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The amount of gold or silver savings you should have

(Survival Manual/7. Warehouse / The amount of gold or silver savings you should have)

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What to Do When – Not If – Inflation Gets Out of Hand.
4 Sept 2012, Financial Sense.com, by Jeff Clark
Pasted from <http://www.financialsense.com/contributors/jeff-clark/what-do-when-not-if-inflation-gets-out-hand&gt;

“The cheek of it! They raised the price of my favorite ice cream.

Actually, they didn’t increase the price; they reduced the container size.

I can now only get three servings for the same amount of money that used to give me four, so I’m buying ice cream more often.

Raising prices is one thing. I understand raw-ingredient price rises will be passed on.

But underhandedly reducing the amount they give you… that’s another thing entirely. It just doesn’t feel… honest.

You’ve noticed, I’m sure, how much gasoline is going up.

Food costs too are edging up.

My kids’ college expenses, up.

Car prices, insurance premiums, household items – a list of necessities I can’t go without. Regardless of one’s income level or how tough life might get at times, one has to keep spending money on the basics. (This includes ice cream for only some people.)

According to the government, we’re supposedly in a low-inflation environment. What happens if price inflation really takes off, reaching high levels – or worse, spirals out of control?

That’s not a rhetorical question. Have you considered how you’ll deal with rising costs? Are you sure your future income will even keep up with rising inflation?

Be honest: will you have enough savings to rely on? What’s your plan?
If price inflation someday takes off – an outcome we honestly see no way around – nobody’s current standard of living can be maintained without an extremely effective plan for keeping up with inflation.

It’s not that people won’t get raises or cost of living adjustments at work, nor that they will all neglect to accumulate savings.
It’s that the value of the dollars those things are in will be losing purchasing power at increasingly rapid rates. It will take more and more currency units to buy the same amount of gas and groceries and tuition. And ice cream.
I’m not talking science fiction here.
When the consequences of runaway debt, out-of-control deficit spending, and money-printing schemes come home to roost, it’s not exactly a stretch to believe that high inflation will result.

We need a way to diffuse the impact this will have on our purchasing power. We need a strategy to protect our standard of living.
How will we accomplish this?
I suspect you know my answer, but here’s a good example. You’ve undoubtedly heard about the drought in the Midwest and how it’s impacted the corn crop. The price of corn has surged 50% in the past two months alone.
Commodity analysts say the price could rise another 20% or more as the drought continues.

While the price of gold constantly fluctuates, you would have experienced, on average, no inflation over the last 30 years if you’d used gold to purchase corn. Actually, right now, it’d be on the cheap side.
When you extrapolate this to other food items – and virtually everything else you buy – it’s very liberating. Think about it: gold continues its safe-haven role as a reliable hedge against rising inflation.
I believe that those who save in gold will experience, on average, no cost increases in the things they buy and the services they use.
Their standard of living would not be impacted.

I think this kind of thinking is especially critical to adopt when you consider that supply and demand trends for gas and food dictate that prices will likely rise for a long time, and perhaps dramatically.
So how much will you need to make it through the upcoming inflation storm and come out unscathed?

Like all projections, assumptions abound. Here are mine for the following table. I’m assuming that:
•  The price of gold, on average and at a minimum, tracks the loss in purchasing power of whatever currency you use, and that it does so from current prices. Given gold’s history, this is an easy assumption to make.
•  Gold sales, over time, capture the gain in gold and silver so that your purchasing power is preserved. (This doesn’t mean I expect to sell at the top of the market; I expect we’ll be selling gold as needed – if gold has not itself become a widely accepted currency again.)
•  We pay taxes on the gain. This will decrease our net gain, but there should still be gains. In the famous Weimar Germany hyperinflation, gold rose faster than the rate of hyperinflation.

To calculate how much we’ll need, I looked at two components, the first being average monthly expenses. What would we use our gold and silver for? From corn to a house payment, it could be used for any good or service. After all, virtually nothing will escape rising inflation. Here are some of my items: groceries, gas, oil changes and other car maintenance, household items, eating out, pool service, pest service, groceries and gas again, eating out again, vitamins, movie tickets, doctor appointments, haircuts, pet grooming, kids who need some cash, gifts, and groceries and gas yet again. Groceries include ice cream, in my case. How many ounces of gold would cover these monthly expenses today?

And don’t forget the big expenses – broken air conditioner, new vehicle, vacation… and I really don’t think my daughter will want to get married at the county rec hall. How many ounces of gold would I need to cover such likely events in the future?
The point here is that you’re probably going to need more ounces than you think. Look at your bank statement and assess how much you spend each month – and do it honestly.

The other part of the equation is how long we’ll need to use gold and silver to cover those expenses. The potential duration of high inflation will dictate how much physical bullion we need stashed away. This is also probably longer than you think; in Weimar Germany, high inflation lasted two years – and then hyperinflation hit and lasted another two. Four years of high inflation. That’s not kindling – that’s a wildfire roaring through your back yard.

So here’s how much gold you’ll need, depending on your monthly expenses and how long high inflation lasts.

Every corn-based product on the grocery shelf will soon take a lot more dimes and dollars to buy. But wait – what if I used gold to buy corn?

If my monthly expenses are about $3,000/month, I need 45 ounces to cover two years of high inflation, and 90 if it lasts four years. Those already well off or who want to live like Doug Casey should use the bottom rows of the table. How much will you need?

Of course many of us own silver, too. Here’s how many ounces we’d need, if we saved in silver.

A $3,000 monthly budget needs 1,285 ounces to get through one year, or 3,857 ounces for three years.

I know these amounts probably sound like a lot. But here’s the thing: if you don’t save now in gold and silver, you’re going to spend a whole lot more later.
What I’ve outlined here is exactly what gold and silver are for: to protect your purchasing power, your standard of living.
It’s like having your own personal financial bomb shelter; the dollar will be blowing up all around you, but your finances are protected
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And the truth is, the amounts in the table are probably not enough. Unexpected expenses always come up. Or you may want a higher standard of living. And do you hope to leave some bullion to your heirs?
It’s sobering to realize, but it deserves emphasis: if we’re right about high inflation someday hitting our economy…

Most people don’t own enough gold and silver.
If you think the amount of precious metals you’ve accumulated might be lacking, I strongly encourage you to put a plan in motion to save enough to meet your family’s needs.

We have top recommended dealers in BIG GOLD, ones we’ve vetted that are trustworthy and have highly competitive prices. We also recommend a service that will deduct whatever amount you chose from your bank account and buy bullion for you automatically. And now, given how concerned we’ve been about the inflation that’s coming, we’ve actually started our own service. You can check it all out in the current issue of BIG GOLD, risk-free. I can tell you that purchase premiums are incredibly low, due to a proprietary system that bids your order out to a network of dealers that compete for your business. We’re already using it, and the response from other investors has been tremendous.

Whatever plan you adopt, my advice is to make sure you have a meaningful amount of bullion to withstand the firestorm that’s almost mathematically certain to occur at this point. And now you know exactly how much gold you’re going to need.

See this article at:

<http://www.financialsense.com/contributors/jeff-clark/what-do-when-not-if-inflation-gets-out-hand&gt;

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Precious metals will become currency as the dollar goes bad

(News & Editorial/ Precious metals will become currency as the dollar goes bad)

bad dollar currency

A. Recent headlines:
1. China-Russia currency agreement further threatens U.S. dollar:
http://www.ibtimes.com/china-russia-currency-agreement-further-threatens-us-dollar-248338#

2. Brazil, China Sign Trade Deal to Bypass Dollars:
http://silverdoctors.com/brazil-china-sign-trade-deal-to-bypass-dollars/

3. China-Australia to Ditch US Dollar…
http://www.stormfront.org/forum/t957807/

4. BRICS Nations (Brazil, Russia, India, China and South Africa) signed Local Currency agreement at Summit. They will not trade in U.S. dollars anymore. Agreements around the world between Countries to Drop U.S. dollar for trade (including Australia http://sherriequestioningall.blogspot.com/2012/03/bric-nations-brazil-russia-india-china.html

5. The Germans Want Their Gold Reserves Back In Germany:
http://www.forbes.com/sites/robertlenzner/2013/01/19/the-germans-want-their-gold-reserves-back-in-germany/

6. “Germany wants its gold back, Fed says…eventually, maybe“:
http://www.examiner.com/article/germany-wants-its-gold-back-fed-says-eventually-maybe

7. Texas Wants Its Gold Back From The Fed:
http://www.zerohedge.com/news/2013-03-23/texas-wants-its-gold-back-fed

With the world human population being 7.0 billion, so 30% of the world has moved away from the dollar.
China (1.3 billion population), Russia (143 million), Brazil (194 million), Australia (23 million), India (1.2 billion), South Africa (51 million) = total 2.91 billion population of listed countries.

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bad dollar historicB. Implications of the loss of the dollar’s reserve status
22 Mar 2009, MarketSkeptics.com, by Eric deCarbonnel
Excerpt pasted from: http://www.marketskeptics.com/2009/03/how-big-deal-is-loss-of-dollars-reserve.html

As the dollar loses its reserves status, at least half of the world’s $5,385 billion dollar reserves will be sold off and replaced with other currencies (yuan, euro, khaleeji, gold, rand, etc…). The US, with its $71 foreign reserves, will not be able to do anything to counteract this mass exodus from the dollar. With outflows of this magnitude, the dollar’s value will collapse to a fraction of where it is now. The process of foreign nations extracting themselves from the dollar is not going to be pretty. The likely impacts are:

1) The dollar’s value will plunge as investors see the writing on the wall and jump ship.

2) US credit markets will collapse. As the dollar fall, a mass exodus from credit market will begin. Investors sitting on toxic securities will sell at firesale prices to escape the currency depreciation.

3) The fed’s balance sheet will explode beyond all reason. In response to the mass exodus from credit markets, the fed will buy trillions worth debt in a desperate attempt to hold interest rates down. Unfortunately, the more debt the fed buys, the more quickly the dollar will fall, and the more panicked the credit selloff will become.

4) US interest rates will soar, despite (or because of) the fed’s efforts.

