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« Letter Re: Book Recommendation: "Possum Living" |Main Friday November 6 2009Letter Re: Preps and Minimizing My Debts Paid Off When UnemployedDear Mr. Rawles, It's been a year since I've been able to find work, and in the intervening time my wife and I have struggled to stay afloat both financially and physically as my wife has Multiple Sclerosis. Thanks to what I had learned from your blog and Patriots, we've made it. When my wife and I were married two and a half years ago I made sure we paid off debt, were smart enough to skip buying an overpriced house, and built up our food stores. Thanks to you when I watched over the past year the price of homes crash and energy skyrocket we were relatively secure in our apartment debt free and chopping up all the deadfall I could find out in the state owned land behind us to burn in our fireplace. I must have saved a thousand dollars last winter heating with wood and more importantly got myself into shape. Once again thanks to you when inflation hit food prices I dug into our larder to get us past the rise in prices. And thanks to you for getting me to take an interest in emergency medicine because I've been able to keep my wife stable during health scares a couple times now as we waited for the emts to arrive. We made it through the rough times, thanks to you and the survivalist community. Today my wife is healthy, our persons secure, and my family while not rich will begin to prosper again. I've found a new job, I enlisted in the US Air Force and am shipping out in two weeks. I'll miss all the holidays this year but I'll know my family is celebrating safe and in peace. Next to good planning, the most important lesson I've learned is to never quit. So through all your trials Mr. Rawles, I hope you can take heart knowing that you and the Memsahib have touched lives from afar for the better. Sincerely, - Brent S. « Odds 'n Sods: |Main| Two Letters Re: How to Capitalize on Urine, Car Batteries, Wood Ashes, Bones and Bird Schumer » Economics and Investing:Regular contributor GG flagged this piece from Zero Hedge: Fannie Mae Seriously Delinquent Rate Hockeysticks to 4.45% From 1.57% In Prior Year M.M. in Utah suggested this piece by Eric Sprott and David Franklin in Markets at a Glance: Dead Government Walking Karen H. sent this: Profit 'Not Satanic," Barclays Says Also from Karen H.: ADP says U.S. Companies Cut an Estimated 203,000 Jobs in October Items from The Economatrix: Gold Extends Record High on India Purchase « Odds 'n Sods: |Main| Influenza Pandemic Update: » Thursday November 5 2009Economics and Investing:SurvivalBlog's Editor at Large Michael Z. Williamson pointed us to some commentary by Peggy Noonan in The Wall Street Journal that sheds some light on attitudes about the current recession: We're Governed by Callous Children. GG flagged this: Junk bond revival stokes credit bubble fears GG also sent us this troubling piece, from England: More quantitative easing is on the way – and that's a good thing. The UK government considers debt monetization a good thing? Watch out! Items from The Economatrix: Oil Hovers Near $78 on Positive US Economic News « Odds 'n Sods: |Main| Letter Re: Archiving How-To Videos From YouTube » Wednesday November 4 2009Economics and Investing:SurvivalBlog's Editor at Large Michael Z. Williamson sent this: Number of Utah jobs created by federal stimulus 'inflated' GG was the first of several readers to mention a recent piece by economist Nouriel Roubini: Mother of all carry trades faces an inevitable bust Damon S. sent us this bit of gloomage: Small-Business Bankruptcy Filings Up 44% Year-over-year, Equifax Data Shows Items from The Economatrix: US Inflation to Appear Next in Food and Agriculture. Here is a quote from the article: "While most mainstream economists such as Nouriel Roubini are warning of deflationary threats to the U.S. economy, it is our belief that massive price inflation has already begun. The Federal Reserve's policy of massive monetary inflation in 2009 has caused the Dow Jones to bounce over 50% from its low, oil to rise 100% from its low, and gold to surge to a new all time nominal high. One NIA co-founder just saw his health insurance premium rise 16% over a year ago; and the average tuition for a four-year public college increased this year by 6.5%." « Odds 'n Sods: |Main| Letter Re: Some Advise of Starting Wood and Charcoal Fires » Tuesday November 3 2009Economics and Investing:HPD sent us this piece by Mish Shedlock: A Remarkable Comparison: Affordable Student Loans vs. Affordable Housing Mr. Smith recommended this BBC audio clip: Fed Advisor Warns of the Next Financial Crisis: Mass Inflation Chad S. flagged this: Geithner Says Commercial Real Estate Woes Won’t Spark Crisis GG sent this: CIT Board Approves Chapter 11 Filing; Government Infusion of $2.3 Billion at Risk Items from The Economatrix: The Next Currency to Crash: The Japanese Yen US Housing "Recovery" in Bubble Territory « Odds 'n Sods: |Main| Influenza Pandemic Update: » Monday November 2 2009Economics and Investing:Jeff E. suggested this: Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash "FarmerGreen" mentioned: Harvard’s Bet on Interest Rate Rise Cost $500 Million to Exit. Even the best and brightest at Harvard lost a billion to get out of a derivatives contract that went south. Bruiser spotted this: California to Begin Holding More of Your Paycheck. Bruiser's comment: "The lesson here is that if one needs a loan, just go out and take it from everyone who has a job. Like Commifornia is doing." [JWR Adds: My favorite quote from the article: "The state is closing part of this year's budget deficit by taking an advance on next year's tax revenues. 'It's a one-time acceleration, or on-time speeding up if you will, of tax dollars that would otherwise be collected next fiscal year.' But the state wants to make clear that the change, which has no cutoff date, is not a tax." Yeah. right. (Only someone that graduated from a California public school would believe that Bravo Sierra.] Items from The Economatrix: « Odds 'n Sods: |Main| Letter Re: Comments of Storing Coffee and Grinding Whole Wheat Flour » Sunday November 1 2009Economics and Investing:Chris in West Virginia was the first of several readers that mentioned Glenn Beck's recent explanation of inflation, interest rates, and the history of destroyed currencies. It was a basic primer for the sheeple. I just wish he had taken a couple of minutes to explain the money multiplier effect of fractional reserve banking. Ehh! Probably too complicated for many television viewers to grasp. The latest from Dr. Housing Bubble: Option ARMs Enter the Eye of the Hurricane: The $189 Billion Recast Problem Targeted Directly at the California Housing Market. Of $189 Billion in Securitized Option ARMs $109 Billion in California. Norfolk Southern Railroad's profit slides as traffic remains slow. Revenues fell across all of the railroad's business segments. (Thanks to Damon for the link.) GG noticed this piece by John Browne in The Asia Times: Inflation by Stealth Items from The Economatrix: Nine Banks Seized this Week, Total Up to 115. The fourth largest failure was California National Bank in Los Angeles Are Things Really Getting Better? New Home Sales Take Surprise Tumble $8,000 Home Credit Still in Play Critic says government spent $43,000 for each sale that occurred because of the program Investors Rush Back into Stocks as Economy Grows « Odds 'n Sods: |Main| Letter Re: Comments of Storing Coffee and Grinding Whole Wheat Flour » Saturday October 31 2009Economics and Investing:The credit derivatives plot thickens: New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers. (Thanks to David V. for the link.) Russia delays sale of 50 tons of gold. (A hat tip to Trey for the link, by way of MineWeb.) GG sent this: Stimulus jobs overstated by thousands SurvivalBlog's Editor at Large Michael Z. Williamson spotted this New York Times piece: Hard Work, No Pay. It includes this memorable quote: "I am not unemployable. I have a master’s of fine arts and spent two years in the Peace Corps." Mike's comment: "Er...I thought that was the definition of unemployable!" Ben L. liked this article: Gold Market Reaching The Breaking Point Items from The Economatrix: Gold to Rise to $2,000 Amid "Massive" Inflation, Superfund Says Paul Craig Roberts: Are You Ready for the Next Financial and Economic Crisis? "Evidence that the US is a failed state is piling up faster than I can record it. One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests." Goldie Sachs Defends Controversial Trading Practices Recession Declared Over But Job Losses Mounting Home Foreclosures Jump in Previously Untouched Cities Credit Card Hikes Raise Congresses' Blood Pressure « Odds 'n Sods: |Main| Letter Re: University of California Disaster Preparedness Videos » Friday October 30 2009Economics and Investing:Tom B. and "Word" both sent us this: Tax refugees staging escape from New York. Tom B. described as "voting with their feet." Julius suggested an amazing Summary of US Foreclosure Activity. Wow! One in every 23 homes in Nevada is in foreclosure! An interesting piece over at Housing Storm: Contradictions and Symptoms of the Great Depression Items from The Economatrix: GM Seen Posting Sales Again « Odds 'n Sods: |Main| Letter Re: Open Enrollment for Many Medical Savings Plans » Thursday October 29 2009Economics and Investing:Treasury Sales Loom, but Demand Is There. $123 Billion Worth in One Week! Not to worry, they can always make it look like they all sold to non-puppet buyers. (Thanks to loyal content contributor GG for the link.) Brad C. found this Business Week article interesting: The U.S. Metros Least Touched by Recession. Brad's comment: Note that none of the cities in the top ten are on the East or West Coast, and that they are all in "Fly Over" country. Once again, free states lead the way. JWR Adds: Also note the correlation with my Recommended Retreat Areas page. Our Editor at Large Michael Z. Williamson suggested this piece posted over at Zero Hedge: The Next Step in the Bank Implosion Cycle??? The sheer volume of bank derivatives now in play is staggering! Items from The Economatrix: Global Exposure in Derivatives in Excess of One Quadrillion Dollars « Letter Re: Protein Powders as Emergency Survival Foods |Main| Note from JWR: » Wednesday October 28 2009Precious Metals in Context: Prudence, Moderation and Balance, by Gentleman Jim from Colorado
As I read the occasional letters and articles on SurvivalBlog about storing/using precious metals (PMs) during a TEOTWAWKI of whatever sort, I must conclude that every single writer is absolutely correct--and yet also mostly wrong. You might ask: How can everyone be right and wrong, simultaneously? It's because most preppers seem to anticipate and plan fairly narrowly for the use of PMs. IMHO, if you're taking such a narrow lane down the preparation highway, you're not thinking big enough. Any situation following a currency collapse will be complicated by varying degrees of social disorder, economic breakdown, extreme paranoia among the population, (hopefully) temporary increases of theft and violence, etc., and thus will follow certain micro-unpredictable, yet macro-predictable, patterns. Saying it in a less scientific way, it is nearly certain that "big-picture," long-term trends for currencies in crisis, and especially the consequences of certain governmental actions, are extremely predictable. There have been more than 500 currency collapses in modern history (most recently in Zimbabwe, that I'm aware of, and seemingly ongoing for the US Dollar). Thus, economists and financial gurus can predict with fairly good accuracy what patterns will emerge during any currency crisis--whether it something as simple as hyper-inflation, devaluation or the wholesale destruction of a nation (and thus its currency). That makes such events macro (big-picture)-predictable. Similarly, centuries-tested stores of value like gold and silver are almost certain to hold their relative value through almost anything crisis. Will gold and silver prices go up and down? Will governments make them difficult, illegal or even dangerous to one's health to hold them? Sure; but look at this way: if gold and silver were good enough for the Phoenicians to trade in; for many Jews to use to escape Hitler; for Marco Polo to use in his travels; for ancient, medieval and modern rulers to bribe the guards and spies of opposing rulers; for royal families to use to pay the ransoms of hostage family members; for Alexander the Great to exact in tribute from besieged cities; and for defeated Nazis to spirit away to safe havens after WWII. So it is a good bet that they'll be just as useful in any future scenario you can imagine. I could be wrong, but you shouldn't bet against that over the long haul. Yes, a number of negative trends (take your pick: currency failure, government failure, world trade imbalances, food shortages, major droughts, out-of-control crime, oil shortages, nuclear terrorism, pandemic diseases, revolutions, major wars, civil wars, etc., etc.) could in theory climax simultaneously, causing gold or silver to be un-tradable for short, perhaps even moderately-extended, periods. (Note: I did not say "value-less." Just un-tradable. Folks will hunker down and drive off potential threats, and food, water and ammo will be the needs in the now. Over any period of more than a few months, though, society will demand a currency to enhance and ease barter, trade and commerce. Yes, there may be short transition periods when precious metals will be temporarily under or even un-valued by some people, in some regions. But survivors must be pragmatic and flexible when they're hungry or in danger. Since nearly all Americans have at least some gold or silver jewelry, it seems likely the mental transition to gold or silver-based barter or currency wouldn't be difficult for most. Look at this way: When we travel overseas, the local currency (be it the Euro, the dollar, the Real, the Yen, the Renminbi, the Hutsi-Tutsi or whatever) always confuses us for a few days, until we get a feel for what it buys in real, local terms. Mentally converting from our "home" currency adds additional confusion, but usually not for long. Don't you and nearly all other foreign travelers very quickly overcome confusions over the local currency? Within a few days, we're bargaining at the bazaar or market and have a very good handle on what something is worth, and whether we're getting charged "gringo prices." Surely a transition away from the dollar and into silver or gold, in whatever form, can't be too much tougher than adapting to foreign currencies, when the need arises. You shouldn't bet your (and your loved ones') survival on a single commodity for future barter purposes, whether that be gold, silver, wheat, rye, 9mm, .223, lead, water, gunpowder, canned meat, spices, guns or whatever. IMHO, a reasonably proportional stash of precious metals in multiple forms increases flexibility, reduces overall risk levels and markedly improves your odds. Quite honestly, there is no single precious metals solution for every situation and need. Gold is too valuable for most day-to-day situations; silver can be too low in value for some needs. Why have only a few dozen Silver Eagles, when you can balance your preps and expand your flexibility by also owning a couple of Gold Eagles, maybe some Maple Leafs, and a good stash of 90% silver pre-1965 U.S. coins? And, why not a few reasonably-sized silver or gold bars or ingots, if that is in your budget and makes sense for your situation? You should tailor and balance your holdings to fit your budget, region, lifestyle, perceived risks and survival strategy. * If you anticipate a "drop everything" evacuation, you'll be leaving behind most of your heavy silver bullion bars, and your stored items in general, due to weight limitations. So, either don't buy them, or bury them some of your stores in locations you can retrieve from later, or be prepared to hide them quickly in some other way. Just as you plan for redundancy and back-up solutions in other areas of preparedness, you should apply it to your precious metals caches. There's a reason you have both power tools and hand tools; several varieties of rifles, if possible; specific handguns for specific purposes (your concealed-carry pistol probably is not your open-carry pistol); and spare parts for just about everything. Most would agree it is wise to have a multi-fuel generator and solar power and some micro-hydro power too. You prepare a defensible retreat, but also also pack bug-out bags just in case, right? Many of us have both gasoline and diesel-powered vehicles, if we can afford it. So why wouldn't the same logic apply to your gold and silver stores? With many different "tools" in your PM toolkit, you can pick the right "tool" for whatever situation you encounter. Now, back to Micro and Macro: While most of us may encounter micro-situations where precious metals hold little immediate value--in the macro sense, those situations will be relatively rare. Indeed, the odds are much in favor of gold and silver retaining important value in any emergency situation. If the ancient Romans, Greeks, Egyptians, Spanish Empire and many other civilizations over millennia have valued silver and gold so highly--why would you want to bet against it for the day after tomorrow? Next month? Next year? To me, the odds clearly lay with gold and silver. Yes, I still have appropriate firearms and ammo, and some reloading equipment, too. I'm just not going to bet everything on firearms and ammo, in isolation. Just like I'm not betting everything on having only food storage. The common-sense rules of prudence, moderation and balance dictate otherwise. In short, never put all of your preparedness eggs in any single basket. For most of us, that means we should pursue a balanced and reasonable cache of silver and/or gold, in multiple forms, for multiple potential uses, along with our other balanced and reasonable preps. Blessings to all, - Gentleman Jim from Colorado « Odds 'n Sods: |Main| Letter Re: Perspectives on Roughing It and Covert Car Camping » Tuesday October 27 2009Economics and Investing:Barry Ritholtz sets the record straight, (by way of a link at The Automatic Earth blog): Existing Home Sales FALL in September 2009. FG sent this: Detroit house auction flops for urban wasteland Jim Rogers Interview: Long Sugar, But Getting Short Bonds (Thanks to GG for the link.) Items from The Economatrix: Derivatives Bill Amended to Let Big Banks Keep Some Contracts Secret Unemployment Getting Much Worse in 43 States Jim Willie: Attack By Central Bank Lilliputians « Influenza Pandemic Update: |Main| Letter Re: Using Direction Finding on Looter Bands » Monday October 26 2009Letter Re: Open Enrollment for Many U.S. Medical Savings Plans
