Showing posts with label economic collapse. Show all posts
Showing posts with label economic collapse. Show all posts

Monday, January 13, 2014

Crystal Ball 2014 Edition

This is the time of year where I talk about what I see coming down the pike. First I will say that I do not have a crystal ball, yadda yadda yadda; then I will immediately follow that with some predictions. Of course it is worth noting that I am not a doctor, lawyer or financial advisory and I didn't even stay at a Holiday Inn last night. Basically my thoughts are my own so if you choose to follow them all of the risk is on you; the only good part is that I don't take 5% off the top and a third of your growth plus monthly fees.

Indicators will be polarized as to whether our economy is recovering. Some indicators will keep growing because eventually folks will come out of their shells; ex people will buy homes, folks move and families reach the time where buying a house is right for them regardless of the market. The biggest single divide between them will be how easily a number can be inflated or manipulated. Example the stock market will probably do well but the number of people out of the work force will increase and the number in crap jobs (low wage, permanent part time, no bennies high turnover) will increase even more.

I fear that rule of law will continue to diminish on many fronts. Example if a young white thug punches an old black person for no reason it is a hate crime but if a poor disadvantaged urban youth does the exact same thing to a cracker it's somehow not a hate crime, barely a misdemeanor.

If a liberal breaks a firearms law it will not be prosecuted but if a conservative does they will be prosecuted to the fullest extent of the law.

Crime will generally rise but it will be kept quiet in the media and obscured in official reports. I see larger organized robberies including the home invasion type to increase as more people, some of whom have a military background, are unable to gain easy legitimate income and may even be pushed to desperate measures.

Increasingly economic winners and losers will not be decided by good business sense or keen competition but government connections deciding winners and losers.

Generally your job prospects are good in government and get better at higher levels (.gov, .state, .county, .city) with the exception of the military.

We are facing a downsizing not seen since the Clinton era. Lots of soldiers and NCO's as well as company and field grade officers, myself  and American Mercenary included, face the risk of being involuntarily separated. They may cut up to 20% of these officers, of that population probably 6% have derogatory stuff (disciplinary, really bad evaluations, etc) and will be easy pickings but the rest are going to be fully qualified Officers who are probably combat veterans. I'm not too worried largely because there isn't a huge point in worrying about it. I'll get my records strait and if they say I'm fired well I'll be sad then move along n do something else. It would be a weird/ rough/ poor year or so but we'll figure it out. It helps that we've made choices (college, saving, low debt load) that would help if need be.

I think inflation is going to keep eating away at our real purchasing power. Say we call real inflation 6% (to choose a number) well if you let that roll for 3-4 years it hurts a lot. Eventually in the next few years, or maybe sooner, it will reach a point that the government can't keep the proverbial car between the lines on the road. The best case I see is the late 70's and early 80's stagflation, the worst is pretty bad.

The whole health care mess is going to continue. I suspect the more we see of this law the worse it will be for average Americans. As it becomes clear the middle class, specifically it's younger members are subsidizing the working and not working poor to benefit the medical insurance industry many normal people are not going to be happy. This could be sadly entertaining to watch.

I don't think our "representatives" are going to get any better at working together to solve actual problems.

What could we pull from these predictions in terms of actionable ideas? (Again noting I'm just a guy with a blog, don't bet the farm on something I think.)

It would be prudent to get yourself medically squared away, especially if you currently have decent insurance. Get that surgery you've been putting off, get that knee fixed, fix that crown that is about to go, get lasic or family planning type surgeries if you want them. Simply put I do not think health care is going to get more accessible, cheaper or better in the near future so it would be prudent to catch up on whatever you need now.

Along those lines if you have been planning a major purchase such as a home or some land that will require credit I would look hard at getting that done. Rates are climbing and in the mid term (say 3-5 years) I can't see them getting better.

Replacing things large and small that are on the verge of going out while you still have an income so it is a minor inconvenience vs a major problem would be prudent. It could be the daily driver that you know is about to go out or a pair of boots from the 80's held together with shoe glue. Right now if these things break replacing them is unpleasant to some degree, on the high end you might have to put off a vacation. On the other hand if in 9 months you've been out of work for 6 months and are barely keeping a roof over your head replacement could be impossible.

Inflation both hidden (smaller servings, 10 cans in a case instead of 12, etc) and not so hidden will keep pushing food prices up. Stuff like coffee, rice and wheat , canned food or long term emergency kits are simply not going to get cheaper.You might want to reread or read The Alpha Strategy, the PDF is all over the net, for some ideas here.

If there is gun stuff on your annual list I would recommend pushing it towards the front. When we get close to the mid term elections the situation could get ugly. Maybe you want a new carry gun or Momma needs a 20 gauge, whatever. Ammo isn't exactly where I'd love it to be but with 7.62x39 in the $230/1k range and good 62 grain 5.56 in the low 40 (42) cent range it's probably time to weigh the chance of prices dropping another 5-10% with the risk of things going nuts. Personally I've been buying 7.62x39 for a couple months and am going to get some 5.56 soon. Prices on shotgun and hunting rifle (30-30, 30'06, etc ammo have stayed more or less flat so that is a no brainer to buy now. Anyway I would look to be done buying guns, ammo and mags for the year around the middle of summer at the latest.

What to do with money these days is a fun question. If you are smart you save, period. The old saying that if you always save 10% you'll never be broke has a lot of merit. Personally I think the stock market is inflated, dependent on continual federal government crap bond purchases and generally a bad place to put your money. Savings accounts are paying interest that is effectively (when you count inflation) negative. Sure you need at least some of the Emergency Fund in the bank in case you get munsoned in the Philadelphia Airport for 4 days or drop the transmission from the family hauler 2 states away but beyond that it's a bad place to park cash. So what to do with it. Here are a combination of my thoughts and things we are actually doing.

