Letter Re: Questions on Saving, Interest, and Preparation Versus Hoarding,

James:
 I offer the following discussion (and answers, I hope) for Christians.
 
Proposition/assumptions: Good financial planning and even seeming ‘common sense’ dictates that we plan our income and expenditures wisely so as to have the ability to withstand a crisis.  This plan makes sense on an intuitive level, and also can be argued quite easily that as a Christian we have a duty to provide for the life and livelihood of our dependents; and that this provision includes saving money and goods for the event of hard times.  Or does it?
Our Christian duty is also unquestionably to be charitable and to avoid the sin of covetousness/greed.  First, some definitions:

Covet (verb: to covet): to wish, long, or crave for something, especially the property of another person
 
Greed: excessive desire to acquire or possess more (especially more material wealth) than one needs or deserves (syn. Avarice: a more religious term, one of the Seven Deadly Sins)
 
Charity: (one of the Three Theological Virtues), meaning loving kindness towards others; it is held to be the ultimate perfection of the human spirit, because it is said to both glorify and reflect the nature of God. In its most extreme form charity can be self-sacrificial. Charity is one conventional English translation of the Greek term agape.  Agape to the early Christians meant that inner bond of blessed union which united the individual with divinity, and mankind with their fellowmen. Till our eyes are fully opened, "there abideth faith, hope, and charity, these three; but the greatest of these is charity" (1 Cor 13).  Charity is commonly understood to mean ‘giving to the needy’.
 
Reflections:  Is there gray area?  Where is it?  Is saving the necessary substantial sum for a child’s college education acceptable?  Is having six months living expenses in the bank acceptable?  Is a year’s worth of food storage acceptable?  Can I save for economic downturns without knowing with certainty that they will come?  Can I save for them knowing for certain that they WILL come, but not for certain that it will result in my inability to provide for my family?
 
What amount of saving is acceptable?  Where does it become ‘hoarding’?  Is the sin of greed more one of quantity, or one of attitude?
 
If any amount of saving is acceptable, how much?  Is it acceptable to save excluding  charity until the acceptable amount is reached?  Or are we obliged to give to charity while saving toward that amount?
 
It is generally accepted that Christians must lend without charging interest; but in what circumstances?  All without exception?  Toward family members?  To other Christians?  Can we earn interest on investments?  Is an interest-earning savings account acceptable? 
 
Can we earn interest in excess of the rate of inflation without sin?
 
Can we sell our home for a profit if we do not need a larger home to accommodate our own immediate needs? 
 
And some rhetorical questions, not meant to insult; but to add more facets for discussion: Does God always provide for his faithful?  Historically, have Christians been safe from starvation through economic hard times?   Is not saving and preparing for disaster a simple reality of living in the temporal world The Almighty has placed us into?  Is saving a function of ‘giving to Caesar’, which is considered acceptable as long as we also give to God? – C.P., MD

Letter Re: Survive or Prevail?

Jim,
I wanted to share the following with you. It really made me stop and think. I just finished reading G. Gordon Liddy’s book “When I Was A Kid, This Was A Free Country.” It is a very good read. Chapter seven is titled “Survive Or Prevail,” and in it he makes an excellent point. Do we want to survive, or prevail? The dictionary says that “to survive” means merely “to continue to live or exist.” Yet the definition of “prevail” means “to overcome; to gain the victory or superiority; to gain the advantage; to have the upper hand, or the mastery; to win; to triumph; to be victorious.” Being a survivor and surviving a SHTF situation is not a bad thing, but we are capable of, and should try for much more. We may indeed end up just surviving, but as my Dad used to say: “Shoot for the stars and you might hit the moon. Shoot for the moon, and you might hit your foot.” We should all be aiming to be “prevailers.” – Gung-Ho

Letter Re: Copper Price Galloping

Dear Mr. Rawles,
I have wanted to write to you for a week or two with respect to an oddity.  An increasing number of sources are discussing the degree to which the base metal in the US penny is becoming more valuable than the penny itself.  This is odd, and www.coinflation.comis tracking it with alleged numerical precision.  If I get some spare time this week, I hope to write about the death of the penny in more detail. Best Regards, – K.A.D.