Hi James, My prayer for you and your family is that you have happy memories without pain in the shortest amount of time possible. - D. JWR Replies: Thanks for that suggestion. One proviso for readers: Be sure to to mark your calendar for a date two weeks in advance of the spending deadline! « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Reader B.B. sent us the link to this "must hear" audio clip: Peter Schiff issues a Red Alert: "Get out of the US dollar". Schiff warns: "This is what the Weimar Republic did, and we are going to have the same result." Flavio liked this video clip of an an interview with Steve Forbes and Thomas E. Woods: Is Capitalism the Cause or the Solution to the Financial Crisis? This 28-minute video is well worth watching. GG suggested a piece by Carnegie Mellon University professor Allan Meltzer in the Wall Street Journal: The United States is headed toward a new financial crisis. Also from GG: Go for Gold: If the Fed Keeps Printing, the Dollar Will Keep Falling Karen H. flagged this item: Goldman Sachs Still Paid for Swaps on Redeemed Bonds Items from The Economatrix: US Jobless Claims Climb More than Projected Seven Months After Stimulus 49 of 50 States Have Lost Jobs « Odds 'n Sods: |Main| Letter Re: Portable, Minimal Prep. Emergency Foods » Sunday October 25 2009Economics and Investing:Reader HPD mentioned this ominous news over at The Market Ticker: Possible Credit Dislocation: Be Warned From The Daily Bell: Dark pool trade limits to be reduced 95% in SEC plan Laura H. sent this: Democrats seek cover to boost debt limit Klaus sent this: China’s ‘Growth on Steroids’ Raises Danger of Renewed Slowdown [and Inflation!] Items from The Economatrix: Sept. Home Sales Rise 9.4%, Beat Forecasts « Odds 'n Sods: |Main| Letter Re: Preparations for Eyesight & Hearing » Saturday October 24 2009Economics and Investing:Reader Troy W. spotted this: Guess What: The Next Housing Bubble is Already Underway Mr. W. sent this: A List of the Next Banks to Fail The Daily Bell asks: Derivatives don't need regulation? Jeff B. sent us this: Worldwide Diesel Glut Could Slam Oil Prices. [JWR's comment: Wait a few weeks before you refill your retreat's fuel tanks! The recent 18 cent jump in the price of diesel is sure to see a correction.] Items from The Economatrix: Friday Follies: Failed Bank Tally for Aught Nine Now at 101 Galleon Group to Shut Down Hedge Funds « Odds 'n Sods: |Main| Two Letters Re: Lessons Learned from Hurricanes Ike, Rita, and Katrina » Friday October 23 2009Economics and Investing:Regular content contributor GG sent us a link to this press release: Adam Storch Named Managing Executive of SEC’s Enforcement Division. "Unbelievable! The Securities & Exchange Commission last week appointed a 29-year old Goldman Sachs executive as the managing executive of its enforcement division. You already know about all the curious contacts Goldman's leader Lloyd Blankfein has had with Treasury heads Hank Paulson and Tim Geithner. So I assume the SEC must also be aware of these contacts. While I have no reason to question Mr. Storch's ethics or motives in taking this job that presumably pays a fraction of his Goldman salary, not to mention bonus, isn't the SEC even a little concerned about its already soiled reputation?" Yea, the great MOAB doth grow mightily, as hath been presaged in the blog of doom: Obama to announce help for small banks, businesses. "Wow, free money for everyone!" (Kudos to GG for the link.) Bank of America to start charging customers for not using credit cards. Latest bank fee is for paying off credit card on time every month. (This news was mentioned to me by both GG and by Mike Williamson.) Items from The Economatrix: « Odds 'n Sods: |Main| Influenza Pandemic Update: » Thursday October 22 2009Economics and Investing:
Charles Hugh' Smith's assessment: Why We’ll See Stimulus 2.0, 3.0, 4.0, 5.0 (and so on), until The Great Implosion Reader Aaron C. suggested: 20 reasons America has lost its soul and collapse is inevitable K.T. sent this video link: The Goldman Sachs Profitability Magic Trick. After some travel, Peter Schiff is back to videoblogging. Items from The Economatrix: 40% of Working-Age Californians Jobless « Letter Re: Wood Stove Selection, Operation, and Safety |Main| Three Letters Re: Storing Food in Commercial Storage Spaces? » Wednesday October 21 2009Letter Re: Should I Rent, or Should I Buy Property?
Sir; 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. « Odds 'n Sods: |Main| Letter Re: Wood Stove Selection, Operation, and Safety » Economics and Investing:Reader Steven H. wrote to mention: VP Biden puts on his Captain Obvious cape and declares "This is a depression". Of course, Joe Biden has developed quite a track record for the inability to keep his mouth shut--most notably when he revealed the "secret" nuclear blast bunker beneath the VP's Residence. Ralph N. suggested this piece over at Volokh about how the FedGov conceals some of its debt: Treasury Inc.: The Shadow National Debt. (It is hidden under a TARP, dontcha know...) Commentary from analyst Niall Ferguson: The Dollar Is Dying a Slow Death. From the Housing Storm blog: Strategic Foreclosure And The Last Man On The Boat Also by way of Housing Storm: Subprime Mortgage Myths Debunked Items from The Economatrix: « Odds 'n Sods: |Main| Letter Re: Storing Food in Commercial Storage Spaces? » Tuesday October 20 2009Economics and Investing:New Hampshire Senator Judd Gregg: U.S. could be on path to a 'banana republic' situation. (Thanks to Tom B. for the link.) Reader MP sent this piece in Business Week: What happens if the dollar crashes? MP also sent this from The Motley Fool: The recession's second wave, subtitled "Green shoots? Sure, but there is actually little evidence of a solid recovery" GG flagged this: FDIC bank fund in the red until 2012. Tom R. suggested this piece: Intractability of Financial Derivatives Items from The Economatrix: Weiss: Bernanke Gone Berserk! Bank Reserves Explode! "Martin here with the most shocking new numbers I've seen in my lifetime. My conclusion: Fed Chairman Bernanke has dumped so much funny money into the U.S. banking system and has done so little to manage how that money is used, the fate of our entire economy has now been cast under a dark shadow of doubt. This is not conjecture or exaggeration. Nor are the underlying facts subject to debate. They are blatant, unambiguous, and fully supported by the Fed's own data ..." « Two Letters Re: Preparations for Eyesight & Hearing |Main| Jim's Quote of the Day: » Monday October 19 2009Twenty-Two Reasons Why this Recession is Different and Why it Will EndureI
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
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. « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Karen H. kindly sent us the following items: Bank of America Posts Third-Quarter Loss on Defaults. "The idea that the financial crisis is over is a fantasy and it looks like the numbers bear that out," GE Profit Falls 45% as Revenue Trails Estimated Buyers Suing Trump in Miami Condo Glut as Values Return to 1989 "There’s no recession in the real estate litigation community,” Focus growing on keeping the jobless in their homes. A Perfect storm's brewing to cool petroleum demand. Items from The Economatrix: Workers Still on Job, But Making Half as Much « Odds 'n Sods: |Main| Letter Re: Preparations for Eyesight and Hearing » Sunday October 18 2009Economics and Investing:Ex-Cop Loses Bank as Dutch Critic Spurs Withdrawals. (A tip of the hat to Karen H. for the link.) Jonathan H. flagged this: DOW 10,000!!!! Oh Wait, Make That 7,537. Jonathan's comment: Due to reduced buying power, the current DJIA at 10,000 is equivalent to only 75% of when the DJIA went through 10,000 a decade ago. Additionally,back then $10,000 would have bought 30 ounces of gold; now its only 10 ounces. Items from The Economatrix: California Bank Becomes 99th Closure « Economics and Investing: |Main| Three Letters Re: Perspectives on Roughing It and Covert Car Camping » Saturday October 17 2009Two Letters Re: Abandonment of the Dollar is a Premature Rumor
Dear Editor: Dear Jim and Family, « Odds 'n Sods: |Main| Two Letters Re: Abandonment of the Dollar is a Premature Rumor » Economics and Investing:
Dollar hit on Fed’s signal of low rates. Meeting minutes show Fed has strong lean to more debt monetization. (Thanks to GG for the link.) Brian H. sent us a link to a piece in Zero Hedge. that quotes Money magazine: "Now 5 institutions hold 97% of the notional value [face amount] and 88% of the market value in derivatives, and they are all basically in the same business and all basically hedge with each other. It is not a true hedge when the other side can't pay, and history has clearly proven how easy it is for the other side not to be able to pay." [JWR Adds: That is the very definition of derivatives counterparty risk.] Brian's comment: "I would add that the risk isn't just concentrated in these "Too Big To Fail" Five. The risks are clearly placed on the backs of the taxpayer, either through Federal Reserve inflation or direct confiscation of taxes passing through to the banks." Items from The Economatrix: Why the Housing Rescue Hasn't Prevented Record Foreclosures « Economics and Investing: |Main| From Michael Z. Williamson: M4 Carbine Failures in Afghanistan Likely Due to High Rate of Fire » Friday October 16 2009Three Letters Re: Abandonment of the Dollar is a Premature Rumor
James Wesley, 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: Jim « Odds 'n Sods: |Main| Three Letters Re: Abandonment of the Dollar is a Premature Rumor » Economics and Investing:Karen H. mentioned this sobering piece, also subsequently sent in by several other readers: Foreclosures: 'Worst three months of all time' The latest from Dr. Housing Bubble: A Comprehensive Look at the Southern California Housing Market: 60,000 Properties Listed on the MLS but over 100,000 in Shadow Inventory. California and Nationwide Median Home Price Trends since 1968. Say Good-Bye to Option ARMs. Also from Karen: Dollar to Hit 50 Yen, Cease as Reserve IRS Intensifies Global Hunt for Secret Offshore Bank Accounts Desperate Dollar Heading to the Basement. (BTW, they concur with my comments on the USDI's crucial support level: 72.) Items from The Economatrix: Dow Passes 10,000 For First Time In A Year. There's another sheep to be shorn every minute... « Influenza Pandemic Update: |Main| Letter Re: Preparations for Eyesight and Hearing » Thursday October 15 2009Two 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
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! « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:GG sent us this New York Post article: Dollar loses reserve status to yen & euro Fed's Bullard warns on inflation, unemployment. (Thanks to GG for the link.) Value of UK farmland could double in five years. Jeff mentioned this piece at Zero Hedge: Why Did U.S. SDR Holdings Increase Five Fold in the Last Week of August? Items from The Economatrix: Weak Dollars, Strong Euro Combine to Create Eurozone Pain « Letter Re: Devotional Candles as an Emergency Source of Light and Heat |Main| Water, Water Everywhere?, by David in Israel » Wednesday October 14 2009Letter Re: Abandonment of the Dollar is a Premature Rumor
Dear Jim and Family, « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Karen H. sent this: Dollar Facing 'power shift Also from Karen: Stone Calls U.S. Economic Growth Outlook "Troublesome" in 2010 GG sent this: Silver Lining: Jim Rogers Talks Up Commodities Reader D.D. sent the link to a good piece by Bill Fleckenstein: Your dollars are just Monopoly money Items from The Economatrix: Gary North: The Fed's Schizophrenic Monetary Economist « Odds 'n Sods: |Main| Letter Re: Making Your Own Maps for the Field » Tuesday October 13 2009Economics and Investing:Reader Brian S. sent this: Dutch DSB Bank Nationalized After Bank Run By Clients. "The Netherlands’ central bank said Monday it has taken control of DSB Bank NV after clients began a run amid fears the regional lender might collapse." Brian notes: "People can [presently] only take 250 Euro per day from their accounts." Icahn: Risk of Double Dip, Investor 'Bloodbath'. (Thanks to Flavio for the linkio.) A piece by Charles Hugh Smith posted over at Housing Storm: Deflation or Inflation: Who Cares? Analysis from Greg Fielding (also at Housing Storm): Did the FHA make bad loans with taxpayer money to prop up home prices? I found an an interesting video of a Jim Sinclair interview by David Williams in South Africa: Gold & Inflation. Sinclair predicts gold at $1,650 per ounce by January, 2011. (This was linked at the Total Investor blog.) Items from The Economatrix: California Budget Already in the Red 10 Weeks After its Passage. California unemployment hit 12.2% in August « Experience With Bicycle Commuting and Touring, Hammocks, and Stoves, by David in Israel |Main| Notes from JWR: » Monday October 12 2009What Recovery? Find Yourself a Recoveryless JobFor 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:
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. 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. 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 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:
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! « Odds 'n Sods: |Main| Three Letters Re: Heating With Wood » Economics and Investing:Mara spotted this: First Fannie and Freddie, Now the FHA? Mara's comment: "Every time I read about more bailout money for existing “customers” or new bailout money for new “customers,” I start to get woozy and lightheaded! Good thing I am sitting down when I read this stuff!" GG flagged this New York Times piece: Failures of Small Banks Grow, Straining F.D.I.C. (100th US bank failure thusfar for 2009.) Items from The Economatrix: The Great Recession: The Numbers Tell The Story « Odds 'n Sods: |Main| Letter Re: Where to Store Food When There is No Simple Answer » Sunday October 11 2009Economics and Investing:The Other Chris sent the link to a New York Times piece: Foreclosures Mark Pace of Enduring U.S. Housing Crisis. Here are some key quotes: "Every 13 seconds in America, there is another foreclosure filing. That's the rhythm of a crisis that threatens to choke off hopes for a recovery in the U.S. housing market as it destroys hundreds of billions of dollars in property values a year." Reader Jim H. sent this link: U.S. states suffer "unbelievable" revenue shortages Items from The Economatrix: Whodunit? Sneak Attack on the US Dollar « Odds 'n Sods: |Main| Letter Re: Documentary Examines a Terrorist Nuke Scenario » Saturday October 10 2009Economics and Investing:Reader KAF forwarded this: U.S. Budget Deficit Hit Record $1.4 Trillion in 2009 Illinois State Comptroller Dan Hynes Says State Finances A Mounting Crisis, Things Getting Worse. (Thanks to Jeff B. for the link.) Matt in Tennessee alerted us to this video clip from Gerald Celente: The Dollar is Finished. And, BTW, Peter Schiff agrees. He announced "The carry trade [in US Dollars] is on!" Items from The Economatrix: « Odds 'n Sods: |Main| Influenza Pandemic Update: » Friday October 9 2009Economics and Investing:Reader CP suggested a column piece by Malcolm Berko: Taking Stock. CP's comment: "While Berko runs an investment advice column, he's generally not a cheerleader for irrational exuberance. This response to a reader's question is an general indictment of the markets and those who might as well be donning grass skirts dancing on a beach to appease the financial gods." Commentary from Dan Denninger: Consumer Credit: Disaster, Down $12 billion Items from The Economatrix: « Odds 'n Sods: |Main| Letter Re: Getting Self-Sufficient in Wyoming » Thursday October 8 2009Economics and Investing:Thanks to reader GWC for this: U.K. Faced ‘Bank Runs, Riots’ as RBS and HBOS Neared Collapse GG spotted this key data point: Hours worked plummets to all time low Thanks to Damon for this news item: Venezuela inflation estimated at 26%, annually. (Prices were up 2.5% in September. But don't worry. Comrade Hugo has a plan.) Mark G. found an interesting New York Times blog article: What Happened to Argentina? Items from The Economatrix: