From Lew Rockwell’s site: Why Bush Will Nuke Iran, by Paul Craig Roberts
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Reader C.M. sent a link to a news story about a power failure in Bangladesh. C.M.’s comment: “Less than two days without electricity and a mob has formed to burn institutions. Fascinating how quickly
it can all come apart.”
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As I predicted, silver and gold are starting to recover from their dips earlier in the month. Buy on the dips!
"If you are guided by opinion polls, you are not practicing leadership — you are practicing followship." – Margaret Thatcher
Here is your daily dose of Doom und Gloom (DUG)TM: I was recently asked by a consulting client where and when the U.S. real estate market will likely bottom. Clearly, the market has until recently been frothy, with all the signs of a speculative bubble. Lots of people that had no business doing so bought “spec” houses. Many of these buyers were under-qualified, often stretching the truth on their mortgage applications when they described their assets and incomes. Many houses were bought with interest only loans. They purchased second, third, or even fourth homes with the goal of flipping them for a quick profits. Now the klaxons have sounded and the spec buyers are crowding the exit doors. Its a Hollywood epic in the making. Recent news reports have confirmed that we are well beyond the to. Bloomberg reports that U.S. home resales are falling. This is the first clear drop in a decade. Meanwhile, the inventory of unsold homes in the U.S.–both new and existing–is climbing. This unsold inventory has grown enormously. In fact the inventory has more than quadrupled in some markets. This has all the makings of a spectacularly declining market in near future. When hardly anyone is buying, the law of supply and demand dictates that prices must fall. I am still pointing to the Spring of Aught Seven for the outright panic and housing market collapse
Based upon the currently overvalued prices (since prices have galloped far ahead of the currency inflation rate), my educated guess is a bottom in 2008 or 2009, with overall declines of around 35% from the recent market highs.(To be more specific: Down 10% in the the least inflated rural inland regions, and down perhaps as much as 60% in the most over-valued metropolitan markets such as Phoenix, San Diego, and Miami. The biggest declines will surely be on the coasts. The old investing axiom “a rising tide raises all ships” also works in reverse. Let’s face it. The tide has been rising for 10 years in most markets, and to mix a metaphor, the pendulum needs to swing the other way for a while.
My advice: If you own a “spec” house, then you should have been watching the market more closely and already sold it. If you can presently sell it for “break even” or even something close to that, then do so, as soon as possible. Ditto if you have a vacation property that you do not intend to keep for your lifetime or that you don’t intend to employ as a survival retreat. If you own rental properties, you should sit down and dispassionately do the math. Consider the potential market decline, and what that will do to rent rates in your area. If house prices drop 30% then rents will drop 30%, or at least close to that. Count on it. If rents do indeed drop and you anticipate a negative cash flow, and you can’t afford to ride out a negative cash flow for 18 to 36 months, then it it is better to cut your losses and sell your rental houses(s) now, while you still can.
If you have a variable rate mortgage on any property, convert it to a fixed rate loan, muy pronto, even if that means that your monthly payment is slightly higher. When the rates rise–and trust me, they will–folks with ARMs are going to get hurt badly when their rates are reset. I call this “ARM twisting” syndrome. I foresee that an interest rate jump of 2 or 3 percent will be a very painful ARM twisting exercise.
If you are comfortable where you are, then stay where you are. Hold on to your cash. Watch and wait for the bottom, and then perhaps do some bargain hunting. Who knows? You might be able to find a nice self-sufficient rural retreat property at the bottom of the market, for roughly 60 cents on the dollar. Don’t buy real estate now unless it is in a relatively safe (read: non-coastal) market and you can buy it at a bargain price from a “motivated” seller. Build an anticipated 35% drop in the market into your purchase calculations. That should limit you to buying only genuinely under-valued bargains.
What if you aren’t comfortable where you are?. What if you presently own a house that is in a vulnerable market and you know that for family, health, or employment reasons that you will be moving within the next three years? (I’m talking to you, Fred.) Then my advice is to take advantage of the market gains and sell you your house. Sell now, and move into a rental house. Yes, I know this is a hassle, but someday you’ll thank yourself for doing so. As previously mentioned in this blog, you might even be able to sell your house to a property management company, and rent it back.
