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Letter Re: Nomex Flight Suits for Ground Troops in Iraq
Dear Mr Rawles,
Just wanted to thank you for SurvivalBlog, and I especially like the useful
tidbits from the troops overseas. I was a Navy Corpsman / combat advisor
with a Marine
[Corps] Police Transition Team (PTT) in Hadithah six months after the alleged
massacre, interesting times for sure.We got in-country in August 2006, and
the Nomex
suits were just catching on [with Marines]. We managed to snag a set for
each of our 10- man team.
The only real reg[ulation]s were that at Al Asad or any large Garrison type
Base they wanted you wearing camouflage [utilities], otherwise they fine
with
the
Nomex, the big deal [with IED flash
burns] was the synthetic Under Armor type shirts
that
are
great for staying dry and cool(er) but [in a flash fire] will melt to your
skin. the Uniforms weren't really the problem. I prefer the uniform especially
on patrol, it goes back to training, with my uniform I know where all the
pockets are, and most importantly I can wear a belt and not feel like I'm
wearing a dress.
I hit one IED in Hadithah, which means I was a lucky b****rd.,
I was in the
back [of the vehicle]. Two other [Marine]s got med-flighted out. We had been
totally engulfed in the blast and flames but no one got burned. Thanks again,
- Matt B.
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Letter Re: Triage in Emergency Mass Critical Care (EMCC) Event
Dear JWR:
I feel that there is a strong premonition in the article you flagged on Wednesday
(Who Should Doctors Let Die in a Pandemic?) This hit the Main Stream Media
(MSM) early this week and quickly fell off the news cycle. The topic is simply
too uncomfortable. The original
articles were published in the medical journal Chest (The
Journal of the American College of Chest Physicians and are very dry and
difficult reading even for a physician. This is unfortunate because it is a
salient topic
which needs to be vigorously publicly debated (instead of who got voted off – insert
various “reality TV” show). It has specific implications for those
of us reading your SurvivalBlog. Several recent postings in SurvivalBlog (specifically
two discussions initiated by questions
raised by DS in Wisconsin )
show this to be a paramount topic.
I would like to address some of these issues by means of an analogy to the
area I live and work. We have a typical, financially struggling, small (100
bed) non-profit hospital serving a population area of approximately 50,000.
Down the road is the “Medical Mecca” (actually more than one) with
total bed capacity in the thousands. Our small hospital has an 8-bed Intensive
Care Unit (ICU) which is always full, with the typical patient in one of the
various states of terminal disease processes. When a critical care patient
leaves the Operating Room (OR), there is the usual story of “Musical
Beds”, where a patient has to be transferred to “make room” in
the ICU. This usually involves transferring the least critical patient to the “Step
Down Unit” (SDU). ICU patient transfers to the “ Mecca ” typically
takes 24-48 hours because their beds are also constantly full. Our hospital
owns four ICU ventilators, and if the number of patients requiring ventilation
exceeds this, additional units have to be delivered from the “medical
supply house”, which also provides rental units to the “Medical
Mecca”. Due to financial constraints, there is no “surge capacity” in
the system. In the typical bureaucratic system, the “mirage” of
available space is accomplished by simply “redefining” a given
patient from “Intensive Care” to something less, either wholly
inside our hospital or by including the “Mecca” in the system (as
in a “larger” system). [JWR Adds: I briefly discussed
the chronic shortage of ventilators in my
static article on Asian Avian Influenza.
I agree wholeheartedly with your assessment
of the shortfalls in
medical delivery infrastructure!]
The issues addressed by the articles in Chest concerned Emergency
Mass Critical Care (EMCC) events, prototypically pandemic influenza. In such
a situation,
even the “mirage” of available space breaks down because you cannot “enlarge” the
system by including more “geographical” area since each additional
area is encompassed by the same problem. The currently circulating “bird
flu” H5N1 is a particularly nasty bug, more closely resembling the various “hemorrhagic
fevers” than typical influenza when infecting humans. The syndrome includes
pulmonary edema (fluid collecting in the lungs, i.e. drowning in own secretions),
disseminated intravascular coagulation (DIC) (internal bleeding) and multi-system
organ failure (kidney and/or heart failure, etc.). Treatment typically includes
intensive hemodynamic and ventilatory support until the body can clear the
infection and heal. Even in our relatively rural area, it would not be unreasonable
to expect to have tens, if not hundreds, of patients needing this level support
in order to survive. The “Mecca ” will see proportionately more
demand.
The recommendations of the authors of the Chest articles are well reasoned
and intelligent, but totally impractical in our financially strapped and egalitarian
healthcare system. These recommendations include providing for the ability
to surge to three times the ICU capacity and provide for 10 days of service
without resupply. Due to shortages of trained nurses, our ICU depends on locum
tenens (contract agency) nurses to staff the ICU and medical care is provided
by a single pulmonologist (physician specializing in lung diseases). It is
totally impractical from a staffing issue to provide 3x surge capacity. As
far as inventory, 10 days is an eternity. Where will the money come from to
stockpile these items and medications (our hospital only has about 30 days
of operating cash on hand)? Will the staff forego a paycheck in order for this
to occur? Additionally, the “medical supply house” typically only
has a couple of unissued ventilators at any given time, before having to “tap
into” their larger supply chain (i.e. maybe a dozen or so “extra” in
the entire State). Where do you expect these to be issued in such a crisis
(try not to be cynical, but I suspect it will be near the State capitol)?
The most difficult (albeit the most logical) recommendations concerns the rationing
of the scarce healthcare resources. They suggest that the effort should go
to those most likely to survive, instead of those likely to die (i.e. those
most likely to benefit from the therapy). This is described as making a medical
decision for the entire population, instead of an individual patient. The goal
is to maximize survival in the population (at the expense of individual survival).
The difficult question is: Who should get the resources and whom should be “redefined” into
the “expectant” (i.e. expected to die) category? Should the ventilator
go to the college student with severe pulmonary edema or the nursing home patient
with the stroke? Should the neonatal/pediatric ICU bed space go to the 20 week
premature infant or the previously healthy two year old? If only these decisions
would be this straightforward. Who is going to tell the family that grandmother
doesn’t meet criteria? Who is going to care for the other patients while
the situation is explained (repeatedly) to these families (typically hours
with each family)? Do you think that that family will quietly accept the decision
or will there be riots? Do you ever wonder why during a food riot, the first
thing destroyed is the bakery? Do you think healthcare providers will show
up for work at an armed camp with constant rioting or stay home and care for
their own family? Would you go to work in a similar situation?
As in most things health related, an ounce of prevention is worth a pound of
cure. With communicable diseases, isolation and personal hygiene are the most
important. These are issues which do not need to be described to the SurvivalBlog
family (look at the archives), but should be seriously discussed within your
own family/group. In regards to the questions raised concerning emergency medical
transport and personal/retreat medical stockpiling, it is an important consideration.
In such a crisis situation, transportation is likely to be futile, if not fatal.
While nobody should expect to have a personal ventilator in their medical kit,
a supply of IV fluids and electrolyte preparation should be standard for those
who know how to administer it. Antipyretics (fever reducers) and antispasmodics/antiemetics
(diarrhea and nausea medication) should also be standard fare as well as easily
digestible foods. A broad-spectrum antibiotic would also be warranted for bacterial
superinfection, although everyone should already know that antibiotics do not
treat viral infections. The data on antivirals (amantadine, rimantadine and
oseltamivir/Tamiflu) is inconclusive at best and contradictory at worst concerning
H5N1 [Asian Avian Influenza], but if they are available it may be prudent to
have some on hand.
It is unfortunate that the public discussion of this topic has died such an
untimely death. Perhaps a little more debate would spare a few hospitals from
the ultimate riots, but I am not enthusiastic, human nature being what it is.
In this era of “Hope and Change”, especially with regards to healthcare,
it will undoubtedly be continued deterioration. We will continue to spend the
majority of healthcare dollars in the last six months of life, instead of helping
the survival of those most likely to survive. In summary, logical evaluation
of such a crisis leads to an illogical result (riots and destruction of the
healthcare system). We will likely be left with taking care of ourselves and
our family. - NC Bluedog
« Letter Re: Advice on Stocking Up on Batteries |Main| Jim's Quote of the Day: »
Wars, and Rumors of War
I got a hoax press release on Friday about Chile declaring war on Peru. But meanwhile, there are lots of real wars gong on. Fierce
fighting has broken out in Lebanon. And to top
it off, crude
oil spiked to an all-time high of $126 per barrel, in part because
of tensions between Venezuela and Columbia.
In the midst of all this war news, the ongoing global grain shortage crisis
is likely to cause additional civil wars, and possibly cross-border wars. It
is
all too
clear that we are living in very dangerous times. Let's call them fragile times.
In such circumstances
it is
prudent to be well prepared. Si vis pacem, para bellum.
If you haven't done so already, get your beans, bullets, and Band-Aids squared
away, muy
pronto.
This advice is meant for all of SurvivalBlog's
readers--all over the globe. (We
have readers in 130+ countries.) Modern commerce is now so globalized
that shortages and conflict anywhere affect us all. Pray hard.
« Letter Re: Advanced Medical Training and Facilities for Retreat Groups |Main| Letter Re: As It Was in the Days of Noah »
Louisiana Sales Tax Holiday for Hurricane Preparedness--May 24 & 25
Residents of the US state of Louisiana can purchase needed items
free of sales tax as they prepare for the 2008 hurricane season.
