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

Monday, August 24, 2015

The Economy and You

The world economy has serious problems. China's stock market basically collapsed despite attempted government interventions. Their economy is cooling. Heck it is just not possible to have 10%+ growth a year for any length of time. They tried devaluing the Yuan but that just stinks of desperation.

 This means many peoples aspirations of a better life are not going to be met. Add that to the real estate market (in China) which is a disaster and there are significant issues. Fundamentally China's recipe of letting people make money in a quasi capitalist economy but restricting freedom of speech, etc all worked when the economy was awesome.

China has a bad case of the flu and all of Asia has gotten sick It is also affecting our markets, arguably pointing out their fundamental weaknesses.

Don't even get me started about the train wreck of the EU. Also slowly but surely the middle east is slipping into a regional war. A war that I can not realistically see a desirable end to. Things are bad there and are almost surely going to get worse.

The stock market had its worst day since 2008. This is bad.

So what can we do?

The standard survivalist advice to move away from a major urban center. Even if moving  to Elk Lake Montana POP 357 is out of the question at least move to a smaller town or bedroom community and for goodness sake get out of NY, LA, Chicago, ATL, Houston, etc.

Along other standard survivalist advice store some food, have guns and know how to use them.

Specifically for this situation.

Before we get started. Look I am not a CPA or a financial adviser.  I am a normal guy who makes what he thinks are the best choices and talks about it on the interwebz. Seriously if you choose to make significant financial choices based on the word of some random guy on the internet you are a fool and deserve everything that happens to you. Consult professionals or be a big boy/ girl and make your own decisions but regardless own your own decisions and don't bitch if they go bad. Consider yourself disclaimed. For whatever it is worth I do have skin in the game as things I talk about are generally in line with, if not exactly, what I am doing. 

Cash on hand. A couple hundred bucks is fine for 3-4 day power outage. Heck for most reasonably prepared people there is some margin in that to pick up a couple things for a neighbor who doesn't have any cash.

 My generic advice is to have at least a month cash expenses on hand at home.

We could define cash expenses as food, fuel, household consumables (trash bags, dishwasher soap, hygiene stuff, etc all), medical needs and the like. Basically the cash expense thing excludes stuff like rent/ mortgage, insurance, investments and other stuff and other such stuff that if need be you could A) send checks for or B) it would not matter immediately. Think about it like this. I have to put cash on the barrel head to get groceries or a tank of gas while, at least in the short term, if I send the land lord/ mortgage company a check they can't cash or not and I'm going to keep living there.

A months cash expenses in small bills (say $100 in ones, $100 in 5's and the rest in 20's up to say 2 grand then the balance in hundreds. ) is a good place to be at. Three months cash expenses physically on hand is a darn good spot to be in.

Saying a months cash expenses vs X dollars is significant because the right answer could vary widely. A single person or lower income family might need to stash $500 to meet a months cash expenses. On the other end of the spectrum a family of 6 in a very comfortable income bracket might need 3-4 grand to have the same level of stability.
More cash certainly wouldn't hurt. Depending on your risk level to suddenly need to take a months discrete vacation (Tony Soprano style) and your overall liquid cash situation more money doesn't hurt. I know a retired person who has ten grand stashed at their place. That would be 6 months cash expenses for them easy. Things were getting weird and banks didn't pay jack in interest anyway so they stashed a bunch of cash at home. Also folks who went through the Great Depression tend to have some strong feelings in this area. They inherently distrust banks and stash cash under the mattress.

Silver and Gold.

Jim the Greek who bought stocks and mutual funds is pretty much screwed right now. His cousin Joe the Greek who bought gold and silver, physically taking delivery, is doing good and has some options.

A guy in an economic collapse who has a few fractional ( sub 1 oz) coins and a decent bag of silver has some options. A guy who has a few ounces of gold and a 50 cal ammo can full of silver has a lot of options. You get the point.

Fuel and Alternative Energy Plans

A few cans full of gas will likely keep your vehicle running for while. A solar charger with some rechargeable batteries is  nice set up to have.

Anyway I guess in closing 1) Live outside of a major urban center. 2) Store your basic beans, bullets and bandaids and 3) It is prudent to stash some precious metals in case you need them later.

