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Sunday November 8 2009

Letter Re: When Does the Other Shoe Drop?

James:
I was having a conversation with my survival think tank buddy tonight and he asked me when I thought the dollar would collapse. I answered that it was like asking when the next ice age would come. It's due in another 1,000 years but we could be off by century or a millennia. It's the same thing with the dollar. It is impossible, mathematically speaking, for it to continue in it's current valuation indefinitely as it is in a non-sustainable negative spiral for reasons people reading this blog are well versed.

A collapse could happen tomorrow but is could also be delayed for years. This is because the timing of the collapse is not something that can be calculated by mathematical formula alone. It also has a great deal to do with psychological and political forces. As an example, Mr. Obama could authorize the sale of missile technology to China in exchange for buying our debt or not dumping the dollar. The media could continue the party line about a jobless recovery (a euphemism still makes me chortle) and people could continue to remain in dollar denominated assets. Banks could continue the counterintuitive action of not moving forward on foreclosures so as to avoid having to put the losses on their books or do upkeep on the property.

The same holds true for gold. As long as the majority of the gold players are willing to take profits in dollars rather than demanding physical delivery of gold contracts the price of gold can be manipulated.
Then there is food. While food commodities can be manipulated, unlike gold, food is continually consumed and we are running out. You can hide the weak dollar by continuing to 'double down' at the world casino until your credit line runs dry. You can hollow out gold bars and fill them with tungsten as long as no one cuts them open. You can even sell the same serial numbered gold bar to 10 people giving them identical warehouse certificates and as long as none of them take delivery, you've just 'multiplied' your gold holdings by tenfold.

This cannot be done with food that is eaten. You either have it or you don't. So, my long winded answer is that you'll know that the gig is up when the food runs out. - SF in Hawaii

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Thursday November 5 2009

The Reliability of the Gas Tube-Driven AR-15/M16/M4 Design is Again Questioned

Several readers wrote to mention these articles: How Reliable is the M16 Rifle? and, a follow-up: The M16 Argument Heats Up, Again. This is sure to raise a ruckus with some of the SurvivalBlog readers that are owners of AR-15s, registered (Class 3) M16s, M4geries, and even AR-10s. Before you send me a fusillade of angry letters, please note that most of the failures mentioned in the After-Action Report (AAR) were with M16s and M4s that had been used in very high volume of fully automatic fire--something that they were not designed to do. (After all these are individual weapons--not crew-served weapons that are designed to be used like garden hoses.) So that is not relevant, in the context of survivalist planning. (If it were relevant, then you 'd be living through a "worst case" whilst living in the the wrong neighborhood!) Meanwhile, as I mentioned earlier this week in the blog, this report was circulated by a British newspaper, castigating the inconsistent stopping power of 5.56mm NATO: Bullets used by British soldiers 'too small to defeat Taliban'. (That too, has been debated before in SurvivalBlog, and umpteen other venues.)

Clearly, the Army and Marine Corps could do better for our troops that the current M16/M4 design. Although it would be an expensive thing to do and it would take a bit of a logistics tap dance during the transition, the entire inventory of M16s and M4s could be retrofitted with new gas piston driven uppers for the 6.8mm cartridge. SurvivalBlog's Editor at Large Mike Williamson notes that the 6.8 cartridge would provide more consistent stopping power, but he sees it more likely to be fielded as the new cartridge for a light machinegun. And I (JWR) believe that regardless of whether or not a caliber change occurs, a gas piston upper should replace the quick-fouling gas tube design that has plagued the M16 and its offspring for more than 40 years. I doubt these either of these changes will be made, since although they are technically the best solutions, the political will and dollars required will be problematic.

Mike Williamson continues: The Brits found out that 7.62mm NATO recoiled too much for full auto, and most of their L1A1s were converted to semiautomatic-only upon being fielded.The 7.62mm NATO is a good cartridge, but it's too much for an individual full auto weapon.

Along those lines, I believe that the recent Special Ops tests with 6.8mm were in no way related to replacing 5.56. It doesn't take any field tests at all to determine that 6.8 is a more effective stopper, but not more effective enough to justify the reduced combat load (for the same weight of ammo). Logistically, it is an inferior military round in terms of mass carried for stops made. However, the modular nature of the AR made the tests easy to perform.

I expect that 6.8mm will be the next support weapon and machine gun caliber, given its shorter action length than .308, and its considerable effectiveness. I predict we're about to witness the end of .30 caliber weapons in the US military.

JWR concludes: I wasn't surprised to see SOCOM do field tests of the 6.8mm rifles. They are famous for "thinking outside the box", for "off the shelf" procurement of various goodies, and for adopting different tactics and even different weapons than those used by "The Big Army". (The SF's casual term for the balance of the US Army--it's conventional forces.) Weapons fielding changes for a couple of thousand SF troops can be done fairly rapidly, but fielding a new rifle for the entire US Army isn't going to happen overnight. That sort of thing takes congressional approval and waiting for slow turning of the gears of the Big Procurement Machine, which from many perspectives is a snail's pace.

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Monday November 2 2009

The Flash to Bang Count: Observations on the October Indonesian Asteroid Airburst

A few days ago, The Telegraph reported:

"An asteroid that exploded in the Earth's atmosphere with the energy of three Hiroshima bombs this month has reignited fears about our planet's defenses against space impacts. On 8 October, the rock crashed into the atmosphere above South Sulawesi, Indonesia. The asteroid was around 20 meters across and hit the Earth's atmosphere at 45,000 mph. The blast was heard by monitoring stations 10,000 miles away, according to a report by scientists at the University of Western Ontario. Scientists are concerned that it was not spotted by any telescopes, and that had it been larger it could have caused a disaster. Luckily, due to the height of the explosion - estimated at between 15 and 20 km (nine to 12 miles) above sea level - no damage was caused on the ground."

Later reports mentioned and estimated 5 to 10 meter diameter for the asteroid. Let's consider the implications of this event. If this had happened in the skies over a First World nation, or if the explosion had taken places at ground level (or near ground level, a la the 1908 Tunguska event), then there would be a huge clamor and calls for early asteroid impact prediction, and greater preparedness. But since this took place above what most consider a backwater nation, and there was no visible damage on the ground to photograph, this news story was resigned to "minor headline" status. And what if the object had been 100 meters in diameter, instead of 20?

We've previously discussed asteroids with Earth-crossing orbits--also known as Near Earth Objects (NEOs)-- and the consequences of potential impacts in SurvivalBlog.

Asteroid impacts are one of those "low likelihood but high disruption" events. The chances of one occurring in our lifetimes is relatively low, but if one were to happen, the implications would be huge. In anticipation of future asteroid impacts, here are some factors to consider:

An asteroid impact could cause short-term climate change that could in turn cause multi-year crop failures on a hemispheric or even global scale. This means that it would be prudent to have multiple years food storage
The importance of living in inland areas. Let's face it: coastal areas anywhere on earth are vulnerable to mega-tsunamis, if you factor-in the threat of asteroid impacts. Unless there is some massive intervening terrain, don't live at less than 500 feet above sea level if you must live within 25 miles of an ocean. A 300+ foot high tsunami might seem hard to imagine, but just ask an astrophysicist. It is possible, and in fact there is some geologic evidence that that mega-tsunamis have occurred in the past 6,000 years.
Never underestimate the implications of mass hysteria and misdirected government reaction to a crisis. News of imminent crop failures might inspire executive orders mandating the collection of "hoarded" food. Hint: This will probably include food that you started storing years ago--long before any imminent threat warning or post-incident panic buying. So I must again warn my readers that it is wise to keep a low profile about your preparations.

I have been studying the threat of asteroid impacts for many years. NEOs represent a "wild card"scenario. Since a fairly complete orbital path tracking database probably won't exist for 20+ years, this threat will remain an imponderable for the foreseeable future. Until a fully-populated database is developed, this will remain a quasi-voodoo science. The Indonesian event illustrates just how easy it is to get blind-sided. And even after we have complete tracking data, it will be decades longer before we start to proactively develop a program to "nudge" the larger NEO asteroids into safer orbits.

But again, keep in mind that this is one of those "low actuarial risk/high consequence" events. Plan accordingly.

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Friday October 30 2009

Letter Re: University of California Disaster Preparedness Videos

Jim:

While scanning through iTunes U, I found a television (or audio) series from University of California TV on disaster preparedness. They are professionally produced and contain a wealth of information about about emergency response systems are intended to work. Included here are four of the fifteen or so shows that they have put together. The ones I have included are Natural Disasters, Chemical and Biological Agents, Pandemic Influenza and Emerging Infections and Disaster Volunteerism

They go over several case studies that happened in California, but talk about organizations generally enough that it is applicable to most areas with advanced emergency response systems. At the end, I have included links to more shows in UCTV disaster preparedness series.

Here are some video links and excerpted brief summaries:

Disaster Preparedness: Natural Disasters

Transportation and care
Multiple disasters co-existing (earthquake, fire, flood)

Wild fire
-larger then expected

Family Preparedness
-Family network - getting everyone involved
-List of material that needs to be packed to go
-Long distance phones can work (call to foreign county, deliver message, foreign county calls to local number you could not reach), calling local people sometimes doesn't when the disaster is local. This would appear to be a failure of the phone system to update their routing tables dynamically.
-Define a meeting place for your family
-Stores and supplies at home
-Tent, stove, propane, water
-72 hour critical supply of food, medicine and water
-Laundry - Something I had not thought about
-Communications and information management, one of the most difficult things
-Real time information systems - where the fire is, what the evacuations plan is
-After action report - learn from what worked and what didn't
-Reverse 911 only works for land lines.
-Multiple layers of communications, multiple contacts per person
-"Alternative care sites" shelter, Fairgrounds, school gymnasiums, arenas, animal shelters
-Special needs patients, elderly, dialysis
-First day great, everyone helping one another - Day 2 short tempers - social workers and behavioral specialists needed, neighborhoods forming
-It is mentioned *many* times that people will not leave their pets behind. Include them in your preps.

Earthquake
-Single point of contact - single voice speaking for a set of resources
-If you build it, they will come. Where lights are on, people go there.
There are several phases
1. Immediate injuries - Crush injuries, Amputations, Head injuries, airway obstruction
2. Secondary illnesses - Blood pressure medication, diabetes medication, increased rate of heart attack and child birth
95% are rescued by local responders and volunteers in the first 24 hours.

Disaster Preparedness: Chemical and Biological Agents

Disaster Preparedness: Pandemic Influenza and Emerging Infections

Disaster Preparedness: Disaster Volunteerism

More Programs in Emergency Preparedness / Emergency Medicine

Regards, - Ben M.

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Monday October 26 2009

Letter Re: Survival Notes from the Dominican Republic

Jim,

I've recently read several of your books and found them both interesting and educational. I would like to offer some personal insights based on my experiences from living in a small rural town one of the larger Caribbean islands. Most of my notes are cheap solutions used by people in developing nations all over the world. There may be better ways, but these work and cost next to nothing.

Water:

There is something especially disturbing about opening the faucet and hearing a sucking air sound. Not being able to shower, flush, or wash dishes is the worst.

One or more 55 gallon drums and 5 gallon plastic buckets are essential items to have. When you see that hurricane on the news, put the barrel it in the shower and fill it up right away. Add a few capfuls of bleach to make it keep longer. Expect the quality of water from the town water supply to drop. Rainwater collection should be set up right away. If possible the roof should fill a large cistern with a pressure pump. A gravity tank should be put on the roof.

Washing up from a bucket is easy enough. A small plastic cup and a five gallon bucket makes is easy. If the water is cold don’t try to heat up all the water. Bring a good sized cooking pot to a near boil and add it to the cold water. A person can wash easily in 2 gallons of water.

Pouring about two gallons of water rapidly into a toilet from a 5-gallon bucket will flush a toilet.

Washing dishes from a bucket without using gallons of water is tricky. It takes some practice to do it right. If you don’t stack your dirty plates and wash them right away, you only have one dirty side and no dried food.

It is very easy to contaminate your water supply. Dirty bucket bottoms and careless bathing are common causes, be vigilant.

Food:

Our community is an exporter of meat, milk, eggs, rice, vegetables and we have a 365-day growing season. Most families have a garden plot to supplement household food. Storing food is always wise but not nearly the problem it is in some other locations. Much of our farming is done with hand work.

Power:

We have daily blackouts here and most houses have invertors with battery backups. Since we have occasional power most people do not have generators but just charge when the lights are on. Most businesses have diesel generators.

A 2.5 KW inverter system with 4 deep cycle batteries will keep a few lights on, a laptop and a fan or two for about two days and costs about $2,000. The better systems run on 24 VDC. Here we are all very aware of vampire appliances [aka "phantom loads."]. All those VCRs, TVs, microwaves, wi-fi boxes, alarm systems, clocks, all pull a significant load. You need to learn your house circuits and unplug and turn off the breakers for things you don’t need. Low wattage bulbs are essential.

Running a generator for about 4 hours will charge most battery systems. Your generator will need to be at least twice the capacity of your inverter. Operating like this you can have basic lighting for the cost of about 2 or 3 gallons of gasoline a day. Running a refrigerator off a battery backup system is just not cost effective. Many people have put up both solar and wind systems as a way to produce some additional power to keep the batteries topped off.

A few simple solutions: Computer UPS systems usually operate on a 6 or 12 V battery. It is very easy to open one up and connect a large battery by running wires through the back of the case. This will give a much longer run time. While you have the case open, take a pair of pliers and crush the annoying power alarm beeper. The charger on these systems is very small and will take a very long time to reach a full charge. An off the shelf battery charger will speed things up. Alternativel,y your car can be used to charge the batteries (12 VDC only)

Guns:

While being armed is important, life is so much easier when there isn’t a conflict in the first place. Some people always seem to have problems wherever they go and need to pull out weapons while others seem to walk through the valley of death without a care in the world. Spend some time researching body language, and read books on interpersonal relationship skills. Besides improving your life right now, it could change a potential fatal firefight into a new friend.

Police:

When we have a crime wave, the police set up road blocks coming into and out of town. Rarely does this cause any real problems for honest people but you do need to have your paperwork for your car or firearms on hand. A smile and a friendly face makes things go much smoother. Acting aggressive or angry will get a messy and thorough search of your person, passengers and your car at a minimum. Knowing your local police makes a big difference. Sometimes we are asked to “help them out” which is code for a bribe. Either pay it with a smile, say sorry but you can’t today, plead poverty, or turn back. Fighting it just is not worth the trouble.

Crime:

Most traveling gangs are small and short lived. They rarely survive an encounter with police. It is very hard for a crime group to survive outside of their own neighborhood where they have local knowledge, a place to sleep and the support of family and friends. On the flip side the crimes committed by these people are usually the most brutal.

Local criminals gangs are much harder to control. Often these are well-connected individuals or gangs who are very good at remaining undetected. Some of them are drug smugglers, cattle thieves or burglars. Persons who are well liked and respected in the community are usually left alone. If you see large gangs forming, seriously consider leaving the country as it is a no-win situation.

Home Security:

This is a very safe country, but it is safe because people here do no depend on the police and protect themselves. With that in mind I have noted some of the more common security precautions here.

My experience here is that a house with lights on and occupied is the house that is left alone. Your best defense is to be the least interesting but hardened house in a occupied community. Vacant houses attract soft criminals and people who need a place to sleep. Most Dominicans always have someone home in the house. Night time home invasions are rare but they do happen. People who do this time of crime are extremely dangerous experienced and hardened criminals.

Isolated houses are at the worst risk for the most serious attacks. A gated community, walled yard, electric gate, bars on the windows, dogs, even armed security guards are all common place here. Country people live in small groups of three or more houses with the fields surrounding them.

Your most vulnerable time is being ambushed entering or leaving your home or car. When designing your landscaping, don’t build easy ambush points for attackers. This sort of thing doesn’t happen much in a small town.

Protests/Strikes/Riots:

Occasionally when the power or water is out too much, the citizens will organize a protest/strike/riot. Often the organizers are union leaders or other non-governmental community leaders. The usual format is to shut down the with road blocks and burning tires. Much of the bad behavior is more for show than reality but trying to pass the road blocks will result in getting your vehicle wrecked by the strikers. It is important to know why people are protesting and to be sympathetic to their cause (in many cases it is well justified). Their intention is to cause just enough of a disruption to get government the government to resolve the problem without getting arrested. Trying to pass the roadblock means that you are disagreeing with the reason they are striking. Know your local area for alternate routes and don’t try to travel during strikes.

Dogs:

Good dogs are essential. A pair of large dogs of a known breed are a very significant deterrent. Rottweiler, Doberman, German Sheppard, pit-bulls are recognized and avoided. Dogs differ widely in personality. Be sure yours matches your needs. Be aware and realistic of their shortcomings. I know too many people who depend entirely on a easily circumvented dog for security. Professional thieves routinely outmaneuver, poison, or shoot dogs.

Don’t overlook the value of small "yippy" and intelligent dogs like Chihuahuas. They are light sleepers, a second set of eyes and ears and are cheap to feed. They often work well with the bigger dogs.

Watch your dogs. If your dogs suddenly become sick, it may mean they were poisoned and you should expect a robbery that coming night or the following day. Look for your dog before you pull into your drive or get out of your car. If there has been an intrusion it may be hurt, nervous, missing or dead. This will often be your first indication of an awaiting problem.

Community

After a disaster (hurricane, flood, earthquake) the best thing for everyone is to keep the community together. Building a good reputation and personal relationships with neighbors and community leaders will make all the difference when resources are scarce and people are scared. The people who are capable leaders and community contributors often get first dibs on any help that does arrive and the right to make decisions on how goods are distributed.

Filling sandbags, organizing relief, passing out information, providing power, clearing roads, etc will make friends and build relationships that are not soon forgotten. This sort of thing can really bring a community back together in a hurry. We all depend on each other and leadership through positive action is a great way to rebuild. Just as looting is contagious, when people see others working together and helping, they are apt to join in. I have seen this numerous times here.

Transportation

Propane is subsidized here and is significantly cheaper than gasoline. Many people have adapted cars and trucks to run on both fuels using a special carburetor. As propane stores well this is a good emergency option for transportation, cooking, and power generation. Additionally propane machines can run on biogas and syngas.

While horses are very common here there would be a shortage if things really went bad. They did become proportionally more valuable as the price of fuel shot up.

I rarely see wood gasification mentioned as a alternative fuel supply. (See the Wikipedia page on wood gasification) This is an excellent modification that was used heavily in Europe in the 1940s. In my opinion, for most people this is the best solution to combustion engine power after a complete breakdown. Both alcohol and biodiesel require working farmland and refineries.

Post crash employment:

Anyone who can provide alternative sources of food, power, fuel or light will do well. A little Google work will show what technologies work on a small scale and provide business opportunities both now and after. Additionally, people here who can repair things never seem to make much money here but they always have work and food on the table.

Currency and hyperinflation:

After a major bank failure here, the currency here devalued by a factor of four in about two years. As the slide begins there are lots of opportunities to buy up things at old prices as many people price things based on what it cost them, not what the replacement value is.

As prices shot up, wages lagged way behind. Interest rates sky-rocked. Food prices shot up. Skilled labor prices went through the roof. The economy stopped dead because it becomes impossible to price things and nobody wants to work.

At the end of the slide the asking prices for everything got just crazy high, and the bid prices so low that almost no transactions took place except as acts of desperation.

Three years later, the currency has stabilized. Interest rates on loans are still slowly retreating. Merchants learned to price goods on replacement cost. Prices are often quoted in USD instead of local currency. Asking prices never really came down, but bid prices slowly rose up and as the spread reduces the economy starts to move again. Salaries are paid in local currency, but pegged to the USD for stability.

I wasn’t expecting to write such a long letter but maybe some of this will help people prepare and know what to expect. Sincerely, - S.H.

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Wednesday October 21 2009

Letter Re: Should I Rent, or Should I Buy Property?

Sir;
I have a question that I think would be of interest to a lot of your Blog readers:

"How to Survive the End of the World as We Know It". I really enjoyed the book. It helped coalesce all of the concepts I learned in "Patriots", [the now out-of-print] SurvivalBlog: The Best of the Blog Volume 1, and "Rawles on Retreats and Relocation".

One of your central precepts is that one should move to a "lightly populated rural area." Okay. With some work, I can find and buy a suitable piece of property and/or house. But you repeatedly point out that the real estate recession is going to get much worse and that real estate prices are going to plummet. Presumably, land prices are also headed far South.

In the interest of getting prepared as quickly as possible, I am interested in finding a viable retreat with a home already constructed on the property.

So, if it's a horrible time to buy real estate, should someone now making the move find a suitable rental property in the hinterboonies? Given the logistics of being a prepper (with literally thousands of pounds of Beans, Bullets and Band-Aids), is renting feasible?

While looking at properties, I have noticed that quite a few sellers are still hanging on to their ideas about their houses' value based on 2006/2007 prices. There are, however, dozens of properties that are for rent at prices way below market rents because of their remoteness and lack of appeal to the typical suburban sheeple (the very attributes which make the property ideal for me).

It doesn't make any sense to me to spend a significant chunk of money on a retreat and then watch as its value sinks over the next 5-10 years.

Should I sign a long term lease (two years or more) of a suitable retreat? And purchase a large sturdy trailer for each of my vehicles and be prepared to move from one rental location to another if required?

Your thoughts/opinions would be greatly appreciated. Thanks for all that you do to educate and prepare the rest of us.- M.M.

JWR Replies: We are definitely in a renter's market. I recommend buying only if the seller will accept a deeply-discounted offer.

I must mention a third approach that I recommend to my consulting clients for times like these, with declining house and land prices and an uncertainty of a turn-around within 10 years: Find a place that you really would like to buy as a retreat, and lease it, with a contracted option to buy. (A "purchase option" contract, commonly called "buying an option.".) That way, if the market tanks, you can walk away, and you will be just out the lease money. Alternatively, you could re-negotiate a purchase price. And if the market stays steady in rural areas (a possibility) or if you are still occupying the property when double digit inflation kicks in, then you can go ahead and exercise the purchase option, with all of the the lease money paid applied to the purchase price.

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Monday October 19 2009

Twenty-Two Reasons Why this Recession is Different and Why it Will Endure

I find it surprising that I'm now getting inquiries from readers, asking if "we've reached bottom" in the current economic recession, and asking if the time has come to start buying stocks or residential real estate. It seems that the talking heads of mainstream media are using some sort of voodoo. How can anyone think that we've hit bottom, and an economic recovery is in progress? To dispel the myths from the CNBC Cheering Section, please consider the following. (And note that I've provided references for each assertion, just so you know that I'm not talking out of my ~~camouflage~~ hat.):

A broken global credit market that has not fully recovered. See: After Lehman, U.S. firms adjust to new face of credit
Lack of transparency in Mortgage-Backed Securities and other re-packaged debt instruments. See: Geithner Blames Lack of Transparency for OTC Derivatives Hit on Market.
The increasing Federal debt, which is growing at an unprecedented rate. See: The National Debt Clock.
Mountains of consumer and corporate debt. See: Observations on the US Debt.
The Federal budget deficit. See: Federal Deficit Hits All-Time High of $1.42 Trillion.
Ever-expanding bailouts. (I call this The MOAB.) See: As More Companies Seek Aid, 'Where Do You Stop?'
Monetization of the National Debt. See: Fed Could Expand MBS Purchases. (Can you spell Oroborus?):
The destruction of the American consumer economy. (It had been artificially credit-driven). See: A Year After The Crisis, The Consumer Economy Is Dead.
Chronic unemployment, possibly much higher than officially reported. See: Alternate Data at ShadowStats.
More than $500 Billion USD in hedge funds that have borrowed short and lent long. See: Assets invested in hedge funds increase by $100bn
A double wave of residential mortgage rate resets. See: this chart of scheduled mortgage interest rate resets.
Continued down-ratcheting of house prices. See: Housing Prices Will Continue to Fall, Especially in California
The under-reported "shadow inventory" of foreclosed houses. See: The "Shadow" Foreclosure Inventory
The very likely collapse of commercial real estate ("the other shoe to drop".) See: Is a commercial real estate bust inevitable?
A huge crisis lurking in over-the-counter derivatives. See my analysis published in 2006 and the dozens of articles on the Derivative Dribble Blog.
Under-funded pensions. See: Almost half of top unions have under funded pension plans.
A coming wave of municipal bond and municipal bond hedge fund failures. See: The Failure of Leveraged Municipal Bond Hedge Funds.
Increasing numbers of bank failures. See: FDIC: Bank Failures to Cost Around $100 Billion.
Insurance company collapses--some, like AIG, were foolish enough to insure more than a trillion dollars in derivative contracts. See: AIG: Is the Risk Systemic?
Worsening state, county, and city budget crises. See: State prepares for shutdown as budget deadline looms, and this article from a liberal site: Predicting Worse Ahead from America's Economic Crisis.
Loss of faith in the US Dollar, on the FOREX. See: Dollar's reserve currency status in focus as G-7 finance ministers meet.
The coming mass currency inflation, following some asset deflation. See: Which is more likely in 2010: Deflation or inflation?

Back in the Fall of 2008, I started hearing from consulting clients with notes of fear in their voices. They realized that something is horribly wrong with the economy, but they could not properly isolate and articulate the problem. In my estimation, the "something wrong" that they sensed is nothing short of a monumental shift in the economic climate.

America will continue in recession. Most economic recessions are simply a product of the business cycle. These recessions are relatively mild and they often last just 12 to 24 months. The economic engine just readjusts and everything soon gets back to normal. But the recession that began in 2008 is something radically different, and it won't be short-lived. The current slow down was triggered by a collapse in the global credit market. For decades, the global credit market grew and grew, in an enormous debt spiral. Our neighbors to the south saw trouble coming decades ago, because their economies were at the time more debt-dependent than our own. As far back as the mid-1980s, their newspapers featured political cartoons that portrayed an enormous, insatiable monster that was invariably captioned "La Dueda"--"The Debt". Our cousins in Latin America saw it coming first, but the dark side of the debt nemesis will soon be clear to everyone.

The Federal governments's debt, just by itself is cause for concern. As an old gunsmithing friend mine, the late Chuck Brumley, was fond of saying: “If your outgo exceeds your income your upkeep will be your downfall." Several decades of profligate spending by the US Congress are finally starting to take their toll. Just because their friend Helicopter Ben has a high-speed printing press does mean that they can continue to spend money like drunken sailors in definitely. (On second thought, I should apologize for impugning the reputation of drunken sailors. They are actually much more conservative with their funds than congressmen.)

Because modern banking in the western world is based on interest charges that create continuously compounding debt, credit cannot continue to grow indefinitely. At some point the excesses of malinvestment become so great that the entire system collapses. This is what we are now witnessing: a banking panic that is spreading uncontrollably as wave after wave of ugly debt gets destroyed by margin calls and subsequent business failures.

Some economists are fixated on reading charted histories--and unrealistically expect that by doing so that the can reliably predict future market moves. Although they are working from a flawed premise at the micro level, the chartists do have some things right on the macro level: There are major economic "seasons" and even climate changes. The most vocal chartists like Robert Prechter hold to what is called the Elliot Wave Theory. And the big bad nasty in this school of thought is a Kondratieff Winter. This "K-Winter" is an economic depression phase that the world has not fully experienced since the 1930s. An economic winter does not end until after the foundations of industry and consumer demand are rebuilt. This can be a painful process, often culminating with war on a grand scale. (It was no coincidence that the Second World of the early 1940s was an outgrowth of the Great Depression of the 1930s.)

The US Federal Reserve and the other central banks are furiously pumping liquidity to the best of their ability, but in the long run they will not be successful. At best, dumping billions in cash on the economy will delay a depression by perhaps a year or two. But inevitably, a K-Winter depression will come. And the longer that it is delayed, then the worse the depression will be. Further inflating the debt bubble will only make matters worse.

"Big Picture" Implications

As I've mentioned before, hedge funds are presently most at risk in the unfolding liquidity crisis, because they use lots of leverage in lending funds that they themselves have borrowed. They borrow short and lend long, and effectively use debt compounded upon debt.

Even more alarming is the scale of global derivatives trading, particularly for credit default swaps (CDSes). Derivatives are a relatively new phenomenon, so most derivatives contract holders are only just now experiencing their first major recession. Thus, it is difficult to predict what will happen in a genuine K-Winter phase. In a perfect world, derivatives are a nicely balanced mechanism, where there are parties and counterparties, and every derivatives contract equation balances out to have a neat "zero" at its conclusion. But we don't live in a perfect world: Companies go bankrupt. Contracts get breached. Counterparties disappear and disappoint. We have not yet experienced a full scale "blow up" of derivatives, but I predict that if and when it happens, it will be spectacular. The pinch in CDSes (a form of derivative contract) in 2008 was just a faint foreshadowing of what we'd experience in a a full-blown derivatives collapse.

The scale of derivatives trading is monumental, and the vast majority of the population is blissfully ignorant of both its scale and the implications of a derivatives crisis. There are presently about $500 trillion of derivatives contracts in play. That is many times the size of the gross product of the global economy, but the average man on the street has no idea what is going on. It won't be until after the giant derivatives casino implodes that the Generally Dumb Public (GDP) awakens and asks, "What the heck happened?" Since the credit market began to collapse in the summer of 2008, the number of new derivatives contracts has dropped precipitously. But whether the aggregate derivative market is $400 trillion versus $500 trillion, when a crisis occurs there will undoubtedly be some very deep drama.

The next decade will likely be characterized by successive waves of inflation and deflation, and perhaps some of both simultaneously, at different levels. Countless corporations, and perhaps a few currencies or even governments will go under as this tumult plays out. (Take note of the recent vote of no confidence in Latvia.) The current low interest rates will soon be replaced by double-digit rates, much like we saw in the late 1970s. The dollar will lose value in foreign exchange, and may collapse completely. The Mother of All Bailouts (MOAB) will inevitably result in mass inflation. The bull markets in silver and gold will surge ahead, propelled by economic and currency instability. (Investors will be desperate to find a safe haven, when currencies and equities are falling apart.)

Mitigating the Risks

Be ready to "winter over" the coming K Winter depression. That will require: 1.) Prayer. 2.) Friends and /or relatives that you can count on (a "retreat group"). 3.) A deep larder, and 4.) An effective means of self defense with proper training. (For each of those four factors, see the hundreds of archived articles and letters at SurvivalBlog.com for details.)

Since additional large-scale layoffs seem likely, it would also be wise to have a second income from a recession-proof home-based business.

In the event of a "worst case" (grid down) economic collapse, it would be prudent to have a self-sufficient retreat in a rural area that is well-removed from major population centers. Get the majority of your funds out of anything that is dollar-denominated, and into tangibles, as soon as possible. The very best tangible that you can buy is a stout house on a piece of productive farm land. It will not only preserve your wealth, but living there may very well save your life.

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Saturday October 17 2009

Two Letters Re: Abandonment of the Dollar is a Premature Rumor

Dear Editor:
This civil debate on the status of the Dollar--and thanks, by the by, for keeping things civil on your blog--all comes down to a matter of not "if", but just "when." The United States Dollar will soon be dead meat. Finis. See this article: Reckoning Day for US Dollar Coming Next Year. We just need to ask: will the[definitive] end [for the dollar's dominant reserve status] come in six months, or six years? So, no matter when, I'm hedging by building up my stash of silver and lead. (The kind that goes "bang.") Since I'm still paying off college loans, my investing is very "modest". As one of the impoverished masses, I followed your advice and I'm gradually building up a supply of nickels. I'm also culling through a few rolls of half dollars from my bank every week. (I live in a small town in Texas.) So far I've found 9 pre-1965 [90% silver half-dollars] and 46 post-'64/pre-'71 [40% silver] halves. It's like finding buried treasure! It sure beats watching Wheel of Fortune on TV. The result of my effort is tangible. Thank you, thank you for mentioning [searching through half dollar rolls]. It is great way for people like me that are just getting started, after college. - Jason V.

Dear Jim and Family,
Those were interesting responses to my post that this dollar-dump rumor is just another rumor. I must point out, importantly, that everything the Saudis say is a lie, including "Hello". They promised $200 per barrel oil in 2008. Lie. They promised repeatedly to decouple themselves from the US dollar unless we do their bidding. Lie. They swore they do not provide money to Osama and his Al Qaeda terrorist network. Subsequent research by reporters proved this to be a lie but the Saudis went to the UK, sued for libel, won in the UK, and had the ruling applied to the author of the book and articles in question here in the USA under some sort of twisted reciprocity ruling which makes sense only to judges and crazy people. Yet another reason that globalism is bad.

Yes, the Dollar is dying. However, it is not dying quickly, and while there's a slim chance it could all go at once in a single day, history, particularly recent history, shows that to be unlikely. The Housing Bubble [collapse] happened over months. The Dot.Com [stock[collapse] took weeks. The Derivatives market crash is still happening and the housing bubble is still half inflated and won't be resolved until 2012 or 2013, depending on government interference, bankster greed, and economic inertia. A dollar crash would cause too many nations would lose control of their violent populations -- by this I mean populations counting on bribes, payoffs, and other forms of corruption bought with dollars to keep their peace. The ones who would gain the most by decoupling from the Dollar are also those who have the most to lose. If there was a viable world reserve currency which was everywhere the dollar was, from bars in Panama to the swamps of the Congo, the banks of Switzerland, the docks of Shanghai and the factory in Abilene, then I think we would have reason to worry. Without that existing everywhere, like the dollar, this is a silly rumor just like all the other silly rumors to erupt from the mouth of yet another lying Saudi.

It isn't Optimism if you're realistic and observant. They call this "Pragmatism". Sincerely , - InyoKern

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Friday October 16 2009

From Michael Z. Williamson: M4 Carbine Failures in Afghanistan Likely Due to High Rate of Fire

Dear Jim,

The alleged failure of M4s in Afghanistan is being discussed on my forum and others. The story so far seems to be that when troops fired enough rounds [in a very short period of time] to overheat the weapons, they jammed. This is true of any weapon. Of course, circumstances may dictate that this happen, but it is not a design defect. The M4 is a carbine, not a light machineguns. It's akin to blaming the HMMWV for having bad armor, when it was designed as a light truck. This site has some details, and a link to the after-action report (AAR). - Michael Z. Williamson, SurvivalBlog Editor at Large

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Three Letters Re: Abandonment of the Dollar is a Premature Rumor

James Wesley,
Regarding the oil-denominated-in-dollars flurry, two important points must be noted. First, dollar denominated contracts can be immediately hedged in foreign exchange markets (FOREX) even before the oil is pumped out of the ground. The oil barons aren't stuck holding their dollars any longer than they can call a FOREX desk or sovereign Treasury department (3/4 of the world's oil is owned by governments, not Exxon/Chevron/etc.)

The more important point of dollar-denominated oil contracts is dollar prestige. Documents from the Federal Reserve show that Arthur Burns not only was interfering with the gold markets three decades ago, but the level of cloak-and-dagger efforts to keep the dollar as the world's reserve currency for political power.

Dollar-denominated oil contracts purposes are to preserve hegemony, not prop up foreign central banks' currency reserve. Godspeed, - Brian in Wisconsin

Sir:
The current situation with the US Dollar is best described as a near perfect case of the Prisoner's Dilemma. The best thing for big holders of US Dollars to do is get rid of dollars as fast as is possible without tipping any other significant holders off that they are doing it. Otherwise their best bet is to get rid of their dollars before anyone else does. If someone did that, it would trigger a crash. The only thing stopping everyone right now is that a dollar crash would likely tank the global economy as well. It is beginning to appear that the carry-trade being funded in US Dollars could be the tipping point for serious action as it is relentlessly driving the value of the dollar down. Just look at a chart of the Dollar Index over the past six months. It is clear that the Federal Reserve has no stomach to raise interest rates to stop this progression of events since that would crash our own economy. It would not take a large event to bring the dollar crashing down any time now. - Mike B.