5) Countries around the world will be hurt badly by the dollar’s decline. These countries include:
_A)  Nations which are heavily dependent on US exports: Japan, Mexico, etc…
_B)  Nations with large dollar reserves: Japan, China, Gulf oil states, etc…
_C)  Nations which receive large amount of US foreign aid: Israel, Egypt, etc…
_D)  Nations which rely on remittances from citizens working in the US: Mexico, India, etc…
_E)  Nations which use dollars as their official currency: Liberia, Panama, etc…
_F)  Nations which have large amounts of dollars in circulation: Central and South America (especially Argentina), Eastern Europe, etc…

6) Some nations will see benefits from the dollar’s decline. These countries include:
_A)  Nations with large gold reserves: EU zone, Switzerland, etc…
_B)  Nations which owe dollar denominated debt will see that debt wiped out: Iceland, African nations, etc…
_C)  Nations who stable currencies: EU zone, Switzerland, China, etc…

7) World politics will be greatly altered. There will be considerable anger at the US from nations hurt by dollar’s fall. The US will lose influence to Asia (mainly China).

8) US retailers will get crushed. As the dollar falls, the cost of imports for retailers will increase, but the American consumer will be unable to afford to these higher prices. Competition between desperate retailers will force them the sell inventory at below cost, creating massive losses. Retailers most heavily dependent on imports (ie: Wal-Mart) will be the first to go under. Eventually as more and more retailers go bankrupt, the few survivors will be able to raise prices enough to cover costs, and the sector will stabilize at a fraction of its current size.

9) American lifestyles will change radically. The end of cheap oil, low interest rates, and deficit spending will mean a lower quality of life and higher taxes.

10) The price of gold and other precious metals will explode.

11) US will experience hyperinflation.

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C. WHAT IF?
29 May 2013, Gold-Eagle.com, an editorial by Larry LaBorde of http://www.silvertrading.net/ Pasted from: http://www.gold-eagle.com/editorials_12/laborde052913.html

What if the US lost its world reserve currency status?  What might it look like? I suppose the first question is; what does it mean that we have the “world’s reserve currency”?
At the end of WWII the allies met at Bretton Woods and decided to use the US dollar as the official world currency and that it would be backed by gold.  All worldwide trade would be priced in dollars and settled in dollars.  Food, energy (oil), etc from around the world would be priced and paid for in USD.  New York became the financial center for all world trade. Fast-forward to President Nixon in 1971 and the USD was cut loose from the gold standard due to OPEC oil imports and a growing imbalance of trade that was causing gold to flow out of the US in large amounts. Today goods from around the world flow to the US and newly created paper dollars flow out.  (Well not really paper dollars, just newly created electronic digits made up on a computer.)  In essence we create IOUs that everyone must accept due to the Bretton Woods agreement and they send us their stuff.
Once we completely figured this out we decided in the 1990’s that we would “think” and they would “work”.
The US was going to run as a clean “information society” and all that dirty industry would go somewhere else.  Our balance of trade kept getting worse and worse.  We imported way more than we exported.
We used to report our imbalance of trade numbers a couple of decades ago with great concern.  Now no one seems to care at all since it is so far out of balance that it can never be fixed.  (Sort of like an annoying knock in the engine that you fix by turning up the radio.)  Ocean going freight containers started to pile up over here because we didn’t have enough goods to send them back fully loaded.  For a while we sent hay overseas in freight containers because we had to send empties back to get them refilled so they greatly discounted the freight on the backhaul or return trip.
Many people have started to find creative uses for these freight containers that are building up over here.  They are the empty boxes on Christmas morning.  Who sends the empty boxes back to the store for more toys?  You just get new boxes.
Under the original Bretton Woods agreement if one country imported more goods than they exported the difference was settled up in gold.  After a while the lazy country sent so much gold overseas that its currency dropped in value and they could not import as many goods.  The lower priced currency made their exported goods more competitive so they began exporting more and the gold flowed back.
When the link to gold was cut this self-regulating mechanism was broken.  So now why should the US export anything?  Why not import everything and just pay for it all with USD made up from nothing?  Works great for the US but everyone else may have a problem with that system.  So why does the rest of the world still accept our USD electronic digits?

One reason is the rest of the world can still spend them at the Middle East gasoline station to tank up with oil.  In the late 1970’s and early 1980’s a deal was cut with the Saudis that so long as they priced their oil in USD and USD only, we would support their family rule with the full force of the US military.   So even though we did not export enough goods to soak up all of our exported USD, the Middle East did.  The OPEC countries then purchased our US bonds with their excess USD and earned a pretty good interest on their USDs – until now.  Whenever someone in North Africa or the Middle East failed to live up to the agreement they were “replaced” with someone who would. The whole system is now broken but still working somewhat.  The only reason the rest of the world has not thrown it out altogether is there is not anything else to easily take its place.  (Your thoroughbred now is old and swaybacked and stumbles along but it is still better than walking.)  The world thought the Euro might offer an alternative to the USD when it was first launched.  We all see where that is now leading.  Doug Casey famously said, “The dollar is an IOU nothing but the euro is a who owes you nothing.”  It seems that the euro is not going to offer the USD any serious competition.  The USD is still the prettiest horse at the glue factory. So what is next?

Well the BRICS (Brazil, Russia, India, China and South Africa) have started their own development bank.  This cuts the World Bank out of the picture in much of the world.  The G-20 is talking about alternative currencies to challenge the USD and perhaps replace it one day with something a bit more fair to everyone else.  China is cutting trade deals directly with Brazil and Australia outside of USDs.  India is cutting deals with Iran outside of USDs.  This is in direct violation of the Bretton Woods agreement.  However, these countries feel they are exchanging value for value in their trade with each other on a more fair and equitable arrangement.
What would make a new reserve currency attractive?  If the country that issued it had a trade surplus or at least balanced trade with the rest of the world a lot of the resentment would disappear.  If the new currency were backed by gold once again the self-regulating mechanism would be fixed causing no one country to benefit to the detriment of another.  If a basket of currencies were used from several strong countries with both of these attributes then even better. Rumor has it that Russia and China have both been working hard to build up their gold reserves and they are both about 5 times the US gold reserve at its peak.  Rumor also has it that the US gold reserve is maybe not as large as reported. What if instead of Greece (or another PIIGS country) pulling out of the European monetary union and reissuing its own currency that something more interesting happened?  What if the strong man with the 3rd largest gold reserves and a strong export economy pulled out and reissued its own currency – backed by gold!
What if Germany pulled out leaving the Euro to collapse?  Then what if Germany looked east and linked up with Russian and Chinese currencies that were also backed by gold?  A new reserve currency made up of a basket of these three currencies (all backed by gold) would be a Eurasian powerhouse. But where would this leave the USD?  So long as the Middle East Gasoline Station was still in business and accepting USD it would survive.  But what if the Muslim Brotherhood took over Saudi Arabia?  What if the house of Saud fell?  What if the Chinese would not loan us any more money to mount Gulf War III to save the house of Saud?
There are several “ifs” here but what might happen? If the rest of the world could not spend their USD reserves at the Middle East Gas Station and we are not able to ramp up our exports and sell them something they might want, then what exactly would they do with those USD?  Why would anyone else in the world want them?  And since 1971 we have been sending them all over the world and they have been piling up in every corner, there are a lot of them out there that suddenly find themselves unloved.  I believe that all at once there would be a race to spend them all at the only place where they must be accepted – to the only place where they are legal tender for all debts both public and private – right here within the US.  They would buy everything that was not nailed down.  Cranes, bulldozers, tractors, trucks, ships and entire factories all to be crated up and carted off.  The mad rush of so many dollars would cause these items to be bid up to very high prices in USD.  This of course would devalue the USD even further.
All of a sudden all those old ocean containers that have been piling up over here would be filled to capacity hauling assets off as fast as possible.  All of those IOUs would come home to roost at the same time.  Of course we could default or slap on export taxes of 1,000% or some sort of currency controls for repatriated USD.  They could even call all of those USD overseas illicit drug money and seize all of it!  But that might lead to a war or several wars.  Wars have been fought over issues far less trifling than that.  No one likes to get stiffed on an IOU.  Especially the largest pile of IOUs in the history of the world.

Assuming that we did the right thing and honored our debts.  What would the US look like after the smoke cleared?  What few factories remained would be largely owned by foreign interests.  With much of the means of production carted off we would have a hard time exporting more than we consumed.  Anything imported would be terribly expensive priced in USD.  A trip to Wal-Mart would be like going to Neiman Marcus.  Since we no longer grow enough food to feed ourselves our imported food would be very expensive.  If the welfare state continued the dollar would devalue even more and finally collapse.  Everyone would have to accept a much lower standard of living as we worked in factories owned by foreigners.  As our dollar finally devalued to a fraction of its former glory the US would become a cheap labor country.  Factories would move back to the US for the same reason many moved to Mexico in the 1980’s and 1990’s.
Slowly we would rebuild and in a few generations we could be a first world country again.
So what can you do now?  Where can you run?  When the War Between the States began and the first Battle of Bull Run was fought, Southern General P.T.G. Beauregard set up his headquarters in the home of Mr. Wilmer McLean.  Mr. McLean was too old to fight in the Southern army and sought to move his family to safety.  He glanced at the map and picked a nice safe place 120 miles further south  – in Appomattox.  You see the war started in his front yard and ended in his parlor as General Lee surrendered the Army of Virginia to General Grant several years later.  The first and last great battles of that war both found Mr. McLean.   Sometimes you can run from danger but in the wrong direction.  Take some time and carefully think things through for yourself.  Make sure you are not jumping out of the fire and into the frying pan.  A storm could be coming our way.  Build a good storm shelter just in case.  Years too early are better than seconds too late.

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D. Arizona lawmakers back gold, silver as currency
18 Mar 2013, Yahoo! News, by Cristina Silva/ Associated Press
Pasted from: http://news.yahoo.com/arizona-lawmakers-back-gold-silver-233837866.html

Arizona Republicans want to allow gold, silver to be used as currency

PHOENIX (AP) — Arizona lawmakers say the global economy is on the precipice of financial ruin and the U.S. dollar could soon be worth less than the paper used to make it.

These doomsayers are pushing forward legislation that would declare privately minted gold and silver coins legal tender, no different under state law than the U.S. dollar printed by the federal Department of Treasury.

The measure is Arizona’s latest jab at the federal government, which prohibits states from minting their own money. It also reflects a growing distrust of government-backed money.

“The public sees the value in it,” said Republican Rep. Steve Smith, of Maricopa. “This is the type of currency we have had over the history of mankind.”

The bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property. The Republican-led Senate gave the bill its blessing in February in a 17-11 partisan vote.

The bill would let people use the precious metals as money as long as businesses agree to take them. If made law, it would take effect in 2014.

Democrats oppose the measure. They say it would be a bureaucratic nightmare because businesses don’t have the equipment to determine the value of gold and silver.