The inaugural 2008 Hurricane Preparedness Sales Tax Holiday takes place on
Saturday, May 24 and Sunday, May 25. The holiday is an annual, statewide event
created by the Louisiana Legislature to assist families with the important
job of protecting their lives and property in the event of a serious storm.
During the two-day holiday, tax-free purchases are allowed for the first $1,500
of the sales price on each of the following items:
•
Self-powered light sources, such as flashlights and candles;
•
Portable self-powered radios, two-way radios, and weather-band radios;
•
Tarpaulins or other flexible waterproof sheeting;
•
Ground anchor systems or tie-down kits;
•
Gas or diesel fuel tanks;
•
Batteries – AAA, AA, C, D, 6-volt, or 9-volt (automobile batteries and
boat batteries are not eligible);
•
Cellular phone batteries and chargers;
•
Non-electric food storage coolers;
•
Portable generators;
•
Storm shutter devices – Materials and products manufactured, rated, and
marketed specifically for the purposes of preventing window damage from storms
(La. R.S. 47:305.58).
The 2008 Hurricane Preparedness Sales Tax holiday begins at 12:01 a.m. on Saturday,
May 24, and ends at 11:59 p.m. on Sunday, May 25.
The sales tax holiday does not extend to hurricane-preparedness items or supplies
purchased at any airport, public lodging establishment or hotel, convenience
store, or entertainment complex.
For more information, visit the State
of Louisiana web site.
« Letter Re: Advanced Medical Training and Facilities for Retreat Groups |Main| Jim's Quote of the Day: »
Is Survivalism Just "Unbounded Imagination of Anxiety"?
It never fails that when the mainstream media writes about survivalists, they
try to lump us together with racists and tin foil hat whackos. Failing that
(since the whackos represent such a miniscule fraction of "survivalists"),
they will often trot out a psychologist or other "expert", to try
to convince the general
public
that
preparedness is
irrational
and that
it is
evidence
of
some deep-seated paranoid
delusion.
This was the case in the recent BBC news article titled: "Do
you need to stock up the bunker?". The article focused on Barton
Biggs,
who is a well-known and relatively mainstream hedge fund manager and economic
commentator. Biggs recently became a convert
to survivalism, and that got the liberal media all in a tizzy. "Well,
we mustn't have that!" they grumbled. So it was time for the "expert" gambit.
The
BBC rolled out this nay sayer:
Frank Furedi, the British-based author of The Culture of Fear, says people
should calm down.
For all the talk of a global bird flu pandemic, in the past five years there
have been 200 human deaths from bird flu. In the same period more than six
million people have died from diarrhoeal diseases and more than five million
in road accidents – these would seem to be more pressing, practical problems
to solve.
"What's interesting about the 'new survivalism' is that its focus is everything," says
Prof Furedi. "Unlike previous alarmist responses to a crisis which focused
on one main threat – for
example, nuclear war – today's survivalism is driven by an unbounded
imagination of anxiety."
"The new survivalism can also be seen as a highly ritualised affectation," says
Prof Furedi. "Through self-imposed restraint and expressions of concern
for the future of humanity, the individual sends out signals about his
own responsible behaviour."
"The affectation of survivalism is one of the most interesting features
of our
'culture of fear' today."
I have a self-diagnosis to report to Professor Furedi: One of the "highly
ritualised affectations"
that I have is the desire to put food in my stomach at least once per day.
This is a deep seated desire. I also have a corresponding deep seated fear of
missing too many meals. Clearly, I must be suffering from "anxiety"
and
have irrational delusions.
I suggest that Professor Furedi make
some changes at his Ivory Tower. First, he needs to stock it with some canned
goods.
« Letter Re: Ammunition Reloading for Survival |Main| Letter Re: Fuel Rationing as a Deciding Factor in Activating a Remote Retreat »
Letter Re: Food Shortages at COSTCO and Sam's Club Stores
James,
I visited COSTCO store in
Woodinville, Washington Saturday morning, right at the store's opening time.
I had my doubts about the reality of the shortages, and needed
to
shop, anyway, so I thought I'd check it out for myself. They had eight big
warehouse guys escorting two pallets of rice out to the showroom floor just
about the time I arrived. Six of the eight then stayed with the rice, handing
it out to customers as needed. Both pallets were completely sold out by the
time I left the store about 45 minutes later.
I talked with two of the warehouse guys independent of each other, playing
dumb and asking what was going on. Both said they were receiving normal shipments,
just as they always had, but that customers were spooked and buying a lot more
than normal. Both told me they expected their next rice shipment on Tuesday.
One of them also told me (then showed me) that they were completely out of "general
purpose" flour, and only had specialized bread-making flour in stock.
Both swore up and down (and I have no reason to think they were being less
than
honest) that there were no shortages, just a run on things
that they blamed on the media. There was enough cooking oil to fill a swimming
pool, no shortages there. - Jeff F.
« Two Letters Re: Recommendations on a Reliable AK and a Competent AK Trainer |Main| Letter Re: Fuel Rationing as a Deciding Factor in Activating a Remote Retreat »
Letter Re: The British Perspective on Food Storage and Preparedness
Dear Sir
The two articles linked below detail issues surrounding world food shortages
(and possible solutions) from a UK perspective.
I thought that they might be
of interest
to you. Certainly there is increasing concern here about rising food and drink
prices and its increasingly becoming part of the national conversation. It
seems there are now almost daily broadsheet newspaper articles on the subject
and I can categorically state that the UK is now experiencing similar trends
to the US, as identified by your readers. Although rationing has not
made the news yet, my father - who is a restaurateur - has discovered that
our five
large local wholesalers who sell exclusively to the catering industry have
run out of rice, cooking oil and other essential foodstuffs.
Families'
annual grocery bill rises by £800
and,
Food shortages: how will we feed the world?
Also, thank you for your wonderful web site. To be honest, I had not even
thought about survivalism when I first saw SurvivalBlog - I was just looking
for outdoor survival techniques for a bushcraft weekend. The more I have
read
the more convinced I am of the need for preparedness. I cannot afford a
retreat but your site has opened my eyes to the numerous other ways I can
keep my
family safe during any periods of potential unrest. It also gives me great
pleasure
to read about these issues from a Christian point of view. Although there
are many British Christians, it is sometimes difficult for us to be open
about
our faith. Our society is extremely tolerant of any and all faiths (as
it should be of course) but unfortunately our media and politicians frequently
marginalise
the very people that make this country democratic and free. God bless you
and thank you once again, - Paolo
« Letter Re: Will Peasant Farmers Fare Better than the Rich in TEOTWAWKI? |Main| Food Shortages in the US Underscore the Weakness of JIT Inventory Systems »
Letter Re: Dramatic Increases in Food Prices
Jim:
Two months ago you could purchase Almond Nut Butter for around $7.50 per 16
ounce jar. Today the Almond butter is selling for $17.00 per jar. Today Cashew
Nut Butter sells for around $11.50 and two months ago it sold for around $6.00 per 16 ounce jar. A clerk
at Walmart commented that prices are rising fast.
Rosauers Grocery Store in Kalispell, Montana had raised its prices more than
11 percent in February and has raised them again in April, some up to 17%.
They blame rising fuel costs. What you purchase today will not cost the same next week because oil and food
commodities future prices are soaring.
A local feed store that also sells food grains had one of its largest selling
days ever Monday when the east and west coast food shortages hit the major
media. I saw one fellow purchase a 3/4 ton pick up truck full of sacked food
grains
and beans.
Money is coming out of the local mattresses to stock up before panic shopping
starts.
It is possible that those food shortage news stories set into motion a hoarding
collapse of our eight day national supply of grain before the stories were
spiked. We will know by the end of the coming week the effects of Monday's strategic nationwide shopping. The e-mail
re these news stories is still being sent around the Internet. Each time a
new food shortage occurs somewhere in the nation expect to see more strategic buying. After we reach the end of
our just in time national grain supply we will see food riots and I expect
the government will formally declare martial law and impose food rationing. The media will step in blaming hoarders
for the food shortages.
Yesterday COSTCO showed my wife what we purchased in
2008 on the hand held checkout wand and that we had already exceeded our
2007 purchases in the first quarter of 2008. Needless to say this tells us all of our shopping habits are being
carefully tracked. I believe that people are being profiled as resistors
or hoarders. [Some deleted, for brevity] - Rosie the Bull, in Montana
« Odds 'n Sods: |Main| Letter Re: Dramatic Increases in Food Prices »
Letter Re: Will Peasant Farmers Fare Better than the Rich in TEOTWAWKI?
Hi,
I’m finding SurvivalBlog very interesting in these troubling
times. I came across it in the bibliography of a good novel, "Last
Light", by Alex Scarrow, which took me to Peak
Oil, and then to your
blog.
I live in a small city in the most unknown part of Italy , a southern region
called Basilicata . It’s always been a region bypassed by history and
its inhabitants have known a modicum of well being only in the past 20 years.
You might have heard of a book called "Christ Stopped at Eboli"
by Carlo Levi. Well, that’s here. Though of course right now, it’s
a charming place to live, with a lively music scene, great art and new restaurants
opening
up every day, people still remember vividly a subsistence existence.
I think having been very poor could actually be a huge advantage if and when
it is The End Of The World As We Know It (TEOTWAWKI).
There’s still a
huge huge amount of knowledge in their DNA about how to make do under harsh
conditions
of extreme
scarcity.