Jim
First, as other people have pointed out here, Iraq provides very little US oil due to its geographic location. The war in Iraq is in no way related to the US oil market. Rather, Iraq is a prime supplier to Europe, in which case a switch from Dollar to Euro was perfectly reasonable (and suited Saddam's temperament). It would be ridiculous to start a trillion dollar war over such a trivial item. There were much more significant reasons, which I'll offer in a separate post for discussion. However, the overall global trend is to diversify from single currencies, which I regard as a healthy movement. A great many of our current global economic problems stem from overemphasizing the paper dollar. The former USSR had the same problem--consider what the Ruble is worth now, versus what the USSR claimed it to be worth (About $5 US, in their over-inflated opinion). Personally, I've never been one for paper money. I prefer to convert it to capital, such as inventory, home equity, useful vehicles and food. You can always trade food. You cannot eat money. - Michael Z. Williamson, SurvivalBlog's Editor at Large

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Thursday October 15 2009

Two Letters Re: Abandonment of the Dollar is a Premature Rumor

In response to InyoKern's letter: The title of this discussion thread and the original text that went with it could just as well have been written by any of the well-scripted talking heads on mainstream F-TV (financial television). My initial inclination is to be diplomatic, but considering the exceptional economic times we are currently witnessing, I say, "Balderdash!"

I could reasonably conclude that the majority of the readers of "Survivalblog" are more apt to follow unconventional economic sages such as Jim Sinclair, Jim Willie, Jim Rogers, Bob Chapman, or Peter Schiff as opposed to the well-orchestrated financial propaganda of CNBC, MSNBC, CNN, "FAUX" News, or any of the formerly-relevant "major" networks that spin financial news in the adoring spirit of the CIA's "Operation Mockingbird" that originated in the 1950s.

As such, these "enlightened" readers will know that the fiat U.S. dollar is doomed along with its unconstitutional facilitator, the Federal Reserve - which, as the saying goes, "is as 'Federal' as FedEx".

Coincidentally, Rep. Ron Paul's bill to audit the Fed has reportedly garnered 300 co-sponsors in the House of Representatives. The Federal Reserve's days are numbered and it too will go the way of the "Edsel" along with its monopoly-money-clone, the U.S. dollar.

The recent clues to the dollar's demise - sooner rather than later - are so numerous and widespread that one would have to be locked in solitary confinement in a maximum security prison to be oblivious to them.

The dollar has dropped from 89.49 to under 76 on the USDX within the last 12 months; gold is at record nominal highs in the $1,060 range; China is dumping dollars for tangible commodities at an alarming pace; Countries are making deals to trade goods and services to avoid utilizing dollars in their international transactions; The dollar is the international "carry trade" currency of choice now which is very dollar negative; The LBMA (London Bullion Market Association) and the U.S.-based COMEX are both in immediate danger of technical default due to lack of physical metals inventory for settlement of contracts that demand physical bullion; the Federal Reserve is monetizing U.S. Treasury debt sales via printing currency out of thin air to purchase foreign central banks' agency bonds to enable those foreign central banks to use the proceeds to purchase Treasuries...and on and on and on.

The readers who have known nothing but the strength and security of the U.S. dollar for their entire lives and cannot accept the fact that a currency change of epic proportions is coming will have a rude awakening in the form of a lowered standard of living and reduced purchasing power - especially those on fixed incomes. The fact that we are talking about the death of a world reserve currency makes the problem exponential in nature.

The days of the world's workers laboring all day for "a song and a dance" so that spoiled Americans can have access to cheap goods financed by the savings of the world are coming to a rapid and bone-jarring end. We have squandered our wealth and the creditors are lining up for the yard sale - and they're bringing our increasingly-worthless dollars with them to buy up our infrastructure.

Got gold? (or silver?, or platinum?, etc.) The answer to those questions may well determine how you answer the question, "Got milk?", in the future. Signed, - RB

Jim,
InyoKern is a real optimist, like so many of your readers. Many countries, such as those in the Middle East, have been in financial trouble, and are selling some of their holdings of all kinds, including dollars. Also, the US stock market is quite small compared to the bond market, where the real action is. And I don't believe Putin's trip was simply about being happy oil exporters.

His analysis below seems really off-base to me:

"And the Japanese, the other big holder of Dollars? We feed Japan with our rice, our Kobe beef (a special breed of cattle raised here in California and shipped across the ocean), and they buy our bonds because the national bank system of Japan is less than effective. Japan is also occupied by US bases since Japan is unable, legally, to more than defend itself within its own borders. Threats by North Korea means we, as their allies, are their defense abroad from a real and determined foe. A hundred million Japanese can't afford to dump the Dollar."

For one thing, an aging Japan is going to need to sell dollars to pay for pensions and medical care. For another, saying that the Japanese buy American bonds because the US banking system is in better shape is dubious. The Japanese have been in a "marriage" with the US, and that's why they are forced to buy American beef, even though there is strong resentment about not buying from a country where they test for diseases better, such as Australia. The trouble is that the husband has had a secret gambling habit, and was actually laid off from his good job a few years ago and has been working part-time and living off credit cards. The wife just found out, and she's letting the neighbors in Korea and China know some of the dirty laundry. Regards, - P.L.

JWR Replies: I agree that InyoKern is overly optimistic, but part of his premise is valid. In essence, the problem with US Dollars is that there are too many of them in circulation. And the problem for foreign holders of US Dollars is that they are holding too many of them, all at once. They cannot dump dollars rapidly, or the value of the dollar will collapse overnight, leaving them with nothing but kindling. (Or the electronic equivalent thereof.) Wise investors have been quietly getting out of dollars and into tangible commodities for several years. I expect this trend to continue for the foreseeable future. Interest rate inequities will perpetuate a Dollar Carry Trade that will be an even bigger market than the Yen Carry Trade that has been played successfully by currency speculators for the past two decades.

In the final analysis, yes, the US Dollar is doomed. Protect yourself by minimizing your dollar-denominated investments, and parlay the proceeds into useful tangibles like silver, gold, productive farm or ranch land, guns, and ammunition. The timing of the dollar's decline and eventual collapse is very difficult to predict. But it is better to be a year early than a day late. Get out of your Dollar-denominated investments!

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Monday October 12 2009

What Recovery? Find Yourself a Recoveryless Job

For more than a month, the mainstream media has been yammering about an economic recovery. Chasing phantom "good number" statistics amidst an onslaught of otherwise bad economic and global credit market news, the Wall Street cheering section is desperately seeking some news that the current recession is coming to an end. They talk about "the recovery in progress"--almost a fait accompli. They have been so good at this that they have fooled some investors into putting their sidelined money back into the stock market. What a masterpiece of disingenuous grandstanding. But the sad truth is that there is no genuine recovery in progress. Perhaps there will be a minor economic boost, generated by the huge bailout spending, but the bottom line is that we are in the midst of a major recession. And unlike the recessions in the past 50 years, this one is not based on just market cycles, but rather caused by a systemic failure of the global credit market. So any attempts to re-inflate the bubble with new credit (based on artificially low interest rates and bailout "programs") are bound to be unsuccessful. This recession cum depression won't end until malinvestment is driven out of the system, and trust in a fully transparent system of credit that backs genuine, truly marked-to-market tangible assets is restored.

America's debt bubble that emerged from over-inflated real estate is at the root of the current mess, just as it was in Japan in the 1980s. (In their case, it was commercial real estate, in parts of Tokyo.) The Japanese government has tried similar measures (mostly in the form of massive public works programs and artificially low interest rates) for 25 years, and they still haven't pulled out of their economic doldrums! But consider that our real estate bubble was much, much bigger, and that unlike Japan, we are a net-debtor nation. (Japan has traditionally been a fiscally-conservative nation of savers.) So how can we expect to do any better at "recovery" than they did?

The Obama administration has two potential courses of action that it can implement--through Treasury Department action, in concert with the Federal Reserve banking cartel's open market committee--to attempt to emerge from the current mess. Neither of these are appetizing:

Continue keep interest rates artificially low. This, however, will create a huge dollar carry trade market that will be the source of laughing derision, internationally. This course of action will eventually destroy the US Dollar as a currency unit.
Allow interest rates to rise, but that will likely choke off any economic growth. And regardless of the path chosen, the current administration (like its predecessor) seems committed to profligate spending on umpteen bailouts. These bailouts are funded by "out of thin air" dollars, creating massive budget deficits. In the long run, this dollar creation will prove to be highly inflationary. But there will probably be a time lag, since the effects of the continuing asset deflation is masking the ongoing currency inflation. I anticipate substantial inflation to become evident, circa 2011 and in subsequent years. It could be very nasty, so shelter yourself from it, as I've previously suggested in SurvivalBlog.

My suspicion is that the BHO administration will opt for the "weak dollar" route, since that will be the least painful of the two options. The sad news, however, is that ultimately neither option will solve the underlying problem, and hence the US economy is doomed to a deep 10+ year depression. During this period we will witness (and endure) massive unemployment, high crime, dislocation, rioting, repatriation restrictions, and substantially higher taxes. With these in mind, take the steps necessary to protect your family's safety, and your assets.

The talking heads on the finance and investing shows would have you believe that an economic recovery, or at least a "jobless recovery", is just around the corner. Do not be deceived. If any of you reading this are still under the deceptive spell of the CNBC rah-rahs and believe that recovery could be underway, then just take a look at this chart of scheduled mortgage interest rate resets, which I've previously mentioned in SurvivalBlog. As you can see, the oft-cited peak in subprime mortgage interest rate resets is now behind us, but the peaks in Alt-A, and Option Adjustable (aka "Option ARM") rate resets are still ahead of us. Thus, in actuality, the worst is not yet over. We are just in a lull between two tsunami waves.

With the exception of a few newcomers, SurvivalBlog readers are already well-informed on the foregoing facts, so I won't belabor these points. Instead, I'll move on to some practical issues that will have some benefit to you. Lets talk about jobs, and to be more specific, your job.

A Recoveryless Job

Even if you are currently employed somewhere in a "safe and secure" job, keep in mind that there are no absolutes. You could have a small town civil service jo, for example at a water treatment plant. But what if the city or county that you work for goes bankrupt? You could be laid off in a heartbeat. The phrase "under new management" often means firing you, and hiring the nephew or old pal of the new boss. The fictional character Sarah Conner said it best: "No one is ever safe." So hedge your bets.

I recommend that you develop a second stream of income through self-employment. Typically this can be found in a moonlighting service job, or a home-based mail order business.

I've often encouraged even my rural consulting clients to develop a second income stream. Why is this important? "Living off the land"-style self sufficiently is an admirable and commendable goal. But even if you are living truly "debt free", you will still have property taxes to pay. That means that you will need a recession/depression proof revenue stream in the event that you lose your primary job.

Successful home-based businesses usually center around unfilled needs. Find something that your neighbors buy or rent, or service that they "hire" on a regular basis that currently requires a 40+ mile drive "to town". Those are your potential niches.

A successful recession-proof home-based business is likely to be one where the demand for your goods and services is consistent, even in a weak economy. These include septic tank pumping, home security/locksmithing, care for the very young and the very old, and escapist diversions such as DVD movie rentals. (It is noteworthy that the movie industry was was one of the few sectors of the economy that prospered in the 1930s.)

One market segment that prospered in the Great Depression of the 1930s was repair businesses. Obviously, in hard economic times, people try to make do with what they have. So repair businesses are a natural. If it is some small appliance that you could repair that could be mailed from and back to the customer, so much the better. (That way you could have a nationwide business, rather than just a local one.) This might include: DVD player repair, laptop computer repair, and so forth.

Its a Dirty Job, But Someone Has to Do It
If you want to work for someone else and have that be recession-proof, then consider the dirty jobs. These are some of the least likely to suffer a layoff. In Japan, these are called the ""Three-K" jobs: kitsui ("hard"), kitanai ("dirty") and kiken ("dangerous"). If you are willing to take on any of the Three K jobs, do cheerful and hard work, and have exemplary attendance, then you will likely have a job that will carry you all the way through a deep recession or even a depression. If times get truly Schumeresque and you get laid off, then please be willing to "think outside the box", and consider taking a Three K job. Some of these are low level city and county payroll jobs. And by low level, I mean things like sanitation worker, animal control officer, sewer technician, solid waste transfer station worker, highway maintenance worker, and so forth.

Think about it: A steady job beats no job. Don't let your family starve, or end up homeless. There is no shame in accepting good old-fashioned hard work. If you take a job that brings in only one half of your existing income, consider that you'll actually come out ahead of any of your contemporaries that are laid off more than half of each year. Further, you will have uninterrupted benefits, such as health insurance, that they will also lack. A menial and low-paying job is better than no job.

Some suggested employment possibilities:

1.) Mining and manufacturing processes that because of shipping expenses cannot be practicably be moved offshore. Coal mining is a good example.

2.) Service industry jobs that are essential and non-discretionary. Let me reduce this to a few key examples, so that you'll know what to avoid:

Essential and Non-Discretionary	Non-Essential and Discretionary
Mortician	Pilates Instructor
11B Infantryman	Hairdresser
Septic Tank Pumping Truck Driver	Manicurist

3.) Retail sales (face to face, or mail order) of crucial items.

4.) Retail sales (face to face, or mail order) of comfort items. In the midst of an economic depression, people will crave escape. Movie DVDs are a good example.

5.) Military service. Most people don't think of the armed forces as service industries, but that is essentially what they are, on a national scale. In the military you are sort of a security guard for the real Mall of America. Or think of it as a lead delivery service. My father was an Air Force instructor pilot, back in the days of T-33s. He summed up his service when he told me: "I was a glorified bus driver, burning up lots of Uncle Sam's jet fuel. I did a great job of defending miles and miles of cactus." Thirty years later, I served as an Army Intelligence officer. It was great fun at the time, but in essence, I was just a detective--or more precisely the manager of detectives--that worked for one of the world's biggest detective agencies.

6.) Repair work.

Be Flexible and Proactive

The coming years will be difficult ones, globally. If you are risk of a layoff, then hedge your bets by developing a second stream of income, now. And if you are laid off, do not hesitate. Do whatever it takes to find steady work, even if means moving, or taking a lower-paying job. Don't just wallow in self-pity and draw unemployment insurance. be proactive and do something!

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Sunday October 4 2009

Two Letters Re: Applying For a Non-Resident Concealed Carry Weapons Permit/License

James:
That was a very good article on by "Sgt. Survival" on CCWs. Just one minor correction ion the portion that mentioned Nevada

The cost of the permit is $100.25 for five years. The training must also take place within the county where you will be applying for the permit.

You can take the course anywhere in the state, regardless of whether you are a resident or non-resident. If you are a resident, you must apply in the county where you reside. My wife and I are CCW instructors and have signed off people from other counties just fine. They now have a list of CCW instructors in Carson City for the entire state.

You are also required to qualify with the weapon(s) that you want listed on your permit.

For autos, yes, but one revolver qualifies you for all revolvers and derringers.

Sorry to hear of your recent loss of The Memsahib. - G. in Nevada

Jim:
For Washington residents, with respect to these permits, I would add two items: RCW 9.41.073 indicates that for residents of Washington, one must have a Washington LCCP to carry legally in-state. A Washington resident who has only an out of state license cannot legally carry in Washington, regardless of what the reciprocity lists of the two states say. Note that several other states have that limitation.

The opening statement that the State Patrol issues the licenses is incorrect. They do process the criminal background check, but the licenses are actually issued by the local sheriff or chief of police. The statewide program is administered by the Department of Licensing, according to their web site, and Washington administrative law.

As a side note, these laws and agreements change rapidly, as they have this year in terms of which states recognize which others. Always best to check before you head out for travel. Warm Regards, - Rick W.

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Wednesday September 9 2009

Letter Re: Bank Walkaways--Banks Intentionally Not Fully Foreclosing?

James Wesley,
I just read an ad on Craigslist explaining some sad stories for individuals on “Bank walk aways” . See BankWalkaways.com for more. It appears that [some] banks are intentionally not auctioning off properties foreclosed on and leaving the titles (… legal responsibility, liabilities, etc.) in the original record holder’s name. Down the road these vacant properties are vandalized, looted, burned etc., then the city comes a callin’ for the “homeowner” to fund the repairs / demolition. This is outrageous if this is true!

Thanks are hardly enough for the wake up call you’ve given me through your book and web site, but Thank You all the same. This is my first email to your in an attempt to contribute to your great knowledge resource looking out for people. On one hand I hope this is not happening, but if it is I hope you post the wake up call. All the best. - Hal H.

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Friday September 4 2009

Letter Re: Some Economic Indicators to Watch

James Wesley,
I just had lunch today with a senior bank executive in Chicago. He confirmed much of what I have been seeing in the economy. After picking his brains, I have put together a few economic indicators to watch:

- Christmas will be a financial disaster - people are reluctant to spend their cash. Weak sales will be a tipping point for many retailers

- Commercial real estate is the next “shoe-to-drop”

- Small businesses continue to struggle – their problems will broaden and deepen as credit is strangled – SBA loans are off-the-street, defaults may be as high as 50% and growing, banks are not lending (see rutledgecapital.com – banks holding record cash reserves from Fred Reserve)

- Consumer Credit Cards – the second next-shoe-to-drop – Piled high and deep – longer unemployment means people can’t keep up payments

-Bankruptcies increase – especially in construction industry and real estate-related industries

- Joblessness – watch the U-6 column (the BLS report on a more “real” unemployment number.) Unemployment, according to Dept of Labor is over 16.5%

The big imminent threat? Inflation – “too much money chasing too few goods” as Milton Friedman warned. The government printing money, and inventories are falling –[ a classic inflation precursor].

Economic recovery? At least 18-24 months from now. Media reports about "recession end in sight" are nonsense.

Federal leadership is a “nightmare” – making all the wrong moves. Look for higher taxes, inflation, increased joblessness (as small businesses fail).

Outlook? Grim.

Best Advice – Avoid bonds (higher yields which are needed encourage buyers of US Treasurys = lower bond prices)

Avoid stocks – look for a "W" market move – stocks to go lower ([Dow] 3,800, H.S. Dent says) Why? Corporate earnings are very weak.

What to buy? Farmland and ammunition

And remember, I am an optimist.

Blessings, - Jeff E.

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Saturday August 29 2009

Real-Life Inspiration for Preparedness, by K.P.

Background Information:

My interest in preparedness started in earnest really just a few months ago. Before that, I had been an avid backpacker, rock climber, and other sports which require self-sufficiency and forethought. I am also a Red Cross volunteer. I was at hurricane Wilma, and I have done local search and rescue, amongst other things. This February I was dispatched to the south-western region of Kentucky for the Ice Storms. What I learned there changed me in a lot of ways.

I was aware of the pending economic collapse, but hadn't really thought of practical things to do until then. As a pre-1840s Re-enactor, I was pretty sure I could comfortably live in a pre-industrial setting. A little hubris, maybe, but at 23 sometimes that goes with the territory.

While we drove into Kentucky, parts of it looked like a war-zone. Downed trees and power lines, roofs collapsed, the whole deal. It was a long drive, and it really set in for us how serious this was. People's lives were on the line.

There were three FEMA gas depots throughout the State, but FEMA did next to nothing to help here. Without electricity, the pumps at the gas station will not work. Some place had hooked up diesel generators to power the pumps if they could, and very few business that were still open would accept anything but cash.

When we arrived in the small town to which we had been dispatched, we found that the Red Cross volunteers at the shelter had not slept for any normal amount of time in close to 8 days. At the height of the storms our shelter slept 150 people.

We gave the local volunteers a needed break, and worked 20-hour days. It was rough; but anyone who has been in that situation knows it can very rewarding as well. We served 800 hot meals a day, gave out pallets upon pallets of MREs and uncounted bottles of water.

The grid-water had been contaminated, so bottled water was really all the people could drink or wash with if they didn't have a very, very deep well, even then they were on a boil-alert. If your house did not have a wood burning stove, then you were sleeping with us. All together the power and gas were out, in some places, for more than 20 days.

That's the background and the quick version of events which eventually led to my interest in this area.

On to the practical details that I learned. First and most important was this: when the trucking lines break down, within two or perhaps three days, every store will be sold out of all dry food. That means, that if you don't have at least two weeks worth of food stored up, you'll be visiting me at the Shelter.

We slept (at out busiest day) 150 people in the shelter. No electricity, no gas, no water. We're talking serious survival kind of situations. In talking with the people there, excluding the elderly, the main reason people could not stay in their homes was heat. If you had a wood burning stove, you were basically fine. You could get by.

FEMA had a recording when you called them, that gave the residents the Red Cross local number. They did such unhelpful things as tell people we were giving our generators, gasoline, and kerosene. Things that to my knowledge the RC has never done, and we were not doing. FEMA had fliers telling people the could free food if they needed it. Supposedly they actually gave out about 1000 meals, but after that they referred people to us.

Lesson learned here: Do not, under any condition, assume FEMA or any other government agency will help you. Help yourself, and help your neighbors.

When I got back from Kentucky, I started to put the things I had seen in order. I started to mentally make lists of the things I would need when this situation came to my neck of the woods. I did not want to be in the shelter when (not if) something happened near me.

The main reason I saw in this specific situation was heat. So I planned on picking up at least two working wood burners. Then came water, then came food, and in a long-term scenario: barter.

Heat:

My house has a fireplace, and although that is not very efficient, in a pinch it would do until I can find the kind of stoves I really want. So I moved on to next item.

Water:

Water was pretty easy. I have a couple of streams on my property, and I can collect rain water. Some friends and I built a gravity-fed purification system. We modified two used beer kegs that we bought very cheap to hold water on top and bottom. We connected them with a 4 foot long stainless steel pipe with a very fine metal mesh at the bottom and filled with activated charcoal. When the water is first put through a matrix of gravel and varying degrees of fine sand, then through this system, you get very, very pure water. We believe it to be near laboratory-grade water. In fact, this system is just a scaled up version of a purifier at out local pharmaceutical company.

The benefit of using kegs is two-fold. First, they are readily available almost anywhere, and two they are stainless steel. I suppose you could also pretty easily convert this into a still if you so desired, for barter or producing barter-goods.

I have been working on something called an Archimedes' Screw to help move the water. It is basically a screw inside a cylinder. When a mechanical force is applied to the screw to turn it, either by hand, modified bicycle, or wind turbine, the screw pulls water up the cylinder, from a low place to a high place. This is not finished yet, so I cannot give it 100% clearance, but the theory seems sound.

Food:

Food takes a bit longer. I started by ordering some 6-gallon mylar bags and a couple packages of 500cc oxygen absorbers. I went to the local Big Box store, the kind that has a bakery inside, and asked if I could have their used 5-gallon buckets with lids. They were happy to help; and they were free. I cleaned them by alternating a bleach wash, a salt wash, and a vinegar with lemon juice wash. That got all of the icing smell out of the buckets. That step was more my OCD then a necessity, since the mylar will keep anything from being contaminated. Although I thought this might reduce the likely hood of insects poking around my buckets...

Place a mylar bag in a 5-gallon bucket. You want 6-gallon bags so you can press all the air, and seal the very end. This allows you to re-use the bags several times. Fill the bag with about 5 gallons of rice, beans, powdered milk, lentils, noodles, red winter wheat... whatever you are storing. Seal about 9/10's of the bag with a clothes iron being sure to leave room for your O2 absorbers to fit though; I like to make a two-inch seal. Grab the bag and lift it and shake it a bit to allow the contents to settle some, pressing the air up towards your seal.

You'll want to do several of these at once, because as soon as you open the O2 absorbers, they start working. I put the unused one in a zip-lock bag which I suck all the air out as I seal it. I also put in the tester pellet that comes with the absorbers so I know if they are good or not.

So let's say you are putting up five buckets. Each bucket gets ~2000cc worth of O2 absorbers. If you bought 500cc packs, that would be four per bucket for a total number of 20. Feel free to err on the side of caution here, if you are using some stored in the zip lock bags. The extra costs of the materials is drastically outweighed by the value of the stored food. If I have had the O2 absorbers exposed to air more than once, I toss in an extra one, more than twice, I toss in two extra, and I have never had any done more than that.

You want all your buckets prepped for final sealing before you open your O2 absorbers, for obvious reasons. I usually ask for a hand with this next stage to allow me to move as quickly as possible with as little exposure to general environmental air for the absorbers.

So, toss in your 4 absorbers, press out as much of the air as you can, and finish off the seal. I like to make my seals 2 inches thick, and again I use a clothes iron. I use a large dictionary with a wooden cutting board on top to make this seal. Snap down the lid of the bucket.

The bucket is necessary to protect the mylar. Although the mylar bags are strong in the sense that they can bear a lot of weight, pressure, or vacuum, they are highly susceptible to puncture.

Once all your buckets contain O2 absorbers and are sealed with lids on, take clear packing tape and put a long strip on the lid. I write the date I packed the bucket, the approximate storage life, the contents, and the weight/volume. I stack the buckets off the ground three-high.

Keep in mind that every dollar you spend here is worth many multiples of that in the future. Even if we are all wrong on the possibility of Schumeresque Scenarios, think of the money you will save just because of inflation.

Now, speaking of money. If you spend $20 for 50 pounds of rice today, and three years from now, you could sell it for $100; if you did not do your storage well, you're out $100 plus the cost of storage materials, not $20. So make sure that you do it carefully. You can also rotate out and in new stock.

Bartering:

No one (or at least not me) has the resources/time/etc to put into long-term storage everything they need for the rest of their lives. Eventually bullets and beans run out. So, you will need something to trade.

I like [non-numismatic pre-1965] junk silver, and one-ounce silver coins/bars. In my mind, these would work for direct bartering: things like mason jars, food, animals, ammunition, whatever. Flea markets are a great place to pick up small amounts of junk silver if your budget does not allow for larger purchases, like $500 or $1,000 face-value bags.

If we find ourselves in a prolonged period of hyperinflation like the Former Yugoslavia experienced (more on this later), then we might want to hedge our bets. You could buy a few 10-ounce silver bars, with the intent to sell them for the hyper-inflated currency before the bottom drops out to purchase needed items. Just a thought.

One could lay up, mason jars, paraffin, salt, sugar, alcohol, tobacco; lots of things for barter. There is also the good old stand-by, ammunition. My concern with ammo for barter, is that you might not know what that ammo is going to be used for, nor know for sure it will not be used against you or someone else. I do see the incredible versatility and all the good reasons for an ammo-based barter system. So do what you like.

The other event that really sent a lot of this home for me was a 6-week stay in Serbia. Listening to stories about how people would smuggle in gas during the embargo, buy any solid good while the money was worth something, and generally do everything they could to survive really had an effect on me. At the height of the crisis, they had 37% inflation per day culminating in the issue of the 500 billion Dinar note. This was of course fifteen to twenty years ago, but the scars are still visible. Belgrade did not demolish or clean up any of the damage done during the 1999 NATO bombing. The Serbs see that every day.

There is a quote I like, that many of you may know that I feel is appropriate here:

"History has shown us that government leaders often ignore the fundamental fact that people demand both dignity and freedom. Stripping motivated people of their dignity and rubbing their noses in it is a very bad idea." - John Ross, Unintended Consequences [JWR Adds: This otherwise excellent novel was marred by some vulgarity and gratuitous sex scenes. Beware!]

Back to the practicals...
People stocked up on silver, charcoal, wood burning stoves, anything that could be a store a value and increase their chances of survival. Another interesting happening was the use of checks. Checks in Serbia and the Former Yugoslavia are all printed with a maximum amount. Usually 5,000 Dinars, (about $70 in today's Dinar/ Dollar exchange rate). So, if you had a business, you are issued a certain number of checks each month. What happened during the crisis is interesting. The checks were spontaneously monetized.

Here is and example of what I mean. I write a check for 5,000 Dinars, but I don't address it to you. You give me the goods for the check. Then, instead of cashing the check at the bank, you give it to someone else for your needs. This usually went on, especially in very small towns for up to four months before my account was drawn for the amount.

This also had the benefit of me being able to write a check I might not have had the money to back it right away, so it was like credit for me, and cash for you. This doesn't happen anymore in Serbia, by the way.

Although I imagine I'm preaching to the choir, I know from my own experiences that it's easy to get down, and disheartened. But don't fret. Get to work, lay in your stores, and every day do at least one practical thing that increases your and your family's chance of survival. Keep your powder dry.- KP

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Saturday August 22 2009

Letter Re: Cattle Rustling on the Rise

James,
First off, we continue to pray for your family. Whatever the Lord’s plan is, he will show you grace and mercy. Blessed be the name of the Lord.

Secondly, one of my cattle buyers, corroborated by one of my truckers, has informed me of some signs-of-the-times, unconfirmed via regular news outlets so far, cattle rustling in Pennsylvania is on the rise, including something not usually seen, carcass remnants. Several barns/pastures have cattle missing, one load of which was recovered at a sale barn, and at least a half dozen reports from different farmers finding carcasses, with primals cut out, in remote portions of hill pastures. I also found this news article and this ABC News video clip.

We all saw the report from Florida about horse butchering, but this is slightly different, IMO. We run cattle on quite a few different operations and are concerned at this potential loss of wealth. We have invested heavily in livestock to preserve wealth, reproduce wealth, insure a food supply and, well it’s also our business! We are holding our first “cattle works” in a few weeks and will be branding all our horses and cattle. It may not solve/reduce all the problems, but we believe it will help.

Thanks for your efforts, you are performing a valuable service. - Trent H., in a Rural Corner of Pennsylvania

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Wednesday August 19 2009

The Open Carry Debate Catches Mainstream Attention

For anyone that might have found my warnings about feral dogs (such as in my "Pulling Through" screenplay) somehow alarmist, see this article: Sheriff: Georgia couple likely killed in dog attack. Too bad that you need a license to carry a firearm openly in Georgia. Parenthetically, we have the occasional grizzly bear that passes through, here at the ranch, but at least we are regularly armed, so we have a fighting chance. IMHO. the open carry ban in Georgia is a racist anachronism that should be abolished.

And speaking of open carry, our compadre Tamara mentioned this: Man carries assault rifle to Obama protest -- and it's legal. The mainstream media is in veritable fits of apoplexy about this, but I have news flash for them: This was in Arizona, where open carry is legal. Get over it!

Yesterday (Tuesday), I was interviewed by Fox News about open carry, in their "Happy Hour" market wrap-up show. Unlike my previous appearances on the show, I actually had time to get a word in edgewise. I offered them one of my old sayings, which in full is: Much like a muscle that atrophies with disuse, any right that goes unexercised for many years devolves into a privilege, and eventually can even be redefined as a crime.

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Sunday August 9 2009

Delay and Pray: Why the FDIC is Broke, by Dr. Gary North

"If it ain't broke, don't fix it." -- Burt Lance

"If it is broke, don't admit it before you absolutely must, and then blame it on events that no one could have foreseen." -- [Gary North's] universal law of bureaucracy

Burt Lance was briefly the head of the Office of Management and Budget under Jimmy Carter. He was a Good Old Boy from the banking world of Georgia. A William Safire piece, "Broken Lance," created enough bad publicity to persuade Lance to retire in September 1977. The article won Safire a Pulitzer Price.

Lance's aphorism, taken from the South, has been with us ever since.

I made up the second aphorism. It is based on my 40+ years of studying government bureaucracies.

The FDIC adheres to the second rule with remarkable tenacity. It closes no banks until Friday afternoon. This ensures that there will not be a run on the bank.

BANK RUNS

A bank run today is not the old-fashioned kind that we see every Christmas season when we watch "It's a Wonderful Life." That was a pre-FDIC bank run. A bank run took place in the Great Depression when depositors, who had been promised payment in currency on demand, exercised their contractual rights. The banks were unable to fulfill their contractual obligations because they had loaned out the
deposits. The deposits were short-term. The loans were longer-term.

Longest of all for banks were home mortgages: five years with 50% down. Longest of all were home loans made by Building & Loans, what we called Savings & Loans until the crisis of the mid-1980's forced them to become banks.

"Borrowed short and lent long." That was Jimmy Stewart's problem in the movie.

Potter ran a solvent bank. He had not made long-term loans. The bank could cash in his short-term loans and pay its depositors. It could meet its contractual obligations.

Wicked, mean Potter!

In contrast was the lovable George Bailey. His institution had made long-term loans. It stayed solvent during a bank run only because (1) Bailey gave up his $2,000 honeymoon [savings] money (about $20,000 in today's money); and (2) the bank run ended at 6 p.m. The bank run did not start up again the next day. That wasn't the work of Clarence, the wingless angel. That was the work of Frank Capra's screenwriters.

Over 6,000 small banks went bankrupt, 1930-33. The FDIC was created in 1934 to prevent that kind of bank run. Its presence calmed depositors, who knew that a government- chartered institution insured their accounts.

The FDIC eliminated the old-fashioned bank run. It replaced it with the modern bank run. This is the type of run we see every Friday afternoon.

This run does not involve depositors going to a suspect bank's ATM and pulling out currency. No one uses that much currency in conventional markets -- only in black markets, Latino men on the street corner markets, and gun shows.

Instead, they send a bank wire draft to make a deposit in a different bank. Or they write a check to a different bank and open an account.

When the money is deducted from the first bank, this reduced its liabilities. This must be balanced by an equal reduction of its assets. But a bank that is in trouble has illiquid assets. It must sell these at a loss. The net worth of the bank falls. The capitalized value of the bank falls. By law, the FDIC must intervene to shut down the bank when the solvency of the bank is threatened.

This law is not being obeyed. Why not?

"If it is broke, don't admit it before you absolutely must, and then blame it on events that no one could have foreseen."

Why does the FDIC wait until Friday afternoon to announce that a bank has been closed by the FDIC. To make the transfer of ownership legal by Monday morning, when it opens for business. "Under new management" means "you don't have to send your money elsewhere." This reduces fear.

If the FDIC closed a bank on Monday, before it had lined up a buyer, there would be a run on the bank all week. Depositors would shift their funds elsewhere. The FDIC would still be left holding the bag. The bag would have lots more IOUs to depositors by the end of the week. It is a bag filled with red ink.

The FDIC is liable for the deposits. The more pulled deposits, the lower the capitalized value of the bank. This means the FDIC is on the hook for more money. It wanted an outside bank to buy these liabilities and assets. If the liabilities must be covered by the FDIC, the FDIC must sell its assets.

It has less than $12 billion in assets remaining. It had $52.4 billion in 2007.

The following letter is posted on the FDIC's web site. It is from an unidentified banker in Alabama. Here, we read the following:

If the public were to understand that the FDIC's deposit insurance fund was at or near the point of depletion there would be a massive run on every bank in the country and the any remaining stability in the financial industry would be gone. This would likely result in the government having to take over more of these failed institutions and eventually having to guarantee all deposits thus resulting in a nationalized
banking system, which I 100% opposed.

If the FDIC posts a letter like this on its web site, then I conclude that the FDIC takes seriously this scenario.

The FDIC has a FAQ list on its site. The list does not include these questions, which I guess are not frequently asked:

How much money does the FDIC have in reserve?

How much money in commercial bank deposits does
this reserve base insure?

Where does the FDIC invest its assets?

Who insures these assets?

At the end of 2008, its annual report revealed that reserves were down to $17.2 billion (Fund balance -- ending). That was down from $52.4 billion at the end of 2007.

Beginning in January 2009, 69 banks have failed. The list is here. [JWR Adds: Since Gary wrote this article last week, the tally of failed banks for 2009 has increased to 72.]

The general estimate is that the FDIC's reserves are around $12 billion. They were at $13 billion in March. The ratio of FDIC reserves to banks assets covered was 0.27%, or 27 cents for every $100 in bank deposits.

The FDIC keeps its [so-called] reserves in short-term U.S. Treasury debt. So, every time it sells T-bills, the government must find a buyer, presumably in the private sector. The FDIC has access to money only by moving T-bills out of the government sector and into the private sector.

If there are no buyers, the Federal Reserve will buy the T-bills. So, the Federal Reserve System is the ultimate insurer of the banking system. How can it do this? By creating money out of nothing.

DELAYING THE ANNOUNCEMENT

The FDIC has an incentive to delay the announcement of another bank failure. If the bank can somehow dig its way out of its crisis, the FDIC conserves its reserves.

In March of 2009 Senator Dodd introduced a bill into the Senate, S. 541. If passed, it will grant the FDIC a $500 billion line of credit. It has not been debated in the Senate or the House. Why not? Publicity.

