Showing posts with label euro. Show all posts
Showing posts with label euro. Show all posts

Monday, July 13, 2015

Greek Bail Out Update

Updated from awhile back. Looks like the initial Greek position, maybe a bluff),was called.They wanted to get back to the negotiating table right away, with even less bargaining power than before. Greece and it's European neighbors as well as the big banks have agreed on a potential deal. 

While I confess to not being super informed on the exact specifics of either deal this one seems a whole lot like the first, with cuts to pensions and significantly increasing the VAT (I believe from 14 to 23%) as well as Greece raising a fund from government property that is being sold to recapitalize banks. Also there is some nominal afterthought about funds for growth. The general concensus is this deal is harsher than the previous one the Greek people soundly rejected.

The Greek parliment will have to vote to agree on this new deal. That is sort of awkward as the last deal, which was probably better, was put up for a national vote and soundly rejected. The issue with the general Greek consensus, as much as a whole population can have such a thing is that it is at best somewhat contradictory and at worst outright mutually opposing. Greeks want to have their debts significantly written down, while ideally continuing to get subsidies to finance government and social programs the country simply cannot afford from it's neighbors and stay in the Euro. Greece wants to have their wine and Ouzo all day long but skip the hangover in the morning. Obviously this is not a realistic stance.

What will happen? I suppose it is anyone's guess. My gut is that the parliament passes the stuff necessary to get the bail out and they kick the can down the road a ways. 

Interesting times for sure.

Sunday, July 5, 2015

Greece Votes No

Greece voted no in a referendum on the most recent bailout offer. It was pretty surreal because the offer expired a few days ago but that does not matter. It was a pretty solid 61 and change no 38 and change yes.

For background Greece is a giant mess. Greek debt is 178% of GDP. To make matters more complicated GDP is the whole economy and not government spending. Government spending is running about 50 some odd percent of GDP which seems like a lot (the US number last year was about 35% and Germany averages in the mid 40's). They are solidly in the IMF/ austerity death spiral. People are seriously unhappy after 5 years of a terrible economy. They recently elected a leftist government with the stated goal of easing up the austerity and getting the economy going.

What does this mean? Well it depends on who blinks first.

A likely outcome is a deal being cobbled together by some group of stake holders to kick the can down the road a few more months. The deal would not be the free and easy pay when you can that Greece wants but more likely something barely palatable to either side. I do not necessarily think that is the most likely scenario but it is certainly a distinct possibility.

On the other hand the current Greek government is extreme and or incompetent enough they might make a deal impossible. Also Europe and in particular Germany seems pretty tired of footing the bill for their lazy overspending cousins. To make matters worse the lazy overspending cousins are not even grateful.

Granted a counter argument could exist. Lets say you loan a lazy overspending cousin twice as much as he makes in a year a little at a time subsidizing his overspending and habitual layoffs, expecting to be paid back with interest. Over time you get him to promise, around the time he needs more money, to start a budget, quit drinking and gambling, put forth effort at work, show up to work on time, etc. You are really suprised that, despite his promises the basket case is still a basket case that you are at least as much to blame for the situation as the shiftless cousin. In any case however much we could argue the lender was foolish that actually does not help the argument that they should open up their wallet to pay the 3 month overdue electric bill and buy some groceries to eat till payday.

Not that it matters too much for Greeks (though for the other PIGS it matters now and arguably for the US it is something to keep your eye on) but I did a post on how I would have prepared for this and so did Alexander Wolfe of T Blog.

So what is going to happen? Peter of Formerly Bayou now Cumberland Renaissance Man did an excellent post on the ridiculousness of both sides and what may come next.

What would Ryan the Greek be doing now?

-Getting the little bit of money I had in the bank out at 60E a day.

-If we lived in Athens (or other major Greek cities, do they have other big cities?) we would be going to stay with relatives in more out of the way areas for awhile. 

-Getting as much of whatever medicines my family needed.

-Stashing as much food as we could, probably looking more to help family members and good friends with pantries on near empty. That being said we would try to close any gaps in our food storage.

-Talking with my neighbors. Setting conditions for potential security plans if needed and seeing how they were doing. Maybe try to help (Oh you are out of matches, I think we have two partial boxes. Bring a half box by the next day.) or at least help guide them to a potential solution (We are a bit worried so we are putting our 60E a day into shelf stable food like rice and pasta. We also filled up our car and the 5 gallon can we use for the lawnmower, you might want to do the same.)

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

Wednesday, January 7, 2015

From Around The Web

Euro at 9 year low vs the dollar.  I wish it would have been 1.19 to a dollar when I was in Germany.
Deflation in Europe
The Greeks elected a leftist government that is anti austerity which could lead to them breaking the current agreement. The problem is once a country enters the IMF death spiral there really isn't a way out. Some smart people have argued that is intentional.