I can’t
imagine them panicking if horrible things happen because every home has a grandmother
or grandfather or an uncle that tills a small field, that can make sausage
and is really good at canning. They have literally thousands of years of experience
in banding together in harsh conditions. My sisters in law know everything
there is about storing food, canning, etc.
In many ways, the millennial poverty (now greatly alleviated) will probably
prepare them well if things collapse. And maybe areas of the world that are
used to living in scarcity will do better than rich urban areas. They might
not collapse, just revert to a previous culture. Also, this area is very rich
in water and they’ve just discovered the largest methane fields in Europe
.
Anyway congratulations on your fascinating blog. Right now, there’s
no food scarcity because Italians don’t have a long food chain. They
are very careful to eat locally and by law food’s origins must be labelled
and Italians prefer national food to imported food, because they are snobbish
about the taste of imported
food. Also, Italy grows most of its own rice. Best,
- E.J.
JWR Replies: I wholeheartedly agree that in the event of
a societal collapse, those that live close to the land will fare better than
most others. It may go down in history as a Great Inversion--something analogous
to France,
during the Revolution, when wealthy people in desperation
traded rings set with precious stones, gold necklaces, and fancy furniture
for loaves of bread. Perhaps in the next collapse they'll be trading Jet Skis
and
big screen
plasma televisions. This sort of inversion was aptly described by Pat Frank,
in his early-1960s post-nuke novel "Alas, Babylon." The novel
is set in rural Florida. The story describes how the erstwhile poor black residents
coped much better
than
rich whites, simply because they were already accustomed to making do. When
dollars became worthless, suddenly it was practical skills that trumped all
else. Before the Schumer hit the fan, the "Po Folks" already raised gardens,
kept small livestock, and
were experienced
subsistence
fishermen.
Their white
neighbors
had a lot
of catching up
to do,
to reach
the same level
of self-sufficiency.
Could life imitate at? I think so. The most likely to prosper in a collapse
will me middle class farmers and ranchers that are well-removed from urban
areas . They can capitalize on their
food
production kills and infrastructure,
yet will be isolated from most of the peril that will grip the cities and suburbs.
A farmer with a pair of well-trained draft horses and old-fashioned (horse-drawn)
machinery will do the best of all. These farmers with new-found wealth will
of course have to quickly hire some mercenaries to protect what they have.
Speaking of Italy, the
days ahead
may get downright Machiavellian.
« Letter from David in Israel Re: Stocking Up on Matzoh |Main| Preparedness Considerations for College Students, by Sam »
Home Invasion Robberies in Argentina, by FerFAL
JWR's Introductory Note: FerFAL is SurvivalBlog's volunteer
correspondent in Argentina. If you haven't done so already, be sure to read
his Profile.
Readers might also be interested
in FerFAL's blog: Surviving
in Argentina.
I just got off the phone, after talking with a college friend of mine. We talked
about the current situation our country is going through, the food shortages
and empty shelves, and how long things will hold on until people
get desperate.
As an afterthought she mentioned that some robbers attacked her father and
his girlfriend (divorced) while they watched over her recently married sister’s
home, while she was on her honeymoon.
I always try to learn as much detail as I can from these situations.
As is currently typical, three armed men intercepted the couple when they arrived
to the sister’s
house, when they were getting out of the car.
Then, three more guys showed up, each driving a car!
They tied them up, loaded the cars full of the newly-wedded couple’s
gifts, everything they had was soon fitted into the cars.
After that, one of the bad guys cut the cable off an appliance, stripped the
end of the cable, and threatened to torture them with electric shocks.
There was also some money in the house--about $1,000--and fortunately they
didn’t fulfill the threat.
A few thoughts that come to mind:
1) Criminals always seem to attack when entering or exiting your house. Those
are the moments when you should be extra careful.
2) Be discreet about what you have. Three cars? They knew about the wedding,
the gifts, the new house, etc.
3) Once you are tied up in a chair, there’s no use in wishing you had
done something before. If they end up raping or killing your entire family,
you can't go back in time, buy a gun, learn how to use it, and defend yourself
and your loved ones. It’s too late.
4) Some people just don’t get it, even when the truth is smeared all
over their faces.
Right after telling me this, my friend told me that the best thing to do is
surrender, cooperate with the criminals and hope for the best.
She told me that she was worried about me because she knew that I was armed
and had the will to shoot if necessary.
I expressed my concerns about the opposite being true regarding her.
5) Three armed guys and three more nearby? Do I really want a six-shot revolver,
or even worse, a five-shot one?
The reality around you dictates the kind of weapon you need, and even then...
guns are meant to be comforting, not comfortable. That’s one of the few
gun maxims I like. - FerFAL
« Odds 'n Sods: |Main| Letter from David in Israel Re: Stocking Up on Matzoh »
Two Letters Re: Automated Parking Garages
Sir,
Regarding a
recent item in your blog about robotic parking facilities: These modern "conveniences" can
be shut down by more than just a power outage. Here's a link to a news storey
about a robotic parking facility in Hoboken, New Jersey which
was effectively shut down for about a week during a contract dispute between
the city and the software company. To make a long story short: The city owned
the facility, while the company owned the rights to the software which ran
it. When
the city opted
not to renew their contract with the company, the parking robot suddenly stopped
functioning. Cheers, - B-Boy
Jim:
Your warning comes a little too late. According to an AutoBlog article, they're
in place in many of our big
cities, including San Francisco, Seattle et cetera. - Eric S.
« Letter Re: Food Riots in Haiti |Main| Note from JWR: »
The Precepts of My Survivalist Philosophy
In the past week I've had three newcomers to SurvivalBlog.com write and ask
me to summarize my world view. One of them asked: "I could spend days
looking through [the] archives of your [many months of] blog posts. But there
are hundreds
of them. Can you tell me where you stand, in just a page? What distinguishes
the "Rawlesian" philosophy from other [schools of] survivalist thought?"
I'll likely add a few items to this list as time goes on, but here is a general
summary of my precepts:
Modern Society is Increasingly Complex, Interdependent, and Fragile. With
each passing year, technology progresses and chains of interdependency lengthen.
In the past 30 years, chains of retail supply have grown longer and longer.
The food on your supermarket shelf does not come from local farmers. It often
comes from hundreds or even thousands of miles away. This has created an alarming
vulnerability to disruption. Simultaneously, global population is still increasing
in a near geometrical progression. At some point that must end, most likely
with a sudden and sharp drop in population. The lynchpin is the grid. Without
functioning power grids, modern industrial societies will collapse within weeks.
Civilization is Just a Thin Veneer. In the absence of law
an order, men quickly revert to savagery. As was illustrated by the rioting
and looting that accompanied disasters in the past three decades, the transition
from tranquility to absolute barbarism can occur overnight. People expect tomorrow
to be just like today, and they act accordingly. But then comes a unpredictable
disaster that catches the vast majority unprepared. The average American family
has four days worth of food on hand. When that food is gone, we'll soon see
the thin veneer stripped away.
People Run in Herds and Packs, but Both Follow Natural Lines of
Drift. Most
people are sheep ("sheeple").
A few are wolves that prey on others. But just a few of us are more like sheepdogs--we
think independently, and instead of
predation,
we are
geared toward protecting and helping others. People naturally follow natural lines
of drift--the path of least resistance. When the Schumer hits
the fan, 99% of urbanites will try to leave the cities on freeways. The highways
and freeways will soon resemble parking lots. This means that you need to be
prepared to both get
out of town ahead of the rush and to use lightly-traveled back roads.
Plan,
study and practice.
Lightly Populated Areas are Safer than High Density Areas. With
a few exceptions, less population means fewer problems. WTSHTF, there will
be a mass exodus from the cities. Think of it as an army that is spreading
out across a battlefield: The wider that
they
are
spread,
the less effective that they are. The inverse
square law hasn't been repealed.
Show Restraint, But Always Have Recourse to Lethal Force. My
father often told me, "It
is better to have a gun and not need it, than need a gun, and not have it." I
urge readers to use less than lethal means when safe and practicable, but at
times there is not a satisfactory substitute for well-aimed lead going down
range at high velocity.
There is Strength in Numbers. Rugged individualism is all
well and good, but it takes ore than one man to defend a retreat. Effective
retreat defense necessitates having at least two families to provide 24/7 perimeter
security. But of course every individual added means having another mouth to
feed. Absent having an unlimited budget and an infinite larder, this necessitates
striking a balance when deciding the size of a retreat group.
There are Moral Absolutes. The foundational morality
of the civilized world is best summarized in the Ten
Commandments. Moral relativism and secular humanism are slippery slopes.
The terminal moraine at the base of these slopes is a rubble pile consisting
of either despotism and pillage, or anarchy and the depths of depravity. I
believe
that
it takes both faith and friends to survive perilous times. For more background
on that, see my Prayer
page.
Racism Ignores Reason. People should be judged as individuals.
Anyone that make blanket statements about other races is ignorant that there
are both good and bad individuals in all groups. I have accepted The
Great Commission with sincerity."Go forth into all nations" means
exactly that:
all nations. OBTW, I feel grateful that SurvivalBlog is now read
in more than 100 countries. I have been given a bully pulpit,
and I intend to use it for good and edifying purposes.
Skills Beat Gadgets and Practicality Beats Style. The modern
world is full of pundits, poseurs, and Mall
Ninjas. Preparedness is not just about
accumulating a pile of stuff. You need practical skills, and those
only come with study, training, and practice.
