Letter Re: Influenza Exercise Shows the Potential for Major Infrastructure Disruptions

Jim:
I thought you and your readers might be interested in this flu pandemic exercise recently carried out by financial services firms. An article in Computerworld describes the scenario: “If a pandemic strikes the U.S., it will kill about 1.7 million people, hospitalize 9 million, exhaust antiviral medications and reduce basic food supplies…”, and, “Among the other things that may happen in an actual pandemic are school closings, as well as blackouts or brownouts in major metro areas because of degraded service as a result of absenteeism. Internet service throughput could be reduced by 50% due to congestion, and Web browsing timeouts would become common. Airlines would cut schedules, and garbage would pile up on streets.”

The article’s fairly standard mainstream media flu pandemic coverage, the kind I’m sure we’ve all seen before. What makes this really interesting is that the scenario information used for the exercise has been posted online. It’s somewhat focused on the financial sector, but there’s a lot of good general information about what might happen when a major flu pandemic strikes. – Chris in Utah

Letter Re: Thoughts on Defensive Handguns

Dear JWR:
I have been reading SurvivalBlog for about a month and I really enjoy it a lot. One subject came to mind that I thought was worth discussing. That area is the [Colt Model] 1911. It is worth saying that I find the term combat tupperware incredibly amusing, as a Glock owner. I do not know what kind of high end custom 1911s people are talking about when they say it is necessary to spend $2,000 to get this platform to be functional. I bought a Springfield [Armory] Mil Spec .45 for about $535 and it works fine though it isn’t as pretty as an Ed Brown or Les Baer.

Some individuals speak about the guns being really unreliable. From my experience these claims are unfounded. The Springfield and Glock 22 have each jammed once, both were easily cleared, luckily on the range not in an emergency. I am sure the 1911 would not perform flawlessly on the Glock torture test but considering it served the US Army for both World Wars and countless smaller ones its reliability is solid enough for me.

The next point of contention that I have with criticism read on this site is about its single stack capacity and the weakness against multiple targets. I think it is worth remembering that in TEOTWAWKI and probably most of you will be carrying an assault rifle so the .45’s magazine capacity of 8+1 is not a big concern. The real niche of the handgun is before the time that I hope never comes! Since it is not convenient or socially/legally acceptable to carry an assault rifle in a 3 point sling to the grocery store or while driving a tractor we are left with a pistol for self protection the vast majority of the time.

The average gunfight is at very close range with a couple of shots fired. During gunfights where individuals (almost always police officers) run out of ammo and find themselves changing magazines rapidly under fire it was because they missed their target(s)! Not because their handguns did not have the needed stopping power or because there were a dozen attackers. Someone can have an extended 33 round magazine in a Glock 17 with four spares in their cargo pocket but if they are not able to accurately engage their target(s) they will probably not survive a gunfight. It is not particularly important what kind of gun you have, it is important that you can accurately engage targets. That is my 2 cents on that topic. – Ryan

Odds ‘n Sods:

Will the house-flipping contrapreneurs on both coasts of the US soon be in Deep Schumer? Reader Charley S. sent us this snippet from The Daily Reckoning: “Two million homes will go into foreclosure in the next two years, if home prices continue to slump, said a report released by Joint Economic Committee Chairman Senator Charles Schumer.”

   o o o

Jason flagged this one: US lacks enough labs to test for contamination if a ‘dirty bomb’ explodes in a major city

   o o o

A hat tip to SJC for sending this: Report: Oil production peaked in 2006, will halve by 2030, possibly leading to war

   o o o

Karen B. sent us a link to a price history chart for wheat.

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.

  o o o

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.

   o o o

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.

   o o o

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.

   o o o

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

   o o o

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

   o o o

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.