From Weapons Man
Some predictions for 2015
The Big Lie about Wanat (AKA why M4's aren't jamming and getting soldiers killed)
Wars to Study, to Study UW

From American Mercenary
Fake cell towers, IMSI grabbers, and how to secure communications through an unsecure medium

From Max Velocity
Max Velocity Riflemen training plan
1978 Nuclear Holocaust: March or Die 40 miles with 40 pounds in 24 hours is a darn good goal yet, for a healthy adult who is willing to do an extensive and deliberate train up, a reasonable goal.

From Sheriff Jim Winson
If You Can Shoot AKA why the gun famed border patrolman, shooter and writer would bury for bad times is an S&W Model 19 with a box of shells.

Thursday, May 24, 2012

Life is What Happens When You Turn The News Off

I seem to go into a sort of cycle with the news. Right now I am about sick of it. I still check out the drudge daily and if things get boring cruise the BBC. Instead of listening to the news at work I have been using a comedy show as background. I keep up enough to have a clue what is going on but really am having a hard time pretending to care.

The issues of police abuses has been weighing pretty heavily on my mind lately. Over a short time (since my being able to pay attention to these things at a relatively adult level) the changes which have occured are widespread and universally negative. Right now I do not have any additional thoughts on this topic which I am willing to share in a public venue.

Gang/ Mob attacks seem to be on the rise. The perpetrators, victims and area demographics seem to be quite consistent. The only thing that concerns me more than this is the total ambivalence of law enforcement about these crimes. The widespread efforts of government and media to conceal these events does not weigh positively into the mix either. I am not personally concerned about this. I do not frequent the kind of areas where this sort of thing has been happening. Also my life patterns, like being home at 7 to put the kid to bed, drops the odds even further. In any case it is still troubling.

Greece getting out of the Euro may almost be a foregone conclusion at this point. The idea of Euro bonds is laughable. Like cosigning for a loan your deadbeat brother in law/ whatever to get a loan it would require Germany be on the hook for things in the end. Like cosigning in general it is just a terrible idea. Banks or private markets are far better judges of who is a worthwhile risk than friends and family. I get what is in it for everybody but Germany, who actually has their financial house in order.

Also to complicate things there is significant risk to the Euro itself. As Tam put it "So Greece's profligate habits are threatening to drag the Euro under. Germany, the only wino at the bar keeping a squinty eye on the tab, is urging some restraint on Greece's part, which makes the Jerries the no-fun bad guy of the story."

The biggest way this inconveniences me is that it means I am not going to Greece which sucks. It was definitely on our short list before the mess of the last few months. Now the risk of getting stuck somewhere with a toddler in tow makes it a no travel zone for us. I guess it is a significant global risk, blah blah blah but I don't care about that.

So what did I do today?

After getting off work I came home for some quiet family time. For no clear reason I decided to make home made pizza. I had never done this but with some help from Wifey utter disaster was averted. I learned to do something new and we had a pretty good dinner. It was a nice quiet evening and I got something out of it.

It is worth noting that Dave Duffy wrote an article that inspired this one but was much better.

Anyway I hope you all have a nice quiet evening.

Monday, January 24, 2011

What Did You Do To Prepare This Week?

When I wasn't at work we've been trying to maximize family time. Not a lot happened here in terms of preps. We've been working our way through storage food and stuff. However since we ended up eating out more than usual (just kinda happened and at this point we are just focused on keeping things as easy as possible) we didn't go through that much stuff.

We have been selling some unnecessary stuff. The combination of Wifey relocating and me deploying comes with all kinds of $100ish expenses as well as a grand for Wifey's ticket home. No big worries as we've got the ticket paid for. This is just a bit of a gentle push to sell the stuff we have been meaning to sell for awhile now. We made $75 for stuff we spent $30 on so that was nice.

We did stash 15 Euro's but that was on accident as we had a 50 and dinner cost 35.

I did OK in terms of working out. Got 3 extra workouts which is under my goal of 4 but certainly better than 0 workouts.

What did you do to prepare this week?

Sunday, December 12, 2010

What Did You Do To Prepare This Week?

The early part of the week I was busy with work. Did some good training which I may talk about later. Also I read most of a book on investing. Got home late Friday. Saturday I decided to inventory a bunch of stuff including our cash and precious metals. I had a pretty good idea what we had but now I know exactly.

Put another 20 Euro's into our foreign currency reserves. Also I counted and divide up all of our Euro change. Going to change in E30 at my next trip to the bank and put it into the reserves also. It is amazing how change can add up, especially since there are one and two Euro coins as well as 50 cent pieces.