Australia Rate Hike Good Sign for World Economy « Odds 'n Sods: |Main| Letter Re: Older Technology Radio Receivers » Wednesday October 7 2009Economics and Investing:GG was the first of more than a dozen readers to mention this article by Robert Fisk (an outspokenly leftist journal list, so take it with a grain of salt.): The demise of the dollar; In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading. Given the import of the preceding (if it is true), is it any wonder that the USDI is tanking, and the future and spot prices of precious metals are going through the roof? You've had plenty of warning and investment encouragement from your editor. Eight years worth, in fact. (I called the bottom, back in 2001.) Greg F. suggested this: Is The FDIC Killing Short Sales? Banks brace for Latvia's collapse; The Baltic states are once again in the eye of the storm after leaked reports that Sweden is bracing for a full-blown economic and political "breakdown" in Latvia. (Thanks to GG for the link.) Items from The Economatrix: Most Economically Stressed US States « Odds 'n Sods: |Main| Influenza Pandemic Update: » Tuesday October 6 2009Economics and Investing:From the Dr. Housing Bubble blog: Three Westside Shadow Inventory Homes. Santa Monica, Culver City, and Rancho Park. Banks will not Hold Inventory Forever. John S. sent this: Bailout cop: Treasury set 'unrealistic expectations' Barofsky, reviewing the first big bailouts to 9 firms, concludes that the government was too rosy to the public about the banks' health. (Read: They fibbed.) Tom B. thought this might be of interest: Baker Hughes: US Oil, Gas Rig Count Up 7 To 1,024 This Week Damon mentioned: Is world economy still in deep woods? (The IMF announced that it plans to sell 8% of its gold reserves.) Items from The Economatrix: Ad Slump Leads Gourmet, Three Other Magazines to Close « Letter Re: Firearms Training -- Some Stress is a Good Thing |Main| Jim's Quote of the Day: » Monday October 5 2009Letter Re: Where to Start in Survival Preparedness? Mr. Rawles, Option #1 - The Air Force pays large bonuses for certain career fields if you reenlist into that career field. I'm interested in one that will pay me a minimum $50,000 ($25.000 on signing, the rest spread out over the length of my reenlistment.) We talked about paying off one auto loan and our credit cards with the up-front $25,000. This would free up about $500/month which we would probably put towards our bigger auto loan. Since the first auto loan would be paid off, we can then sell that car and buy a less expensive '73-'86 Chevy/GMC Blazer or Suburban (gas). That would take care of survival vehicle #1. The other $25,000 over the following years would be used to pay down our other vehicle to where we can pay off or even break even so we can purchase survival vehicle #2---1994-1997 Dodge Ram 2500 4x4 5.9L Cummins diesel. If we go for this option, most if not all of our debt will be gone and we'll have about $1,000/month to spend on fortifying our equipment, supplies et cetera. The problem with this option is we won't be too prepared if something were to happen in the next 4-to-5 years or so. Option #2 - Let's assume that I still have the same bonus as listed above. I retire in eight years and would like to have a little piece of land to go to--TEOTWAWKI or not. We plan on 10+ acres somewhere in north central Idaho (Orofino/Pierce/Deary--that area). Well, I could take the $25,000 up front bonus and put it down on a piece of land. We don't plan on spending over $80,000, so we can figure on a payment of around $300-$600/month. Then, when I retire, I'll move the family up there and build a house with a mini-farm. Of course, if I went this route I would still have a lot of debt. Option #3 - Perhaps I should plan for more immediate needs. My family has little of the proper equipment/supplies that we would need. Shoot, we don't even have a Bug-Out Bag.. I've considered using that bonus money (or a portion) to build up in the equipment area and forego paying any additional to debt (after all, if TEOTWAWKI happens in the near future, debt will be the least of our problems). So, this is the dilemma that I am faced with. I know my end goal a (self sustaining mini-farm in Idaho, while still receiving a pension and being debt free). Getting there is the hard part. The costs of my current debt, state of provisions, buying land, building on the land, vehicles, alternative power for the retreat will probably cost anywhere from $200,000-$500,000 when it's all said and done. I think the smart choice is putting as much money as possible towards debt and getting that out of the way, but at the same time making small provisions for WTSHTF. Perhaps I've missed something? - Dan W. JWR Replies: For anyone that might be laid off, debt can be a real killer in the next few years. I still predict a at least another 18 months of deflation to be followed by sharp inflation. In deflationary times, having any debt load would be disastrous if income were interrupted due to a layoff. Granted, military service is a unique situation, but my general advice is to pay down debts, and avoid taking on any new debt. The situation in the immediate future will resemble the Great Depression of the 1930s, where cash was king, and the few people that had jobs fared well, but those that were unemployed suffered badly. So my advice is to take Option #1: Pay off one auto loan and your credit cards with the $25,000 re-up bonus. Not only will it remove the stress of potential loss of income, but it will eliminate interest payments, which are a non-productive drain on your resources. Then make your preparations gradually, using your expendable income, without incurring any new debt. If need be, downgrade one of your vehicles to an older model that won't require a car loan. That will free up even more cash each month. « Odds 'n Sods: |Main| Three Letters Re: Travel Security, by CapnRick in Argentina » Economics and Investing:Reader Eric S. spotted this: CIT debt swap could cost U.S. more than $1.8 billion By way of Market Oracle, Damon found these two links: News From 1930 and Zero Hedge discusses railroad carloading statistics. Items from The Economatrix: Jim Willie: Systemic Failure Approaches. "Numerous sustaining forces will contribute toward the inexorable path to systemic failure. It will begin with the relapse failure of the US banking system. Citigroup is facing real bankruptcy, whose numerous segments are underwater and growing worse. Bank of America is in a death spiral, whose CEO Ken Lewis departs amidst political and shareholder legal pressures. Wells Fargo is so dead that its true balance sheet makes a skeleton come to life, whose prime Option ARM and second mortgage exposure is monumental." « Odds 'n Sods: |Main| Two Letters Re: Applying For a Non-Resident Concealed Carry Weapons Permit/License » Sunday October 4 2009Economics and Investing:World Bank could run out of money 'within 12 months'. (Thanks to Chris H. for the link.) Don W. flagged a New York Times piece: Too Rich to Worry? Not in This Downturn. JWR's comment: When even the uber-wealthy feel the pinch, then it is clear that this is not just a typical market cycle-triggered recession! Items from The Economatrix: Stocks Fall Following Disappointing Jobs Report « Jim's Quote of the Day: |Main| Travel Security, by CapnRick in Argentina (Part 1 of 2) » Saturday October 3 2009Economics and Investing:Greg L. suggested this Housing Storm piece: Is it too early to declare mortgage modifications a complete failure? Reader HPD mentioned this commentary by Mish Shedlock: Collectively, Economists Are A Perpetually Optimistic Lot Ukraine's Naftogaz indicates default on bonds (Thanks to Danny S. for the link.) Items from The Economatrix: Wall Street Money Rains on Senate, Especially Schumer « Odds 'n Sods: |Main| Influenza Pandemic Update: » Friday October 2 2009Economics and Investing:Reader DLF spotted this: Detroit: Too broke to bury their dead Foreclosure Rate Rises 17 Percent. (Thanks to The Other Chris for the link.) A residential real estate shadow inventory case study. Items from The Economatrix: Manufacturing, Employment Pounds Stocks « Odds 'n Sods: |Main| Two Letters Re: Crystal Radios » Thursday October 1 2009Economics and Investing:A Year Later, TARP Inspector General Barofsky Sees a 'Far More Dangerous' Financial Situation Officials: Fed will need to boost rates quickly. (Thanks to El Jefe Jeff E. for the link.) Bob G. sent the link to this Wall Street Journal piece: Plenty More Bank Losses Expected Globally; Additional $1.5 Trillion in Write-Downs Forecast by End of 2010 Account overdrawn: FDIC Fund Goes Negative. Although the US Treasury is the guarantor of last resort, it now won't take much to trigger bank runs. (A hat tip to K.T. for the link.) Items from The Economatrix: « Odds 'n Sods: |Main| Influenza Pandemic Update: » Wednesday September 30 2009Economics and Investing:Reader GG spotted this sobering piece: Corpse of a Thousand Houses. More foreclosures will soon be flooding the market, further depressing the housing market. This is the negative feedback loop (aka "death spiral") that I've been warning about since late 2006. From El Jefe Jeff E.: US large-loan bank losses triple to $53 billion; Regulators say US lenders expected to lose $53 billion in 2009 on loans larger than $20M. Jeff's comment: "53 Billion is a lot to lose, and they were 'surprised' by the losses....I wonder what else is lurking that will cause these banks more surprises." Also from Jeff E.: Economists React: “A Surprising Decline” in Orders Reader Mike W. sent this advice from The Motley Fool on the US Dollar: Get Out Now! Items from The Economatrix: What's The Real Reason Banks Aren't Foreclosing? « Odds 'n Sods: |Main| Letter Re: Crystal Radios » Tuesday September 29 2009Economics and Investing:From veteran blog content contributor GG: A $4 billion Postal Service bailout Also from GG: Ten reasons for an imminent stock market crash Reader mark S. flagged this: Another housing slump coming? Analysts say 7 million soon-to-be foreclosed properties have yet to hit the market. Items from The Economatrix: Simmons (Mattress) Plans to File for Chapter 11 Bankruptcy Protection « Odds 'n Sods: |Main| Two Letters Re: Preparedness Information for Diabetics » Monday September 28 2009Economics and Investing:SurvivalBlog's Editor at Large Michael Z. Williamson sent a link to: Dollar under scrutiny at G20 summit Lost Vegas: Living Underground in Flood Tunnels. In Las Vegas, 1 in every 33 homes is in foreclosure. Where did all the people go? The answer might surprise some. There are an estimated 700 troglodytes live beneath Las Vegas.. Do they realize the mortal danger in the uncommon event of a flood? (A tip of the hat to David R. for the link.) From Jim D.: Social Security strained by early retirements. An ever bigger budget deficit! Items from The Economatrix: FDIC is Broke, Taxpayers at Risk House Passes Bill To Prevent Government Shutdown « Odds 'n Sods: |Main| Influenza Pandemic Update: » Sunday September 27 2009Economics and Investing:
From Paul D.: US faces Armageddon if China and Japan don't buy debt Investors gird for post-recession inflation HH latched on to this article: U.S. Debt Crisis May Cause ‘Fall of Rome’ Scenario, Duncan Says Items from The Economatrix: Fed Admits Hiding Gold Swap Arrangements « Odds 'n Sods: |Main| Small Breed Dogs--Nature's Leatherman Tool, by B.C. » Saturday September 26 2009Economics and Investing:Can you spell monetization? Federal Reserve Accounts For 50% of Second Quarter Treasury Purchases (Thanks to GG for the link.) GG also flagged this piece in the Globe and Mail: Desperately seeking an exit strategy. (Roubini says debt monetization and inflation "the path of least resistance") J.O. suggested this piece by Peter Schiff: Lehman Brothers Revisited Items from The Economatrix: UK: Crude Price "Shock" Next Threat to Recovery « Odds 'n Sods: |Main| Grub and Gear--Lessons Learned from an Alaskan Trapper, by Old Dog » Friday September 25 2009Economics and Investing:FG and Adam W. both flagged this: Homeowners who 'strategically default' on loans a growing problem. The article begins: "Who is more likely to walk away from a house and a mortgage -- a person with super-prime credit scores or someone with lower scores? Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to "strategically default" -- abruptly and intentionally pull the plug and abandon the mortgage -- compared with lower-scoring borrowers." El Jefe Jeff E. recommended this piece by famed economist Arthur Laffer, in The Wall Street Journal: Taxes, Depression, and Our Current Troubles. Jeff's comment: "Arthur Laffer makes interesting comparisons of today's monetary policy with that of the Great Depression. The Fed has increased money supply 100% in recent months. A tax increase may be the tipping point." GG recommended this piece by a Cato Institute fellow: The growing debt bomb Items from The Economatrix: « Odds 'n Sods: |Main| Influenza Pandemic Update: » Thursday September 24 2009Economics and Investing:From Karen H.: Trailing Indicators: Out of a Job, Some Decide to Take a Hike Don't Trip in Your Search for Higher Bond Yields Blaine sent this: Ten Big Companies Veering Towards Bankruptcy DD flagged a news item: FDIC considers borrowing cash from banks; Insurance fund that protects depositors is quickly running out of money Jim Jubak asks: Will US repeat mistakes of 1937? Items from The Economatrix: Reversal: FDIC May Need Bailout from Banks US to Push for New Economic World Order at G-20 « Influenza Pandemic Update: |Main| Letter Re: Chronic Troubles with PT/MMC Pistol Night Sights » Wednesday September 23 2009Three Letters Re: Will Junk Silver Be Accepted for Barter, Post-Collapse?
Jim: I just checked Dex Online for coin dealers in Dallas, Texas. Dex brought up 18 coin dealers. Dex also brought up 18 antiques and collectibles dealers (who always know the value of old coins.) I don't think there would be a problem converting pre-1965 "junk" silver coins into whatever new currency replaces the US dollar after the collapse. Nearly every town in the US with a population of 10,000 or more has at least one coin dealer. Every coin dealer knows the value of pre-1965 "junk" silver coins. So does every jeweler and every pawn shop (not recommended.) In my estimation it will take perhaps one week after the final collapse of the US dollar before people will be pawning their wedding bands and emptying out their kids' coin collections. It won't take long before everybody knows what still has value. Gold and silver have always kept their value since long before the Roman Empire. If anybody still thinks that pre-1965 90% silver coins will be difficult to use after the collapse of the US dollar, then I recommend buying a copy of A Guide Book of United States Coins 2009 by R. S. Yeoman. (It is often just referred to by its nickname, "The Red Book.") Every Barnes & Noble store sells these. In the mean time it would be a good idea to begin to equate the values of common good to an ounce of silver today. At $17/oz. one ounce of silver buys six gallons of gasoline in most parts of the US, for example. Figure this out for every necessity. Write it down on a legal pad for reference. Begin to educate your family and friends. Post-US dollar collapse their will be a mass re-education in the values of gold and silver - out of sheer necessity. Sir: Obviously, the more stuff you have to trade, the better, but silver should be among your stockpiles. - Brett
What I did not tell you at that time, was that the Romanians were widely using old silver coinage, much from the old Austro-Hungarian Empire days, as a regular means of paying for such things as food. Even though the Romanian Lei, nearly died out as a currency, in favor of the Deutsche Mark, US Dollar and British Pound, old silver coins were widely used! It didn't take long for folks to accept old Austro-Hungarian silver coins as a viable means of barter etc. While this was illegal, I never heard of any enforcement efforts being made by either the regular police, or the Romanian Securatate. Your assessment that pre-1965 90% silver coins will be widely used following the collapse of the fiat currencies is a sound prediction of what may yet come to pass. Initially, some may refuse to accept a silver quarter dollar as anything more than 25 worthless cents. But, it won't be long until everyone will gladly accept a real dollar (in silver coins) as the "real deal." « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Tamara (of the View From The Porch blog), linked to this by Les Jones: Three tales of inflation From DD: Retraining roulette: New skills, no new job Trent forwarded this video link: Bullish Today, Marc Faber is "Highly Confident" the Future Will Be Very Bleak Items from The Economatrix: Weiss: From Deflation to Inflation. This is a significant change, because up until just recently, Marty Weiss had for more than two decades been warning about deflation. « Odds 'n Sods: |Main| Letter Re: Grub and Gear--Lessons Learned from an Alaskan Trapper » Tuesday September 22 2009Economics and Investing:Unemployment in California at 12%, Highest in Nearly 70 Years GG flagged this: UK Public debt hits £800 billion - the highest on record Tom B. sent this item: Charts predict: "Risk of Full- Fledged Dollar Crisis" Items from The Economatrix: Obama: G-20 Good Time to Assess Economy « Letter Re: Storage Food Cookbooks |Main| Jim's Quote of the Day: » Monday September 21 2009Letter Re: Will Junk Silver Be Accepted for Barter, Post-Collapse?
