Odds ‘n Sods:

Pending Home Sales Index Hits Record Low

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From Newsweek‘s Daniel Gross: There’s No Inflation (If You Ignore Facts)

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Green Mountain Gear has found a limited supply of some more original German HK91/G3 alloy magazines. This new batch is in new-in-the-wrapper condition. These are in the original factory wrappers, with factory labels and anti-corrosion paper strips on the followers. (Just as they left the factory in the 1960s.) They don’t come any better than this.

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DV and David L. both suggested this article: Dollar’s double blow from Vietnam and Qatar

Jim’s Quote of the Day:

"Your food stamps will be stopped effective March 1992 because we received notice that you passed away. May God bless you. You may reapply if there is a change in your circumstances." – Letter from the Department of Social Services, Greenville, South Carolina

Note from JWR:

After my recent gun show trip to Montana, I have added a few new items to my catalog page, including a scarce special order takedown Winchester Model 1894 .30-30 short rifle that was made in 1896, and a scarce special order 5″ barrel S&W Safety Hammerless (“Lemon Squeezer”) Third Model .38 S&W revolver that was made around 1891. For residents of most of the United States, both of these antique guns can be shipped directly to your doorstep, with no FFL paperwork!

Letter Re: Why Physical Gold Versus Gold Stocks?

Mr. Editor:

Why on earth do you place such a strong emphasis on gold “in hand” as opposed to gold [mining] stocks? From what I’ve read, gold may soon double or triple [in price], but gold mining stocks like Barrick and Newmont are set to go up 5x to 7x. I think that you’ll be missing the boat as this bull market in [precious] metals continues. I feel sorry for you, pal. – Pete in Tampa

JWR Replies: I recommend buying (and personally holding) physical gold rather than gold stocks for three reasons: safety, safety, and safety:

The first “safety” is protection from a collapse in the dollar. Mining stocks are denominated in dollars, not ounces of gold or silver. So if the dollar is ever wiped out as a currency unit, then I know that I’ll be safe. I’ll have it in my personal possession, safe and sound.

The second “safety” is from mining company management stupidity. Ever since the early 1980s, the major gold mining companies have built up a large backlog of over the counter derivatives–commonly called their “hedge book” of forward sales. (This started when gold prices were chronically weak, back in the late 1980s and early 1990s.) Although many of the hedged position have been eliminated (“unwound”), there are still millions of ounces of gold that have “sold forward” at promised prices below $320 per ounce. In some cases this forward selling will account for more than 50% of their next five years of production. What will happen if gold zooms up to $1,500 per ounce? The miners will be stuck. They will still have to fulfill those forward sales contracts at the promised prices. Presumably they can add extra production shifts, but because of their hedging, their profitability will suffer, even when gold is going sky high. So if you are buying any gold stocks, first do your homework and only buy stocks from companies that have a small hedge boo, or better yet no hedging whatsoever.

The third “safety” is from social turmoil. In a major economic cataclysm (“WTSHTF“) all paper assets will be wiped out–even mining stocks. For that reason, I recommend that individual investors have a core holding of at least one $1,000 face value bag of pre-1965 circulated US 90% “junk” silver coinage per family member. This is for use in barter in the event of major depression. After you have that silver in hand, then you might consider some “paper” gold or silver mining investments.

I realize that all of the foregoing is an ultraconservative approach to precious metals investing. And I also acknowledge that I might miss out on some potential big gains. But I’m just an ultraconservative kinda guy.

Letter Re: Advice on Finding a Preparedness-Minded Spouse

Dear JWR,
I am a middle-aged female, single and have no children. I recently relocated to an area that I believe to be “safer” than where I had been living previously. I had hoped to meet others who were awake to the realities of life once I settled here, but much to my disappointment and amazement the natives seem to be “clueless.”

So I find myself in a very difficult if not dangerous situation. I may likely find myself alone when the SHTF. I have searched endlessly for a message board or the like in which I could communicate with others who have a similar interest, but to no avail. I know that there must be many others who share my concern about being alone when the time comes. I have a tremendous amount to contribute in many ways and I don’t give up easily either.