“This should be addressed by the Federal Reserve and not by the state,” said Democratic Rep. Rosanna Gabaldon, of Green Valley.

Keith Weiner, president of the Gold Standard Institute, which supports gold-backed currencies, said he envisions a system where people can pay for goods and services with debit and credit cards backed by gold and silver.

Paper money is a “recipe for worldwide bankruptcy,” Weiner told Arizona lawmakers Monday. “Everybody is going bankrupt on this system so we need a sound and honest money system, such as gold and silver.”

In 2011, Utah became the first state in the country to legalize gold and silver coins as currency. Lawmakers in Minnesota, North Carolina, Idaho, South Carolina, Colorado and other states have debated similar laws in recent years.

Many investors have invested their money in precious metals in recent years as a hedge against the declining value of the dollar. When the value of the dollar declines, gold prices rise.

Gold rose $12, nearly 1 percent, to $1,604.60 per ounce on Monday with news of Europe’s bailout plan for cash-strapped Cyprus. Silver inched slightly higher, up 2.3 cents to $28.874 per ounce.

The dollar was up against the euro, the currency used by 17 European countries, as well as the Japanese yen and the Canadian dollar in February.

Proponents of the switch to gold and silver argue paper money is too vulnerable to government manipulations. When central banks boost the amount of currency in circulation to drive down interest rates, the value of that currency relative to others can decline.

“It’s actually strange to me that we don’t have this already,” said Republican Rep. David Livingston, of Peoria.

Gold-backed money fell out of favor during World War I because the U.S. and many other countries needed to print more cash to pay for the war. In 1971, President Richard Nixon formally abandoned the gold standard.

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 E. Arizona’s Hard Currency: How Much Gold Might It Need?
27 Apr 2013, Gold-Eagle.com commentary, contributed by Miguel Perez-Santalla
Pasted from: http://www.gold-eagle.com/editorials_12/perez-santalla042713.html

How much gold & silver might Arizona, Utah and the other states now involved in hard-currency laws come to need…?
ARIZONA is moving to allow gold and silver coin to be used to pay debts, and – effectively – go shopping. This has already been approved in the state of Utah, and there is an assortment of other states that are moving in this direction as well. However, Utah’s gold currency law has been on the books for more than a year. But it has not yet made any headway into how to manage gold and silver being used as currency. Nor will payees be obliged to accept bullion as payment. As a result, many pundits are pooh-poohing Arizona’s gold idea, acting as obstacles to its possible success.
Though I don’t personally believe that physical gold and silver carried around by persons is the future of our country, I do believe that there will be some structural change to come. The small yet actively progressing action in many states is an indicator of the demand for better controls and justification of the value of our money. Concern that the ability to print money without measure will destroy this country is not only just, but is also warranted.

The Federal Reserve – which is not part of the government – is actively in charge of our currency. By injecting capital to the markets to support the banking sector, which irresponsibly lost billions of Dollars in their management of customers’ funds, they have instituted an invisible tax on all citizens of the United States of America. It is no surprise that many people who pay close attention to these matters are up in arms. Especially, since they don’t participate in the windfall of free capital given by the Federal Reserve to the banks as a safety net.
In essence, every time the government issues money freely and gives it to others it is a promissory note on the ability of the populace to pay, it puts us all more in debt. The people of the United States of America are becoming fed up with the free-flowing funds the government regularly gives away as gifts of supposedly humanitarian aid to foreign countries that are not even considered allies. These gifts in the billions of Dollars are on top of expenses needed to support our infrastructure. This creates a mountain of debt that essentially devalues the US Dollar. Our ability to pay is what the citizens are concerned with.
To avoid this many are turning to silver and gold bullion as a reliable asset or marker of value. Of course when you tie up your money in an asset like gold and silver you want the most easily accessible manner to extract that value whenever needed. This is where the effort to make gold and silver accepted as currency is coming from.
So let’s take a look at what would happen if one state such as Arizona were to convert to a precious metal economy. Arizona’s GDP (Gross Domestic Product) was roughly $258 billion at last count. As a proportion of the United States’ entire economy, that’s about 1.7%. Which if we apply that number to the total of currency in circulation and bank deposits (known as M2 by the economists) gives Arizona a money supply of somewhere around $180bn. Using today’s market prices, in gold that would represent 126,000 ounces which is nearly 143% of the current annual world production, and it would represent over 945% of the world’s annual silver production. But of course silver is an extremely bulky and difficult metal to handle. No one thinks the entire state of Arizona would go to 100% metal-backed currency. People will of course remain free to use fiat (backed only by faith) money, and most would likely choose the same fiat Dollars and bank-account credits we already have.
But it’s important to understand that – in the proposals as they stand – people could choose to use metal-based currency for all their in-state transactions. So the potential ceiling on the gold or silver needed is much nearer to 100% of that $180bn than it would be under a formal “Gold Standard”. There, with Dollars redeemable for gold, full gold-backing wasn’t necessary.
The Gold Standard instead used precious metals as a standard of value. The last US gold standard was a 25% basis of gold in fact, before it was repealed in 1968. Applying a classical Gold Standard, and using a 25% basis for gold or silver, Arizona’s cash and bank-deposit holdings would occupy 235% of the world’s annual silver production at current prices, or 36% of the world’s annual gold production.
A more logical decision may be a combination of the two, with a 5% silver and 25% gold funding which would represent 30% annual gold production and 39% silver production. This of course would drive the value of the precious metals much higher, as the market adjusted to accommodate Arizona’s impact on global demand. But as we just saw, Arizona’s proposals go far beyond a Gold Standard, making 100% metal-backed banking and currency a possibility, if highly unlikely. Note, this is only for one state – and one where barely 2% of the US population now live. The numbers involved are already stupendous.

You can imagine what would happen to gold and silver prices if all 18 states currently working on similar “hard currency” laws saw only 10% of their citizens move to holding precious-metals. But that being said, I do not believe at this very moment it is the goal of this legislation. The new legislation deems to allow transactions to be negotiable and settled in full using gold or silver if the parties involved agree to it. Hence you can sell your car for 4 ounces of gold or buy a house for 10,000 ounces of silver. But to do so without an official government structure you would have to in effect be your own central banker and invest your currency into your own private gold and silver reserves. Hence when you go to enter into a transaction the value of your asset should have been protected from any central banking or government debt fiascos. Are currencies backed by gold and silver to be the future? This is possible in some form. Had this system not been tried before? The answer to this is yes. But the methods that were used in the 20th century were complicated by the entry of the Federal Reserve System and other Central Bankers. It was prior to central bank machinations that gold and silver brought stability to the financial markets and the economy in general.

With the entry of the central bank models, including the Federal Reserve, free spending of the people’s money became a possibility and is what eroded the gold standard and derailed a more functional system. Unfortunately most of the spending was used to fund wars. Maybe if wars had to be paid in hard assets they may have ended sooner than later with less loss of human life. However, there are arguments on both sides of the fence. As I read and study more and more about our modern-day banking system it is a miracle that it has not failed sooner. Of course this is my personal belief. This is also what is driving the current activity in the states to bring in some correlation of currency to gold and silver as hard assets. The history of the Federal Reserve, which is not a bank, has the US economy since its inception riddled with negative GDP growth. It is peppered with financial calamities. Its primary function was said to be the stabilization of the economy.
It has failed and has not performed better than any other prior system. I don’t have the answers but I know it doesn’t lie in the Federal Reserve System. This is a centralization of power away from capitalism to a form of modern day socialist tendencies of spending without limits within our system. This indicates to me in the event of a serious economic downturn, which seems to be forthcoming since we already did kick the can down the road as far as we can, we will have serious troubles in the union of these United States of America. But for the time being the general public who are able, are happy buying their gold and silver and keeping it in a safe and secure place for when this situation rears its ugly head. Those that do and are in the states where they have legalized its use as currency stand to have a much more secure environment moving forward as the government is not allowed to take away your money without cause. At least, not at the moment.

bad dollar charts

[Today, we have a price buying opportunity in gold and silver bullion coins. When the SHTF, prices on retail items will rise, inflation will surge, precious metal prices will have risen steadily ahead of events as the global situation deteriorated in ways not understood by the public. When everyone realizes that they need a stable source in which store the value of their rapidly eroding currency (dollars), those precious metal commodities will already be exceptionally expensive in dollar terms. You have to buy the dips while the opportunity exists, as the ancient adage says, “By low. Sell high”. Mr. Larry]

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Why you should prep

A.  Your personal obligation,
May 2014 by Mr. Larry
“Two hundred years ago (1812) the majority of the human race lived an agricultural life, their tools, assets and  knowledge were fitted to extracting most of their livelihood from the land, their land.
Fast forward to 1937 (75 years ago) , agriculture had become mechanized, allowing a great many families to migrate to the cities. These new urban residents learned skills that replaced the previous agricultural knowledge on how to provide for their families sustenance.

Meanwhile, back in the countryside, as had been the practice for 8,000-10,000 years, the remaining farm families continued to use the excess from their crop yield to sustain themselves during the winter, they maintained a quantity of their produce as seed for the following spring planting, some of the crop yield fed their livestock, some grains was sold for trade currency,  and if  the harvest had been really good, they added a couple more head of live stock.

The farm family stored food supplies, seed for future crops, and maintained a supportive ecology based on agricultural foods, wood from the forest, and water from the well or stream. They maintained a supply capacity to cover the eventuality that: a rainstorm might damage an early planting,  a drought could reduce summer production,  or an early frost might kill crops before they’d fully ripened. There could also occur: a crop disease in the field, insect and pest infestations in storage, robbery, heavy taxation,  a wild-fire, or a number of family members (work force) could be ill and removed from the seasons production labor effort. There were and are a lot of potential threats, fortunately none have a high probability of severe occurence on any given year.

The new landless,that is,  the migrants from the farm to the city-town, like their country kin, needed to maintain a savings from the slight excess generated by their labor. Life,  in some ways, may have become easier in the city, but there was/is still the chance of losing one’s job; a business bankruptcy; severe, long term illness in the family; theft by robbery and taxation; currency devaluation (more governmental theft), fire, war, calamity, personal needs and eventual retirement.

There remained a need for everyone to set some of their income aside to cover an eventual, “rainy day,” and not just a literal day or a week, but to cover the individual or family in case they missed a significant part of their harvest or a seasons labor for wages.