Pay down debt. The conventional wisdom is that paying down debt in an inflationary situation is foolish because you can pay it off later with cheaper dollars. The problems with that idea are 1) it presumes you are making more money to keep up with inflation. If paying off the debt is unpleasant now imagine when the grocery and fuel bills double but you make the same amount? Also 2) Looking at ways to make money or at least save money if you put cash towards a loan with a 5% interest rate you are saving and in effect making back 5%. Also 3) the pay it back in cheaper dollars plan presumes you keep your job/ income. High inflation makes for ruinous economic circumstances. Even if the $1,000 mortgage paying is worth $600 in real dollars it's hard to pay when you are unemployed.

For goodness sakes pay off any adjustable rate debts. Look, rates are going to rise, I cannot say when but they will. To people whose vehicles or homes are dependent on paying a loan whose interest rate will likely increase significantly it will be ruinous.  If you listen to nothing else I say get those debts paid off or turn them into fixed rate loans. The only exception I see is a loan/ card/ line of credit that is at an advantageous rate WHICH YOU CAN PAY OFF AT THE END OF THIS MONTH OR ANY GIVEN ONE IF NEEDED.

-Buy food and ammo. Get all you may possibly need (obviously considering the shelf life of food) and maybe some more. During firearmagedon a guy with a case of 5.56 and a case of 9mm set aside to sell could have done really well for himself. In coming potential events a guy with a couple hundred new in the package PMAGs could double, triple or even quadrupole his money.

-Put money into yourself. Take a class to learn to use a combat rifle by a pro like Max Velocity, get a certification to prove to a stranger you know how to do something like weld, work on engines or whatever. Get a degree or a second degree to improve your competitiveness at the current job or get a better one. Remember nobody can take away what is in your head.

-Put money into things that will let you earn money/ barter. If you are a welder get a genny and a setup to do small jobs on your own. If you are a mechanic buy tools and spare parts. If you are a carpenter buy tools, nails, hardware and lumber. If you can reload any type of ammo stock deep in powder, primers, lead and all manner of casings. If you can garden stock seeds deep for your own use and trade.

-If you have big money there are some bargains out there in real estate. A person could buy a couple duplexes or 3 small houses that are in reasonable shape in decent neighborhoods and get a modest reliable income out of them. When said person eventually sold those homes they would also benefit from appreciation of the property.

Along the big money lines I would look at relatively low upkeep businesses: trailer parks, storage facilities and stuff like that with a proven track record of earning money. In this situation do consider the necessity to have the time to do it yourself or cost to have a competent manager in place. If you don't have managerial desires consider the possibility of buying a share of an existing business. Say Bob's storage is a productive profit earning business but they can use a cash influx to buy 5 acres next door that are for sale and expand, you put up the cash and Bob gives you 25% of the business, win/ win.

-Put money into things that will improve your situation. Build a chicken coup and get chickens, put up a fence you need to use part of your land that has been fallow, buy a milk cow, build some raised beds to grow a bigger garden, put in a good road on the back 40, etc. You get the idea.

-Purchase bargains on useful items. If Joe 6 pack is going to sell Daddy's .357 mag, his mall ninja AR, a good generator or a toy 4 wheel drive truck that screams Bug Out Vehicle fast to make bills somebody is going to show up on short notice with cash offering 70 cents on the dollar, it might as well be you. Either you can flip the stuff to make a quick buck (since you can wait 30 days for a buyer willing to pay 95 cents on the dollar) or you use the stuff for awhile and keep it to sell on a rainy broke day.

-Put money into things you are going to need at some point. Maybe your kids will need AR's to go play with Dad on the weekends or sooner or later your farm/ business is going to grow and you will need a larger generator, another vehicle, a piece of equipment or something. Maybe you've been putting off buying a .338 Lapua for awhile. I don't know what applies to your situation. The point is to look towards future purchases and make them with today's available dollars ideally hiding them from inflation and thus saving money over the future cost of said item(s).

Anyway those are my thoughts on that. What do you think is coming in 2014?

Tuesday, December 10, 2013

Bank Depositors Please Read This

If you do not wish to read the entire article .. just read the info directly below... and you will understand that the US is way past bankrupt... there were more banks during the 30's depression than there are now.....
JPMorgan Chase - zombie bank
Total Assets: $1,947,794,000,000 (nearly 1.95 trillion dollars)
Total Exposure To Derivatives: $71,289,673,000,000 (more than 71 trillion dollars)
Citibank - zombie bank
Total Assets: $1,319,359,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $60,398,289,000,000 (more than 60 trillion dollars)
Bank Of America - zombie bank
Total Assets: $1,429,737,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $42,670,269,000,000 (more than 42 trillion dollars)
Goldman Sachs - zombie bank
Total Assets: $113,064,000,000 (just a shade over 113 billion dollars – yes, you read that correctly)
Total Exposure To Derivatives: $43,135,021,000,000 (more than 43 trillion dollars)

Too Big To Fail Banks Are Taking Over As Number Of U.S. Banks Falls To All-Time Record Low