Hope you all get something out of this.


Monday, July 27, 2015

End of Empire

I stumbled into this series while aimlessly looking for the end of the internet. It is about the end of the British Empire. How they left all, well most, of their various overseas holdings and all that came afterwords. For historic and survivalist (great powers decline, we are arguably doing that now) purposes the end of the British colonial period interests me. This series, albeit incomplete on youtube, goes a long way to fill in my lack of knowledge about this very interesting period of time. Each episode talks about how events unfolded in a specific area.

Anyway if you have the time this series is pretty darn interesting. 

Sunday, June 28, 2015

Scenario Discussion: Greece June 28 2015

When I solicited for input somebody mentioned doing scenario type posts. I thought Greece today (well more this general period not the specific day) would be a good one.

So what is the scenario. The Greece economy is a mess with high unemployment and a boat anchor of debt. It is clear in my mind Greece will never be able to pay their debts off. Whether they are written off by choice or when Greece simply does not pay is a separate discussion and not really relevant to this post.

Greece recently elected an anti austerity government. This government has the unenviable job of trying to placate their creditors/ neighbors and delivery some sort of a win to their people to get the economy moving.

This is significantly complicated because Greece is part of a common currency, the Euro. The good is that they have been able to exploit being linked to much stronger neighbors. The flip side of the coin this is bad (for the government) is they can not simply inflate the currency; lowering its value and making their goods/ services cheaper giving the country more competitive and giving it an economic boost.

Even more troubling the country is in what I call the 'IMF Death Spiral'.

My current working definition of the IMF Death Spiral is "The situation where a country is deeply in debt and continues to receive loans on the conditions that it will follow certain conditions set forth by the IMF or other national/ international organizations. The conditions of the loans typically include cutting government spending, laying off government employees, raising taxes across the board and various social policies that suit their agenda. The stated goal of these reforms is to improve the economy of the country. However at least in the short term it has exactly the opposite effect. High unemployment inevitably follows and the increase in taxation crushes what is left of the economy."

Now one could argue once countries reach the point of the IMF Death Spiral they are a lost cause anyway. On the other hand we could look at results and say the IMF intervention certainly does not help matters any. One could argue the IMF, etc all's goal in lending out huge sums to countries that cannot possibly pay it back is about extracting a profit, offloading the losses to the citizens of first world countries and having a measure of control over the debtor nations. The little I have read on the IMF was pretty eye opening.

I confess to be almost hopelessly stalled halfway through but this book is a good place to look at the business of big banking.

Anyway back to Greece.

There is a distinct possibility that Greece will A) default on it's debts by failing to make their payments. This would be bad. Another possibility is A) and B) Exit the Eurozone AKA Grexit. This would lead to Greece moving back to their own currency which would be valued on the merits of their economy AKA not worth very much.


Of course the basic preparedness stuff of long term shelf stable food, water filtration like a good Berkey, first aid gear, alternate cooking like a Coleman stove, etc apply.

Greece gun laws are fairly European (stupid and strict) so legal modern defensive weapons are out but shotguns are allowed for hunting. A double barreled shotgun and a case of buckshot or large game type shot that is legal and stored in your home would be darn handy if/ when things go sideways. Now on the less legal side I am sure there are plenty of AK's floating in from the Balkans and Romania. If a person had the connections, could afford and didn't care about the laws a concealable pistol and a AK with a dozen mags and a couple cases of 7.62x39 ($220 for 1k of Tula 122 gr FMJ at Lucky Gunner) in some hidey hole sure would be darn nice if things went worse than expected. However I would still want that legal shotgun. It will probably be sufficient and a self defense option on the right side of the law is a good thing to have.

I would look to stock up on normal easy to cook shelf stable foods my family ate. Pasta, canned soup, rice, crackers, PB&J, etc. If/ when the Grexit happens inflation and short term shortages would almost surely follow. About 3 months of normal food your family ate and some long term emergency type food/ big buckets of bulk staples would be a good place to be.

Also the possibility of a job being lost now, and especially if/ when things get worse is higher.


I would seek to get as much of my money out of the banks as possible. Might leave enough in the bank for convenience to pay a couple small bills with a card or order a thing from amazon, etc. Max $500.