"If it is broke, don't admit it before you absolutely must, and then blame it on events that no one could have foreseen."

The FDIC is delaying the announcement of its takeover of three regional banks whose liabilities could deplete the FDIC's reserves. Karl Denninger posted a revealing report on his site on August 2. It considered the situation facing these three banks. Two of them have reported negative Tier-1 Ratios. This means that they have a negative ratio of assets versus liabilities. They are legally bankrupt.

The third bank needs a $500 million infusion of private capital, plus another $500 million from the Federal government. If this bank goes under, it will be the sixth largest bank failure, by assets, in U.S. history.

It has $20 billion in assets. How much money might the FDIC be forced to raise by selling its own assets if this bank goes under? In the case of Florida's BankUnited, which had $12.8 billion in assets, the FDIC had to pony up almost $5 billion. That was a loss of 40% of assets, Denninger points out. Yet the bank showed nothing like this loss until it was shut down. Neither did IndyMac.

The FDIC has not closed any of the three banks. By law, it must take Protective Corrective Action, Denninger says. It hasn't.

These three banks are regional banks, not small local banks whose losses the FDIC can afford to absorb without much publicity on a Friday afternoon.

PAR FOR THE GOVERNMENT'S COURSE

Why did the other busted banks suffer such enormous percentage losses when the banks' accountants revealed nothing like this? Denninger offers a cogent explanation.

An enormous number of banks are holding loans at or close to "par" that really aren't. They're holding mortgages at massively-inflated values, even on defaulted properties, and this is why you
are not seeing more foreclosure sales - that is, why inventory is being held back. If they sell it the accountants will force recognition of the loss, which will render them instantly insolvent, but so long as they "extend and pretend" they are marking these loans way, way above recovery value. The upshot of this is that these firms' balance sheet claims on asset values are massively inflated, regulators know it, and
they're intentionally ignoring it.

If this is true, which I think it is, then the continuing crisis in housing will pressure the banks even more. The suggestion that the crisis is over ignores the looming losses from defaults on re-sets of Alt-A mortgages and Option ARM mortgages. Over he next two years, they will rival the losses inflicted on lenders by subprime mortgages. The chart is here.

Denninger's conclusion seems sensible to me.

The claim of banking sector health and "successful rescue by Treasury and The Fed" is in fact false. No such thing has occurred. What's going on here is nothing more or less than intentional false claims of asset "valuation", which is repeatedly exposed when the FDIC is finally forced to seize institutions, exposing the lies. Then, suddenly, 20, 30, even 40% losses on alleged "asset books" come out into the
light and the taxpayer eats them.

The banks are allowed to carry these dead and dying assets on their books at par value. This is par for the course -- the government's course.

[Like Denninger], I believe the FDIC is broke and knows it; that under the law they should have seized these three banks (and many dozens more, including some really big ones) some time ago, but doing so will force them to tap the Treasury "emergency" credit line. They're well-aware that this could instill quite a bit of panic in the public (never mind Congress!); as such they, along with [the Office of Thrift Supervision] OTS and [Office of the Comptroller of the Currency] OCC are conspiring to (once again) hide the truth and pray for an economic recovery before they are forced to act as the law demanded months or even years ago!

This policy of delay and pray is pushing up the stock market. He pointed out that insider sales by corporate executives are higher today than an any time since late 2007. They know what is going on inside their own firms.

CONCLUSIONS

When banks refuse to sell empty foreclosed houses, the houses deteriorate. The bankers delay and pray, hoping the housing market will turn back up. They don't want to list these properties as losses. They are allowed to delay such a listing until the properties are sold.

Empty houses deteriorate fast: weather, squatters, and vandals. This is why private property insurance firms revoke property damage insurance after 30 days of vacancy.

These capital losses are mounting, thereby lowering the value of the loans' collateral. These are hidden losses. The lenders' books do not record these losses.

The longer banks delay sales of foreclosed houses, the greater the capital losses for these banks.

The longer the FDIC refuses to close these banks and get these properties sold, the larger the losses the FDIC will suffer when it finally closes the banks.

The longer these empty houses are not sold, the longer this sword of Damocles hangs over the residential real estate market. This delays the recovery: too much inventory.

This "shadow inventory" is not reported to any official institution. No one knows how large it is nationally. All that investors know is that it is large, and it will get larger.

Delay and pray will fail. But no government official will lose his or her job when the day of reckoning comes.

Delay and pray will therefore continue.

"If it is broke, don't admit it before you absolutely must, and then blame it on events that no one could have foreseen."

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Saturday August 8 2009

Letter Re: Hard Times at Here--Are You Ready?

Mr. Rawles:
The recent article that you linked to about the unemployed Indiana couple was disturbing on so many levels. The family in this article had a completely different way of doing things and the timing of reading the two articles in a short period of time highlighted the stark difference. - G&K in Florida

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Thursday August 6 2009

Hard Times at Here--Are You Ready?

The hard economic times that I--and many others--warned you about are now here. We are clearly now in the opening stages of a full-scale depression that will last a decade or longer.

This news article (sent to me by SurvivalBlog reader Eric C.) .about an unemployed couple in Indiana is a microcosm of what we will be witnessing for the next decade. Take a few minutes to read it.

Our pampered society is in for a rude wakening. Now, at the risk of sounding unkind and judgmental, the term "white trash" comes to mind. Note that this man in Indiana had no savings, plenty of debt, and obviously no food reserves. Also note that despite his "austere" budget on unemployment insurance, he wastes hundreds of dollars per month as he smokes cigarettes, drinks soda pop, drinks beer (in large quantity), gambles, and pays for commercial car washes. His wife still carries a Blackberry with an airtime contract. Why are they buying disposable diapers, when they could be washing cloth diapers? The article also mentions that the husband has gained 40 pounds in the year since he was laid off. Did he consider planting a vegetable garden? Or washing his own car? (Both would have saved money and provided exercise.) This couple needs a serious lesson in budget priorities. They say that they are worried about their children's school grades, yet they still have a television and XBox games. It is time for a garage sale, to sell those time-wasting gadgets. Then regularly-scheduled trips to the local library, to get their children literate!

This gent is in his thirties, yet he has ruined his health with drinking, smoking, and over-eating. He and his wife seem to view military service as a last resort for their high school senior son. Well, I have a news flash for them: Both the son and the father should have enlisted! In 2006, the US military raised its maximum age of enlistment to 42. (BTW, as the economy continues to worsen, I expect the military to raise their standards considerably and eventually begin turning away large numbers of candidates, just as they did in the 1930s.)

It is also noteworthy that this man is on anti-depressants. He is not alone. Consider this article that was sent to me by Karen H.: Antidepressant Use Doubles in US, Study finds. That is alarming just by itself, but just consider what will happen if and when the Schumer Hits the Fan, and all those patients run out of their medications. (And their booze, and their cigarettes, and their marijuana, and their MTV, and their Crackberry instant messages, and their chocolate, and their American Idol, and their Dunkin' Donuts, and their porn, and their meth, and their soap operas, and their "Energy" drinks.) This could get very ugly, very quickly, once so many millions of suddenly very cranky, very desperate people start roaming the streets. My suggestion is: Don't be near then, in any significant numbers. Move to hinterboonies.

In summary: I had no idea that wallowing in self-pity was such exhausting, time-consuming work. At least they have a comfortable couch and recliner. This old quote mentioned by a SurvivalBlog reader sums up their situation: "The Lord does not bless the farmer who leans on his hoe."

Here is my advice for SurvivalBlog readers on how to survive the currently unfolding Depression:

Work cheerfully and diligently. It is slackers that find themselves unemployed first.
Get debt free and stay debt free. Take on no new indebtedness, and pay down the debts you already have.
Learn to distinguish essentials from non-essentials.
Write a budget, and stick to it. Whittle it, as necessary, to avoid debt.
Sell off your useless Beanie babies and assorted knickknacks.
Increase your savings
Build up your food storage
Diversify your investments. Don't put all your money in one bank.
Check your bank or S&L's safety rating at TheStreet.com. Check your stocks, ETFs, mutual funds, and insurers, while you are at it.)
Hedge your investments with some tangibles
Sell off any vacation or rental properties that don't have retreat potential
If you move, then it should be to a place near a secure job, and preferably to a piece of farm or ranch land that provides some self-sufficiency.
Develop a second stream of income.
Release yourself from your addictions. Pray fervently, and if need be, seek help.
Plant a garden.
Stay in shape.
Be willing to accept work that is lower paying or less appealing
Be charitable.
Most importantly: Get right with God. (Believe, repent of your sin, confess Jesus as your savior, and be baptized.) It is time to pray hard, folks! I believe in predestination. If you are reading this, and feel convicted to make change in your life, then you are fulfilling what God has had planned for you since "before the foundations of the Earth."

Forgive me for ranting, but that article about the unemployed family in Indiana got me a bit riled up.

One suggestion, in closing: If you get laid-off, do not move to a relative's basement in Michigan. Instead, move to where you can find work, even if it hard, "rolled up sleeves" work.

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Monday August 3 2009

Letter Re: Increasing Security for an 1870s House

Hello Jim,
My family and I have been offered a great price on a house ($7K,000 for a 3,400-square-foot two-story house, built in 1876, with a full basement and large backyard--the house was originally on the market for $104,000, but the seller hasn't had any offers in three years, since the housing market crashed) in a small city with open spaces less than an hour's walk away if bugging out should become necessary.

However, the bigger appeal of this house is the ample space it provides for us and a few other family members, a large backyard for gardening and the fact that most of the rest of our family is less than a 15-minute drive away (or an hour's walk--and this hour's walk would put us out in rural areas). My biggest concerns are the large (six foot wide) picture window on the front of the house, overlooking the front porch, and the front door with large window. The house is in a historic neighborhood, and any improvements to the structure of the house have to fall within certain restrictive guidelines because of the neighborhood in general and the fact that the house itself is on the state register of historic places.

I'm well aware of the prospect of smash-and-grab burglaries, especially in houses with large windows such as this one has, but I wonder what kind of modifications could be made to the windows and doors that would minimize the break-in risks. Would it be practical to add reinforced (possibly even bulletproof/brickproof/etc.) glass behind the picture window, and could you suggest possible modifications to the front door as well?

I'll add that there are several points inside the house where increasing levels of security leading to a safe room can be established without affecting the historic nature of the structure itself.

The house itself is not particularly conspicuous--it's in a historic neighborhood, so there are literally hundreds of other structures like it in the area, and there's not much turnover in terms of residents or home ownership. I've lived within four-block of this location for almost eight years, so I'm very familiar with the area. A sizable percentage of this area's residents have lived here for decades and
have no plans to move, so I don't think flight to the suburbs or beyond is really a problem, i.e., seemingly few worries that this house will be in the middle of a ghost town if things get bad. I think this house could be a major asset as a "bug-in" location and I'm sure my family isn't the only one looking to stay put rather than getting out of Dodge. Your advice would be greatly appreciated.

JWR Replies: Windows that large were not made in the 1870s for middle class houses, so that very large picture window that you described surely must be from a much later retrofit. (Six pane sash windows were the norm.) Even with historic preservation codes, you could easily go back to a smaller traditional sash window, and put a pair of "storm" shutters on it. (Hint: See my novel "Patriots" for details on ballistic shutters.) Just so long as it "looks" period, you should be okay.

Ditto for the door. You can have one custom built without a window (or just a very small, high window), out of 4" thick solid oak.

Convincing the county clipboard minions just takes some historical research. At your local library or online, find pictures that were taken before 1900 of houses built in the 1870s. Be selective, and find pictures of houses with small windows, storm shutters, and stout doors. These photos will be your leverage needed to get permission to restore your house to an authentic 1870s appearance, and that should make the Historic District Authenticity Gnomes happy.

Good luck with your upcoming move and security upgrade project!

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Monday July 27 2009

Community Disaster Recovery--Asking the Right People the Right Questions

I was pleased to see this post over at the Mountain Steps blog: A letter to our county commissioner about emergency preparation for hyperinflation. It is commendable to make such inquiries, but it is essential to ask detailed questions. Especially when contacting elected officials, vague, general questions tend to elicit vague, general answers, and hence most likely no action will be taken.

It is also essential that you do some research first, to direct your inquiry letter or phone call to the right individuals. Flunkies don't create or change policy, they just implement it. You need to direct your letter to someone that has the authority to make policy, and has the budget to implement it. (In some cases, this will mean separate contacts to whomever controls the purse strings.)

I recommend that you ask detailed questions, such as:

Do you have a back-up generator, and how many days of fuel do you keep on hand? What is your contingency plan to implement before that fuel runs out?

Can you continue to operate without grid power? If not, then what contingency plans do you have?

Is the city's water supply gravity fed, from end to end? If not, then what contingency plans have been put in place to provide water to utility customers, in the event of a grid power interruption longer than 48 hours?

And ask:

Are electrically-pumped filters used, or traditional gravity filters?

Then, if you discover that the water system is mostly via gravity, but it uses electric pumps only for pressurized filtration, then ask: If electrically-pumped filters are used, then has a disaster contingency waiver been established with the USEPA, (for turbidity and other standards), to allow bypassing of filters in the event of a grid-down emergency situation?

Similarly detailed letters or phone inquiries should be made to your local irrigation district, your fire department, power utility, phone companies (both cellular and land line), refinery, hospital, kidney dialysis clinic, coal mine, National Guard, grocery store, et cetera.

Do not expect the grid to magically stay up and running, Assume the worst case, and plan accordingly.

OBTW, one key word to search for when estimating the resiliency of your community's infrastructure is co-generation. Find out where the co-gen plants are, and their capacity!

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Wednesday July 22 2009

Six Letters Re: Self-Sufficiency in England? Take the Gap

Hello Mr. Rawles,
Thank you for taking the time to reply to my previous e-mail. I must confess your original post on your blog and your reply left me feeling somewhat bothered and a little defensive. I have been mulling this over all day and deep down I know the reason why, it's because you are absolutely 100% right.

My wife who makes my world go round could not leave her family, my son who has special needs is receiving very specialist care locally, my community, friends and neighbours who have worked this land for generations rely on me for support and will come to rely on my specialist skills come TEOTWAWKI. This is the hand of cards I have been dealt, idealistic young fool I may be, but I cannot abandon my family, friends and country.

There may be a die-off, there may be wars, unspeakable hardships and suffering but I have to do the best I can for all my people and for the sake of our country,a country that may be currently on the skids but it is still a country that generations of our fathers, brothers and sons have fought and toiled for.

I could be just as easily shot and killed as an outsider in New Zealand, Belize, or Idaho come TEOTWAWKI, if I am going to meet my maker I would rather do it with the respect of myself and my loved ones, knowing that I did not abandon them in their hour of need.

Keep up the good work Mr. Rawles, I will continue to read and enjoy your blog. - Handyman

Sir,
Having been an avid reader of your superb blog from the very beginning, I would like to thank you and all the contributors for an invaluable resource. It’s my computer’s homepage and is the first thing read every day.

Your forecast for the probable scenario post-TEOTWAWKI, or even mini-TEOTWAWKI seems pretty accurate, although the population figure you give [for England] is out-of-date. As of mid-2007 we were at almost 61,000,000 and counting. Soon to be standing room only, it seems. [JWR Adds: Just to clarify, the population of all of the UK was 61 million in 2007. Wikipedia says 51 million is the correct figure for just England.]

So I was right with the 51 million figure. The only good news is that if you consider Scotland, the population density for the entirety of the UK is much lower. Not that Scotland has the most agreeable climate. I'll update that letter accordingly.

Despite living in as near to the middle of nowhere as is possible in these crowded isles, my family and I have been planning our G.O.O.D. from the UK for some time. I’m happy to say that the new place [in the Mediterranean region] is now up and running and we are spending 50% of our time there, (soon to be 100%).

Some things we learned during our relocation exercise:

· It seems, if the television programmes on the subject are to be believed, that some people, after a two-week trip to some exotic location, decide on the spur of the moment to move there – and do just that. Maybe it’s just me, but I think that falls under the ‘failing to plan is planning to fail’ caveat, aka the ‘P7’ rule. Please, please, please, think it through and do your research.

· Where ever you may roam, you take yourself there. Sit yourselves down and think deeply about what you want to do, where you want to go, what you want when you get there, and what you will need to make it happen. If you are running away from something, don’t be surprised if you find it at the end of your journey, sat waiting for you. Running towards something on the other hand..

· I cannot stress this enough: Do your homework. This applies if you are relocating to the next county or the other side of the world. Do not be seduced by picturesque views and/or sales talk. One of the nicest locations we saw on a previous move has appeared on national (UK) television many times; sadly, due to its propensity to flooding several times a year. Fortunately we had looked into it and bought higher ground, elsewhere. The Internet is your friend here, but does not remove the need for feet on the ground and genuine field research.

· Once you’ve identified your chosen location, do yet more research and find the right spot. I will not preach to the choir about the need for fertile soil, water, politics, etc, but would say, as we found to our cost, that sometimes people can be mistaken in their beliefs, if not downright economical with the truth. Check your information, then check it again. It cost us in the region of 5,000 Euros and counting for failing to check an item.

· Allow a realistic timescale for your move. Our (hopefully) ultimate G.O.O.D. exercise involved a change of country, for which we had allowed five years to achieve. It’s going on seven now and whilst installed, we are still commuting internationally and hoping not to get caught up in the Swine Flu snafu whilst in transit. It’s not all been bad news though, the delay has allowed time to improve language skills and inventory, and my good lady has developed a fearsomely accurate eye with her new Benelli. (Sadly, Messrs. Mossberg & Remington are hard to come by out at our location, but the Italian job is a nice, if expensive alternative). It is also pleasing to know that ownership of same does not make one automatically suspect in the eyes of the law or the local politically correct set (whom, I am glad to report, have not found their way here yet).

· Be aware, be very aware that even a short move can result in you finding yourself in a much different culture. This is as true of village/small-town life as it is if you change countries. Be prepared for things being done differently. Many countries prefer the mañana philosophy to the Protestant Work Ethic and this can be incredibly frustrating for some. I personally know of several wannabe ‘GOODers’ who have given up in sight of the finish line due to their inability or unwillingness to adapt to local conditions. If you cannot or will not adapt, then please, stay where you are. (I appreciate this sentiment doesn’t generally apply to ‘our type’ of folk, but if you prefer to be dreamer, save yourself a lot of hassle and money, just don’t..). Similarly, many of these out of the way locations reputedly use the ‘small brown envelope’ method of getting things done. I cannot of course possibly comment on this, but YMMV.

· Render unto Caesar.. This probably should go under the ‘culture’ paragraph, but I think it’s worthy of its own piece. You might not fully understand local bureaucracy – indeed if in a foreign country, with a different language, you probably never will, but it is no excuse in the eyes of the law. If nothing else, find out how, when and where to pay your taxes – and make sure you do. I am told the impound lot for our location is literally full to overflowing with foreign vehicles because owners neglected to pay local taxes on them. (And this is a small, rural location). Remember, the nail that stands out gets hammered down and one presumes under the current financial conditions that this can only get worse. It’s bad enough to lose your pick-up, but your home?

So far, the move has proven the right thing to do. We are totally off-grid and re-learning the joys of septics, generators and, until the well is bored, tanked water.

High on the list is a solar PV set up. We could have held off moving till this was installed, but decided that being there was the number one priority. Given the climate, electricity is not a priority here in the summer, except perhaps for ice and the winters are typically much milder than the UK, so we feel our genset will more than suffice for the time being.

Getting used to the new way of life is fun and challenging at the same time. One thing we have found, is that working full-time in the summer sun of the southern Mediterranean is very different than sitting on a sunbed sipping a beer! Perhaps the man who invented the siesta was not so crazy after all.

In conclusion, if you do decide to take the gap, be aware that it’s not something to do lightly, but it can be done and is more than worth the effort. - Michael

Jim,
As the only military-experienced "beans, bullets and band aids"-type survivalist who shows up at the local weekly Peak Oil meetings, I can say there's a lot of Transition Town stuff going on. It spun-off from Post-Peak Oil groups.

I made the effort to avoid all the Transition Town stuff a long time ago. It mostly consists of retirement age hippies-turned-yuppies-turned-retirees, trying to be do-gooders. I'm just a fellow Army intel guy who's done his own extensive research with regards to Peak Oil (to include fusion between various sources, researchers, etc.), and have been prepping accordingly. After all, we did hit the global peak in liquid fuels extraction in June, 2008. Judging from the shape of this peak mathematically, in addition to the plateau we've been at (there have been a lot of head-fakes since 2005), along with the continuing depletion rates of the current 54 oil fields around the planet that are now in decline (source: TheOilDrum.com), this one looks for real (some are politically intentional slow-downs in production, I have to admit).

I've noticed that all the transition town types have no preps to speak of, and are clueless about preparedness in general, and "don't believe in survivalism".

"We're all going to sing kumbaya in our little communities (which only exist in their minds, BTW) and grow cute little green things, but we're not going to store anything" (one of them even had the audacity to ask me about getting a firearm. Again, I mainly hooked-up with Post-Peak Oil in order to learn how to grow food organically, and have learned a lot, and made some good friends). I have to admit though, that the movement has been growing in the US.

There's a certain British Transition Town expert who has been assisting Post-Peak Oil in this area, and I've asked him specifically, "Does Totnes actually feed itself?" Does Totnes generate its own electrical power?" I've never gotten a straight answer from him, just "well, kind of, sort of, not yet..."

Then what exactly is a Transition town? I'm going to be making sure my friends from Post-Peak Oil get your post.

Keep-up the good work. My wife was part of Book Bomb Day, back in April: One copy for me, one for her father: An old, Mel Tappan type, who had not even previously known about SurvivalBlog. - J.E.

Hello From Ireland,
My wife and I were delighted to see the article on England and your advise to leave for more lightly populated areas of the globe.

Things in England might be bad but here in Ireland things are worse. The economy is in tatters, taxes are being raised, people are advised to avoid getting pregnant because of swine flu. There are talks of keeping schools closed after the summer holidays to avoid the spread of the swine flu so that a vaccine program can be administered, even though we all know there isn't a vaccine available yet. The
unemployment rate is 12% and our brilliant Government inform us it will go to 20%.

The population density is 180/sq mile, knife and gun laws are unbelievable ( I have been waiting six months for a license for a .22 rifle even though I have no criminal record and served three years in the Reserve Defence Force performing security details several times at a major airport with a weapon loaded with live ammunition) sad to say it is possible to get a gun illegally within 24 hours. Pistols are now illegal, because the drug gangs were shooting each other with pistols, despite the fact that no one was ever killed with a legally held pistol. The gang crime here is at level comparable to what was seen in [cities in] the USA in the 1970s. Our Police are retiring at a rate of 45 per month (the maximum size of the force was 12,000) and because of the recession they are not being replaced with recruits, and best of all a Government report advises the closure of half of the country's Police Stations.

My American Wife and myself (Irish) are making plans to get the hell out of Dodge we are looking at Northern Scandinavia as the best option for a place to escape before it all goes very bad here. There are several other Irish people who think the same as ourselves and are making their own escape plans. We would welcome your comments on our choice of location. - INNUKSUK Survival, County Limerick, Ireland.

Jim,
Although I very much agree that UK residents should, if possible, move overseas, I nonetheless believe that due to financial, residency requirements and other reasons, not everyone will be able to leave the UK to relocate in America, NZ or elsewhere. For those people, there remains the option of what I believe is one of the best retreat locations within the European Union: north of the Great Glen in Scotland. Specifically, I view the lower lying (farmable) terrain along the west coast and islands as being best suited to this purpose.

The benefits are, from my various sorties to study the region:

1. One of lowest population densities in western Europe.

2. Both distance (by UK standards!) and formidable mountainous barriers between the region and the large urban centers of Glasgow, Edinburgh and the east coast. Its isolation reduces its allure as a target for roaming urbanite gangs, a point even more applicable to the likes of [The Isle of] Skye which, during the days of the conflicts between the Lords of the Isles and the Stewarts, was so shielded by the Highlands wilderness that the king had to send his fleet from the east coast around the north of Scotland to attack them by sea. Even on the Great Britain mainland, the Knoydart region has no road access from the rest of Scotland; it can only be reached by 2 day hike or by sea. Something to bear in mind in a modern grid down scenario.

3. A largely conservative indigenous population, quietly distrustful of modern ways.

4. There are numerous small semi self-reliant communities dotted throughout the region, many of which are used to taking in idealist outsiders seeking refuge from the madding crowds.

5. Whereas the interior of the Highlands can have very severe winters with prolonged periods of heavy snow and sub-zero temperatures, the lower portions of the west coast are relieved by mild Atlantic currents providing a lenient maritime microclimate.

6. A hunting and outdoors culture. There are so many red deer in the region now that some locals are calling for the wolf to be reintroduced to reduce their numbers.

On the down side:

1. Isolation comes at a price; in good weather, it can take the best part of two hours to get to Inverness or Fort William from the west coast or [from the Isle of] Skye. In winter, you may have to wait longer until a storm ends or a snow plow comes along. Bad news if you need urgent medical treatment which, for now, can be circumvented by emergency helicopter missions undertaken by the military.

2. Strict Reformed Christians, who are considerable in number in the region, frown upon many activities that outsiders take for granted; for instance, their observance of the Sunday Sabbath in some cases compels them to pull a chair from the table rather than push it away, as the former mode is seen as less like work than the latter. So digging your garden or hanging clothes on a line on a Sunday would be a good way to alienate them. On the other hand, their lax attitude towards alcohol consumption will surprise teetotaling Christians from outside.

3. There is an undercurrent of lingering resentment towards the English who are still blamed for the infamous Highland Clearances. There is perhaps an outside chance of the odd Englishman becoming the local "expendable gringo" come TEOTWAWKI.

4. The quality of the soil is generally not great, although it is nonetheless possible with assistance from compost to grow a considerable amount of vegetables. Sturdy stock fencing is a must, due to the deer menace. Also, I am told that eagles account for high losses in spring lambs.

5. Self sufficient farming comes under a lot of petty scrutiny from over eager bureaucrats; for instance, it is illegal to help someone else butcher livestock on their holding; you can only do it to your own cattle on your own land.

6. And of course, like the rest of the UK, gun ownership is insanely regulated.

7. Scottish law and conveyancing practices are alien to those in the rest of the UK. Also, property prices tend to be very high, as are property taxes. I know someone who left the Highland to live in France because he couldn't bear the property taxes.

8. Summertime sees the area swamped with hillwalkers and tourists from all over Europe, many of whom are drawn to the quaint coastal communities and who may note ongoing self-sufficiency preparations for later reference.

Overall then, it's very far from perfect but nevertheless presents perhaps an emergency, last minute kind of option for those who don't think they have the wherewithal to make a bigger jump.

Finally, [for an illustration of the high population density,] see the photos of Europe from space at night. Kind regards, - Jay W.

Mr. Rawles,
Greetings from England. Having read "Patriots" from cover to cover many times and long been a devotee of your blog I do regard you as being one of the foremost experts in the world of preparation for TEOTWAWKI situations. However, I do have some queries with some points on your recent article regarding a SHTF situation in England.

While I appreciate that for some people it is the best option to emigrate, what practical advice would you have for people who emigration would not be possible? We are part of a well armed (many shotguns, Deer stalking rifles, .22 LRs, crossbows, compound bows etc.) rural community, that even with our climate produces more food than we could ever eat, in a defendable location, many locals are ex-military and our population is sufficient that there could be workers and soldiers.

Regarding moving abroad, Is not one of the golden rules of survival not to become a refugee or an outsider? It can take a long time to fully integrate into a community and be accepted, I believe that the threat of TEOTWAWKI is upon us now and in many places we would be regarded as "outsiders" or "foreigners". Belize was one of the options you put forward as a possible place to emigrate to, having worked for 18 months all over Belize I know enough about the people, the crime level, the corruption and the various factions to know that maybe that is not the best idea in the world. In a SHTF scenario there is not enough British troops there to protect it's interests and Belize is quite low down on the British Governments list of priorities.

Your advice and thoughts would be appreciated. - Handyman

JWR Replies: Your town might be the exception to the rule. One key question: How many miles from a major city is your town, and is it on a major highway? Or is it "off the beaten track" , away from refugee lines of drift? That could make a crucial difference in whether or not your town would be overwhelmed by refugees in a societal collapse.

Another consideration is counting the roads into the town. If you are fortunate, the geography will be favorable, limiting the avenues of approach. But in open farming country, there are usually numerous access roads. In a worst case scenario, how many roadblocks would have to be manned? Think through the number of defenders that would be required to maintain 24/7/360 security.

I only mentioned "...or perhaps Belize" for folks that already have friends or relatives that live there, and that you preferably already speak Spanish. Granted, you'd be considered an outsider, but Belize still has a very class-conscious society. Because of this, land owners--regardless of their origin--are generally held in esteem. I'd be more worried about criminals crossing the porous border with Guatemala, than about your next door neighbors.

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Sunday July 19 2009

Oh, Henry! Worried About TEOTWAWKI?

A recent news headline in the English newspaper The Independent caught my eye: Paulson reveals US concerns of breakdown in law and order. I only rarely post entire newspaper articles. But this article is particularly significant to the SurvivalBlog readership, and since it is brief, I'm posting it in full:

The Bush administration and Congress discussed the possibility of a breakdown in law and order and the logistics of feeding US citizens if commerce and banking collapsed as a result of last autumn's financial panic, it was disclosed yesterday.

Making his first appearance on Capitol Hill since leaving office, the former Treasury secretary Hank Paulson said it was important at the time not to reveal the extent of officials' concerns, for fear it would "terrify the American people and lead to an even bigger problem".

Mr. Paulson testified to the House Oversight Committee on the Bush administration's unpopular $700bn (£426bn) bailout of Wall Street, which was triggered by the failure of Lehman Brothers last September. In the days that followed, a run on some of the safest investment vehicles in the financial markets threatened to make it impossible for people to access their savings.

Paul Kanjorski, a Pennsylvania Democrat, asked Mr. Paulson to reveal details of officials' concerns, which were relayed to Congress in hasty conference calls last year. The calls included discussion of law and order and whether it would be possible to feed the American people, and for how long, according to Mr. Kanjorski.

"In a world where information can flow, money can move with the speed of light electronically, I looked at the ripple effect, and looked at when a financial system fails, a whole country's economic system can fail," Mr. Paulson said. "I believe we could have gone back to the sorts of situations we saw in the Depression. I try not to use hyperbole. It's impossible to prove now since it didn't happen."

The Oversight committee is investigating the takeover of Merrill Lynch by Bank of America, a deal forged in the desperate weekend that Lehman Brothers failed, and which later required government support because of Merrill's spiraling losses.

Mr. Paulson defended putting pressure on Bank of America when it had last-minute doubts about the deal in December. Not to have done so could have rekindled the "financial havoc" the bailout had calmed.

(Special thanks to the publishers of The Independent.)

Hmm... This is certainly food for thought and grounds for further research. It notable to see the difference between public statements and what actually goes on behind closed doors. Compare the foregoing testimony with these excerpts from Paulson's widely-circulated press release on October 14, 2008:

"America is a strong nation. We are a confident and optimistic people. Our confidence is born out of our long history of meeting every challenge we face. Time and time again our nation has faced adversity and time and time again we have overcome it and risen to new heights. This time will be no different...

...President Bush has directed me to consider all necessary steps to restore confidence and stability to our financial markets and get credit flowing again. Ten days ago Congress gave important new tools to the Treasury, the Federal Reserve and the FDIC to meet the challenges posed to our economy. My colleagues and I are working creatively and collaboratively to deploy these tools and direct our powers at this disruption to our economy.

Today we are taking decisive actions to protect the US economy. We regret having to take these actions. Today's actions are not what we ever wanted to do – but today's actions are what we must do to restore confidence to our financial system...

...While many banks have suffered significant losses during this period of market turmoil, many others have plenty of capital to get through this period, but are not positioned to lend as widely as is necessary to support our economy. Our goal is to see a wide array of healthy institutions sell preferred shares to the Treasury, and raise additional private capital, so that they can make more loans to businesses and consumers across the nation. At a time when events naturally make even the most daring investors more risk-averse, the needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it...

...These three steps significantly strengthen financial institutions and improve their access to funding, enabling them to increase financing of the consumption and business investment that drive U.S. economic growth. Market participants here and around the world can take confidence from the powerful actions taken today and our broad commitment to the health of the global financial system.

We are acting with unprecedented speed taking unprecedented measures that we never thought would be necessary. But they are necessary to get our economy back on an even keel, and secure the confidence and future of our markets, our economy and the economic well-being of all Americans.

By December of 2008 Paulson was browbeating Bank of America's CEO Ken Lewis into a shotgun wedding with Merrill Lynch. Paulson now claims he did so, in part, because he was worried about a banking meltdown and the possibility of what we would call TEOTWAWKI. Perhaps he was reading too much SurvivalBlog, or someone gave him a copy of my novel and he was losing sleep over it.

What is to be learned from all this? Here is Rawles Axiom #1 on Political Awareness: Don't trust or even pay much attention to what public officials say. Instead, concentrate on what they do, and more importantly on the subsequent results and consequences of what they do. Words don't mean much to politicians. They all too frequently tailor their words to match their particular audience, with little regard to honesty or forthrightness.

If you think that I've over-reacted to the preceding cited quotes, take a moment to consider that this is the same Henry Paulson that had publicly declared just a few months before (on March 16, 2008): "I've got great confidence in our financial market, our financial institutions. Our markets are resilient and flexible. Our institutions, our investment banks are strong,"

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Friday July 17 2009

Three Rules for Living Through the Second Depression, by Chaz Valenza

I believe we are on the precipice of the Second Depression. Though President Obama is working valiantly to turn the country’s financial ship, it appears to me that the lack of a genuine
economic engine to create sufficient, sustaining, value-adding jobs will come too late. What should the common man do?

Much of the advice on how to live through such hard times is often too specific, not specific enough or draconian. How many of us are ready or should even consider survivalist methods? Who among us can afford to completely restructure their finances on a moment’s notice? Which of us can effectively plan now for the unforeseen severity we may or may not face?

Often to my amusement, I have found that everything in life can be boiled down to Three Rules that pretty much envelop the whole enchilada. I call these simple statements of essential truth a “Three Rules" poem. They can be fun, amusing, thoughtful, whimsical, et cetera. This one, presented for your approval and commentary, is dead serious.

Properly deduced, by sorting through the minutiae to find the lowest common denominator, a given Three Rules won’t tell you exactly what to do, but they should provide the framework for recognizing actions to a successful conclusion.

Here are mine:

Three Rules for Living through the Second Depression

1. Escape and avoid entanglements with scams and the authorities.

2. Stick together to defend each others right to food and shelter.

3. Make yourself useful.

Allow me to elucidate on each of the above.

Escape and avoid entanglements with scams and the authorities.

Debatable as it may seem now, this rule will become imperative. As the situation grows grimmer, more and more people and organization will devise ever more devious ways to steal the resources they want from those that can be conned or exploited.

As we have seen, much of what is called our financial system is nothing more than a cabal of greed that has worked diligently to sanction rules that effectively fleeced workers of their deserved earnings.

Look at any list of what to do during a financial crisis and you will find suggestions as to the preservation of your hard earned capital, should you have any, or a suggestion that you get out of debt. Good ideas, but they do not go far enough or wide enough to give anyone practical guidance and doable tasks.

First, let’s go wide. This rule includes all powerful or legally protected organizations that promise more than they know they can ever deliver. Here are examples that deserve skeptical analysis: unsecured debt of all kinds, especially credit cards with numerous fees, charges, penalties and usury interest rates; work at home scams; costly education with no job certainty; fortune tellers and spiritualists of all varieties; full commission sales positions with no base salary; internet scams; credit counseling; insurance; job counselors, resume services and business consultants; barter brokers; pyramid schemes and other versions of musical chairs; speed, DWI and other police traps to snare high fines and surcharges; et cetera.

