: First, go to the local book store and pick up a huge folding non laminated paper map of the locale your are interested in relocating to (in CONUS that would typically be a particular State or region) and simply mark your route on the map and allow yourself three full days (not including travel time to and from) to simply drive the entire region. Stop in each town for a look see, breath the fresh air and talk to the local farmer at the general store, that person is usually a wealth of knowledge.

On a side note, please dress appropriately! If you’re coming from a major population center and going into the boonies, do not wear what you think is casual, since “out there” it will be over dressed and the locals will not talk to you. If you take the time to really dress down, you’ll be respected and even though you’re from “down there”, you’ll have a good chance to gain allot of critical Intel from the local population. Do not show up to see property in shorts, tennis shoes or high heels. I’ve actually had several clients come to town on their search and even after I told them to wear long pants and bring hiking boots to be prepared to walk in thick brush and varied terrain, someone shows up in a skirt and tennis shoes, great for looking at condominiums while carrying your toy poodle, but not realistic for retreat shopping. The next thing you know your spouse is pouting in the car while you and your agent are out seeing the property and the trip just goes downhill from there. Pack accordingly for the climate and the general terrain of your locale!

Back on track. If, for instance, you were thinking of moving to the Libby, Montana region you’ll want to drive from Kalispell all the way through Northern Idaho to Spokane, Washington (200 miles) just to give yourself a good working knowledge of the terrain and climate of the region as well as familiarizing yourself with any large metropolitan cities that may be a threat someday. This would be the run phase of your operational SOPs.

Next, once you have the ‘big picture’ you’ll need to identify your main retreat locale, if the one you picked while surfing the web was deemed unworthy, and three alternative retreat locales. Then go to the walk phase. During this phase you may need to take an entire week of vacation so you can actually stay in each locale, walk the towns, talk to everyone you can meet and really seek that warm fuzzy feeling you will have when you have finally found your retreat. Take your tools (such as the Rawles on Retreats and Relocation book) and make checklists of the characteristics that are important to you outside of your retreats W.A.L.L.S. and once you spend an entire day or two in each locale you’ll be ready for phase three.

Finally, in the crawl phase you’ll be ready to actually spend considerable time viewing properties in your main and backup retreat locales. Remember that sometimes you’ll find the best property in locale # 2.. If so, by all means buy it, since you’ll be spending more time at your property than out in the general vicinity anyway. And a short drive is nice out here in the country!

To recap, you’ll need to take a minimum of three trips to your retreat region and locale before attempting to purchase. First, make a large overview and narrow your region into several locales. Then take another trip to narrow the locales into two actual towns that meet your characteristics and then and only then come back with your checkbook in hand. The amount of time spent should be anywhere from 10 to 14 days of actual ‘ground time’, not including your travel days. So you’ll need to plan on saving up your vacation time and using the weekends (or your days off) to your advantage.
God Bless, – T.S. in Idaho


JWR Adds: If possible, schedule one of your retreat scouting trips for the dead of winter. This is particularly important if you are looking for a retreat anywhere at higher elevations or in more northern latitudes. Elevation and solar exposure make a huge difference in comfortable living. There are also some localized climate variations to consider. (The “snow belt” factor.) Asking a seller or agent about how much snow to expect in January is one thing, but seeing it for yourself is another. Odds are that after your mid-winter trip you will revise your retreat shopping plans to concentrate on lower elevation properties, southern exposure, and ready winter access via regularly plowed roads. (OBTW, I have found that any property that is on a School Bus Route is a good thing, even if you home school your kids, since typically those are the roads that get the highest priority for snow plowing in winter.)

Odds ‘n Sods:

The US residential housing market implosion isn’t over yet. My recent web searches turned up some testimony before the U.S. House Judiciary Committee Subcommittee on Commercial and Administrative Law. In reading it, we learned that the majority of ARM rate “resets” in the US will occur in in the fourth quarter of 2007 and the first quarter of 2008. And specifically, the peak for subprime resets will be in March of 2008, the peak in agency loan resets will be in September of 2008, and the peak in “jumbo” loan resets will not be until April of 2009. Buckle your seatbelts and be prepared for a long, bumpy, downhill ride.