Ordered a 1,000rd case of 9mm Federal 115 gr JHP from Lucky Gunner for $350. The price is usually $380 which is very competitive already but it is on sale for the awesome price of $350 until the 16th. The holidays are definitely an expensive time of year but if you are a bit light on defensive 9mm ammo and have the cash to spare this is a great deal. Also I was pleased to see that they don't stick it to you for shipping. It looks like they just pass on the actual cost of shipping and forgo the punitive 'handling' charges.

Personally I store 3 tiers of ammo for defensive rifles and handguns. The first is real premium stuff (Federal Hydroshok's, Corbon, etc), ya know the kind that costs around a buck a bullet or more. Stocking up is really cost prohibitive so I just keep a few boxes of this stuff. Next is the more generic type of JHP or soft points. This stuff probably isn't quite as good as the real high dollar ammo but it is at a price where I can actually afford to stock up on it. Certainly I would be better off loading this stuff than ball and it doesn't usually cost that much more. This is the Walmart white box hollow points and the like. Lastly is cheap ball ammo which I store mostly for practice.

I also purchased a nice two point adjustable sling. Did some looking and ended up purchasing a Vickers Padded Sling. For most folks a generic sling works fine but I have recently found them to be wanting. As I spend a lot of time carrying a rifle the added utility and comfort should be well worth the $52.

Ended up reordering a Biachi 100 professional holster for my Glock 19. Thought I had got one already (sometimes unfamiliar websites are finicky AKA I am just stupid) but when I went to check on the order it said I didn't exist. Reordered from another site and actually saved $16 which was an added bonus. Hopefully it will get home soon enough to use it at home.

We are headed home for the holidays which I am looking forward to. Haven't been home in awhile so it will be good to be able to see everybody. It looks like I am going to be able to spend some time with my co author's Ryan and Chad which I am excited about. Unfortunately it doesn't look like it will be the three of us. However between getting a bit spread out geographically, varying travel/ work schedules and grown up type life commitments we have to take what we can get.

The manager of the warehouse which receives and stores stuff for me said I am going to have my own early Christmas just opening everything. I will have to pick up some ammo cans and properly store the ammo in them. Also I need to organize spare parts in some meaningful way. I am definitely looking forward to shooting.

Considering it was a short week in terms of prep time I am pretty happy how it turned out.

What did you do to prepare this week?

Saturday, November 27, 2010

Interesting Note and a Reminder To Keep Currency On Hand

Something sort of strange happened. My sister came to Germany and of course she brought money with her. A lot of banks charge crazy (10% isn't unheard of) rates for using ATM's in Europe so we suggested she bring cash. Usually changing it to and from Euro's is easy. However it just didn't happen before Thanksgiving and stuff was closed then. We headed out of the country for a trip to Paris, her destination of choice and weren't particularly worried because we figured we would be able to change it at our destination. Most countries have those little money changing booths everywhere.

Not Paris. There are no convenient money changing booths and banks won't change money. Maybe you can do it at the airport but I am not sure. We walked around for more than an hour this morning trying to change money. It is definitely very convenient if not impossible.

It wasn't a big deal in the course of things. Our travel money was mostly in an account that doesn't have punitive charges for outside of the US transactions so we just paid for stuff. Wifey told her to just have me get whatever she wanted and we would figure it out later. I got the bonus of being able to make fun of her for nobody being willing to take her stupid American money. Things like telling her a pick pocket would just give her wallet back because it's not like he can buy anything with or change dollars here anyway.

It was nice that we could make light of the situation. However as she pointed out if she was alone it would have been a real problem. I would extend that idea into preps. If you are planning to be able to buy stuff you need a means of exchange people will accept. While can openers, AK mags, common caliber ammo and 5 gallon buckets of food are great to have for a lot of reasons they are not regular means of exchange. You need a stash of whatever the currency in your area is. It isn't necessarily a bad idea to have some money in a currency you see as stable like the Swiss Franc or the Euro or the Yuan but that should be in addition to your stash of currency you can spend at the gas station, corner store, etc.

In this precious metals have an interesting category. They are bought and sold everywhere it is legal and the same I presume is done underground in places where it is illegal. It is however not convenient. In most places you have got to sell them to an individual who understands them, knows the value and how to make sure they are legit, etc. You've got to sell them to a guy to get currency before you can go to the store. I can see how a reasonable person might not want to hold onto a ton of dollars these days, particularly if they bought a good amount of gold and or silver 5 or 10+ years ago at very good prices. However I would still say they need a decent stash of cash (sticking with a months cash expenses as a minimum) just to make things work for awhile and then if need be sell some PM's. Of course there is a risk of those dollars getting hit by inflation but there is a risk to everything. I would however submit to you that if things are bad enough that a months cash expenses getting inflated away rapidly (vs a high of even 8-15% in a year which would still be devastating) in weeks or months then you've got bigget problems than missing that bit of cash.

So keep some of the currency that is used in your area. Might not be a bad idea to keep some currency of an area where you could reasonably decide to go to if things get wonky. Wouldn't get crazy about that but enough to rent a room and get some food would be wise.