Money in banks would almost surely be converted to Drachma at the official conversion rate which is laughably unrealistic. So hypothetically Greece moves to the Drachma with an official exchange rate of 1 Euro to 2 Drachma. A Greek persons 20,000 Euro's would turn into 40,000 Drachma. The problem is things that used to cost a Euro actually cost 4 Drachma which is functionally a 50% loss in purchasing power overnight. The Greek Government would take all the Euro's it stole and use them to buy things they need or to pay enough to their creditors to get a little but of breathing room.

So Joe Greek goes to the bank and pulls out all his Euro's. What to do with this money?

The basis that we mentioned earlier come to mind. As does the shelf stable food. If those bases are not already covered I would put some money towards them. However for the sake of discussion lets say those issues were already addressed.

If I had between one Euro and 20,000 Euro's (the exchange rate right now is 1 dollar to .91 Euro so for normal people amounts we can speak of them as about the same value) I would find a good place in my home, bolt down a compact but quality safe and put my money in it.

If I had more than 20,000E I would take the first 20k and put in a good safe in my residence. This would be my money to buy food, fuel, etc in the short term if/when things go downhill. I figure for most people 20k E is at least 3-4 months cash expenses (food, fuel, etc not rent/ mortgage, eating out, cable/ internet, car insurance, health insurance, taxes, etc) to ride through a rough time. If your family/ lifestyle is such that 20k E is not sufficient for 3-4 months cash expenses adjust the amount upwards accordingly. Maybe a multi millionaire with 7 kids would need 50 or 100K to ride out a few rough months.

For money beyond that 20k/ 3-4 month cash expense level up to say 200k. I would go to a different country for a long weekend of sight seeing and visit a bank. To the best of my knowledge a country defaulting has not been able to confiscate foreign held bank accounts in different (than the defaulting countries) currencies. I would probably go to Switzerland but Cyprus, England and Luxembourg might be good candidates also. Since I have never had enough money to need to look into it I can not say specifically which countries have the strongest protections of bank accounts for in Europe. If a person could get some interest then a savings account is worth thinking about. Then again if a bank in a stable country is going to pay less than 1% and I did not foresee needing the money soon (Say I have an income and am not retired relying on this money to pay my bills.) I might just toss it in a safe deposit box in a stable country like Switzerland.

Of course if I could swing stashing a bunch of alternate passports and a handgun in that safe deposit box that would be cool. The Jason Borne safe deposit box is to safe deposit boxes what the Sara Conner connex is to caches.
A safety deposit box to envy. Only way it would have been any cooler would be some sort of an SBR like an MP-5K and a black velvet bag full of diamonds.
Don't see any food but the Sara Conner Terminator Cache has guns and ammo covered.

As to cash beyond 200k. Honestly a person with over 200k in liquid assets is not going to be looking at some yahoo on the interwebz for advice on financial stuff. At this point you talk to an accountant and a lawyer then posture your financial situation accordingly. Best do it now as big moves take time and there might not be much time left.


-If I were Greek my biggest concern would be Euro denominated debt. If we look at different economic collapses the trend is that the government screws the people and the banks help, if just to come out OK. So it is government before banks and banks before the people. A scenario that has plaid out more than once is suddenly all accounts are in the new, less valuable currency at an artificially high exchange rate (say the official rate is 1 Euro to 3 new Drachma but the street price is 1 to 6) but euro denominated debt might still be in Euro's.

Honestly we have not seen this play out with a common currency. The best I can do for actual facts is to look at Argentina's collapse and the recent mess in Russia as their currency has gone down like a desperate aspiring actress on a casting couch with a big name producer. Loans in dollars (in Argentina) and Euro's (in Russia) were fine and dandy till the exchange rate went crazy. Put it like this. Say Joe Greek makes 90k a year and has a 3 year car loan for 30k.  Not the way my family handles money but still pretty reasonable. Lets say the Grexit happens. Now overnight Joe's $30k car loan in Euro's might functionally turn into 60 or 90k value since he is suddenly paid in Drachma which are significantly less valuable than Euro's, far beyond the official exchange rate. Joe's reasonable car is now eating up a quarter or more of his income.

-Of course interest rates in Greece would go through the roof if any of this happened. I would run, not walk, away from any variable interest debt that you did not have the resources to pay off at any time.