During recent decades (roughly the last 75 years), the exploitation of essentially free energy (free lunch) from fossil fuels has made the world’s lifestyle wealthy compared to  that of ancient kings. The largess of Western social economic structures have grown to provide an economic safety net for both farmers and unemployed urban residents. These public welfare programs have become so prevalent, that people now expect someone else to look after their deficiencies.
Diligent industry and personal responsibility have given way to public welfare, there is no longer a need for diligent industry or personal responsibility; quite the contrary, both the rural and urban worker can at times maneuver their situation in conjunction with the letter of the law to profit from sloth. Once enrolled in the public welfare, enough people find ways to stay in the program that they become a burden to society. [See also my post, “Tragedy of the Commons”]

The point here is: While governments has set up well-meaning, social welfare programs, these programs can only be expected to function as long as government structures operate within  some nebulous limit we might call, “Normal Conditions”. It’s great that a new layer of protection has been added as insurance for our personal sustenance, but each individual adult, each family, still has to provide diligent industry and accept personal responsibility to protect themselves.

When you  fulfill your obligation to look after your own survival, like any other larger animal on this planet, then you can accept public welfare on a temporary basis.  Relying on and expecting public assistance in times of regional-national-global hardship is like an irrational farmer who thinks: there will never be a crop loss, who doesn’t maintaining supplies, who does not maintain a flock or herd, and who eats the seed set aside for next year’s crop. This is a line of thinking that is bound for disaster, this is “our modern way” in the West and it has been for the last decade.
All it takes is one crop failure; or, in modern terms: massive unemployment, an extended period of high inflation,  the government declaring bankruptcy, a couple of nuclear missiles entering our skies, a deadly pandemic, any form of economic collapse…
…In 3 days you could be dying of thirst, followed by several weeks of social disorder that escalates by maybe two orders of magnitude (100 times worse than what “bad” means in “normal” times), starvation begins in 4 weeks…” (Mr. Larry)
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B.  Aesop knew how it worked — 2500 years ago
If anyone doesn’t understand the obligation of families to one another during a serious economic national crisis, I recommend you read Aesop’s fable,  The Grasshopper and The Ant, as follows:

“Once there lived an ant and a grasshopper in a grassy meadow. All day long the ant would work hard, collecting grains of wheat from the farmer’s field far away. She would hurry to the field every morning, as soon as it was light enough to see by, and toil back with a heavy grain of wheat balanced on her head. She would put the grain of wheat carefully away in her larder, and then hurry back to the field for another one. All day long she would work, without stop or rest, scurrying back and forth from the field, collecting the grains of wheat and storing them carefully in her larder.

The grasshopper would look at her and laugh. ‘Why do you work so hard, dear ant?’ he would say. ‘Come, rest awhile, listen to my song. Summer is here, the days are long and bright. Why waste the sunshine in labour and toil?’

The ant would ignore him, and head bent, would just hurry to the field a little faster. This would make the grasshopper laugh even louder. ‘What a silly little ant you are!’ he would call after her. ‘Come, come and dance with me! Forget about work! Enjoy the summer! Live a little!’ And the grasshopper would hop away across the meadow, singing and dancing merrily.

Summer faded into autumn, and autumn turned into winter.
The sun was hardly seen, and the days were short and grey, the nights long and dark.
It became freezing cold, and snow began to fall.

The grasshopper didn’t feel like singing any more. He was cold and hungry. He had nowhere to shelter from the snow, and nothing to eat. The meadow and the farmer’s field were covered in snow, and there was no food to be had. ‘Oh what shall I do? Where shall I go?’ wailed the grasshopper. Suddenly he remembered the ant. ‘Ah – I shall go to the ant and ask her for food and shelter!’ declared the grasshopper, perking up. So off he went to the ant’s house and knocked at her door. ‘Hello ant!’ he cried cheerfully. ‘Here I am, to sing for you, as I warm myself by your fire, while you get me some food from that larder of yours!’

The ant looked at the grasshopper and said, ‘All summer long I worked hard while you made fun of me, and sang and danced. You should have thought of winter then! Find somewhere else to sing, grasshopper! There is no warmth or food for you here!’ And the ant shut the door in the grasshopper’s face.

It is wise to worry about tomorrow today.” (That was human thinking 2500 years ago. lfp)
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C.  Remember the addage , “It wasn’t raining when Noah built the Ark.”  (about 5000 BC)
One thing about the future is that no one can be too sure how it’s going to turn out. Most of us are realists and understand that in regards to the future, it’s better to prepare for the likelihood of falling on hard times than be stuck in the middle of it without any preparations or plans.

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Definitions use in the following article
SHTF – Shit hit the fan (event). Think: Temporary, local or regional disaster that disrupt some services, business and-or social structures for days to months. Hurricanes, earthquakes, tornado damage, flooding, riots, local volcanic activity, major snowstorms, hyperinflation…Black Swan SHTF events that trigger a chain of cascading disasters can lead to TEOTWAKI.
TEOTWAWKI – The End Of The World As We Know It. (event). Think: long term wide spread disruption, systemic failures, extreme hardship, trying to survive within a collapsed social structure, crime violence escallates, seeing dead human bodies becomes somewhat common. Nuclear War, solar and terrorist EMP, deadly pandemic, major volcanic activity…
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D.  SHTF vs. TEOTWAWKI?
SurvivalCache.com, by  Captain Bart
http://survivalcache.com/shtf-vs-teotwawki/
“This past President’s Day, all the satellite channels on my cable went out. Annoying. About an hour later all power in the house went out! This is about how it would play out if a big CME (Coronal Mass Ejection) were to hit the earth.

Prepared?
First the satellites and then some time delay later (depending on CME speed) the power goes down. Since I hadn’t followed my usual practice of daily checking on the Sun, I didn’t know and it was too late to find out. Then I noticed the cell phones still worked, my Blackberry allowed me internet access (NOT a Carrington Event). Turns out a line fuse had blown and about 40 houses were without power for 20 minutes or so. Not even much of a SHTF event but for a few minutes, a whole lot of things I wish I had already done went through my mind.

We often use SHTF and TEOTWAWKI almost interchangeably, but they are not the same thing. For the first week or two, they may be almost identical. Law enforcement may still be in place well into the TEOTWAWKI event. In many scenarios we won’t know if it is TEOTWAWKI for weeks or months. This causes difficulty in preparations. Get it wrong and you could be in trouble.

My SHTF moment may be your TEOTWAWKI event. When Hurricane Ike hit Houston, I shared food, firearms and ammo with neighbors. It was a SHTF and not even a ‘Black Swan” event. The problem with this, of course, is that now my neighbors know I’m prepared. If you lived on Bolivar Penninsula near Galveston, Texas, Hurricane Ike was a TEOTWAWKI event. This Cat II hurricane had a storm surge like a Cat IV storm and in parts of Bolivar not even the foundations are left.

The point of this is that not only is one man’s SHTF another man’s TEOTWAWKI, one event can morph into the other. How you prepare for one event effects how you deal with the other type event. If you have only prepared for TEOTWAWKI and that plan is basically taking your fully tricked out assault rifle and scrounging what you need from your neighbor’s deserted homes, then you may find yourself in real trouble when the SHTF but it isn’t TEOTWAWKI. SHTF and even ‘Black Swan’ events happen to all of us to varying degrees with surprising regularity although we often don’t recognize it. If you worked for Bernie Madoff and his ponzi scheme, the SHTF big time when your job, your investments and your savings all went away at the same time! Everything changed overnight.

I think the most likely TEOTWAWKI event will be some type of pandemic that will start slowly and grow in isolated locations until some critical mass is reached. You may have a different “favorite” TEOTWAWKI event but this one serves for discussion. At the point critical mass is reached everything shuts down, martial law is declared and the TEOTWAWKI spiral begins.

Plan For The Mostly Likely Events
What does this mean for us? I would argue that most of our preparations should be for SHTF events. A TEOTWAWKI pandemic and a normal flu outbreak will be identical on the local level for the first days to weeks. So my first preparations will be to survive a one-week ‘shelter in place’ – grid up and utilities working. My next step is to survive a 2-week, shelter in place, grid down scenario followed by a possible 4-week bug out stint. I am ready and flexible if things change but I feel that this is the most likely scenario and what I base my planning around.

The moral is to prepare for the most likely events first since they are the ones that will surely happen. I KNOW Houston will get hit by another hurricane. If I’m ready for Ike, then I’m set for a different 2 to 4 week grid down Black Swan. If I stretch my preparations to 3 months then I’m ready for a massive commerce interruption and so on. Baby steps will carry you far if you are consistently improving. Giant steps can lead to major, perhaps catastrophic mistakes in planning and execution. Take care of the smaller, high probability events and the low probability events and Black Swans can be successfully handled.”

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E.  How Horrific Will It Be For The Non-Prepper?
May 12th, 2012, for  SHTFPlan.com, by  author, Be Informed
http://www.shtfplan.com/emergency-preparedness/how-horrific-will-it-be-for-the-non-prepper_05122012

This article has been made available by regular SHTFplan contributor, Be Informed.
Editor’s Note: You have no doubt had your own set of issues dealing with friends and family members that simply don’t see the writing on the wall. The following article may serve to assist you in convincing those who simply don’t know, don’t want to know, don’t care, or have never even thought to contemplate. Some of the scenarios outlined below may be frightening, as they should be, because when it hits the fan millions of people will be thrown into desperation with no hope of a solution. Be Informed provides a variety of point-by-point details that may (and hopefully will) convince the non-prepared individual to at least insulate themselves with the basic necessities. The consequences for not doing so, as you’ll see, are severe and often deadly.

I have become personally so disenchanted with the way people fail to prep. People still don’t understand how important it is to put away. I have gotten into arguments over this and had cretins call me a fool because I put away food, water, and supplies. I thought about this and the frustration that other preppers have with this laid back idiotic attitude that there is no need for preparation. There are good people that just can’t/won’t start preparing. They have the money to do so, but just don’t want to. Many have only seen what happens to non-preppers on TV, but it still doesn’t make an impact.

In this article I detail some hard core realities to show just how awful it will be for those that don’t prep. Every one of these scenarios is something that has occurred to the non-prepper throughout history. While strong images come to mind, the purpose is to jar some people out of their inaction and into action before it is too late.

Preppers are good people and care much about those around them, and unless something does jar those around them that choose not to prep, their own survival chances could be reduced. For every bit of food, water, ammunition, or supplies you sacrifice to the non-prepper, the fewer irreplaceable supplies are left for you and your family in a crisis situation. It is hoped that the following can help certain people put into TRUE perspective just how horrific it will be for those that don’t prepare.