Personally I keep both of the currencies I use. I also store precious metals. Regardless of the situation I cannot see how I wouldn't go through all of at least one type of currency (even if in a day or two) before going to the shiny stuff. It is downright hard to realistically see a situation where random prep type items (even barterable ones) are more desirable for trade then the shiny stuff, let alone cash.

Thursday, July 8, 2010

What Did You Do To Prepare This Week?

This week I was pretty busy with some other stuff. For once it wasn't work which was real nice. Did however get some stuff done. We have like 60 Euro's worth of coins to change into bills and put into the fund. Yeah the euro is going through some rough times but seeing as it is the currency in the area I live in keeping some around is just something smart people do. I don't keep a whole lot of money in euro's but a few hundred bucks is just smart.

Also I read a couple of books on Afghanistan which was cool. Kill Bin Laden was good. It talked a lot about the challenges of fighting in rugged mountainous terrain and working with indigenous Afghan forces. Charlie Wilson's War was very interesting.

I read part of a book on money stuff but it sucked.

Also I got a pair of 3 d cell mag lights with some batteries to feed them.

What did you do to prepare this week?

Thursday, June 17, 2010

What Did You Do To Prepare This Last Couple Weeks?

I will try to get better about this feature. Anyway here is what I have been up to the last couple weeks.

I started an Orange Savings account at ING. Ya know the kind of account that paid 5% a few years ago and now pays 1.3 or so. Beats 0% and it is FDIC insured. Beats the heck out of having my emergency fund sitting at 0 percent.

Reeived some gold and silver as well as  beer brewing kit. Read most of the book that came with the kit.

Stashed some Euro's. Not a whole lot but it is sure growing on itself.

Starting to fall into a modest workout regimen.Well modest in that it occurs outside of normal work hours.

Restocked the pantry with some staple foods.

What have you done to prepare this last couple weeks?

Saturday, June 12, 2010

The Future Is Not Set

Dollar to regain parity with Euro, if it still exists.

Belgians vote on future, united country in doubt. 

We need to not fall into a pre WWI mindset that history is set and all that can change is minor details. Seriously if you take a look at any period of (just to toss out a number) say 50 years in history some crazy stuff happens. The future is not set and things will change. Currencies will fail and borders will change and countries come and go all together. There will be conflicts.

I think that most notably sooner than later European nations and in particular Germany (man they really aren't happy about this Greek bailout madness and the Euro tanking) are going to collectively forget about the massive horrors and almost two entire generations of young men lost in WWI and WWII and give up on their whole recent pacifism kick. They may come to question the status quo in the tried and true fashion of war.

Just like the last 50 years (or any recent start point you choose) it is going to be a wild ride. Buckle up tight.

Our advertisers pay us so you don't have to. Please click on their links and check out what they have to offer. Seriously these folks sell some really cool stuff at very fair prices and it is worth giving them a look. A click a day will keep this place up and running. 

Saturday, June 5, 2010

Where We Are Going

I have been thinking about this in various forms for awhile. Maybe the world will go all Mad Max and we will be killing each other over cans of dog food but almost surely not. Maybe there will be a massive long term global economic implosion brought on first by the total collapse of the Euro Zone then hyperinflation in America and the total collapse of the US Dollar. I hesitate to try and quantify this one. It is more likely than a Mad Max scenario but less likely than say higher taxes, increased crime, inflation of significant but not hyper levels and a generally bad economy for some time to come.

I have been thinking about positive things an individual can do to improve their situation. Also real world quantifiable stuff that is likely to affect us. Of course common sense stuff like having food, water, arms and savings applies but I talk enough about those.

I am seriously concerned about the long term prospects of those in the 40-60 age range. My Grandparents (more or less the "greatest generation" did pretty well for retirement. Most of them spent a long time at one job and got a defined benefits retirement which coupled with social security and various personal savings left them comfortable. They generally bought, stayed in and paid off modest homes and were pretty good savers. I fear that my parents generation (the Baby Boomers) are in a far worse spot.

They generally do not stay for their whole working life with one company. Few companies offer a lot in the way of retirement anyway these days. The only folks offering defined benefits plans (great for the worker, bad for the company) are a few huge corporations, union jobs and government at various levels. Unfortunately this generation seem to have saved like they had a defined benefits style retirement coming when in reality they sometimes had a 401k match. Thanks to modern health care they are going to live for a long time.

Where my grandparents generally bought one house, paid it off and stayed in it they move a few times, often up sizing and or using their equity like a Visa card. Instead of a paid off home at retirement age Boomers often have a relatively expensive not paid off house. I watch the financial adviser shows and laugh my head off when somebody wants to retire and still has a mortgage or two. How the heck do they think that will work.