If you haven’t already noticed, the police are out in force and quick to pull the ticket book trigger. Here in New Jersey, though the civil and criminal courts were subject to cost-cutting furlough days, no such thing happened in the money making municipal courts. Basically, now is not the time to get caught being late with payments or cheating on taxes, nor the moment to get on any bureaucrat’s building code violations clipboard. As the tax & budget shortfalls grow, expect to be hunted down for the most insignificant violation of any law, code or tax regulation.

The authorities will continue to work diligently to create money-raising traps disguised as public service. Be careful out there! That you've done nothing wrong, nor hurt anyone, may not matter. If caught in any such snare, don't exacerbate the situation, minimize the damage.

Keep you relations with the government limited to only what it can do for you and beware that even these “community chest” transactions may include trade-offs, expressed, implied or otherwise that may work against you.

Going as far as possible, if you lose you job or you’ve been purchasing necessities on your credit cards, or you can’t afford the medicine or medical care you need or you’re about to lose you home or car, definitely consider escaping the entanglement and life sucking burden of debt. Are you feeling guilty about the option of filing for protection from your creditors? Consider this, you didn't’t make the rules, but you have to live by them. Bankruptcy is in the rule book, use any and all rules to your advantage without any qualms.

Stick together to defend each others right to food and shelter.

All of the accounts of the Great Depression remind us of how important organizing will be to survival in the Second Depression.

Face facts, it’s good to be member of any club that supports you in living a decent life.

I am no fan of organized religion, and I do not advocate its proliferation, but I must recognize its one aspect of value to the individual participant: community. Remember, you don’t have to believe in Santa to have friends. Any group will do, especially family. Have a pact to house each other if worst comes to worst.

In Florida, Max Rameau is housing the homeless in foreclosed property. He considers his work both civil disobedience and the morally proper response to human necessity. In desperate times, we will all do what we must. We must all protect the most basic human right to food and shelter for each other.

Do what they did during the Great Depression, support your neighbor and don’t let them be evicted. Homelessness is a nightmare that can bring the strongest of us to our knees. The right response is not to let it happen to our friends, family and neighbors.

Act locally to secure food resources to your geographic community, both near and wide. Industrial agriculture, the menace that brought you cheap, unhealthy and non-nutritious food, will starve you when you cannot pay the price. Recognize that hunger is a political/financial issue; it has nothing to do with a lack of food in the world. This will not change during the Second Depression.

During the Great Depression, there was abundant food, much of it warehoused and going to waste as scare jobs meant scare money and starving people. Monsanto, ConAgra,
Nestle and ADM are not going to feed you if you can’t pay; neither are McDonalds, Burger King, Fridays, Chili’s or the rest of the chain palletized food venues.

Support your local farms and fisheries as much as possible. Not only is that where your food will be grown, it’s where the local jobs will take root. Farmer’s markets, chef-owned and independent restaurants, the locally owned quality supermarket may be a little more expensive, but chances are they offer real value and will be there to underpin the your local community when times get tough.

Make yourself useful.

You can start right now. Play “what if” with yourself and do a little mental planning. What if, I can’t afford the rent? Make the call to friends and family so you will know where you can go and for how long. Figure out your finances now. Do what makes sense now in light of what is probably going to happen in the future.

If you have a job, keep it. If you hate your job, know the risks before you make a move. If you have savings, secure it. If you have debt, do what must be done to get rid of it. Sooner is better than too late.

If the worst happens and you’re out of work this is the rule to heed. Figure out what you can do. They’ll be plenty to do to help others and help you and yours.

As with food, jobs are going to become an important local resource. Local business are not going to move, but the may fail, without your support during the Second Depression. Consider local options for everything you buy now. Tech support and computer repair: the local geek shop or a Dell extended warranty? Banking: Citibank or the local credit union that will still FDIC secures your deposits? Customer service and support: deal with the person in Bangalore or request for a representative in the United States? It goes on and on: The local organic farm or Perdue? Quality clothes made in the USA or Wal-Mart’s Chinese imports? The big box home center or the local hardware store that is not just luring you in to sell you patio furniture? We’ve made too many poor choices in all these respects over the last three decades. Let’s think local and long term starting now.

Fix it. Paint it. Repair it. Weed it by hand instead of buying Round-up. Collect rain water for your garden. Basically, when your money is in short supply and your time is long, use your time and don’t spend the money.

Voting early and often may be out of the question, but if you got the time why not make yourself useful and give your elected representatives an earful. Now is the time to make your voice heard as our timid politicians tip-toe around and hope for the best.

In conclusion:

Apply these rules starting now to your particular situation, needs and environs. We can get through this if we start thinking and acting more deliberately and cut out those institutions that only want our money and have never cared a whit about us.

JWR Adds: Before you send me a Nastygram about Mr. Valenza's article, please re-read my introductory note, above.

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Monday July 13 2009

H1N1 Influenza: A Cytokine Storm Conclusion, But Still More Questions Than Answers

The good news on H1N1 (commonly called Swine Flu) is that in current strains the death rate appears to be as low as 1 in 2,000 infections, at least in First World countries with modern hospital facilities. The bad news is that at least 60% of world's population is expect to contract the bug, and that further mutations are probable.

The Mutation Question

Mutations to less virulent strains are the historic norm for viruses but there is the risk of one that is very deadly. (To explain: in the grand scheme of things, a mutation with high lethality is is not good for a virus. Some, like Marburg and Ebola, have had strains that were so deadly that the hosts didn't live long enough to pass it along to a large number of new carriers. The most successful viruses are the ones that propagate well, but do not kill too many of their hosts.) We can surmise that the absolute "worst case" for H1N1 is that a much more lethal strain emerges, to be followed by a global infection, and a large-scale die-off. But again, that is the less likely outcome.

The Cytokine Storm Question

Up until recently, I agreed with SurvivalBlog reader "L. Jean" in England who in an e-mail last week noted that we were "still waiting to find out if it's a cytokine storm that kills or not." This is a determining factor whether young, healthy folks should try to boost their immune response, or whether that might make matters worse. Based on the latest literature, I believe that it is now safe to say that with H1N1 a cytokine over-reaction is indeed a substantial risk, and could be a bigger killer than the virus itself. So my updated advice is to continue to store immunity boosters, but not use them to treat H1N1 unless you are Imuno-suppressed. Otherwise healthy patients in ages between 18 and 50 should refrain from doing so. I have updated my article on influenza pandemics, accordingly.

The Immunization Question

There is a vaccine for H1N1 in development, but it has been put on a radically fast track for development and trials. This has raised concerns about contamination and efficacy. Since the strain chosen for the immunization is both a "snapshot" and a "best guess" about what strain will be circulating next winter in the northern hemisphere, and there will only be limited animal testing to rule out pathogenicity. So there are some critics that argue that the vaccine might pose more of risk than the flu itself. It is also noteworthy that the vaccination program will require multiple injections for each patient. In my opinion, it is not yet clear whether the risks will outweigh the benefits. For some of my readers this won't be a matter of choice. Both Canada and the UK have announced their intent to implement universal inoculation programs.

The Madagascar Question

In the well-known computer game Pandemic II, the president of the island nation of Madagascar is quick to isolate the country to prevent the advent of a pandemic. This has become a standing joke among gamers, and the term "Madagascar" has migrated into the epidemiology community. "Going Madagascar" is essentially slamming the doors shut, in the hopes of avoiding infection. (BTW, I know of at least two survival retreat groups that use "Madagascar" as their activation codeword, a-la the novel Alas, Babylon .) As I noted previously, the "worst case" for any virus is that a very lethal strain emerges, and rapidly spreads globally, as depicted in the novel (and television series) Survivors by Terry Nation. The spread of H1N1 via modern jet air travel illustrated just how quickly this could happen. H1N1 has already spread throughout the United States. So I stand by my oft-quoted advice: In such an event you need to be ready and able to isolate your family for an extended period of time. Essentially, you would declare your homestead a mini-Madagascar and "button up" to wait for the virus to burn itself out. (BTW, I briefly describe the logistics of this in my article "Protecting Your Family From an Influenza Pandemic.") It is obviously too late and inappropriate to take extreme measures to isolate yourself from the current strain of H1N1, but we must remain vigilant for any new viral threats. The ability to "go Madagascar" is just one more reason to a have a deep larder!

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Monday July 6 2009

The Nascent Depression: Be Ready to Barter and Adopt the Rhodesian View

I receive several e-mails each day from readers asking whether the currently-unfolding economic depression will be inflationary or deflationary, whether it will last long, and whether or not the US Dollar will be supplanted by a new currency. My answer is simple: "All of the above." Back in early 2008, I warned that a depression with simultaneous inflation and deflation was possible. As I've mentioned several times in my blog, here in the US we are likely to see a continuation of the current gradual deflation followed by a period of mass currency inflation. Plan accordingly.

Try to start looking at prices in terms relative value. In a world of hyperinflation where everyone is a millionaire, absolute prices area almost meaningless, but watching relative prices and values is crucial. For example, a loaf of bread and a gallon of gas have sold for roughly the same amount, since the late 1970s. This outlook on prices is what I call The Rhodesian View. To explain: Those who have lived in Zimbabwe (formerly Rhodesia) since before the change of government eventually learned to adjust their conceptions of "price" and "value". This new outlook was necessitated by the destruction of the national currency by Comrade Mugabe. His hopelessly inept and horribly corrupt government embarked on a systematic looting of the country, which included mass inflation that later became hyperinflation. At one recent point, the Zimbabwean dollar was inflating so rapidly that it lost half of its value each few hours. (An annual inflation rate of more than 200 million percent.) Similarly, nine years of hyperinflation and multiple currency recalls in Argentina had the net effect that to buy what had cost 1 Peso in 1983 would have cost the equivalent of 100,000,000,000 Pesos in 1992.

After having been accustomed to a very gradually eroding dollar for so long, it will be difficult for may people to adopt the Rhodesian View. Once inflation sets in, nearly all assets denominated in dollars will suffer horribly. This will be particularly true for dollar deposit accounts, and pensions. Those folks that don't adapt quickly will get blind-sided by inflation. Some investments like stocks will be re-valued and still retain some value because of the intrinsic value of the underlying assets (such as company's inventory, equipment, land, and facilities). Thus, they might be able to "keep up with inflation", at least in the early stages of an inflationary spiral. But most other dollar-denominated investments will be wiped out in a mass inflation.

Now lets's look at the prospects for mass inflation in the US: Say, for example, that in 2007 your house's value peaked at $350,000, but on paper it has subsequently lost $100,000 in value. (So it is now valued at $250,000, even though your property tax assessment might erroneously still show its value somewhere north of $300,000.) Fear not! Mass inflation will "restore" the dollar value of your house in just a few years. But the bad news is that shortly thereafter, inflation will be galloping along so rapidly that $250,000 may buy just one typical automobile. And then perhaps a year after that, $250,000 will only buy you a bicycle. And then perhaps less than another year later, $250,000 will only buy you a loaf of bread. Be ready, folks, and adopt the Rhodesian View of economic reality. Keep informed, be flexible, and shelter you assets in barterable tangibles! Granted, we may see no more than 20% inflation in the next few years, but the snowballing effects of mass inflations are impossible to predict. Once the psychology of double-digit or triple-digit inflation sets in--namely the anticipation of continued inflation--it becomes virtually self-perpetuating, often continuing beyond a corrective change of monetary policy, (Ben Bernanke may shout "stop help presses" (and raise the prime rate and restore the bank reserve requirements), but the paper chase may continue for many months.

I've said this often in SurvivalBlog: The time has come to begin sheltering part of your net worth in practical tangibles. These include firearms, common caliber ammunition, precious metals, full-capacity firearms magazines, high quality tools, and productive farm or ranch land that can double as a survival retreat. Once inflation kicks in, prices set in dollars will become almost meaningless, and saving "money" will become a pitiful joke, as the dollar's value melts in the fiery furnace of inflation.

Start thinking in terms of relative value, potential usefulness/productivity, ounces, and gallons, instead of dollar digits.

Get used to bartering. It is a valuable skill that will become crucial in the next decade. Practice barbering now, rather than after a crisis begin. (Learn from your mistakes now, while the consequences are small and not life threatening, rather than later, when the consequences could be much greater.)

Develop savvy about precious metals. Buy the references and tools you'll need be able to spot fakes. Practice calculating relative values. You must get handy with a pocket calculator and some standard references. (I have several listed later in this post.) For example, you should be able to calculate the values of a one ounce silver "trade dollar" round versus pre-1965 silver quarters versus a box of of .45 ACP 230-grain ball ammunition. And, with just the knowledge of the day's closing New York spot prices for silver and gold, you should be able to quantify the number of 90% silver dimes that would equal the value of 10 gallons of gasoline or the gold contained in a 1/2-ounce Gold Canadian Maple Leaf or a 2-Franc French "Rooster" or a Swiss Vrenelli. Does this sound daunting to you? If so, then you need to study and practice!

As you build up your stockpile of barter goods, you must simultaneously build your knowledge base about barter goods--especially ammunition, guns, fuel, canned foods, and precious metals--since those will all be sought-after, in a monetary crisis. Assemble a reference library that can serve you both for establishing the authenticity of goods, and for establishing their relative values. Be sure to print out some useful data and weight conversion formulas, and keep those pages in a reference binder. In my estimation, if you don't already have your own copies of the following books at home, then you are behind the power curve:

In closing, remember that it will take time and practice to get accustomed to dealing in a barter economy, and thinking in terms of real value rather than "dollars". In times when dollars are like grains of sand in an hourglass, tangibles will represent a fixed yardstick. Take the time to practice bartering now, when the stakes are low. Start attending gun shows, coin shows, antique shows, and flea markets. And be sure to gather those key reference books now, while they are still readily available. Someday, you may be very glad that you did!

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Friday July 3 2009

Letter Re: California's Absurd Weapons Control Laws

Hi Mr. Rawles,
I live on the sinking Titanic that is California, where this morning one of our co-workers failed to come into work and we could not reach him. We finally heard from him. He had just got out of a night in jail by posting $1,500 bail. Why? Because after a car accident last night, he consented to a police search of his vehicle where they found, of all things, a blackjack. Yes, an old-fashioned small club like the bad guys used in the Bugs Bunny cartoons. Years ago he found it in another state and had carried it in his car here, never realizing it was illegal. Had it instead been a large, hard baseball bat, this nice young man would not have spent the night in jail, lost $1,500, or gained a police record.

Yes, blackjacks are illegal in California according to our Dangerous Weapons Control Law. I can only hope that this is one of those absurd left-over laws from the 19th century.

Lesson learned: Protect yourself from absurd laws, and protect your privacy, by refusing to consent to search. The laws do not always have our best interests in mind. - Jason P.

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Monday June 29 2009

Ug-99 and The Ugly Times Ahead--There'll Be Fungus Among Us

My consulting clients often ask me me for predictions. "What's your timeframe, Mister Rawles?" I hear that in almost every consulting call. My clients ask: "When will the US economy crater?" I tell them that is impossible to predict, because there are so many variables and interdependencies, and because the markets are so heavily manipulated. They also ask me: Is the H1N1 Flu sure to mutate in to a more virulent strain, and if so, when?" I answer: "That is impossible to predict." I'm also often quizzed about the Ug-99 wheat fungus (aka "Durable Wheat Rust", or simply "the stem rust"). Clearly, it is advancing , but without a specific timeframe. Scientists are now calling the advance of Ug-99 around the globe "inevitable". My greatest fear is that instead of just being spread gradually by the wind, the stem rust will make "leaps", via the cargo holds of ships, and hence end up in the world's "bread baskets": Australia, the Ukraine, the US, and Canada. In the long run, containment is seen as almost impossible. Thusfar, attempts to create a rust-resistant wheat variety have been thwarted by the rust's rapid mutation rate.

Let's look at some numbers: 20% of the calories consumed by the human population of our planet currently comes from wheat. That means that there will likely be a caloric shortfall for a number of years--until either wheat fields are re-planted in some different crop, or until a viable rust-resistant wheat variety is developed.

I encourage readers to study the Ug-99 threat, and think through its implications on a macro (global) scale. Then think through the implications of a wheat famine at a personal level. Where will you and your family get your daily bread? Have you stored up for seven lean years?

I cannot more strongly urge SurvivalBlog readers: Get your food storage squared away, immediately. Supplies are plentiful now, and prices are still reasonable. But the threats that we are facing are numerous, large, and all too likely. And, of these, UG-99 is almost a certainty in the next decade, and it will directly affect the global food supply. Stop dawdling and get ready. You owe it to your family to do the best that you can to prepare.

In a recent exchange of correspondence abut Ug-99 with reader Jim M., he wrote: "I think stored food should be viewed more as a supplement, especially wheat in view of UG-99. Alternative sources of complex carbohydrates should be sought by preppers. Other grain seed should be planted and replenished by those with land and climate to do so: oats, barley, rye, spelt, millet, maize, quinoa. A few thousand square feet of each suitable grain type would provide continuous seed viability as well as training for larger-scale crops and harvests in the future. Starchy tubers could also figure greatly in extending long-term food stores. Anyone with even a sunny balcony should be able to grow their own potatoes for instance and there are plenty of other tubers they can try."

Preparedness is keyed to trends and to the emergence of general threats, not specific dates. It has not been since Y2K that we've had specific date target. And that was clearly an exception to the general rule. Perhaps we'll someday read about a large asteroid with a predicted earth-crossing orbit (like Apophis), and have a multi-year countdown to disaster. But otherwise,we just have to be ready at all times for a variety of potential situations.

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Letter Re: An Upcoming Retreat Purchase -- Sell Gold or Take a Mortgage?

Jim,
We love your site. It is part of our daily must reads. While driving to view possible retreat locations today, we printed out your advice on retreat locations and read it again as we drove to the determined area. After looking most of the day, we literally stumble upon (because it was not visible from the road – only a for sale sign) a nearly perfect location, several springs, trees, hillside with level areas, in the top three in all categories of your retreat lists, etc.

In looking to make an offer we wanted your advice regarding financing the purchase. Would you recommend selling gold reserves, home equity line of credit (HELOC) on debt-free primary residence, seller financing to the extent available or institutional financing? Why and/or why not for each? Thank you so much for all you are doing. You are providing an extremely valuable and much appreciated service. - Ken I.

JWR Replies: I can understand the temptation to to hang on to your gold and take a mortgage, but to be conservative and low-risk, my advice is to be debt free. We will probably experience another year or two of deflation before inflation re-emerges. Avoid debt in deflationary times! Mortgage debt is a killer when layoffs occur in droves. So go ahead and sell your gold. But, if possible, wait for a short-term rally.

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Sunday June 28 2009

Security at Places of Worship: More Than a Matter of Faith, by Scott Stewart and Fred Burton

In recent months, several high-profile incidents have raised awareness of the threat posed by individuals and small groups operating under the principles of leaderless resistance. These incidents have included lone wolf attacks against a doctor who performed abortions in Kansas, an armed forces recruitment center in Arkansas and the U.S. Holocaust Memorial Museum in Washington, D.C. Additionally, a grassroots jihadist cell was arrested for attempting to bomb Jewish targets in the Bronx and planning to shoot down a military aircraft at an Air National Guard base in Newburgh, N.Y.

In addition to pointing out the threat posed by grassroots cells and lone wolf operatives, another common factor in all of these incidents is the threat of violence to houses of worship. The cell arrested in New York left what they thought to be active improvised explosive devices outside the Riverdale Temple and the Riverdale Jewish Community Center. Dr. George Tiller was shot and killed in the lobby of the Reformation Lutheran Church in Wichita. Although Abdulhakim Mujahid Muhammad conducted his attacks against a Little Rock recruiting center, he had conducted preoperational surveillance and research on targets that included Jewish organizations and a Baptist church in places as far away as Atlanta and Philadelphia. And while James von Brunn attacked the Holocaust Museum, he had a list of other potential targets in his vehicle that included the National Cathedral.

In light of this common thread, it might be instructive to take a more detailed look at the issue of providing security for places of worship.

Awareness: The First Step

Until there is awareness of the threat, little can be done to counter it. In many parts of the world, such as Iraq, India and Pakistan, attacks against places of worship occur fairly frequently. It is not difficult for religious leaders and members of their congregations in such places to be acutely aware of the dangers facing them and to have measures already in place to deal with those perils. This is not always the case in the United States, however, where many people tend to have an “it can’t happen here” mindset, believing that violence in or directed against places of worship is something that happens only to other people elsewhere.

This mindset is particularly pervasive among predominantly white American Protestant and Roman Catholic congregations. Jews, Mormons, Muslims and black Christians, and others who have been targeted by violence in the past, tend to be far more aware of the threat and are far more likely to have security plans and measures in place to counter it. The Jewish community has very well-developed and professional organizations such as the Secure Community Network (SCN) and the Anti-Defamation League that are dedicated to monitoring threats and providing education about the threats and advice regarding security. The Council on American-Islamic Relations has taken on a similar role for the Muslim community and has produced a “Muslim community safety kit” for local mosques. The Church of Jesus Christ of Latter-day Saints (LDS) also has a very organized and well-connected security department that provides information and security advice and assistance to LDS congregations worldwide.

There are no functional equivalents to the SCN or the LDS security departments in the larger Catholic, evangelical Protestant and mainline Protestant communities, though there are some organizations such as the recently established Christian Security Network that have been attempting to fill the void.

Following an incident, awareness of the threat seems to rise for a time, and some houses of worship will put some security measures in place, but for the most part such incidents are seen as events that take place elsewhere, and the security measures are abandoned after a short time.

Permanent security measures are usually not put in place until there has been an incident of some sort at a specific house of worship, and while the triggering incident is sometimes something that merely provides a good scare, other times it is a violent action that results in tragedy. Even when no one is hurt in the incident, the emotional damage caused to a community by an act of vandalism or arson at a house of worship can be devastating.

It is important to note here that not all threats to places of worship will emanate from external actors. In the midst of any given religious congregation, there are, by percentages, people suffering from serious mental illnesses, people engaged in bitter child-custody disputes, domestic violence situations and messy divorces. Internal disputes in the congregation can also lead to feuds and violence. Any of these situations can (and have) led to acts of violence inside houses of worship.

Security Means More than Alarms and Locks

An effective security program is more than just having physical security measures in place. Like any man-made constructs, physical security measures — closed-circuit television (CCTV), alarms, cipher locks and so forth — have finite utility. They serve a valuable purpose in institutional security programs, but an effective security program cannot be limited to these things. Devices cannot think or evaluate. They are static and can be observed, learned and even fooled. Also, because some systems frequently produce false alarms, warnings in real danger situations may be brushed aside. Given these shortcomings, it is quite possible for anyone planning an act of violence to map out, quantify and then defeat or bypass physical security devices. However, elaborate planning is not always necessary. Consider the common scenario of a heavy metal door with very good locks that is propped open with a trashcan or a door wedge. In such a scenario, an otherwise “secure” door is defeated by an internal security lapse.

However, even in situations where there is a high degree of threat awareness, there is a tendency to place too much trust in physical security measures, which can become a kind of crutch — and, ironically, an obstacle to effective security.

In fact, to be effective, physical security devices always require human interaction. An alarm is useless if no one responds to it, or if it is not turned on; a lock is ineffective if it is not engaged. CCTV cameras are used extensively in corporate office buildings and some houses of worship, but any competent security manager will tell you that, in reality, they are far more useful in terms of investigating a theft or act of violence after the fact than in preventing one (although physical security devices can sometimes cause an attacker to divert to an easier target).

No matter what kinds of physical security measures may be in place at a facility, they are far less likely to be effective if a potential assailant feels free to conduct preoperational surveillance, and is free to observe and map those physical security measures. The more at ease someone feels as they set about identifying and quantifying the physical security systems and procedures in place, the higher the odds they will find ways to beat the system.

A truly “hard” target is one that couples physical security measures with an aggressive, alert attitude and sense of awareness. An effective security program is proactive — looking outward to where most real threats are lurking — rather than inward, where the only choice is to react once an attack has begun to unfold. We refer to this process of proactively looking for threats as protective intelligence.

The human interaction required to make physical security measures effective, and to transform a security program into a proactive protective intelligence program, can come in the form of designated security personnel. In fact, many large houses of worship do utilize off-duty police officers, private security guards, volunteer security guards or even a dedicated security staff to provide this coverage. In smaller congregations, security personnel can be members of the congregation who have been provided some level of training.

However, even in cases where there are specially designated security personnel, such officers have only so many eyes and can only be in a limited number of places at any one time. Thus, proactive security programs should also work to foster a broad sense of security awareness among the members of the congregation and community, and use them as additional resources.

Unfortunately, in many cases, there is often a sense in the religious community that security is bad for the image of a particular institution, or that it will somehow scare people away from houses of worship. Because of this, security measures, if employed, are often hidden or concealed from the congregation. In such cases, security managers are deprived of many sets of eyes and ears. Certainly, there may be certain facets of a security plan that not everyone in the congregation needs to know about, but in general, an educated and aware congregation and community can be a very valuable security asset.

Training

In order for a congregation to maintain a sense of heightened awareness it must learn how to effectively do that. This training should not leave people scared or paranoid — just more observant. People need to be trained to look for individuals who are out of place, which can be somewhat counterintuitive. By nature, houses of worship are open to outsiders and seek to welcome strangers. They frequently have a steady turnover of new faces. This causes many to believe that, in houses of worship, there is a natural antagonism between security and openness, but this does not have to be the case. A house of worship can have both a steady stream of visitors and good security, especially if that security is based upon situational awareness.

At its heart, situational awareness is about studying people, and such scrutiny will allow an observer to pick up on demeanor mistakes that might indicate someone is conducting surveillance. Practicing awareness and paying attention to the people approaching or inside a house of worship can also open up a whole new world of ministry opportunities, as people “tune in” to others and begin to perceive things they would otherwise miss if they were self-absorbed or simply not paying attention. In other words, practicing situational awareness provides an excellent opportunity for the members of a congregation to focus on the needs and burdens of other people.

It is important to remember that every attack cycle follows the same general steps. All criminals — whether they are stalkers, thieves, lone wolves or terrorist groups — engage in preoperational surveillance (sometimes called “casing,” in the criminal lexicon). Perhaps the most crucial point to be made about preoperational surveillance is that it is the phase when someone with hostile intentions is most apt to be detected — and the point in the attack cycle when potential violence can be most easily disrupted or prevented.

The second most critical point to emphasize about surveillance is that most criminals are not that good at it. They often have terrible surveillance tradecraft and are frequently very obvious. Most often, the only reason they succeed in conducting surveillance without being detected is because nobody is looking for them. Because of this, even ordinary people, if properly instructed, can note surveillance activity.

It is also critically important to teach people — including security personnel and members of the congregation — what to do if they see something suspicious and whom to call to report it. Unfortunately, a lot of critical intelligence is missed because it is not reported in a timely manner — or not reported at all — mainly because untrained people have a habit of not trusting their judgment and dismissing unusual activity. People need to be encouraged to report what they see.

Additionally, people who have been threatened, are undergoing nasty child-custody disputes or have active restraining orders protecting them against potentially violent people need to be encouraged to report unusual activity to their appropriate points of contact.

As a part of their security training, houses of worship should also instruct their staff and congregation members on procedures to follow if a shooter enters the building and creates what is called an active-shooter situation. These “shooter” drills should be practiced regularly — just like fire, tornado or earthquake drills. The teachers of children’s classes and nursery workers must also be trained in how to react.

Liaison

One of the things the SCN and ADL do very well is foster security liaison among Jewish congregations within a community and between those congregations and local, state and federal law enforcement organizations. This is something that houses of worship from other faiths should attempt to duplicate as part of their security plans.

While having a local cop in a congregation is a benefit, contacting the local police department should be the first step. It is very important to establish this contact before there is a crisis in order to help expedite any law enforcement response. Some police departments even have dedicated community liaison officers, who are good points of initial contact. There are other specific points of contact that should also be cultivated within the local department, such as the SWAT team and the bomb squad.

Local SWAT teams often appreciate the chance to do a walk-through of a house of worship so that they can learn the layout of the building in case they are ever called to respond to an emergency there. They also like the opportunity to use different and challenging buildings for training exercises (something that can be conducted discreetly after hours). Congregations with gyms and weight rooms will often open them up for local police officers to exercise in, and some congregations will also offer police officers a cup of coffee and a desk where they can sit and type their reports during evening hours.

But the local police department is not the only agency with which liaison should be established. Depending on the location of the house of worship, the state police, state intelligence fusion center or local joint terrorism task force should also be contacted. By working through state and federal channels, houses of worship in specific locations may even be eligible for grants to help underwrite security through programs such as the Department of Homeland Security’s Urban Areas Security Initiative Nonprofit Security Grant Program.

The world is a dangerous place and attacks against houses of worship will continue to occur. But there are proactive security measures that can be taken to identify attackers before they strike and help prevent attacks from happening or mitigate their effects when they do. - Scott Stewart and Fred Burton, Stratfor

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Saturday June 27 2009

Letter Re: Dealing With Local Building Inspectors

Mr. Rawles,
[To follow up on TANSTAAFL's letter,] I have worked for several engineering firms as a GIS technician, then manager. Counties will advertise when they will be re-flying parts or all of the county. Most county engineers, auditor, or Property Valuation Administrator (PVA) offices will tell you what the schedule for mapping is out a couple of years (usually the department in charge of tax assessments). A give away that it is happening is when you see large X's painted in intersections with a metal spike sunk in the middle of the X (these are control points), with survey trucks with GPS receivers sitting in intersections or other open ground. Most orthophotography is done in late winter or late fall, when the leaves are off the trees and there is no snow on the ground. Evergreen trees are good for masking what lies on the surface. Not much you can do to hide any earth work that changes contours. There is another means of gathering contour information, LIDAR. Basically a laser that oscillates and paints the ground. Even trees won't fully obscure it.

On a side note, the old USGS quadrangle maps are now almost supplanted by FEMA's flood insurance rate maps, which are all digital. There is all kinds of info available through those maps for interested parties.

On the non-government side, Google Earth is getting better resolution all the time, farther and farther away from population centers.

Your best bet to avoid attention is anonymity. That is true for all sorts of things. - School Dude

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Friday June 26 2009

The Meme of Crushroom: A Key Retreat Architecture Element

One bit of retreat architecture that I've often recommended to my consulting clients who are designing (or retrofitting) retreats is the inclusion of a protruding entryway foyer, that I call a crushroom. Passing this advice along to you gives me the chance to employ one of my horrible puns: The Meme of Crushroom. A crushroom is a controllable confined space, typically an entry foyer, that can be covered with small arms fire or subjected to irritant or obscurant smoke or sprays. The outer door (or barred gate) to the crushroom is normally left open, but has a spring loaded self -closure device, and an automatically-engaged remote-controlled lock release mechanism. Think of it as a box trap for Bad Guys. Have you ever visited a Big City apartment with a communal door where you need to get "buzzed in"? In this case, the Bad Guys will have to be buzzed out of your crushroom

The home invasion threat can only be expected to increase in coming years. I anticipate greater use of dynamic-entry tools by home invaders. For instance, they will soon use commercial or improvised door-entry battering rams and Hallagan tools—like those used by firemen and police entry teams. This means that standard solid-core doors by themselves will be insufficient. In a worst, case, thugs might even use vehicle-mounted battering rams. In such circumstances, it will be wise to have the extra layer of protection afforded by a crushroom.

You should position the outer door to your crushroom one of its side walls, rather than lined up with the entrance door to the house. Having this 90-degree turn and allowing just a four foot space in front of the house entrance door has several advantages: First. it makes it impossible to use a long battering ram--since it limits the length and "throw" of a battering ram. (Even a very stout door, hinges, and doorframe will not withstand the impact of a 10-foot-long battering ram that is manned by a team of thugs). Second, it removes direct line of sight into your house. This is useful for light discipline, in a grid-down situation. (When you are likely to have electric lights in your house interior, but your neighbors won't.) Lastly, the crushroom wall opposite your front door provides another layer of ballistic protection--it would have to be knocked down before your front door could be attacked.

Picture this: With your intrusion detection security system, you see one or more thugs approach your house. They are acting "hinkey", or outright aggressive--perhaps rushing in to conduct a home invasion robbery. Then they proceed to try to kick down your front door. But lo and behold, they don't succeed, because you've built your door and barred it to Rawles specifications. (Strong enough to resist even a small battering ram, and armored against small arms fire.) Using your intercom-loudspeaker, you sternly warn them away. But since they have bravado to spare and have never before encountered a door that they couldn't kick in, they persist with their futile leg exercises. At that point, you already have your telephone in hand, and have dialed 911. (That is assuming your are in pre-Schumeresque circumstances, when there still is a police or sheriff's department willing and able to respond.) You then flip the switch, releasing the crushroom's outer door. It slams shut, and locks. Now, the thugs feel trapped, crowded, or crushed in the close confines of the foyer. They will then almost surely turn their attention to kicking at the outer door (or barred gate). At this juncture, you have several "continuum of force" options:

A.) You shout a stern warning and then hit the switch releasing the outer door and "buzz them out." This is effectively just letting them go,, with a warning. Such a course of action is recommended only in current day "peaceful" circumstances.

B.) Using your exterior loudspeaker, you spend five minutes sharing the Gospel with the thugs, then you hit the switch to release the outer door.

C.) You pull a wire that is attached to the pin on a smoke grenade in the decorative "overhead light fixture" in the foyer, and simultaneously start playing your retreat's PSYOPS tape over your exterior loudspeaker, at around 60 decibels. This combination (especially a violet smoke grenade and a tape of Jimi Hendrix playing Purple Haze) is sure to make the thugs think twice about coming back.

D.) You pull a wire on that is attached to the pin on a CS tear gas grenade, and simultaneously start playing your retreat's PSYOPS tape at around 90 decibels. This, (especially a tape of Credence Clearwater Revival singing Bad Moon Rising) will probably make the goblins soil their trousers and reconsider their life of crime.

E.) You slide open an armored gun port, and protrude the muzzle of your favorite large-caliber lead dispenser.

F.) Any combination of options B, C, D, or E, in whichever sequence seems apropos, given the day's relative Schumer Index and the prevailing exigency of the circumstances.

Alternatively, your crushroom could normally be kept locked from the outside. This will provide a valuable delay for even the most ambitious dynamic entry by home invaders. It will also provide you a safe place for you take delivery of mail and packages with some "stand-off" distance.

Four Important Provisos:

1.) Only build a crushroom if you are also going to first upgrade your front door and doorframe to very stout specifications, and the surrounding wall is of similarly stout (i.e. masonry) construction. The last thing that you want to experience is a bunch of enraged bad guys actually entering your home.

2.) Do not mention the purpose of your crushroom to friends, neighbors, or even relatives. It should outwardly just look like either a "mud room", a "weather airlock", or perhaps a "Spanish style" foyer, with "decorative" heavy wrought iron bars. If you are indiscreet, word of it may get around, and then at best you'll get labeled as the local survivalist whacko. Or at worst, word will get as far as the local band of goblins, and whilst sharpening their knives they will deviously plan to bypass your crushroom entirely. They may decide to either bushwhack you while you are out splitting wood, or invade your house via your roof, with a chainsaw or a fireman's metal-cutting rescue saw.

3.) I most strongly encourage readers to use your crushroom's outer door as a mantrap (and any of the other active measures that I've mentioned) only in truly post-TEOTWAWKI circumstances. As I've noted many times before in SurvivalBlog, we live in an extremely litigious society. Displaying the audacity to actually hold bad guys in place until the gendarmes arrive could be grounds for civil lawsuits (for false arrest, excessive use of force, mental distress, etc.,) and possibly even criminal charges. In essence, if you hold someone in a citizen's arrest in excess of what a jury of your peers deems justifiable and reasonable, then you could conceivably be charged with felony kidnapping. Here, the "Reasonable Man" standard will probably be applied. (Black's Law Dictionary defines citizen's arrest as: "The apprehending or detaining of a person in order to be forthcoming to answer an alleged or suspected crime." See: ex parte Sherwood, (29 Tex. App. 334, 15 S.W. 812).

4.) Be sure to provide yourself a way out of your crushroom, in the event that the outer door closes unexpectedly when you don't have a door key in your pocket. Perhaps a spare key that is very well-hidden behind some molding.

For further background, see this letter in the SurvivalBlog archives on "man trap" architectural features.