The old saying goes, “buy low and sell high.” In the near future I believe that you will see a lot of your neighbors trapped by their debt burdens and forced into doing just the opposite. It won’t be pretty.
My thanks to R.E.M. for his hard-earned experience on rotating food stocks. Perhaps I can ease his frustration a bit about not reading the packing date of USGI MREs – there is indeed a numbered code packing date on every MRE case, the outside of the newer USGI MRE retort packages and best of all, every individual item in each MRE package. You can go to the www.mreinfo.com web site for the whole story, but to condense the code for you, say you have a four-digit or longer number on the outside of the package – take the first number to mean the last number of the year the item was packed and the next three numbers to mean the day of the 365 or 366 day calendar year. For instance a date code of 6097 means that the item was packed on the 97th day of the year 2006, or April 7th, 2006. Knowing this code can be very handy and expedient when you are browsing cases of MREs at a gun show or individual items at a surplus store. You can refer to the web site above for more detailed information and shortened or extended storage times of MREs dependent on the temperature. The web site also has a sub-page for foreign GI MREs, and info on them, for overseas readers. regards, – Redclay
Michael Z. Williamson is correct that folk don’t think about all the uses of oil in the products we buy. The sustainability of our growing population is dependent upon massive amounts of oil used in pesticides and fertilizers in order to obtain spectacularly large crop yields per acre, not to mention the harvesting, transportation, and transportation of food. Shortages of oil could have a severe impact on food production, and last year even the “moderately high” price of fuel caused a few farmers to not be able to harvest their crops.
One problem with the oil picture is that not all sources disclose or accurately portray their reserves. The Saudis have said for a while that they will increase production but in fact their recent production has decreased as they pulverize their fields with water injection. Their new ratios of heavy crude to light crude are also not encouraging. Commodity prices, particularly steel, are rising enough (partially due to Asian demand) that constructing new rigs /platforms and refineries is prohibitively expensive. The Saudis recently contracted for three oil rigs to be transferred from our gulf to their area. The internationally tight supply of drilling equipment plus unpredictable hurricanes and now recent quake activity in our gulf will likely be negative factors
The statistics of where the oil is derived from are not by themselves terribly relevant to proving why we went to war. For the explanation of why we went to war I find Mike Ruppert’s Crossing the Rubicon illuminating. The critical factor for us is that very small shortages are sufficient to cause economic upheaval in a culture that depends on Just in Time (JIT) service delivery and has most of it’s citizens profoundly dependent upon their vocational specialization. To create a crisis, oil supplies don’t need to have leveled out or decrease as in Peak oil theory, but rather if increases in demand eclipse the supply available (which may or not be increasing) that will do the trick. Demand is soaring in some parts of the world. Some of the more difficult to reach oil fields are reported to be viable when prices are high enough, but realistic production responses(drilling new fields) to shortages can be years away. Pricing dynamics are irrelevant if the BTUs required to extract the oil meet or exceed that drilled from the ground, which is an issue for some fields. Pricing does however play a role in conservation via demand destruction, which describes how higher oil prices reduce demand. Demand destruction also cools off the economy as folk spend less, which further reduces demand for oil. We may be seeing some of that now. The other factor to keep in mind is that most oil sources are politically unstable, and many don’t especially respect the U.S. Best to keep a flexible mindset, enjoy the golden age of oil while you can, and be prepared for the unexpected. – B.F.
The Rabid One mentioned that there is an interesting thread of conversation over at The FALFiles Survival/Preparedness Forum about fallout meters and the small “personal” detectors such as Nuk-Alert.
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SurvivalBlog reader Stephen mentioned that there is some interesting commentary on derivatives down near the end of The Mogambo Guru’s latest posting.