Even if they want to just continue working that might not be an option. Workers in their mid to late 50's are in a rough spot. They are generally expensive to employ as they have a lot of experience at something. Also as their experience is pretty specific they can have a hard time finding a new job. Plus their health care costs are higher and they are sick more often. The old back up plan of just working a couple more years to help the retirement numbers is not something that should be counted on. Many organizations have a strong incentive to replace them with younger less expensive workers.

So I fear many in my parents generation may economically need to work past when they would want to retire but be unable to do so. That means a lot of folks are going to be hosed. If I was a 50 something I would be doing the math to see where I was for retirement without social security. Without some X factor the best I can see (from the retiree perspective) is them getting paid in increasingly less valuable dollars based on progressively more and more cooked CPI numbers.

One interesting thing is that people did not used to really "retire" but they also lived far shorter lives and were part of a 3 generation household with a fairly large degree of self sufficiency and low taxation. People were usually pretty healthy, got sick and then died. Thanks to modern medicine people live far longer than a hundred years ago. However we haven't really been able to extend the plateau of "good years" much. 

As a young person I see a lot of families becoming 3 generation households. I will likely be one of them but not for economic reasons. Young people might want to have an informal talk with their parents about this. If just to see if they should look at tacking on another bedroom to their house.

For us younger folks I think it is going to be a crazy decade or two. The only good thing for us is that we are young and have the ability to ride something out and recover afterwords. I see the scenario for low skill "blue collar" workers as particularly bleak. These folks are either going to need to either change paths or reside themselves to a life which is below the "middle class".

As for my generation. I think that for us the differences in outcomes based on choices of jobs and money management will be the starkest since the Great Depression. Those who get marketable skills will be in a decent place. Cash talks in a bad economy. However people who decide to have 2 expensive cars with loans to match and a credit card bill that costs a buck and a half to ship then buy a house with a payment that is 40% of their pre tax income will fail miserably. Wages will not necessarily grow at old rates. Relying on home equity growing fast and forever to bail them out won't work either. As people change jobs at least a few times in a working life those with payments to the hilt will have issues.

Those who stay out of debt and live within their means will do OK. They always have and always will if just relative to the situation. It is probably going to be a wild ride but those with  available resources will be able to best position themselves for it. Folks with payments up to their eyeballs don't have many available resources. Good choices beget more good things and bad choices beget more bad things.

If nothing else those spare resources can be put toward building a bedroom for the parents.

Saturday, May 15, 2010

Little Bit of Life

We were real busy today. Definitely the busiest non traveling weekend day in awhile. We got a whole bunch of super cheap used baby stuff. Everything is major brand (same stuff we would have gotten anyway) and in very good condition. We seem to be paying between 10 and 15 cents on the dollar. Of course we could buy the stuff new without it being an issue. That is because unlike so many young people these days we waited till a decent financial place to have a kid. However (except for safety stuff) I see no reason to shun perfectly good used stuff. As soon as Walked Texas Ranger slobbers, pees and barfs on a given item it is used so why not save the devaluation. Reality is that quite often people who can afford to not worry so much about the cost of stuff (because they make choices to earn a good living and spend below it) do worry about it and make intentional plans to put themselves in the best position possible.

We also got a great deal on a chest freezer. It might be a sign of adulthood but I am so excited about more freezer space. Now we can store more meat and other low frequency stuff (popsicles, breakfast sausage, hamburger and hot dog buns, etc) which will be super nice. Also instead of picking up 1 extra when there is a good deal we can now pick up 5. This will let us save even more money and keep more food around.

Wifey decreed that we are moving things around in our residence. It falls inside her area of responsibility so my only real function will be physically moving stuff to its new locations. On the plus side she decided that we need more shelving, like big industrial type metal shelves for the kitchen. First we can just use more space for food storage in the kitchen and second we need to improve the ability to organize and easily access food. It is generally easy to find the canned stuff you use often and thus keep around in quantity. Spaghetti sauce, rotel tomatoes, baked beans, tomato soup and such are easy to find. Laying your hands on that one can of a thing you hardly ever use but really want to make a recipe at 8 in the evening is a bit harder if it is buried in a cabinet. I've been thinking when we get more shelves having a dedicated random area will be good.

Tonight we got Chinese food which was very tasty.

The Euro tanking is nice. Well it is nice for me anyway as I'm paid in dollars. It is fair to say that the shift is more a realization of the Euro's weakness than the dollars strength reemerging. I don't know what will happen with Greece or Spain or the Euro Zone at large but it sure makes for interesting reading.

I haven't been on the world band in awhile. Will probably fire it up tomorrow night. That is all for now.

Take care of each other.

Friday, May 14, 2010

Living In a Duel Currency World

I live in a duel currency world. I am paid in one currency and it isn't the currency of the country I live in. I routinely (if not constantly) carry 2 currencies and use them to buy goods and services in order to live my everyday life. Here are some random thoughts that come from these experiences.