Some Suggested Suppliers:

Door closing springs. Check your local Yellow Pages for "Fire Door" hardware suppliers. Your local locksmith probably knows of a supplier, or may have a pile of used one in his back room. For a man trap, the faster the action of the door closure, the better. Hence, a traditional coil spring action is preferable to the more modern, slower pneumatically-dampened springs. Think in terms of cattle chute hardware, rather than what you'd likely see on shopping mall doors.

Door release solenoids. (You've probably seen these on fire doors at hospitals and other public buildings.) Note that in circumstances where grid power is iffy, you can substitute a mechanical release, activated by a simple pull-cable and cotter pin.

Door lock & release solenoid ("buzzer lock") mechanisms. Search for local suppliers with a the web search phrases "mantrap" or "common door buzzer lock". To provide sufficient "hold the goblins in place" strength, you may have to use multiple locking solenoids--at the top, middle, and bottom of the door--that are engaged and disengaged simultaneously.

CS tear gas grenades. These are available from police supply houses. In most states it is not illegal for citizens to possess them. But by their company sales policy, most police supply houses will only sell these to orders placed on police department letterhead. But I've occasionally seen gas grenades sold at at gun shows, and they also come up from time to time on firearms auction sites like GunBroker.com and AuctionArms.com. For example, see this current GunBroker auction. Be sure to consult your state and local laws before buying these or similar pyrotechnic devices.

Gun Ports. You might luck into some of these at a scrap yard (from a retired bank armored car), but more likely you will have to fabricate these yourself, or have a welding shop make them for you. Remember: Gun ports work both ways, so you will want a thick, well-braced, sliding backing plate that latches securely. Specify everything for the ports very thick and very stout. Any exposed hardware should be large-diameter and welded in place, once assembled.

Exterior (weather resistant) loudspeakers. Rather than buying new (and expensive) speakers, try placing a "wanted" ad in Craigslist. It is amazing to see what people have salted away in their garages and attics.

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Tuesday June 23 2009

Letter Re: Feedback on The American Empire is Bankrupt

JWR:
I was puzzled by the piece by Chris Hedges (The American Empire is Bankrupt, from truthdig.com) that you linked to in Friday's SurvivalBlog. There are two huge, crucial, inestimable, incredibly fundamental flaws in Hedges' article:

* One is his assessment of the primary cause of the American national bankruptcy,
* The second is his conclusions as to who will be causing the greatest social disruption in our nation as that bankruptcy starts impacting our daily lives.

First, the fundamental causes of the American bankruptcy. Hedges quotes heavily from an article from & interview by The Financial Times' Michael Hudson. So that I don't take anything out of context, here is the text direct from Hedges' article, mostly quoting Hudson:

"The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement."
"There are three categories of the balance-of-payment deficits. America imports more than it exports. This is trade. Wall Street and American corporations buy up foreign companies. This is capital movement. The third and most important balance-of-payment deficit for the past 50 years has been Pentagon spending abroad. It is primarily military spending that has been responsible for the balance-of-payments deficit for the last five decades."
"To fund our permanent war economy, we have been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem."

These statements are partially true...as far as they go. But what is left out is more important than what is said. No discussion (in fact, not even a mention) of spending for the U.S. welfare state? Not even the slightest consideration of the fact that American military capabilities are clearly authorized as Constitutional responsiblities--but not our welfare state? This is, simply put, looney toons logic and math.

· Reasonable people can argue over costs, scope and effectiveness of U.S. military budgets/overseas operations (not to mention declared and undeclared wars) since 1916. But that's not where all the big money has been going. The serious spending increases in our budget are in domestic nanny statism, welfare, circuses and feasts—since at least 1965. You don't have to be a degreed economist to figure out that military spending constitutes "half of America’s discretionary spending" is because welfare state spending has been made non-discretionary! After all, that is why they're called entitlements!

o We could defund every military capability we have...but not a single welfare payment can be stayed legally by the hand of the President, his Cabinet, or the U.S. Congress. Welfare and nanny-state benefits are literally entitlements, and by law cannot be left unfunded.

· Things like welfare benefits, Section 8 Housing, etc., especially in this age of electronic payments, must be paid, even if the Congress does not pass those parts of the federal budget. (I believe this was written into law soon after the Clinton-Congress budget train wrecks in the 1990s.)

· If you cut the entire U.S. military budget in half, you only dent the deficit. But if you cut just 25% of the sum total of all welfare state benefits, there would be a huge annual federal budget surplus.

o I conclude Hedges' illogical placement of blame for the budget situation, and all of the impending consequences, are based on his political leanings... which are decidedly leftist, judging by this article. So, what is he trying to accomplish, since he is blaming the wrong folks for the crime?

Second, I completely and absolutely dispute (verily, even dismiss) Hedges' conclusions as to who will be causing the greatest social disruption in our nation as the U.S. bankruptcy starts impacting our daily lives. Hedges states that:

* "If [other nations] succeed [in dumping the U.S. dollar as the world's primary currency], the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class. The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose."

Hedges is saying, politely, that those crazy religious people clinging to their guns are already going nuts, and they will get even worse once they start starving! And all of the "proto-fascists," which presumably means all of those folks recently described in Department of Homeland Security memoranda as being "risks" [read: pro-life, pro-balanced budget, conservative, libertarian, pro-2nd Amendment, Christians, ministers, bishops, Ron Paul supporters, Republicans, etc.], will be using the opportunity to enact "vengeance, radical change, order and moral renewal." What Hedges fundamentally has done is blame all the victims for being raped!!!

* I'm surprised he didn't go further and blame it on all of those evil "survivalists," but even looney tunes logic has trouble blaming the preppers for the very situation they've been predicting for a couple of decades now.

Personally, when TSHTF I won't be nearly as worried about "working and middle class" folks as I am about the welfare-dependent, “entitlements-R-us” folks. The working and middle class folks have the brains to figure things out--we've had a number of neighbors start quietly storing food and gear over the last six months--even the ones who (now regretfully) voted for Obama. But, as proven repeatedly during and after the Katrina crunch...it is the welfare-dependent underclass that will tear the cities and countryside apart. Can things get ugly among "working and middle class" types?? Of course. Still, I think most folks who actually work for a living will quickly band together for security and burden-sharing purposes to endure and survive. However, I'm far more skeptical about those who think "the government" owes them a living, no matter what the situation--survivalblog.com fans are well aware of the many violent examples of that syndrome following multiple disasters over the last decade. (If not, try a couple of internet searches for "Katrina violence" or "Katrina gun confiscation" or "Katrina looting" or...well, you get the idea.")

Bottom line: Hedges's article borrowed the language, analysis and conclusions of the prepper/survivalist/fiscal conservative movements--to use as a tool with which to attack them indirectly. Indeed, Hedges appears far more interested in painting the impending social unrest (read: welfare & food riots) as a tool of the another evil right wing conspiracy, than in acknowledging them as the inevitable consequence of the social policies he has supported and championed.

Many of us were taught in our youth that we should "dance with the girl what ya brung." I think Hedges has concluded his "girl" (read: politics) is darn ugly, emits foul body odors, suffers from multiple social diseases, and has bad teeth to boot. Not surprisingly, he now wants to switch partners while blaming it on all the other, far more circumspect squires at the Preppers' Informal Dance--but we shouldn't help him get away with it. Respectfully, - Gentleman Jim in Colorado.

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Saturday June 20 2009

U.S. Dollar: the Good, the Bad and the Ugly, by Axel Merk

Russian President Medvedev suggests the dollar is on its way out; Russian Finance minister Kudrin says there is no substitute for the dollar. The Chinese see a need to diversify out of the dollar; the Japanese say their trust in the dollar is unshakable. Let’s look at this puzzle and make some sense of it.

It’s usually more productive to look at what policy makers do rather than what they say. Having said that, this time around, the talk also speaks volumes. Notably, world leaders have expressed their concern about the U.S. dollar and a need to diversify, to reduce dependence on the U.S., to build new alliances as well as to strengthen domestic markets. This is the strategic perspective. Conversely, when a finance minister speaks, it is the realistic perspective. There is simply no substitute for the U.S. dollar today; no other market is as deep and liquid, or able to absorb the cash that needs to be deployed by central banks around the world. The eurozone is (a distant) second, with no clear third contender in line. When China announced it sharply increased its gold holdings, their gold holdings actually decreased as a percentage of total reserves. That’s because the gold market is tiny compared to the money markets (or even compared to most other economic sectors) and China has mostly been acquiring domestic gold production, to avoid causing disruptions in the world markets.

Does that mean the dollar is safe and one should forget about gold as some suggest? Before you exchange your hard money for freshly printed Federal Reserve Notes (the U.S. dollar), think about the dynamics: the CEO of a country says we need to change course; the CFO says we don’t have the tools to get from A to B today. Any CEO worth their salt (and arguably some might not be) will tell the CFO not to whine about the obstacles, but come up with a solution. If you don’t have the tools, get the tools! Turning a large ship around may take some time (in the case of General Motors it took too long), but the ship will eventually change course. Circling back to the greenback, its value is set by supply and demand; more importantly, the marginal buyer or seller sets the price of the day. If, on the margin, countries increase their non-dollar holdings, odds are high it may have a negative impact on the dollar. Everybody hopes this adjustment process will be slow and gradual; with due respect, however, hope is not a strategy.

To put substance behind the hope, we believe countries around the world are racing to put the “tools” in place to be less dependent on the U.S. dollar. In Asia, for example, after the 1997/1998 financial crisis, Asian countries realized they needed to bolster their countries’ reserves. In the latest crisis, they realized that holding almost exclusively U.S. dollar reserves was a risky strategy. The solution is all too obvious, namely to develop domestic markets. This isn’t just about developing domestic consumption to create a more “balanced” world economy, this is about creating domestic infrastructures, fixed income markets in particular. Currently, many global investors invest in Asian markets by buying U.S. dollar denominated securities plus derivatives. This makes Asian issuers – governments, supranational and corporate issuers alike highly dependent on the U.S. dollar. This will only change if global investors have confidence in the stability and maturity of the local markets. The message to “CEOs” of countries around the world is to show that they are open and ready for business. Such trust is not earned overnight. In Asia, Singapore is a leader; not surprisingly, Singapore has a healthy domestic fixed income market. China is on its way, but needs to do more to provide access to its domestic markets (also see our recent analysis Geithner & China: Who are You Fooling?).

Global imbalances typically refer to the fact that the U.S. is responsible for much of the world’s consumption and spending; whereas Asia focuses on production and saving; this is quantified in the current account deficit. Historically, when the current account deficit reaches too high a portion of Gross Domestic Product (GDP), the currency serves as a valve to help level the playing field. To understand the dynamics, one has to realize that global imbalances will always be with us – the world is not flat. However, dangerous imbalances can be built up if the valves are disabled. Of the smaller countries, New Zealand has shown that it is willing to keep its valves open – during the boom years, interest rates were raised in an effort to calm an overheating housing market as the current account deficit approached 10% of GDP; New Zealand suffered in the bust, but unlike most countries, allowed market forces to play out. The currency suffered substantially, but the country is now better positioned than most to participate as the world tries to reflate. At the other end of the globe, take Latvia, which has a current account deficit of about 26% of GDP while insisting on pegging its currency to the euro. Not only has the Latvian economy been wrecked, possibly for years to come, it may pull Sweden down with it, because Swedish banks have substantial exposure to the Baltic country. The International Monetary Fund (IMF) and others are rightfully concerned about what may happen to neighboring countries if and when Latvia devalues its currency. Ask anyone in New Zealand and the response is that the roller coaster of its currency has been no fun and painful to many businesses; however, these are rough economic times and New Zealand has swallowed its medicine. When countries resist, far greater harm can be caused.

This past weekend, finance ministers gave a pep talk for the dollar. They also assured the world that the focus is shifting from saving the world’s financial system from collapse to the “exit” strategy; German chancellor Merkel has been a leading voice in warning central banks that the current policies may lead to substantial inflation. Let us discuss the dynamics here briefly: a key driver of inflation is inflationary expectations – when inflation is a fear, employees will ask for higher wages; businesses will try to push for higher prices, amongst others. As a result, central banks seem to believe that printing money is no problem as long as the markets believe that central banks have an exit strategy; that central banks will mop up all the liquidity in time. To recap, why do central banks say they are working on an exit strategy? That’s what the market wants to hear. How likely is it that they are indeed going to get tough? In our assessment, it’s about as likely as a balanced budget from the U.S. administration.

We have had a lot of talk of “green shoots”, but once one looks deeper, most negative news one hears are facts, whereas most positive news appears to be subjective forecasts and expectations of policy makers. Dark clouds on the horizon include sharply rising mortgage rates (in progress); major trouble in the commercial real estate sector; a continued dislocation in the housing market where home prices cannot be sustained by income; a big wave of foreclosures yet to come as many of those who bought their houses at the peak of the market in 2007 are likely to see big challenges in the summer of 2010 as their mortgages begin to reset. In the banking sector, problems have been brushed away by easing accounting rules. In Europe, a catastrophe in Baltic countries may only be a matter of time; while the IMF and central banks around the world may ride to the rescue, does this sound like the beginning of the exit strategy? Not to us.

Add to that the amount of debt that needs to be raised by the U.S. government. According to our calculations, at least US$15 billion may need to be issued every single business day until the end of the year. This will require a substantial ramp up from the pace seen in recent weeks, a pace that saw bond prices plunge (long term interest rates rise) due to the increased supply of government bonds in the market. When considering that summer months tend to be slower months for governments to issue debt (it’s vacation time around the world), we believe long-term interest rates may have to rise substantially later this year to attract buyers. The U.S. government will be able to finance its deficits, the question will be at what cost. Interest rates are one issue; the other is whether government activities will crowd out private sector borrowers. Corporate America also needs to finance its operations, not just the government, and where is that money going to come from? What about all the other countries that are issuing record amounts of debt? Just ask Latvia – a recent government bond auction yielded zero bidders. But even established countries, say Ireland, have seen the cost of its borrowing surge.

That’s when the bad may turn to ugly: how will central banks, notably the Federal Reserve (Fed) in the U.S. react should interest rates soar? Will they allow it to happen as they currently posture? It looks to us that we risk a collapse of economic growth if the cost of financing soars. There is still too much leverage in the U.S. economy, at the consumer level in particular. At this stage, a broken system has been propped up; the housing market is seen as key to an economic recovery – and all that money printing will have been in vain if market forces overwhelm the Fed by pushing interest rates higher. Naturally, the Fed puts up a brave face. Ultimately, this may be a game of chicken where Fed talk aims to keep interest rates low. However, we believe the Fed may blink first, and increase its financing activities of the U.S. deficit; by printing the money to finance government debt, the Fed may jeopardize the U.S. dollar, in particular if the Fed, as we believe, will be “more efficient” at printing money than other central banks around the world.

Will events unfold as described here? We don’t know, but we believe the risk is real; and if investors agree this risk is real, they may want to consider doing something about it in their portfolio allocation. We have not exchanged our gold for Federal Reserves Notes.

- Axel Merk, Manager of the Merk Hard and Asian Currency Funds

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Monday June 15 2009

A Derivatives Market Meltdown: "We Apologize for the Inconvenience"

The collapse of the Collateralized Debt Obligation (CDO) market underscored the enormous overhang of the larger over-the-counter derivatives contracts market. This is far from over, folks! For example, we have not yet to seen a full-blown Credit Default Swap (CDS) market implosion. I have been warning blog readers about CDS instruments since 2005. And even though our politics are diametrically opposed, I was not surprised to see George Soros recently chime in on the subject. Derivative instruments are essentially unregulated and they measure in the hundreds of trillions of dollars. The counterparty risk is enormous, yet the derivatives market is quite opaque and little understood, even by most of the people that work in the financial sector.

To illustrate both the potential magnitude of a derivatives disaster, and the incredibly blissful ignorance of most investors, I offer the following analogy:

You are a business traveler. It is 9 a.m. on a Monday morning and you are seated at a crowded gate at the Newark, New Jersey airport, waiting for boarding of the 9:25 Delta Airlines flight to Atlanta. You are feeling nervous, because the 20-something man that is sitting next to you is suffering from a bad hangover. You've correctly surmised that over the weekend he got fleeced at the gaming tables in Atlantic City after the casino offered him too many "comp" cocktails. He looks only semi-conscious and you are afraid that he is going to puke on your nice suit. A ticket agent announces on the loudspeaker: "Ladies and gentlemen, I have some bad news." She pauses and you think to yourself: "Oh great, two or three of us are going to get bumped." The agent goes on: " It was just announced by the chairman of Delta Airlines that the company has declared bankruptcy. All Delta flights have been cancelled for the foreseeable future. Because Delta is now insolvent, no replacement tickets, vouchers, or refunds will be issued. We apologize for the inconvenience. Have a nice day, and thanks for flying Delta Airlines." There are shouts and anguished cries from the other passengers. You sit for a minute in stunned silence. Your mind is racing. You remember reading that Delta has over 1,630 scheduled flights a day, moving roughly 277,000 passengers per day from city to city. The drunken gambler shouts "Hey!" and he leans close to your face. With his breath smelling like a dog kennel and his eyes glassy, he asks: "I don't get it, man. What do they mean, "insolvent"? You take a few minutes to explain the situation in simple terms to him. But the gambler just gives you a blank stare. "What do you mean,?" he repeats. Now you are angry, and you shout at him: "Aren't I getting through to you? I'm talking about two hundred and seventy seven thousand bumped passengers!" Finally, the dazed drunk has a flash of realization across his face. "Oh. I get it. This is bad news. It'll be hours before they'll call for seating on my row!"

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Monday June 8 2009

Welcome to the Savage World of the Year 2009

"Welcome to the savage world of the year 2009". That was the tag line of the 1992 sci-fi film Freejack , starring Emilio Estevez. Do you remember it? The movie that featured Cadillac Gage V100 wheeled APCs painted in bright colors? My old friend All-Grace-No-Slack-Really-Reformed Kris just reminded me about this movie. Kris noted: "It was a bit corny but it had some good scenes and characters such as Amanda Plummer as the gun-toting nun." This film provides an insight on what futurists then thought 2009 would be like, as well as a retrospective on life in 1992.

Let's look back at 1992: It is amazing how much the world has changed since 1992. To me, it doesn't seem that long ago. In 1992 I was 32 years, old, and our first child was an infant. In 1992, .308 ball cost $180 per thousand rounds, a Colt M1911 cost around $350, and cases of MREs could be bought at gun shows for around $30 each. Back in those days, I was running a mail order business from home, selling magazines. I was buying M1 Carbine 15 round magazines in cases of 100, for $90 per case, and re-selling them by the onesees and twosees for $3 per magazine. (One of my "get rich slow" ventures.) In 1992, you could still buy a plane ticket for cash, and stroll right up to the departure gate without a ticket in hand. Yes, there was a metal detector, but you could board a commercial flight with a pocketknife with a single-edge blade less than 2-1/2" long. (Remember when knife catalogs had "Airline approved" models?) In 1992, gasoline was $1.05 per gallon ($1.09 for premium), and a good loaf of bread still cost 49 cents. In 1992 you could take a car trip into Mexico or Canada, with a smile and the wave of your state driver's license.

In 1992, I owned a small ranch near Orofino, Idaho. House prices there ranged from $39,000 to $155,000. (In 1989, we had paid $29,000 for an unfinished house on 40 acres.) Silver started that year at $4.20 per ounce, but drifted down to under $3.70 in December. (It was still in the midst of a two-decade long bear market.) A semi-auto AK-47 cost $179, an AR-15 was around $500, and an M1A was $800.

Fast forward to 2009: The local gun shops are chronically short of ammunition, and what little they do receive from their wholesalers sells out immediately, at an average of $1 per round. Today .308 ball costs $900 per thousand rounds, a Colt M1911 costs around $1,200. A case of MREs can cost upwards of $90, and a loaf of bread is anywhere from 99 cents for the dreadful "air bread" to $4.69 for the good stuff. Gas is back up to more than $2.50 per gallon. A semi-auto AK-47 costs around $700, a low-end AR-15 is around $1,200, and a standard grade M1A is $1,600 if you can find one. Today, people line up like sheep and remove their shoes before boarding an airplane, and opening a checking account requires umpteen pieces of identification. Now, thanks to "Homeland Security" regulations, they will turn you down if you don't have a physical street address. (BTW, that gets a bit sticky here in The Unnamed Western State, where lots of my neighbors live so far back in the boonies that they don't have a street address. The bankers get all befuddled if you start quoting the Township, Range, and Section numbers of your quarter-section.

In 2009, house prices are still plummeting from their 2006 highs, but still quite "spendy." A house around Orofino with a good spring now costs around $400,000. Who knows? In the current bear market, the price of houses may not bottom until they are close to their 1992 levels. Oh, and wait a minute! Firearms manufactuers are now working around the clock, and prices are expected to soon come back down. In 1992, a Steyr AUG cost $800, but then they peaked in 2008 at around $4,000. But now new production AUGs (made by Steyr in the US) have hit the market for under $1,800. You gotta love a free market economy. Maybe the more that things change, the more they remain the same.

The "Freejack" script was loosely based on Robert Sheckley's novel "Immortality, Inc." The screenwriters had a few things right, but plenty of things wrong. For example, the "destroyed ozone layer" hasn't wrecked our health. And I don't feel at risk of my brain being hijacked. But, then again, I don't own a television.

« Economics and Investing: |Main| Seeking Reader Input for "Patriots" Sequels »

Friday May 29 2009

Mexican Flu Update:

Anger Over Breach of Quarantine in Oz

Swine Flu Infects 13,000 People in 46 Countries

« Mexican Flu Update: |Main| Letter Re: DIY Baking Powder Solves a Shelf Life Dilemma »

Thursday May 28 2009

Letter Re: A Ship's Belated Flu Quarantine as an Object Lesson

Hi Jim,
Here is a bit about the progress of Swine Flu in Australia with this article about a quarantined luxury cruise ship.

We now have a cruise ship, the P & O Pacific Dawn, being quarantined at Willis Island on the Great Barrier Reef – with 2000 people on board. Yesterday the ship was photographed flying the yellow quarantine flag! Our “brilliant” state health departments let 20 infected people disembark at Sydney and they [then] flew throughout Australia .

[Some background:] 13 of these people turned up at the Robina Hospital at the Gold Coast and the staff at the hospital had no idea what to do with them. The people were put in a single room with a single bed and most of the family was made to sleep on the floor. Authorities seemed to be clueless.

They (the New South S]Wales government) then let new passengers embark on the infected ship and let the ship leave Sydney on a trip. They also let three infected staff sail on the new voyage. No prizes for guessing what happened next. All people on board now exposed to the swine flu and the ship has been quarantined.

I really enjoy your web log and I have been sharing it with my friends. Keep up the great work and my prayers and best wishes to your wife with her illness. Yours sincerely - Jamie in Queensland, Australia

« Economics and Investing: |Main| Letter Re: Questions on EMP Protection »

Wednesday May 27 2009

Mexican Flu Update:

Scientist: UK Swine Flu Really 30,000

Swine Flu Spreading Wider Than Official Data Shows So, if just 1 in 20 confirmed cases are being reported in the US, then there are possibly now 100,000 US cases

« Economics and Investing: |Main| Two Letters Re: Dealing with Uninvited Guests »

Tuesday May 26 2009

Mexican Flu Update:

Face Protection Effective in Preventing the Spread of Influenza, Study Suggests

Swine Flu Hits Spanish Military Base; 500 Quarantined

18 US Soldiers Have H1N1 in Kuwait

« Mexican Flu Update: |Main| Letter Re: Keep Ammo in Original Boxes? »

Monday May 25 2009

Letter Re: FDA Restricts Over the Counter Sales of Bulk-Size Hemostatic Supplies

Sir;
I try to keep a gun shot trauma kit with my shooting range supplies; when I was ordering some new medical supplies from North American Rescue I was informed that the public can no longer purchase Quikclot ACS+ or any other such hemostatic from them. The operator proceeded to tell me that the [U.S.] Food and Drug Administration (FDA) began regulating these products mid-May because "they go inside the human body." I was able to order some of my other products in the "scrape and light cut" size" but none of the larger quantity hemostatics. Perhaps some other SurvivalBlog readers might have some insight into this situation and can offer some advice. Regards, - "Pop N Fresh"

JWR Replies: That is a most unfortunate development. Much like last year, when Polar Pure iodine crystals were taken off the market, it sounds like another window of opportunity is closing. I strongly encourage readers to stock up on Celox and QuikClot while there is still some remaining inventory available from individual retailers. Several of our loyal advertisers-- including Safecastle and Ready Made Resources--carry these products, and probably still have some left on hand. I'm sure that they would appreciate your patronage. BTW, please mention SurvivalBlog whenever you contact any of our advertisers. Thanks!

« Economics and Investing: |Main| Letter Re: FDA Restricts Over the Counter Sales of Bulk-Size Hemostatic Supplies »

Mexican Flu Update:

WHO Chief Says to Expect Severe Flu

Genetic Analysis of Swine Flu

WHO Warns of Double Influenza Threat

« Economics and Investing: |Main| Letter Re: Dealing with Uninvited Guests »

Saturday May 23 2009

Mexican Flu Update:

Kudos to KAF for sending this piece: Researchers: Swine Flu Genes Swirled for Decades Undetected

Emergency Preparedness Exercises Held at Banks

Swine Flu Spreads in Australia

Some Older People May Be Immune to Swine Flu

Swine Flu Extends to Tokyo; 11,000 Cases Worldwide

56 Hospitalized with Swine Flu in NYC

Dr. Niman's World Flu Tracking Map

« Mexican Flu Update: |Main| Biological Threat Assessment and Containment, by Anon.T »

Thursday May 21 2009

Letter Re: Any Widespread Flu Will Overwhelm America's Emergency Medical Services

Dear Mr. Rawles,
As an avid SurvivalBlog reader since '05, I've got to say, the quality of your blog continues to go up and up. Just when I think I can't possibly absorb anything more, new posts appear that make me think, plan, and act.

Upon your blog's advice, I have begun taking an EMT class at a local college to expand my medical knowledge base. What the Paramedic teacher said today in class gave me the chills. We were discussing all manner of diseases and then he touched on H1N1, the Swine Flu and its possible affects upon the EMS system. He said that during the SARS crisis, which in our neck of the woods was just a brief scare, the volume of calls into the 911 center went up 10% for several weeks due to everyone that had a cold thinking they had SARS. The EMS crews were advised that if they transported a patient with symptoms consistent with SARS, that they were to disinfect the entire truck with a bleach and water solution from top to bottom and then allow the truck to air dry for three hours
before it was placed back into service. He noted that in our county of around 1/2 million people, there were 20 to 30 ambulances on duty at any one time. He dryly noted that it would not take much of a crisis in public health to bring the EMS system as we know it to it's knees just based on the increase in call volume,not to mention the ambulance down-time to disinfect the vehicles.

One solution [that the instructor] hypothesized, was a system of 911 triage in a pandemic that said to callers, we will not transport you if you have the flu; you are on your own to get to the hospital. I think this point should be obvious to most SurvivalBlog readers but it dovetails nicely with the pharmacist's postings regarding securing your anti-viral drugs now.
All the best to you and your family, - B.H.I.

JWR Adds: For anyone that missed my May 1st post about getting ready for an influenza panic, this portion bears repeating:

I recommend that SurvivalBlog readers seriously think through the implications of successive waves of Mexican Flu sweeping around the globe for the next three years. From what we've already seen of its virulence after the normal "cold and flu season", then the next couple of winters could bring very high rates of infection and overwhelm the healthcare system. Please take the time to watch Dr. Henry Niman of Recombinomics discussing"Swine" flu. His projections are disturbing, to say the least! Think this through folks, on a macro scale: How would a pandemic impact your work? Commuting? Grocery shopping? Church activities? School? (If you are not yet homeschooling, then you should plan on it!) Your vacation plans? Summer camp? Family holiday get-togethers? Sports and cultural events? These implications are enormous. As SurvivalBlog readers, you are already accustomed to contemplating abstractions at this level and getting "ahead of the power curve." You also likely have the benefit of superior training and a deep larder. And, hopefully, many of you took my advice three years ago, and began to develop home-based businesses. (Mail order businesses will undoubtedly flourish, as people shun face-to-face sales.)

There are no guarantees, but you have a better chance of getting through this unscathed than most of your neighbors. Hopefully, all of you read the backgrounder on family flu preparedness, that I've had posted here are SurvivalBlog for more than three years. But if not... Now is time to make the requisite adjustments to your daily routine and to top off your logistics:

Now is the time to order several boxes of N95 masks and rolls of bandage tape (for sealing any mask edge gaps )
Now is the time to buy a steam vaporizer (new, or used -- Try Craig's List for used ones)
Now is the time to approach your family doctor, and ask for a scrip for Tamiflu.
Now is the time to lay in a supply of Sambucol (Elderberry extract.)
Now is the time to lay in supplies of hand sanitizer (with aloe) and latex gloves--or nitrile gloves for those with latex allergies
Now is the time to stock up on Vitamin C, Vitamin D, and Guaifenesin expectorant
Now is the time to buy a couple of Bag Valve Masks
And lastly, for this and umpteen other contingencies, now is the time to acquire an honest one year supply of storage food (or more) for your family. Buy some extra, for charity.

If you wait too long, then those supplies will either be non-existent, or exorbitantly priced. By the time most of the sheeple think this through (or have it explained to them by the talking heads on the Idiot Box), you will have long since "topped off" your preps. But not if you hesitate. As my friend Bob in Tennessee is fond of saying: "Panic now, and avoid the rush."

Mark my words: A true pandemic will disrupt supply chains, starting with relatively exotic items (such as antivirals), but eventually working down to basic commodities. Be ready.

« Economics and Investing: |Main| Letter Re: Any Widespread Flu Will Overwhelm America's Emergency Medical Services »

Mexican Flu Update:

WHO: Is This The Calm Before The Storm?

NYC Toddler Death, Adult In Missouri Raise Swine Flu Concerns

CDC: Not Out of the Flu Woods Yet

Swine Flu vs. Bird Flu: Which Is The Greater Pandemic Threat?

« Letter Re: Diverters and Pre-Filters for Roof Rainwater Catchment |Main| Jim's Quote of the Day: »

Wednesday May 20 2009

Into the Maelstrom, and a Refuge on the Far Side

For the past few weeks I've let the news headlines speak for themselves, but I now feel convicted to comment on the deteriorating economic conditions. The global economy in general, and the economies of the English-speaking nations in particular are in deep, deep trouble. A massive credit bubble has popped, and all efforts to re-inflate it have failed. National congresses and parliaments, are throwing trillions at the problem, but they have done no good. The policy wonks in government, and their cronies at the central banks are essentially clueless. Their uniform reaction to each failed "stimulus" policy seems to be: "Well, that money creation didn't work, so it obviously wasn't enough!" This is something akin to a frustrated Emergency Room doctor, trying to resuscitate an obese cardio patient that has suffered a massive myocardial infarction. This fat blob lays torpid on the gurney, with a"flat-lined" heart monitor. The first three attempts to revive the patient didn't work, so all that the doctor can think to do is keep increasing the voltage and slap on the paddles again. Whether the doctor is Ben Casey, or Ben Bernanke, doesn't matter. All attempts to revive the patient with the tools at hand have failed.

As I mentioned in a recent interview with a German journalist, the central banks are using the public treasuries to attempt to re-inflate the credit bubble. This will only make the situation worse, and it will most likely turn the recession instead into a lengthy and deep depression. We are witnessing a complete meltdown of the global credit system. More credit is not the solution, and in fact loose credit via artificially low interest rates was actually the cause of the problem.

In my estimation, the only genuine long term solution to the continuing boom-bust cycle is to do away with fractional reserve banking. What we needed instead is traditional warehouse banking (without interest), and currencies that are fully-backed (1-for-1 redeemable) in gold and silver. (The only difficulty there might be the eventual drift in the ratio of the relative values of silver and gold.) Another part of the solution is in the creation of private credit clearing circles. It is noteworthy that private credit clearing has been done successfully by WIR Bank in Switzerland, for more than 60 years.

On a personal level, I recommend that SurvivalBlog readers get ready for the worst. Be prepared to hunker through a depression that may last a decade. As I've written before, we are are likely to see general price deflation for a couple of years followed by a nasty bout of high inflation. The latter will come once the huge cash injections work their way through the economy. Let me explain: Currently, bankers are terrified of risk, so they are refusing to lend. But eventually, realizing that because of Treasury loan guarantees that have come hand-in-hand with the Mother of All Bailouts (MOAB), most bank lending will no longer have any risk or real consequences. So they will begin to lend money lavishly. The trillions of dollars in new "out of thin air" money in circulation will benefit from the multiplier effect, and mass inflation will ensue.

Given the misguided government intervention that is perpetuating widespread malinvestment, I can foresee many years of trouble ahead. Don't consider any of the following to be firm predictions, but here are some possibilities for the next decade, in brief:

Declining residential real estate prices, perhaps as much another 50% in some markets
Declining commercial real estate prices, perhaps as much another 65% in some markets
A chronically weak consumer market.
Very few retail stores will prosper--mainly just "second hand" sellers.
A substantially higher personal savings rate
Huge corporate layoffs, resulting in a high unemployment rate
High property crime rates, characterized by waves of home invasion robberies in the cities and suburbs.
Further spikes in the foreclosure rate, most notably in 2011.
Higher taxes and fees at all levels, as legislators scramble to make up for lost revenue
Huge new "make work" programs similar to the WPA and CCC in the 1930s
Severe restrictions on expatriation of currency, precious metals, and gemstones
More frequent and larger bank failures,and possibly some bank runs
Major dislocation, as millions of out of work families move to find work or move in with relatives that still have reliable income
Crowded colleges and universities, as out of work young people gamble on increasing their marketable skills
The military "full up", and turning away thousands of would-be enlistees
Huge pension fund failures, both private and public.
Huge municipal bond failures
Drastically scaled-back city, county, and state services--including police and fire departments
A stock market roller coaster ride, with multiple "sucker" rallies
Enormous over the counter (OTC) derivatives failures with many counterparty risks not revealed until post-facto (post-schumero)
Employment benefits and perquisites scaled back drastically
Collapsing prices for fine art collectibles, vintage wines, vintage cars, and other luxury goods.
Spectacular hedge fund failures
Traumatic bankruptcies for airlines, auto makers, newspapers, truck manufacturers, cruise lines, aircraft makers, and many other industries
Many major department store chains merging or going out of business
Consumer price deflation, followed by high inflation, with multiple currency changes
Wage and price controls
A nationalized health care system
Tighter immigration controls
A continuing and ever-expanding Mother of All Bailouts (MOAB)
A few bright spots in the economy may include entertainment, firearms, home security, precious metals, storage companies, some aspects of healthcare, and gardening/home canning products

In summary, we are headed into some very bad times. Be ready to hunker down and be able to fend for yourself.

« Economics and Investing: |Main| Three Letters Re: Stocking Up on Prescription Medicines »

Mexican Flu Update:

WHO May Raise Flu Level--Japanese Cases Leap

Japan Reports 173 Swine Flu Cases, Closes Schools

WHO: No Swine Flu Vaccine Available For Months

« Economics and Investing: |Main| Letter Re: Prince of Wales Island, Alaska as a Retreat Locale? »

Monday May 18 2009

Mexican Flu Update:

CDC: Up to 100,000 Are Probably Infected in US US Deaths at five, all reportedly with underlying health problems. Globally, 7,000 (which means many more cases than have been confirmed)

Swine Flu Cases Continue to Rise But No Pandemic Called Yet "Fukuda notes a pandemic has nothing to do with the severity of the disease, but rather with its geographic spread."

Avian Flu Beaten By Cold Noses

WHO eyes swine flu transmission rates, new vaccine

« Economics and Investing: |Main| Letter Re: Which Form of Precious Metals? »

Saturday May 16 2009

Adios to Naish Piazza, But Perhaps Not to Front Sight

This news article was published yesterday: Business as Usual? Front Sight Assets Seized. Please take the time to read it. I haven't yet been in touch with the new management at Front Sight to get any additional details.