Here are the awful consequences for those refusing to prep.
As the world continues to decay at multiple facets, the common person has and continues to be lulled into a sense that everything is improving and will continue to for the distant future. After all, to them unemployment has peaked out and will drop until everyone that wants to work will easily be able to find good paying work, North Korea is no threat because all their long range “bottle rockets” fizz out, sanctions will eventually make Iran give up their nuclear program, oil prices will start going down after June or so, Europe will bail out Greece and Spain and everyone else, and U.S. debt will eventually come under control.

After 2012 everyone that has prepared themselves will go back to more “sensible” lives. “Good times are coming”, baseball season is here, let’s get back to watching some more crackerjack news.

It is amazing how people become good conversationalists with most others discussing all the gossip related news, while becoming mentally tranquilized into a totally deceptive state of denial of truly dangerous issues of the times. It’s the blind leading the blind… right off the cliff.

Rather than dealing with harsh reality, people surround themsleves with easy to digest material that can be talked about without directly influencing anyone’s lives. Meaningless chatter. Even for those unwilling to even think to prepare for a societal catastrophic event, there is also no desire to even face the extreme possibility of a sudden loss of one’s employment. A personal SHTF.

Look at some of the terrible personal pain experienced in America right now – and it hasn’t even hit the fan on a grand scale. Those people who have lived it up on credit, who failed to put much of anything away for a rainy day, who’ve lost their job, and who eventually lost their unemployment benefits are experiencing the first level of collapse. This is happening to millions of people in our own country, all around us, as we speak.

These Americans, who once enjoyed the luxuries that modern living had to offer, are now at their wits end, with very little hope for a return to their previous lives. They are no longer able to pay most or any of their bills. Many have to humiliatingly turn to others for help to pay for food, or worse, to obtain old, unhealthy and poor tasting food from locally funded food banks. Their credit cards are totally worthless. Many have been evicted from their homes and have uprooted their families to live either on the street, in tent cities, with relatives, or have been forced to live at homeless shelters, They’ve have had their vehicles repossessed, or simply can’t afford the gasoline anymore. Their living conditions often make it difficult, if not impossible, to look presentable for job interviews. For many, the life of stability they knew just a short while ago is gone, replaced with fear and a constant stress to the point of nervous breakdown.

A personal economic meltdown is confined to the individual or family, or at worst a few families. The human civilization remains intact and so do society’s safety nets.

With food assistance, rental assistance, homeless shelters, and family to turn to, even the most destitute are almost always able to find some sort of help – however menial.

It is no wonder with these known assistance programs, then, that people have forgotten or never thought to consider what happens IF and WHEN human civilization goes through a strong enough SHTF event. If that happens on a mass scale what happens to everyone that needs help that has not prepared ahead of time? What happens when governments are in such total disarray or destroyed altogether that they can’t help even if they wanted to?

The media and others have portrayed the good people that sacrifice much if not all “luxuries” of life to prepare themselves and their family and friends for extreme times, as chicken littles. Those who have made the choice to store up emergency food, water, and other necessities to avoid extreme life threatening risks, including suffering horribly during and after a widespread SHTF event, are laughed at and ridiculed often for “wasting” their lives on delusional paranoia.

But who is delusional? Those who see the signs around them and understand how vulnerable the system is, or those who believe that things never change, that politicians have their best interests at heart, and that if the worst happens the government will be there to provide everything they may need?

How many have considered the dire consequences of their failure to prepare in the event that the infrastructure and everything a country’s people depend on totally collapses?

The misery from long term unemployment and lack of money is like a walk in the park compared to the severe anguish and dangerous conditions that await those who have failed to prepare for the aftermath of a large scale cataclysm. The “minor” problems of unemployment that seem extremely major and painful to most today should serve as a wake up call to what life will be like when something much, much worse happens – when those proverbial safety nets are no longer there to catch us.

Many preppers have become deeply frustrated at those around them, especially those that truly mean something to them, because they simply refuse to put away anything at all for emergencies. The prepper is usually a person that cares a lot and it is often difficult for them to take a tough stance towards the people that they care about. However, unless someone changes the habits of those people that fail to get ready, decisions will need to be made, and they won’t be easy.

The choice of what the prepared prepper should do will boil down to either either adding these people to their own circle or survival group and reduce the group’s safety, supplies and self sufficiency, OR, they will have to let the non-prepper fend for themselves. This is a very personal choice, and each of us will need to decide based on our own morals, ethics and personal relationships.

As a last ditch effort, discussing the following scenarios with the non-prepper may help them understand what life will be like without what has sustained them so comfortably for so long.

This is the hard reality the non prepper needs to understand:

•  Without power the water company cannot get water to their faucets. Without water dehydration occurs within 24 hours. Dehydration causes much suffering before death.
•  Toilets in homes, unless they have an incineration toilet that still need power to work, don’t flush without water. Where will they go to the bathroom and then where will they dispose of human waste?
•  There will be no clean water available anywhere, especially in major cities, and they cannot live more than about three days without it.
•  Drinking dirty and polluted water will make them incredibly sick and accelerate the dehydration process.
•  Polluted water must be purified and that means having a good filter, bleach or other disinfectant, or fuel and something to boil water with.
•  Understand just how fragile the power and the infrastructure is that pumps water to the public. A breakdown in our power infrastructure or a cyber attack against utility systems will render them useless.
•  A single event can rapidly lead to a cascade of other events that would certainly collapse almost, if not, everything. This is why major snow storms, hurricanes or solar events  in the past have affected millions of people in an entire region all at once.
•  A single, seemingly unimportant event may become quite terrible as its repercussions spread; this can include a far and away disaster.
•  Understand that the economies of the world are so interwoven that when one major economy falls it affects everyone.
•  Not having any food in the house means that if the stores are emptied suddenly in a bad enough situation that there will be no food available for a long period of time afterward. Recent history during disasters around the world has shown that stores can literally be emptied in minutes.
•  Think about how totally horrible the feeling of being very hungry is and what circumstances would cause one to be desperate enough to eat anything.
•  ALL stores can be closed instantly under martial law.
•  Understand that you may not be able to purchase anything after it starts, especially with any credit cards.
•  Understand the complexity of food and water distribution; breaks in these chains can stop anything from getting to the people.
•  What life will be like if no toilet paper is stored?
•  Understand that without light sources, the night will be pitch black, often with zero visibility.
•  There will be no communications, other than probably martial law type of instructions over the radio, that is if they have batteries for the radio.
•  Other than ham and shortwave radio, any information that is available will be sent out by the government as filtered propaganda that “they” want everyone to hear.
•  Without power consider what it will be like to not have any heat to stay warm, or air conditioned air to stay cooler – with no way of alleviating the situation.
•  Travelling will likely be by  foot or bicycle, as their will be no fuel and roadways may be blocked.
•  Realize that ANY travel outside of the home or neighborhood will be extremely dangerous as ANYONE  who moves becomes a target
•  Non preppers will be pushed way beyond their limit because of lack of supplies.
•  The non prepper must realize their government does not really care about them individually, that they are a mere number and help will likely not come from them.
•  They have to figure out somewhere to get food. This can mean wild plants which they must know how to identify as safe, or risk poisoning themselves.
•  They have to understand that when we refer to “having no food” it doesn’t mean not having the food they are used to enjoying, it means no food to eat at all.
•  They have to understand that if they are fortunate enough to have any running water, they will probably have to bathe in cold water for lack of stored fuel to heat water.
•  They have to realize that the very strange and totally unexpected is going to be all around them, made that much worse because of lack of any reliable self defense stores or skills.
•  They might have to remain on the run constantly because of looking for water and food.
•  They must understand that bad will be magnified magnitudes to living misery because of lack of food, water, and other necessary items that they took for granted for so long.

Okay, now comes the “truly ugly and unthinkable” life that most, if not all, people that have failed and refused to prepare themselves will deal with. Clear vivid visualization is key here for anyone that ho hums the idea of prepping.
What horrors they will likely face after a cave-in of their nation’s economy, war, geophysical upheaval, or whatever crisis is bad enough to disturb or stop their nation from working and functioning? There are plenty of very potential SHTF events that are simply awaiting a catalyst to trigger them.

•  The Non-Prepper (NP) has to realize right off the bat that 911 and other emergency calls in will be met with silence or some recording telling the caller not to panic.
•  The (NP) that has no reliable self defense that can stop an attacker, will not get help from public services, and will become a victim of rape, assault, torture, or murder.
•  The (NP) that has no reliable self defense and will not only be at the mercy of criminal elements, but also have to contend with many desperate animals, some with rabies.
•  The (NP) that has no food will either have to find food or be ready to beg for food or worse, like sacrificing their bodies or other horrible acts or things to get a bite of food.
•  The (NP) will have to go through the worst, most rancid conditions of garbage to just maybe find what they should have stored up.
•  The (NP) will go through panic and near if not total psychosis looking for any water source right before their bodies begin shutting down during advanced stages of dehydration.
•  The (NP) will go through unbearable trauma when their children and other people around them are crying, screaming, and suffering with intense hunger pains in their stomachs.
•  The (NP) will have to deal with the awful stench of rotting wastes from many sources because they have not taken the effort to even store up waste disposal plastic bags.
•  The (NP) will have disease and pathogens everywhere, not only because they have no trash disposal means, but because they haven’t prepared how to deal with trash and waste.
•  The (NP) will have to live in very primitive conditions after things around them deteriorate rapidly, because they have neglected putting away anything to make life more bearable.
•  The (NP) and those around them will likely develop all sorts of infective skin rashes from the lack of insight of storing up toilet paper. Imagine the smell for a moment.
•  The (NP) will have to handle biting insects and other vermin that will collect amoungst the filth that will pile up. No pest control stored up along with no other supplies
•  The (NP) will have no way of treating sickness certain to follow a SHTF event, no first aid and likely no training or knowledge about how to treat the ill on top of this.
•  The (NP) will have sick and dying people around them because of not being able to treat minor injuries. Didn’t even stock up on disinfectives. Unsanitary conditions lead to infection.
•  The (NP) and others around them will experience much grief as they watch helplessly as their family members literally die of starvation right in front of their eyes.
•  The (NP) won’t believe how desperate hunger drives them and those that mean everything to them to “trying” to eat food that taste so bad it gags them and comes back up.
•  The (NP) will likely have  family and friends around them that have also not prepared committing suicide because they can’t take it any longer.
•  The (NP) will witness some of those people around them lose any sense of civilized humanity in them and behave like wild animals after some time from lack of necessities.
•  The (NP) and family members, maybe friends also, will at some point end up barbecuing or eating raw the family dog, cat, bird, any pet dear to everyone for food.
•  The (NP) will likely get into  physical fights with other family members over any scrap of food available as rational thoughts are lost to wanton hunger.
•  The (NP) as many other (NP’s) will eventually go out of any safety of their home looking for food and or water, become disorientated and lost, and die a hard death somewhere.
•  The (NP) that is “lucky” enough to find some government help will likely have to almost sell their  soul, probably all their freedom, to get tiny rations – just enough to keep them alive.
•  The (NP) will see widespread violence and barbarism that will shock them to the core and will wish that they had purchased some form of firearm and stocked up on ammunition.
•  The (NP) better get used to attempting to explain the children and other adults why they wasted all that money on junk, and didn’t buy any emergency food and other supplies.
•  The (NP), no matter how positive they are will drop quickly into depression and lose willpower as  having nothing to hold on to does this, along with lack of any nutrition.
•  The (NP) will feel the worst guilt imaginable as they hear their family moaning in anguish from lack of anything to eat, knowing they could have done something to prepare.
•  The (NP) will most likely not see the rebuilding and recovery after A SHTF event. They will, like almost all NP’s, be statistics. Some will die hours or a day before help arrives.
•  The (NP) from lack of food, drinking bad water, no light at night, the horrid smells, no good self defense, the overall horror, will often be paralyzed with fear and despair, blank stare.
•  The (NP) is totally helpless after SHTF, will have to rely totally on charity of those prepared to live. They will take all sorts of desperate measures likely to get them shot. They’ll attempt to eat hazardous foods like an animal trapped in a house will do, and get sick and suffer much before dying. The (NP) will      likely die (ugly and hard) as they lived, unprepared for anything.