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Reader Ben L. mentioned this article about more Nanny State encroachment: Breed Specific Dog Bans
“Being a lover of freedom, when the [Nazi] revolution came, I looked to the universities to defend it [freedom], knowing that they had always boasted of their devotion to the cause of truth; but no, the universities were immediately silenced. Then I looked to the great editors of the newspapers, whose flaming editorials in days gone by had proclaimed their love of freedom; but they, like the universities, were silenced in a few short weeks…Only the Church stood squarely across the path of Hitler’s campaign for suppressing truth. I never had any special interest in the Church before, but now I feel a great affection and admiration for it because the Church alone has had the courage and persistence to stand for intellectual and moral freedom. I am forced to confess that what I once despised I now praise unreservedly.” – Albert Einstein, translated from Kampi und Zeugnis der bekennenden Kirche
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There is a big problem with counting the Chevron Oil strike in the Gulf of Mexico because of its depth. This hit that is estimated to be large is also inaccessible using current equipment. Chevron and two other companies had to go 7,000 feet below the warm water layer of the Gulf of Mexico, and then drill miles below the sea floor for a total depth
of 28,175 feet. For comparison this is cruising altitude for an airliner, compare that depth to the 69 foot depth of the first commercial oil well in the USA. We need to first design and build tools that will let us design and build the drilling equipment needed. Let us say around ten years in the good side to get this alleged huge deposit running. The dry tundras in Canada are no picnic either since the oil production is dependant on ability to supply water and heat to the shales and tars. The easy oil is running out.
Jim-
I sent a preparedness study [from Columbia University] to your attention a few weeks ago; I could not find the online source document. Since it showed up in my media scanning again today, I tried to track it down a little better. I have below some associated links, and the home page (which has a great deal of additional info on it:
Preparedness Study News Article
Columbia University Projects Web Page
Columbia University Research Page
Columbia University Index Page
As a side note, I purchased Arbogast’s “Rawles Gets You Ready” preparedness course.; it has much well thought out content. FYI, Costco no longer sells the hand sanitizer in the large containers, it has been discontinued, according to the store employee, but no reason given. My personal cost analysis has in this AO (Ottawa, Canada–temporarily for me), a dollar store sanitizer product as my best buy. I just buy a few and refill the older large container.
Thanks for your good work, and broadcast loudly the release of your Rawles on Retreats and Relocation book; I am looking hard at touring Idaho and western Montana for a few acres near a small town. Thanks again, and here are the links. – William
DAK hams were mentioned in a recent article as a good canned meat to store. I agree with this 110%….I’ve actually called and talked to the supervisor of DAK hams in the USA. His name is Ole he is very nice and wonderful to talk too I recommend it… Ole has told me repeatedly that DAK hams will store for at least 5 years at normal room temperatures. Ole
also told me how to read the date code on the can. its format is XXXX H or generally that way the first 2 digits are the DAY of the year and the last 2 are the digits for the YEAR that the can was sealed. so if you have a code 6006 H it was sealed on the 60th day of 2006 and would be good at least until 2011. The 60th day would be about FEB 28th. Ole has also promised that they will not be putting that new virus experiment on their hams since they are cooked and sealed and have no need for germ protection….Thank goodness.
I believe that Ole is from Denmark where DAK hams come from, you can tell when you talk to him. So I trust him a lot with DAK products…DAK hams are also very
inexpensive at $3.99 and have 8 slices of ham in them, good for any backpack venture or survival storage. They also can make a nice little gift to friends or to the poor. – Cruzan
Dear Jim,
I concur on a gladius (which is the same size as a Celtic leaf blade, Greek hoplite, Swiss baselard or 18th century artillery short sword) as a good choice in swords. It’s about the length of one joint of the arm, so it becomes an almost perfect extension and usable fairly instinctively. It works better with a shield–1/2 to 3/4 plywood. A basic one can be cut from thin leaf spring stock (1/4″ or 3/16″) or riding mower blades. It works best in formation, but that’s unlikely to be a scenario in the future.
Swordsmithing more than bladesmithing is a very complex task, not for the beginner. Heat treatment is critical, and there’s a lot of metal to move. Grinding one takes longer and will waste some metal (more than half), but shavings can be recycled or melted down. Grinding means less chance for impurities to seep into the metal, and takes only a file or a stone (such as the curb).