By Michael Snyder, on December 3rd, 2013
 
     
Lower East Manhattan - Photo by Eric KilbyThe too big to fail banks have a larger share of the U.S. banking industry than they have ever had before.  So if having banks that were too big to fail was a "problem" back in 2008, what is it today?  As you will read about below, the total number of banks in the United States has fallen to a brand new all-time record low and that means that the health of the too big to fail banks is now more critical to our economy than ever.  In 1985, there were more than 18,000 banks in the United States.  Today, there are only 6,891 left, and that number continues to drop every single year.  That means that more than 10,000 U.S. banks have gone out of existence since 1985.  Meanwhile, the too big to fail banks just keep on getting even bigger.  In fact, the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years.  If even one of those banks collapses, it would be absolutely crippling to the U.S. economy.  If several of them were to collapse at the same time, it could potentially plunge us into an economic depression unlike anything that this nation has ever seen before.
Incredibly, there were actually more banks in existence back during the days of the Great Depression than there is today.  According to the Wall Street Journal, the federal government has been keeping track of the number of banks since 1934 and this year is the very first time that the number has fallen below 7,000...
The number of federally insured institutions nationwide shrank to 6,891 in the third quarter after this summer falling below 7,000 for the first time since federal regulators began keeping track in 1934, according to the Federal Deposit Insurance Corp.
And the number of active bank branches all across America is falling too.  In fact, according to the FDIC the total number of bank branches in the United States fell by 3.2 percent between the end of 2009 and June 30th of this year.
Unfortunately, the closing of bank branches appears to be accelerating.  The number of bank branches in the U.S. declined by 390 during the third quarter of 2013 alone, and it is being projected that the number of bank branches in the U.S. could fall by as much as 40 percent over the next decade.
Can you guess where most of the bank branches are being closed?
If you guessed "poor neighborhoods" you would be correct.
According to Bloomberg, an astounding 93 percent of all bank branch closings since late 2008 have been in neighborhoods where incomes are below the national median household income...
Banks have shut 1,826 branches since late 2008, and 93 percent of closings were in postal codes where the household income is below the national median, according to census and federal banking data compiled by Bloomberg.
It turns out that opening up checking accounts and running ATM machines for poor people just isn't that profitable.  The executives at these big banks are very open about the fact that they "love affluent customers", and there is never a shortage of bank branches in wealthy neighborhoods.  But in many poor neighborhoods it is a very different story...
About 10 million U.S. households lack bank accounts, according to a study released in September by the Federal Deposit Insurance Corp. An additional 24 million are “underbanked,” using check-cashing services and other storefront businesses for financial transactions. The Bronx in New York City is the nation’s second most underbanked large county—behind Hidalgo County in Texas—with 48 percent of households either not having an account or relying on alternative financial providers, according to a report by the Corporation for Enterprise Development, an advocacy organization for lower-​income Americans.
And if you are waiting for a whole bunch of new banks to start up to serve these poor neighborhoods, you can just forget about it.  Because of a whole host of new rules and regulations that have been put on the backs of small banks over the past several years, it has become nearly impossible to start up a new bank in the United States.  In fact, only one new bank has been started in the United States in the last three years.
So the number of banks is going to continue to decline.  1,400 smaller banks have quietly disappeared from the U.S. banking industry over the past five years alone.  We are witnessing a consolidation of the banking industry in America that is absolutely unprecedented.
Just consider the following statistics.  These numbers come from a recent CNN article...
-The assets of the six largest banks in the United States have grown by 37 percent over the past five years.
-The U.S. banking system has 14.4 trillion dollars in total assets.  The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.
-Approximately 1,400 smaller banks have disappeared over the past five years.
-JPMorgan Chase is roughly the size of the entire British economy.
-The four largest banks have more than a million employees combined.
-The five largest banks account for 42 percent of all loans in the United States.
-Bank of America accounts for about a third of all business loans all by itself.
-Wells Fargo accounts for about one quarter of all mortgage loans all by itself.
-About 12 percent of all cash in the United States is held in the vaults of JPMorgan Chase.
As you can see, without those banks we do not have a financial system.
Our entire economy is based on debt, and if those banks were to disappear the flow of credit would dry up almost completely.  Without those banks, we would rapidly enter an economic depression unlike anything that the United States has seen before.
It is kind of like a patient that has such an advanced case of cancer that if you try to kill the cancer you will inevitably also kill the patient.  That is essentially what our relationship with these big banks is like at this point.
Unfortunately, since the last financial crisis the too big to fail banks have become even more reckless.  Right now, four of the too big to fail banks each have total exposure to derivatives that is well in excess of 40 TRILLION dollars.
Keep in mind that U.S. GDP for the entire year of 2012 was just 15.7 trillion dollars and the U.S. national debt is just 17 trillion dollars.
So when you are talking about four banks that each have more than 40 trillion dollars of exposure to derivatives you are talking about an amount of money that is almost incomprehensible.
Posted below are the figures for the four banks that I am talking about.  I have written about this in the past, but in this article I have included the very latest updated numbers from the U.S. government.  I think that you will agree that these numbers are absolutely staggering…
JPMorgan Chase
Total Assets: $1,947,794,000,000 (nearly 1.95 trillion dollars)
Total Exposure To Derivatives: $71,289,673,000,000 (more than 71 trillion dollars)
Citibank
Total Assets: $1,319,359,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $60,398,289,000,000 (more than 60 trillion dollars)
Bank Of America
Total Assets: $1,429,737,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $42,670,269,000,000 (more than 42 trillion dollars)
Goldman Sachs
Total Assets: $113,064,000,000 (just a shade over 113 billion dollars – yes, you read that correctly)
Total Exposure To Derivatives: $43,135,021,000,000 (more than 43 trillion dollars)
Please don't just gloss over those huge numbers.
Let them sink in for a moment.
Goldman Sachs has total assets worth approximately 113 billion dollars (billion with a little "b"), but they have more than 43 TRILLON dollars of total exposure to derivatives.
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 381 times greater than their total assets.
Most Americans do not understand that Wall Street has been transformed into the largest casino in the history of the world.  The big banks are being incredibly reckless with our money, and if they fail it will bring down the entire economy.
The biggest chunk of these derivatives contracts that Wall Street banks are gambling on is made up of interest rate derivatives.  According to the Bank for International Settlements, the global financial system has a total of 441 TRILLION dollars worth of exposure to interest rate derivatives.
When that Ponzi scheme finally comes crumbling down, there won't be enough money on the entire planet to fix it.
We had our warning back in 2008.
The too big to fail banks were in the headlines every single day and our politicians promised to fix the problem.
But instead of fixing it, the too big to fail banks are now 37 percent larger and our economy is more dependent on them than ever before.
And in their endless greed for even larger paychecks, they have become insanely reckless with all of our money.
Mark my words - there is going to be a derivatives crisis.
When it happens, we are going to see some of these too big to fail banks actually fail.
At that point, there will be absolutely no hope for the U.S. economy.
We willingly allowed the too big to fail banks to become the core of our economic system, and now we are all going to pay the price.