Contingency Plans

-If I lived in Athens, and in particular it's downtown/ historic and or financial districts, I would find a friend or family member who lived elsewhere to stay with for a few days if things got weird. I would look to position some food, clothes, etc there. You probably would not need to leave forever but a place to lay low for a couple weeks could come in handy.

For the sake of full disclosure I have lived in Europe but never been in Greece, somewhat ironically because they started having all the money problems and riots. My general sense is that things could get pretty ugly in Athens but a person who lives in a medium sized town or little village is unlikely to have any contact with riots and such. I believe the general security situation would deteriorate if things went downhill but mostly the bad stuff would play out in larger cities. A village of 300 or town of 3,000 is going to fair better than a big city, let alone an urban center.

-I would look hard at what my financial situation would be after a significant loss in purchasing power, say two semi arbitrary numbers 30% and 50% respectively.  Could I pay my bills? Would it be prudent to sell the fancy car (with a loan to match) and downsize to a more modest but decent paid off car now, before other people are trying to do the same thing?

-What is my plan if I (or we in a dual income household) lose my job in an environment where there is very high (say over 30%) unemployment and many well qualified people are out of work? Do I have an in demand or easy to get into (family business, etc) back up gig? Maybe you are in sales but were the best bartender in town and still have a bunch of contacts that would give you a job tomorrow? Sure welding in one's parents or Uncle's shop is not what a mechanical engineer wants to do but if it pays the bills till a better job can be found it is what people do. A union plumber probably does not want to fix clogged toilets for $100 but that is a constantly in demand job. Point made.

-Presuming Joe Greek, like most people including yours truly, does not own his residence free and clear. Since t is very realistic that he could be unemployed for a long time Joe should be working hard on a back up plan. Say Joe loses his job and is unemployed for a year (not unrealistic, Greek youth [which might be a pretty wide group I can not recall actual ages to go with the stats.] unemployment is about 50%.) and thus are not going to be able to pay the mortgage/ rent. If Joe has some money a modest little cottage or just a piece of land would be great. Depending on where Joe is located camping after the collapse might be an option. However a much better option would be to stay with your parents or relatives in their paid off modest, avoiding high property taxes, home.

For this problem let us look at  a variety of options for different  financial situations:

'I have resources'-A little cottage on the coast in a small village/ town with enough room to put in a garden and host  a few relatives or friends  would be awesome. You could enjoy it for vacations during good times and be ready if bad times come.

'I have some money'- A piece of land that is paid for free and clear where you could put a travel trailer or at least set up some sort of decent camp would not be a bad setup at all. Things would be kind of rough but at least you could pre position supplies and nobody could hassle you for living there on your own land.

'I can scrap up a few bucks' - A travel trailer you could park at a relatives or move from place to place as needed. Living at a relatives is going to be a lot more palatable for everybody if you all have a self contained space to live, or at least sleep in.

'Resources are very limited'- A good 3 season tent with a tarp big enough to cover it, a Coleman stove, some sleeping bags and good sleeping pads. Maybe you can live or at least camp at a relative or friends place.

'Broke as a joke'- A cheap tent and a tarp.

 I feel the need to reiterate these are worst case back up plans. Obviously Joe Greek, and more importantly the Mrs Hellena Greek, would prefer to stay in their normal residence but having a plan in case that is not an option is prudent.

Well I hope this gives some insight on how I would handle the localized but really bad situation that might unfold in Greece.

As always I am eager to read your comments.

Sunday, October 26, 2014

RE: Bayou Rennaissance Man: How to Prepare Under These Conditions

Bayou Reconnaissance Man wrote an interesting post How To Prepare Under These Conditions.

The basic highlights of the question:
I'm stuck with an unemployed partner and teenage kids who can't earn their own living.  We haven't been able to afford reserve supplies for an emergency, yet it's clear that even harder times are on the way.  I want to build up reserves for my family to help cope with them, so I'm selling a bunch of our stuff at garage sales and through Craigslist.  By mid-November I hope to have $2,000 to spend.  What's the best way for me to use that money?

