SurvivalBlog.com

Jim,
Just one more note regarding the rising cost of metals, especially copper in the market – I sent an earlier message regarding recycling cartridge brass (which contains copper) instead of stockpiling copper, but now the New York Times notes in a Saturday brief:

“Price of a Penny Could Exceed a Cent – What happens if a penny is worth more than one cent? That is an issue the U.S. Mint could soon face if the price of metals keeps rising. The cost of the metal in a penny has climbed to almost one cent. Add in the cost of transporting the pennies, and the cost to the government of producing a penny is estimated at 1.4 cents.
The real problem could come if metals prices rise so high that it would be economical to melt down pennies for the metals they contain.
Appearances aside, pennies no longer contain much copper. In the middle of 1982, after copper prices rose to record levels, the mint started making pennies that consist mostly of zinc, with just a thin copper coating. But these days, zinc is newly popular. Rising industrial demand and speculation have sent the price rocketing. Since the end of 2003, zinc prices have tripled. Gold, by contrast, is up only about 50 percent.”

Will pennies disappear soon, or will they remain as a token of our graciousness to ‘give a penny, take a penny’? Regards, – Redclay

JWR Replies: If rapid inflation re-emerges (and I suspect that it will, soon), then those ubiquitous “give a penny, take a penny” bowls will likely be superceded by “give a dollar take a dollar” jars.

Jim:
I think we now have another way to compute the countdown to the collapse of our society as we know it.
Several months ago I read on one of the economic web sites, we both visit, that for every penny the price of fuel goes up $1,400,000 per day is sucked out of the consumer economy.
With oil at $74 per barrel today and the PENAC people pushing for another Middle East war, this one with Iran, we are looking at oil reaching $125 per barrel or higher as soon as this dumb war starts. This translates to $5.25 – $6.00 per gallon fuel by October / November.

The media and the economists are now saying that we will have $4.00 per gallon fuel by June 1 on current oil prices. One of my trusted friends is telling me that fuel is already $3.90 per gallon is some rural California cities.
I believe that the true unemployed figure here in the US is more than 12%. And, that the underemployed figure is 6% to 10% With our millions of unemployed, increased fuel costs will dry up the economy before winter this year. That means the crash will come before the first of the year.
Just using the preceding figure of $1.4MM per day being sucked out of the consumer economy the numbers look something like this.
1 cent per gal increase = $1,400,000 per day.
50 cent per gal increase = $70,000,000 per day.
100 cent per gal increase = $140,000,000 per day.
150 cent per gal increase = $210,000,000 per day.
30 days at 150 cent per day increase = $6,300,000,000 . That number is six billion three hundred million dollars being sucked out of the consumer economy in 30 days ending June 30, 2006.
Granted there are all kind of formulas to compute the disastrous affects of such an increase and my math is simple and rough, however, the American people cannot withstand such a hit and survive as a nation.
Now look at the global effects of a war with Iran. The US purchases no oil from Iran. Most of Iran’s oil is sold to Europe and other nations. A dumb nuclear strike or using depleted uranium ammo on Iran will contaminate that country for many lifetimes. Oil will trickle out of Iran just like oil from Iraq fluctuates. The price of oil will skyrocket as nations compete for available oil. The high price of fuel will curtail farming, food packaging, trucking, energy production, manufacturing, construction and the economy. The economies of many countries of the world will crash because the fiat dollar is the current primary global unit of International exchange. The Euro will crash a short time later because their central banks are tied to our central bank.
Yes, the crash can be put off for a little while by nationalizing the oil companies, major manufacturing, restricting travel, electrical use and subsidizing the farmers, but it will come regardless because you cannot build a nation on usury. Usury violates the 10th commandment and mocks God.
The lack of or the price of oil will soon bring our nation to a standstill, with or without another un Constitutional war. Civil unrest will surface and Americans will start taking out their frustrations on all foreign workers holding work visas, illegal border jumpers (the uncharged criminals living of America), the owners of businesses who hire foreigners, the banks that do business with them, foreign embassy consulates, the PACs, NGOs, churches, and the globalist in America. Under the guise of Homeland Security our anti American government employees will try to intervene and that will foster rebellion in various parts of the country. I am thankful I do not live in Texas, Arizona, New Mexico, Colorado, California or any sanctuary city. My brother and his entire extended family just moved to Idaho without any encouragement from me.
Now I am sure there are some economic professionals who visit this blog and can provide a better analysis than myself and I welcome their comments as to when we might expect the crash. I will go out on a limb and say, that absent government intervention it will probably come before the first of the year. Regardless, it is coming, and very soon.
Sincerely, – Rosy the Bull in Montana

We asked you this week, dear reader: What will the next Great Depression bring? How will Americans survive in our day-to-day lives? The responses to this not-so-hypothetical query continue to clog up our inbox, which doesn’t surprise us. What does surprise us, however, is how united our readers are on this subject. Not one message lamented on how strong our economy is right now, and how we are fools for even bringing up the possibility of another Great Depression. Each e-mail portrayed how
real this idea is to Americans – that something this bad could be right around the corner.
“A Great Depression signals a swerve in global direction, a massive transformation of the world society and economy,” says echolist.com.
“One great system perishes. The Great Depression marked a critical stage in a transformation of the global economy that began around 1900. That’s when the Industrial Economy of the 19th century slowly and fitfully began to morph into the 20th century’s Consumer Economy. To tame the almost naked continent of 1845, the Industrial Economy required immense savings. To save and invest became the 11th Commandment. Imagine. Americans saved up to 40 percent of their income!”
Apparently, we learned nothing from the events that occurred over seventy years ago. The U.S. savings rate has fallen into the negative level for the first time since the Great Depression. Debt, consumer and national, is skyrocketing. We continue to see people dig themselves deeper and deeper into debt, with no regard for preparing for the future.
“Having parents who lived through the First Depression (during the late 1920s-1930s), and having a father-in-law who was the proverbial ‘packrat’ (among other things, 7 washing machines, 15 vacuum cleaners, etc., when we cleaned out his house) they all had the mentality that nothing was wasted;
everything had value; and that what they had was of good quality,” writes one Daily Reckoning reader.
“Today we have very little of this. We do not know how to fix anything, build anything, or save anything of quality (because what little we have is made to expire and be thrown away).
“I personally can not imagine what it will be like when our dollar is worthless, and the shelves at the stores display a few dented cans of beans that are selling for whatever the price of an ounce of silver (or gold for that matter) is worth.
“Who among us will be able to keep the lights on, the water running, and our cars tuned?! What jobs will pay the best? For that matter, what jobs will be available for any of us? And what about our children? How will we care, feed, and educate them?
“I am half-empty kinda of person, but what I see ahead for the USA scares me very much (especially since it will stretch into my elder years of
life). It is going to be a very hand-to-mouth existence, with a lot of sadness, anger, and senseless violence (over simple everyday commodities).”
Short Fuse – The Daily Reckoning.
JWR Adds: The Daily Reckoning is one of my daily “must reads.” Subscriptions are free.