If we were to use one single word to describe the torments that someone who “chooses” not to prepare will go through after a true you know what hits the fan it would be “PREVENTABLE”.

Almost every single person, even a very poor person, has the capacity to put away emergency food and supplies. Even homeless people have stashes of something just in case things become so bad that the normal hand outs and thrown-away items dry up. Many people with good sources of income don’t even have an extra can of food or any water put away at all. This is stupidity beyond words.

Every day lightweight disasters happen in all parts of the world that disturb services enough that people are confined to their homes for a certain amount of time. While recovery is short, people are still uncomfortable during these times. Look what happens after a power outage at night and you will be mystified at how many homes are completely dark for hours. People have not even bought an extra couple of candles or any battery operated light sources. Even in well-to-do neighborhoods you may hear only a lone generator going after a blackout. This lack of preparedness is truly frightening and plays itself out again, again, and again every time services are disrupted for minor to major reasons. It’s as if there is something wrong with storing extra food, water, and supplies.

Even after “lessons” played out to what happens to those non-prepared, most people still feel that it just cannot happen to them, or won’t ever happen to them again. It should be proof enough to people what happens to those unprepared after disasters simply by looking at those that have gone through it firsthand. The difference, though, comes in that these disasters have had recovery periods and help from others. Even Haiti received some help and conditions remain putrid over there.

After a TRUE SHTF, it is presumable that government help and others coming to the aid of those in need WON’T happen for long periods of time. During that time those that have chosen to not put food, water, and necessities away are going to be in life threatening positions. Most people just don’t get that when the supermarket shelves are empty they will stay that way for an extended period. When the utilities go down, especially water, it may be weeks, months, or longer before they come back, if ever. Without what someone needs to survive each day, it is not going to magically appear, and depending on the goodwill of others to feed them and sacrifice their own family’s survival chances is a terrible choice.

People MUST know what life will be like after SHTF in mega fashion if they refuse to prepare. This is NOT new. Terrible events have plunged people into the deepest levels of desperation and hopelessness, and they will happen again and again.

While the above consequences to the non-prepper are extremely abysmal for anyone to read, the simple fact of the matter is they have already happened time and time again to those that have nothing put away. People have resorted to cannibalism and gone to levels of primitive savage behavior out of shear desperation and out of literally losing their minds to the physical depletion of food and water that keeps the physical body operating. Sometimes showing the extreme severity and results of a person’s lack of action, such as failure of the simple act of putting away extra food, water, and supplies, can be the kick in the complacency that they need.

It’s really easy to put away food and supplies. All one has to do is add a little bit of extra food to the grocery cart for long-term storage. Over time this adds up to a well stocked pantry of supplies.

There is something that is in a can of food that everyone can eat and enjoy the taste of, so talk to family members about their nutritional preferences and start stocking up. Toilet paper and other supplies that really don’t have any expiration date can be put away and forgotten about ’til needed.

There MUST be common sense and intelligence to see what happens IF they don’t stock up for the future. There has to be the DESIRE to get started, and this is the real problem with so many.

Once started, however, prepping becomes a type of life saving routine or positive lifestyle habit. It is easy and can and will save one from misery. It may save their life and the lives of their family from ruin when SHTF, which is almost inevitably going to happen someday. Every month and year that goes by without a true SHTF event, makes it more likely that it will happen. Basic statistical chance shows this to be the case, but people continue the same pattern of behavior that has led them to the same devastation countless time before.

For those preppers that have people around them that refuse to prepare, you can at least have some degree of solace knowing that you tried to show the non-prepping person(s) what not having anything will mean to them and their families.

All we can do is try. Once we’ve given it our best shot, all we can do is let those who have been warned about the direness of the possibilities live their lives the way that want to. They will, unfortunately, live in a world of regret and suffering if the nation and the world falls apart around them.

To every action there is an opposite equal reaction. Preppers will see their efforts have been more than worth it. Objects that are motionless tend to remain motionless and non-preppers will find there are horrific consequences for their lack of effort and motion to put away “life insurance” preps for themselves and their families.”

End of article

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Life After The Collapse, Part 2 of 2

Survival Manual/2. Social Issues/Life After The Collapse, Parts 2 of 2)

J.  De-nationalization
Along come racial conflict, the disintegration of our nation-state will begin. It is not impossible to control large areas of land using primitive means. Look at China and Russia. They had their ups and downs, the enlargement than the contraction of the areas they were able to control. But over centuries they could keep large areas under one rule. The US might not be able to do so. This will mostly hinge on oil availability. And perhaps the ability to utilize the railroads. The East has the water transportation system, which might also be used for troop movement. Even with some neglect, as seen in all sectors of our infrastructure, the upkeep will be minimal. And the bulk of the population is on some waterway. But military transport is largely oil based. Whereas in World War Two we moved large troop numbers by railroad and merchant marine, it is doubtful we can duplicate this again. The support system has been neglected to a large extent. Nevertheless, if you have a railroad nearby you are hoping will help support your community come road transit breakdown, it is possible it will be nationalized and used for military use. Not guaranteed, but a possibility. Even if the military uses every possible means of transporting themselves to trouble spots, most likely their numbers will be too small. I can’t see an immediate withdrawal of overseas troops to quell local troubles. By the time they are shipped home, the civil unrest will be too large to contain. Assuming of course things get bad enough that kind of unrest takes place. Which I think is a safe bet. They might successfully subdue some areas, but not all. Long term, one area after another will become unruleable. Add in severe economic trouble, disease outbreaks due to failing health care and sewage main breaks along with water contamination, troops needing to help against huge crime upsurges, an unhealthy dependence on high tech needing foreign parts and a total mechanized military, the trouble of depending on troops to fight fellow citizens and even the inability to properly feed and reequip soldiers and I can almost bet on the military being too inefficient and undermanned to keep the peace.

      This in no way should give you peace of mind regarding military suppression and martial law. You could very well be effected. This is a long-term outlook. Short term, you could find yourself battling police forces, the military, criminal gangs, local militia, or more than one at a time. Which should worry you. Not only because it means you might get killed, but because trade will stop or become disrupted and you might find yourself with a dwindling stockpile of ammunition to protect yourself. If China stays around as a viable power, you might see them eager to help out the disruption and arm whatever group they see as helping their interests (which is the destruction of the US as a military power able to challenge them), but that is not a sure enough thing to base your choice of a personal firearm on. In other words, the steel cased ammo that feeds an SKS or an AK-47 may or may not still be available.

Unless you can stockpile as much as you think you will need beforehand. This projected resupply problem is why I frown on semi-automatic weapons. They are superior as fighting weapons in a lot of aspects, except logistics come collapse. Now, as much as I disagree with the direction our country has taken away from a Constitutional Republic, rest assure that if and/or when the government is unable to keep the Union together come collapse, local tyrants are not going to be any better and most likely will be a lot worse. Local strong men won’t even acknowledge there is any rule of law other than that from the barrel of a gun. And they won’t see anything wrong with wringing all the wealth from the citizens without regard of their long term health. And since they don’t rule from far away they will be much more effective in their suppression. So, while it will be nice to see the current group of thugs lose power, their replacement will be much worse.

So, after you get done suffering economically as everything you know and are used to (cheap energy, welfare state, your currently employable skill ) is done away with, after a short depression followed by hyperinflation kills any savings and dwindles your emergency supplies, you’ve just seen the warm up of the collapse. Oil will start running out or become unavailable from overseas. Food won’t be delivered and many people will start to go hungry. The military will try to contain unrest with brute force. The ghettos will spew violent criminals and race dominated wars. The US will start to break up. Infrastructure will collapse. Water won’t run, the toilet won’t flush. Disease will spring up everywhere, to include a lot of resurgent tropical or Third World diseases. Perhaps even a few man made ones to use against dissident areas. Neighbors will try to turn you in for rewards, crime will explode as authority recedes. If you don’t die now from mugging, kidnapping or home invasion, you might be gang raped and die later of AIDS. Both male and female. This is the start of the huge die-off.