JWR Replies: Silver is about 45 times more bulky than gold, (As I’m writing this, gold is $605.10 per ounce, whereas silver is $13.28 per ounce.) Even still, I prefer investing in silver. It is bulky, but stilll marginally portable. However, in general, I cannot recommend investing in physical copper! It is far too bulky. As a base metal, copper is far too heavy and bulky to be practical as a tangible investment. Just $2,000 worth would be too heavy to carry in a car. Perhaps if you are a retiree that lives at your retreat year-round, and if you have no intention of moving for the rest of our retired life. For anyone else, I cannot recommend investing base metals. Since only pre-1982 U.S. pennies are all copper (the later ones are merely copper-flashed zinc tokens) unless copper skyrockets, it is hardly worth your time to sort pennies. (But you might get lucky and find a cache of prte-1982 penny rolls.)

Odds ‘n Sods:

Chuck the Welding Wizard introduced me to an amazing publication, called the Encyclopedia of “Made it Myself ” Ideas. (30th Anniversary Edition, published by the folks at Farm Show Magazine). It has a wealth of knowledge on farm machinery modifications and outlandish inventions, some of which will doubtless prove useful at a retreat. It is available through http://www.farmshow.com. While you are at it, I recommend that you get their collection of magazine back issues on CD-ROM–less than $40 for 30 years of back issues.

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Former Federal Reserve Chairman Al Greenspan says that he regrets “irrational exuberance”

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Another U.S. mountain lion attack

 

Note from JWR:

We’re having some difficulties getting our continuous loop scrolling ad bar to work with Internet Explorer. 🙁 So unless you have Firefox, Safari, or Netscape, our ads may "disappear" until we get things straightened out. (Needless to say, I’ll be crediting all of our advertisers for some free days.) We may revert to non-scrolling ads for a while. Thanks for your patience.) much more secure and resistant to viruses.

Letter Re: A New Breed of Feral Dogs, by Buckshot

This article raised a valid point. But I think it overstated the threat. And it conveyed a lot of negative thoughts, like “you will freeze up, your shots will go into the ground, you will be overwhelmed before you can react,” etc.
 
  I’m a dog lover; owner of three Bull Terriers, which are basically civilized, happy Pit Bulls. No question, the strength, destructive potential and “hard to kill” factor of many dogs is true. But the author of that article overlooked a key feature of the “pack mentality.” Kill the lead dogs, and the followers probably will slink away.
 
Granted, the earlier the interdiction the better, via snares or other means. But I’d like to present a more positive scenario if one is attacked. I agree that short barreled, smaller caliber handguns may be inadequate. So if feral dogs are a real risk, carry a shotgun loaded with buckshot. You are less likely to miss, and more certain to stop any dog you solidly hit.
 
If attacked, identify the alpha dog and his strongest followers (that won’t be hard; they’ll be in front,) and shoot them in order. If you have six to eight rounds of buckshot, and use them effectively you very probably will prevail. In fact you may be surprised how fast the “follower dogs” run off once the Big Dogs go down.
 
If the SHTF badly enough for packs of wild dogs to form, one already should have got over that “can’t be happening” response. Training should have overcome the “ejecting unfired rounds” syndrome too. If you’re still worried about that, get a semi auto shotgun.
 
Your site is great, and the original article was valid. Just wanted to address the issue from a different perspective. – Mike in Mesa

Two Letters Re: The U.S. Housing Bubble–Yea, the Pinprick Cometh

Mr. Rawles,
I read the article on the housing bubble on SurvivalBlog and would like to add a bit of evidence to the claim.  I currently own a home in Orlando, Florida and haven’t sold in five months.  This is unheard of for that region, but it is just not me all the houses in the area having the same problem.  Here are a couple of quotes from my real estate agent on the Orlando market:
“I just returned from a real estate conference in Tampa.  The main topic was the large amount of time listings are sitting the market before they sell.  And, the huge inventory of homes available. 
 