Thursday, July 18, 2013

Sunday, April 7, 2013

Cyprus Preps

Ferfal did a great post on the topic. Seeing as he has actually lived through an economic collapse it's worth listening to him. It goes something like this:
-Basic Preps: Food, medical, guns, ammo, etc
-Cash in hand
-Silver and Gold
-A safe or two
-Offshore banking. I'm not so sure on this one but if you have no debt, plenty of preps and PM's as well as a decent paid off home/ retreat and still have enough extra money to merit the hassle look into it. Here is the video if you have 20 minutes to spare.
I would add that you should take care of medical/ dental stuff that you've been putting off as well as vehicle repairs, new tires, etc all. Get stuff you know is going to have to happen done now while the cost is still sane.

As Thomas Sowell noted this is arguably happening now in the US via inflation. It took me a long time to really understand inflation. Reading The Alpha Strategy and "Economics in One Lesson" let me understand inflation for the sinister regressive tax that it truly is.

We could debate how bad things are going to get in the US or the probability of certain results. The bottom line is that something less than optimal will certainly happen and something bad is probably going to happen. Start doing something about it while you still can. 


Saturday, March 30, 2013

Cyprus, Herbs and Taters, Smith and Wesson M&P and Ramlings

That whole mess in Cyprus was pretty interesting. The model that government will screw citizens to protect banks is proven yet again. At this point banks are playing like Nicki from Casino. Gamble and collect if they win; should they lose they do not pay. If I was a Cyprusian, or whatever they call themselves, who happened to of had 100k Euro's in the bank I would be a lot poorer and very angry right now. Like buy a hoodie and a bandana then start burning stuff down angry.

The jilt of the situation is that bank deposits were stolen levied in a one time tax to help support the EU bail out of the countries banking industry. Cyprus is unique as it is a popular place for rich to moderately well off sometimes crooked Russians to stash money. Needless to say Russians are not a big fan of this. Maybe President Putin who is a real life bond villain and the most awesome man in the world will kill them all. I'm not sure.

This brings up a couple interesting points. As TEOTWAWKI Blog noted it is important to have some cash on hand. A month's cash expenses (food, fuel, medicine, incidentals) is a good reasonable goal. More would not hurt if your overall situation merits it. Given the effectively negative interest rates these days if you have more lying around one could go to 2-3 months cash expenses.

Claire Wolfe brought up a good point about considering how much cash you have in the bank. This is something that concerns us. We have a lot of money, by percentage and considering our life situation in the bank. Over the next several months we are going to do something about that.

Some dude in Tuscon is looking at handing out shotguns to low income women in high crime areas. I cannot see how it could make the war zone that is low socioeconomic status Tuscon any worse. Heck it might just make things better.

Today for dinner I heated up some frozen meatloaf MIL made when she was here. Did up some crashed potatoes to go with them. I liked that Greek oregano and green onions from the gargen were part of it. That is pretty cool. It looks like one of the strawberries died. The other strawberry plant I think is going to be fine.

So I've been hanging around in gun shops to buy ammo recently the opportunity to handle a couple of guns has come up. I really liked the ergonomics of the Smith and Wesson M&P. That gun feels great in my hand. It would be a very hard sell to get me to purchase a 9mm that isn't a Gen 3 Glock but I like the M&P a lot. Should I decide to buy a .45 it might be an M&P.

Also handled a Rossi Ranch Hand. That thing might just be a stupider gun than the damn Judge. A lever action pistol caliber gun you need to hands to reload, seriously people. If it's compatible with a bigger stock you could (of course pay $200 and fill out some forms first) make a Cowboy SBR I guess. Seriously folks just get a revolver that beats this piece of junk in about every possible contest.

Been doing a lot of reading about the battle of Grozny (the first one in late 94 to early 95) for some work stuff. Will probably talk more about that later. There are definitely some lessons to be learned and it is pretty interesting.

Well I'm bored of writing now so it's time to end this.

Hope you all are having a great weekend.



Tuesday, March 12, 2013

Economic Crack Binge and Coming Effects

The best comparison to our countries economic situation and coming problems I can think of is Charlie Sheen. Our problems with massive deficits are like Charlies problem with crack cocaine and alcohol. Lets call derivatives the Charlie equivalent of prostitutes/ porn stars.

Now I cannot predict the specifics of Charlie Sheen's next breakdown/ meltdown/ fail. I can however confidently say 100% that there will be one. Maybe he will shoot his celebrity fiance, hold a knife to the wife's neck at Christmas dinner, manage to mess up staring in the top rated sitcom on tv, who knows. (These are all things Charlie has actually done;)

 Disturbingly our upcoming economic problem is like Charlies upcoming breakdown/ meltdown/ fail. Just maybe we will manage to kick the proverbial can a ways down the road. Maybe it will be 70's era stagflation. Could be the standard South American currency devaluation/ hyperinflation or an all out Argentina like economic collapse. The old adage that big powerful countries do not go broke, they go to war (a la Germany) could prove accurate again. Maybe a combination of crumbling infrastructure and weakened defense makes an attractive time for an old enemy to attack or just use an EMP to keep us distracted internally. Maybe one of the dreaded black swans pops up in the time we are able to handle it the least.

What can we do about this? Well the usual advice to buy bullets, silver , gold and emergency food is always sound. Things like water filters might become important as infrastructure crumbles or breaks and standards just plain drop. (Yes that is a lot of linkeage in a paragraph. Got to keep the bill payers happy.)

Being as healthy as possible is prudent. Get fit, take care of lingering issues you may have, go to the dentist, order a couple spare sets of glasses and stock extra medication.