(Peter's notes) A bit of background:  she lives with her husband and two kids, a boy of 15 and a girl of 17, in a small suburban home in a Missouri city.  The local crime situation wasn't bad until recently, but it's getting worse as economic hard times bite deeper.  The family owns one older car free and clear - they sold a second, newer vehicle when they couldn't afford the monthly payments.  The mortgage on their home runs about $650 per month, which isn't too bad if both of them are earning, but for the past year her husband hasn't been able to find work.  Her income isn't enough to cover all the bills.

Peter added his thoughts in a subsequent post. It is worth reading both of these posts before continuing.

Ryan here: 

We need to look at the issue of the family income and housing situation separately from the question of how they could potentially prepare.

Due to a limited amount of information I have to make some assumptions which will be based on general trends and may or may not be accurate for this particular person.

One particular assumption based on the tone of the whole conversation is that we are talking about a fairly small ($$$) wise gap between their current situation and making it. This assumption is largely because folks tend to buy homes slightly proportionately and we aren't talking about a $2,500 mortgage here, we are talking $650. Of course any income gap over basic expenses is an issue but this problem is more manageable than a much larger one.

The income/ budget/ housing situation can be broken into 4 main areas: income, income stimulus via selling stuff, overall budget and housing.

Income: First and foremost this family has an income problem. Dude (dad or male partner/ whatever) needs a job time now. Unless there is some information I'm not tracking, like he is paralyzed, has terminal cancer, etc, Dude needs to be a man and start providing for his family right blankety blanking now. End of story.

Since he has been unemployed for a year I assume things are not going well finding a job in his previous field in their area. Maybe Dude needs to seek lower prestige/ compensation work in his chosen field. A legitimate mechanic becoming the oil change guy at Quicky Lube or a journeyman carpenter fixing decks and building sheds won't feel great or pay as well but we aren't trying to get rich, we are trying to keep a roof over the families heads and food on the table. The advantage of this COA is that if he gets a foot in the door and proves to be a decent worker when a better job (that he is qualified for) opens up he should be a lock. A potential additional option for Dude exists if his skill sets lend themselves to odd job type work and he has the gear to do it on his own.

 Another option is to get a very low skill anyone can do it type job. Dude could be a temp worker at UPS and sort packages, mow lawns, dig ditches, sweep whatever. This is not the forever plan. The goal is to keep things going till he can get back into a better job.

Honestly Dude needs to get the first job he can find. I really don't care if it is swing shift mop boy at Show World. He needs a check time now. I'm not 100% sure he is in a funk but it would fit with the long term unemployment. Once he gets back to doing something, anything, hopefully he can get back into something better.

One could say you can put effort into job searching and be picky in relation to your options. If the family was making it on Momma's income then he has time to be picky and look for a job at his leisure. If they had a 50k safety net that would replace his income for a year I'd say he can be picky and have some lazy mornings or whatever. In this families situation I would say job searching is his job right now so he should do it from 8-4 every day. Given the inability to wait he has to take any job he can do.

Ditto for Dude potentially going to a different location from the family for awhile. Maybe dude needs to work someplace else for awhile to make the family budget work. Depending on his skill set(s) some parts of the country, specifically south Texas, the Gulf Coast and North Dakota are booming. Many of these jobs have employees work long days for a stretch then have more time off. Several weeks on and a couple off is not uncommon. This would work well for him to be able to stay busy (and not bored/ lonely) wherever employment is then spend some time at home.

Again I do not know the whole scenario and maybe there is a valid reason for this long term unemployment and not getting any sort of job but were I the spouse (of either gender) when the family is in this situation a serious conversation would have happened awhile back. This person needs a self esteem boost and a loving but firm push out of apathy in the right direction.

As to the kids. Personally as a father (of little ones) I am disinclined to tell school aged teens they have to get jobs to help the rents fill an income gap, doubly so when a parent is not working. However letting them know that we will meet their needs for shelter, clothing and good it might not be exactly as well as we (and they) would like.

(Slipping into the budget part because it makes sense to finish this small part here. I wouldn't ask them to put their part time earnings toward my mortgage problem. However they would be nicely informed, in as soon as possible, that their basic needs would still be met by us but any desire for fashionable clothes, cell phones, spare cash to go to the malt shop, etc all were regrettably going to be unfunded by the family budget. If they want these things in the near future they would need to earn the money to pay for them.)