Last night, I dismissively posted a piece to SurvivalBlog, castigating the plaintiffs in this case. But then I spent several hours later last night doing web searches about the various Front Sight lawsuits, and it was an eye opener. Up until yesterday, I had thought that only one of the lawsuits had any merit, and that Naish Piazza was merely a convenient target for "deep pocket" lawsuits. Please forgive me for not taking the time to do this research before! I can now see that Naish Piazza had indeed been doing business unethically. I'll be removing the Front Sight ads from my web site, and will discontinue using Front Sight course certificates as writing contest prizes.

I won't promote Front Sight again unless or until it can be established that A.) Naish Piazza has no influence whatsoever with the new Front Sight management and will not profit from the operation, and B.) The existing Front Sight course certificates will be honored by the new court-appointed management.

Please accept my humble apologies for my lack of due diligence about one of my advertisers.

I have no idea about what will happen with the course schedule at Front Sight, and the status of the Front Sight course certificates that are presently in circulation. I will post details as soon as they become available. I must mention that none of the preceding comments detract from the reputation of the outstanding staff at Front Sight, and the quality of the training. It is still one of the premier firearms schools in the country, and I still highly recommend them.

As for the current round of the SurvivalBlog writing contest that was to have had a pair of Front Sight course certificates as the "first prize", I will be substituting other prizes.

« Economics and Investing: |Main| Letter Re: "Patriots" Book Sighting in Downtown Chicago »

Thursday May 14 2009

Mexican Flu Update:

Swine Flu Spreads to More Countries

Australian Research Says Swine Flu May Be Result of "Human Error"; CDC Investigates Claim

I noticed that the excellent Flu Wiki web site has been updated and expanded.

« Economics and Investing: |Main| Letter Re: Ideas for Home-Based Businesses? »

Wednesday May 13 2009

Mexican Flu Update:

China Confirms First Mainland Case of Swine Flu

Swine Flu Tally 29 Countries, 4,379 Cases

CDC: Flu Numbers Represent a Very Great Underestimation

Swine Flu is as Severe as 1957 Pandemic, Two Million Deaths

« Economics and Investing: |Main| Two Letters Re: A Practical Tip on Using Roof Catchment Rainwater »

Tuesday May 12 2009

Mexican Flu Update:

Top Flu Expert Warns of a Swine-Bird Flu Mix

12 More Swine Flu Cases Confirmed in Massachusetts

First Flu Death in Canada; US Cases Rise

Mexico Deaths; Cases Higher than Reported

Swine Flu May Be More Infectious than Thought

Swine Flu Moments and Decisions Lie Ahead

WHO Reports Big Jump in Worldwide Swine Flu Cases 3,440 Cases, 29 Countries, 48 Deaths

Japan, Oz Confirm First Cases of Swine Flu

Swine Flu Lacks 1918 Killer Traits (So Far)

US, Costa Rica Flu Deaths Mexico has suspected upswing in cases, delaying school reopening in six states

Number of American Flu Cases Overtake Mexico's; Now Almost 3,000

« Economics and Investing: |Main| Three Letters Re: Deer Ticks - The Threat Within Your Perimeter »

Monday May 11 2009

Mexican Flu Update:

WHO Says Up to Two Billion Will Get Swine Flu

Swine Flu: A Survivor's Tale

Swine Flu Kills 30-Something Woman in Texas (First US Citizen Casualty)

« Economics and Investing: |Main| Letter Re: Concerns About Toxicity in Water From Roof Catchment Rainwater »

Friday May 8 2009

Mexican Flu Update:

Heather sent a link to an article was featured in Seven Days (an ultra-liberal newspaper in Burlington, Vermont: The Pandemic Pantry; Stocking up on staples, just in case. Heather's comment: "I think this article illustrates the fact that the preparedness mindset is starting to reach the mainstream. Maybe the sheeple are beginning to catch on? The article on the side talks about the LDS Church. While I have theological disagreements with the LDS I think their food storage program is outstanding."

KAF sent us this: Another Swine Bug Raises Scientists' Concerns. KAF's comment: "This is particularly disturbing. When Egypt began mass slaughtering the pigs, I thought they were mad. Now I am wondering if perhaps they knew something we are just finding evidence of? "

Via K.J.'s e-mail: Confirmed US swine flu cases rises to 896

From Tricia: WHO: Up to 2 billion people might get swine flu

Decision on Flu Vaccine Looms

Does WHO need to declare flu a full pandemic? (Thanks to Ray V. for the link.)

« Economics and Investing: |Main| Letter Re: Expanding the Family Larder with Coupon Shopping »

Thursday May 7 2009

Mexican Flu Update:

Second strain of flu may complicate picture-study

U.S. reports 642 new H1N1 flu cases

What's wrong with this picture? Teacher Tests Negative for Swine Flu but Then She Dies of the Flu

This was linked at the Drudge Report: CDC: US public at risk from complacency over flu

« Bicycles in War, a Book Review by by Michael Z. Williamson |Main| More About Depression Proof Jobs--Consider the Three Ks »

Tuesday May 5 2009

Letter Re: Gun Show Report--A Window of Opportunity?

Jim,
On Sunday, I attended what is billed as the largest gun show in North Carolina and thought you and your readers might appreciate an update.
What I saw lead me to believe that supplies of black rifles and magazines are catching back up to demand but that ammunition and reloading components remain in short supply -- especially primers.

When I attended the November show, I had to wait in line 30 minutes or so just to get in. I heard the March show had a two hour wait. Today, there was no wait at all. It was crowded inside, but not jammed like the first post-election show. Still, a healthy amount of business was being conducted, far more than two years ago when I last attended as a dealer.

My first stop was to pick up the smokeless powder that I use to load .223. It was sold out at my normal dealer. They had a big sign that said "No Primers." I found another dealer and bought two pounds. The price was reasonable. He had only magnum pistol primers in stock. He told me the price as $48 per thousand, but he expected it to settle back down in three months. I did not see any other primers in the entire show. Several folks were selling bags of 100 pieces of brass, but no one was selling 1,000 piece bags of it or other large lots, and prices were up. So brass and primers remain in short supply. Possibly it is all going to commercial ammunition production.

I was surprised to see that there were lots of new black rifles available -- more than I had expected. There were plenty of AR-15s well as AR uppers and lowers. Despite wider availability, prices remain high. The cheapest plain vanilla AR-15 that I saw was $1,080, with most guns starting at $1,200 and anything with an adjustable buttstock and rails instead of the older forearm starting at around $1,600. In fact, I would say $1,600 was the average price for a Bushmaster or a S&W M&P. Of course, there were still $3,000 guns for sale, but no one was showing much interest.

Stripped lowers from the lesser-known manufacturers were going for about $139 and full lowers with an adjustable buttstock from Rock River Arms were $359. I was looking for a spare bolt and bolt carrier, but never found one. I also saw that part kits for lowers were in short supply. So if you are planning on piecing together a gun, it might make more sense just to buy one complete. You could wait weeks for parts and possibly spend even more when all is said and done.

AK-47s were widely available, as were the Ruger Mini-14 and Mini-30. AKs were running in the $600 and up range while SKSes were closing in on $400. A CETME rifle with a Century Arms receiver that cost $300 five years ago was not going for a shockingly high $1,295. I only saw one Springfield Armory M1A. It had a stainless steel barrel and was $1,695. FALs were scarce and at least as pricey.

Based on this show, magazines seem to be back to reasonable availability. Used AR-15 magazines were $9. New .223 alloy magazines from C-Products or DPMS were starting at $15 at most sellers. MagPul polymer magazines were $25 to $29, depending on the model. They were some available, but limited quantities.

Pistol dealers were doing a very robust trade. I saw many more people buying pistols than I did long guns. There were dealers with 20 tables just lined up with Glocks, Springfield Armory pistols, SIGs, Smith and Wessons, Kahrs, Kel-Tecs and just about anything else you could see. Every pistol dealer had people sitting in chairs filing out paperwork.

Rifle ammunition was in decent supply. I saw at least three dealers that had stacks of 1,000 round cases of new, commercial .223/5.56 from Federal XM193 and/or PMC for $459 and up. Many others had Wolf, Bear or other Russian or Eastern European ammo. There were also folks selling "remanufactured" ammo -- 500 in a .30 caliber ammo can for $275. Since this was the second day of the show and near the end, I was surprised at this availability -- all the anecdotal evidence I had heard lead me to believe cases of .223 would be sold out. .308 ammo was harder to come by, with very little domestic production available. There was a moderate supply of Russian calibers and one guy had a pallet of 8mm [Mauser] that didn't seem to be selling.

Pistol ammunition was much more scarce than rifle ammo, especially in common calibers. I saw only one dealer with .380 (for $35 a box) and only a few with 9mm. Dealers had signs saying "No 9mm" or "No .45 ACP." Self defense ammo with a good hollow point, such as Gold Dot or Ranger SXT were going for $45 or $50 for a box of 50 rounds. There was more .357 and .40 [S&W] and good supplies of less common calibers like .44 Special. I only saw one dealer with bricks of 1,000 .22 LRs, but plenty were selling the small 50 or 100 round boxes.

If this one show is any example, I would say that the industry is doing a good job or meeting the increased demand for firearms, albeit at the expense of the secondary market. Demand remains high, but is down from the surge in the months immediately following the election, and supply is now catching up. The threat of additional legislation, assault weapon bans and magazine bans remains and is likely to grow rather than recede. As a result, this may be a good window of opportunity to buy a new firearm. While it is possible prices will drop if we reach an over supply situation, I personally think that is unlikely in the next two or three years unless the Republicans win an awful lot of seats in the next congressional election.

The strong sales of pistols and lack of availability in pistol caliber ammunition leads me to believe that many people are worried about rising crime and are arming themselves. This is consistent with the up tick in people taking concealed carry courses. One has to wonder if the same lines that produced pistol ammo have been converted over to rifle calibers and if we are destined to see shortages in one or the other for some time to come.

Finally, the recent sales explosion in firearms and the sudden lack of availability in the market should be a lesson to anyone sitting on the survival fence. Do not put off your preparations any longer. A sudden change can suck all the supplies out of the pipeline and result in months of backorders for long term storage food, water filters, medical supplies, etc. The just-in-time supply situation is a precarious one and any small shock can upset the balance, resulting in shortages and price increases. - Captain Dave

« Economics and Investing: |Main| Bicycles in War, a Book Review by by Michael Z. Williamson »

Mexican Flu Update:

As the H1N1 flu spreads across the nation and around the globe, the key question seems to be: It the flu is spreading this quickly in warm weather, then what will it do next winter, when people are generally in closer proximity, indoors? The CDC has vowed to "...continue to get ready for a possible pandemic in the fall."

Clearly, prudence dictates that we be well-prepared, so stock up!

The latest flu headlines:

Jim S. suggested a video from an academic on the implications of H1N1 hitting Phase 5.

Chan hits back at WHO critics. (Thanks to Greg C. for the link.)

At Bloomberg: Swine Flu May Merge with Other Flu Viruses, CDC Says

Linked at Drudge: Mexico to resume business, pork row erupts

« Economics and Investing: |Main| Letter Re: Responding to a CBRNE Event, by J. Paramedic »

Monday May 4 2009

Mexican Flu Update:

Reader RG in Arizona recommended this article: Scientists dig for lessons from past pandemics

Mexico: No New Swine Flu Deaths; Cases Up to 443

UK: Supermarkets Prepare For Panic Buying

Why the Flu Can Never Be Eradicated

CDC Current Statistics 21 states, 160 cases, 1 death ("officially")

More Schools Shut As Swine Flu Spreads (430 schools) "The government issued new guidance for schools with confirmed cases, saying they should close for at least 14 days because children can be contagious for seven to 10 days from when they get sick. That means parents can expect to have children at home for longer than previously thought."

In California, Cases Suggest Border Origin

More on the Latest Three Bank Takeovers

H1N1 (Swine) Flu Cases in 15 Countries China, Hong Kong, Denmark confirm outbreaks. Now in 15 countries. "The regions hardest hit are in the western hemisphere, said a WHO spokesman. We have not seen sustained human-to-human transmission anywhere outside the Americas region," he added."

Two Human-To-Human Transmissions Confirmed in UK "Until now, cases were confined to people who had themselves recently come back from Mexico."

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Sunday May 3 2009

Mexican Flu Update:

SurvivalBlog reader Laurence W. wrote to warn that it is premature to post early estimates that the Mexican Flu is mild. "It may or may not be. There are not enough data points yet to speak authoritatively.
All one can correctly say is that it is too early to tell." He cited recent some well-informed discussion threads in the Flu Wiki Forum and the PlanForPandemic.com Forum.

Reader Laura C. recommended visiting the US Archives Online Exhibit of 1918 Flu. Photographs and Letters.

141 Cases, 19 States "The World Health Organization is warning of an imminent pandemic because scientists cannot predict what a brand-new virus might do. A key concern is whether this spring outbreak will surge again in the fall."

Farmers Fear Pigs Might Get Flu from Us

Swine Flu Originated on California Border?

Toddler Who Died in Texas Visited Houston Mall Before Onset of Symptoms

Swine Flu Starting to Look Less Threatening

First Genetic Analysis of Swine Flu Reveals Potency

Confirmed Number of Global Swine Flu Cases: 367 and Counting

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Saturday May 2 2009

Mexican Flu Update:

The first really good news on the flu outbreak came yesterday: Scientists See this Flu Strain as Relatively Mild. I am hopeful that the current strain won't mutate into something more inimical. But be sure to be well prepared, and get in the habit of frequent hand washing, regardless.OBTW, if I were in a position of influence, I'd recommend that the custom of handshaking be temporarily replaced with saluting, as was done during the 1918 Spanish Flu Pandemic. (But alas, these days some segments of society might see that as overly militaristic and politically incorrect.)

Reader Pat M. suggested an interesting article in Science Daily on social isolation to prevent the spread of influenza. OBTW, to minimize "casual contact", I recommend curtailing social events, and shifting to family wilderness activities such as hiking and rock hounding. If you are a target shooter, instead of going to public ranges do your shooting on remote BLM land, or on private land (with permission.)

The latest flu headlines:

The Binder sent us a link to a Newsweek article that suggests that the number of flu cases may be under-reported in Mexico: City of Fear; How the swine flu is terrorizing Mexico's capital. An on-scene report.

Queensland residents told to stockpile food amid flu fear

WHO to Stop Using Term "Swine Flu" to Protect Pigs

Vaccine Promised as US Cases Passes 100

More than 40 Probable Cases in Illinois

48 Confirmed Cases in New York State

Three New Cases Confirmed in Britain

Swine Flu Spreads to 11 States, 100 Schools Closed

Pandemic of Panic

E-mail From Trucker to Steve Quayle

Government Issues Guidance on Facility Closure: School Dismissal and Childcare

More Than 300 Schools Now Closed in US "Closing a school alone won't stop community spread. "If a school is closed, it's not closed so kids can go out to the mall or go out to the community at large," Homeland Security Secretary Janet Napolitano said. "Keep your young ones at home."

Hong Kong Confirms Asia's First Case of Swine Flu (now known as H1N1) Detected in Mexican man who had come from Shanghai.

Security Agent Likely Caught Swine Flu on Trip with Obama

NYC Mayor Says Many Sick People Not Tested, Number of Cases Probably Higher

Doctor in Washington State Saw 22 Patients Before Falling Ill

Ft. Worth: Mayfest, Other Events Cancelled Over Flu Concerns

Harvard Medical School Cancels Classes Over Possible Swine Flu

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Friday May 1 2009

Mexican Flu Update

Now is the time to order several boxes of N95 masks and rolls of bandage tape (for sealing any mask edge gaps )
Now is the time to buy a steam vaporizer (new, or used -- Try Craig's List for used ones)
Now is the time to approach your family doctor, and ask for a scrip for Tamiflu.
Now is the time to lay in a supply of Sambucol (Elderberry extract.)
Now is the time to lay in supplies of hand sanitizer (with aloe) and latex gloves--or nitrile gloves for those with latex allergies
Now is the time to stock up on Vitamin C, Vitamin D, and Guaifenesin expectorant
Now is the time to buy a couple of Bag Valve Masks
And lastly, for this and umpteen other contingencies, now is the time to acquire an honest one year supply of storage food (or more) for your family. Buy some extra, for charity.

Mark my words: A true pandemic will disrupt supply chains, starting with relatively exotic items (such as antivirals), but eventually working down to basic commodities. Be ready.

Today's flu headlines:

Panic buying and government distrust in Mexico

1st US Swine Flu Death: Toddler in Texas (visiting from Mexico) Flu also now in Austria and Germany

"Patient Zero" may have been found. A 5-yr-old who lives near a pig farm.

Access to Safe, Reliable Food Essential in Pandemic

Swine Flu Tracking On-Line

Ron Paul: Putting Swine Flu in Perspective

Dr. Len Horowitz: Mexican Flu Outbreak 2009 Special Report

Swine Flu Worries Shut Down Three Private California Schools

US Swine Flu Cases Now Officially at 68

Schwarzenegger, Obama Boosts Efforts Against Swine Flu

WHO Warns Swine Flu Threatening to Become Pandemic

World Takes Drastic Steps to Contain Swine Flu

Biden Tells Family to Stay Off Planes, Subways

Mexico Shuts Nonessential Services Amid Swine Flu

Asia Suspected Swine Flu Cases Rise

All Ft. Worth, Texas, Schools Closed Over Flu Fears

49 Confirmed Cases in NYC

CDC Latest Facts and Figures Re Swine Flu

Obama: US May Close Schools to Battle Swine Flu

Swine Flu Could Threaten Millions with Other Diseases

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Letter Re: Life Under South Africa's Gun Laws, by Joe Ordinary Voortrekker

This article is a response to a large and glaring preparedness dilemma for myself. Being a law abiding citizen I cannot willfully put myself or my family into a situation where we can be held legally liable for the commission of a crime. If I had a ‘run-in’ with the law because of my beliefs on firearms and freedom, it can and will put my family at risk. Unfortunately we live in a country where the liberty of its
citizens is at the mercy of the State. South Africa is for all intents and purposes a ‘Free and democratic’ country. However, our government is an openly socialist government. They require the dependency of its citizens, every law that is passed is to ensure a more conformist and dependant populace.

One of the laws that was passed was the Firearms Control Act of 2000. It is another of a long stream of attempts to remove the right to bear arms in South Africa. This act and the previous one allow for highly controlled and restrictive legislation. Below, I will give a brief overview of the pertinent points as it relates to the rights of individuals to keep arms. It is however, the root of my dilemma. No
matter how many or types arms I would like to possess, or what types and amounts of ammunition I would like to keep, I am controlled by the State every step of the way with 101 different [regulatory details.]
Before I get to South African firearms legislation, let me give you some insight as to where my thoughts stem from. Basically, after reading through the Profiles of survivalists on SurvivalBlog,
and the recommendations of the most esteemed JWR. I could see no way that I could become ‘squared away’ on the arms and ammunition side. Our laws in South Africa are just too restrictive! That however has changed, as there is a way. All it took was a little bit of lateral thinking and a copy of "Patriots" . Well actually the other way around, the lateral thought came after the second reading of "Patriots".

In this article I’m going to talk from a South African perspective and relate this information from our view. What I am hoping and intending is that it will get people to think through their firearm purchases and utilize every aspect or at least as many aspects as possible of the law for their own benefit. The South Africa situation may or may not apply to you, however this article is not intended for the US readers of SurvivalBlog, but more to people that live elsewhere and to give them the hope that there is potentially a way. The idea is to think laterally and use the rights that have been allowed you in every way possible.

Here is a brief synopsis of how the South African Firearms laws are applicable to ordinary citizens. For the ‘casual’ owner, people are restricted to a maximum of four firearms. The breakdown is as follows:

One Handgun
One Shotgun
One Rifle (Not Semi Auto) (With associated proof that you hunt)
One Casual Sports shooting firearm ([another] one of any of the above)

Only one of the first two (Handgun/Shotgun) may be designated a self defense firearm and there are legal ramifications if you shoot someone in self defense with another firearm. If you are a dedicated
sportsman/hunter/collector you are able to increase your firearm collection, but always under strict monitoring and conditions. And you have to have proof, proof and more proof.

Also we need to re-license every 2, 5, or 10 years depending on the type of license. Along with additional costs, competency tests, fingerprints, home/safe inspection and vetting of you by your family and/or neighbors, etc etc ad nauseam. The way that I see this is that the Government wants the public disarmed, and they are making it harder and harder and a real pain in the sphincter to re-apply for their licenses, so most guys just give up and hand their weapons in.

With Ammo, you may only possess a maximum 200 rounds of any of the calibers that you are licensed for. Possession of a single [loaded] round of any other caliber is illegal unless you are a licensed cartridge collector. (This is another painful exercise, and will not assist in stockpiling ammo) As for components. Bullets, brass cartridge cases and magazines are not regulated. However primers and propellants are. With primers, no more than 2,400 of any size. In addition, so are some spare parts, barrels, sears etc. (BTW, a spare barrel is considered a firearm in South Africa [, since pressurized gun parts are regulated. Effectively, the barrel rather than the frame or receiver is considered the "firearm"])

As an aside, I have watched the debate on concealed carry in the US with interest. In South Africa we are legally bound to carry [handguns] 100% concealed, no open carry, unless you are in Law Enforcement. So the question is with laws like this, how does one stockpile firearms and ammo? And what is the best way to get the maximum out of the minimum we are allowed to possess.
The only way that this can be done is to prepare for possible scenarios that may develop in the future. This is the tack that we have taken:

1) Get legally diversified with the correct calibers.
2) Keep only calibers that allow you to maximize your long term defense potential
3) Stock up on unregulated items that will allow for barter even if it’s not one of your calibers.

Okay, so I just mentioned that one needs to have the correct calibers This is, as everyone knows a very subjective statement. So how did we decide what the correct calibers are? In a scenario where there is true TEOTWAWKI then there will be a source of readily available arms and ammunition. Courtesy of our Law Enforcement and Military. Looking at these services, we see that the following calibers are the most common.

12 Gauge Shotgun,
5.56 NATO (AKA .223)
7.62 NATO (AKA .308)
and 9mm Parabellum (9x19mm ["Luger"]).

My logic and methodology here is to maximize my options in terms of usable and obtainable ‘components’ while still keeping within the framework of our legal system. I have also decided that we will not
apply for further weapons licenses as I do not want nor require the additional infringement of my privacy nor the ‘red flags’ that come with owning a ‘large’ firearms collection. So based on the highest
OPSEC possible in this situation, here is what we have done.

For a handguns I have chosen a .45 ACP my wife a 9mm Parabellum
For shotguns we have both chosen 12 gauge Pump actions
For casual Sports Shooting my wife has chosen a .22 LR pistol, and I have a scoped and suppressed .22LR rifle.
For hunting rifles I have chosen a .308 and my wife a .223
So our choices above keep us [both] at the four gun limit, no additional background checks and gives us a broad spread of calibers that will allow us to store primers, powder, and some ammunition.

On the unregulated side we have and are currently stocking up on the following. Virgin and fired brass in all of the above calibers, in addition to this we add any fired brass that we can scrounge. Various design and weight bullet moulds with the same methodology, factory made bullets in rifle and handgun calibers. Reloading dies, in any and all calibers that we can get. However we do concentrate on the dies for the brass that we have. (There is no point in having dies and no brass.) Cleaning kits and components, and lead and tin stocks, as well as reloading presses. For [rifle and pistol] brass reloading, we have standardized on Lee brand turret presses and the single stage RCBS Rockchucker as most can be had at very reasonable prices on the secondhand market here. For shotgun shell reloading we have standardized on Lee Load All.

Now the logic behind this. If ever the SHTF in a big way, we will be able to drive off most attacks, however if this degenerates into an extended and protracted “Patriots"-like scenario we should have all of the ‘makings’ to use captured weaponry as well as being able to supply and reproduce the correct ammo for such captured weaponry.

There are a few points to remember.
1.) Pressure and primer differences in military and civilian ammo. Know what you are doing or don’t do it!
2.) Always stay within the law, while the law is the law. Becoming an illegal ‘arms hoarder’ will get you into a heap of trouble, which only leaves your family at risk.
3.) OPSEC, OPSEC, OPSEC don’t brag around the braai (Barbecue) as to what you will do when TSHTF. Or what you have stockpiled, hidden, buried etc. Personally, I find that very few people in South Africa have a preparedness/survivalist mentality. If you start discussing what you are doing be circumspect in every aspect.

Finally, as an aside, Just this last week we were given detailed information about the preps of a ‘new age’ religious Doomer ("The sky is going to fall in 2012") that lives just outside a small town over
400 kilometers away. This person has told her family about her preps and this news has now traveled all over the country. We now know almost everything that she has done including evacuation and storage details. The family (rightly?) believes she is a nutcase and actively ridicule her preps. [An OPSEC breach like this presents] a very scary scenario.

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Thursday April 30 2009

Mexican Flu Update

Cheryl wrote to mention an article that described using Vitamin D to prevent a cytokine storm The dose is 2,000 units of Vitamin D per kilogram (1 kg = 2.2046 pounds), once per day. Thus, for an average 150 lb. adult, the dose would be would be 136,060 units of Vitamin D. This is to be taken for three days. (I.U. Equivalence: 50,000 units = 1.25 mg) My Strong Proviso: The usual fat soluble vitamin (KADE) warnings apply. Don't over-do a good thing. You should discuss vitamin D testing and replacement with your physician before acting on that doctor's recommendations! Vitamin D supplement limits vary depending on body weight, diet, and exposure to the sun.

Today's flu headlines:

WHO pandemic threat level raised to 5 out of 6

New Flu Strain is a Genetic Mix

First US Swine Flu Death, Cases Now in 10 States

France urges Mexican flight ban

Cuba Halts Mexico Travel (First Country to Do So)

Pandemic Risk Grows as New Cases Emerge US cases now at 64, Mexico 152 dead, over 2,000 infected

US Flu Deaths Seem Likely as Outbreak Spreads

Scary Advertisements From 1976 Flu Outbreak Today they tell us to stay calm

Mexico City Mayor: One more death, toll stabilizing

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Wednesday April 29 2009

Mexican Flu Update

It has been reported that the incubation period for the Mexican Swine Flu is 4-to-5 days, and perhaps as long as 10 days in children. That's the "hot" period when someone infected is shedding the virus. This is bad news for epidemiologists. With modern air travel, this means that there is probably no stopping the flu from making it to the far reaches of the globe. So now, all that we can do is wait, watch, and pray that it doesn't mutate into a more lethal strain. Barring that, my guesstimate is that it will be every country with a couple of months. The crucial time will be next winter in the Northern Hemisphere. It is now Fall in the Southern Hemisphere, so their upcoming flu season might give us a preview of what will happen up here, next year. Are you ready to hunker down when the flu hits your town?

Here are today's flu headlines:

The Government’s Forecast if Flu Problem Explodes: Two Million Americans Die "Ninety million citizens would get sick. The economy would shut down."

DHS Sets Guidelines For Possible Swine Flu Quarantines

Official: US Flu Victims May Be Infecting Others Confirmed cases in Asia Pacific and New Zealand

Schumer Bragged About Cutting Pandemic Funding (Well, now we are all in Deep Schumer.)

Swine Flu More Dangerous than Bird Flu

Why Does the Swine Flu Kill Healthy People?

WHO Revises Scale For Pandemic Alerts

Mexican Reports: Flu Much Worse Than Reported "The truth is that anti-viral treatments and vaccines are not expected to have any effect, even at high doses. It is a great fear among the staff. The infection risk is very high among the doctors and health staff. There is a sense of chaos in the other hospitals and we do not know what to do. Staff are starting to leave and many are opting to retire or apply for holidays. The truth is that mortality is even higher than what is being reported by the authorities, at least in the hospital where I work it. It is killing three to four patients daily, and it has been going on for more than three weeks." - Dr. Antonio Chavez

Two Swine Flu Cases Confirmed in Scotland

Swine Flu Boosts Demand For Face Masks, Antivirals

Swine Flu Warning Raised as Virus Crosses Continents Now at Level 4. Could become Level 5 in the next few days.

Washingtonians Prepare for Swine Flu

Flu: Worst Case Scenario

Swine Flu Epidemic Enters Dangerous New Phase "The virus poses a potentially grave new threat to the U.S. economy, which was showing tentative early signs of a recovery. A widespread outbreak could batter tourism, food and transportation industries, deepening the recession in the U.S. and possibly worldwide."

40 Cases of Swine Flu in US to Date (No Deaths)

WHO Confirms Pandemic Alert Level Raised to Level 4

Swine Flu Cases Around the World

Swine Flu Fears Close Schools in CA, TX, NY

Americans Told to Wear Masks as Swine Flu Spreads Around the World

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Tuesday April 28 2009

Mexican Flu Update

The death toll in Mexico now at 149, and climbing, with more than 2,000 patients are hospitalized there. Containment appears unlikely. For a flu to spread this rapidly outside of the normal "cold and flu season" tells us something about its ferocity. I suspect that we will see multiple waves of infection, with the worst of them probably being next winter in the Northern Hemisphere. Mutations are impossible to predict. The only good news is that at least in the long term, viruses tend to mutate into less lethal strains. (The most lethal--a la the Marburg type hemorrhagic viruses--are so lethal that the hosts don't live long enough to pass on the viruses to others. Hence the tendency for many bugs is to become less virulent. The common cold (acute viral rhinopharyngitis), it is said, probably started out as a killer, many centuries ago.)

SurvivalBlog Editor at Large Michael Z. Williamson sent us a link to the first really practical article on using N95 masks that I've ever seen, by Tara Smith.

Mentioned a useful CDC background piece: Antiviral Drugs and Swine Influenza

Reader Matt J. in Kentucky notes: "Wal-Mart in Louisville, Kentucky is already out of N95 masks, but the hardware stores like Home Depot and Lowe's have 20-packs readily available (I bought two 20-packs at Lowe's and one 20-pack at Home Depot." OBTW, Bob at Ready Made Resources mentioned that sales have been very brisk, and they are now nearly out N95 masks, despite buying all that their wholesale suppliers had on hand. He also mentioned that their inexpensive full protective suit ensembles are going fast

Here are some of the day's flu headlines:

World closer to swine flu pandemic

Swine Flu: Five Things You Need to Know About the Outbreak Thanks to Dave (at Captain Dave's) for the link

Texas Closes More Schools as Flu Spreads

Obama: Flu Matter of Concern Not One of Alarm (yet)

Mexico City Now a Zombie City

Call Your Congressman! US Says Not Testing Travelers From Mexico

Swine Flu Hits Ernst & Young in Times Square, N.J. Department of Health Confirms Five Probable Cases

Flashback to 1994: CDC to mix avian, human flu viruses in pandemic study

« Flu and Antibacterials, by David in Israel |Main| Mexican Flu Update »

Letter Re: Tapping the National Medications Stockpile

Jim,
Sunday, the US Department of Homeland Security (DHS) announced that they would open up the National Stockpile of medications to provide antivirals to areas that may need them. This comment is a big clue to the real concern that this is already getting out of control. The National Stockpile is rarely tapped so this is a big event and a potential trigger for those out there who need to be aware. Luckily this year’s human flu was resistant to Tamiflu so there appears to be stock left, but this is also the end of the season so normal supplies are low. Relenza is another antiviral that is available and the swine flu is sensitive too, (at this point). Tamiflu [dosing] is weight-based for children and Relenza is not indicated for patients less than seven years old. I would suggest that anyone with significant medical conditions obtain an antiviral prescription from their friendly doctor now, and not later. Obviously large cities, especially those with international airport hubs, and those on the border, or with large migrant populations probably aren’t the best places to be right now. What triggers a bug out is individualized, but there is a definite advantage of being in a small town. But even Kansas hasn’t been spared with this one. With schools being shut down, that forces adult parents to stay home which causes shortages of employees not only at the mall, but the grocery store, the shipper, the police station, the hospital, the gas station…etc… Plan accordingly for any last minute items you need. - Mike the MD

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Flu and Antibacterials, by David in Israel

James
I constantly see recommendations for people to use hand sanitizer especially every time the flu-de jure becomes a problem. Over my years as a firefighter/paramedic many of my co-workers used hand sanitizer on a regular basis, the most frequent users often ended up with cracked skin and infections or scabs at the corners of their fingernails. These users even ended up occasionally spreading the fungus to me and other non antibacterial users due to their compulsive wiping of antibacterial compounds onto steering wheels and other surfaces.

Your best protection is not to nuke your own protections and hope any bacteria die, but rather enhance your own systems. Vinegar rubbed onto the hands doesn't remove your body's protective oils, it also doesn't cause the [drying and] cracking that alcohol based rubs do. Acidophilus is available in capsule form which can be opened and rubbed onto damp hands, acidophilus is a powerful microscopic security force that works in symbiosis with your body. I also had a policy of not using soap but spraying with dilute vinegar after rinsing my hands, sometimes rubbing in a few drops of olive oil, my hands stayed soft making my wife happy, the toughened skin stayed tough, and my skin protection layer stayed intact.

Day to day long periods of wearing of latex or nitirile gloves will cause your hands to crack and dry out. Since you will probably not encounter open puddles of body fluid by surprise cotton gloves, safety or eye glasses, and a cotton or better yet a HEPA face mask should help prevent acquiring any airborne hyper-communicative diseases if you need to go into a public place. Carry nitrile gloves and safety glasses in case you are called to provide first aid. Be sure to safely remove, bag, and wash any reusable protection before entering your home or vehicle.

Top attention should be placed on keeping your hands away from your face, especially the mouth and eyes. When I was a paramedic instructor I had the students hands dusted with UV-glowing powder. After class I brought out the black light, nearly everyone's face showed that they had touched or itched, even knowing that they would get extra credit for coming up clean.
Unfortunately I never had time to set up a proper scientific study with control groups, but my experience, and those who followed my advice was generally positive, most of the antibacterial gel users had hard cracked hands with our resident black fungus in the cracks and occasional infection at the corners of the nails. Why didn't the gel users stop? They really believed they were protecting themselves.
As for flu, if you keep yourself properly fed including dark leafy vegetables and citrus, don't work yourself to exhaustion, keep yourself warm, clean, and dry and you should be much more resistant, even if this is finally the super flu that the government has been waiting for all these years. - David in Israel

JWR Adds: I agree that antibacterials are over-used on a day-to-day basis, but they are appropriate in the short term, when a true viral killer is stalking the streets. Many years ago, I heard that mixing 20% (by volume) of aloe vera liquid with typical methyl alcohol-based antibacterial "hand goop" will prevent drying skin. BTW, I've noticed that some commercial antibacterials are now sold with aloe added, although I wonder at what ratio.

In addition to disposable gloves, don't overlook the need for glasses with side protection and disposable booties that can be shed and discarded just before you get in your car or truck. Disposable Tyvek suits are nice, but their use on a daily basis might be prohibitively expensive

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Monday April 27 2009

Letter Re: Caught Between OPSEC and a Hard Place

Jim,
A friend of mine had a recent encounter with the police that illustrates the importance of Operational Security (OPSEC), even for the tiniest details. My friend is a survivalist and keeps both an SKS (unloaded but with ammo nearby) and a CZ handgun (loaded) in the cab of his truck. This is basically what Boston T. Party and others recommend: a handgun instantly at the ready and a rifle nearby. My friend does not have a CCW permit and in Washington State you must have a permit to have a loaded gun in a vehicle. He was pulled over while driving on the freeway, and his conversation with the officer who pulled him over went something like:

Cop: “I pulled you over because you failed to signal when you changed lanes…”
My Friend: “Oh, that’s odd, I know I used my signal.”
Cop: “…And I see that you have an NRA sticker on the back of your truck. Do you have any firearms in the vehicle?”
My Friend: “Yes.”
Cop: “Get out, I’m going to search the vehicle.”

After searching and finding the CZ, the cop arrested my friend for having a concealed weapon without a permit (note that the gun was “concealed” in the car, not on his person). With my friend locked in the back of the police car, the cop proceeded to hold the SKS up in the air on the side of the freeway, checking the chamber to see if it was loaded (while hundreds of people drove by). I’ll skip the rant about this incident further lowering my already-low opinion of the Police, and concentrate on the OPSEC implications.