K.  Die off
Die off’ will be due to a lot of different things. Disease. Hunger. Exposure to the elements without heat or cooling. Crime, which includes losing all your stored food and equipment. Combat with police or the military. Widespread death will happen. The global carrying capacity of a non-oil, primitive agrarian society is less than a billion people. And this number is assuming the entire population knows how to survive without petroleum. Since a lot of areas have completely lost their roots with nature, that figure will initially be less. Say half a billion. Globally. However, it is the nature of things that when a die off happens, the numbers of survivors fall sharply below the natural carrying capacity to begin with.
Rome went from the center of a vast civilization, a metropolis of its day, to little more than a village after collapse. Mayan cities went from large urban centers to overgrown jungle ruins with a few paltry settlements set on their fringes. China always had its farmers as the center of its civilizations and fared better, although in recovery its population figures did fall sharply. Populations are built up, having conquered farmlands to swell its numbers. Centralization helped the numbers increase. But when the lands carrying capacity was surpassed and there were no more victims to plunder, population took a swift downturn. Crime, disease, starvation and warfare took its toll. This process has been likened by others as a bottle of alcohol being brewed, and I can’t top that description. A sugar rich environment aids a rapid increase in the culture, who eat up the available food. When a critical mass is reached and the culture dies off to almost zero. There is no more food left. We are left with a bottle of spirits, which is a good thing. In the human environment, you are left with a corpse ridden field with just a few survivors remaining. In our case, the die off will result as the remaining oil is not sufficient to feed the swollen population. Most die off from hunger and the remaining few take the little available fertile soil and relearn organic farming on a decentralized level. Animal population are another illustration. In an example from others, a herd of caribou is introduced on an island which has overgrown with lichen due to no known “predator”. With this rich food source, the caribou population goes from a few pairs to hundreds or even thousands. The natural replenishment rate of the food is, say, a hundred. But once too many animals are there, once the plants no longer feed everyone, almost all of them die from hunger and just a dozen or two remain. Then it takes time to bring the population level up to that optimum hundred. Once the oil level declines just enough on a permanent basis to cease feeding all six billion, Humans, will see die off far below the level the globe can naturally feed with solar energy alone. Oil doesn’t have to run out, just fall below today’s needed level.

L.  Survival preps
This is where survival preparations come into play. You aren’t storing enough provisions to live forever. For most, a daunting if not impossible task (to say nothing of preparing for multi-generational survival). What you are doing is trying to prepare to survive the die-off period. Food stores are only part of the picture anyway. You must survive the conflict that accompanies the die-off. People will not stay at home, meekly waiting a slow death as the cupboards stay bare. Towards the end there will be no more strength to fight for what they need. But initially, they will try to take what they need to survive.

This is why a retreat out in the boonies is so often advised. It is far from the perfect answer, of course. Day to day employment and provisioning is necessary. And few have the means of buying this kind of land anyway. You can find remote land. The West is full of vast areas seeing no settlement other than near water sources. But the “perfect” retreat, with fertile land, woods for fuel, and available water is rare and expensive. I advise what I call junk land. The crap no one wants and is nothing more than a patch of dirt. You won’t pay much more than a thousand or two for it. But it has a poor road leading to it, no surface water or shallow water table, infertile soil and most likely in an economically depressed area. You can actually use these flaws to your advantage since few people will be nearby. It isn’t a farm, ready to feed you and your family. It is merely a legal squat so that in the initial collapse you won’t be harassed for camping on public land or private property or on the side of the road. Your supplies will keep you alive, not the land. After the troubles have subsided you can move to better land, into a settlement to barter any skills you have, or take up banditry or become a nomadic herder. No good answers, but if you are poor to begin with you don’t have a lot of options to pick from.

      It is impossible to guess the time period of collapse and die off. Some maintain it will be a long drawn out process. An emergency, shortages, ad hoc solutions. A traumatic period, then a leveling off as people adjust to the new way of doing things. Then, further resource depletion and more emergencies. More depopulation until the “new” level of resource availability is met. A period of relative calm until another spasm of die off, adjustments to the next level of food availability. Etcetera. This could very well happen, as illustrated by the two hundred year Mayan decline or the three centuries it took Rome to fall. I’m far less optimistic. Back then, a primitive level of agrarian existence was practiced, even as farms became bigger with conquest or water sources were centralized. Come overpopulation and soil depletion, you merely saw enough famine to adjust to less population, that which matched less fertile soil or limited water. Today, most soil is already infertile, only producing because of oil inputs. Farms are far from population centers and transportation is required. Instead of ninety percent of the population farming, there is only a few percent, in the single digits. Most farm areas have water availability issues, such as California seeing drought decrease mountain snow melt off or aquifer depletion in the middle part of this country (Texas, Nebraska, etc.). The adjustments needed will be much larger than in the past. There is far less knowledge of farming than in the past (we concentrate on the industrialized First World throughout). There is far less farmland available than in the past, due to artificial fertilizers and mechanized farming growing so much more per acre. I foresee a much bumpier, more rapid decline than in the past because of all this.

M.  Types of preps
Survivalists come in all shapes and sizes and they usually rival the different sects of Christianity in their dispute over doctrine. There are primitive Stone Age adherents, short term ‘weather disaster preppers’, ‘nuclear fallout shelter occupants’, ‘back to the landers’ only concerned with growing their own food, Yuppie Survivalists intent on recreating every luxury of their middle class existence in Armageddon mode, hoarders of gold and silver that will buy their salvation, modern day desert hermits who will survive through a collapse unknowingly due to loss of contact, or, my favorite, ‘frugal preppers’ that can prepare on almost nothing as their needs have been pared down to the bare minimum. I can’t say which group has the most chance of arriving intact on the other side of die off.
•  The Stone Age practitioners are least vulnerable to technological collapse, but any number of poor marksmen with modern firearms can invade their territory and kill off all large game leaving him nothing to eat but berries, insects and small rabbits. Will there be enough skins to get him through winter, or is he far enough away to thrive?
•  The short-term preppers don’t stand much of a chance with limited supplies unless there is an instant die off such as an asteroid strike, Yellowstone volcanic eruption or nuclear exchange and he can pick and choose supplies lying around as in a poorly budgeted B-movie.
•  The nuclear crowd is well equipped to survive only one type of disaster. Or will the local tax man except MRE’s in lieu of property tax during an economic depression?
•  The ‘back to the landers’ are well equipped to feed themselves, their arriving family and perhaps a neighbor or two. Unfortunately most of their plans need to have a strong government capable of keeping the lawless forces away from them so they can continue to till the soil unmolested. Plus, they usually owe a mortgage on their perfect farm and are thus susceptible to economic downturn.
•  The Yuppie Survivalists are the school most taught by authors of best selling preparedness books. That is because the breed will buy anything that promises to save them in complete comfort. Authors and salesmen follow the money and sell to these people. The ones who can’t stand the thought of any decrease in their standard of living. Instead of stocking candles for illumination they will buy $800 worth of solar panels, 12v auto lamps and a few hundred bucks in marine batteries to see with while off  the grid. Their whole preparedness plan is just like this, spend one hundred times the needed amount for tools because they can’t let go of their soft and comfortable lifestyle.
•  The precious metal advocates are not wrong because “you can’t eat gold”. Precious metals will play a vital part after the recovery. They are wrong because they think money alone, even in a safe inflation proof form, will help them survive. They only look at the aftermath, forgetting one must travel a ways through treachery to get to a society living once again on a gold standard.
•  Desert rats that are not at the end of their hoard of beans and bacon can blissfully ignore the world crashing around them as they are alone in the wilderness and protected from the folly of their fellows. Unfortunately, they only postpone the day of reckoning when they must come in for resupply.
•  Frugal preppers are not the most enlightened nor the smartest. This school of survivalism is not any more perfect than most other types. Except for one critical factor. It allows anyone, even those of the most humble economic means, to prepare as much as possible for the coming collapse. This is why it should be much more attractive than it currently seems to be. Especially during the current economic collapse when job losses are epidemic, credit continues to contract causing companies that were just a year ago sound and prosperous to see so many problems beset them.

These go hand in hand, where companies have no choice to salvage some stock value and continue to give their top echelon workers a “merit” based raise or bonus at the end of each quarter. Before, when cutting costs was the path to efficiency during boom times, workers were habitually laid off. Today, vastly increased numbers are given pink slips regardless of the long term effect this might have on productivity. Panic mode is in full bore and where once the left over work force was compelled to handle the increased work from fired coworkers, now the trimming is so close to the bone it is doubtful the companies can survive. Before, another competitor bought off the suffering company with cheap and plentiful debt. Now, entire industries will all but disappear to a fraction of their former selves to claim the reduced demand of cash negative and credit impaired customers. States and all other levels of government are also seeing their ability to borrow suffering, and since they can’t print money like their brothers at the Federal level they will have no choice but to ax civil servants. Government will not be the safe haven for workers it used to be during downturns. Therefore, everyone should be very wary of being able to keep their jobs and thus their mortgages, credit rating, SUV’s and other badges of a middle class lifestyle. You would think a cheap way to insulate against calamity with an affordable stock of food and protection and alternate energy would be most welcome by frightened workers. Alas, the herd instinctively runs to the big money boys, the Yuppie Survivalist teachers and suppliers. Just as they did during the 1970’s.

      If you are one of the few that sees the futility of spending twenty grand on an arsenal, a quarter million on a remote farm and five grand per person on freeze dried field rations, welcome to frugal survivalism. Anyone can have the basics for under a grand. That includes food, shelter, protection, filtered water. Another three grand will see you safely on your own paid for land in a more permanent shelter.

To briefly summarize; The basics consist of a store of whole wheat kernels bought from a feed and grain store (untreated by vet medicine), stored in five gallon poly buckets. A $25 cast iron grain grinder. A moron proof way of constructing your own 13,000 gallon water filter for just $50. A used WWII surplus bolt action thirty caliber rifle, usually on sale under a hundred bucks. There is a bit more to it, but in essence by preparing at a bare bones level anyone can afford to stock a years worth of emergency rations and protect it adequately. The cheap homesteading method is to buy a piece of junk land (usually on E-Bay) on little more than a grand and park a trailer or build a very small cabin on it for the same amount. Most off-grid expenses such as a generator or well or septic can be bypassed cheaply. Remember, preparations only get you through a die off period. Even spending half a million on a remote farm and protecting it with your home grown militia toting semi-automatic carbines and eating MRE’s will do little to increase your chances of survival due to the rest of the world surrounding you and wanting to interfere with your existence. You should clearly see this as you read further. There will be strategies to diminish this threat, but all in all inexpensive functional tools will see you through as well as the much more expensive ones. Mindset will be far more important. Just ask yourself, do I want the help of dirt poor rednecks that learned at the school of hard knocks and are barely equipped. Or do I want a bunch of pampered Yuppies loaded with the most expensive tools who are unaccustomed to almost any hardship outside of the corporate boardroom along for the ride?
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II.  Life after the collapse

A.  How far will we collapse

The last time an individual possessed all of the needed skills to survive was during the Stone Age while hunting and gathering. Since the Agricultural Age began almost no farming community has existed without outside trade. Before, an individual could survive physically if separated from his tribe ( psychologically was a different matter ). After, a farming community separated from trading with others could not survive, in most cases. If a local source of salt was available, and if there was an ore deposit nearby then semi-independence was possible. But, by and large, since we tied ourselves to the land we have needed to trade to survive. There were few areas were all the necessities of life were available, so trade allowed far more marginal lands to be settled. For instance, a dry rocky area was perfect for olive groves and produced almost no grain or meat but did have an abundance of oil. Another area rich in soil that yielded a surplus in grain could trade for oil, something they had little of. One area had forests of nut trees. Rather than fell the trees and plant on soil ill suited for anything else, the nut surplus was traded for other foods. Today, it makes sense to grow coffee on hilly areas (or cocaine, but that’s a different story) and trade it to the Americans, who have an over abundance of corn that is a staple of your country. The corn was cheaper (pre-Bush ethanol debacle) grown up north by mechanical means and shipped south than could have been achieved on those steep hillsides. When man was first growing crops and domesticating animals, there were few people and some really choice spots to settle down and grow. As the globe has filled up, trade has become more and more important as people live in far from choice spots. Trade is essential now, even for the barest necessities of survival. Almost no one outside a few nomads still living primitive lives can live without trade.