Buy food. Yes it is getting more expensive but basic staple food, even the long term stable stuff, is still a great deal. Right now food is ridiculously cheap by historic percentage of income. Most people here can probably make some choices to put a few bucks into food and fill up the pantry.

Learn skills. Specifically learn skills that will let you do things yourself instead of paying somebody else to do them.

Get ready to protect yourself. Things aren't getting better. Have realistic and sustainable (if it's not comfortable you will not do it) plans to carry weapons while still going through your normal life.

Most of these things are not new. In fact they are generally the same stuff I talk about. Best get too them before they are more expensive and harder to do.

Tuesday, February 19, 2013

Inflation Coming and What Are You Doing About It

It has been more and more clear to me that we are in an inflationary situation. If you have been to the grocery store, gone clothes shopping or filled up the family auto you have probably seen it also. Maybe I am just really noticing it but it is here. Lots of hidden inflation in food products, smaller servings, etc but it is still apparent.

The scary thing is that our current slowly robbing you of purchasing power inflation can suddenly begin quickly robbing you of purchasing power. When the banking conglomerate market focuses on a country things can spiral out of control in a hurry. Not months but weeks if not days.

This week for whatever reason I am getting out of the problem admiration phase. Put up a close line earlier this week. Dug out the spare parts to fix Wifey's bike and will get it up and running probably tomorrow. Trying to find a deal on a bike for me.

Today I picked up some plants; herbs, yellow peppers and tomatoes. My brilliant plan is to grow them. I think the plants are going to be coming inside at night for a bit until the risk of frost is over, probably in 2-3 weeks but I have to do some more reading about it. Am going to get my stuff together, do some research, and try to grow a half dozen buckets (or pots as Wifey doesn't want our yard to look white trash fabulous) of different stuff. If I can make it work without a hassle it would be nice to do the heirloom thing and keep the seeds for next time.

With the exception of  getting the bike up and running and hopefully finding another one for cheap these are tiny steps. Growing some food would be nice, both to teach kiddo about taking care of things and have a fun activity to do with him and to save a few bucks. In fact I expect failure. I don't expect a whole ton to happen from these efforts. The reason I am doing it is to get the inevitable growing pains out of the way now when it doesn't matter. However the real point is to start building some skills. Skills we may need later. Skills that may be the difference between barely getting by on stored food and having some variety to go with it.

I also dug out FerFAL's book Surviving the Economic Collapse  and started going back through it. I briefly talked about his book years back but it turns out I never did a full review. Might have to fix that. In any case despite the relatively high cost of $25 I suggest buying and reading this book. If you are really cheap, read all his old forum posts, guest posts at Survival Blog and his blog it's probably OK to skip the book. That being said I did all that stuff, bought the book and was happy I did.

We are also putting money into food. Stuff like freeze dried emergency food and plain old canned staples like rice and beans. Depending on where your preps and finances are you might want to think about precious metals. If your financial situation is in decent shape (no credit card debt, some savings, etc), you have some gear and a few guns with ammo PM's are a good place to park a few bucks. In particular I think silver is a good buy right now with at $30ish.

I am not saying that you need to do what we are doing. Everybody has different strengths and weaknesses and working from them instead of blindly following me or anybody else makes sense. The point is that you should be doing something.

What have you been doing?


Tuesday, January 1, 2013

Ruminating Thoughts On The Coming Year

The Sun will continue to rise and set. Basically I expect a slightly worse version of this year.

Taxes- Taxes will go up. Part of this will be strait forward rate increases but most of it will be increases in 'fees', eliminations of various loopholes and such. The bottom line is that more money will flow from your pocket to multiple levels of government.

The Economy- I am not sure about our economy. My initial thought is that the lost decade our current jobless, non housing inflation and cheap money fueled recovery will continue. In this regard I expect a bit worse version of 2012. Then again who knows.

The European Sovereign Debt issue could well reemerge. With China's unsustainable growth rates turning to inflation and the economy slowing the US may well be one of the better looking horses in the glue factory this coming year.

I suspect artificial manipulation of gold and silver prices to continue. Silver will probably continue to be a pretty good buy over the coming year. Once our food storage goals are met we will put away some more PM's for sure.

Inflation- Hidden inflation will continue. The current CPI calculation seems manipulated to suit political aims inaccurate on how inflation affects normal folks. Most of this inflation will be covered up by smaller packages, less food by weight and the usual tricks. Expect your income to purchase fewer goods and services than before. 

Gun Control- I think that gun control could go many ways.  Were I forced to take a guess something will probably happen next year. The Dem's will do something, potentially via executive order if needed, to get a symbolic victory. It could be as benign as mandatory reporting of certain behaviors by medical professionals and maybe import limitations on certain guns like Siaga 12 shotguns and AK's or could be worse.

Crime- It ain't gonna get better. The flat lined economy will push some marginal folks towards crime. Also as state and county agencies try to make budgets work they are going to continue or increase prisoner releases. Yes these folks will generally have been arrested for nonviolent offenses but that is just what they were caught for. Plenty of violent criminals are incarcerated for various minor offenses and some of them will inevitably be released.

Down here in the South West I think the Reconquista downward spiral of drug/ cartel violence and unchecked illegal immigration will continue.

I wish that it wasn't my opinion that the partisan nature of politics in the US will get worse. Identity politics and hate mongering to suit various agendas will continue. There is potential for short flashes of localized violence being orchestrated to suit specific purposes. Think twitter flash mobs against political opponents.

Afghanistan- It isn't going to get better. The writing is on the wall that we are leaving. Expect limited conflict to support political goals. Think 'Nam in about 1971.

Wellthose are, for whatever they are worth, my thoughts on what is coming in 2013. Hopefully they give you something to think about. Again in closing I expect it to be a lot like last year but a bit worse.  Good luck,

What are your thoughts on the coming year?