This is one of the many things that Americans simply do not deal with. An American can live a normal life and just never come into contact with anything but good old US Dollars. America is a huge and powerful country. For a normal persons life in the US there (except paranoia or unorthodox financial transactions) is simply no need to hold anything but dollars.

Many Americans end up going on a trip here or there at some point, if just to Canada or Mexico. These people end up dealing in a foreign currency but often exclusively. They change the dollars they are going to spend on entertainment, dining and shopping into pesos or whatever and just use that currency for the duration of their stay. While dealing in a foreign currency is a novel experience it doesn't compare to dealing with two (or I guess more) currencies on a regular basis to conduct normal transactions.

People will not accept currency they are not used to. If they don't know what it looks like or what it is worth they will not take it. Businesses will deal with currencies that pop up regularly in the hands of intended customers, well that and the owners know what it looks like and is worth. I recall a few years ago some TV blip about how the Dollar was dying (long before the Sub Prime mess) because some trendy shops in NYC were accepting Euro's. A big part of why it made the news was that there were trendy wanna be European (it is a sort of East Coast thing I think) Wankers involved. A more practical example would be a city near the border with Mexico or Canada accepting their currencies or a store in an area with a large immigrant population accepting that currency. Also the theme of a business accepting currency that they know the look and value of which shows up repeatedly continues. In my immediate area a good percentage of businesses will accept dollars, of course as well as euro's. If I drove 25 miles to a little random village they would only accept euro's.

While a wad of "stable" currency could be valuable as an inflation hedge don't necessarily expect the local grocer in Peduke, Iowa or Andersonville, Texas to accept Swiss Franks or Australian Dollars or whatever.  If the local currency goes to heck in a hand basket some people may learn more about different kinds of currency. Often people end up using a precious metals shop/ money changer to convert their currency into local money at the current exchange rate to buy whatever they need.

The biggest thing you need to live successfully in a dual currency world is the ability to rapidly make fairly accurate calculations between currencies. This means knowing what the exchange rate is and being able to do some math rapidly. Unless it is making huge shifts don't worry about this one too much the goal is to put the cost of a service or item into terms you can work with. Think about it like converting metric to standard or whatever. Really for average personal transactions a pretty accurate figure is good enough. To put that into perspective 2 percent on a hundred dollar purchase is 2 dollars. When you talk about transactions in thousands or tens of thousands of dollars or more a 2 percent difference matters but for a round of drinks or dinner or such it really doesn't.

You just need to be able to do this to know if a given price is good or too much.

What I am describing is a (relatively) free market scenario. Anybody inclined to do so can carry whatever kind of currency they want. Only my resources, desire and ability to find random currencies limits what I can carry or hold. The key is to see what value you are exchanging for a given good or service. Does it really matter if I pay ten dollars or about 7.60 E for a given item? No it does not because they are worth the same.

The same could be said about precious metals. Does it really matter if you pay for something with $340 or a quarter ounce of gold (lets say the value is the same, I know it is close)? No it doesn't.

Where things get downright crazy is when the system is strongly regulated by a government, go figure! Governments with a weak or essentially worthless currency often try to keep their currency alive through price and wage controls. Also it might not suprise you but this doesn't work real well. At best it works in the most utterly authoritarian and isolated regimes like the former USSR which was also big and resource rich enough to be able to manufacture (at least junk versions) of most things they need. These governments will find a way to trade for essential items they can not produce nationally. Following typical authoritarian priorities this means fancy cars and luxurious stuff for the elites and things to keep the military running to hold down their unhappy population. Not much else gets imported because go figure an appliance plant in a place that doesn't suck has no interest in their worthless currency.

Also these countries at least try to limit possession of and transactions in other more stable currencies or precious metals. Part of this is Gresham's Law but the bigger issue is (official) exchange rates not being equitable. Getting back to my free market example for a minute. If a nice dinner at a little restaurant/ bar/ hotel costs the equivalent of 10 euro's or 13 dollars (or lets say a half ounce of silver) and I can easily trade between the three at the current honest rate I just pay with whatever is most convenient. Now back to a sucky (generally socialist) country. Their currency is valued way too high. The "official" exchange rate is a joke. Often these governments will (with varying degrees of success) restrict or outright ban the possession of other currencies.

I think somebody said once that when the free market becomes criminalized then criminals will run the free market. People will find a way to smuggle in goods that are otherwise rationed or unavailable (to the non elites). Authoritarian Communist regimes are big on security of their borders. Despite their propaganda it is really more about keeping their people from leaving than anybody from invading.

The thing is that authoritarian communist regimes conscript a large amount of their force and pay is generally quite poor. So unmotivated poorly paid people guard their borders. While I have zero sympathy for corruption in military and government of non sucky countries I understand why it exists in sucky ones.