I have been reading your blog for quite some time now and I have a different outlook that I would like for you to comment on if you would be so kind. I have seen multiple references to pre-1965 coins being good for barter in a post-SHTF environment, but I do not follow this reasoning. I live in Dallas Texas, and frequently converse with other like minded people about survival preparation and the world climate and, until I told them about the high melt value of pre-1965 coins, they had no idea it was greater than the face value. It should not have struck me as odd as I myself had no idea of this before I began reading your blog. These are well informed people, so it made me wonder how common this knowledge was. I began asking various people about this, and not one person had any idea that these coins had a higher silver value than their face value. Here is my perspective on this subject. In a post SHTF environment some people will have prepared and some won't. However, regardless of this, when it comes time to trade with others the universal doctrines will apply. 1. You will have to have something that I want for me to trade you what you want. 2. A think worth what someone is willing to pay for it, not it's asking price. Now, if the vast majority of people have no idea that pre-1965 coins are almost the same as silver, most of them will likely have no desire for them at all, or worse, think that you are trying to scam them by pushing a trade with a currency which is likely defunct. Further, due to the probable lack of access to information, it is unlikely that people would be able to research the claim that these coins are worth more than their face value. Thereby keeping the populace at large ignorant of their true commodity value, and keeping the coins out of the trading markets. I believe that the only scenario in which pre-1965 coins could come to be regarded as a barter good would be if people that already knew of their value agreed to take them in as trade for something that the ignorant populace already believed had value, such as ammunition or food. Again, however, there is a very small percentage of the populace that has knowledge of the melt value of pre-1965 coins, much less has a stockpile of them to use after the SHTF. Therefore, I believe it to be unlikely that there would be enough people, in enough varied locations, willing to make a sufficient number of trades of their items for coins for the trend of pre-1965 coinage as a barter good to become ubiquitous in the "villages" or "trading posts". Due to these perspectives, I find it to be unlike that the new "villages" or "trading posts", that spring up out of the ashes of our previous society, will use pre-1965 coins as even an uncommon trading good. Most of the idea behind amassing coins for preparedness I believe to be tied to the value of silver, and the above illustrations assume that silver will be valued after the crash. However, after the crash I do not find it likely that silver will have any value at all for the the majority of the people. Very few people will be so well -prepared that they will have enough that they can concern themselves with amassing hard wealth for when society returns. I am certain that the majority will be trying to just survive as best they can. While there will be a Rolex or a diamond ring traded for a few tins of tuna, this will likely be an uncommon occurrence as society continues to devolve. Few people will have so much that they can trade away usable resources for hard value items in mass. While people may have the memory that silver used to be valuable, after having spent some time circling the drain with the rest of society, it is unlikely that they will have found a use for it since it can neither be used to defend nor feed one's self. It is more likely that a wealthy man will be one that has enough food, warmth, defense, and shelter to survive indefinitely. That only leave silver coins as an easily identifiable currency. So, let us suppose that there are places that have almost gotten back to some sense of civilizations, such as the "villages" or "trading posts". As such they will likely want to use some form of currency. However, as we look to the past to inform the future, it is more likely that each community, or group of communities, will develop their own individual currencies in an effort to avoid counterfeiting and theft. Historically, in the absence of a centralized government, individual communities do what they feel they must to survive and to insure that they function as smoothly as possible. This is likely to focus more on food and defence, items that provide life stability, than it is on amassing hard value items. In order for silver coins to have a value a person needs to want them from you more than they want to keep what you want from them. I can not see any functionally use for silver after the crash. I know that there are a great many very intelligent people that firmly believe that these coins will have a high value post SHTF, so I feel like I must be missing something. I would be most appreciative if you would share your views on the reasoning that I have outlined. I am very hesitant to invest in pre-1965 coins as a future barter good until I am convinced that it is a better investment than just using the same money to buy more food, guns, or ammunition. The ideal of having a compact, universal, and non-degrading barter good available when the time comes is very appealing, I'm just not sure that it is silver coins. - Russell from Dallas JWR Replies: I stand by my prediction that in the event of a currency collapse, pre-1965 junk silver will very quickly become adopted as a de facto barter currency. Many people may not presently be familiar with these coins, but once the US Dollar's value disintegrates, people will wise up to what constitutes real money, very rapidly. Adaptability is in the nature of free markets. It won't take more than a couple of months for prices to stabilize in the new reality of silver coins, packs of cigarettes, boxes of .22 cartridges, and gallons of gasoline--in barter. I predict that within a month, the sound of ringing silver coins will become familiar--starting first at "mom and pop" stores and at farmer's markets. These coins will be eagerly sought in barter, because they encapsulate all of the key attributes of a genuine tangible currency: recognizability, scarcity, durability, portability, fungibility, and divisibility. Being 90% silver, they also have useful industrial value. No barter currency is perfect, but pre-1965 coins come very close, at least for use here in the United States. « Jim's Quote of the Day: |Main| Influenza Pandemic Update: » Economics and Investing:Greg sent us this: FDIC Considers Borrowing From Treasury to Shore Up Deposit Insurance Chaz liked this one: The U.S. Balance Sheet: Households See Net Worth Down by $12 Trillion Since Peak and Total Debt Floating in the Market of $33 Trillion Items from The Economatrix: Housing, Jobless Data Point to a Slow Economic Recovery Odds 'n Sods:Federal Judge Rules Police Cannot Detain People for Openly Carrying Guns -- Includes nationwide map linking to open carry laws for each state. (Thanks to Cheryl for the link.) Food Stamp List Soars Past 35 Million: USDA o o o o o o « Odds 'n Sods: |Main| Squeezing Efficiency Out of Every Second of Your Workday to Provide Quality Relaxation Time, by KAF » Sunday September 20 2009Economics and Investing:"Option" mortgages to explode, officials warn. (This is not a news flash for SurvivalBlog readers--I first warned you about this in March of '07, and several times since.) A picture is worth a thousand words. BTW, I have found that this chart link is very useful to send to any deluded relatives who have bought into the lie that the real estate market has "bottomed" and that are planning to buy back into the market. US residential real estate is presently a playground for idiotic contrapreneurs. The very earliest that real estate could turn around in the US is 2013, and I actually expect it to be much later than that! GG alerted us to Mish Shedlock's highlighting 'Black Swan' Taleb's frank comments on Bernanke and Summers Garnet and Cheryl both mentioned the story of how one family got out of debt. Items from The Economatrix: « Odds 'n Sods: |Main| Note from JWR: » Saturday September 19 2009Economics and Investing:More trade war rumblings: China Condemns U.S. Tariffs on Tires as 'Protectionism'. (Our thanks to KAF for the link.) Reader Laura H. mentioned: In 2009, US public debt will be approximately 90% of GDP "In 2009, US public debt will be approximately 90% of GDP. It will quickly approach and surpass 100% of GDP in the near future." Items from The Economatrix: « Odds 'n Sods: |Main| Linda Rawles Memorial Fund Donations » Friday September 18 2009Economics and Investing:Pete A. spotted this one: Map: Household incomes by state. Look for some coming shifts in this map as the recession cum depression deepens. I think that the steepest declines in come will be on the coasts and in The Rust Belt. But a lot of my Recommended Retreat Areas may do better. From Krys W.: US credit shrinks at Great Depression rate prompting fears of double-dip recession Items from The Economatrix: Foreign Demand For Long-Term US Securities Fall « Odds 'n Sods: |Main| Bug Out and Refugee Considerations, by Brad T. » Thursday September 17 2009Economics and Investing:U.N. calls for replacement of U.S. dollar; Joins Russia, China and G20 with demands IMF step forward (Thanks to Laura H. for the link.) Reader John M. suggested a Market-Ticker link that clearly describes the urgency of the financial situation: Warning: Deflationary Collapse Ahead. Items from The Economatrix: Derivatives Still Pose Huge Risk, BIS Says How the Collapse of Lehman Bros. Averted a Second Depression « Odds 'n Sods: |Main| Influenza Pandemic Update: » Wednesday September 16 2009Economics and Investing:Wow! Take a look at the latest market tickers for spot silver and spot gold. We might soon witness some profit-taking that could temporarily drive silver back to the $12 per ounce range. But consider that a buying opportunity. The next leg up will probably be in November, when The Chartist Gnome predicts silver over $18 per ounce and gold over $1,070. For those that already have bought metals: Do not attempt to "time" such a volatile market. Just hang on, and as the Gnome says, "Be ready for a roller coaster." Items from The Economatrix: « Odds 'n Sods: |Main| Note from JWR: » Tuesday September 15 2009Economics and Investing:Monty recommended this piece over at Seeking Alpha by J.S. Kim: The Coming Consequences of Banking Fraud More about insider selling, courtesy of Pete S.: Insiders sell like there's no tomorrow; Corporate officers and directors were buying stock when the market hit bottom. What does it say that they're selling now? GG sent this: U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month Items from The Economatrix: Analyst: It's Too Late to Save Sears « Odds 'n Sods: |Main| Letter Re: Living in the Time After TEOTWAWKI » Sunday September 13 2009Economics and Investing:"The Other Jim R." was the first of several readers that sent us this: Federal deficit hits $1.38 trillion through August. Mr. W. sent this: Three more down: 2009 Bank failure tally hits 92 Items from The Economatrix: Treasury Sees Millions More Foreclosures Forbes: The Dollar Collapses Gold Climbs to 18-Month High as Dollar Weakens US Growth to Slow After "Clunkers" Rebate Ends, Survey Shows « Odds 'n Sods: |Main| Influenza Pandemic Update: » Saturday September 12 2009Economics and Investing:You might have noticed that gold set a record weekly closing price on Friday at $1,005 per ounce, and silver closed at a respectable $16.70. I expect some profit-taking in the next two weeks, so be ready to buy on this dip! From Jeff D.: Treasury sees millions more foreclosures Ben M. spotted this piece quoting Items from The Economatrix: Government Paid Dealers $1.2 Billion for "Clunkers" « Four Letters Re: Prepare to Garden Like Your Life Depends on It, by Prepared in Maine |Main| Notes from JWR: » Friday September 11 2009One Woman's View of Budget Preparedness, by Lisa L.I wanted to write something for the contest for other ladies with children were in the same situation with wanting to be more prepared but not having the means to do so like the books recommend. I've had my frustrations but I've learned and bought gradually and wanted to share. :) It always upsets me when I hear in the media or from people their point of view that people are helpless due to their income level. This is what I've learned so far, how to cook with wheat, stockpiling shampoo for very little and ways to acquire some supplies for a 72-hour-kit inexpensively. 1. Educate yourself! I was able to get every preparedness book I requested from inter-library loan. Now I have high speed Internet and there are so many videos on YouTube. I was interested in learning how to use wheat so this is my experience. :) There are so many other preparedness topics and skills on youtube and in books. Try to eventually purchase wheat in different forms like whole wheat berries, cracked wheat , bulgar, whole wheat flour, and whole wheat pastry flour. Purchase items found at regular the grocery store too like oats, beans and rice. 6. Buy wheat in a larger quantities like 25 lbs or 50 lbs. At this point you will already be using it in your meals. You can do this from the same place you bought it in a small quantity before. Do this even if you don't have grain processing equipment but are cooking it on your crock pot. Look into buying other grains in the large quantities too like beans, rice and oats. Sam's club has the best price on Bastmati rice. Learn how to store food in 6 gallon buckets with a mylar bag and oxygen absorber. The same place that sells you wheat should sell 6 gallon buckets except for a health food store. I have not tried to pack my food like this yet but it's next on my list. :) There are some great videos on YouTube that demonstrate this. You can buy grains already packed like this. For some things like rice, I plan to pack myself with the O2 absorbers and mylar bags myself since it's more economical. (And sugar, too, minus the O2 absorbers.) Some Lessons Learned It now seems so easy but at first I had no idea about purchasing small quantities of wheat. I called some of the vendors and had no idea about small cans, had no idea the health food store sold wheat, etc. It really took me years from the time of learning about it to purchasing it because I didn't have the money for 50# and had no idea I could buy it in a #10 can or locally one pound at a time at the health food store. It would have saved me a lot of time had I known those things. I learned about 72-hour kits and low cost things from dealing with the hurricanes. The Prudent Homemaker. I know Brandy from the internet and she eats from her food storage. The nice thing about her blog is she posts recipes that she actually makes from her food storage and garden. She is really talented in making the food look really nice too. « Odds 'n Sods: |Main| Four Letters Re: Prepare to Garden Like Your Life Depends on It, by Prepared in Maine » Economics and Investing:This piece, sent to us by Damon S., should come as no surprise to SurvivalBlog readers: The Dollar Collapses; Commodities, stocks and foreign currencies all rise as investors sell dollars. As I've stated before, the magic number to watch for on the US Dollar Index (USDI) is 72. The territory south of 72 is terra incognita. "There Be Dragons." Phil G. sent this: Swiss topple U.S. as most competitive economy U.S. ‘unlikely’ to recoup auto outlay, panel finds Lack health coverage? You may pay; "Americans would be fined up to $3,800 for failing to buy health insurance under a plan that circulated in Congress on Tuesday as President Barack Obama met Democratic leaders to search for ways to salvage his health care overhaul." Items from The Economatrix: Rising Commodities Push Industrial Stocks Higher « Letter Re: A Practical Use for Post-1982 US Zinc Pennies |Main| Jim's Quote of the Day: » Thursday September 10 2009Letter Re: Living in the Time After TEOTWAWKI
Dear Mr. Rawles, However, I have not seen anyone talk about how we will boot strap ourselves to back towards some sort of village life and civil society[, in the event of TEOTWAWKI]. In your novel "Patriots" , you touch on this with the Troy Barter Faire, and then fast forward at the end of the book to this being an accomplished fact. In the novel "One
Second After", the author makes the point that an EMP event could have pushed people back to a 19th century lifestyle, but things were more medieval because no one had the knowledge of how In a post-SHTF scenario, there won't be much call for fibre-channel administrators, but there will be a demand for bakers and candle makers. What I suggest is that while people are assembling their preps, they also look at the skills and services that they will need afterwards, and see if they can't learn to do these things themselves. After all, if they need them, Here's a quick list of skills/trades that I think would be useful in a post-SHTF world. Food: Dry goods, sundries: Clothing: Materials: Manufacturing: Many of these skills and trades can be started as a hobby. I suggest that people think about these now, and find what they have a knack for and consider it "job security" for the future. - Bear in California « Letter Re: Prepare to Garden Like Your Life Depends on It, by Prepared in Maine |Main| Letter Re: Living in the Time After TEOTWAWKI » Letter Re: A Practical Use for Post-1982 US Zinc Pennies
Dear Mr. Rawles, « Often-Overlooked Readiness: Preparing for Joy, by Carla |Main| Letter Re: Prepare to Garden Like Your Life Depends on It, by Prepared in Maine » Economics and Investing:
The latest weekly commentary and podcast from Don McAlvany: ECOSPASM: Inflation, Deflation, & Stagflation in One From DD: Is Buffett worried about stocks? Regular contributor Karen H. sent these news bits: Wealthy Families Face Bankruptcy on Real Estate Crash Items from The Economatrix: Lew Rockwell: The Great Fakeroo Recovery « Economics and Investing: |Main| Prepare to Garden Like Your Life Depends on It, by Prepared in Maine » Wednesday September 9 2009Letter Re: Bank Walkaways--Banks Intentionally Not Fully Foreclosing?