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Courtesy of reader SJC: Centex Reports Loss as Housing Slump Intensifies

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Stephen in Iraq sent us this article that comes as no great surprise: Merrill Lynch Reports Loss on $8.4 Billion Writedown

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The folks at Front Sight have posted their 2008 schedule of courses on their web site. Click on Course Schedule in the left hand navigation bar. The Memsahib and I can both personally attest that their training is absolutely top notch, and indispensable! At least one member of each retreat group should attend both the Front Sight four day practical rifle and four day defensive handgun courses, and then come home to train others.

Note from JWR:

For those of you that have been waiting, I just got another case of 10 copies of the latest edition of The Encyclopedia of Country Living by Carla Emery. This massive three pound, 870 page compendium is a must for every prepared family’s bookshelf. If you look around, you can sometimes find used copies of the latest (Ninth) edition at local used book stores, or through Internet vendors. If you can’t find a copy locally, new copies are available through our Catalog page.

Letter Re: Advice on Retirement Plans and Precious Metals IRAs

Helo Jim,
Just a note to let you know what a great job your doing with the blog. I have a question that as far as I know you have not addressed. Most of my individual retirement account (IRA) money is in a 403b at work. [A 403(b) is a tax deferred retirement plan for the employees of nonprofit organizations.] I had wanted to roll this over into a precious metals IRA. However I am not allowed to do this until I leave my current job. Is there anything you would advise that I can do to protect my 403b against the declining dollar besides cashing it out and taking the huge hit in penalties and taxes? Thanks, – Jeff in Ohio

JWR Replies: My first suggestion is that because in most cases (depending on your income) you can have both a 400 series (401/403) retirement plan and an IRA, that you go ahead and set up a gold IRA, even if the majority of your retirement funds are locked up in another plan. Just minimize your contributions to the 400 series, and maximize your contribution to your gold IRA.

Company retirement plans vary widely. Some have a narrow range of investing options, while others offer a plethora. Even if you are “trapped” in a 400 series retirement plan, then at least direct your funds that are there into low risk investments. Since the US stock market is presently over-valued and likely to decline rapidly, this not a good time to have your retirement fund weighted toward stocks or stock mutual funds. If you have the opportunity to direct your portfolio in to bonds, I would recommend doing so, at least for the next few years.

One option for folks that feel trapped in their current retirement plan is to work out an arrangement with their employer to resign and come back on board–typically after a brief vacation –as an independent contractor. This would allow you to roll your 403(b) directly into an IRA. Note, however, that you must carefully weigh the costs and benefits. If the only retirement benefit that your company provides is the 403b proceeds, then it is is probably a good idea. But if your company also provides a traditional retirement payment, then this would probably be unwise. (Since the benefits that you would earn for the rest of your life are potentially quite large.) Also, switching to independent contractor status will mean some income tax and FICA “contribution” changes and necessitate finding your own health insurance. Run all the numbers before making such a drastic change.

The many variations of IRAs go beyond the scope of this brief discussion, but be sure to research them, and find out what is best for your particular circumstances

Precious metals IRAs are available through Swiss America. I’ve had a gold IRA with them (through American Church Trust, and more recently through Goldstar Trust Company) since the late 1990s, and in the past six years it has performed very well. Since the bull market in precious metals is still in it early stages, I expect further gains in the years to come.

I generally recommend pre-1965 circulated silver coins for tangible (“at home”) holdings, but gold for precious metals IRAs. This is because the purchase premium (above the spot price) is considerably higher for silver American Eagles versus gold American Eagles.

Note: As stated in my Provisos Page, I’m not a registered investment counselor, and I don’t give compensated investing advice.

US Food Riots Much Closer Than You Think, by Robert Felix






(The following is re-posted with permission, from IceAgeNow.com)

Recently, I said “we’ll be fighting in the streets for food long before we’re buried in ice.” I say the same thing in my book Not by Fire but by Ice.
I just received an email from a reader that sums it up better than I did:

“I spent about thirty years working in commercial agribusiness. My main job was to purchase ingredients, mainly grain, for flour mills and animal feed mills. As a part of my job, I was forced to understand the US food supply system, its strengths and weaknesses.