Any
armchair
survivalist
can
buy a set
of stylish camouflage fatigues and an M4gery Carbine
encrusted with umpteen accessories. Style points should not be mistaken
for genuine skills and
practicality.
Plentiful Water and Good Soil are Crucial. Modern mechanized
farming, electrically pumped irrigation, chemical fertilizers, and pesticides
can make deserts bloom. But when the grid goes down, deserts and marginal farmland
will revert to their natural states. In my estimation, the most viable places
to survive in the midst of a long term societal collapse will be those with
reliable summer rains
and rich
topsoil.
Tangibles Trump Conceptuals. Modern fiat currencies are generally
accepted, but have essentially no backing. Because they are largely a byproduct
of interest bearing debt, modern currencies are destined to inflation. In
the long run, inflation dooms fiat
currencies to collapse. The majority of
your assets should be invested in
productive farm land and other tangibles such as useful hand tools. Only after
you have your key logistics squared away, anything extra should
be invested in silver and gold.
Governments Tend to Expand their Power to the Point that They Do Harm. In
SurvivalBlog, I often warn of the insidious tyranny of the Nanny
State. If
the state where you live becomes oppressive, then don't hesitate to relocate.
Vote with your feet!
There is Value in Redundancy. A common saying of my
readers is: "Two
is one, and one is none." You must be prepared
to provide for your family in a protracted period of societal disruption. That
means storing up all of the essential "beans, bullets, and Band-Aids" in quantity.
If commerce is disrupted by a disaster, at least in the short term you will
only have your own logistics to fall back on. The more that you have stored,
the
more
that
you
will have
available for barter and charity.
A Deep Larder is Essential. Food storage is one of the key
preparations that I recommend. Even if you have a fantastic self-sufficient
garden and pasture ground, you must always have food storage that you can fall
back on in the event that your crops fail due to drought, disease, or infestation.
Tools Without Training Are Almost Useless. Owning a gun doesn't
make someone a "shooter" any more than owning a surfboard makes someone a surfer.
With proper training and practice, you will be miles ahead of the average citizen.
Get advanced medical
training. Get the best firearms
training that you can afford. Learn about amateur radio from your local
affiliated ARRL club.
Practice raising a vegetable garden each summer. Some skills are only perfected
over
a period
of years.
Old Technologies are Appropriate Technologies. In
the event of a societal collapse, 19th Century (or earlier) technologies such
as a the blacksmith's forge, the treadle sewing machine, and the horse-drawn
plow
will be
far easier
to re-construct than modern technologies.
Charity is a Moral Imperative. As a Christian, I feel morally
obligated to assist others that are less fortunate. Following the Old Testament
laws of Tzedakah (charity
and tithing), I believe that my responsibility begins with my immediate family
and expands in successive rings to supporting
my immediate
neighborhood
and
church, to my
community, and beyond, as resources allow. In short, my philosophy is to "give
until it hurts" in times of disaster.
Buy Life Assurance, not Life Insurance. Self-sufficiency
and self-reliance are many-faceted. You need to systematically provide for
Water, Food, Shelter, Fuel, First Aid,
Commo,
and, if need be, the tools to enforce Rule
308.
Live at Your Retreat Year-Round. If your financial and family
circumstances allow it, I strongly recommend that you relocate
to a safe area and live there year-round. This has several advantages,
most notably that will prevent burglary of your retreat logistics and
allow you to regularly
tend to gardens, orchards, and livestock. It will also remove the stress of
timing a "Get Out of Dodge" trip at the11th hour.
If circumstances dictate that you can't live at your retreat year round, then
at least have
a caretaker and stock the vast majority of your logistics in advance, since
you may only have one trip there before roads are impassable.
Exploit Force Multipliers. Night vision gear, intrusion
detection sensors, and radio communications equipment are key force
multipliers. Because
these use high technology they cannot be depended upon in a long term collapse,
but in the short term, they can provide a big advantage. Some low technologies
like barbed wire and defensive road cables also provide advantages and can
last for several decades.
Invest Your Sweat Equity. Even if some of
you have a millionaire's budget, you need to learn how to do things for yourself,
and
be willing to get your hands dirty. In a societal collapse, the division of
labor will be reduced tremendously. Odds are that the only "skilled craftsmen" available
to build a shed, mend a fence, shuck corn, repair an engine, or pitch manure
will be you.and
your family. A byproduct of sweat equity is muscle tone and proper body weight.
Hiring someone to deliver three cords of firewood is a far cry from
felling, cutting, hauling, splitting, and stacking it yourself.
Choose Your Friends Wisely. Associate yourself with skilled
doers, not "talkers." Seek out people that share your
outlook and morality. Living in close confines with other families is sure
to cause friction but that will be minimized if you share a common religion
and norms of behavior.You can't learn every skill yourself. Assemble a team
that
includes members with medical knowledge, tactical skills, electronics experience,
and traditional practical skills.
There is No Substitute for Mass. Mass stops bullets. Mass
stops gamma radiation. Mass stops (or at least slows down ) bad guys from entering
a home and depriving its residents of life and property. Sandbags are cheap,
so buy plenty of them. When planning your retreat house, think: medieval
castle.
(See the SurvivalBlog Archives for the many articles and letters on Retreat
Architecture.)
Always Have a Plan B and a Plan C. Regardless of your pet
scenario and your personal grand plan of survival, you need to be flexible
and adaptable. Situations and circumstances change. Always keep a G.O.O.D. kit
handy, even if you are fortunate enough to live at your retreat year-round.
Be Frugal. I grew up in a family that still remembered both
our pioneer history and the more recent lessons of the Great Depression. One
of our family mottos is: "Use
it up, wear it out, make do, or do without."
Some Things are Worth Fighting For. I encourage my readers
to avoid trouble, most importantly via relocation to safe areas where trouble
is unlikely to come to visit. But there may come an unavoidable day that you
have
to
make a stand to defend your own family or your neighbors. Further, if you value
your liberty, then be prepared to fight for it, both for yourself and for
the sake
of
your progeny.
« Letter Re: The Survivor Mindset |Main| The Precepts of My Survivalist Philosophy »
Letter Re: Food Riots in Haiti
Mr. Rawles,
The BBC and several other news outlets are reporting Food Riots in Haiti, where
food scarcity and price increases have resulted in violence. Reports say mobs
are looting shops, burning cars, blocking roads, and shooting at UN Peacekeepers.
It is also reported one man was shot to death by UN Peacekeepers. The rioters
are responding to food prices increasing some 50% over the past year. Apparently
the United States and France will be sending more money to assist in subsidizing
food prices. There's plenty of information about this showing online. Here
are a couple of links, one
from the British Broadcasting Corporation, and one
from the Australian Broadcasting Corporation. - KMA
« Odds 'n Sods: |Main| Letter Re: Don't Delay Dental Work and Elective Surgery! »
Letter Re: Implications of High Grain Prices for Livestock Owners -- Stock Up!
Dear JWR,
The prices for wheat and soy and orchard grass crop seed have risen 40% in
our region this spring. And that is the farm supply co-op pricing. The N
and Phos. fertilizer is pretty well matching this increase. Lime is only
20% higher than last fall. Most of the larger crop farmers (200 acres or
more)
in our eastern central area (which 5 years ago used to be primarily tobacco
fields) are now counting on a moderate to large profit in return because
these edible cash crops are being currently negotiated and purchased in bulk
to be shipped to China (soy) and Egypt (wheat). The corn crops grown locally are being sold for US bio-fuel production.
Heads up! If you have large farm animals and poultry, put up a one year reserve
of feed grains and feed hay or fodder now, if you can find it for a reasonable
bulk purchase price and get busy breaking ground on that fallow pasture land
and start planting your own rotational plots of grasses for hay, forage and
feed grains! I am perplexed to how many people are selling off completely or
drastically reducing the numbers of their large farm animals now at a time that they should
bare caution in their reflexive reactions. Consider that this may not be the
best resolution as a result of the price increases of the grains.
This is the time to ride the grain increase out until they can become self
sufficient in their own home grown supply and to stock up on seed. The prices
will only get much higher in a year. If they can just hold out until their
own grains come on line, the inflationary prices to come will make the value
of those animals worth triple or quadruple their price in the short coming
years. Trying to buy new livestock is not going to get cheaper either. Now
is not the time to be selling off your extra edible or working farm animals.
This is a time to hold and make yourselves busy as self sufficient
farmers. We're now in this for the long haul! Think for the long term future,
not just for today. - KAF
« Weekly Survival Real Estate Market Update |Main| Note from JWR: »
Economic Climate Change: The Long Winter May Begin This Summer
I've had several consulting clients contact me in recent weeks, all with notes
of fear in their voices. They realize that something is horribly wrong with
the economy, but they cannot properly isolate and articulate the problem. I
haven't been able to calm them, however, because to an extent I share their
anxiety.
In
my estimation,
the "something wrong" that we sense is nothing short of a monumental
shift in the
economic
climate.
America is clearly headed for a 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 this
nascent recession 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.
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.
(They can't do that any more than I could predict the
bends in the road ahead by keeping a chart of the preceding left and right
turns
of
my
car's steering wheel. My apologies for any offense to my friend The
Chartist Gnome, but you
are fooling yourself.) 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. I think that veteran market analyst Jim
Rogers had it right, in a recent interview.
Take a few minutes to watch that video. Jim Rogers sees the big picture. I
wouldn't be surprised to hear that he has gone off somewhere to hunker in a
bunker.