There are six times more homes on the market right now than this time last year.” The Denver market seems to be doing similarly.  My sister is a real estate broker and she heard at a recent conference 50% of all homes for sale in Denver are in foreclosure.
The bubble is bursting. – Sean

Jim,
Your book “Patriots” radically affected my life: I only wish I had read it pre-Y2K. I live in Nebraska where the farmers are struggling with historically low prices and unprecedented costs for producing their products. Because of their relationships with their creditors(i.e. bankers) they have no choice but to continue going further
into debt. If they don’t plant, they will be foreclosed on, but if they do plant,they are probably going to lose even more money. They lose no matter what they do. In spite of the unprofitable nature of farming, the price of land is continuing to appreciate and taxes are rising, making it even more unprofitable. In the last week there have
been rumors that farmers are receiving unsolicited cash offers for their farms from foreign (Chinese) investors. Jim, I believe that in the event of a dollar collapse, we could end up in a situation like that of Argentina, where foreign corporations own the farms and refuse to sell their products for worthless dollars. Additionally, we are
now a net importer of food. Finally, I believe that the rise of Aztlan is attracting the notice of the people that can be awakened and a mass exodus of refugees from the Southwest is about to ensue.
This will have a profound impact on the food supply as investments in this region will become speculative and as the farm laborers become more militant.
In conclusion, while I believe a housing collapse is inevitable, I think that agricultural land in the Northern states will continue to appreciate as long as financing is available. Thanks for all you do. – Neb

The U.S. Housing Bubble– Yea, the Pinprick Cometh

I am now convinced that the housing bubble in The United States is about ready to pop. Once home sellers see that “the Spring buying season” does not reappear along with hay fever this year, they will get panicky. Up to 30% of the homes that have been sold in the past two years have been sold to over-extended speculators who were hoping to “flip” them–taking advantage of the rising house market. The old saying goes “A rising tide raises all ships.” But the inverse is also true. When the flippers realize that they are on a down escalator, they will start discounting their prices to make sure that their “spec” house sells before the music stops. Once this psychology sets in, it is just a matter of time before the mindset of “Get my investment back out of it” is replaced by “Dump it, and save part of my principal, while I still can.”

There are already reports coming out of Florida and Southern California of a “buyer’s market”, with prices being substantially discounted. Some of the big house builders are offering unusual incentives ranging from gym memberships to cruise ship tickets. One of them is even advertising a “selling at our cost” sale, in an attempt to break even. Methinks this smacks of desperation.

As quoted in yesterday’s Daily Reckoning (one of my daily “must reads”–BTW, I highly recommend that you sign up for a free subscription) economic analyst Richard Benson offered his insights on why housing is about to go to H*ll:
“Consumer debt is up to $2 trillion (not including $440 billion of revolving home equity loans and $600 billion of second mortgages). Not only do consumers owe a whopping $9 trillion in mortgage debt, but home equity extraction has reached $600 billion annually. Homeowners have basically received, and spent, in excess of $2 trillion that they never
earned (Just take a look at the increase in total mortgage debt in the Federal Reserve’s Flow of Funds Data since 2000).
“Home prices are under horrible pressure. There are probably a few million property owners, including speculators, flippers, and second-home buyers, who are in way over their heads. We’ve all heard stories about second-home buyers who really couldn’t afford the luxury and high expense of a second-home priced at $200,000, yet they purchased one for $250,000
and rationalized its affordability because ‘the value would only go up to $300,000 or more.’ Besides, they naively believed ‘It could always be sold quickly in a bidding war for a profit.’ In resort areas – given the number of days people actually use their second home – staying at the Ritz for $500 a night could be a much better deal. Do the math; it’s not pretty.”

My advice: If you have a second home, sell it muy pronto. And if you anticipate moving within the next two or three years, sell your house and rent. The hassle of moving to a rental is nothing compared to the mental anguish of being “upside down” in a house mortgage in a plummeting market. The next five years will be a great time to be a renter. One unusual approach that might be prudent: Sell your house to a property management company, and then rent it back from them. Let them watch the value of the house go down. meanwhile, you’ll sleep well.