Do you have any resources or ideas that you would share? Thank you in advance for your time and consideration! Sincerely, – Beth

JWR Replies: I recommend this site previously mentioned in SurvivalBlog, as well as the Country Singletree Forum at Homesteading Today. Use the same precautions that you would with any other online dating service. Proceed with prayer.

Letter Re: Underground Storm/Fallout/Vault Shelters

Mr. Rawles:
Utah Shelter Systems sells pre-fab shelters built inside culvert pipe. At $38,000 for a 10×25 pipe based shelter, it’s not cheap but it is a complete solution including two entrance/exit ways with blast doors, ventilation, bunks, shelving, lighting, and so on. The bunks, flooring system, and other furnishings all seem designed to maximize storage space. – BR

JWR Replies: There are a number of approaches for hard shelters that work well. Buried galvanized culvert pipe shelters are just one of them. Other folks say that they like underground poly or steel tanks, while others insist on reinforced concrete. Good drainage is essential, regardless of where you live. In areas with high water tables, I highly recommend aboveground reinforced concrete shelters, such as those made by Safecastle. I realize that there are indeed below-ground shelters that can be built in those areas with a supplemental sump pump. But after all, our view of the future here at SurvivalBlog includes the prospect of extended periods without grid power.

Letter Re: Digitized Data for Your Bug-Out Bag

James:

JN is absolutely right about TrueCrypt, it’s an excellent tool. Be aware, however, that you can be compelled to disclose your encryption keys in the UK legally, and you can always be compelled to do so via extra-legal means. If you have any data that you truly wish to keep secret, a good start is to use a second TrueCrypt volume containing important data inside the primary volume which contains
data that is less crucial. Regards, – PH

Odds ‘n Sods:

The Chartist Gnome chided me in a recent e-mail, after I had mentioned that after having dropped decisively through the 80 level: “Some analysts suggest 75 or perhaps even 72 as the next support level for the US Dollar Index.” He said that I was being overly optimistic. By his calculations, “the next logical support level for the USD Index is 72 and then if that fails to hold, we can expect a step off the cliff with no support until 42.” Lest you think that this is some wild-eyed exaggeration, Jordan Roy-Byrne (editor of The Trendsman) came up with almost identical numbers. (Namely, 72 and 40 support levels.) Gulp! A USD Index level of 42 would equate to around $2.75 to buy a Euro and $4.02 to buy a British pound. As The Memsahib is fond of saying: “Good thing that there’s no inflation.”

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The next frontier for battery technology: betavoltaics: Scientists Invent 30 Year Continuous Power Laptop Battery 

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The folks at Ready Made Resources report that their home biodiesel production systems are now shipping. How about a cost of just 67 cents per gallon to produce biodiesel?

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RBS recommended this free e-book on the 1929 stock market crash and its aftermath: The Greatest Bull Market In History

Jim’s Quote of the Day:

"I fully understand the primary function of guns in the human condition: to protect oneself against the aggression of others. If other people are going to use them for the purpose of aggression, why, that’s all the more reason for me to own one (or in my case, considerably more than one)" – Kim du Toit

Note from JWR:

If reading SurvivalBlog has substantially added to your survival knowledge and family preparedness, then please consider becoming a 10 Cent Challenge subscriber. Less than 2% of regular SurvivalBlog readers have done so, with the other 98% assuming that “someone else will do it.” Please be that someone else. Subscriptions are 100% voluntary, and greatly appreciated. Thanks!

U.S. Foreclosure Numbers are Up–Some Retreat Property Possibilities?