Smithing of locks for muzzleloaders isn’t too complex, though it takes some skill tempering, but barrels are a task in themselves. What many re-enactors use for cheap functionality is high-pressure plumbing pipe. Instructions for building a rifling cutter are available in the out of print Foxfire books and others. It’s time consuming but not too complex. Be warned that this pipe will handle blackpowder, but will burst with more modern propellants. With a lathe, transmission shafts or other chrome-moly steel (4140 or similar material) can be bored and turned into good barrels for modern cartridges.
The Chinese repeating crossbow, which I have handled and shot, was intended for use by massed peasants. It suffers from several problems. First, it cannot be aimed well, as the mechanism is above the stock and (second) must be worked while shooting. Third, it is not very powerful, so fourth, it lacks range. Against even thick leather, it is unlikely to penetrate. Fifth, the mechanism is complex. However, an earlier Greek mechanism was built as a ballista for rapid firing bolts. This is a great way to disperse a crowd in a hurry–dropping a dozen spears into the midst will certainly make any charge scatter. And obviously, even a hand-held one has psychological effect for the rate of fire, especially against unarmored people. I would prefer accurate shots at greater range, however, and when the magazine loading time is taken into account for the repeating crossbow, a good recurve in practiced hands is more effective and simpler. (For note, I have recurves, longbows and crossbows in the house and compete at re-enactments at an adequate if not impressive level. I am generally biased toward recurves for rate of fire, but I prefer the crossbow if I have time to make the shots count.)
I just saw this video on archery (it’s in Korean). The interesting part for me is the great slow-motion shots of arrows in flight, showing the oscillations that they must go through in order to fly “Straight.” The arrow is propelled straight by the string, but must bend around the limb of the bow. This is something that arrows must be designed for for best accuracy. – Michael Z. Williamson, (in sword maker rather than sci-fi writer mode)
In a recent newsletter article, economist Dr. Gary North commented: “We are at the cusp of Bernanke’s experiment: to reverse Greenspan’s era of monetary expansion without toppling the bubbles that this expansion led to. Can he do it? If he can, and if he does, then he is a wizard much more gifted than Greenspan. Anyone can inflate the money supply. The trick is to stabilize it without tanking the economy after the policy of inflation is a decade old. Paul Volcker could not do it, 1979-81. Greenspan never tried. For those of you who don’t remember January, 1980, gold hit $850 and silver hit $50. The dollar was worth twice as much back then. Are you prepared for something similar?”
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Three great pieces of commentary were recently posted over at Gold-Eagle.com: “The Economy In Denial: Fallout from the Bursting Housing Bubble”,by Axel Merk, “Stay Focused on the Major Trend”, by the Aden Sisters, and “What’s Behind The Meltdown In The Commodity Markets?” by Gary Dorsch.
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Gun Parts Guy (GPG) is having a big seasonal sale on FAL and L1A1 parts. The sale ends on October 2nd. All of you that are FAL owners should check it out!
"The rifle is a weapon. Let there be no mistake about that. It is a tool of power, and thus dependent completely upon the moral stature of its user. It is equally useful in securing meat for the table, destroying group enemies on the battlefield, and resisting tyranny. In fact, it is the only means of resisting tyranny, since a citizenry armed with rifles simply cannot be tyrannized. The rifle itself has no moral stature, since it has no will of its own. Naturally, it may be used by evil men for evil purposes, but there are more good men than evil, and while the latter cannot be persuaded to the path of righteousness by propaganda, they can certainly be corrected by good men with rifles." – The Late Jeff Cooper, The Art of the Rifle
We were saddened to hear of the passing of Col. Jeff Cooper yesterday. He was a fine American, a true Patriot, and a master at his craft. Our condolences to his wife Janelle.
Round 6 of the SurvivalBlog non-fiction writing contest ends in three days! The writer of the best non-fiction article will win a valuable four day “gray” transferable Front Sight course certificate. (Worth up to $1,600.) Second prize is a copy of my “Rawles Gets You Ready” preparedness course, generously donated by Jake Stafford of Arbogast Publishing. If you want a chance to win Round 6, e-mail us your article, ASAP. Round 6 will end on September 30th. Remember that the articles that relate practical “how to” skills for survival will have an advantage in the judging. The following article is another entry in Round 6.