James Wesley, 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. « Odds 'n Sods: |Main| Letter Re: Bank Walkaways--Banks Intentionally Not Fully Foreclosing? » Economics and Investing:U.S. Government to Loan Brazil's Petrobras $10 Billion. This supercedes the old offer of $2 billion. Oh, but wait a minute! So if the BHO administration favors offshore drilling in US coastal waters, then why is this money going to Petrobras-Brazil instead of to US companies? Sue C. spotted this one: Dollar Falls to Lowest Versus Euro in 2009 as Stocks Rally And from A.C.: Schiff: Rising Gold Signals Inflation Items from The Economatrix: Gary North: Deflation, Inflation, Stagflation, Mass Inflation, Hyperinflation: Which One Will Get Us First? « Odds 'n Sods: |Main| Influenza Pandemic Update: » Tuesday September 8 2009Economics and Investing:Courtesy of The Other Jim R.: Dollar Will Weaken, Currency Crash Possible, Roubini Says From FG: More US wealthy opt to surrender their citizenship Ambrose Evans-Pritchard asks: Does the world have the courage to deal with its debts? "There are three ways out of our mess. We can pursue 1930s liquidation that purges debt through mass default. Such Calvinist destruction cannot be imposed on a modern democracy. We can devalue debt by deliberate inflation. This will backfire as bond vigilantes boycott government debt - unless rigged by capital controls or "administrative measures". You see where this leads. Or we can try to right the ship by paying down our debts, very slowly, by sweat and toil, navigating a treacherous course between the Scylla and Charybdis of the twin-flations, for as long as it takes. This is the only responsible course left we as we face the devastating consequences of our own credit delusions. Are we up it?" Reader Randy F. flagged this: China alarmed by US money printing; The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy. Items from The Economatrix: Food Stamp List Soars to New Record Past 35 Million « Odds 'n Sods: |Main| Influenza Pandemic Update: » Monday September 7 2009Economics and Investing:Sluggish growth in france leading to big trouble. (Thanks to DD for the link.) Larry T. sent this: Why Default on U.S. Treasuries is Likely, by Jeffrey Rogers Hummel. "Buried within the October 3, 2008 bailout bill was a provision permitting the Fed to pay interest on bank reserves. Within days, the Fed implemented this new power, essentially converting bank reserves into more government debt. Now, any seigniorage that government gains from creating bank reserves will completely vanish or be greatly reduced." Items from The Economatrix: Five Weeks on the Brink: Reliving the '08 Meltdown « Odds 'n Sods: |Main| Influenza Pandemic Update: » Saturday September 5 2009Economics and Investing:I found this linked over at TotalInvestor.com: Worst of slump yet to come, says economist; Ann Pettifor predicted a painful end to the good times. Now she says that only radical action can prevent further gloom. Her prediction was right, but it is sad to see that she has bought in to the notion that governments can "spend their way out" of the credit collapse. GG sent this: Students Borrow More Than Ever for College--25% Increase FG flagged this Wall Street Journal piece: The Coming Reset in State Government - Governor Mitch Daniel. The governor of Indiana explains why the tax well is dry, and why it will remain dry. Items from The Economatrix: Jobless Rate Jumps to 9.7%; 216,000 Jobs Lost in August « Two Letters Re: Do it Yourself Low Temperature Casting |Main| Jim's Quote of the Day: » Friday September 4 2009Letter Re: Some Economic Indicators to Watch
James Wesley, - 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. « Odds 'n Sods: |Main| Two Letters Re: Do it Yourself Low Temperature Casting » Economics and Investing:Items from KAF: Gold Increases 2.3% as Greenback Drops China Pushes Silver and Gold Investment to the Masses Hong Kong Recalls Gold Reserves, Touts High-Security Vault Retailers Report Sales Decline for August More Americans than Anticipated File Jobless Claims Sugar May Drop 24% as Demand Stalls, Supply Grows Edinburgh Hedge Fund Feel Madoff Effect as Clients Get Pickier HSBC Says Switzerland Luring More Rich Foreigners as Taxes Rise And from HH: The $531 Trillion Dollar Derivatives Time Bomb The Nightmare of Contemplating Global Derivatives Investors Rush into Gold Like 1849 Items from The Economatrix: The Secret That Will Destroy the World's Financial System "We Spent $13 Trillion And These Banks Are STILL IN THE CR***ER!" « Odds 'n Sods: |Main| Letter Re: A Nation of Improvisers--More About Everyday Life in Communist Cuba » Thursday September 3 2009Economics and Investing:
SEC’s Schapiro Calls Derivatives Data ‘Critical’ for Probe Jeff C. spotted this: IndyMac's mortgage struggle. How does modifying a "liar loan" somehow magically make a semi-employed borrower credit worthy? From John in Ohio: Is America still depression-proof? Reader MSB mentioned: The Shell Game - How the Federal Reserve is Monetizing Debt Oldest Swiss Bank Tells Clients to Sell U.S. Assets or Leave (Thanks to DD for the link.) Exit strategy? Fed's Plosser: U.S. rate increases could be rapid. (A tip of the hat to Brenda C. for the link.) JWR's comment: This is starting to remind me of the policies that created stagflation in the 1970s. Karen H. sent us these three items: Bond Market Eyeing 10% Jobless Rate Rejects Recovery Oil drops nearly 4 percent on China Economy fears Shanghai Index May Drop 25% on Economy, Xie says « Letter Re: Advice on Camouflage Covers for LP/OPs |Main| Guest Article: Disaster Preparedness--Principles of Self-Sufficiency, by Don McAlvany » Wednesday September 2 2009Letter Re: A Practical Use for Post-1982 US Zinc Pennies
Sir: As you know, pennies are roughly 97% zinc and 3% copper. To that mixture, one may add a few aluminum cans and minor amount of copper wire to bring the mix to 93% zinc, 3% copper, and 4% aluminum. This alloy melts at relatively low temperatures and is called “Zamak”. Zamak is a light, strong, easily castable alloy that because of its “campfire” range melting temperature is just the ticket for replacing small metal parts in a pinch. I keep a bucket of pennies next to the lathe just for this purpose. Although from a “coin melt” perspective this [stockpiling of recently-minted pennies] may look like a loser, it’s a huge bargain when you consider the cost of having the [UPS] boys-in-brown deliver you copper, zinc, and aluminum ingots. - J.W.G. JWR Replies: I had never fully considered the casting possibilities of zinc pennies with a home sand-casting foundry. I'm a tinkerer art heart, so henceforth, I'm going to save all of the pennies that I get in pocket change. I'll simply leave them all unsorted for now. I suppose that I'll eventually have my kids build us an inexpensive low-volume penny sorting machine, to divide the sheep from the goats. That is, sorting the early 95% copper pennies from the newer (and now more-common) copper-flashed 97.5% zinc pennies.) Thanks for that suggestion, and welcome aboard! « Jim's Quote of the Day: |Main| Influenza Pandemic Update: » Economics and Investing:This may be one of the most important pieces of economic news in many months, yet is did not receive much mainstream news coverage when the wire story was circulated yesterday: Beijing's derivative default stance rattles market. This implications of state-owned Chinese industries being given carte blanche to nullify derivatives contracts are enormous. You'll probably recall that I have been warning about derivatives counterparty risk for almost three years. And it was there that I specifically warned about the risk of "disappearing counterparties". This new turn of events will likely shake the very foundations of the global derivatives markets. If the derivative contract holders fail to call the bluff of the Chinese (or if their respective national governments don't back then up), then the entire derivatives market may disintegrate into chaos-or perhaps fracture into regional subsets. But if they do call their bluff, and the Chinese then decide to play hard ball (read: non-participation in US Treasury Note auctions, for starters), then it is impossible to predict how this might spin out of control. Entire currencies and even governments may topple. Expect to see some votes of no confidence in some of the parliamentarian states, and perhaps even rumors of war. Do you remember my analogy of "kingdom towing" that I posited back in 2007? Such events are starting to look even more likely. And, speaking of derivatives... Wall Street Stealth Lobby Defends $35 Billion Derivatives Haul I found this linked over at TotalInvestor.com (one of my favorite news aggregation sites): Lefrak: Commercial Real Estate Will Kill 500 Small Banks This Reuters article was linked over at Total Investor: Cerberus clients overwhelmingly want out: report. The troubled times for hedge funds that I predicted back in Aught Seven are far from over. As long as the global credit markets remain in turmoil, anyone that borrows short and lends long will will continue to be in deep trouble. Bradley recommended a "must see" videotaped interview posted over at the Lew Rockwell site: Faber: Central Banks Blowing New Bubble. JWR's comment: Faber's predictions are quite possibly right, although he is a bit fuzzy on timeframes. He said: "One stimulus package will lead to the next one, and more money printing, and so in five to ten years time the real crisis will break out, when the whole system collapses -- that will be the end." Faber reiterated his earlier advice to the same Aussie journalist, that goes beyond economics and gets down to quasi-Rawlesian survivalism: "Buy a farm and a gun..." Odds 'n Sods:Several readers sent this: The Farmer's Almanac's Frigid 2010 Forecast. Have you cut and stacked plenty of firewood? o o o LJ in England sent this: Blackout Britain warning as Government predicts severe power shortages within a year o o o Steve S. recommended these two Lifehacker articles: Boost Your Map Skills for when GPS Fails You and, Get to Know Your Edible Berries with a Simple Mnemonic o o o « Letter Re: Old Boy Scout and Girl Scout Handbooks are Available Online |Main| Notes from JWR: » Tuesday September 1 2009Developing Our Family's Survival Strategy, by FBP
We started prepping about 18 months ago. I have felt like a chicken with its head cut off, going wildly in all directions. I’ve learned a lot about a lot, some by research, but have learned most from doing. Being prior military (I served six years in the Army Captain, and as a civilian, I was a financial planner), I started identifying mission statements and initiating plans, backwards (aka backwards planning) in order to get them accomplished on time. The first mission: “How do we survive hyperinflation?” My readings led me to believe that the best protection is to plan on not needing to spend money on stuff and save money for taxes. The question is how to accomplish that! I concluded that becoming as self-sufficient as possible and inter-dependent and mutually supportive with other like-minded persons. Another mission: “How to survive societal meltdown with options and strategies.” We determined that we needed to prepare in-place in our current home while we simultaneously worked to identify a homestead, but one that also optimized our security needs under a societal meltdown scenario. We had to define those security needs and defensive goals. We also decided to initiate some basic security in-place. What kind of retreat? What does one need for a retreat and where? Our pursuits included looking at everything from two perspectives, the retreat and the in-place strategy. We have decided that if we haven’t relocated, that bugging out would entail leaving the majority our resources and is not a viable option. We will defend in place if we don’t get relocated before TEOTWAWKI. My research indicated that to be fully self-sufficient where we not only grow our own food, but also that of our livestock, that we would need around 15 acres. Notably, a 5 acre homestead would do a lot! In researching homesteading and agriculture in-place alternatives I found out that Cubans grow 70% of their own food in the cities! I found that there are several cases of very small acreage homesteaders of an acre or less growing nearly all their needs! I recently discovered that I wouldn’t need to preserve so much if, instead of a huge garden once a year, I maintained a year-round greenhouse and grew what we needed on a staggered rotation basis inside the greenhouse with fresh food all the time! This year a summer thunderstorm hail storm wrecked a good portion of my garden and reminded me of the need for having a storage pantry! I will be doing a bit of both, for safety. Other factors which have bearing on the retreat are: [JWR Adds: Finding a property with sub-irrigated pasture is great, as is finding a property with micro-hydro development potential. But finding a parcel with both is a genuine rarity, because land that is sub-irrigated is almost always dead-level, near a stream or river. But for good micro-hydro power, you need a fast-flowing creek or river, with plenty of "fall" that you can exploit. For that, you need hilly property, not "bottom land." So those two goals are almost mutually exclusive, unless you buy a huge parcel that has both features.] How does one survive hyperinflation? Research includes Harry Figgie's book Bankruptcy 1995, in which Chapter 8 spells out the history of hyperinflation. I figure that the US didn't go Bankrupt in 1995 because it has been spending Social Security funds for operating capital. Can you spell Ponzi scheme? Other research included the hyperinflation of the Weimar Republic 1923, Argentina 2001, and Zimbabwe today. I have obtained an actual 100 Trillion Zimbabwe dollar note, worthless and no longer a currency, as a reminder of where we are headed. The Zimbabwean people have to pan for gold to buy bread. With worthless currency, the population (will that be us?) cannot get paid enough to keep up with the ever increasing costs of things and cannot afford heat, or food. It is my belief that hyperinflation can be survived primarily through Homesteading and Self-sufficiency and/or inter-dependence in a tight-knit group. Essential Elements for self-sufficiency and which I/we have done include: How do we survive a melt-down crisis? In addition to food, we wanted a year’s store of normal shopping of household supplies: toilet paper, aluminum foil, plastic wrap, (handkerchiefs instead of Kleenex tissues), (towels instead of paper towels), laundry soap, bar soap, shampoo (sure we could make it, but we’d need “fat” and “hardwood ashes” to make it ourselves), medical supplies for general medicinal and also for emergencies: bleeding, dental, disease / quarantine supplies (masks, gloves, antiseptics), etc. We also anticipate that the banking system will not be available, i.e. there will be no operational ATMs, no open Teller Windows, and credit cards will be declined/inoperable. We set aside an amount of “cash”, today’s currency, for our crisis operating capital, and some in silver. We liquidated some IRAs to obtain the assets now. To us, these assets are better now to get prepared and are better than having more, but worthless currency in the future. The saying, a bird in hand is better than two in the bush, comes to mind. We have researched the metals markets and deemed them manipulated but with lots of upside (see Ted Butler's commentaries). We feel that one of the best investments is agricultural real estate. We are debt free and hope to stay that way. We own our own home free and clear. This is not to brag or make someone feel bad, but rather to motivate you to wonder how. It is by not being a ‘consumer’, but by being balanced and frugal, buying what we needed, foregoing vacations, doing without ‘designer labeled jeans’, without landscaping, however we did invest in having a dump truck load of dirt dropped in the backyard for the garden since all we had was rocks for soil. We have several original household appliances and fixed them when they broke instead of getting new ones. We buy good used cars, maintain them well and keep them for years as long as they meet our needs. I believe that there is a game of keep-away when it comes to how to get and stay ahead financially. The banks and others profit more by people remaining ‘consumers’ and participating as a throw-away society. Massive disinformation exists to misdirect and profit from the populace efforts. A lot of wealth for others is made and maintained by keeping the populace misinformed about financial tools, how they work and what they are used for correctly. However, ‘financial tools’ (CDs, Stocks, Insurance, Loans) are exactly that, “tools”! Tools can be an incredible resource and can help us build monuments, or can be deadly weapons that can destroy us. Financial success starts with you. Identify your ‘needs’. Spend to meet your needs, not to ‘save’ on an on-sale item that you truly didn’t ‘need’. Shop wisely. Will second-hand merchandise meet your needs; can the item be repaired, etc.? Take care of your things and you don’t have to replace them so often. You need to shop and learn about financial tools to meet your goals. The first is the placement of your savings (short-term, mid-term, long-term). There are numerous options with a few listed below. Banks ‘are not your friends’! They are a ‘Tool’! They are a place to situate your short-term cash--your working capital that is used to pay bills. Loanership dollars where you loan your money for a rate of return to you (interest): Banks (CDs), Money Markets, Insurance Companies (annuities), Corporate (Bonds), Municipal (Bonds), and Government (Bonds). Ownership dollars where you invest your money and accept ownership risks (of loss or gain): Insurance is a “Tool”! You need insurance to cover the calamity expense/risk(s) which you cannot afford, only! Often, you are not informed that your premium would be much lower if you accepted a higher deductible. It might be inconvenient to have to pay $1,000 if your car was wrecked or your home damaged, or a major medical claim, but the insurance would cover a catastrophic loss! A home loan is a tool too. The structure of a loan is important, fixed or variable. Variable contains a ‘gamble’ element. Unless it is stipulated otherwise, most home loans can be prepaid, or accelerated. You have the ability to pay an extra amount above the mortgage payment. This extra amount can be applied towards principal, which you need to specifically specify ‘apply to principal’! Pre-paying a mortgage, especially in the early years of a loan is one of the greatest savings rates a person can achieve! We actually paid our 30 year mortgage off in about 12 years. Admittedly, our friends drove newer cars, went on vacations, have better furniture, prettier lawns, fancier clothes, and went out to dinner and the movies more than we did. However, we are debt free. Yes, we are still worried about tight finances and the world situation, but our current position is a lot less stressful than being loaded with lots of debt. It can be done, with sacrifices! It is an imperative for Americans to educate themselves, to not trust the system. Find out about things. Get inquisitive and broaden your horizons. This year I have eaten cooked nettles. Yes, it was very good. It was similar to spinach and no nettle burn! I had Yak meat at a local restaurant and now want to pursue having Yaks for livestock. Learn new things and hard skills. Become creative and inventive; how else can it be done? Become flexible, find alternative ways of getting things done, adapt! We have a small group of friends with whom we meet regularly, try new projects and explore ideas. Our daily ‘walks’ have helped us meet our neighbors. Our friends suggested that we hold a ‘Meltdown Neighborhood Tea Party’ Potluck get-together. That sounds like a good idea to meet our kind of people. I believe we can do anything we put our minds to, especially if we work together. « Odds 'n Sods: |Main| Letter Re: Old Boy Scout and Girl Scout Handbooks are Available Online » Economics and Investing:Brendon sent this: "Zombie suppliers" haunt manufacturing sector From H.H.: Italian banks may take ham and wine as collateral Cut my pay ... please! As the number of layoffs mount, more workers are ready and willing to take significant pay cuts to find employment. (Thanks to Ben M. for the link.) From DD: Small retailers feel sharper pinch; Cuts in consumer spending hit mom-and-pop shops hard Reader KAF spotted this: As Banks Repay Bailout Money, U.S. Sees a Profit U.S. Stocks Fall After China Markets Trigger Global Sell-Off Damon flagged this: Daily Commodities Fundamentals: China Takes An Overnight Plunge, Oil Follows (Gold down, silver up.) Also from Damon come this piece in The Australian: China's liking for silver is good news for miners I found these three bits of analysis posted over at Gold-Eagle.com: Puru Saxena: Peak Oil - Supply Data Doesn't Lie Chris Laird: Prelude To Stagflation? Transition From Crisis To Stagflation Jim Willie: US Bank Enemies At The Gates « Two Letters Re: Precious Metal and Base Metal Composition of Foreign Coins? |Main| Letter Re: Old Boy Scout and Girl Scout Handbooks are Available Online » Monday August 31 2009Letter Re: Stockpiling Dimes?