The cop never asked permission to search the vehicle: he informed my friend that he was going to search. My friend likely did not commit any traffic infraction, and was probably pulled over just for having an NRA sticker. He is now facing misdemeanor charges for carrying concealed without a permit; If he is convicted he will have a criminal record. The CZ has been confiscated and he will never get it back.

Like many people, my friend did not want to get a CCW permit and put his name on a government list of people who carry weapons; he saw getting a CCW as a breach of OPSEC. He chose to exercise his Second Amendment rights despite an unjust state law and he carried without a permit. If he hadn’t committed another, tiny breach of OPSEC, he would not have gotten caught. It’s sad that we’re at the point where even being seen as a supporter of the NRA has become a breach of OPSEC, and something we must hide from the police. Because of this incident I will be removing the NRA sticker from my own vehicle soon. - “Big D” in Washington

JWR Replies: To begin with, your friend handed his exchange with the officer the wrong way. He could have maintained his privacy and his Fourth Amendment rights by not answering the officer's question or by changing the subject, when the officer went on his "fishing expedition." I am a Christian and I don't believe in bearing false witness, but there is no Biblical admonition about opening one's mouth. In fact, there is just the opposite: See: Proverbs 18:7: "A fool's mouth is his destruction, and his lips are the snare of his soul." I also recommend the "Don't Talk to the Police" lecture by Professor James Duane, that has been mentioned before in SurvivalBlog. I consider it "must" viewing for teenagers and adults. I also recommend studying the book You & the Police! by Boston T. Party.

And, yes, it is a sad state of affairs when we have to hide our political affiliations when traveling public highways.

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Sunday April 26 2009

The Mexican Flu and You

In the past 24 hours I've received dozens of e-mails from SurvivalBlog readers about the emerging Mexican Flu. Some news stories have included cryptic comments from heath officials, implying that the mechanism of infection makes this particular virus "very difficult to contain." This leads me to conclude that those infected have a long latency period during which they are infectious, yet, they do not display frank symptoms. This does not bode well for any hopes of containing the spread of the virus.

Then we hear a CDC official stating: "The swine flu virus contains four different gene segments representing both North American swine and avian influenza, human flu and a Eurasian swine flu." That strikes we as something very peculiar.

The disease is respiratory, and has one strong similarity to the 1918 Spanish Flu: "The majority were young adults between 25 and 45 years old," said one official under the condition of anonymity. Since, young and healthy people with strong immune systems are the most likely to succumb, this might indicate that the biggest killer is a cytokine storm--a collapse caused by the human immune system's over-reaction to a pathogen.

I strongly recommend that everyone reading this take the time to re-read my background article on flu self-quarantine and other precautions: Protecting Your Family From an Influenza Pandemic. The details that I give there are quite important. Pay special attention to my discussion of the shortage of hospital ventilators. If anyone in your family is immunosuppressed, consider yourselves on alert. Make your final preparations to hunker down, immediately.

In the next few days, there is a good chance of wholesale panic, including some well-publicized "runs" --probably first for hand sanitizer and face masks, and soon after for bottled water and groceries. Plan on it.

UPDATE: The BBC News web page Mexico flu: Your experiences has some updates posted from individuals in Mexico City

To summarize, here are some key quotes from a recent article:

"This outbreak is particularly worrisome because deaths have happened in at least four different regions of Mexico, and because the victims have not been vulnerable infants and elderly.

"The most notorious flu pandemic, thought to have killed at least 40 million people worldwide in 1918-19, also first struck otherwise healthy young adults."
...
"But it may be too late to contain the outbreak, given how widespread the known cases are. If the confirmed deaths are the first signs of a pandemic, then cases are probably incubating around the world by now, said Dr. Michael Osterholm, a pandemic flu expert at the University of Minnesota.

"No vaccine specifically protects against swine flu, and it is unclear how much protection current human flu vaccines might offer."

Current statistics show a less than 10% lethality rate, but of course the first wave of flu victims are getting access to the best medical care available. If the contagion spreads, sheer numbers will quickly overwhelm hospital facilities--particularly the number of mechanical ventilators available. So the lethality rate may rise, even if there is not a viral mutation.

Here are the latest headlines on the flu, as well as some background pieces. I'll post more links, as they become available.

Swine Flu, Mexico Lung Illness Heighten Pandemic Risk

Swine flu could infect U.S. trade and travel

Mexico Races to Stop Deadly Flu Virus

Spanish Flu Survivors Remember

Some Facts About Past Flu Pandemics

WHO ready with antivirals to combat swine flu

Possible Swine Flu Outbreak at NYC Prep School

California Expects To Find More New Flu Cases

Swine Flu Jitters Sparks Sell-Off In US Hogs

Swine Flu Resources

Most Mexico fatal flu victims aged between 25-45

Swine Flu May Be Named Event of ‘International Concern’ by WHO

[A UK] County's masterplan to deal with flu pandemic

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Thursday April 23 2009

Letter Re: A.P. Reporter Seeks Newbie Preppers in SoCal for Interview

JWR's Introductory Note: I got the following from a legitimate reporter that has promised a fair and balanced article. Of course the usual OPSEC considerations apply...

Hello.
I am a reporter with The Associated Press and I am working on a story about the growing number of people taking steps to stock up on emergency food, water and other supplies because of concerns about the recession and the stability of the networks that keep our grocery stores stocked up and our power running. I interviewed Jim Rawles last week and he suggested that I post here to find people who would be good to talk to for my piece.
I am specifically looking for people who haven't really thought much about emergency preparedness/survivalism before, but have started to stock up on supplies recently (say, in the last six months) because of the bad news on the economy and the financial system. I am based in Southern California, so I am really looking to talk to folks who live in Southern California – although I could do interviews by phone with people from out-of-state.
Please contact me at reporting4good@gmail.com if you would be willing to be interviewed for this story.
Once you contact me, I will respond with my business e-mail and name and other contact information. I would just rather not put up that information in a general post that anyone can see.
I look forward to hearing from people soon!

Gillian Flaccus
Associated Press, Orange County Correspondent

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Tuesday April 21 2009

Letter Re: Rethinking Uncommon Rifle Chamberings

Mr. Rawles-
I read "Patriots: A Novel Survival in the Coming Collapse" a couple of weeks ago and enjoyed it. Thank you.

I wanted to mention: I try to follow conventional wisdom about caliber choices for SHTF weapons. Interestingly, in the current ammo shortage, it’s still somewhat easy to get ammo for oddball calibers. For example, if one needs 7.5x55 Swiss, 7.65x54R Russian or 7.5x54 French, many online dealers have it in stock, while 9mm, 45 ACP, 12 gauge buckshot, 308, 223, 7.62x39 etc., are very hard to come by. For people who don’t have the budget to stockpile a lot of ammo, this may justify keeping at least one [rifle chambered in a] non-standard caliber in the arsenal. The bolt action Russian, Swiss and French rifles are relatively inexpensive, sturdy, and hard hitting. The fact that the ammo is in good supply during a nationwide ammo shortage is a bonus.

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Monday April 20 2009

Letter Re: The Mexican Drug Wars Come to the United States

Jim,
As the economy gets worse, crime of this sort will only increase. Small towns that have secondary and tertiary highways are not immune. Often these secondary routes parallel the primary highways that have the heaviest enforcement which leads the traffickers to use the secondary routes to evade Law Enforcement. We have had first hand experience with interstate drug traffickers in our Midwestern town of 1,300 people that has a parallel secondary highway running through it. I shudder to think what will happen to our borders, cities, and towns when bankrupt states and cities are forced to confront the stark reality of forced service reductions due to insufficient revenues. - LEO in the Midwest

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Friday April 17 2009

Cooper's Color Codes and Bugging Out Before the SHTF, by H.I.C.

Colonel Jeff Cooper once wrote that he was born in another country. Born and raised in the US before the Great Depression, the country of his youth was no longer. It had been hijacked by pointy headed socialists with academic degrees and not a trace of common sense. At 50 years of age I not only agree, but maintain that the “New America” based upon a globalized economy, Federalized powers, and an Urban-centered society is dying. Our great country is dying and our great cities will burn in the funeral pyre.

Most Americans know that survival in our great cities, deserts, and marginal climate areas of the US would not be possible without continued delivery of basic Supplies (food and gasoline), Services (water, electrical power, natural gas), and Civil Order (rule of law, generally accepted currency). What they may not know is that these great cities have no great food warehouses, no great fuel tank farms, few electrical power plants, few water storage reservoirs, and they have disarmed the law abiding public at every turn. These supplies are transported by thousands of semi trucks, ships, barges, and trains every single day. If a sudden crisis disrupts transportation, if we lose the use of our interstate highways or the diesel fuel to transport supplies, everyone in these cities will either have to leave or they will die.

Recent hurricanes, recessions, and terrorist events are reminders that our modern society is fragile and that critical supplies, services, and civil order will likely be interrupted by any major event. Look at what happened to New Orleans (population 480,000) during Hurricane Katrina. More than half the population left early, but when the storm hit, tens of thousands either would not or could not leave. Now imagine these barbaric conditions in a city like Phoenix (population 2 million) or Los Angeles (population 10 million). Now imagine it happening all across the US if our oil refineries are either destroyed or the world runs out of crude oil.

Transportation in the US is totally dependent on crude oil and most of this oil comes from folks who hate us. The supplies underground and our ability to find new supplies are diminishing and no one knows how much is left. Even without the potential for a renewed terrorist attack using WMDs, or the long dreaded west coast mega-quake, our cities will not be sustainable without some new technology. Renewable power sources such as solar, wind, and geothermal can produce electricity but do not effectively power transportation. Hopefully most Americans can be sufficiently motivated to move out the cities with their families, but those who will not listen must feel.

Should I Stay or Should I Go?
I think it is a common belief by newly awaken survivalist that they can keep living in a big city until the stuff actually hits the fan and then bug out with their vehicle and all of the survival gear and prepared food. I am curious, have any of you actually tried this? Have you taken the time and effort to load your vehicle with thousands of pounds of guns, ammo, survival gear, and freeze dried food? Have you then driven through a major city, a long distance interstate trip, stopped for the night, or had car trouble? And what if you are forced to bug out without shelter and a considerable amount of food, have you really improved your chances for survival?

I have and the whole process was a pain in the . I hooked up my one ton pickup to my 5th wheel trailer, filled it with the guns, ammo, tools, extra fuel, and food storage, and the rig grossed at 18,000 lbs. Let me tell you this was not bugging out, this was crawling out. Even powered by a Cummins Diesel, nothing weighing 9 tons moves quickly or escapes over steep or narrow roads. I also tried towing an open trailer filled with a tractor and tools cross country and learned about road trash puncturing trailer tires and criminals loitering at rest stops and RV parks. Fortunately, these problems surfaced during normal times when the highways are open, fuel is available, and I was the only one freaking out. My experience is telling me that the best response is to move away from the cities before an event. Move to a more secure area now. Preposition your survival tools and food storage at a secure site before the stuff really hits the fan. Then find a way to move there your self.
I have read all the government’s emergency preparedness books talking about folks pulling together, one big nation singing Kumbaya. But I have also read the postings from folks who were late evacuating New Orleans. Many of them were threatened, robbed, and assaulted by their neighbors simply because they were better prepared. I do not know if this entitlement mentality is really that widespread, but experience suggests that Americans will get scared and will act like animals.

Deciding When to Leave; Cooper’s Colors for a Social Crisis.
Jeff Cooper also devised a series of situational awareness colors to allow his self defense students to make proper decisions and know when to use deadly force to protect their lives and family. Borrowing Cooper’s Colors for a social crisis I suggest the following:

Condition White) Circa 1981-1988: Following the Vietnam war, Watergate, and the Iran hostage crisis, the US was ready for a positive change. During the Reagan years we challenged the Soviet Union and emerged as the world’s lone supper power. Despite some evidence to the contrary, we felt that we had no reason to be concerned by terrorism. Paul Volcker tamed inflation by inducing a severe recession. We all shared the economic pain, then we shared the rewards of a growing and stable economy combined with low inflation. Social changes were being made slowly and with participation from the general public. The Government rarely took violent actions against protesters. Crime was random and quickly dealt with by law enforcement.
Tough times, but the US government was working for the People.

Condition Yellow) Circa 1989-1998: The US is struck repeatedly by terrorists at home and abroad. The Government treats this as a criminal manner. The economy fluctuates but appears to correct itself rapidly and without visible government interference. The US starts pursuing free trade and globalization treaties. Manufacturing, agricultural, and finally high wage jobs are being outsourced. High risk mortgages and investments are legalized and encouraged. Presidents Bush (I) and Clinton start talking about and building a “New World Order”. Social changes are being made to protect and benefit the people in power, without participation from the general public. The Government begins to track, infiltrate, and take deadly action against small religious groups and grass roots militias. Law abiding citizens are blamed for violent crime and gun ownership is highly regulated. The only bright spot during this decade is the results of the 1994 midterm election and the subsequent Contract with America.
A break of trust between the US Government and the People. Citizens should store guns, ammo, food, and fuel. Prepare financially, physically, and mentally for change.

Condition Orange) Circa 1999-2006: The US is struck repeatedly by terrorists at home and abroad. The Government responds by aggressive military action designed to change the conditions in countries hosting terrorists. The economy fluctuates between extremes of growth and recession, as if no one knows the true worth of these commodities and major corporations. The Government begins to spend massive amounts of money on the war and hides this spending off budget. Price increases affect the availability of food and fuel. Social changes are being made without participation of the citizens or even the US Congress. The most offensive of these changes are rammed down the throat of a disbelieving public by the courts and petty bureaucrats. The heavy handed tactics of the State and Federal Government begin expanding the number and boldness of protest groups, well ahead of their attempts to control them. Crime is increasingly organized by gangs, carried out by minors and illegal aliens, and is funded by illegal drugs. Law enforcement is not effective against this and many believe the problem is intractable.
A second break of trust. Citizens should liquidate their financial assets, purchase and store critical supplies and solar panels, and move to safer locations.

Condition Red) Circa 2007 – ????: High risk loans, derivatives, and credit default swaps cause huge financial losses and trigger irrational stimulus spending. The US Treasury and US Federal Reserve start taking up major ownership stakes in US corporations, then use this position to control the means of production. They announce plans to create a Federal domestic police force. This may be used to enforce new requirements for domestic passports, travel restrictions, and to deal with any visible protests. The Obama Administration is full of folks committed to new laws regulating guns ownership and banning the sale of effective defensive weapons, ammo, and reloading components. Large scale energy, income, and sales tax increases are planned. I believe that Americans will again be deprived from owning real [precious metals] money. Our currency will be devalued by perhaps 80% to offset the massive Federal spending. Price controls and rationing of food and fuel will be introduced by executive order. During the Great Depression, FDR banned the private holding of gold and foreign currency. US dollars (gold certificates) were replaced by Federal Reserve Notes. Many banks were closed without returning deposits to account holders and what little cash was left in the hands of the people was devalued by the Treasury by 40%.

Many folks are moving out of large cities. They are buying rural land and planting a garden. They are buying and hoarding guns, ammo, food, fuel, and looking to buy gold and silver. While economic conditions appear bad, the break of trust between the Government and the People is more reminiscent of the Civil War than the Great Depression.

Can You Make an Orderly Transition?
a) Moving Out of the City but Keeping Your Job.
Many folks simply can not leave their big city job and feel trapped. For them, moving your family out of the city and keeping your present job, and commuting back and forth may be the best interim solution. You might look at public transportation in your area and see if you could buy a home near this. Also consider owning a Jeep or a pickup that can contain survival tools, food storage, hiking boots, even a mountain bike and commute using that vehicle when you feel that a crisis could be imminent. You need to practice for this occasionally to find out how to drive home without using freeways, or clogged intersections, or having to refill your gas tank. If you plan on biking home, why not try it once a month. Find out now if it is a viable alternative.

b) Career Changes that Improve Your Preparedness.
Some friends of mine recently underwent a significant career change. They left their research position at a US government lab in California to take a college professorship in a small Midwestern town. There are many opportunities for folks to change careers and significantly improving their preparedness level without losing their career and every thing they have built. Creating a portable small business, building a farm or ranch, taking a related job in small town America are all good ways to improve your position without the big and scary step of quitting and living off your savings.

c) Transfers and Early Retirement.
I moved out of Los Angeles 25 years ago, to a small desert town three hours away. I soon plan to retire and move even further away from California and its enormous insatiable and unsustainable cities and their outrageous politics. Often times these transitional changes take years of planning and savings to carry out successfully. For me, the years of planning and savings are worth it. If you are just a few years away from retirement, you might want to find out the rules and calculate how to retire early and how much such a change would cost you in the long run.

How Can You Bug Out Safely?

d) What are you Bugging Out From.
This may be the most important question. I believe that you must know what you fear before you can plan what to do, and ultimately where to go. What could convince you that you must leave your current home? Are you worried about a natural disaster such as a hurricane, an earthquake, or a tsunami. Perhaps you are concerned about a 1930s type depression, a renewed terrorist strike, or a combination of events that teardown the rule of law and allow rioting and conflict on a nationwide scale. If you are just worried about keep yourself employed in our current economic mess, you might consider mobility and job skills more important than bugging out. But if you have come to the conclusion that the American society will fracture when subjected to enough stress and that the inevitable reaction to almost any sudden crisis will be rioting and nationwide loss of the rule of law, you might want to consider moving to an area where you fit in and are accepted by the community.

e) Selecting the best route and location.
Leaving your “Big City” job and moving back to your home town is a pretty popular idea right now, perhaps even smarter than trying to start a new life in a new and strange part of the country. I grew up on a small farm in the Midwest and am planning to move back to a small farm. When I talk to my new neighbors I find that I actually have more in common with them culturally that the folks I have worked with here in California for over 25 years. Truth is I am still a farm boy who is more concerned with my farm and livestock than I am with a Lexus or a wide screen entertainment system. No one seems to be much impressed about my “Big City” job but every one is stoked that I am a qualified gunsmith and can trap beaver out of the creek.

Some good friends of mine moved back to their home town of Sandpoint, Idaho about 12 years ago. Northern Idaho seems like a nice enough place when I visited a back then, but even a couple of local boys with engineering degrees had a hard time landing a full time job. Perhaps moving where you can actually find a job and where you can still afford some nice farm land would make more sense than moving to someone else’s idea of an ideal location, (Sorry, James).

The same applies to your route selection. Staying away from the inner city areas that always seem to be the flash points for social unrest seems obvious. But perhaps moving out of the big city early is more important than planning the best escape route and waiting too long. If you must wait until the last minute you should consider finding a bug out location that is within a very short drive, say only a few hours away. Another advantage of have a “local” bug out location is using as a vacation spot on long weekends. Suddenly, taking a week off and driving out of the city is more of a regular occurrence. If you practice it often, it is more likely to work under the added stress of a real crisis event. [JWR Adds: The drawback to this is that if your retreat is in close proximity for you, then it is also in close proximity for The Golden Horde. A three hour drive out of Los Angeles, is just about where most refugees will be running out of fuel. Choose your retreat locale wisely, well-away from exit corridors and natural lines of drift.]

f) What to Carry, What to Pre-position.
Even if you have a very secure location to preposition or cache goods and equipment, I believe that you need to store the primary means of survival at your home and be prepared to carry it with you. I define the primary means of survival as food, water, shelter, clothing, and protection from immediate harm. Secondary stuff would be the means to sustain life beyond the immediate threat, i.e. productive land to grow food, livestock, tractors and farm equipment, means of producing electrical power, reload ammunition, trade goods, gold and silver. I recommend that you keep the primary stuff at home and have the means of transporting it to safety at a moment's notice. You may choose to store the secondary stuff at your retreat location (and take the risk of theft) or at home (depending upon your ability to transport it). In practice, I would suggest that the heaviest and most bulky secondary items should be pre-positioned or cached at the retreat location.

g) Selecting a Bug Out Vehicle.
If you plan to--or fear you may have to--make a lengthy bug out trip with a loaded vehicle during crisis conditions you might consider the fuel range and load capacity as the most important considerations. While recently designed gasoline vehicles tend to be very reliable and more fuel efficient than trucks built in the 1970s, their fuel mileage is still much lower than an equivalent turbo diesel with a manual transmission. Plus it is easier to add significant auxiliary fuel storage tanks to a diesel. My number one recommendation for a bug out vehicle is a 1994 thru 1997 Dodge Cummins one ton pickup with a 5 speed manual transmission and 3.54 rear end. Add a 90 gal Aux. fuel/tool box combo for 1,900 mile range without stopping to refuel.

What If You Leave Too Early?

h) Leaving When You Should.
Human nature is a funny thing. Through out history folks have remained in very dangerous conditions, literally losing their own life, because they are afraid of public ridicule for running away. This was particularly true with the Jews in 1930s Germany. While leaving may have been difficult and even prohibited by the Nazis, it was possible. So why did so many folks bow to social pressure to remain. Who cares what the sheeple think, learn to run like a scared little rabbit. If you can not move to a safe area permanently, then find a way to move there temporarily. Look for an opportunity to take a sabbatical, or take time off to care for an aging parent, or to work part time. Look for anything that allows you to leave the most dangerous area at the first hint of a crisis. Yes, your friends may harass you for bugging out too early and slinking back a couple of weeks later. Just remember who they are and invite only those folks who seem to understand the risks we appear to be facing.

i) Leaving Yourself a Way to Return.
Please do not plan to max out your credit cards, pull out of your retirement accounts, or burn bridges with your boss. History is full of folks who thought they knew the end of the world was coming, only to be forced to deal with reality the next day. Did you ever hear of the 1840s religious group, the Millerites? They gave away everything they owned because their leader knew that Christ would return on a particular day. Leave yourself a safe way to return to your old life if you decision to bug out is wrong. While I believe that it is a much better plan to live in a safe area all the time than try to predict the event, I also recognize that many people can not move quickly enough. I believe that the Bible states that the end will arrive like a thief in the night. No notice, no warning, one second every thing is fine and the next second the world has changed radically.

j) Living with Your Mistakes.
It is possible that you will be caught up in a crisis in spite of all your preparations. Perhaps you needed to travel to a big city hospital or take a long range flight on just the wrong day. Perhaps a crisis develops while you are living your life and not really paying any attention. Life is not going to send you any emails telling you that the stuff has hit the fan and you are now on your own. I recommend that you always carry a bug out bag with the basic survival food and equipment, and bring along your knowledge, skills, experience with you. Carry enough gold, silver, and cash to replace some of your preparations and allow you to purchase the means to get home if you are caught taking a long distance flight.

Summary.
There really is not any way to know what they future is going to look like. We could experience a long degrading slide into the dust bin of history (France, Spain, Japan) or in a blinding flash of cataclysm (1917 Russia, 1934 Germany, 2001 Argentina). We could be looking at a repeat of the Great Depression, a World Was over the remaining oil supplies, or a second Civil War. What I do know is that our Government has been corrupted and is responding to the unbridled greed of an elite few and against the needs of the many. Studying our own history and the history of other developed nations under similar shows two clear possible futures: Those that shared the pain recovered, those that spared the elite at the expense of the many suffered from long debilitating economic depressions that often decayed into Civil War, Fascism, or Communism.

I would rather face the future surrounded by like-minded people in an area that can support both my life and a sustainable society. A society that is not dependent on long distance transportation of critical goods, non-renewable energy sources, centralized control and just in time deliveries, or intensive industrialized agriculture. I was born on a small farm in the breadbasket of the world, and I want my country back!

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Monday April 13 2009

Three Letters Re: Why Survivalists Should Buy Local Organic Food

Mr. Rawles,

Yesterday, you posted Chad L.'s submission concerning buying "organic" and/or locally produced food. In it, Chad made a few statements that are simply wrong. This is an example: "...factory farming requires the use of fertilizer made from oil, largely derived from the Middle East. " This is a wholly ignorant statement, ignorant because if the author had bothered to check, he would have found that the USA produces nearly all of it's nitrogen fertilizer from natural gas. Even if we did use oil as the source for ammonium nitrate, OPEC only accounts for about half of the oil we import, if you only count Iraq it accounts for 10 percent of that (or about 5 percent of all imports). We import more oil from Canada and Mexico than from any country we are current at war with. This sort of soft-thinking is impossible to support, but sounds nice to many who take such statements as fact without taking the time to check them. We don't produce nitrogen fertilizer from oil, and if we did, the USA produces far more than it imports, so the "largely derived from the Middle East" is patently false. Heck, OPEC isn't comprised only of countries from the Middle East. Venezuela as well as several independent African nations are lumped in too. Take them out of the equation and the total oil imported to the USA from the Middle East only about a third of the total OPEC imports we receive.

He also doesn't point out that the majority of the world is fed by corporate farming, he even makes "corporate" sound like a dirty word. Any farmer I know who is making a profit, is incorporated. It costs approximately 1/3 to produce (by weight) a "corporate" tomato as it does an "organic" tomato - and the only purported guarantee you get is that no pesticides were used to produce it. If the world went "organic" the world would starve. Sure it's a good idea to grow your own food, but to do so because you hate "corporations" or that non-organic food is somehow less safe (anybody remember the folks who died/got sick when they drank the "organic" Odwalla juices a few years back?) or more safe is living in a fantasy world.

Let's not forget the offhand insult delivered to that ignorant guy wearing the NRA hat. Was it meant to say that the guy, being a gun-owner, should know something about a place he'd never been? Or, more to the point, was it simply an ad-hominem attack on some marginalized citizen (aren't all ignorant rednecks, NRA hat-wearin' types?) who had the misfortune to cross this man's path?

Since he touts "organic" local farming as using, in his words, "very little oil-based fertilizer" where, exactly does he think they get their ammonium nitrate? Any farmer can make the claim to use "very little oil-based fertilizer" since nearly all fertilizer is made from natural gas (that we produce in the USA).

His arguments simply do not support the truth and facts about farming. He also knocks, "South American factory farms" and makes an incoherent statement about millions of low-income immigrants (the same incoherent statements made about the Irish, Italian and WWII waves of immigrants) who flee here because of economic conditions on South American farms. The last time I checked, immigration from Chile (the major source of our winter fruits and vegetables - remember, the seasons are reversed below the equator - not so with Mexico) was so small, they did not fulfill their maximum quota with the US department of state. In fact, with a 96 percent literacy rate, they are better educated than we are in the USA. And in fact, with a population of only about 16 million (most descended from european immigrants) they would depopulate very quickly if they did support his "millions" number. Corporate farming in Chile works well, they help feed the rest of the world. Argentina is a close second. Many of the farm workers in Chile, for instance, are multi-generational employees of the same evil "corporations" as their fathers and mothers. How do I know this? I visit there, and have several connections in their agribusiness community. He picked a poor example of "insuring national security", most of the illegal workers in the USA do not work in agriculture-related industries, although this may not be readily apparent to a Californian (the breadbasket of the USA). This also casts unfair aspersions on the character of the human swarm he would have us fear as a "national security risk", do you really think an illegal immigrant would countenance someone coming to the country he needs to work in to support his family as his side in a border crossing, if that person were to attack the USA? He would have you fear the "great brown horde" the same way people in the northeast were taught to slur those "swarthy grape stompers" from Italy.

His facts are either skewed, or wrong. His thinly veiled disdain for gun owners and their intellect is insulting. And he is ignorant about where ammonium nitrate comes from. - L.D.M.

JWR Replies: To bolster your position, I should mention that SurvivalBlog reader "3CanKeep" kindly did some research and found that only 3.1% of the U.S. natural gas supply comes from foreign sources.

Jim,
I really enjoyed Chad L.'s article from an organic farmer reaching out to the preparedness community. It was very well written with many bits of humor and many very relevant thoughts, such as, "if I’m lucky I just might get to be a farm hand if things go bad." and"That requires knowing how to grow it, something that is well beyond even moderately accomplished hobby gardeners",and "a book can be a great source of information, but it will likely never replace hands on learning from someone that knows what they’re doing. If you want to be able to grow enough food to live on you should know a farmer."and, finally, "Much lore and utility can be learned from those that actually know how to do things and no thing is more important than being able to produce food."
For some unknown reason, I've been really fired up during the last few weeks to learn as much about gardening and growing food, more than I have ever been during my last 50+ years. If this is Providential direction, I had better get my rear in gear!

Chad's article is truly reaching out to those of us who, "have never really been to a farmer’s market because he thought it was full of overpriced vegetables and dope-smoking hippies", and I commend him for his efforts and have a better idea as to how those prices may be not as high as I thought.

I just want to second what Chad is saying. Having been around production (factory), small scale and organic farming for about 40 years, it is clear most of the production farms and farmers will not survive times when oil and it's associated fertilizers and pesticides disappear or are in very short supply, the same is true if credit is tight. The knowledge curve to change from production to organic farming is a multi-year process.

For the preppers having seeds in a can sounds good and may make some folks feel good but it is unlikely their first crop will provide sufficient food to make it till the next harvest. That also assumes they have knowledge to preserve the crops and an a appropriate place for storage. There are only two groups that might grow us enough food to survive, the small homesteading folks that are currently supplying food for their family and the small growers that are selling into the farmers markets and/or have Community Supported Agriculutre (CSA) organizations. Of these two only the small growers have the knowledge to rapidly scale up output.

Having been a conservative most of my life and having watched George W. take away many of our freedoms with the Patriot Act and Paramilitarization of the police force though the war on drugs, I now mostly try to ignore the far right, 'christian' right, far left, and other fringe groups and just focus on the individual people. There are many folks planning and preparing for tough times, it will be difficult enough to survive without using the knowledge of all of us.

Thanks for the blog. I just ordered your new edition of "Patriots". - Riverrat

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Sunday April 12 2009

Why Survivalists Should Buy Local Organic Food, by Chad L.

I know the name of the woman who raises the chickens that lay the eggs that I eat. Do you? I know about her daughter’s college plans and her vacations and how she got into the business of raising chickens. This might not seem so important from a survivalist perspective, but I think it is and I’ll explain why in the following paragraphs.

Now think about where you get your eggs. Chances are they come from a big chain grocery store. That means they are raised in a huge factory farm, staffed by underpaid workers of questionable legality, and overwhelmingly dependent on Chinese produced chicken feed. Which of these eggs do you think is better for the long-term goals of a preparedness minded individual? I thought so.
What I’m getting at here is that an American preparedness culture should be supporting small, local, organic farms whenever possible. In this essay I am going to avoid environmental arguments in support of local, organic foods. Although, I will confess that I believe that environmental issues are one of the largest threats to American personal and national security and that a dedication to environmental solutions will ease many of the problems that threaten us, especially including dependence on foreign oil and government corporate welfare in the form of unnecessary farm subsidies.
I started thinking about this topic because I work at a Farmer’s Market in Northern California and I rarely see customers that exhibit some of the tell tale signs of the “survivalist” crowd (Ruger hats, NRA T-shirts, etc.). However, many of the farmers can be seen wearing “the signs”. Small farmers are, as a whole, very hard working, practically minded, conservative leaning people who care deeply for their families. They would mostly fit right in at any Preparedness gathering; even the really Left of center politically leaning ones.

One morning a man walked up wearing an NRA hat and we got to talking. It turns out he had never really been to a farmer’s market because he thought it was full of overpriced vegetables and dope-smoking hippies. He was having a good experience and was really impressed by how knowledgeable the workers were about what they were selling. I could certainly offer no counter to his concerns over the hippies (it is Northern California after all. Although, to tell the truth there aren’t that many of them left). The counter to his cost concerns is more complex.
Organic food costs more than non-organic food. It is certainly more expensive to make food grow like this and the cost is passed on to the consumer. There have been plenty of recent big agriculture financed studies showing that there is little nutritional difference between organic and factory produced food which leads a consumer on a budget to validly wonder “why should I buy this if it isn’t better for me?” Even if these studies are true, they do not tell the whole picture.

Organic has become a major buzz word and a major marketing tool. Plenty of the stuff that’s labeled organic gains a lot of its cost from being shipped from South America and the big grocery stores (especially the big health food stores) are more than willing to tack on high prices for perceived value. It’s the same thing that goes on with the designer bags my wife covets. They might not do anything special (they hold stuff the same as my backpack does), but they look nice and are sought after by a particular and demanding consumer that is willing to pay extra for premium.
But this isn’t the whole story or even the segment of the food producers I’m suggesting we as survivalists support. There are huge hidden costs to the production of cheap factory food. First of all, cheap food requires cheap labor. When people in South America are sick of being sprayed by pesticides and working for next to nothing, where do you think they are going to go?
Your hard earned dollars should not be supporting factory farms that are abusing humans (a Christian issue if ever there was one if that concerns you) or creating an economic climate that gives incentive to millions of desperate people to illegally enter the country. The cost of supporting these South American factory farms is inestimable when you factor in all of the issues surrounding illegal immigration, issues that should be on the minds of all Preparedness minded citizens. |

Second, factory farming requires the use of fertilizer made from oil, largely derived from the Middle East. Ask anyone with a child serving in Iraq what the cost of oil is and you are not going to get a dollar amount. I’m not suggesting that we should not use oil or that our actions in Iraq are unjust or unnecessary, far from it. I am suggesting that supporting a food production model that uses very little oil-based fertilizer is in the best interests of Americans. Small, local farms that utilize crop rotation and sustainable practices do not destroy the land at the same rate (often the land is replenished) and do not need to pump Saudi chemicals into the ground.

A trip to a farmer’s market is far different than a trip to a place like a Whole Foods store. Vegetables and livestock that are in season and not delivered very far (the Locavore rule of thumb is to try not to eat food from more than 100 miles away if you can help it) have a negligibly higher cost at the register and virtually no societal costs associated with factory farms.

This is really just the tip of the iceberg of the issues surrounding the ways factory farming weakens national security. The more you dig, the more you see that true freedom and liberty depends on the yeoman farmer so celebrated by Thomas Jefferson. The Jeffersonian agrarian ideal is alive and well and you can help it survive simply by shopping.

Think about this: if the stuff really hits the fan and the country goes to h*ll, whom do you want to be friends with? I want to be friends with hard working men and women that know how to grow food and make their land work for them. Shopping at farmer’s markets is a great way to make community connections that are both personally rewarding and potentially life saving. I know the names of many of the people I buy my food from and if I’m lucky I just might get to be a farm hand if things go bad.

Thankfully there seems to be a shift away from the “hoard away somewhere with guns and MREs and ride it out” model of survivalism. Those MREs are terrible and will eventually run out. If you had to survive on them for any period of time you would likely add a great deal of depression to what is likely going to be a stressful situation. I want to be in a position to eat real food. That requires knowing how to grow it, something that is well beyond even moderately accomplished hobby gardeners. Even the gnarliest “I’m gonna drive 'the last of the V8 interceptors' and pump .50 caliber rounds into any desperados I see” survivalist is likely including gardening books in their personal survival library.

If you want to learn how to do something, a book can be a great source of information, but it will likely never replace hands on learning from someone that knows what they’re doing. If you want to be able to grow enough food to live on you should know a farmer. It’s real easy to meet them. Just go to a market and ask them about their product.

Being able to grow food is more important than even being able to properly operate a firearm (and many who can do the former know the latter simply by cultural osmosis). If you are willing to buy premium American made firearms, learn from the knowledgeable through conversation and classes, and enjoy them, you should be willing to do the same with your food.
Like all the best survival preps, gardening is fun and rewarding on its own and provides a wonderful opportunity to connect with your family. It ranks right up there with teaching your kids how to fish and shoot, but it has unfortunately fallen out of vogue in the last fifty years. When you’re picking up a head of lettuce from your new friend that grew it for you, ask him how you might do the same. It could save your life.

Shopping at farmer’s markets protects national security interests, builds important connections with like-minded people able to withstand hard times, and provides a way for families to connect with the traditions of one of America’s most hardworking and iconic professions, the farmer. Much lore and utility can be learned from those that actually know how to do things and no thing is more important than being able to produce food.