There has been a lot of news in recent weeks about real estate foreclosures in the US. Foreclosure.com (one of SurvivalBlog’s Affiliate advertisers) just published the following US residential real estate foreclosure statistics:

National Highlights:
* Foreclosure activity increased 36 percent from July
* Foreclosure activity increased 115 percent from August 2006
* REO (“Real Estate Owned”)s increased 59% month over month, the biggest increase of any of the three foreclosure categories (Default, Auction, REO)

State and Metropolitan Statistical Area (MSA) Highlights:
* Nevada, California and Florida posted the top three state foreclosure rates
* The states with the most total foreclosure filings were California, Florida, Ohio, Texas and Michigan
* California cities accounted for six of the top 10 metropolitan foreclosure rates
* Modesto, Stockton and Merced (all in California) documented the top three metropolitan foreclosure rates
* Other top 10 metropolitan foreclosure rates were Detroit, Fort Lauderdale, Las Vegas and Cleveland

Beneath these statistics, there are millions of untold tales of woe. Many of them come from house buyers that were never properly qualified to buy in the first place. Clearly, they just couldn’t make the payments. They had “the dream of home ownership” but they were really just dreaming. In essence, they were never really home owners. The bankers were, since they held the notes for 90% or more of the purchase price and very little of the loan principal was ever paid. Huge numbers of houses have gone through foreclosure and are now “bank owned” (a lovely euphemism). That number is expected to increase substantially in the next 18 months, as mortgage interest rate “resets” kick in on millions of adjustable rate mortgages (ARMs). Meanwhile, if the economy slips into recession as predicted, there will be large corporate layoffs, and that will mean even more payment delinquencies and inevitably more residential foreclosures. Many of the defaults and foreclosures will come from the once-popular but now notorious “2 and 28” mortgages. (These are 30-year ARMs that feature two years of a low “teaser” rate followed by 28 years of a substantially higher interest rate.)

What does the new glut of foreclosures mean to those of us that are actively preparing for hard times? A few of the foreclosed properties hitting the market are in lightly populated rural areas with good soil and plentiful water–prime candidates for use as survival retreats. If you are in the financial position to buy a retreat with cash (or with a very small mortgage)–perhaps in partnership with some members of your extended family–then watch the foreclosure listings carefully. A service like Foreclosure.com is a good way to monitor new foreclosure listings in your chosen retreat area. But of course you can accomplish nearly the same thing for free by bookmarking the web sites for three or four real estate agencies, checking them daily, and regularly reminding local agents that that you are looking for a foreclosure. Since bankers will want to cut their losses, they will start the auctions for many of these properties at substantially below their market value. Those houses that receive no outside bids (that are “bought back” by the banks at the opening bid price), will probably hit the market at true bargain prices, to ensure quick sales. Wait. Watch. Pounce.

In coming weeks, you will see some listings for foreclosed properties that would be appropriate for retreats on our spin-off site, SurvivalRealty.com.

Todd Savage Adds: Remember that in most locales the banks cannot just ‘take back’ a foreclosed property, they must bid on it themselves on the day of the auction and the amount is usually the face value of the first mortgage note plus any back fees et cetera. The second mortgage holder is out of luck unless they want to buy the first mortgage and try and sell the property. This of course usually only happens in rising markets. If you or your agent locate a property that is a good deal then you may want to have them go to the auction on your behalf and make a bid. Remember though that in most cases the purchase price is due upon closing of the sale and you must pay cash. So those of you that have done your refinancing and taken $300,000-to-$400,000 out of your investments then this is a great deal. Bring cashiers checks in large denominations and then you’ll write a check for the small difference. There are also a few locales that allow you to bid and hold a property for 30 days to come up with the money, but you must present a large non-refundable deposit (sometimes 10% of the sale price). If you are sure you can pull it off then go for it. Otherwise, be careful!

Letter Re: Digitized Data for Your Bug-Out Bag

Sir:
Regarding the SD card idea, I have been doing something similar but with a few improvements:
1. Instead of a camera flash card, get a USB keychain drive [also known as “thumb” drive or “jump” drive]. These are cheap, available in at least 4GB [capacity] and are darn near impossible to break. The USB models can be read by nearly any PC or Mac.
For encryption, I recommend using True Crypt. This program is free and has been well-tested in the computer security community, as its code and design are open source.