Income stimulus via selling stuff: In his response Peter hit on this a fair amount. Admittedly part of the original question mentioned her selling some stuff to free up cash for preps so that is a big factor I imagine.

I do not find selling stuff to help with the economic situation to be a meaningful option unless they have some big ticket items like a 10k Harley in the garage, gun/ stamp/ coin collection sitting around it's not going to do much to close this gap.

As to selling stuff for preps. Selling unused items to buy preps is a fine idea.

Overall Budget: This has  probably been done already but it is worth relooking the budget. Things that used to fit might need to be cut out for awhile. The short term prioritization of food, energy, mortgage, insurance, bills is probably a good way to look at it.

Wifey brought up an excellent point. Since Dude isn't working he could look at it as his job to save as much money as possible. Cutting coupons, making bread from scratch, making lunches for people to take to work/ school instead of eating there, etc.

Housing: Peters comment about relocation are valid. If they want to stay in the area and want to try and make it work that is one thing but it doesn't seem like they really do. Additionally the potential implications of being come after for the balance of the loan are worth looking at though if the family is in effect judgement proof (no significant assets, big retirement accounts, etc) it is less of a concern than if they had 100k in an IRA and another property.

The amount of equity in the home is a big consideration here. If they have 50k in equity in the house  I'd say fight like hell to hold onto it at least long enough to sell and get that money out. On the other hand if they are underwater or have a few grand in equity that would be eaten by various home selling costs it's probably not worth the emotional struggle to prolong the matter.

The cost of other housing in the area (if they choose to stay there) is a consideration too. While home ownership has costs if the complete mortgage including taxes, etc is $650 and an apartment is $650 moving to one won't really save money.

Overall (again I do not know their income level, etc) it does not seem these folks bought an unreasonable home. It's not like they have a $1,400 a month mortgage and a $2,400 take home or something. These folks do not seem to have a house problem, they have an income problem.

Onto the prep discussion:

Really conflicted about this as I am pretty into preparedness and all that stuff. That being said I honestly do not think this family needs to be worried about making preparations for some SHTF or economic collapse scenario. It is my belief that they are currently in a pretty nasty situation that if handled wrong could potentially leave them 'outdoors' and that this gal, and by extension her spouse, need to focus their energy( emotional as well as physical), time and resources towards figuring out the situation they are currently in. All the way from the short term of next months bills, the mid term goal of them getting the income up enough to stay current on essential bills including the mortgage and the long term goal of replacing some or most of their income so they can get some breathing room, have some financial stability and get this stress out of their lives.

Also if they are intense and fix this problem in 3-6 months and are back to normal in a year think of the energy, intensity and resources they would be able to throw at preparedness,

Put it like this: Lets say there is a bear out in the woods near your home being a jerk and eating people but there is an angry wolf in the kitchen. Yes the bear is bigger and more dangerous but THE WOLF IS IN YOUR KITCHEN. The bear *might* be a threat someday but THE WOLF IS A THREAT RIGHT NOW!!! Also if the wolf kills them today it doesn't matter what great plans they have for the bear whenever it maybe shows up.

I cannot in good conscience recommend putting any meaningful amounts of money (if a few batteries, cans of food or a box of ammo for the family gun makes you feel better than by all means) into preparedness until the family is:
A) Current on basic bills. I do not care about a visa card but do care about the mortgage, water, sewer, electric, insurance and the like.
B) Making enough money to stay current with basic bills and life needs, even if at a new lower standard and.
C) They have $1,000 saved for Dave Ramsey's baby step 1

However since it is part of the discussion. 2k rough breakdown:
Food- $600 to start. Split between easy to eat stuff like canned goods, PB&J, etc and rice n beans.
Water filter- $150. Basic Berkey setup like a Go Berkey Kit. Or if handy you can do the bucket and black filter element  route. Total $750.
Alternate cooking source- $80. I would go with a basic 2 burner Coleman camping stove and several gallons of fuel. Purchased used these can often be had under $50. That leaves thirty bucks for fuel. Total $830.
Lighting- $90. A couple good candle lanterns and a bunch of candles. Say that runs $60. Spend $30 on batteries for whatever flashlights are already in the house. Total $820.
Medical- $80. We could square this a lot of says. Lets say they spend about $30 on some sort of decent basic first aid kit (or find a knowledgeable friend to help them assemble one) and the rest on OTC drugs and various disposables: band aids, Tylenol, benadryl, 3x5 gauze, etc. Total $1,000.