Ryan




Sunday, November 11, 2012

From Around The Web

Thousands of Portuguese soldiers protest budget cuts. This individual event may be nothing but broadly speaking large scale military protests are indicative of serious instability. Often this sort of thing is followed by the executive branch trying to fire/ arrest a couple of key Generals next week followed by a bloodless coup that puts in a "transitional council" of key military leaders that may or may not go away.

Syria fires at Israel who returns a warning shot. Those two countries haven't exchanged fire since 1973. This is obviously not good.


On a lighter note
Meth has been proven to help fight the flu. Talk about the cure being worse than the disease.

Saturday, October 13, 2012

RE: Advice on Military/ Banking/ Finances

Saw this post over at FerFal's place. After thinking on it for awhile I decided to do a post here instead of commenting over at his place. Nothing wrong with FerFal's ideas but let's just say I have probably thought about this scenario a bit more.

The basics of survivalism/ preparedness obviously apply. Have food to eat, water to drink and the means to purify more, medicine for when you are sick and arms and ammunition to protect your family. That statement is a mouthful we do not need to get bogged down as the specifics of each of those are another series of posts.

These folks have some cash in an IRA. I definitely wouldn't mess with what is already there. Maybe depending on what they are contributing in comparison to other savings they could slow IRA deposits but that is getting into the weeds. Remember folks, we do not know what is going to happen. Maybe my grand kids will be living on a hard scrabble little farm in the woods shooting small game with home made bows and defending their lives with ammo I have stored. Then again it is probably a lot more likely that things will keep on ticking and in 40 years when I'm bouncing grand kids on my knee it will be nice to have some money.

As FerFal suggested keeping a good portion of your liquid emergency fund in cash is prudent. I wouldn't keep it all at home as accidents can happen when you are away. However keeping at least 2-3 months essential cash expenses (food, fuel, medicine, etc) worth of money makes sense. You could make a good argument for keeping more beyond that up to say half of your liquid savings in cash.

The benefits of owning some precious metals were mentioned and are pretty obvious. They are a good hedge against inflation and currency failures. Don't go crazy here. Buy an ounce or two of silver when you can (or save it and make bigger orders to cut down shipping costs and take advantage of better deals) and over time it will add up.  If you have a bit more money buy some small (1/10th and 1/4 ounce ish) gold.

The topic of off shore accounts came up. Let's move forward assuming this money isn't best spent elsewhere and we want to keep it in some sort of currency. I wouldn't worry about off shore accounts unless you have serious money to stash. If you have a few grand I would put some in the gun safe and maybe hide the rest in a well thought out cache. The hassle wouldn't be worth it and the potential benefit's are iffy. Anywhere they will take a card cash will work, the opposite is not true. Now if you had fifty thousand dollars maybe it's worthwhile to take a trip to the Cayman Islands or someplace.

As FerFal noted the military and security folks like police are going to get paid unless things fall apart entirely and go totally Mad Max. I am going to get the exact amount of dollars and cents on the first and fifteenth. That does not however carry any guarantee that the money I receive will be able to purchase a given amount of goods and services.

Inflation is coming, heck it is here now. I fear that the best case is for it go get worse, like 10-20% real inflation for a few years. If things get crazy it might be worse than that. I don't see Zimbabwe/ 1920's Germany hyperinflation happening but 30-50% inflation would be ruinous. 

The one big thing I would add to FerFal's post is to decrease your standard of living now. Be balanced and don't do anything radical overnight. Try to pay off some debts and maybe eliminate bills by canceling various nonessential services. If you can start doing things for yourself [Guys buy a shaver and cut your hair at home. If I can do it you can. Gal's put a lot more stock in their hair so unless somebody is good at cutting it then get it done at a good but sanely priced place. That's just my .02 cents.] to eliminate bills. Buy stuff on sale and take advantage of coupons. The point here is to decrease your basic household expenses. Again be balanced with this and do it over a period of time so it is less uncomfortable.

Reallocating money you are used to spending on whatever is very hard. I know because have done it. Cutting twenty bucks from the grocery budget means you don't get Digorno pizza on Wednesday, the Mrs doesn't get the soda she likes  and you both have to drink less beer (or whatever). The point is that it sucks. Sorry, wish there was a better answer. Being smart and doing it over time helps. Also seeing the benefits of what else you can do with that money helps considerably. The savings account may grow as could cash and precious metals on hand as well as preps put away.

For military folks or anybody else with a fairly predictable salary schedule there is another option to use in conjunction with decreasing expenses. When you get a raise make some intentional choices with this money. Instead of letting it slip into your budget with a few small lifestyle increases save that money, put it into precious metals or preps or whatever else makes sense. Do that a few times and you will have a nice gap between what comes in and what you actually need.

This gap building we are has a couple benefits. First it lets you go into overtime paying down debts, putting away cash and precious metals, storing preps or whatever your goals are. Doing these things helps improve your situation even further. It is a positive feedback loop.

Second and more on topic this is your inflation protection. Living on 50-60% of what you make means there is some room to absorb inflation. Of course you would want to change your standard of living to still save, etc but you would have time to figure that out in an orderly manner. Not a fun option but I fear it is very realistic.

Think about it like this. If Fate left a message saying that your income would drop by 30% on a given date you would start doing things to get ready for it. If that date was in 6 months or a year you could pay off that credit card and ease out of $5 coffee every day, mani/pedi's or whatever, and other luxuries. Might even trade in a car for an older model, eliminating another payment. You would darn sure save some money. Now if that date was a week away all it would do is be depressing. By getting in front of this problem you have the luxury of time to make things as pleasant as they can be.

Anyway those are my thoughts on the matter.

Saturday, September 29, 2012

RE: Southern Prepper 1 Video Thoughts, What Would I Do..