If I had an equivalent job in a sucky socialist country with price controls I might well be put on border guard. I would likely be in charge of some random intersection and the land around it. I would be poorly paid and my men would be paid worse. If an enterprising individual wanted to bring a truck of black market items across that checkpoint and wanted to make a deal I would be sympathetic. I would get some cash and my guys on guard would get a bottle of Jack Daniels or a carton of Marlboro's or some Levis or whatever. Would we stop spies or shoot at invaders, of course, but a little black market action is another matter.

Sucky authoritarian communist countries have black markets to varying degrees. People smuggle stuff in or steal stuff from work or whatever and trade it. In more extreme cases the local currency might not even be accepted there, but if you have something they want you can trade. Many average and poor people are stuck out of this market in its most narrow meaning because they do not have access to other currency. They may however have a skill or some stuff they snagged from work to swap with a neighbor who works at a place that makes something they need.

This sort of duel currency world is infinitely more complicated. It is often impossible to trade the local currency for a more valuable one. It is often illegal (if just poorly enforced) to possess other currencies or precious metals. Instead of just going to a store and getting what you need it can be a pain.

In conclusion. If you can afford it having a percentage of your resources in an alternate currency or precious metals makes sense. Knowing the value of different currencies and precious metals is prudent. It is essential to be able to rapidly figure out the real cost of goods and services.

Saturday, April 10, 2010

A Late Night Conversation and Random Thoughts Theiron

I couple days ago I ended up pulling an all niter. Had a bunch of work that needed to get done so I was working until about 1 o'clock. I had to wake up at 4 the following morning. Since I would have the opportunity to take a nap the next day I just stayed up. Ended up having an interesting conversation with the night shift folks.

Personally I am not so sure about the security and stability of China. Their ability to keep totalitarian rule going is something I doubt. Buying people off with letting them own property, make money and such works OK as long as the economy is good. However if it gets too good they have problems. Right now their system works to a large part because the rural poor from the inland area are forcibly held in place. Also sooner or later rich people will want the same sort of social and political freedom as they have for the economy.

While there is was some debate on how bad things could get in the US the picture is bleak. At best I see a rather painful decade coming up. When people eventually get back to work and businesses grow and borrow and invest we are going to see inflation. I just can't see a way that when the massive amount of new money gets moving through the economy it will not decrease the value of currency. It might be catastrophic hyperinflation which could lead to war or a full on default. It could just be late 70's to early 80's style high inflation and interest rates. One fellow saw the Fed getting shut down and replaced with a true government currency. Avoiding adjustable rate interest debt like the plague and generally being financially fit is good advice. If you can afford it putting a few spare bucks into silver and gold isn't a bad idea either.

We were generally not enthusiastic or optimistic about this new health care bill. That it started by being billed as stopping big, evil insurance companies from hurting people and ended with people being forced to buy health insurance from big, evil insurance companies is sad, ironic and not at all surprising. Personally I think we the people are getting taken for a ride but soon enough government may well stick it to insurance companies. In general our government likes to start a program (special education is a great example) and then gradually remove funding but still under threat of something bad, force the program to continue.

There was significant concern voiced by one fellow that since the government is now in the health care business they can and probably will stick their nose further into people lives. Even aside from trying to centrally manage (or at least shot call) 1/6th of our economy it is a great excuse to get all up into peoples business. Think of it like the Commerce Clause but for personal behavior.  Since you doing X might arguably cost the government money via health care it is now taxed/ restricted/ banned could become a common summary of upcoming legislation and decree's.

In some ways the recent problems with the Euro were surprising to us. Then again if you really stop and think they shouldn't be. First of all the relatively recent times where the Euro has pwned the dollar have not been about the Euro's getting stronger but about the dollar getting weaker. Secondly lets look at Europe. In general northern Europe and particularly Germany have solid economies though now and then their socialist programs (they are expensive) cause issues. Southern Europe is a big financial mess. They have relatively similar socialist programs as the rest of Europe but without the economies to support them if things go less than perfectly. Europe is an expensive place to do business and especially the kind of business that employs lots of people. Those whose industry can be anywhere often avoid Europe's high wages and crazy powerful unions. The last couple years chaos has hurt them albeit slower and to a smaller degree than the US but I am not convinced these issues haven't been building for awhile.