Defense- $600. There are a lot of ways to go here. I laid some out in my Basic Guns series. Peters recommendation for a good basic pump shotgun like a Maverick 88 or Mossberg 500 is sound. Personally I would try to get a handgun. That is a whole nother ball of wax. I like revolvers but if you don't care about common calibers a Makarov or whatever commie nation clone in 9x18 can be had for under $200 USD and ammo is dirt cheap. If you want to stick to wheel guns and are willing to shop a serviceable (I would ask to test fire) Taurus or Rossi .38 can be had in the same price range. Toss in some ammo in 9x18 or .38 special [Incidentally Lucky Gunner has a case of CCI Blaser .38 special ammo for $329/1k] and call it $250.

Used pump shotgun such as a Maverick 88 or Mossberg 500 in 12 or 20 gauge. Factor in about $200 for the gun, $70ish for a case of bird shot to get everyone familiarized, some buckshot at least 100 rounds though 250 rounds of buckshot would be even better, a  few slugs and that closes out defense.
 Total $1,600

Additional Fuel- $225. Fill up whatever gas cans they have, ditto the BBQ grill. Maybe get an extra 5 gallon gas can and fill it up or extra fuel for the Coleman stove. If there are decorative storm lanterns in the house get some fuel for those. Whatever is left after that goes to batteries for flashlights, the ambiguous AM/FM boom box, etc. Total 1,825.

Hardware This and That- $100. A roll of clear plastic to temporarily replace a broken window, a tarp, some duct tape, a but of rope, etc. Logically fill some shortages in existing tools and stuff. Total $1925.

Comfort Items- $75 (Remaining Balance). During hard times it is nice to have some comfort items. Mom likes tea or coffee so get some. Dude likes salted pretzels so get a few bags. Kid #1 likes gum so get some. Kit #2 likes chocolate so get a couple big bags of M&M's.

Total 2k. (Edited to include: Think I messed up the math on this by a C note. It's too late and I'm too tired to go back through it. If that is the case pinch a few bucks from each category to get it back to 2k.

So those are my thoughts on that. What do you think?

Saturday, September 27, 2014

From Around The Web

Often I see stuff in blogs, on youtube or whatever that I want to highlight and potentially discuss. These can almost take over the blog as there is so much good content out there. I have decided to roll this stuff up into a 'From Around The Web' series'. This will be a semi regular series 

 Formerly Bayou Rennaisance Man on: Protecting your economic future in a time of chaos. I very much enjoyed this two (at least so far) part series on Protecting your economic future in a time of chaos (see pt 2 here). I noticed this awhile back and meant to talk about it but things got away from me.

My thoughts:
- I am uncomfortable playing fortune teller about the future. However I currently see bad things happening. Inflation is eating at my income, especially in the areas of food and fuel. Our costs are soaring AND things are supposedly just fine. Heck if you watch the news we are in a great recovery.

- I certainly do not disagree with anything Peter said about building skills and food stuff. Generally speaking I think for this scenario (and a lot of others) there are some commonalities. You need some stored food to get through an initial shock period. You also need to be gathering or producing some food. One of these does not replace the other. Obviously urban folks will have a hard time with the food production and suburban folks have challenges compared to rural folks (with some acreage) but we all need to find answers that fit our own situations.

- In terms of work and income I think trying to consciously put yourself in a position where A) your job cannot readily be absorbed by a couple co workers and/ or B) a machine or C) a person in India.

-Furthermore I think building up some sort of income separate from your 'job' is pretty important. This way you will have a little money coming in that will not vanish if your job/ business falls apart. If this side effort is in the type of area that is recession proof. In a recession people may not remodel bathrooms in fancy Italian marble but they will get the broken toilet fixed. People may not pay for a fancy home theater system but will still want a home alarm, especially if crime goes up. You get the point.