Sir, JWR Replies: Stockpiling dimes would not be wise. See the base metal value data at Coinflation,com. As of Saturday, August 29th, the base metal value of a post-1964 dime is $0.01704, (less than 2 cents) but the acquisition cost fro each coin is the face value of ten cents. Meanwhile, the base metal value of a post-1945 nickel, is 0.04811, but the acquisition cost is just five cents--nearly its actual base metal worth. So it is quite realistic to stockpile these as an inflation hedge. Unlike pennies, (which require sorting, and it requires a substantial investment to recoup the cost of buying a sorting machine), the nickel is the only other commonly-circulating coin that has a metallic value near its face value, so I'm steadfast in my advice on saving them. That is, at least until the inevitable new debased issue is released, whereupon it would become difficult to sort the wheat from the chaff. For someone with time on their hands--such as a retiree--I recommend searching through rolls of half-dollars, from your local bank. The US 50 cent pieces made in and before 1964 are 90% silver (now worth about 12x face value), and those made from 1965 to 1970 are 40% silver (now worth about 5x face value.) Also, those that are dated 1970 have an even greater numismatic value, since it is a "rare date", as they were only issued in mint sets and proof sets. Although it is not very common, once in a while later-date rare proof coins, which are also 90% silver will slip into circulation. These are easy to spot, because of their distinctive high contrast appearance. By the way, after you have done your "date picking", when you re-roll the coins to return to the bank, make sure that you mark the rolls in a distinctive way (such as applying a ring of black magic marker), so you can avoid searching through the same roll twice. « Letter Re: Bug Out Contingency Planning |Main| Letter Re: Stockpiling Dimes? » Two Letters Re: Precious Metal and Base Metal Composition of Foreign Coins?
Mr Rawles,s J.W.R.; JWR Replies: I recommend getting copies of both the 2009 Standard Catalog of World Coins 1901-2000 Canadian Nickels - Composition Another good reference for US coins is The Official Red Book: A Guide Book of United States Coins 2009 « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Brad H. sent this from Capitalism magazine: The Collapse of America? The Dire Message of Mr. David Walker Detroit sets record for unemployment--28.9% (Thank to Paul B. for the link.) Items from The Economatrix: Arnold Holds Great California Garage Sale To Help Economy « Odds 'n Sods: |Main| Forest Fires and TEOTWAWKI, by J.B. in Florida » Sunday August 30 2009Economics and Investing:From Reader GG: Poll: 34% of U.S. Workers Surveyed Have Only One Week or Less of Savings to Cover Expenses if Laid Off from Work. We are a nation of debtors, not savers, and someday that's going to bite us.
Reader A.C. kindly sent all these items that he gleaned from News Max Money News: Global Recovery Not the Same as Equity Recovery The Deflationists Just Do Not Get It Germany and France Not So Hard-Hit by Recession China Meltdown Could Boost the Dollar And these two items are courtesy of Karen H.: The Weak Dollar is Pushing Energy Prices Higher Items from The Economatrix: Meltdown 101: Why Banks Struggles Have Worsened « Letter Re: Bug Out Contingency Planning for Relatives |Main| Note from JWR: » Saturday August 29 2009Real-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: Back to the practicals... 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 « Odds 'n Sods: |Main| Letter Re: Bug Out Contingency Planning for Relatives » Economics and Investing:Bill T. sent us this: 2009 Nickel & Dime Minting Stoppage. "The editors of Coin World have reported that the U.S. mint, as of April 23, has ceased minting 2009 nickel and dime issues. The mint has claimed that a precipitous drop in demand from the Federal Reserve for circulating coinage was the primary reason to cease production." I found this linked at Drudge: ‘Problem’ Banks Rise to 15-Year High on Bad Loans, FDIC Says From Karen H.: Dollar May Surpass ‘Established Lows,’ Goldman Says GG sent us this: Preparing for a major bank shakeout; Rising failures and a weak economic recovery could accelerate a decades-long trend towards fewer, bigger banks. « Odds 'n Sods: |Main| Influenza Pandemic Update: » Friday August 28 2009Economics and Investing:Got Rhodium? World faces hi-tech crunch as China eyes ban on rare metal exports. (Thanks to Jeremy M. for the link.) GG sent us this: China Tears Up America’s Credit Cards Trent H. spotted this: The Dollar Will Fall, The Only Question is "When?" From John S.: "In the Tank Forever": U.S. Consumers, Retailers in a "Death Spiral," Davidowitz Says 1,000 Banks to Fail in Next Two Years (Thanks to Heather H. for the link.) Items from The Economatrix: Government Agency that Insures Deposits May Need Lifeline of its Own « Odds 'n Sods: |Main| Letter Re: Battery-Powered Dirt Bikes » Wednesday August 26 2009Economics and Investing:Tsunami of Home Foreclosures to hit U.S. (A tip of the hat to Heather for the link.) DD sent us a link to this Newsweek article: Slums of Suburbia Sorting through the rubble of California's foreclosure tsunami. JWR's comment: They were Living Large for a while, on NINJA loans, now they are Living Lard, in Manteca. Also from DD: White House, Congress project record deficits; Both see the overall national debt nearly doubling over the next decade From Chris: Senator warns of hyperinflation rivaling the 1980s Greg C. mentioned the following articles: Rhode Island governor to shut down state government for 12 days Labor Leader Named Head of New York Fed [JWR notes: Somehow, this doesn't give me a warm. fuzzy feeling, since I don't trust union bosses any more than I do banksters.] Items from The Economatrix: Oil Falls 4% After Hitting 10-Month Peak of $75 « Odds 'n Sods: |Main| Influenza Pandemic Update: » Tuesday August 25 2009Economics and Investing:Analyst Bove sees 150-200 more U.S. bank failures (Kudos to Krys in Idaho for the link.) Jeff D. flagged this: Remember me? Wall Street repackages toxic debt From DD: There's No Will to Fight Inflation Also from DD: Housing crisis set to enter new stage Nouriel Roubini warns: The risk of a double-dip recession is rising Items from The Economatrix: Fed to Steal State Pension Funds By the always insightful Charles Hugh Smith: So Long, California « Odds 'n Sods: |Main| Influenza Pandemic Update: » Monday August 24 2009Economics and Investing:The other shoe has finally dropped: China reduces holdings in US debt. Expect more of the same in the months to come. (Thanks to Dave S. for the link.) From GG: Mounting joblessness fuels US housing crisis Noah was the first of several readers to mention this article about the failure of the second largest US bank of the year: Bank Failure #81: Down Goes Guaranty Items from The Economatrix: The Mother of all Bank Runs « Influenza Pandemic Update: |Main| Jim's Quote of the Day: » Sunday August 23 2009Letter Re: Trading Numismatic $5, $10, and $20 Gold Pieces for Bullion Coins?
James: I have a question for you. Should a person keep old $20 gold coins, or convert them into 1 oz. gold American Eagles? This would assume coins with no great [numismatic] value, just old coins. Also, what about $5 and $10 gold pieces? Thanking You in Advance ,- Jim A. in Montana JWR Replies: As I've mentioned before, the often-mentioned threat of another gold confiscation is overblown, so essentially, "gold bullion is gold bullion." For buyers here in the US, I recommend American Eagles from the US Mint, because they are widely recognized and accepted. There are also some tax advantages to buying them. (In some states, for instance, there is sales tax charged on all gold bullion except US Mint Gold Eagles.) Unless your $5, $10, and $20 gold pieces have sentimental value, then I recommend selling (or trading) them a like-value (but greater weight) of gold American Eagles. The 1-ounce variety have the lowest premium. But if one of your concerns is the ability to barter for necessities in the midst of an economic collapse, then I recommend also buying some silver coins---either pre-1965 US quarters and half dollars, or 1 ounce .999 silver "rounds". As I described in "Patriots:
A Novel of Survival in the Coming Collapse" « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Greg C. sent this bit of mainstream media spin doctoring: AP source: White House projects lower deficit. Greg's comment: "Another case of “The deficit is growing slower than we originally thought.” They fail to point out its still growing exponentially. They “saved”$250 billion while we will be at $2 trillion in the hole by year’s end. I love their math and outlook on life!" Thanks to Damon for this: Marc Faber "in China there is an investment bubble ...the total collapse is ahead of us and probably a world scale war..." Reader Jim P. flagged this: Obama to raise 10-year deficit to $9 trillion. The MOAB just won't quit growing! From A.C.: Stiglitz: Dollar Reserve System Falling Apart Items from The Economatrix: Iceland: What Ugly Secrets Await Being Revealed in the Meltdown More Shoppers Getting Cold Feet in Checkout Line « Odds 'n Sods: |Main| Letter Re: Cattle Rustling on the Rise » Saturday August 22 2009Economics and Investing:Peter Schiff: Hyperinflation Risk High, Stocks Will Crater (Thanks to "Straycat" for the link.) A interesting piece over at iTulip: Does USA 2009 = Argentina 2001? Part I: Falling economy reaches terminal velocity - Eric Janszen Karen H. notes: Nickel May Gain as Stockpiles Fail to Deter Funds: Chart of Day "Nickel, which surged 17 percent the past month, may advance further as “price momentum” and inflation expectations lure fund managers even as stockpiles of the metal approach a 14-year high, according to Commerzbank AG." Have you been stocpiling nickels? FG mentioned this survey: L.A. ranks near bottom among big cities for finding a job, website says Items from The Economatrix: The Next Crisis in the Making Bernanke Says US Economy on Cusp of Recovery. (Perhaps he also has some Elvis or Evita Peron sightings to report.) « Odds 'n Sods: |Main| Letter Re: Preparedness for Living on a Chesapeake Bay Island » Friday August 21 2009Economics and Investing:From perennial content contributor GG: Germany braces for second wave of credit crunch Neal flagged this: The Week in Charts, Buckle the Heck Up! Greg C. sent us this: Woman's House Mistakenly Auctioned by Bank Karen H. kindly sent several items: U.K. Has Record July Deficit as Recession Curbs Taxes U.S. Initial Jobless Claims Rose by 15,000 to 576,000 FDIC May Add to Special Fees as Mounting Failures Drain Reserves Swiss to reveal UBS accounts to settle U.S. tax battle "Switzerland has agreed to reveal the names of about 4,450 wealthy American clients of UBS AG to U.S. authorities in a tax dispute settlement that pierces Swiss banking secrecy and now threatens to spill over to other banks." Citigroup To Initiate Fees on Some Cards To Reduce The Dent To Their Income Items from The Economatrix: « Odds 'n Sods: |Main| Letter Re: Fireproof Document Boxes, Mold, and Rust » Thursday August 20 2009Economics and Investing:Thanks to GG for this: Pimco Says Dollar to Fall as It Loses Reserve Status Also from GG: Credit Card Delinquency Wave Reaching Tidal Force Amish see the recession as a challenge and a blessing (Thanks to DD for the link.) « Letter Re: Burros for TEOTWAWKI Transport |Main| The Open Carry Debate Catches Mainstream Attention » Wednesday August 19 2009What Divides You from The Sheeple? Plenty!Nearly every week, I get at least one frantic e-mail from a new SurvivalBlog reader, stating that they feel woefully under-prepared. The gist of these e-mails is: "I'm behind the power curve! How can I possibly get prepared in time?" Fear not! Just by reading SurvivalBlog and taking some small, gradual steps at preparedness, you are miles ahead of your sheeple neighbors. And even with just modest preparedness measures, you have already substantially increased your chances of surviving most scenarios. As I see it, here are your advantages: Awareness Skills and Knowledge Networking Tools Planning Logistics Locale Communications Capacity for Charity The Bottom Line « Influenza Pandemic Update: |Main| Letter Re: Burros for TEOTWAWKI Transport » Letter Re: Silver Jewelry for Barter?