Over the years, I became aware of some things that nearly all Americans are completely unaware of. I am going to make a list of statements and then you will see where I’m going.

— 1% of the US population grows all of the food for all Americans.

— Nearly all Americans know essentially nothing about where the food they eat every day comes from. How it gets from the ground to them. And they don’t want to know about it. It’s cheap, as close as their local store, and of high quality. So no worries.

— The bulk of the food we eat comes from grain. Although they raise a lot of fruits and vegetables in California, Arizona, Florida, Oregon and Washington, those things don’t compose the main part of the average diet. Half of what a meat animal is raised on is grain so when you eat meat you are really eating grain. And, of course, we eat grain directly as bread, bagels, doughnuts, pasta, etc. Milk (and milk products like cheese) comes from cows that eat grain. A lot of grain. And the grain they eat is not produced where the cows are located.

— The lion’s share of grain produced in the US is done in a concentrated part of the US Midwest (Illinois, Iowa, Kansas, Missouri is the center of this area). The grain is moved to the coasts (where 70% of the population live) by only two railroads.

— Nothing is stored for very long in a supermarket. One day grain travels (by rail) from Kansas to Seattle to a flour mill. The next day the flour mill makes the flour and sends it to a bakery. The next day the bakery makes it into bread (and other baked things) and the next day it is at the store where it is purchased that day.
Nobody stores anything. The grain is produced and stored in the Midwest and shipped daily in a single railroad pipeline to the rest of America where the people live.

— Up until the 1980s there was a system that stored a lot of grain in elevators around the country. At one time, a whole year’s harvest of grain was stored that way. But since taxpayers were paying to store it, certain urban politicians engineered the movement of that money from providing a safety net or backup for their own food supply in order to give the money to various other social welfare things. So now, nothing is stored. We produce what we consume each year and store practically none of it. There is no contingency plan. Now for my take on what this means for us and what it has to do with
the topic you are publicizing.

— If a drought such as has lingered over other parts of the US where little grain is grown were to move over the grain-producing states in the Midwest where few people live, it would seriously damage the food supply of the country and the apples of Washington, the lettuce of California, the grapefruit of Florida and the peanuts of Georgia won’t make up the difference because grain is the staff of life and most of it is grown in the Midwest.

— Americans are armed to the teeth. In Los Angeles people burned down their own neighborhoods to protest a court case.

— In order for riots to break out the whole food supply doesn’t have to be wiped out. It just has to be threatened sufficiently. When people realize their vulnerability and the fact that there is no short term solution to a severe enough drought in the Midwest they will have no clue as to what they should do. Other nations can’t make up the difference because no other nation has a surplus of grain in good times let alone in times when they are having droughts and floods also. It takes two or three months to raise grain, yet people have to eat usually at least once a day, usually more than that.

— So, basically, we have in place a recipe for a disaster that will dwarf any other localized disasters imaginable. The important thing to note is that there is no solution for this event. There is no contingency plan for this. People living in certain parts of the US will fare better than others (which is another story) but those who live in big cities, where most of the US population live, are done for.

Anyway, I have no agenda of my own concerning this. I just thought I’d share it with someone who appears to have an idea of what might likely cause this scenario to occur. The only people who know about this are those who are involved in the production and distribution of the food supply and there are very, very few of them number-wise. And most of them haven’t put two and two together yet, either.”

JWR Adds: Do you have plenty of stored wheat and a wheat grinder for your family? If not, then contact any of our advertisers that sell storage foods, pronto. These include: Freeze Dry Guy , JRH Enterprises, Ready Made Resources, Safecastle, and Best Prices Storable Foods. (Be sure to also store plenty of rice, beans, and honey.) Have you stored a good assortment of heirloom variety (non-hybrid) garden seed that is less than three years old? If not, then contact the Ark Institute or the Seed Savers Exchange.

Odds ‘n Sods:

I found Cathy Buckle’s most recent letter from Zimbabwe well worth reading. The ravages of hyperinflation are hard to appreciate except when seen first hand, as related by someone like Cathy.

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California Fire Battalion Chief – Whoever Did This Knew What They Were Doing

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Alphie mentioned that the October Backwoods Home Magazine e-newsletter is now available.

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The Black Swan’s lessons–The value of considering improbable possibilities