One nice thing about this program, is that it lets you create a single file that you can access like a drive. And the program is only one file which can be run from the USB drive without the need to install anything on the PC.
I have several copies of this distributed to friends, and I have an envelope with the key distributed to some family members. This way, either one losing the goods does not compromise my info. And nobody can access the data unless I put them in touch, or they get together because I’m stuck somewhere and need a replacement passport/etc.
Regarding the family photos, the best way to make a digital album of 1,000+ pictures is to get a good quality digital camera and a copy stand. You may have to peel back the clear page covers to get rid of the glare, but the results with a high-megapixel camera are pretty darn good. Scanning dozens of albums on a flatbed is just not feasible.
Once you have them scanned, make DVDs and send them to your family. Make it a Christmas present or something. If your house burns, you not have nothing irreplaceable.
Hope this helps! – JN, EMT

Odds ‘n Sods:

Frequent contributor RBS sent this article link: Credit derivative volumes rise 32 percent to $45.5 trillion. I’ve warned SurvivalBlog readers about the threat of a derivatives implosion before, but for the sake of new readers, I’ll mention it again: Derivatives–The Mystery Man Who’ll Break the Global Bank at Monte Carlo

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The bidding is now at $500 in the SurvivalBlog benefit auction, for a scarce pre-1899 antique Finnish M39 Mosin Nagant rifle from my personal collection. This rifle was rebarreled by Valmet during WWII, and is in excellent condition. It comes with a replica bayonet, original sling, and original muzzle cap. Since the receiver for this rifle was made in 1898, it can be mailed directly to the winning bidder’s doorstep, with no FFL paperwork! The auction ends on October 15th.. Just e-mail us your bid.

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From The Australian (by way of SHTF Daily): Americans watch greenback fall

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The recent mention of CONEXes prompted Mike Williamson to forward us a link to his friend John Wagner’s blog. (Foul language warning!) Wagner recently had the sad experience of having a CONEX at his remote New Mexico property broken into by some goblins with a cutting torch. They also stole several restored 4WD vehicles at a neighbor’s house. (Also unattended.) This underscores the advice that I have been giving my consulting clients and SurvivalBlog readers many years: Never leave a retreat property both stocked and unattended. Unless you have a kindly, watchful, and close proximity neighbor with line of sight that is there year-round, then you need to have someone living at your retreat. The only viable alternative to on-site security is leaving your retreat essentially “stripped” and all of the valuable goodies in a completely hidden cache room–either above or below ground. And I do mean well-hidden. One clever approach that I saw was a false wall at the far end of a 40′ x 70′ rectangular barn that left a full-height five foot deep room for storage. The entrance door was hidden by a metal wall locker. Only a clever thief with a 100 foot tape measure and plenty of time to ponder would ever find a cache room like that. Another cache room that I saw was a “half basement” that in actuality was a full basement with a poured concrete divider. The only entrance to the concealed half was via a hidden trap door in a bedroom closet and a descending ladder.

Jim’s Quote of the Day:

“When it all comes down, the last man standing is going to be standing there in shorts and sneakers [armed] with a ’98 Mauser, and all the ninja-looking guys belly up at his feet – with all their cool gear.” – Louis Awerbuck

Notes from JWR:

The bidding is still at $460 in the SurvivalBlog benefit auction, for a scarce pre-1899 antique Finnish M39 Mosin Nagant rifle from my personal collection. This rifle was rebarreled by Valmet during WWII, and is in excellent condition. It comes with a brand new replica bayonet, original sling, and original muzzle cap. Since the receiver for this rifle was made in 1898, it can be mailed directly to the winning bidder’s doorstep, with no FFL paperwork! The auction ends on October 15th.. Just e-mail us your bid.

The recent query about burying CONEXes sparked a large flurry of replies. You may recognize the writer of the last letter posted below–“Doug Carlton”–as one of the characters from my novel “Patriots: Surviving the Coming Collapse”. The character was loosely based on a real life friend for mine that I have known since college. We went through ROTC together, in the early 1980s.