James, JWR Replies: I predict that following TEOTWAWKI, it will just a take a couple of weeks for people to mentally "switch gears" and adjust to the new realities of a barter economy. The main problem with silver jewelry is that hallmarks can be faked. A few choice date numismatic silver dollars have also been faked, but worn non-numismatic silver pre-1965 dimes, quarters, and half dollars have never been faked, to the best of my knowledge. Pre-'65 coins will be accepted in barter without hesitation, while jewelry would probably have to be assayed. And if it were reluctantly accepted in trade without an assay, it would only be at a deep discount. So buy coins, not jewelry! « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:"Red Hen" sent this bit of global MOAB expansion news: IMF Governors Formally Approve US$250 Billion General SDR Allocation Courtesy of Steve G.: Credit tightening threatens China's 'giant Ponzi scheme' From DD: Lowe's Profit Plunges as Consumers Stay Away JS spotted this: The "Zimdollar:" Dead, but still used for bus fare. (It sounds like something out a of a novel: $3,000,000,000,000 for one bus fare, and goats for barter!) Items from The Economatrix: « Letter Re: Comfort and Holiday Foods for Family Food Storage |Main| Notes from JWR: » Tuesday August 18 2009Barter Goods -- A Woman's Perspective, by "Wry Catcher"
Most of the survival information published today comes from thoughtful and hardy men who plan, prepare, and protect themselves and their families from disasters. My admiration and appreciate for such men cannot be overemphasized. I doff my hard hat to all of you. There are, however, some elements of survival that are perhaps better served from a woman’s perspective. In particular, this article focuses on barter goods – those items that can be traded to other survivors for an improved quality of life or for basic necessity. For purposes of clarity and ease of reference, this article is divided into age groups. That’s because each age group has a specific set of needs and wants, aside from basic survival supplies. Let’s get to it! Infants and Toddlers Chew Toys: Chew toys aren’t just for dogs. Very young children like chew toys, too. The toys help with teething and they keep a child content when parents are busy. Be sure to acquire those that have no extraneous parts, and any painted surfaces must be non-toxic and non-allergenic. To be safe, buy those that are made of new materials and have little or no decoration that could come off, including surface colorations. Go for the plain models, in other words. The child who wants a chew toy is not looking for anything fancy, just something to mouth. Do not acquire a chew toy that could be swallowed or could block the airway. The toy must be too large to fit wholly within the child’s mouth. Any store specializing in infants and toddlers should have a wide array of acceptable chew toys, although they may prefer the term “teething ring” to “chew toy.” Most people working to survive a disaster of any type are not going to plan for something as specific as a child’s chew toy. They will, however, soon learn that their young one will be much happier and therefore much less fussy if there is something fun and safe to chew on. The toys will make good barter for adults with young children, and chew toys take up little space and weigh next to nothing. If teething infants are not part of your survival group, these toys may be used as dogs’ chew toys or as older children’s playthings if not too infantile in decoration. Keeping the toys simple will make them more versatile. Pull Toys. Toddlers like to walk, and when they walk, they like to drag something along with them. A few inexpensive pull toys will provide hours of enjoyment for them. If the toy makes a little noise, the fun is doubled. Beware those that have excessive parts – they are harder to repair and could become a choking hazard. Ages 4 – 9Crayons & Coloring Books. Nothing keeps a youngster as content and therefore as quiet and occupied as a set of crayons and a coloring book. Put aside some girl-oriented coloring books and some books appropriate for boys. Girls like girly things: houses, clothes, female figures, rainbows, horses, and furry critters. Boys like trucks and tractors, robots, war scenes, cowboys and Indians scenarios, and outdoor scenes. These are the types of outlines that coloring books should contain in order to satisfy a child who is cast into a situation where her/his world may be vastly different and his/her friends may be unavailable. If your own child has a particular preference, be sure to include that theme in your acquisition. Published coloring books will have gender-specific covers that will immediately signal whether they are more appropriate for boys or for girls. Crayons should be non-toxic and come in a wide variety of colors. Acquire several boxes of crayons and do not remove them from their boxes, they will be less likely to melt. Obtain or make several coloring books, some for your own children and some for barter or charitable donations. Downloading outlines and compiling them into 3-ring binders can be done in lieu of purchasing published books. Kids of all ages might find them fun, whether they color on them or not. Older children may use the books for paper airplanes or for journals. Crayons are useful for adults, too, when an all-weather writing instrument is needed. Hard candies add a sweet touch in what may otherwise be a sour situation. Kids love candy, and giving them an individually wrapped hard candy at midmorning or mid-afternoon may be a treat that eases the change in routine which is an unavoidable part of any survival scenario. Although there are some drawbacks to storing candy, the rewards for doing so will offset any problems. Store them in rodent proof containers and in a cool, dry location and they should be good for 12 months or more. Dental hygiene may be difficult, and too much of anything is seldom good, so ration the dole and don’t divulge the hiding place. Families will want to add some candy to their provisions, so lay in a supply of individually wrapped hard candies. [JWR Adds: The ingredients for candy store much longer that wrapped candies, but even old candy that has "gone sticky" is generally still safe to eat. An annual candy-making session can be a lot of fun for kids, and it is also economical. Our favorite to make at home is molasses taffy.] Clutch Toys. Yard sales often provide an inexpensive source for small, fluffy clutch toys. These are toys that young children can carry with them for comfort and companionship. Look for small, soft toys and dolls that are clean and, whenever possible, brand new in the package. All loving parents want their children to be happy whether in good times or bad, so items that children want will make good barter items. Senior Citizens Personal Care. Denture cream, magnifying glasses, packets of facial tissues, hand creams, bucket hats (this style of hat is often worn by both men and women), cold packs, heat packs, compact chess and checker sets, large print puzzle books (don’t forget the pencils), condoms, over-the-counter anti-inflammatory medications, Ben-Gay, Vick's Vap-O-Rub, hard candies, and sunglasses. While perhaps not as vigorous as they once were, these elderly folks can provide much depth and affection in a family, particularly for the children. They should be treated with the respect and care they deserve. When they or their family have nothing to trade, a caring person will provide the barter item anyway. That’s what keeps us human. Adults Some good barter items for this group, and in general, include pocket knives (get some small and colorful ones for the ladies), condoms, individual cosmetics, WISP (Colgate product) toothbrushes, .22 ammo, honey, Vaseline, sturdy work gloves in various sizes and colors, romance and mystery paperback books, spare batteries in various sizes, feminine and masculine baseball-style caps, pocket sewing kits with spare buttons, eyeglass repair kits, used hand tools (hammers, wrenches, screwdrivers, folding pruning saws), tampons, pencils and pens, journals, and bags of jerky. A word of caution: don’t trade anything to anyone that could later be used against you or your family. For example, don’t barter ammo or a fixed-blade knife to someone you don’t trust, unless you absolutely need what they have and can’t get it elsewhere. Conclusion « Odds 'n Sods: |Main| Letter Re: Comfort and Holiday Foods for Family Food Storage » Economics and Investing:The dip in silver that you've been waiting for has arrived. Take advantage of it. Come November, you'll be patting yourself on the back for your foresight. Steve G. sent us the latest from Mish Shedlock: As of Friday August 14, 2009, FDIC is Bankrupt. Don't worry, be happy. Uncle Tim and Uncle Ben have a plan: Just add linen paper and ink! A hilarious interview with The Mogambo Guru (aka Richard Daughty) was posted by The Daily Bell. From Heather H.: Mountain of Debt: Social Security crisis looms. Heather's comment: "Finally, someone had the guts to call Social Security a 'Ponzi scheme'." Federal Reserve Secretly Buying Treasuries at Auctions Even more in the The Mother of All Bailouts (MOAB): Social Security crunch coming fast. (Thanks to DD for the link.) Items from The Economatrix: Stocks Plunge as Investors Worry About Consumer Spending AP Investigation: California Lawmakers Boost Staff Pay ("What budget crisis?") Chicago City Government Closed Monday Due to Budget Constraints. Europe and US Still at Risk for Deflation Trap Lack of Inflation Means No Rise in Social Security Benefits Consumer Confidence Falls Unexpectedly in August Yikes! The lowest measure of buying confidence in 60 years! Stocks Drop Around the World on Economy Concerns Darryl Schoon: Gold and Why Gold Now? Wave of Foreclosures About to Break US Housing Market Dam « Odds 'n Sods: |Main| Influenza Pandemic Update: » Monday August 17 2009Economics and Investing:KAF flagged this: Tax Dodgers Scramble for Options Amid U.S. Crackdown [JWR Adds: Given this development, I predict that the offshore banking crowd may soon embrace some heretofore "outlaw" nations. There are lots of folks that are willing to take more risk in exchange for total privacy.] Karen H. forwarded these: Consumer Prices Fall as Shoppers Hold Back With Lobster Prices Low, Things Get Ugly in Maine Recession Chills Sunshine State Tourism Items from The Economatrix: « Odds 'n Sods: |Main| Letter Re: Viability of a Well-Stocked Suburban Retreat? » Sunday August 16 2009Economics and Investing:Farmer John suggested this piece by James Quinn: American Idiots. John's comment: "This is why the government can do what it wants." Karen H. kindly sent these items: Regulators Shut Down Colonial BancGroup; Largest U.S. Bank to Fail in 2009. JWR Warns: There are many more bank failures to come! Toxic Loans Topping 5% May Push 150 Banks to Point of No Return Sugar May Advance 80% on Supply Crunch, Coleman says [Have you already stocked up?] U.S. Economy: Consumer Sentiment Falls, Prices Steady Items from The Economatrix: Alabama-based Colonial Bank Fails, Cost is $2.8 Billion « Letter Re: Correction on Sniping Record for Afghanistan |Main| Note from JWR: » Saturday August 15 2009A Primer on Gold, by JavamanI wrote the following essay five years ago. Not only are the issues presented below still relevant today, they're more critical than ever. This is about the end of your financial world as you know it, independent of a terrorist strike Perhaps one of the most alarming observations is that, up until our present generation, Americans were far more aware of the meaning of money and they carried gold and silver coins in their pockets. Today, the people are much too pre-occupied, distracted, or just plain naïve, and they don't possess the outrage about what is happening to their money and their country. I hope that this effort, in some way, puts our present condition into perspective. There are three things that guarantee our freedom: God - spiritual freedom, Guns - freedom from tyrants or anyone who would do you harm, and Gold - freedom from the money masters who would enslave you. --- One of the laws of the Human Condition is that man must be productive in order to survive. Historically, this productivity has been measured in everything from sea shells to gold and just about every commodity in between. These commodities enabled productive man to barter or exchange his wealth for other things he desired. The problem today is that our productivity is measured in U.S. Dollars, a currency printed at will by the Federal Reserve. Originally, the currency of the U.S. was gold and silver. With the introduction of the Federal Reserve in 1913, they established a paper currency that was redeemable in gold and silver which meant that one could take their dollars to the bank and exchange them for like value in gold or silver. Whether you were a foreigner or citizen of the US, the dollar was "as good as gold". In 1933, President Roosevelt changed that and made it illegal for US citizens to own gold. The Bretton Woods Agreement of July 22, 1944 replaced gold and established the U.S. dollar as the new reserve currency. After all, since the U.S. had literally saved the world during World War II, and was the only country left standing with a healthy economy in the aftermath, it was reasoned that the U.S. dollar (which was fully backed by gold of course) could and should serve as the reserve currency of the world. Then in 1971, France became aware that the U.S. was printing dollars with abandon so they began to redeem their dollars for gold per the Bretton Woods Agreement that the U.S. had signed. President Nixon realized that this would be catastrophic for the U.S. as, at that rate of redemption, our gold reserves would quickly be depleted so he reneged on the Bretton Woods Agreement and "closed the gold window" which meant that foreigners could no longer redeem U.S. dollars for gold. In other words, they were stuck with paper dollars they had accumulated worth nothing more than the "good faith and credit of the U.S." no longer redeemable for gold but, rather, for goods and services provided by the issuer, the United States. We and the rest of the world were, for perhaps the first time in history, on a complete fiat currency standard experiment. As a result, it would be instructive to view a chart of the volume of dollars that have been created since then with no real backing whatsoever as it is an almost vertical graph. It might also be interesting to note that since 1971, we transitioned from a nation with the greatest trade surplus to one with the greatest trade deficit. This is not a coincidence. So if the Federal Reserve can print dollars with no tie to redeemability to a true asset, then the measure of one's productivity is totally arbitrary and subject to the whim and will of the Federal Reserve. Also, the freedom to print the world's reserve currency is extremely fortunate for the U.S. (France referred to it as "exorbitant privilege"). In the words of Dire Straits, the U.S. is getting it's "money for nothing and its kicks for free". Roosevelt, 1933Going back to pre-1933, we find the ubiquitous $20 gold piece (consisting of [nearly] 1 ounce of gold) with a value of $20 dollars of purchasing power. The US was in trouble due to the Great Depression and the economists of the day were at a loss to solve the problem so it was decided the government had to "finance" the recovery by printing massive amounts of dollars. (Actually, one must wonder what type of solution this actually is since it's simply a hidden tax on everyone through inflation and increased taxes never help to pull an economy out of a recession / depression.) The problem was that gold was a reliable barometer for measuring inflation and if inflation was perceived to be on the rise (which it surely would) everyone would cash in their paper dollars for gold. So in the wisdom of the government, the decision was made to outlaw gold ownership by U.S. citizens. Check out The Gold Confiscation Of April 5, 1933. It became clear to the government that they could not afford to allow people to own and keep their gold. Murray Rothbard explains: "Government could never cement its power over a nation's currency, if the people, when in need, could repudiate the fiat paper and turn to gold for money." After the gold confiscation, the U.S. government immediately revalued gold at $35 per ounce. So that same $20 gold coin that was just relinquished by the good, law abiding citizens would now cost $35 dollars to repurchase...if it were legal to do so. [JWR Adds: It was not until January, 1975, (42 years later!) that it again became legal for individual Americans to own non-numismatic gold.] See this link for a detailed explanation: Should We Be On a Gold Standard? From the link... "As James Bovard observes, "citizens had accepted a paper currency based on the government's pledge to redeem it in gold at $20 per ounce; then, when Roosevelt decided to default on that pledge, he also felt obliged to turn all citizens holding gold into criminals. [10] Roosevelt also condemned them as selfish traitors." One day later Roosevelt reduced the gold content of the dollar by 41%, raising the price of gold from $20.67 per ounce to $35.00 an ounce. The devaluation resulted in a $2.8 billion "bonus" for the government." An especially tidy sum in those days. This is clearly one of the most blatant and manipulative examples of the U.S. government reneging on a promise to it's citizens. And, by the way, today that one ounce of gold in a $20 gold piece is worth about $425. It's interesting to note that, in the early 1900s, one could by a nice dress suit with that $20 gold piece and today they still can get a nice dress suite for the value of that $20 gold piece or $425. So gold hasn't gotten more expensive, rather the purchasing power of the dollar has declined, dramatically, thanks to the Federal Reserve. Larry Summers and Gibson's Paradox... For some background information on Gibson's Paradox, go to The Golden Sextant and scroll down to the Essays section. There you will see a link to Gibson's Paradox Revisited: Professor Summers Analyzes Gold Prices. Then visit this article which brings it all together... From the link... One very influential person in the Clinton Administration was very much aware of Gibson's Paradox, which Keynes noted was one of the best documented relationships in all of economics. Gibson's Paradox stated that if "real" interest rates decline, the price of gold will rise vis-a-vis the currency. But the Clinton Administration knew full well that a rising gold price would hurt their ability to leverage America's future for their own political gains. Hence, the Clinton Administration began to intervene in the gold market to "cap" the price of gold, just as Lawrence Summers clearly noted they must do in a paper he co-authored while a professor at Harvard in the late 1980s. Dollars, Oil, and the Euro From the link... "But the need to dominate oil from Iraq is also deeply intertwined with the defense of the dollar. Its current strength is supported by OPEC's requirement (secured by a secret agreement between the US and Saudi Arabia) that all OPEC oil sales be denominated in dollars. This requirement is currently threatened by the desire of some OPEC countries to allow OPEC oil sales to be paid in euros." and... "The United States has at present little reason to fear a challenge to the dollar from Malaysia. But Malaysia is an Islamic country; and the US has every reason to fear a similar challenge from the Islamic nations in OPEC, were they to force OPEC to cease OPEC oil sales in dollars, and denominate them instead in euros." The War Enabler When a country's currency is tied to a real asset such as gold and there isn't enough gold in the treasury, it simply can't pay the expense of waging war and alternative solutions are found. A country on a fiat currency system has no problem printing the money to pay for the war machine so war it will be. For example, some say the US government has already spent $100 billion on the war in Iraq. Additional costs are estimated to be anywhere from another $50 to $200 billion. Where does all this money come from? The simplified answer is probably something like: The U.S. Treasury prints paper Treasury Bonds that they "sell" to the Federal Reserve which prints the paper dollars required to pay for the T-Bonds. Now the government has the dollars to pay for efforts in Iraq and the Federal Reserve uses the T-Bonds as an asset against which they can print many more dollars (principal of fractional reserve) to be lent to banks across the country. See this link for a graphic flow chart of