There was some talk of the world reserve currency shifting away from the dollar. Personally I think that baring a complete economic melt down of the US, that is unlikely. I think this because there isn't any better option. The Euro certainly isn't as solid as it seemed not too long ago and in terms of managing it the Europeans have too hard of a time getting anything agreed on. I don't think anyone is stupid enough to go with the Chinese Yuan because of a lack of long term history and well, China is not the kind of government one would want to trust with something that big. The Japanese Yen is all over the place and their whole weird pseudo fascist system plus people still vividly remember their Lost Decade. The Pound Sterling is probably in some ways worse off than the Dollar. Russia is a totally unstable Gangsterocracy and heavily dependent on energy prices staying high. That whole "basket" idea seems unreliable and outright nutty. I have a hard time seeing enough nations being willing to buy into it. Then again it is so nutty and prone to manipulation that governments might love it. I see the dollar staying as the world reserve currency for the foreseeable future, if just because better options are not currently available.

 Also, at least for relatively short periods of time coffee helps you stay awake.

Lastly I have been enjoying The Drudge Report as of late. If I have just a 15 minute coffee break to get the news a glance there and one at the BBC News front page gets me up to date.

Since it is late I am going to bed now.

Sunday, March 28, 2010

What Did You Do To Prepare This Week?

Work was pretty nuts for me but that is life sometimes. Monday I dehydrated some apple slices for Wifey. Stashed some Euro's because instead of going out for dinner we just grabbed a pizza and stayed home on Saturday. Had some fun with the shortwave radio last night. I cleaned out the paperwork cabinet getting rid of unnecessary or outdated stuff and excessive copies. While doing that I took all the real essential stuff which isn't in our wallets and put it into one of those plastic paperwork envelope things. Passports, birth certificates, marriage certificate, car title and an extra checkbook. The stuff we would really want if leaving in a hurry and packing light. I had been meaning to do that for awhile. We picked up some extra ketchup at the store today because it was on a good sale.

All things being equal it was a pretty productive week. 

What did you do to prepare this week?

Thursday, March 25, 2010

Only as Strong as the Weakest Links

Portugals debt rating is downgraded to AA. The Euro is going down in value. Today it was at a 10 month low. Some sort of a vague potential last resort bail out for Greece is in the works. All of their cost cutting measures are not really equaling out the current higher costs of the borrowing necessary to feed their economy. Very interesting times.

Sunday, March 21, 2010

What Did You Do To Prepare This Week?

Well a case of .223 ammo alone made this a good week for me. I also dehydrated some pineapple. It is pretty good though I need to really figure out the exact right amount of time. I did a lot of cooking this week in the crock pot. Since Wifey is working these days our dinner choices seem to be crock pot, quick pasta or meat and taters kind of stuff and occasionally some sort of cheater meal. For a little while there we were slipping from eating real food as a general rule. We started eating out a bit more and then when our cheapness made up knock that off moved to easier stuff. Not that there is anything wrong with some good processed Americana like hot dogs now and then but too often just isn't good for you. This week we were better which is good. Today I made barley casserole which is pretty darn good.

We put away some more Euro's which is good.  Folks occasionally question that. Some of them likely weren't tracking that I am in Europe right now. I keep some Euro's around because that is what spends here. If I was in Japan I would have Yen and if I was in Canada I would have Canadian Dollars. Other folks don't seem to see the point in keeping cash on hand and favor silver or something. The thing is that you need cash. Yesterday I counted up our random change and took it to the bank to exchange for a fiver. One of the interesting parts of having one and two euro coins instead of bills is that having too many of them gets bulky and heavy fast. We do keep some onesies, twosies and change around for small purchases. Stashing a 10 or a 20 every week seems to be working pretty well. It isn't particularly likely that we will need them but like the case of ammo, when you need it you really need it!

 The next several weeks are going to see little to nothing getting done but that is life. Tonight or tomorrow night I will fiddle with the Shortwave Radio which is getting more entertaining as I can hear stuff now. Will write about that later.

Sunday, March 14, 2010

What Did You Do To Prepare This Week?

I have let this one go for a few weeks. No great reason why but things got sort of busy when I traveled for that week and I got out of the pattern of it.

Over the last couple weeks we got a bunch of clothes at the thrift store. I got  a pair of nice fleece jackets for 50 cents each.

Whatever money out of our entertainment fund we have not spent has been going toward the goal of stashing some more Euro's. At some point we will pull the difference out of the bank but at 10-20 Euro's a week over the course of the year it will be easier on the budget than just grabbing it all at once.

We got a bunch of flour as well as sugar and salt at the store plus some peanut butter and jelly.

Got a couple of interesting books at the library. One on war in European history, another on Pakistan and a third that is by Thomas Friedman, the title of which escapes me.

Really got the Grundig up and running. Will talk more about that later.

Today we saw running shoes on sale for 50% off. They happened to be Asics which are the brand I wear exclusively. They had my size so we snagged a pair. I got a new pair recently so I will not need another for probably 4 months but for a bit over $36 instead of $72 snagging my next pair was an easy decision. One of the real benefits of having a few bucks lying around is that you can take advantage of that sort of thing.

Well it has been a pretty decent couple weeks.

What have you been up to?
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