Letter Re: Unintended Consequences of a Failure of Basic Services in a Disaster

Mr. Rawles:

I have maintained that next to water, food, medicine, and defense; waste disposal is going to be a BIG unexpected problem if and when any prolonged interruption of services occur after 9/11 part 2 or some other calamity eventually happens.
 
One of the reasons New Orleans, Louisiana (NOLA) is not rebounding is that garbage that piled up after Katrina is still rotting in the streets.
 
People that I have seen at my place of work from that area say that less than 5000 people showed up for Mardi-Gras this year because of the stench of rotting garbage and even corpses of dead animals that are still in the streets, waterways, and sewers. Many that showed up stayed a day and left Ricky-Tick because the air quality was so bad.
 
In my own back yard, we had no garbage pick up for nearly 10 days after hurricane Rita. People from other areas began to trespass dumping their waste in our area or putting it in the burn pile. The president of the homeowners’ association was notified and went to the dumpsters and burn pile and put up a chain link fence and notice in order to secure the area.
 
We tried calling the Sheriff’s department, but they would not respond to anything that was not considered “life threatening.” I can only imagine what would have happened if things had gone on for several more weeks, months, or if the entire State had been affected.
 
Most Americans take waste disposal for granted with curbside garbage pick-up, flush toilets, and sink disposal systems. Where I live, we have none of these “luxuries” and they can be a hassle at times.
 
During inclement weather, taking the trash to the dumpster is a hassle. Kitchen scraps have to be taken to the compost pile, and wastewater either goes to the septic system if it is blackwater, and to a cache for reuse if it is greywater. The septic tank has to be babied, and you have to be very careful what you pour down the sink, since the water is reused.
 
One of the big problem during Katrina was that during the flooding, with waters up to 20 feet high, all the household chemicals that were typically stored under the sink contaminated the entire city and will never biodegrade. (At least not in our lifetimes.)
 
Again, I bring these issues up because most people do not consider them a high priority. In a situation where the service infrastructure fails, it is not going to be a matter of how your 401(k) is invested or how many guns you own. It is going to be a matter of how well you can deal with seemingly insignificant things like what to do with your own body waste.- RJL 

Letter Re: Unintended Consequences of a Failure of Basic Services in a Disaster

Mr. Rawles:

I have maintained that next to water, food, medicine, and defense; waste disposal is going to be a BIG unexpected problem if and when any prolonged interruption of services occur after 9/11 part 2 or some other calamity eventually happens.
 
One of the reasons New Orleans, Louisiana (NOLA) is not rebounding is that garbage that piled up after Katrina is still rotting in the streets.
 
People that I have seen at my place of work from that area say that less than 5000 people showed up for Mardi-Gras this year because of the stench of rotting garbage and even corpses of dead animals that are still in the streets, waterways, and sewers. Many that showed up stayed a day and left Ricky-Tick because the air quality was so bad.
 
In my own back yard, we had no garbage pick up for nearly 10 days after hurricane Rita. People from other areas began to trespass dumping their waste in our area or putting it in the burn pile. The president of the homeowners’ association was notified and went to the dumpsters and burn pile and put up a chain link fence and notice in order to secure the area.
 
We tried calling the Sheriff’s department, but they would not respond to anything that was not considered “life threatening.” I can only imagine what would have happened if things had gone on for several more weeks, months, or if the entire State had been affected.
 
Most Americans take waste disposal for granted with curbside garbage pick-up, flush toilets, and sink disposal systems. Where I live, we have none of these “luxuries” and they can be a hassle at times.
 
During inclement weather, taking the trash to the dumpster is a hassle. Kitchen scraps have to be taken to the compost pile, and wastewater either goes to the septic system if it is blackwater, and to a cache for reuse if it is greywater. The septic tank has to be babied, and you have to be very careful what you pour down the sink, since the water is reused.
 