"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
lon, effectively use debt
compounded upon debt. Many,
many hedge
funds
will
be bankrupted
before
the end of 2008.
Even more alarming is the scale of global derivatives
trading, particularly for credit default swaps (CDS). Derivatives
are a relatively new phenomenon, so derivatives contract holders have
not yet experienced a major recession
or
a depression.
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 ever experienced
a derivatives full scale "blow up", but I predict that when
it happens, it will be spectacular.
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
he 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 last
summer, 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 whole governments will go under as this tumult
plays out. The current low interest rates will soon be replaced by double-digit
rates, much like we saw in the late1970s. The dollar will lose value in foreign
exchange, and may collapse completely. The Mother of All Bailouts (MOAB)
will 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.)
Risk Mitigation
Be ready to "winter over" the coming K Winter depression. That will require:
1.) Prayer.
2.) Friends 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 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.
« Letter Re: A Special Antibiotics-By-Mail Offer for SurvivalBlog Readers |Main| Letter Re: Learn How to "Roll Your Own" Ammo »
Letter Re: Sword Ban Begins on April 6th in the United Kingdom
James:
In the past you have recommended that SurvivalBlog readers in the UK
to get a samurai sword. Well, they
are banning them now.
As of the 6th April 2008 it will become illegal to manufacture, import or sell
(but not own) all swords with a curved, single edged blade over 50 cm in the
U.K.
Although they can still supply such weapons for "permitted activities".
These activities include; Historical re-enactments and Sporting Activities.
The legislation does not mention samurai swords. It only mentions single-edged
curved swords with a blade length of 50cm or over. As per the document, it
appears that all swords with those characteristics will be banned. Including
Chinese
Dao, American & European Sabres, Filipino Swords etc.
They have not had a vote with the members of parliament on this. They are
just banning them [by decree].
If you want one before that, I would say the best makers seem to be Cold Steel
(but they cost a lot more and I don't think you will find one in time), or
Hanwai / Paul Chan. (For he latter, contact the
UK dealer--you may
be just in time.) It looks like I got my samurai [sword] just in time.
You can always get a non-curved blade like a Shinodi (Ninja sword), a broad
sword or a Side sword (I want the Hanwei one) these last two are also double-edge.
Cold Steel makes a [straight] double-edge samurai sword so that for now will
be okay for now
but I bet soon they will ban anything double-edge or with a blade over 50cm.
- Simon in England
JWR Replies: The UK government is clearly doing its best
to put its citizenry at the mercy of criminals. Soon enough, your ever-tightening
Country Code will have your self defense options reduced to just butter knives, ASBOs,
cricket bats, and harsh language. It is now abundantly clear that violent crime
is already at unacceptable levels in urban areas
of the UK. In the event of an economic collapse, things could resemble the
recently-released
Doomsday movie. Under those circumstances the majority will fall
prey to a minority that is younger, stronger, and uninhibited by moral compunctions.
I must reassert that it is clearly time
to take
the gap. The US and New Zealand still have immigration programs that
are advantageous. Get out of England soon, while these programs are still
available.
« Lessons From Fiction--A Critique of "I Am Legend", by Michael Z. Williamson |Main| Note from JWR: »
News from Wall Street and Capitol Hill--The Mother Of All Bailouts Begins to Grow
Last week, the mainstream media described the latest expansion
of the Mother of All Bailouts (MOAB),
but they politely refrained from calling this what it
is: socialism, plain and simple. The grand plan, as it stands now, is
to bail out not just consumer banks, but also investment banks, with taxpayer
dollars.
They are effectively making our life savings and our future earnings surety for
a
bunch of idiotic contrapreneurs'
loans on everything from flat top duplexes
to McMansions.
These
were
houses
that the contrapreneurs
bought,
that they could never
really afford unless the market continued to rise at an artificial rate.
They bought these houses with the intention of "flipping" them,
but then the
market topped out, and the "easy money" party ended.
At
least
those hated fascist dictators like Mussolini
had
the
common
sense
to
nationalize
viable,
productive
companies.
But now Ben Bernanke
is
busy
nationalizing a
slew of corporations with negative net worth. This is absolute lunacy!
Here
are
four
examples
of
the
mainstream's
view:
From The Washington Post: Fed
Leaders Ponder an Expanded Mission.
From The New York Times: Treasury
Dept. Seeks New U.S. Power to Keep Markets Stable
From Reuters: Treasury
regulatory overhaul plan "timely": Fed
And finally (with an ever-so-slightly more conservative view), this from Fox
News: Bush
Administration Proposes Sweeping Overhaul of Financial Regulation.
All of these calls for regulation, new government agencies, and greater scrutiny
might outwardly sound well-reasoned, but they ignore some inescapable underlying
problems: We have
a fiat currency
that is based
on debt, we have a banking system with fictional fractional reserves,
we have a derivatives
market that is a $500 trillion casino, and
we have a national treasury that is backed by wishful thinking--certainly not
by anything tangible.
The other key point that seems to have escaped the mainstream media is that
this new regulatory power is being handed to the Federal Reserve, which is
a private
banking cartel,
not a government agency. They are no more "Federal" than
the Federal Express parcel courier company. So this isn't just socialism.
This is nothing short of corporate-controlled
socialism--where a handful of banking corporations are given access to the
Federal tax coffers
to bail
out
other
institutions
and
then, even further, they are given sweeping regulatory powers. This
power grab is deemed "necessary" by circumstances that the Federal Reserve itself created!
Somewhere, somehow,
somebody stands to make a lot of money in this process. Cui bono?
I'll wager that it won't be the American taxpayers that benefit.
As economist
Mish Shedlock observes, this is like putting the
Fox in Charge of the Henhouse. Mish summed up the current mess succinctly:
"The biggest, most reckless credit experiment in history has started to implode.
It's far too late to stop a complete systemic collapse now. Granting new powers
to the agency most responsible for the mess simply does not make any sense."
Secrecy is another concern. In a recent e-mail, SurvivalBlog reader
KAF commented: "We should be greatly concerned about the fact that the
Federal Reserve has provided public release anonymity to the institutions who are taking
'30 day' never ending loans. We'll now never know if the institutions we
deal with are truly solvent and credible, This new"confidentiality" allows
the Fed. to manipulate reserves on a routine basis. We'll never know if this
country's Federal Reserve is or is not heading for bankruptcy
unless we use the tests of consumer spending and commodity pricing as indicators." She
hit the nail on the head. At the same time that the press is howling for "greater
transparency" in banking, and writing exposes of "predatory lending
practices",
the Powers That Be are drawing the veil of secrecy over lending institutions.
They'd rather treat us like mushrooms--keeping us in the dark and feeding us
barn waste--than risk a panic by letting the public know the real depth of the
liquidity
crisis and its collateral effects.
Instead of government platitudes, do you want some figures to chew
on? Look at this
Federal Reserve web page. The negative numbers at the bottom of the "Non-loaned
Reserves" column speak volumes. Without the newly-created Federal Reserve "emergency
lending
mechanisms",
many
banks would be absolutely bankrupt. As you can see, the bankers are swimming
in red ink. There is now a huge risk of bank runs, but this threat is being
ignored by the mainstream media. Mark my words: There are bank runs
coming.
The fact is that the global lending system is essentially broken. Artificially
lowering interest rates won't fix it, when bankers are afraid to lend.
As I've previously noted, the bankers are afraid to lend because so much re-packaging
and reshuffling
of
debt has gone on in the past seven years that nobody knows who owes
what to whom,
and precisely what assets are underlying these exotic debt "packages." Meanwhile,
the bankers have learned that the big insurance firms like Fitch, Moody's
and
S&P were in on the swindle. We now know that they colluded with their mortgage
firm buddies to inflate assets and
deflate
risks in
a
masterpiece
of legerdemain that would make Enron's accountants proud.
The bottom line is the the entire world economy is is in deep, deep trouble.
Without financing, the Big Machine is grinding to a halt. The
next few years will probably see the economy plunge into a deep recession,
if not a full blown
depression. The current headlines are just a foreshadowing of the
real crisis to come. The MOAB will grow and grow, eventually bailing out far
more than just
banks. There will be brokerage houses, insurance firms, S&Ls,
credit unions,
Fannie
Mae, and Freddie
Mac, and possibly even muni bonds
and pension funds are all lined up, ready to reach into our wallets.
Once the government starts down the slippery slope of bailout-socialism schemes,
they will perforce spread to more and more institutions. And, as I've
previously noted, the public
coffers will be insufficient to
cover
the
inestimable
costs of the MOAB. So this mean that Uncle Sam will monetize the difference.
They'll just create the needed "dollars" out of thin air. This will
be outrageously inflationary, at all levels.
All of this is not going unnoticed by European and Asian bankers. They can
see that the dollar is set for mass inflation, so they are dumping dollars
as fast as they can. It is no wonder that the US
Dollar Index has plummeted.
When I last checked, it took $1.58 to buy one Euro! The foreign bankers aren't
stupid. Upcoming auctions of US Treasury paper will languish with very few
takers. I predict that in less than a year, the Treasury yields will have to
be pumped
up substantially to attract enough bidders to get the needed financing to cover the budget deficit.
We could see double digit rates--a
la the
late 1970s--in the not too distant future.