the process. Perhaps the most dramatic example of what this can lead to is from the Weimar Republic after World War I. It's instructive to realize that in the beginning, the Weimar Republic's currency was the 20 Mark gold piece, a coin about the size of one of our quarters. After World War I, the Weimar Republic was decimated and they fell into the trap of embracing a fiat alternative to honest money, the new currency became the 20 Mark paper note and as could have been predicted, the inflation began. This was no ordinary inflation though, as the original 20 Mark paper notes eventually inflated to 4,000,000,000,000 Marks. That's 4 trillion Marks to buy what the original 20 Mark gold piece would buy only several years earlier. I have seen pictures of women loading wheelbarrows of paper Marks into the fireplace to burn for heat and cooking because they were worth less than wood. The government was printing them so quickly and in such numbers that, to conserve the ink, they only printed one side of the paper note. I am reminded of an exchange with a women who lived through those times in the Weimar Republic after World War I in which she was asked, "how could you possibly support someone like Adolph Hitler through his rise to power?" The lady's response to the question put to her was quite simple, "when you have to catch rats to eat for food, any alternative appears more attractive." I'm not saying this will be the fate of America, but visit this link for a candid assessment of the state of matter today. This article about The $44 Trillion Abyss sheds some light on the financial mess our politicians have created. Scroll down to 12/13/2003 Interview on the left of the page for the Real Audio and MP3 links to listen. Who is John Galt? Unfortunately, President Nixon terminated the Bretton Woods Agreement by reneging on the redeemability of dollars for gold in 1971. Today, countries have accumulated huge numbers of dollars with which to settle their trade accounts but the dollar is reaching the end of its time line. As Voltaire said: "Paper money eventually returns to its intrinsic value - zero." Visit Gold and Economic Freedom to see what Mr. Greenspan thought of gold and those who print paper money. Given Mr. Greenspan's eloquent dissertation on the subject, I can only see two possible conclusions, either Mr. Greenspan has sold out and become one of the very statists he railed against in his now famous speech at the link above or he sees himself as Ayn Rand's hero, John Galt, who's mission it was to stop the economic engine of the world and thereby forcing everyone to come to their senses. Time may tell. Honest Money Fiat currency is the antithesis of honesty. Today, the Arab world is moving toward commerce and settlement in the Islamic dinar, a gold coin, in there attempt to break away from the U.S. dollar hegemony even as the U.S. demonstrates via Iraq how such efforts will be met. Europe had a chance to do likewise but they decided on just another fiat currency, the euro. Yet these developments bring us ever closer to the possibility of a universal currency. From Making Economic Sense... "For a half-century, the Keynesians have harbored a Dream. They have long dreamed of a world without gold, a world rid of any restrictions upon their desire to spend and spend, inflate and inflate, elect and elect. They have achieved a world where governments and Central Banks are free to inflate without suffering the limits and restrictions of the gold standard. But they still chafe at the fact that, although national governments are free to inflate and print money, they yet find themselves limited by depreciation of their currency. If Italy, for example, issues a great many lira, the lira will depreciate in terms of other currencies, and Italians will find the prices of their imports and of foreign resources skyrocketing." "What the Keynesians have dreamed of, then, is a world with one fiat currency, the issues of that paper currency being generated and controlled by one World Central Bank. What the new currency unit is called doesn't really matter; Keynes called his proposed unit at the Bretton Woods Conference of 1944, the "bancor"; Harry Dexter White, the U.S. Treasury negotiator at that time, called his proposed money the "unita"; and the London Economist has dubbed its suggested new world money the "phoenix." Fiat money by any name smells just as sour." Then consider this quote from one of history's most notorious bankers:
It may not be a one world government we have to fear, but rather a one world currency. The good news is that, today, gold is readily available to those interested in purchasing it. In closing, I would like to share this link to Running On Empty by Mr. Pete Peterson that speaks to the subject. What I find refreshing is that he is someone from the Republican Establishment, Nixon Secretary of Commerce, a personal friend of the Alan Greenspan, secretary Snow and others and yet he has the integrity to articulate and explain the very dangerous road we are on, i.e. a $44 trillion debt in unfunded liabilities. His motivation for writing the book was "to protect our children". I don't know about you but that catches my attention. He holds the Republican and Democratic parties equally responsible yet I wonder if, like Mr. Kotlikoff who wrote The Coming Generational Storm, Mr. Peterson isn't just another "voice crying in the wilderness". And isn't it interesting that you don't hear much about this crisis in the popular media. So where does all of this leave us? It leaves us in the clutches of government doing what government does best. Government has a propensity to grow. Our founding fathers where well aware of this and it is exactly what they wanted to prevent. As government grows, it expands not only its reach into the individuals life but it also exacts a tax in doing so. This tax together with all the other sources of revenue have a limiting effect on government as they can only extract so much in the form of taxes. So in order to circumvent this limitation, government simply prints more dollars. Note that this solution was not available to the statists while under an honest money regime of a gold-backed currency. This point brings, full circle, the question and answer of why our elected representatives have brought us to this point in time. They relish the ability to curry the favor of their constituency, and thus their votes, by being able to provide spending programs for which there is no money. This is the logical progression: tax business and the citizens to pay for votes. Increases taxes until it becomes politically unpopular to do so. Then inflate the currency (hidden tax) by creating money to finance spending. Between August and the end of October the government must sell $300 billion in Treasury bonds (loans) to finance a government lifestyle that is spending way beyond it's means. And here is the key note: foreign countries, the major investors of US Treasury bonds, are growing increasingly concerned that their investments are diminishing in value because the US is printing excessive amounts of dollars, consequently devaluing their investments. As they buy fewer US Treasury bonds (loans), the unsold Treasuries will have to be bought and this can only be done by the US printing dollars and buying its own debt. This mechanism is called "monetizing the debt". It signals the beginning of the end because once the US begins to monetize the debt, the consumers of US Treasury bonds will reduce their consumption for fear of loss of value due to the US dollar printing. This will cause the US to have to print more dollars to buy up the Treasury bonds the rest of the world shunned. And this, in turn, creates even more reluctance by the rest of the world to finance our debt and the death spiral of hyper inflation is launched. In case you're not aware, this process began several months ago with a Federal Reserve announcement of intent to purchase $300 billion in Treasuries. And that's why you need gold. - Javaman « Odds 'n Sods: |Main| Letter Re: Correction on Sniping Record for Afghanistan » Economics and Investing:Greg C. flagged this: Retail sales dip unexpectedly, jobless claims rise. Greg's comment: It is amazing how they still keep trying to spin this [continuing decline] as a “recovery.” Bobbi-Sue sent this Der Spiegel piece: Global Banking Economist Warned of Coming Crisis. Thanks to Heather for sending this: US sugar supplies 'running out' US food manufacturers call for an easing of sugar import limits, saying they fear the country may run out of supplies. Items from The Economatrix: The Problem with Sticking it to Your Creditors « Odds 'n Sods: |Main| Influenza Pandemic Update: » Friday August 14 2009Economics and Investing:S.T. spotted this: IMF puts total cost of crisis at £7.1 trillion [Thusfar!] This Forbes piece came from SC: Fed Faces Its Zimbabwe Moment Regular content contributor DD sent us these two articles: Items from The Economatrix: Foreclosures Rise 7% in July from June A prediction from the ever-cheery Ambrose Evans-Pritchard: Fiscal Ruin of the Western World Beckons « Letter Re: Storage Underground or in Humid Climates |Main| Letter Re: Grid Beam Construction » Thursday August 13 2009Letter Re: Accumulating $1 Coins as Protection from an Eventual Currency Exchange?Hello Jim, JWR Replies: In terms of their compactness per dollar you are right, but in terms of their base metal content, the $1 coins are a poor choice. The base metal value of a $1 Sacagawea or Presidential "gold" dollar is only about 5 cents. As I described in my nickels article (which, BTW, was recently re-posted at the LewRockewell.com web site) stockpiling nickels will protect you from both mass inflation and from a possible 10-to-1 or 100-to-1 currency exchange. The base metal value of a US nickel (five cent piece) is presently about $0.04935--nearly its face value. So, say for example that we get into inflationary times, with 20% to 30% annual consumer price inflation. If the spot price of nickel were to then double or triple, a market would soon develop for people willing to pay more for rolls of nickels than their face value. But it would take tremendous inflation before a similar market would develop for "clad" (post-1964 silver-flashed copper token) dimes, quarters or the new "genuine gold tone" dollar coins. For the details on the base and precious metal value of each type of US coin (including the long-discontinued silver issues), see www.Coinflation.com « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Flagged by KAF: US government to loan Petrobras $10 billion. Note the comments in the article about increasing costs of exploration , and strong competition with China for new oil fields. Also from KAF: Wish you weren't here: The devastating effects of the new colonialists. Cousin Al sent this: Soaring deficit may defy forecasts. (A quadrupling budget deficit? Yikes!) This Jay Taylor "Turning Hard Times Into Good Times" pod cast was linked from the Total Investor news aggregation site: Will Silver Outperform Gold? Items from The Economatrix: Coming Soon: Second Wave of Depression: Hyperinflation Likely « Influenza Pandemic Update: |Main| Preparedness Beginnings, by "Two Dogs" » Wednesday August 12 2009Three Letters Re: Acquiring Pre-1965 Silver Coinage
Jim: JWR Replies: Thanks for reminding SurvivalBlog readers--especially those of the younger generation--who might not be familiar with that indicator. OBTW, many readers might also not be familiar with the 40% silver half dollars that were minted between 1965 and 1970. These coins are often still found in circulation. It is worth the time to ask for rolls of 50 cent pieces at banks, particularly in small towns. You can also occasionally find "War Nickels" minted between 1942 and 1945--back when there was strategic shortage of nickel. So the US Mint substituted 35% silver!
We live on the periphery of a small town in central Pennsylvania and until this time, receiving "junk-silver" as change has been al but nonexistent. Since the burglary, I have not only found silver quarters along the road during my morning runs, I have received several silver dimes as change from local merchants. It has been a standing joke that we are receiving our sliver as change. Perhaps there is more truth and less humor to this assertion. JWR Replies: The real "cheating" and the original crime happened back in 1964, when the government unconscionably replaced our sound silver currency with debased copper tokens that are just flashed with silver, to make them look somewhat real. Having two types of currency in circulation--one genuine, and one debased--doesn't last long. (See: Gresham's Law.) I estimate that 98% of the silver coinage was promptly and righteously pulled from circulation by the outraged public before the end of 1968. (The debasement prompted the coinage shortage that lasted for three years. during which the various US mints produced a mix of the new "clad" coins and some 90% silver coins.) OBTW, a similar coin shortage just occurred in Argentina, when the citizenry realized that coins would retain some value, while the paper currency would not. When some of the genuine silver coins are found in bank rolls these days, it is cause for celebration. See, for example, the forum run by coin collectors that obtain rolls of coins from banks to painstakingly sort: Treasurenet's Coin Roll Hunting Forum. These folks call themselves Coin Roll Hunters (CRHs). It is a fun hobby for someone with time on their hands, and good eyes. If an adult of normal intelligence hands you pre-'65 silver coins for a transaction at face value, then the odds are quite high that they stole them from someone. If a child (or an idiot, or a recent immigrant) does so, then it might be out of ignorance. They deserve a lecture, and need to be sent home to apologize for raiding their family's silver coin hoard without permission. So at the retail level--outside of banking, which is a special case since coins have passed through several hands before being sold to you in rolls--then you are correct. A sale's clerk's role should be that of educator, not a coin gleaner. The individual offering the coin(s) needs to be shown the error of their ways. (Either of their ignorance or more likely their penchant for larceny.) And, for good measure, the lecture should include a bit of history about The Great Clad Coin Scam of 1964. Oh, and by the way, we would not be faced with the ethical dilemma of taking pre-1965 silver coins from anyone at face value and substituting debased coins if it were not for the grand larceny committed by our elected representatives 45 years ago. In retrospect, we should have had a revolt in this nation in 1964-1965, against the evildoers in Washington, DC who effectively robbed us, so thoroughly. They should have been tarred and feathered. When inflation re-emerges in the next few years (as the FedGov monetizes its way out their current predicament), I expect commodities prices to start to gallop (in Dollar terms.) This will make some US coins--most notably nickels and pre-1982 pennies--worth far more than their face value. Once they get past four times their face value, the Generally Dumb Public (GDP) will catch on, and they will disappear from circulation. My advice to SurvivalBlog readers: Panic now, and beat the rush. See my static page: "Mass Inflation Ahead--Save Your Nickels!", for details. « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:Reader DD sent this piece about prospects for hyperinflation: A Pessimist or a Realist? Items from The Economatrix: BoE Pumps Another 50 Billion Pounds into Economy « Influenza Pandemic Update: |Main| Letter Re: The Virtues of Fasting Experience for Well-Rounded Preparedness » Tuesday August 11 2009Letter Re: Acquiring Pre-1965 Silver CoinageHello James, I've been an avid reader of Survivalblog for two years now. I have also read and passed along "Patriots" when I bought it on Amazon, during the Book Bomb event in April. I also purchased the"Rawles Gets You Ready" preparedness course a couple of years ago. I'm prepping even as I'm typing this. During this economic downturn starting in the last year or so, the corporation I work for has demanded no more overtime, cut back on the company match for our 401k, and since no one is buying anything, my sales commissions have gone to almost $0. To try to make up for lost income, I got a part time job (24 or so hours per week) working at a liquor store behind the counter. This store is located in a more or less seedy part of town. We are surrounded by Section 8 housing, with a 7-11 [convenience store] next door. This location makes for quite a mix of customers. The store owner is of foreign origin, and does not distinguish the difference between a silver coin and a paper dollar. In these times of rising unemployment, higher gas, food, and general living prices, our customers have resorted to digging in the sofa, robbing their child's piggy bank, and got into the family stash of money. Some of this money is spent at the store in the form of junk silver coins. For an example, a woman came in with a fine condition silver dollar (worth $17.00 at the time), and 29 pennies to buy a 24 oz. [bottle of] beer. I immediately put a paper dollar in the register, and pocketed the coin. Since then, I have found pre-1965 quarters, dimes, and several wheat pennies. Just yesterday, a man came in and paid with three pre-1965 half dollars. I just wanted to make people aware that there is a lot of junk sliver out there, and that people are starting to spend it. They either do not know the value of what they have, or they just don't care. If you are in the retail trade, keep your eyes open for silver coins. They have become unmistakable to me in my short time of looking. They make a totally different sound when they hit the counter, and they also "look" different. Not so much the shiny "new" coin look, but almost a dull silver finish. I will continue to collect the junk silver for as long as I'm working there. Keep up the good work, and the writing. My prayers are with you and the Memsahib. Regards, - JK in Colorado JWR Replies: Readers should be advised that a large percentage of the silver coinage found in high crime areas has re-entered circulation because it is being spent by drug addicts that have conducted residential burglaries. Unless they are stupid enough to "spend" a numismatic coin that is still encapsulated in a serialized slab, stolen coins are essentially untraceable. Needless to say, retail merchants should avoid "fencing" stolen items. « Odds 'n Sods: |Main| Influenza Pandemic Update: » Economics and Investing:From Theo M.: Deficit grew by $181 billion in July Chris H. flagged this: No Longer Jobless, But Still Struggling Frequent contributor Karen H. kindly sent several items: Treasurers' Fear of Next Credit Freeze Shown in Cash Hoarding “Cash is king,” said Paul Kasriel, the chief economist at Northern Trust Corp. in Chicago. “Businesses are in survival mode right now.” Minneapolis Federal Reserve Inflation Calculator (see the upper right hand corner of their web page) States End Up Losers in Gambling Pullback (one more reason we will all be seeing a tax increase) Vacancies Suppress Southern California Recovery Unemployment Among Teenagers Remains Stubbornly High Krugman says world avoided second Great Depression "Still, recovery was likely to be "disappointing" as government spending wasn't sustainable in the long-run and unemployment rate still lagging behind, he told a two-day world capital markets conference here." « Odds 'n Sods: |Main| Letter Re: Preventing Steel Food Cans from Rusting in High-Moisture Environments » Monday August 10 2009Economics and Investing:GG flagged this: Banks still getting sicker; The economy may have tu | ||||||||
, [the now out-of-print] SurvivalBlog: The Best of the Blog Volume 1, and 
/oat roller (it manually flakes grain) and the 
(electric grain mill to make flour from the whole wheat). Both have pretty good resale value compared to the initial cost [if purchased used] on eBay if you ended up needing to sell it quick to pay a bill. I use the grain flaker to crack wheat and turn oat groats into oats. I use the Wonder Mill to make whole wheat flour.
, which is about $6 at Wal-Mart, you can ‘can’ almost everything you may want to put up including meat, vegetables, and even condiments and meals! I also discovered 
and the 
reference books. Composition data on Canadian coins is also available at these web pages:
, but coin composition data is also available online at 
[JWR Adds: This otherwise excellent novel was marred by some vulgarity and
gratuitous
sex scenes. Beware!]
or your 
] comes to mind. Same thing as cheating someone out of money.