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Friday April 10 2009

Two Letters Re: Knob Creek Report on Ammunition, Magazines, and Parts

Jim, I also have been a regular attendee of the Knob Creek gun show in Fort Knox, Kentucky for the past 8 years and would like to add a little more insight. I always attend the October show and occasionally attend the April show. Times being as they are I made an extra effort to attend last week and bring some first timers with me. The shock started Friday morning when the booths opened at 9:00am. My first encounter was Hi-Tech Ammunition (St. Louis) table. They were already out of all rifle and pistol powder. Only remaining was some military surplus machine gun powder. The I went to a Wolf ammo supplier to only to find 7.62x39 was now $375/1,000. Their 9mm Federal was $325/1,000. I was not going to buy more since I already had an ample supply from the October show. ($185/1,000 for 7.62x39 and $175/1,000 for 9mm). In six months did the price really double? Yes it did and where will it be next month. I already new and expected .223 to be over $400/1,000 and was right. .223 is easy to reload for under $200/1,000 so its back to my basement married to my Dillon 550B.

Rifle and pistol prices are also hair raising issues. I have been tracking the costs of AK-47s extensively for the past two years. Since the October 2008 show AK-47s went up 50%. What used to be $375 for a Romanian WASR-10 is now $600. Any Hungarian or Bulgarian varieties that were $500 to $650 are now $700 to $950 and I did not see one Yugo AK in the three days at the show. SKSes were selling for $300 and up.

Your earlier Knob Creek reporter summed up the magazine market perfectly. Mags were available but the prices were all over the place, but mostly up. Once fired brass was very hard to find. I also heard that the dealers bought everything up on Thursday before the show started. Everything I wanted was gone, extremely limited or twice the price. What a depressing show. I had to the same conclusion to start shooting the AK-74 round (5.45 mm) but when everybody catches on its going to be the same problem we have right now. - John at the Trading Post

Dear James,
Yesterday you included a note from a reader who had attended the Knob Creek Shoot. In it he wrote: "On the whole, the current situation seems to favor those moving into the AK-74 realm. AK-74 [parts] kits were $495, receiver flats were $12, transferable receivers were $60 and the ammo was $300 per 1,300 rounds (in sealed tins). There never seems to be much competition for that ammo. I am thinking about getting a 5.45mm AK."

If you have standardized with the AR-15 platform, you can still use the 5.45x39 ammo which is still relatively cheap these days. Smith & Wesson makes both a full carbine and an upper in 5.45x39. AIM Surplus has the upper only available for $569. They also have the Russian 53 grain FMJ available for $149 per 1080-round can. This is where I bought my S&W flat-top upper.
I know there are other companies which make uppers in 5.45x39. If you already have an AR lower and want to take advantage of the price differential, this may be the way to go. - John R. in North Carolina

JWR Replies: That is a good point. For someone that does a lot of .223 target shooting, this os presently a good option. Let's do the math: Typical 5.56mm NATO ball (such as Winchester white box was $5 a box three years ago. It is now $15 per box. Suppose that you were to buy three 1,080-round cans of 5.45x39 ammo for $450. The equivalent quantity of 5.56 ball would cost a whopping $2,430. That is almost a $2,000 difference! Even after the expense of buying a dedicated 5.45x39 upper receiver assembly (around $800 for a nice one, presently), you'd still be nearly $1,200 ahead and would significantly reduce wear to your original 5.56.barrel.. It is also just the trick for that Red Dawn scenario.

It won't be long until folks catch on, and the supply of 5.45mm ammo dries up, so don't dawdle. If you currently own an AR-15 or M4, buy several cans of 5.45 ammo now. Just be willing to be on the back order list for a 5.45x39 upper receiver assembly for several months. Come next Fall, you'll be laughing all the way to the ~~bank~~ shooting range

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Monday April 6 2009

Old Frontier Forts as Alternative Bug Out Locations?, by R.D. in Wyoming

I wish to present an alternative prep situation that I have not really seen talked about on your blog and at other other sites. First a small bit of biographical background and anecdotes to explain my reasons for what I (now recently we) are doing.

Ten years ago, I retired from the military (26+ years, Life Scout (in a younger form) and an ex-scout leader (both Boy and Girl Scouts), fixed income with a part time job, never lived at one address longer than three years (requirement of military lifestyle), hobbies oriented to colonial/fur trade eras (see anecdote), recent earnest prepper (caused by that feeling in the pit of my stomach and head that things really aren't right and not going to get better). Fiscally responsible but bought the "earned your retirement" false dream long ago--that can't be changed now.

While in the military a lifestyle of semi-preparedness was necessary because of my low income. (I suffered through the Carter and Clinton administrations). We canned food from our garden wherever we were stationed to stretch the food budget and teach our children how to make their own food; we cut firewood for heat in some locales; we relied on kerosene lamp back-up lighting and camp stove cooking because of unreliable base power grids. At one base I was even visited by the Public Works officer to find out why my quarters had lights during a power outage. Imagine his surprise to find both lights and heat off the grid, plus all my neighbors and their children warm and well fed.

At times, while in the service, we qualified for assistance food and based upon those experiences have reached some unconventional decisions. Assistance food usually meant a five-pound block of USDA cheese, #10 cans of dehydrated soups or powdered eggs, surplus breads and very large containers of dried milk. When you open these it becomes a use-it-or-lose-it menu even for a family of four!

My colonial/fur trades hobbies came about with involvement in Scouting, teaching merit badges, Indian skills and camp crafts. They are both enjoyable and practical from a barter-trades aspect: hide tanning/leatherworking, moccasin and footwear making, non-manufactured clothing making (no zippers or buttons) and using trade cloth/blankets), primitive cooking and camping skills and pioneering--the art of using logs and rope to construct bridges, platforms and watch towers, cranes and jack-legs, and other basic heavy lifting rigs. I highly recommend adding Scouting handbooks and merit badge books (older printings) to family preparedness libraries. There is a wealth of information there!

Last year, while looking for our current home, I was really taken with a 1950s home that still had a primo Civil Defense specification bomb shelter in the back yard, primarily as a safe place for my reloading and weapons storage. It was the high end style that was connected to the basement of the house with a concrete tunnel, doored at both ends, and three feet underground. It was in mild disrepair: vent system damaged and entrance sealed off at the house, but repairable. We passed on that house because it was in the end too small for our needs and in a shall-we-say "unstable" neighborhood. Six months after purchasing our current home my wife, out of the blue, says that maybe we should have bought the other house! This from a woman that has made disparaging remarks when I have added to our LBE kits and checked the status of our "homeland defense" items.

She seems to have had an epiphany after our taxes were prepared when she wanted to know why we had not taken the $3,000 credit from our small investment nest egg before and I explained that we had never lost over half of it to the economy! When the "boss" changed her attitude and became interested in my "below the radar" preps, I started to include her in the decision and prioritizing of what to buy and the impacts on our limited budget.

"Below the radar" preps means passing off a purchase as some other need (diplomatic when not everyone is on board with the idea): a small generator was for our tent camper, food items were for this summer when our grandson visits or to replace things lost in a move, water jugs were because of the places where we camp, extra gas cans were for the lawn mower (a stretch but it worked), the FRS radios were an aid when we are out hiking, though there was no need to disguise the increase in reloading components when the election results were in.
All this brings me to our different style of prepping.

While I would like to be able to stock up as is generally noted and advocated, our finances and storage space do not permit the expenditure of the amounts necessary to buy in bulk. Also from my experiences in the military I don't like to place all my eggs in one basket. I will admit that while it is more expensive per unit cost, it is also more "do-able" in an on-going practical sense on a fixed income and has an unforeseen future benefit.

We make our storage food purchases with only the two of us in immediate mind, to aid in use and rotation, by buying individual serving packages for most of the items that we get: boxes of rice sealed in boil-in-bag pouches, powdered milk in boxes that have quart size servings inside, individual packages of Ramen style noodles, small cans of fruits and vegetables (the type with the pull-off lids), non-refrigerated microwave meals that serve one (these are very practical as they go in our lunches on a daily basis), individual packet boxes of instant oatmeal, and normal sizes of canned meat, chicken and fish. Some items naturally are bought in what would be normal sizes but for only the two of us they seem to last forever: Five pound bags of flour, sugar, cornmeal, coffee and pancake mixes. The primary factor in these purchases is getting the longest expiration dates that we can find. All this gets put into 22 gallon Totes that have latches for the lids but only one container of each item per Tote: a box of rice, a box of milk, salt, coffee, etc., 4 each of the fruits and vegetables (36 total), 4 rolls of toilet paper and towels, strike anywhere matches, sets of durable plastic knife, fork and spoon, zip-lock bag of 28 individual size soap, 4 empty plastic bullet boxes that hold 4 Bic style [disposable butane] lighters, 2 packets each type garden seeds. This list is not complete, but you get the idea. The content of each Tote equate to one month's food and paper needs and is movable by even our 13 year old grandson. We currently have six totes filled, after only four months of serious additions. We are trying to add one Tote a month in addition to the other things that we are getting. My part-time job provides the funds for this so what we can get depends on what else is on a priority that month. We do have an additional Tote that holds 36 MREs and is marked for priority loading. Our water is stored in the newer G.I. five-gallon plastic water cans, available at flea markets. These are stored in a dark storage room. Our small camper is always stocked and ready to go no matter what season of the year.

Now for the reasoning behind this method. If TSHTF or TEOTWAWKI occurs it may be gradual or a traumatic event requiring different tactics. If gradual and we can hunker down while finishing up necessaries, only one Tote at a time needs to be opened to augment what we have. If traumatic, anyone can carry/load the Totes into one of several available G.O.O.D. vehicles or the trailer while another watches their "six". The urgency of a bug-out may dictate how much can be loaded in the time available. The more Totes that can be grabbed, the longer we can make do but the MRE Tote and water is always loaded first. This is in addition to B.O.B.s and homeland defense items.

Now for the unforeseen future benefits that I mentioned. As you have noted several times and places, I too could not turn away others that are in need if I can help. But giving someone a #10 can of beans or soup will not really help them. A grocery bag of individual servings that they are familiar with and provide variety and full meals for one or two days plus a means to heat it will help while not depleting our stores. Secondly, if a bad guy finds a single Tote with a few of everything in it, they may assume that's all there is and not attempt to engage in a protracted search for more.

One last item that may not meet with approval but is out-of-the-box thinking in the selection of several fallback retreat sites that most others probably will not think of. If we cannot stay in the city, as small as it is, I have found a couple of locales that would prove ideal. One is a semi-restored 1870s military post. Yes, I know that I don't own it in the traditional sense though I have paid for it through my taxes, but if there is no more authority in force, it could prove useful. The fort is already set up to function without power as we are used to, just coal or wood heat and cooking (there is no electricity on site), bulletproof buildings and pre-determined fields of fire, close to a year round water source, small homes for families and barracks for singles and designed by some of the best military minds of their times. Even has a powder magazine and jail! It also has a very low visitor count. If it is occupied or contested, no problems, as there are others at regular distances closer or farther. If not, then it allows for a rally point and the expansion of a Group as others arrive that are aware of my thinking. And they are not unique to our Area of Operations (AO). I have been to some really complete ones back east, in the south, and on the west coast. Let your mind do the walking.

I didn't realize how long this became. If you find it suitable for others to see to help them achieve their goals with limited or minimal means, please feel free to chop it as necessary.

Very Respectfully of your efforts to aid others, - R.D. in Wyoming

JWR Replies: That is an interesting concept, but implementing as you describe would require a quite unique set of circumstances. Namely, it could only happen if there were a sudden an near total collapse of society, and if all law enforcement evaporated overnight. It is far more likely that we will witness a "slow slide" from recession to depression, (and then, much less likely) to collapse. For most that continuum, your actions would be seen as criminal, and you'd quickly attract the attention of government. So then you might end up behind some other very stout walls. And BTW, any of these forts that are on National Forest or National Park land are considered Federal property, so any occupation deemed "trespassing" would be a Federal offense and likely carry a much more severe penalty than trespass on state or county parklands. So it is best to make this a "very low likelihood" contingency plan.

In my estimation the only pragmatic way to occupy an old fort in the midst of a slow slide situation would be to include representatives of county, state or perhaps even Federal government as part of your planned cadre, and characterize it all as a "continuity of government" (COG) endeavor. Bureaucrats often enjoy thinking (or pretending) that they come up with original ideas. Given the promise of safety for "selected" people, this should not be too difficult to orchestrate, especially as the economy worsens and the crime rate escalates. Creating a nexus with a governmental organization could be as complex as getting qualified as an EMT, or as simple as joining a Sheriff's Posse, joining a County SAR team, or becoming a RACES-affiliated ham radio operator.

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Sunday March 29 2009

Letter Re: Paying Off Debts with Inflated Dollars?

JWR,
I understand when you say that hyperinflation will make the price of things go up and up, like a ten dollar or hundred dollar loaf of bread. But what happens to a financed item, specifically the home [that is] mortgaged? Can the lender change the interest rate or the length of loan? What about other financed items like a car loan? If nothing changes then a person would be paying back the loan with inflated dollars, which might be a good thing? Please explain. Thank You, - RenoFlyBoy

JWR Replies: To begin: You had asked: " Can the lender change the interest rate or the length of loan? What about other financed items like a car loan?" The short answer is no. But don't underestimate the ability of politicians to monkey with market fundamentals. In the event of hyperinflation, there could conceivably be some sort of tiered inflation indexing of existing debts. This is very unlikely, but given the entrenched army of banking industry lobbyists in Washington, DC, it is not impossible.

You may have missed these five posts in SurvivalBlog from the past three years:

Letter Re: Is it Deflation or Inflation Ahead? Should I Pay Down My Debts? (2009)

Letter Re: Does Future Inflation Justify a Higher Level of Indebtedness? (2008)

Are Simultaneous Inflation and Deflation Possible? (2008)

Letter Re: With Inflation Ahead, Why Be Debt Free? (2007)

Letter Re: Fiscal Fitness (2007)

Take the time to read all five of those posts.

Given the multi-trillion dollar overspending that is in now progress, I still believe that mass inflation of the US Dollar is inevitable. But we are in uncharted waters, at present. (We have just seen an unprecedented asset and debt bubble go "pop".) Thus, nobody is sure how long it will take to put the economy back on track, and likewise nobody know how long deflation will persist To be safe, avoid debt for the next couple of years. Also, as I've mentioned before, it is not morally conscionable to take out a loan that you do not intend to pay back.

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Friday March 27 2009

Letter Re: An Impromptu SurvivalBlog Meet-up at Front Sight

There was a bit of a ‘covert’ Survivalblog gathering at Front Sight recently. Along with Tim R & Tantalum Tom I was also in attendance earlier in March. I have two grown sons, both of which had expressed a desire to have a handgun for home defense. As a law enforcement officer and former SWAT team member I am familiar with the operation of and responsibility with owning a gun. I am confident in my training and ability to defend my home and family through that training. My two sons, however, had barely even held a gun, let alone fired it. This spurred me to obtain the proper training as any responsible gun owner should do, and when I heard about the "get a Gun " promotion for the four day Defensive Handgun course that Dr. Piazza was offering, I jumped on board for all three of us.

Both of my sons were shocked when I made the presentation to them last year. Before doing so, they knew something was coming, but had no idea as to exactly what it was. When I gave them the course, including transportation and lodging, they were both flabbergasted and ecstatic. Imagine how amazed they were to find they would also be using a brand new gun of their choosing which would belong to them upon completion of the course, with Front Sight sending it back to our local FFL dealer. I gave them this present last July, and thanks to Front Sight’s generous scheduling policy, I had the luxury of planning the trip at my convenience, choosing dates in mid March.

The trip to Vegas was go od, where we rented a car and drove out to Pahrump, about 50 miles to the west. We even had enough time that first day to go back to Vegas where we feasted on the sights and sounds of ‘The Strip’ and one of the many great buffets, catching a show afterwards. On Friday we drove up to the front gate at Front Sight where we were welcomed and directed to the check in location. Often times any of us are nervous when doing something for the first time, especially in unfamiliar territory far from home. But here we were greeted with a smile by a well organized and helpful staff. Nerves disappeared almost immediately, replaced by the excitement of what was to come.

The five days there were phenomenal, especially as I had the honor of sharing that voyage of discovery with my two sons. You’ve undoubtedly read the commentaries from other attendees, so I will spare you from repetition other than to say the education I received was excellent. I put some 800 rounds through my [Springfield Armory] .45 XD and by the end of my time there it felt so natural in my hand to be almost a part of me.

I was most taken back by the staff who make it truly phenomenal. I will refer to my range-master as the ‘Stair’-Master who took us, step by step, through their procedures in such a natural way. He was informative, professional, friendly, o pen and knew what he was teaching inside out and back to front. But to be perfectly honest, you could say the same for all of them. There were times when we had seven or eight instructors on the line with us. Talk about individual coaching and instruction! Unheard of! This by far is the best firearm instruction I have ever received, and would recommend it to anyone, both novice and expert alike.

In addition to receiving great instruction on the range, we were also afforded some informative and well thought out lectures introducing the concept of owning, using, choosing and carrying a gun. The presenters make it interesting and use their experience and real life situations to better relate to the student body. I even found myself enacting one scenario out with them in a realistic, unscripted way that I have to say, would be very realistic given the situation they presented.

I would also recommend the lunches available through pre-order from ‘Beach Café’, linked through the Front Sight web site. They deliver lunches daily and I found them more than sufficient to get me through the day. As others have said, make sure you hydrate, dress appropriately (layers) and expect to spend long days there which whiz by with all that you do. The coffee is plentiful and the friends you will make from those around you will make it even more special. Come the last day I ‘slowly, carefully, reluctantly’ placed my gun back in its holster and shook the hands of the new friends I had made, determined to return and further my education on a later date. Cruise eBay for some first time student gray course certificates and you too can attend some of their courses at a great rate where you will then discover the awesome deals available to return students. Folks, you will not be disappointed, and you will feel so much better prepared in your ability to protect yourself, your home, and most importantly, your loved ones. - DeFuz

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Sunday March 22 2009

Letter Re: Ammunition Shortages in U.S. Might Become Chronic

Hi Jim,
A man with the Customer Service department at Midway explained that backorders are expected to continue and there appears to be no reduction in demand. Browsing their web site, I see 'expected' delivery dates pushing further into the future, and up to six weeks delay for the less expensive and common caliber hunting bullet, mostly .30 caliber bullets. Many premium bullets are also on 'back order' since my last visit. And now, even less common caliber bullets are backordered as well as other reloading components and reloading tools. The shortage at Cabela's also continues. The Civilian Marksman Program (CMP), advises that delivery could take 100 days for their still inexpensive M2 ball (.30-06) for the M1 Garand [and many other] rifles.

I believe that you've mentioned the possibility that "Ballistic Wampum" could be more useful than silver for the purposes of barter. The ammunition and component shortage is making a me believer. If events unfold as they might, the shortage could become increasingly severe and chronic. It may actually now be easier to obtain silver than bullets or certain and popular loaded ammunition. Over the last two years, I've done better with ammunition than silver, and have decided to trade in silver if necessary, for bullets. In memory of the Lone Ranger, silver would be a poor substitute for lead as the sectional density of a sliver bullet would be significantly less and therefore less effective. As I am no Lone Ranger, I would need all the advantages possible, and rather have the good stuff.

More folks are waking up everyday, and I suspect most of them will feel the need to protect and feed themselves. Many of those folks will be without the means to do as they discover that they cannot afford buy a good supply or any supply, and if able, may find that shipment could be months into the future. The Fed's recent action makes continued and escalating hyper inflation a given. If delivery in months away, prices might change, or delivery might become impossible at some point. I'd error on the side of caution. - E.L.

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Wednesday March 18 2009

Letter Re: Private Gated Communities May Not be Gated After All

Dear Mr. Rawles,
I read Brad S.'s letter with interest today. About ten years ago I was working in property management for an apartment community in Lakewood, Washington. Not exactly a low-crime area, to say the least.

One of our selling points was the gates at each entrance of the community. My manager and I took over the property not knowing the sort of people the previous management team had rented to. Over the course of four months, we evicted dozens of tenants for being months behind on rent, among other things. When this process began, we noticed that we received daily complaints about our gates being "busted".

Turned out disgruntled ne'er do wells whose pass codes had been deleted and locks changed were using their vehicle [bumper]s to push the gates open to get into the community. Because the gates open in the direction the vehicle is going (i.e. in for incoming vehicles and out for outgoing), these was extremely easy for them to do. One (non-criminal) resident actually got brave enough to slip outside one night and get video footage of a vehicle so that we could help the police try to track them down.

We went through thousands and thousands of dollars by the time we just gave up and stopped fixing them. It became a game for the nasties in the area and just wasn't worth it any more. The police had a heck of a time getting anyone involved in the Neighborhood Watch in the area, but when they finally got mad enough about their rent money not keeping up "security", people started cracking down on their former neighbors and current neighbors. Yes - current - even some of the punks who didn't get evicted were still doing it just to infuriate my boss.

Additionally, most of the apartments set up like this will purposely lock the gates open during heavy commute hours (say, 0700-0900 and 1600-1800) just to save on the electric bill and keep lines from forming at the gate. This means that anyone and everyone who happens to notice this on a property can just time their visits appropriately and have full access to your community.

Unless you are the only family on your place with much better gates and a better system, such gates are nothing but a mental barrier to keep honest people honest, as they say, and to instill a sense of security and class in the residents. This doesn't apply to heavy duty gates, especially those that slide from side to side on a track, vs the kind that open on a hinge with a small motor, of course. But in general, as somebody who got to write up about a hundred repair requests - skip 'em. They aren't worth it if they are the generic "make you feel special and make your place look fancy" type of gates.

Thanks for all your hard work. - M.K.

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Letter: Full Capacity Magazine Price Inflation and Scarcity

James,
I too purchased a PTR-91 [HK91 clone] rifle and ordered 50 magazines from PTR 91 Inc. The shipping was reasonable and when I received them, there were [actually some free "bonus", for a total of] 55 magazines. They ranged from good to like new condition and had dates all the way from 1963 thru early 1990s. For $107 delivered, I got 55 magazines and a very big smile on my face. - M.E.K .

« Letter: Full Capacity Magazine Price Inflation and Scarcity |Main| Cold and Dark--An Account of an Ice Storm, by Steve S. »

Tuesday March 17 2009

Letter Re: Private Gated Communities May Not be Gated After All

Hi Jim,
Due to the real estate slump and the poor economy, my wife and I are trying to unravel our mess of real estate investments. One thing we did, was to abandoned our McMansion in a rural area near Seattle, Washington. It was a new four thousand square foot custom home in a gated community. All the other houses were as large and some significantly larger. We had abandoned the house about a year ago after failing to sell it for what we owed, and have not made any house payments since then. We also chose not to pay the home owners association dues which is there to maintain the landscaping and the automatic gates.

Last week we received a letter from the gate maintenance company. they repair and service the gates. They sent a contract to each of the houses behind our particular gate requesting us to pay them month service fees in order to have the gates that were owned by the neighborhood to be operational.

Apparently, the association had several people not pay the yearly fees and they have decided to keep the landscaping maintained, but not the gates.

My point is that these are a very false sense of security. I know for fact that if power is lost, the gates automatically open. and the power can be turned off usually by an unlocked power panel behind some bush nearby the gate. I thought this was interesting and wondered if any other people had this same experience. - Brad S.

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Letter: Full Capacity Magazine Price Inflation and Scarcity

Greetings -
Just wanted to say "thank you" for suggesting the PTR-91 as a battle rifle option. I will freely admit to getting caught up in the AR-15 hysteria but I have come to my senses and saved money thanks to SurvivalBlog.

German surplus G3 alloy military surplus magazines in good to excellent condition are easily available in quantity for $3-to-$4 each. Contrast that with AR-15 mags at $15+ each, and that's a 5:1 ratio. Or, for the same $90 folks are paying for a single AR-10 mag, they can get more than 25 surplus G3 mags, shipped! In addition, while AR-15s are nearly impossible to find at $1,000 or less, I am finding PTR-91s on the shelf for $1,100 just waiting to be bought. Yes, 7.62mm NATO is more expensive than 5.56 NATO, and the G3 mags are only 20-rounders, but all in all I can't think of a better, low total ownership cost battle rifle than the PTR-91. - JT in Michigan

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Monday March 16 2009

Letter Re: Wealth Destruction--Real Wealth or Just On-Paper Wealth?

Sir:
I followed the link in Thursday's blog to this I followed this news story: 45 percent of world's wealth destroyed: Blackstone CEO. It stated: "Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half." I don't see how Schwarzman can be right about that. The factories are still there. the farms are still there. The houses are still there. And there are still warehouses full of everything from Machinery and bar stock to Sponge Bob Squarepants toys.So what has been destroyed are just "on paper" profits, not any real wealth. Please correct me if I'm wrong, but what is to stop us from just revaluating things, and getting along with life? Thanks, - F.T.G

JWR Replies: You are mostly right, but partly wrong. You are correct that there has been very little real tangible wealth that has been destroyed, other than inventory that might be discarded for lack of a market, some half-finished commercial and residential building projects that will eventually get bulldozed, and some perishables that have been delayed in transit and that went to waste. You are also correct that most of what still exists tangibly has genuine value. But consider that an under-utilized factory produces fewer goods than a fully-utilized factory. (OBTW, on that note, we can thank President Obama for at least keeping America's gun, ammunition, and magazine factories working at a fever pitch.)

So let's step back and look at the big picture...

What has been destroyed:

1.) Asset Values:
This goes without saying. Reader FTG is correct that facilities and capital equipment are physically intact, but their values have been greatly reduced. I expect to see this process continue for several more years.

2.) Wages and Buying Power:
By cutting out overtime, reducing shifts, idling assembly lines, canceling re-stocking orders, reducing pensions, scaling-back benefits, and laying off employees, there has been a great contraction in wage-earning income and hence buying power--even to the point where people are having trouble making their mortgage payments. This leads to a chain collision of missed house payments, foreclosures, and evictions. Worse yet, it means even more houses will be dumped onto a market that is already flooded with "excess inventory."

3.) Credit, and the Perception of Credit-Worthiness:
As I've described before, the economy is presently in a phase characterized by revaluation--as the various market sectors probe for new market prices.(Economists call this "Price Discovery.") Simultaneously, lenders are are positively petrified to lend to their heretofore "credit worthy" clients. There has been so much debt re-packaging that has gone on, that it is now very difficult to reliably assess any accurate values of assets and to evaluate loan risk

4.) Consumer Confidence
Much of the consumerism that built up in the US for the past 30 years was a Spendthrift mentality, created by the bygone oceans of "Easy Credit". Both that credit and the resultant spending are now gone. And I do mean gone. In previous recessions, there had been brief declines in consumerism, but I can foresee that this one one will be different. This will be more like the 1930s, where the nation developed an entire generation of penny-pinchers. Don't get me wrong--I consider this a good thing! Saving is admirable. Overspending is foolish. But from the standpoint of economic recovery, this could delay recovery by several year, since a large portion of the economy had built up around the concept of women with 25 pairs of shoes, and men with three sets of golf clubs

5.) For Many, the Hope of Retirement at Age 65:
Millions of American that were nearing retirement have lost any hope of retiring. Aside for the holdings of a few crazy "gold bugs" (like SurvivalBlog readers), their IRAs and 401(k)s have been devastated. There are also some company pension plans that have gone "poof" or that will surely be scaled back considerably. I don't want to gloat, but those of you that took my advice three years ago and sold their dollar-denominated investments and invested in tangibles have come through the credit market collapse virtually unscathed. Some of you even came out ahead. Meanwhile, those that left their money in stock-heavy 401(k) accounts have been devastated. Losses of 30% to 50% have been the norm. Ouch!

6.) Carefree Mobility:
Before the housing bubble burst, people could easily change jobs, sell their houses (at a profit!) and move from coast to coast without much inconvenience. But to do so now constitutes major trial and tribulation. Up to 40% of people with mortgaged homes now have negative equity--meaning that the remaining principal of their mortgage now exceeds the market value of their house. (This is commonly called being "upside down" in a mortgage.) So now, even for someone that can make their mortgage payments, changing jobs to a new locale beyond commute distance means losing their house and starting over. And if they go with the "jingle mail" method, it means starting over with a ruined credit rating.

7.) The Last Shreds of Job Security:
Following the trend set by Silicon Valley, when the "Dot.Com" bubble burst in 2000, many industries are now getting positively ruthless about cost-cutting. There is now a constant barrage of news of layoffs, reduced benefits, and cutting our perks. Don't expect "normality" to resume to the corporate workplace in our generation. Any vestiges of "job security" have become a thing of the past.

What Will Likely Continue to Be Destroyed:

1.) Further erosion of asset values.
The price of real estate (both residential and commercial) will likely continue to decline until either A.) The economy starts to recover, or B.) Inflation kicks in. If it is the latter, (which is what I suspect, sooner or later), property prices will start to rise only because general price inflation has grown. But this will be a false recovery in real estate. Real property values will continue to decline, while the currency unit itself is being destroyed. Yes, your house may be worth a several million dollars, but what will a million dollars buy you in such times? The same may happen with stocks. In the presence of inflation, news of a "stock market rally" will be nothing but fiction if the currency. Amidst the "Happy Days are here again" hoopla, real values will still be in the dumpster.

2.) More job losses and further-reduced wage-earning hours

3.) More failed pension programs

4.) The dollar itself as a currency unit. This recent news article was a subtle warning: The Swiss central bank has already fired the first shot in the global currency war. I expect large devaluations--both formal and informal--by many nations in the near future. The bottom line is that the US Dollar is doomed.

What will Remain and Gain:

Tangibles, Tangibles, Tangibles! I've been harping on that theme in SurvivalBlog for three years. Again, those of you that took my advice are mostly sitting pretty. Silver and gold have doubled, as have ammunition and many full capacity magazines. Productive farm and ranch land has held most of its value, while at the same time suburban real estate has plummeted. If you have not yet transitioned out of dollar-denominated investments, then do so immediately. (The current stock rally is nothing but a sucker rally in the larger context of secular bear stock market So this is a good opportunity to bail out.)

The present-day wave of deflation will likely be followed by a period of sharp inflation. At some point, all those trillions of "magically created out of thin air" dollars that will needed for the Mother of All Bailouts (MOAB) will inevitably catch up with the Dollar. My closing warning: Be ready for some serious consumer price inflation, most likely starting in 2010.

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Tuesday March 10 2009

Letter Re: Supply and Demand at American Gun Stores

James,
We finally caught up on magazine sales in late February, filling our last outstanding back orders, and I actually have a limited number of C Products AR-15 magazines in stock and some Magpul PMags (which I really like). The manufacturers tend to send out a half of an order and then a few weeks later, the balance of it. They are clearly allocating inventory across their customer base and I would estimate that they are running two to three months behind. The delivery situation is getting worse, and my guess is that new orders placed today would likely arrive in June or July.

Almost anything related to AR-15s/M4s is backordered. Spring sets, repair kits, accessories, bolts and bolt carriers, etc. Even magazine repair kits have dried up. I probably have close to $4,000 worth of merchandise on back order from Brownell's for our web-based store. Prices are rising as well. Wholesale cost on Glock magazines have jumped to what used to be our retail sales price. We've seen a 60% jump in the
wholesale price since the election.

The ability of these producers to ramp up production is limited. Many are running extra shifts or hours on existing machines, but none of them want to add new equipment because the capital expense will take so long to recoup. If the law changes and their products are suddenly banned, their income will drop off a cliff and the new debt burden could just force them into bankruptcy that much sooner. So the pipeline is constrained due to the uncertain future. This is another lesson in why it is better to prepare sooner than later.

My advice for anyone who wants to buy ammunition by the case lot and black rifles is to try GunBroker.com. I do not sell there, but I have been doing some personal buying there. Sellers have items in stock, but prices are not low as the auction format tends to float prices up when demand is high. Still, you can buy ammo by the case, complete guns, complete lower [receiver]s and stripped lowers as well as magazines and accessories.

I wish you continued success, safety and security, - Dave of (Captain Dave's)

JWR Replies: That matches what I have been seeing. As recently as September, an AR-15 "Lower Parts Kit" (the hammer, trigger, sear, pistol grip, trigger guard and assorted pins, springs and detents needed to complete building a stripped AR-15 receiver) was selling for as little as $49. Today, they are very scarce, and selling on Gunbroker.com for as much as $125 each! There are so many folks frantically parting-up ARs that there is a genuine shortage of not just the receivers themselves, but also the little "fiddly bits" piece parts!

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Letter Re: Some Observations at a Recent Gun Show

JWR,
I attended a gun show in a Southern state this weekend and wanted to share my observations. I got there very early and was among the first ten in line. By the time we were allowed to enter, the line was out the door of the building and around the corner. I'd estimate around three hundred people in line. I left the show a mere hour later and the room probably had in excess of eight-hundred people and the line was still quite long.

Ammo, of course, went fast. I was able to acquire all the ammo I desired, in all my favorite calibers, with no problem, from my regular favorite vendor. His prices were the same as four weeks earlier, which both surprised and pleased me. Other ammo vendors were doing brisk business, as well, but some of their prices were dramatically higher. By Sunday afternoon, my vendor had extinguished their bulk ammo supply in .223.

My attendance was centered on finding a good deal on an AR-15 full upper, at a decent price (a relative term, of course). Most AR-15 full uppers were going for between $700-$1100, depending on manufacturer and features. The vendor from whom I'd planned on buying was, surprisingly, not there. The very last table I came to, however, had five AR-15 carbine A3 uppers, made by Model 1 Sales, the vendor from whom I'd hoped to buy. Mine came out to $611 with bolt carrier assembly and charging handle, which was easily the best deal at the show, since I'd seen the same basic configurations for $100-$500 more. Most astonishing was the deal I found on Sunday when a vendor was laying out a used DPMS AR-15A2 in excellent condition for a scant $799. She wouldn't hold it for me and by the time I returned with the necessary funding five minutes later, it had been sold. Most fully assembled ARs, used or otherwise, were going for $1,100-$2,500.

Magazines are definitely going up in price, dramatically. The [formerly inexpensive fairly plentiful US government] contract O'Kay Industries AR-15 mags are now $12-20 in used condition, and new ones are $15-25. P-MAGs at the show were $28-35 and obviously becoming scarce. Springfield XD9 factory mags were going for $28-40, way up from the $21 each that I had paid just two months ago.

One last note. I picked up an ARMS rear sight #40 for $110 and even managed to run across a brand new Vortex flash hider for $60 (I've been searching for one for several months now). Average prices there, I guess, maybe a little high.

I've also noticed more and more private sales by people buying and selling person to person, increasing one's odds of finding a good deal. Just the sort of activity that makes Charles Schumer's hoplophobic blood curdle. I spent $1,500 at this show and got probably half of what I could have bought a year ago for the same money. I suspect this time next year will find me saying the same thing again. Ordnance...at inordinate prices.

May God bless your continued endeavors, - Shrike

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Friday March 6 2009

Letter Re: The Impact of FDIC Insurance Rate Increases on Small Banks

Mr. Rawles,
We live in mostly rural northeastern Oklahoma. Our local newspaper just printed an informative editorial about FDIC changes which result in huge fee increases for member bank. Here is an excerpt from the editorial Oklahoma banks paying price for bailouts:

"Imagine paying $500 per year for your car insurance and then being told it had gone up to $4,000 even though you have been a perfect driver with no accidents, no moving violations. That’s the magnitude of premium increases local bankers are facing. The local banks I spoke to had no part in the sub-prime loan implosion and did not receive one cent from the bail out. However, they were not expecting large “assessments” in addition to huge premium increases. The first assessment, due September 30th, will likely be 4 times larger than all of the premiums each bank paid in 2008. Another assessment, half that size is anticipated before the end of 2009. To put this in perspective, a bank that paid, for example $250,000 in total for 2008 would pay nearly $500,000 per quarter this year, have an additional $1 million assessment in September, and another half million later in the year for a total of $3.5 million for 2009. So, if your bank fails, the Government takes your bank, if you operate a fiscally responsible bank, the FDIC will now take a big chunk of your bank’s money." [signed] Bailey Dabney, Publisher, Claremore Daily Progress

- Kevin A.

JWR Replies: A recent news story makes it clear why the FDIC