All of these macro-level implications might seem fairly abstract, so let me
put them in real world terms and take the risk of extrapolating on some trends
that I've observed: There will be
a recession, and it will be deep, and long-lasting. A recession will mean
that there will be some big corporate layoffs. Be
ready. There
will be bank runs and banking "holidays". Be ready. There
will be huge flows of "bailout" funds that will effectively nationalize
many industries. Be ready. There will probably be
a stock market collapse. Be
ready. There will be a further collapse in residential real estate
that will make the recent declines seem small, by comparison. Be
ready. Credit delinquencies and foreclosures (on car loans, home loans,
credit card bills, etc.) will dramatically increase. Be ready. There
will be a collapse of the commercial real estate market.
Be ready. Even though the credit available for IPOs and
private mergers and acquisitions has dried
up, there
will
be news
of
some
large and
seemingly
inexplicable acquisitions in the near future, all sanctioned by and
in some cases, underwritten by, and even funded by,
the Federal government. Be
ready. There will be shortages of key
commodities including fuel and food. Be
ready. Strapped for cash, America's highway, rail, water, sewer, telecommunications,
and power infrastructures will degenerate. Be ready. There
will be mass inflation of the US Dollar that will devalue any dollar denominated investments. Be
ready.
And now, to further extrapolate, (with a lower level of confidence): All of
the aforementioned economic dislocation and surging inflation might trigger
mass protests, riots, looting, and arson in the cities. Be ready. There
may then be massive out-migration from the cities. Be ready. Wars
have been known to follow close on the heels of depressions and financial
crises, so there may be
a war, possibly big enough to require another draft. Be ready.
As I've written many times before, the real lynchpin to worry about is the
power grid. If the grid goes down, then all bets are off. Be vigilant,
be well-stocked with a deep larder, and be self-sufficient. Store
extra for charity. If you can afford to, establish a survival
retreat in a lightly-populated
region, and if possible, live there year-round.
« Odds 'n Sods: |Main| Note from JWR: »
The Nationalization of Wall Street, by John Ing
Federal Reserve Chairman Ben Bernanke once said: “By increasing the number
of U.S. dollars in circulation, or even by credibly threatening to do so, the
U.S. government can also reduce the value of a dollar in terms of goods and
services, which is equivalent to raising the prices in dollars of those goods
and services. We conclude that, under a paper money system, a determined government
can always generate higher spending and hence positive inflation.”
The Fed slashed short-term interest rates six times in six months to 2.25 per
cent from 5.25 per cent despite the U.S. Department of Labor reporting that
consumer prices had jumped 4.3 per cent at an annual rate in January -- the
biggest rise in two years. As a result, the Fed's benchmark overnight lending
rate is about half the rate of inflation and real interest rates are now negative.
The last time interest rates were negative, housing exploded; the housing bubble
grew larger stoked by Wall Street's alchemy of mortgage backed securities that
are at the heart of the unfolding crisis.
Bernanke, a student of the Great Depression, believes that policymakers and
politicians then were too slow in countering the downturn, letting the resulting
panic sink the economy. Bernanke is right about the foot-dragging almost eight
decades ago. But by slashing interest rates and lending hundreds of billions
to Wall Street today, he risks creating yet another bubble. Already, Bernanke
has orchestrated the biggest bailout since the Great Depression in the wake
of the collapse of the mortgage industry. Even oil, gold and other commodities
retreated rapidly from record highs as traders flattened positions in a desperate
deleveraging process. The greatest fear is the fear of the unknown. The current
financial crisis is due to the lack of confidence and trust because of uncertainty
about the extent and breadth of the potential financial losses.
Counterparty Defaults
The credit market simply lacks credit. The subprime woes have spilled over
into dislocations in the overall credit markets – from municipal debt,
to corporate debt, to derivatives. Fears of a default by a counterparty is
threatening the global financial system and is believed to be one of the reasons
behind JP Morgan Chase’s bid for Bear Stearns. Banks are hoarding and
have stopped lending since their thin capital base (and solvency) is at risk
while their customers such as hedge funds, private equity and Corporate America
are forced to deleverage and dump the assets – like those owned by Bear
Stearns – in a no bid market. Lower rates will not unblock this logjam.
Unfortunately, lower interest rates are not the answer in warding off this
financial market crisis. The source of America’s problems is not interest
rates. The problem is simply too much debt and too much leverage. A great unwinding
is the answer.
Despite the dramatic drop in rates, there are still no signs of a pick-up in
the credit markets. Trust has evaporated. Banks are desperately trying to dump
billions of leveraged securities in an illiquid market. To date Wall Street
has taken only $200 billion of writedowns but has only raised about $100 billion,
leaving a shortfall. The Fed has extended loans to the investment banks, taking
on some of their illiquid paper as collateral. After failing to offload these
to a naive public, the game of "slicing and dicing" risk and dispersing
this risk is over. Now, that risk has come back to haunt them. And any sale
becomes a new benchmark for these dubious assets, leading to more price cuts
and, of course, further fire sales and bigger losses. The markets have yet
to reprice risk.
The Tip of the Iceberg
In the credit binge, the risk-rating agencies became more like principals rather
than advisors and helped spread the poor quality of debt by rating risk highly.
Today, AAA ratings mean nothing. With the closing of America's capital market,
the big Wall Street icons such as Citicorp, Merrill Lynch and Morgan Stanley
were forced to rebuild their balance sheets with the help of foreign buyers
such as foreign sovereign wealth funds from Singapore to Kuwait. America's
growing reliance on foreigners for funding its deficits has become its Achilles
heel. Already there is a controversy over the growth of sovereign wealth funds
(SWF), which manage between $2.5 trillion and $3 trillion, and to date more
than $100 billion has bailed out Wall Street's biggest investment banks. But
the United States can't accept this money without conditions. In the past,
the Asian or Middle Eastern buyers bought trophy buildings, recycling their
excess dollars back into the United States. As of last summer, foreigners owned
$ 6 trillion or 66 per cent of the entire $9 trillion U.S. federal debt load.
In order to keep their currencies competitive, the Asian central banks and
the petro powers of the Middle East ploughed their reserves into U.S. treasuries.
This is great while it lasts, but as Asia booms and Wall Street declines, the
big buyers of treasuries are growing disenchanted with some of their earlier
purchases. No one likes to lose money and the Fed must somehow maintain the
trust of foreigners. China's near-Bear experience and the promise of more taxpayer-assisted
bailouts will certainly cause foreigners to think twice about investing in
the United States. Wall Street's problems seem to be chronic and the Chinese
are looking at huge losses in their foray into Wall Street. It will get worse.
We believe there will be less Asian money available to finance America’s
trade deficits, which requires over $2 billion a day of outside funds.
Wall Street's Margin Call
The party is over on Wall Street. Carlyle Capital Corp., the publicly traded
investment fund affiliated with the powerful Carlyle Group, defaulted on $22
billion of mortgage securities on a flimsy capital base of less than $1 billion.
That is 22 times leverage, exceeding the leverage of bankrupt Long Term Capital
Management LLC. And venerable Bear Stearns was sold for about one third per
cent of its value the previous week. With almost $100 billion of liabilities
against book value of less than $12 billion, the investment bank was forced
to close its doors at liquidation value. Bear Stearns was the key prime financer/broker
for America's biggest hedge funds and its demise threatens a domino-like counterparty
chain reaction that could spread throughout Wall Street.
Bear’s key role in the web of financial players and counterparty risk
emerged as a major reason for the Fed’s bailout. Ironically, it was last
summer’s collapse of two Bear hedge funds that sparked the upheaval in
the markets. Bear simply was hoist upon its own petard. Most troubling is that
all investment banks are similarly highly leveraged. Bear Stearns borrowed
$30 for every $1 of capital. Yet Morgan Stanley has leverage of 32 to 1, Merrill
Lynch 28:1, Lehman Bros. 32:1 and Goldman Sachs 26:1. Worse still, not even
the Sheriff of Wall Street is around to witness the unraveling.
That Wall Street cannot fund itself has forced its major players to borrow
massive amounts of money from the Federal Reserve. The Fed has even taken to
accepting dubious assets as collateral to alleviate the financial stress in
the markets, which in essence makes the Fed "the garbage collector of
last resort." The Fed created a growing $200 billion lifeline available
to lend treasuries in exchange for unmarketable triple-A mortgage-backed securities.
Bear Stearns was the first recipient of this largesse and already the Fed is
on the hook for more than $30 billion of Bear's obligations that JP Morgan
does not want. This is not a crisis in liquidity but one of solvency.
In our view, the Fed’s solution is simply the beginning of the de
facto nationalization of Wall Street. What’s particularly worrisome is that
the Fed has started on the slippery slope of taking on the credit risk and
liabilities of Wall Street, similar to the Bank of England’s bailout
of Northern Rock, which ended in the nationalization of that sorry institution.
The Bank of England’s nationalization of Britain’s largest mortgage
company cost taxpayers more than $200 billion. The sobering message, however,
is that it’s far from over. Inevitably, politicians and regulators are
pressured to prevent more problems, but there is no point in closing the barn
door after the horse has left.
With the shadow of the Thirties looming, the Fed's orchestration of events
since August, from the decision to give Wall Street access to the discount
window, to the acceptance of Wall Street's inventory as collateral, to the
cronyism of the Plunge Protection Team (PPT)
to the $30 billion backstop of unwanted securities to the Bear Stearns' rescue,
to the relaxation of rules
governing quasi-government bodies such as money losing Fannie Mae and Freddie
Mac, all points to a role beyond that of a lender of last resort. In absorbing
the liabilities of Wall Street, the Fed is simply piling on debt on more debt.