-In the second part of the series Paul looks at taking advantage of employment opportunities in boom areas. If you cannot find a job to support yourself at home it is prudent to look at moving instead of sitting and whining. If it's going to be short term maybe a parent moves and the family stays put.

A relative of mine lives in a small town in western Montana. The economy there is in the tubes. The young motivated blue collar men work in the oil fields. A bus runs from North Dakota to town Friday night and goes back Sunday afternoon.

I can certainly understand people choosing to stay in the area of their choice, especially if family is there, and accepting it may limit them economically. If that is the difference between making 60k a year and 40 it is one thing. If it's the difference between long term unemployment and surviving off charity or being able to support your family then be an adult and make the hard choice to move.

NutnFancy did an excellent review on the Yugo M70 N-PAP AK-47 rifle.
This rifle is a darn good AK and an amazing value.The lack of a chrome lined barrel is not ideal but I do not think it is a deal maker either, especially since this is a proven design. They have been letting Slav's kill other Slavs for years and to my best recollection not a single rifle that fought WWI or WWII had a chrome lined barrel.

The AK vs AR discussion is a valid one and as AR prices drop and AK prices slip upwards becomes more relevant. Additionally if your particular flavor of Apocalypse allows for small amounts of ammo/ mags/ parts to trickle out of .mil and .leo hands the AR offers a considerable advantage. That being said I would absolutely take a Yugo M70 over a bottom end no name AR (Franken parts gun or factory). If the goal was an AK pattern rifle and cost was a consideration (eliminating Rifle Dynamics, Krebs and other high end custom jobs as well as the production but uuber pricey Arsenal) I would without a doubt suggest the Zastava M70 PAP.

Would I choose one over Project AR, definitely not, but price wise that is talking apples and way, way more expensive apples.

On a tangent I was drinking beers and BSing with bro in law and building an AR came up in the discussion. I took a minute to roughly tabulate the total cost of project AR and almost shite myself. It was about $2,400 though that includes a Burris MTAC, a LA Rue mount, a Surefire light and a free floating rail. Honestly I built that rifle in a situation where I did not need a rifle but wanted to build a really good one, not totally disregarding cost but going for quality with the goal of doing it right the first time so as to not want to go back in 3-4 years and do it better. While I might drop a better trigger like a Giselle in there I am fundamentally totally thrilled with the rifle.

If I were living on a boat or in a travel trailer so was thus limited on # or weapons and wanted a quality genuine go to war rifle that I wouldn't cry if it got lost the M-70 would be the ticket. A Yugo AK with a dozen mags and a case or two of 7.62x39 ammo is enough defensive rifle for anything I'll face. Honestly if I can't fight my way out of a situation with that rifle it likely will not happen with another rifle.

FerFAL did a video worth watching not so long ago.
There are things in this video I disagree with and others I agree with. Like anyone who has been involved in an event that was very powerful our friend FerFAL may be a bit focused on the specific scenario that he lived through in Argentina in 2001. No doubt his experiences were significant and powerful that being said it is easy for a person to to stovepipe on a scenario they were involved in.

 I am not exactly focused that everyone carries a full sized Glock (or M&P/ whatever) all the time. If we focused entirely on an economic collapse scenario where things were going bad that idea has some merit. The problem is our friend, who is genuinely a good person doing good things, speaks only from the view of his experiences.

I am not against packing  full sized pistola at all. However A) Baring genuinely crazy situations most folks will not carry them and B) Depending on your scenario a lot less gun could work just fine. Down here in CENLA I am comfortable with a single stack 9 or a 5 shot j frame. Granted if I was in Houston or NOLA  all the time I would carry Glock 19 or larger with 2 spare mage and probably have a folding stock AKor AR 'pistol' in my vehicle just in case.

Where I agree strongly with FerFAL is about stuff I have talked before.  Southnarc a said the same things  which mesh heavily with Street Robberies and You. Take away's actively engage people with eye contact. Should that not be sufficient get a good firing grip on your handgun. IMO this matters a lot. First because it shows the crooks you are packing which convinces them to go elsewhere, second it drops your time to draw radically, third because if you should get into a close up fight having a good firing grip on your pistola almost guarantees nobody will shoot you with it.

Anyway that is what I saw around the web recently. Hope you found it as interesting as I did.

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)
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?


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.
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