One of the big problem during Katrina was that during the flooding, with waters up to 20 feet high, all the household chemicals that were typically stored under the sink contaminated the entire city and will never biodegrade. (At least not in our lifetimes.)
 
Again, I bring these issues up because most people do not consider them a high priority. In a situation where the service infrastructure fails, it is not going to be a matter of how your 401(k) is invested or how many guns you own. It is going to be a matter of how well you can deal with seemingly insignificant things like what to do with your own body waste.- RJL 

Letter from Rourke Re: A New Breed of Feral Dogs, by Buckshot

Dear Jim:
The article “A New Breed of Feral Dogs”, by Buckshot was excellent.  I think he’s right that far too many of us only have “Lassie” or “Benji” idea of dogs.  One generation back my family had labs and would have trusted them with their lives.  Remember the old dog lover vs. cat lover saying, “If you die alone in your home, your dog will die at your side, but if you have a cat, it will eat you”.  I certainly prefer dogs to cats, but I  was over to friend’s home who had a Doberman and felt very uncomfortable with that animal, and kept watching where it was. My aunt was once suddenly attacked at a friend’s home by their dog, and had to protect her with her left forearm, which the dog mauled before the owners could get control of the beast.  She had to have plastic corrective surgery and had to go to her only daughter’s wedding with a cast over it.  Was the dog put down for that?  Unfortunately this happened in California, so no, it wasn’t.  My Uncle threatened to kill the dog, and they told the police, and the police threatened him.
 
In the recent 2004 movie The Day After Tomorrow, they had to make the giant leap of faith that a pack of wolves somehow escaped from the New York City zoo, but notice this is what they chose as the terrifying nemesis from nature – being hunted by a pack of wolves in New York City.  There is something about that, being the elk, being the moose, surrounded by the pack that is a scary thought.
 
With our modern day veterinary science keeping dogs far more healthy, we forget about the image of a dog “foaming at the mouth” – and thus being rabid and dangerous.  I think people in very rural areas do have more of an appreciation for this article.  I had a friend who, as a young teenager in Northern Wisconsin got cornered on a dock alone while fishing by a smaller dog, literally foaming at the mouth.  He used his fishing poles to fend it off from coming toward him on the narrow dock, and considered jumping off and swimming for it, when the dog heard something in the woods and took off.  After a few minutes he ran to the cabin and called his father.  He, a few men then hunted it down as it was vacation area with a lot of children. The point one of the men made that my friend remembered was – “Once a dog goes wild, it’s different than other wild animals because it has no fear at all of man.”
 
My brother recently went fishing in Alaska and brought a .45 Winchester Magnum, an actual “Grizzly Mag” on an [oversize] 1911 frame.  The guides up there though used 12 gauge with Moose shot (OOO size buckshot, I believe) and aim for the face seeking to take out the eyes and have the shot go into the brain and take the big animal down.  For those of you who can’t walk around with a gun, remember the old postman’s remedy, pepper spray.  It’s an easy thing to carry, especially if you are just out walking or even biking in a rural area.  My sister in law loves to run in rural areas, and I have finally convinced not to do that without pepper spray on her, dogs being one of the main reasons is used.  Cheers, Buckshot, great article on something we all should consider. – Rourke

Odds ‘n Sods:

For those of you that own .223 AK-47s, I just noticed that the folks at K-VAR got in a batch of those nifty Bulgarian “clear” plastic AK magazines. Tell them that Jim Rawles at SurvivalBlog sent you.

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DEA Agent shoots himself in the foot during lecture–stupidity caught on tape

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The markets were closed yesterday for Good Friday, but the New York Access (“after hours”) Market was open, and the commercial traders bid spot silver up to $12.91 per ounce! With silver consistently holding over $12.70 and the launch of two silver ETFs just around the corner, a “short squeeze” in silver is looking more likely. If there is indeed a full scale squeeze on the short sellers, spot silver could jump to $18 an ounce (or higher) within the span of a week. Mark my words…