I posted a video from Southern Prepper 1 a couple weeks back. It has been in the back of my head since then. The things I would do if I KNEW an economic collapse was coming in say 6 months are as follows in no particular order:

1) Secure 6 months of all medications we use.
2) Get a new bike for me (mine was stolen) and ensure the wife's is ready and functional. Stash extra tubes, tires and chains and such.
3) Sell the SUV we shipped from Germany and purchase a small commuter car. Depending on how bad things might get fuel may still be available but more expensive. A little car would let us do things that are not easily walkable at the lowest possible cost.
4) Stash lots of food.
5) Buy a better small solar setup.
6) Finish off a variety of loose ends. Just small stuff really.
7) Have more of my available liquid cash on hand than in the bank.
8) Have developed and refined a couple more systems for light and heavy (vehicle) bug outs.
9) Purchase a small (5X8 or 9ish) enclosed trailer.
10) Store some gasoline.
and one more for the bonus
11) Ensure we had the next 2 sized of clothes and shoes for the kid(s).

Of course I would also pull out everything we have in the bank and stocks and convert it into PM's or readily barter able stuff but that is kind of gaming the scenario. 

Anyway most of this stuff is what we should be doing anyway. Might not be a bad little list to work on.

Saturday, September 15, 2012

Southern Prepper 1 Video And Thoughts.....



A pretty interesting video. It is prudent to look at your situation and do some thinking. The idea to decrease your expenses by paying down bills or eliminating services (like for example cable tv) is sound. Also being able to do stuff for yourself that will further decrease your expenses like planting more stuff you eat to cut grocery bills is good also. I think it bears repeating not to do anything crazy or create panic within your family. Just do some thinking and within reason consider taking some steps to improve where you are.

I have some thinking to do.

Thursday, September 13, 2012

Putting on my Nostradamos Cap

On Economics/ Politics:

Well QE 3 is finally getting launched so we will see a fast meaningful recovery the lost decade will continue.

Unfortunately I do not think our economy is going to get better until we are really honest about our situation and take the steps to get back to an honest and stable place. This requires facing the pain of unraveling all the bad "assets" floating around and the massive empty inventory in the housing market gets unloaded at realistic prices. As this is not happening any time soon the pain will continue.

I saw an interesting article over at James Dakin's place (original Lew Rockwell article here) that basically says we will not have hyperinflation because it is not in the best interest of big banks and their whole crony network. I cannot say that I understand it fully but, not necessarily for any quantifiable reason, I agree that hyperinflation is not likely.

We do need to get onto the same page as to exactly what is considered hyperinflation. Let's pick the definition of hyperinflation as greater than 50% inflation in a month. It is as good as any. I do not see this happening. Yes we have a huge debt but we are too big and powerful with too many huge productive businesses for it to be likely IMO. (Also I think Arctic Patriot noted that huge powerful countries do not go broke, they go to war) I don't intend to argue this point, it is just my take on things.

Now I do think a period of painfully high inflation is quite possible. Maybe somebody gets some sense and cuts off the free money that has been subsidizing big businesses and poor decisions like dollar shot night at the local bar. Maybe our creditors start to get wise and demand an actual return on their money. Maybe the big banksters aim their destructive market powers at US. I don't know.

We could see 10-13% inflation which would probably leave the fed rate around 16%, prime mortgages around 20% and consumer debt in the area of 30%. This would drag down our economy like a guy trying to swim with an anvil tied to his waist. Several consecutive years of this would essentially destroy those on fixed incomes. Folks holding adjustable rate debt's would probably face default or ruin.

We may see rioting and disorder as welfare/ food aid/ etc that are chained to the ever more manipulated to give a happy story CPI get left behind. [Briefly touching on Matthew Bracken's When the Music Stops I do not see our government failing to send out welfare/ food stamps (now on cards)/ etc. I respect Matthew Bracken immensely but IMO this article misses the simple point that our government via it's cronies the Federal Reserve has a darn license to print money. It is like saying that Jack Daniels will run out of Whiskey or Tula will run out of .45 caliber bullets.

Seniors and moochers will get what they are "entitled" down to the exact penny. However that doesn't mean it will be worth the same as it is today. Somebody on food stamps or whatever will get the same dollars worth of hand out's but if a pound of rice costs $5 and a Digorno frozen pizza costs $10 it won't go very far. Not quite as sudden or whatever as envisioned in the scenario. It would more likely cause a slow upswing in problems than a sudden burst of angst. That is of course unless some sort of response was coordinated to meet a specific purpose in support of some agenda.]

I see this arguably intentionally orchestrated series of events potentially diminishing our status on the world stage with a wimper, not a bang. Think of the way Britain's role and power have changed from WWI to now. They went from being the biggest and arguably most powerful nation in the world to being publicly dissed by Argentina stealing their island (yeah they later took it back, barely).

On War:

The madness between Israel and Iran is out of control. All I hear in the media is war drum's. At this point I really would not mind if they get it over with and fight, at least that way it would get done and we could have  the news back. Except of course it would cause a lot of problems, likely embroil us in a nasty conflict, maybe cause nuclear war, blah, blah, blah.

On Gun Control:

I do not see a reinstatement of the Assault Weapons Ban or whatnot. The balance of public opinion is clearly against it. Unless the Dem's sweep the house and senate plus keep the presidency which is probably not likely I am not concerned. Even then I am not so sure for heavens sake Walmart sells AR-15's.

That being said ATF fiat and possibly executive orders might pop up with some fun new stuff. The play of the ATF arbitrarily usurping more of our rights changing some regulations which FFL's (and individuals) will then follow or face their lives being ruined and livelihoods destroyed is already in the playbook. Remember that your shotgun is a shotgun unless it is suddenly a pistol or maybe an evil assault weapon.

On Crime and Disorder:

In general I think crime is getting worse with the signs showing the trend is likely to continue. Maybe it is the economy. With everybody (well a lot of folks anyway) taking a step down the proverbial economic ladder some folks look to crime as the easy way out. Some of it is cultural/ environmental but that doesn't really matter. For reasons I am not entirely clear on criminals seem to be getting more and more violent. Home invasions seem to be becoming more and more prominent.