No nation, even the United States, can borrow forever without facing up to
economic consequences. And no one is too big to fail.
Just Who Will Bail Out The Fed?
The U.S. dollar is among the sickest currencies in the world, giving up 50
per cent of its value since 2002 because the United States is deep in the financial
hole. The gap between spending and revenue grows ever wider. Today, foreigners
are not so eager to help. The problem is that America is a debtor country and
dependent on foreigners to finance its chronic deficits requiring an inflow
of $800 billion from foreign investors each year to finance the country's deficits.
Not surprisingly, America's creditors are losing confidence in the country's
solvency. Americans spend too much and save too little. America's trade deficit
is at seven percent of GDP and the budgetary deficit - excluding supplement
spending for the war - is estimated at $400 billion. The Congressional Budget
Office (CBO) estimated the costs of the wars in Iraq and Afghanistan so far
at $600 billion and Congress is to approve another $275 billion. The CBO estimates
the war might eventually cost between $1 trillion and $2 trillion by 2017.
Meantime, consumer spending accounts for more than 70 per cent of the U.S.
economy, but household debt is now at 140 per cent of consumers of after-tax
income. Debt on debt is not good.
There is no question that the bursting of the housing bubble and the cost of
the inevitable breakdown of the financial system has created huge dangers for
the global financial system. The vortex already has dragged down institutions
in the United Kingdom, Switzerland and New York. The United States is on a
path similar to Japan’s deflation in 1990s. While the savings and loan
bailout cost U.S. taxpayers “only” $200 billion, this time the
potential cost of the biggest bailout in history is estimated at more than
$1.2 trillion or enough to wipe out half of the global banking sector’s
capital. We believe that fears that U.S. taxpayers face even bigger bailouts
to save Wall Street will further undermine confidence in the dollar, boosting
gold’s allure. Gold is a good thing to have as a barometer of investor
anxiety.
Previous crises such as the stock market meltdown in October 1987, the S&L crisis in the early the 90s and the Asian contagion in 1997 or the bursting
of the tech bubble in 2000 had a common denominator – too much money
chasing too few markets. Warren Buffett warned that derivatives today are the
new ticking time bomb. Derivatives exploded to a whopping $516 trillion by
2007, according to the Bank of International Settlements. Yet it is not the
size of the market that concerns us. It is the growing risk of counterparty
failure since the capital position of the global banking system supporting
the $500 trillion plus of derivatives is estimated at only $2 trillion, insufficient
to handle even one per cent of potential losses.
Stagflation Now?
In January, U.S. farm prices had an annualized 7.4 percent increase, the biggest
yearly gain in more than 26 years. Beset by credit woes, the U.S. economy appears
to be entering a period of low growth and high inflation, just like the stagflation
of the 1970s. Rising food and energy prices are sopping up what is left of
consumers' discretionary income. The bad news is that central banks appear
to be providing the very fuel that will stoke inflation even further. The Fed's
dramatic lowering of interest rates has not helped domestic demand. Instead,
it has simply sped up the flood of capital away from the United States. There
is tight productive capacity from potash to steel to coal while the only surplus
seems to be in cars and condos. Of concern is that the rise in commodity prices
is not cyclical but structural, with huge supply shortages.
Inflation is the monetary flavour of the week and the month. Inflation is rising,
pushed upwards by high oil, food and commodity prices. Short-term government
yields are at lows only because of the Fed's panic to prop up Wall Street
and long rates are actually rising. More important, inflation is on the rise
in France, Japan and Saudi Arabia. Meantime, in China it is at the highest
level in a decade.
The Fed is worried more about the risk of a financial meltdown than rising
inflation. This time, central banks have not only flooded the system with money
but also loosened financial regulations for highly leveraged mortgage giants
Freddie Mac and Fannie Mae. Prices, of course, are rising because there is
too much money being created. The root cause of inflation is money creation.
Sadly, for the central banks and the financial markets, inflation is the obvious
solution to U.S. indebtedness, allowing money to depreciate even faster. For
creditors, this is not a solution.
The potent combination of a slowdown, the cost of Wall Street's bailouts and
skyrocketing commodities has investors justifiably worried about a repeat of
1970s stagflation. In the 1970s, two oil embargos doubled the price of oil
to $50 a barrel. The oil shocks were accompanied by a surge in 'soft' commodities
after the anchovy fishery off the coast of Peru almost disappeared. The need
to replace the anchovies caused the Japanese to switch to soybeans, which caused
a spike in prices. Indeed, the jump in commodities crippled the global economy.
Costs went up and wages were raised to compensate for increased prices in a
classic case of cost-push inflation. In 1980, the U.S. inflation rate reached
13 per cent and wage and price controls were imposed when inflation hit 4 percent,
the identical level today. Gold rose from $35 an ounce to more than $850. Interest
rates soared to double digits when the government realized that it had to fight
inflation, Fed Chairman Paul Volcker arrived on the scene, eventually snuffing
out inflation by sending interest rates to the sky, which ended in a decade
of stagflation.
Today, we have similar ingredients in place, now only monetary policy is much
easier. The parallels are most ominous. Recently, M2 money supply increased
a whopping $35 billion a week as the Fed provided both expansive monetary and
fiscal stimulus. With inflation picking up, investors should know that the
current monetary inflation is not just an increase in the monetary base. It
is the leverage impact of this monetary inflation, which creates bubbles. As
in the 1970s, food prices have now risen by more than 75 percent from the lows
of 2000. Meantime, China's growth and poor weather has intensified demand,
cutting into supplies at the same time. Ironically, the spike in the oil price
has encouraged the conversion of grain to bio-fuels, helping to trigger a dramatic
increase in food prices. This is controversial because Americans are actually
subsidizing crops for fuel instead of for food; making it seem more important
to drive an SUV in the United States than it is to eat.
Moreover, the news could be even worse than we think because the government's
inflation statistics are skewed. For example, the 'core" inflation rate excludes
energy and food prices because of a desire to 'even out' spikes. Thus, we
are told inflation rose only 2.7 per cent on an annualized basis in February.
The elimination of food and energy has relegated inflation to the back pages,
making historic rate comparisons meaningless. The bottom line, however, is
that energy and food prices are increasing and the core rate is on the move.
The CPI rate is actually 4.3 per cent, the same level that spurred wage and
price controls on Aug. 15, 1971.
When The Swamp Drains, The Ugly Frogs Are Exposed
For us, there is a sense of déjà vu because the
Bernanke reflation is similar to Alan Greenspan keeping interest rates too
low for too long causing
the housing bubble and, ultimately, the credit bubble. Now both have burst
and we have Bernanke pumping yet again. To avoid a systemic banking crisis,
the Fed has opened the monetary flood gates. Investors are concerned about
credit conditions. If Wall Street firms continue to lose money at current rates,
they will find themselves below capital requirements in less than six months.
Bernanke and Wall Street appear to think that the solution is to reduce interest
rates. And yet by relaxing borrowing requirements, they are in fact leveraging
the system even more.
America's solution is to devalue its currency further and monetize this mountain
of debt by inflating its way out of the problems, just as it did in the 1970s.
And the emphasis on more bailouts has prompted investors to seek refuge in
'hard assets' such as gold and oil as a hedge against future inflation and
currency depreciation. That is why gold hit $1,000 an ounce.
The U.S. dollar has fallen to a new low against the euro while gold recorded
new highs. Further rate cuts by the Fed have the effect 'pushing on a string'
and to date has not ended the downward spiral in housing. The Fed has cut rates
by 300 basis points but long-term yields have actually gone up, not down, further
reflecting investors' concern that inflation is the next big problem. Mortgage
rates have actually gone up. After the subprime mess came the CDO mess.
Then the investment banks fell and now the hedge funds are falling. All are
subject
to capital constraints, and in the deleveraging process, Wall Street's inadequacies
are surfacing just as a draining swamp exposes its ugliest frogs.
The Bottom Line?
We believe the piling on of more debt to rescue the financial system and the
U.S. economy is unlikely to work in the face of a surge in inflation. Nor will
driving interest rates to the floor work since it will debase the dollar further.
Americans have become too dependent on foreigners, who have become increasingly
uncomfortable with their enormous dollar holdings.
Reflation has created a new commodity bubble. The other driver is the emergence
of China and India, coupled with supply constraints caused by sustained underinvestment.
The aging infrastructure of the commodities producers has not kept pace with
the new demand. Thus, there is a need for the market to return to balance.
Unfortunately, greater money supply will neither cause a fall in demand nor
significant increases in supply, so prices are expected to remain at elevated
levels for some time to come. In mining, for example, it will take at least
five years before any new discoveries come on stream. In addition, power shortages
in South Africa have led the mining industry to both curtail expansion and
current production. Consequently, there will continue to be waves of consolidation
as the bigger mining companies look to economies of scale. Gold is a good commodity
to own.
What Do We Need?
Needed is the recapitalization and restructuring of Wall Street, which is bloated
from a decade of financial innovation. Needed is the repricing of risk. Needed
is a new way for the rating agencies to rate risk, in that they cannot be principals
but truly arms-length advisors. Needed is a restoration of faith in the U.S.
dollar, which requires a fundamental change of policy in the current and next
U.S. administrations. Needed is a boost in the U.S. savings rate, which now
sits at zero. Needed is a reduction in the twin U.S. deficits. Needed is more
candour from officials and policymakers. Needed is a deleveraging process.
Needed is for the Fed to allow the investment banks to take their losses, support
those in need of liquidity, but not assume those losses. While prices will
undoubtedly go lower, investors are really looking at a repricing of risk.
The markdowns are needed as a discipline. Needed is a change in the accounting
rules to reflect mark-to-market losses and the impact on the investment banks'
capital. Needed is a reversal of the accounting rules that allowed the banks
to leverage up and instead put an emphasis on capital building rather than
leverage. Needed are the changes in the impact of securitization that converted
illiquid debt into new instruments. Needed is a change in accounting rules
for off-balance sheet vehicles.
The United States must also address its continuing problem of too much consumption
and its reliance on debt. America’s credit woes come at a time when the
rest of world is no longer willing to finance its current account deficits.
After a quarter century of wealth creation, Americans have no choice but to
work harder, tighten their belts, retire later and save more.
The economic downturn has paved the way for a new sheriff in town. Among the
Democrats, one of them is an inspiring orator but both offer no solutions other
than hope. Both want a government to spend more, abrogate trade agreements,
bail out its institutions and use more government intervention. For a time,
Americans enjoyed a free ride on the stock market and housing market. Now they
need a leader to solve the country’s problems in new ways, not old ones.
And Finally, Needed is a Role For Gold
Gold cannot be created like fiat currencies or be printed like dollars. At
one time, the pound sterling was the world’s reserve currency. It, too,
failed. The monetary order is changing again and the dollar as a reserve currency
is losing value and influence. In our view, a basket based on gold’s
value will go a long way to restore needed liquidity in the markets. Gold is
simply the new old currency. Gold hit $1,000 an ounce because the world has
been losing confidence in the dollars issued by the Fed.
Gold reached new highs amid tight supply/demand fundamentals, U.S. dollar weakness,
investment buying and, equally important, the lack of faith in dollar assets.
Gold has doubled in euro and yen terms since 2005. Investor demand is at a
record, led by China, which has consumed more gold than India and United States
combined. Meantime, supplies have been constrained as South Africa, the second
largest producer, has curtailed its production due to a lack of power. China
holds only about 600 tons or less than one per cent of its total reserves in
gold. With reserves of $1.7 trillion, China will inevitably diversify part
of those holdings into gold.
But most important, gold is a global currency that will become the “go
to” asset class as the foundation for the global currency system falters
due to the protracted credit crisis. Gold will go higher as long as America’s
solution to its debt crisis is to pile more debt upon debt, further debasing
the dollar. America will, in effect, default on its obligations, either through
currency debasement or inflation. Gold has no counterparty risk and no risk
of default. This bull market has just begun. We see gold more than doubling
to $2,500 an ounce. Gold is the ultimate “currency” and the inevitable
store of value and medium of exchange. When George W. Bush was sworn in as
president, gold was at $265 an ounce. This month, gold traded at $1,030 an
ounce. In essence, the U.S. dollar has been devalued by more than 100 per cent
in almost eight years of his presidency. Will the next president do any better?
JWR Adds: For the second half of this article, including
John Ing's specific investing recommendations, see
Gold-Eagle.com
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Meet The Economic Collapse Family, by Will in Wyoming
In recent months, as he described America's incipient economic peril, Jim
Rawles has made references in SurvivalBlog.com to "The Mother
of All Bailouts." To
illustrate the extent of the disaster that is awaiting us--I'd
like to introduce you to the entire Economic Collapse Family's cast of characters.
This family is so large that I'll use numerous
analogies and, with apologies, some
mixed
metaphors.
To include the full Dramatis Personae I'll have to borrow
from both The
Addams Family, and The
Munsters. My apologies to anyone that
never saw these two TV shows from the 1960s. This will seem like gibberish to
you.
And
if
you
hate allegorical pieces, just skip reading this. - Will in Wyoming
You are Pugsley Addams. (The American citizenry.)
You are a content, pampered, over-fed child. You have indulging but perverse
parents.
They let
you eat all
the junk
food you'd like (consumerism),
and they let you watch as much television (the mass
media)
as you'd
like,
to
keep
you
occupied.
Their only demand is that you "do your chores" (pay taxes.)
You live in a strange sprawling
old
mansion
with extensive grounds and horse stables
(America).
The mansion doesn't look like it has been painted or repaired in decades.
(Crumbling infrastructure.) You are young and naive, so you don't
really understand all that is going on around
you.
But
you have
had
a
vaguely
uneasy
feeling
for
as long
as you
can remember. You certainly have a lot of strange relatives.
Your father, Gomez Addams, is a banker. (The Federal
Reserve.) He
always wears a dark suits and he keeps a pocketful of cigars (call loans)
handy. Oddly, they are lit, even as he pulls them out of his pocket. On his
time off, he likes to play with an elaborate
electric
toy train set (the
economy)
with
you.
It
is
one
of those
father and son bonding opportunities. He is always at the controls of the the
train. (The train set was very expensive, so you can only watch.) Whenever
he sees trouble ahead, instead of hitting the brakes,
he takes
a
puff
on his
big cigar,
and opens
the throttle (liquidity) wide open. After all, he has always enjoyed
seeing a nice train derailment. Gomez is madly in love with his wife. They
are inseparable. (The Federal Reserve's monopolistic cartel relationship
with the US government.)
Your mother, Morticia Addams, is also known
as the Mother of All Bailouts. She (the US government)
is supported by her husband Gomez, the banker. She makes any problems go away
by throwing
money at them.
Oddly,
she
always wears black
(debt),
but
it matches her long black hair (the budget deficit). Morticia has
a timeless beauty, but you wonder what potions she takes to maintain that beauty.
Morticia's
hobby
is growing carnivorous plants (stocks and stock mutual funds) that
have insatiable appetites. She has an unlimited supply of cash because of her
brother, Uncle
Fester.
Uncle Fester (the US Treasury) is an inventor
of sorts, always experimenting with new things up in the attic. Years ago has
invented a nifty high speed
printing press, on
which
he can produce as many $100 bills as he
wants. He also has a spare set of plates to produce $100,000 bills.
Lurch. He is the lugubrious house butler (the police).
Lurch is seven feet tall and very strong. He obeys the orders of your mother
and father without
question. Whenever there
are any
difficulties,
you
mother
and father can ring a bell, and Lurch comes immediately to solve the problem.
Whenever he enters the room, he asks in a very deep voice "You rang?"
Cousin Itt. (Social unrest.) Your mom and dad have
always given Lurch instructions to keep Cousin Itt locked up in the basement.
They've
warned
Lurch that whenever "Itt"
gets loose,
he starts
breaking
things. But luckily "Itt" rarely gets out, and for not very long.
Without fail, Lurch catches Cousin Itt, and locks him up again. But a lot of
your mom's fine
china
gets broken each time. She gets angry, but she just takes some of the money
from Uncle Fester's printing press and buys new dishes from the store. You've
notice that
the new dishes are all marked "Made in China."
Thing. Even more scary than Cousin Itt is the disembodied
hand creature called
"Thing". (The US military, warfare.) Thing is powerful,
and also breaks
some china, but thankfully that is usually in other people's houses.
Some of your cousins are The Munsters. They live
in a big house of their own (much older than your family's),
that is called Europe. They drive a very
stylish car. (The Munsters have a great sense of design and style.) Their daughter, Marilyn,
is a real babe. She could get work as a model at a Paris fashion show. Her
little brother is your cousin, Eddie
Munster.
He is cool and likes a lot of the same games and TV shows that you do. Their Grandpa (the
European Central Bank) is a strange old man that is sort of like Uncle Fester.
(He is also in inventor.)
Your
mom once said
that
the
Addams
Family and the
Munsters are very closely
related.
She mentioned
something
about
some cousins marrying each other, but never gave you the details. The Munsters
always seem to be getting in fights with their neighbors, so occasionally
your family has
to send Thing over to the Munster's house and restore order.
Thankfully, circumstances
are different in your neighborhood. For as long as you can remember, the
Addams Family has
had
peaceful
relations
with all of your nearby neighbors
(Mexico and
Canada), mainly because they are all afraid of your dad's creepy mansion
and all of his money. Starting about 30 years ago, one of your neighbors
sent a maid named Maria (uncontrolled American immigration)
to help out with
the chores at the Addams mansion. You realize that Maria has been having
a lot of babies up in her room, but they are quiet, so nobody worries about
them.
The Latest Episode:
Your dad dashes into the TV Room. You have been distracted
there (with the newer, big screen television with all the extra channels),
so you didn't
notice
the changes in your dad's toy train set up. Your dad excitedly tells you
"Come to the parlor,
son, to
see the upgrades that I've made to the train!" Among
other things,
you see that he has switched from the old low-current transformer (precious
metals backed currency) to a new, high-current transformer (fiat currency.)
This new
train
set is
swell.
It
isn't
just
an old
steam
locomotive.
This one
is a shiny streamlined Zephyr. It is very fast. (The post-Greenspan low
interest rate economic boom.) Uncle Fester helped design and build it. Instead of just
an old fashioned derailment, your
dad
says that
he
has a dramatic ending
planned, using the "The D Word." He calls them derivatives,
but you recognizes those bundles: They are bundled sticks of dynamite.
"Watch this, son!" The toy train goes speeding down the track, faster
and faster. It is barely staying on the tracks. Your mother and Uncles Fester
clap their hands in de