As discussed above there is a potential scenario (amongst others) where things could just go nuts like LA Riots times 1,000 all over the place.

Anyway that is what I think may be coming. Now to what we might be able to do about it:

Economics:

Some folks argue that having a lot of debt is fine because hyperinflation or at least inflation will let them pay it back in cheaper (or basically free) dollars. The first issue with that plan is that if you haven't figured it out yet banks are going to get taken care of at the expense of common folks, not the other way around. The second issue is that you it will be hard to pay back cheaper dollars if you lose your income/ job because the economy tanks.

If you listen to nothing else that I say get out of any debts that have an adjustable interest rate. The only exception would be if you have the cash to pay the debt off immediately (like in the next payment) but choose to keep it at a low adjustable rate so you can stay a bit more liquid. Rates are very low right now with almost a guarantee that they will go up. As we saw with various European countries a bad auction or two can jack up rates in a hurry.

The basics still apply here. Minimize debt and live below your means. Save in various forms against an uncertain future.

Gun Control:

In this quadrennial 'OMG the evil gun haters might ban everything' period I have spent a bit of money but that was just bumping up some purchases I planned to make anyway by a bit. Sort of hedging my bets if you will. That being said I have been getting squared away in this area for awhile and while things aren't perfect (are they ever?) most of our bases are covered. If you do not own something, especially if it is likely to be targeted in a ban, that you want and can afford then consider getting it.

Crime and Disorder:

Things are getting more and more dangerous. Carry a weapon if it is legal and practical for your lifestyle. Get the training to know what you are doing. Make yourself a hard target. If you live someplace that is sucky and dangerous with a high percentage of unhappy urban folks and welfare types consider moving if you can figure out how to afford it.

Note that most of the things I have recommended are the same things I have been talking about for awhile. Preparing for every situation is not the same. You do not need a dozen assault rifles to survive an economic collapse. Having half your net worth in PM's will not be ideal if things go all mad max. That being said a whole lot of the commonalities are the same. Live below your means saving (in various forms) for emergencies and the future. Store food, fuel and other various things you will need. Have the skills and weapons to protect yourself and your stuff.

Anyway that is what I have been thinking about. Thoughts or input are of course welcome. 








Wednesday, June 13, 2012

Fed: Recession kicked median household wealth to 1992 level

Here is the article. This is not suprising but still sort of depressing. What they fail to mention is that a buck is worth considerably less today than back in 1992.

I look at who benefited from this, the classic cui bono if you will. It is pretty clear to me. Big bankers and financiers made a killing. Politicians did well on campaign contributions from those folks as well as using the money flowing into their coffers to buy votes. Personally they also made a killing on insider trading their consistently and consistently lucky investment choices. Some normal folks did well, if just for awhile. Nobody was complaining when their homes went up in value 20, 30 or even 40%. Nobody was complaining when the construction industry was booming.

I realized in writing this that I have sort of looked at bankers in the wrong way. I think a bit too locally. The assistant manager of West lake Trust in Peduke, Iowa population 50,000 didn't wreck out economy. That guy gives people loans they come to the bank looking for. Now the big bosses at Citibank, B of A, WAMU, etc all on the other hand had to knew what was really going on. That is why they got rid of these loans like a kid playing hot potato. They made money hand over fist for years. When the game was up they dumped all the junk onto the public in a variety of ways both above and below board. After that we loaned them cheap money which they used to buy up the competion which was slightly worse off or couldn't get easy money friend loans.

Between politicians making laws, setting conditions (keeping interest rates artificially low for years) and supporting their friends in banking and finance a lot of the blame goes to our wonderful elected officials. Banksters knowingly gave bad loans which they repackaged to unrecognizability then sold as rock solid. They bought politicians to do them favors and provide mafia like protection. These two groups royally screwed normal everyday Americans out of tons of money.

I cannot however totaly absolve people of the choices they made or the situations those choices caused. Lots of folks used electronic/ paper gains in their homes to finance vacations, new cars or home improvements and such. Some of them are mad now because they are "underwater" and have to pay back the money they so prudently cashed out during the boom. Lots of normal folks made poor choices thinking that somehow the good times would never end and ended up in a bad spot. Others tried to get in on the game and lost too, by the time normal folks get into the game the smart money is already on it's way out. Normal folks are standing when the music stops in the proverbial game of musical chairs.

Today I may be more disenchanted, with the establishment for lack of a better word, than I have been since the height of this mess in 2008 or so. Not exactly sure what if anything I will do about it.

Friday, May 11, 2012

Friday Randomness

Well it seems President Obama's view has evolved to where he now supports Gay marriage. My thoughts on that issue are on the record and I am pretty much ambivalent about this new development. I suspect it is about firming up his base and making Romney look like an evil hate monger.

If you have been waiting to buy PM's at a dip it might be time to pull the trigger.

In case you were wondering 2 year old girl scout cookies taste just fine.

If you are short on doom and gloom there is an outbreak of whooping cough in Washington State. In case you needed any more reason to vaccinate yourself and your children.

JP Morgan lost a couple billion dollars in the last few weeks.

Greek leftists want to stay in the Euro but avoid any sort of austerity.

France's economy isn't doing so well.

I have been enjoying the show Person of Interest lately. It is a bit big brothery and will make you want to delete all social networking stuff then smash your laptop and cell phone but those may not be thoughts worth fighting anyway. There is always action and the good guys win which makes for an enjoyable show.

Dewars Scotch whisky has found a place in our liquor cabinet.  It is smooth and affordable enough to drink whenever the mood strikes me.  It isn't going to be mistaken for a nice single malt but at half the price that would not be a reasonable expectation. One of the downsides of scotch is that a decent blend is the price of a bottle of Crown Royal or a good burbon.

Have a good weekend,

Ryan

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