Why is this important? Because trade is impossible without a functioning economy, trust, rule of law and energy for transportation. All of these things are ending. The US has been living off of creating debt, inflating its currency, bullying its partners into nearly giving away their goods, and little else for some time. Our GNP is no longer a measure of manufactured goods being shipped overseas but of a measure how much the bankers borrowed from China and loaned to consumers through credit cards, how many dollars were created to “buy” our oil from Third World countries, how much houses were inflated in worth to create derivative sales to pensioners in Europe, and other computer manipulated, magically productive activities that only could come true with a healthy sprinkle of Pixie Dust. As our economy unravels, trust in the form of credit is being destroyed. Without trust, no trade takes place. As it is, credit is contracting wildly right now. And there is no end in sight, as everyone else is seeing how manipulative and dishonest our financial community has been. They are starting to show caution to our future promises. The rule of law, or law and order, is breaking down. African pirates holding ships hostage is only one sign of the coming unrest. Month long protests in once placid First World countries.

Energy for transportation is, as already discussed, on a downward trend. Add it up and it spells the eventual halt in trading. At the point where an international police man is impotent, trade falls to a low level, where only luxury goods are profitable, where only precious metal is accepted, and where the bulk of necessities revert to whatever can be produced locally. At that time, we are back in another Dark Ages ( Post Oil Dark Ages ). Mass migrations will occur, as the many uninhabitable areas are abandoned. The rest die off, their area unable to support more than a hand full. After Rome fell, and trade stopped, areas formerly pottery centers of the empire were reduced to being unable to produce anything other than crude approximations of their former wares. Specialists were supported by wide-spread business. They turned out quality and quantity. Once trade suffered, the factories almost reduced to ruins, the specialists departed or killed, the area known for high quality low cost pottery was unable to do little more than turn out misshapen lumpy, poorly glazed pale imitations. This is what the collapse of trade does. Specialists can’t ply their trade, centralization and economics of scale falter. Poorly made inexpert handcrafts take products places. Now, add in our dependency of oil. We are untrained in manufacture due to our dependence on machines. We are unschooled in many modern basics such as chemistry or engineering due to hyper-specialization. We are on the down side of the Oil Age. The collapse can go mighty low once the perfectly aligned parts are disrupted.

      Even if you can get an expert to join your group of survivors, they won’t have oil to run their machines. Or any machines, susceptible to parts failures. Or basic supplies to practice the modern arts due to trade disruptions. Add in the need to eat, and hostile surrounding forces. You all don’t stand a chance, and neither does our modern society. Things will turn primitive really fast. Knowledge alone is no guarantee a process will be practiced. It takes skill, practice, parts supplied from centralized factories far away, a strong defense force to protect against bandits. We all take progress for granted. But destruction is much easier. It takes two minutes with a match to burn down a million dollar mansion that took a year to build and several decades of toil to pay for. And destruction is only curtailed by the forces of law and order. Which will be hard pressed to achieve either. After a certain point is reached, the collapse continues until there is almost complete ruin and almost no one left alive. And where the technology level is far below that once practiced. We will return to a primitive agrarian society, and as our modern tools fail there will be only primitive replacements. Some areas will still pump and distill oil ( on a small level ). Some areas will mine and smelt the metal from the ruins. But it will be unavailable to most due to a collapse of trade and a shrinking of borders.

B.  Lifeboat communities
A nice concept, lifeboat communities. Get a bunch of modern hippies together and start a community that practices all those neat concepts that circumvent the need for oil. French Intensive organic gardening, alternate energy, super insulated buildings, integrated crop/livestock production, old time skills, etc. The first problem with these is that they are very expensive to start, as currently envisioned. It is one thing to put up some mud/straw walls and thatched roof, get a few chickens running around and making your own candles. It is quite another to build straw bale 2,000 square foot houses, greenhouses, import specialty livestock, install solar panels, sink hundred foot wells, convert a truck to bio-diesel, grow specialty crops for the French chef in the towns $75 a plate Yuppie Greasy Spoon, pay property tax and a mortgage on the land, etc. No one is going to get together and do it cheap and primitive, but high dollar and comfortable. Thus, very few go past the planning stage. Then, once your community is up and running, you have a nice big target painted at your front gate. Look, we grow crops here. We can survive the end of oil. Won’t you come on in an conquer us and make us the serfs to your royal personage? Lifeboat communities are not exactly security conscious. They attract the idiots that gazed at Al “I invented the Internet” Gore with a twinkle in their eye and tried to save the world by changing their regular lights with made in China by political prisoner labor fluorescent bulbs. They are not heavily armed with anything more than guilt over their opulent middle class lifestyle paid for with a taxpayer supported job as environmental consultants. Yes, their heart is in the right place. So was Jimmy Carter’s, and he made some colossal blunders.

      Unless you can get together a group of militia that likes to grow organic lettuce, forget lifeboat communities. They could have been the spark that carried knowledge through the coming darkness, if they hadn’t been plundered during the first food shortages. Wishful thinking and fantasy is what led us to this problem of oil dependency in the first place. Wishing upon a star to make it all go away isn’t going to work either. Power will trump righteousness. They might be just what the world will need, but some lazy, vicious greedy punk is going to exploit them quickly. It won’t matter if it is the current mayor or sheriff, a former drug gang or a new home grown power. The natural order of things is for a gang of criminals to exploit the work of others in exchange for “protection”.

C.  Organic farming
Organic farmers are not as vulnerable as lifeboat communities. They are not advertised in New Age magazines, nor do they give interviews to the local TV station for filler in-between the weather and sports scores. They are decentralized and widely scattered. They can include, more often than not, an armed owner. And they are the only way to farm after the oil stops running. Unfortunately, this does not come with a Get Out Of Jail Free Card. Just because you have a skill does not automatically make you precious and invaluable after the collapse. The local ruler can, indeed, force you to share your skills whether you want to or not. And likely not on your terms. When twenty horsemen approach you with an offer you can’t refuse, it might not be wise to do so. They can take family members hostage, burn down your house one night, snipe at you, horse whip you until you concede, etc. You are tied to the land. You can’t run away. This is the problem with farming. It leaves you as a stationary target. It is justifiable when you gaze with pride at a productive field. You created a means to sustain your family out of nothing. Hard work, a large investment. All for nothing when law and order break down and local tyranny triumphs. Unless you are isolated and have a lot of armed men with good logistics, you will not survive on your land unmolested.

      When slavery is mentioned, you usually think about a muscled black hoeing cotton. Grunt work. But look at history. Most advanced civilizations had highly skilled slaves. They were craftsmen, and they were teachers. They were not protected from slavery because they had skills. They were much more valuable than mere field hands, true. That fetched them a higher price at auction. And allowed them far better treatment. But they were still slaves. But you won’t even be that unless you are lucky. You will merely be a serf. Tied to the land. You won’t face as bleak of a future, since modern organic farming is a much better producer than ancient farming. You won’t starve as easily. But you will produce the food for your owner, and you had better do a good job because he will take his cut. You want enough to eat and sell for some small comforts, you grow as much as possible. Organic farming won’t keep you free, just better fed. It will increase your odds of a full stomach. Just not as a free man. That said, this might still be one of the few good options open to you. We will cover the other viable trades likely available after the collapse, but if you don’t realistically see yourself capable of performing them ( or don’t see your family holding up under their demands ) farming might be your only option. It is the only one most of us can practice now. If you have access to land, farming now has several benefits. It reduces your stress from your daily job, reduces your stress about the future, saves you money as times get tough, allows you to eat much healthier at a time when medical costs are making health care an unaffordable luxury, and will see you nicely through the Depression and the initial collapse phase. There is a reason that farming holds such an allure. It is better than money in the bank, which is a tool that only works in good times. Feeding yourself is tailor-made for bad times. Just beware of its long-term consequences when we enter a true dark age.

D.  Population shifts
Another bit of bad news for you to worry about is population shifts. Come collapse, the population will move. Even if little or no automotive transport is available, expect huge population shifts as people flee to perceived safety. Americans have always been nomads, shifting locations to better serve their financial interests. It is bred into us, as normal as breathing. We are not like most other societies, where staying near our safety net meant life or death. There have always been nomadic cultures. But they have been the exception for the eight thousand years we have lived by agriculture. It has paid to stay put. The Mongols were only able to live in areas of rich grasslands. The Gypsies have always been marginal in numbers, and more of a gang of grifters moving away from their victims. The Bedouin were confined to their desert. There is always a place for nomads, as they bring mostly agrarian wasteland into production to the benefit of all. But they are not the majority. The stationary farmers are. So American society has been somewhat unique in its mobility. Largely, this was the process of filling up a huge area that had never been “mined” of its wealth. We killed off the Indians and moved in wave after wave of people taking advantage of unexploited resources. After that was done, we lived the same life but now by living off the accumulated riches of our exploitation. We slowly started living off of our seed corn, the accumulated principle of our savings. That is now over and done with and the decline of our civilization has started, but the huge numbers of autos, the large amount of oil we take from others by trade or force, all this still gives us the illusion of the wealth we had and we still feel free to move around. A perpetual band of Okies seeking the illusive Golden State.

The point being, Americans are still very much in the habit of thinking riches (or at least safety) are just over the horizon. Most will turn into unknowing refugees with very little provocation. Expect several large waves of humans. To the warmer South and Southwest after heating oil, natural gas or even electricity are no longer available to keep them alive in the winter. To navigable rivers and waterways as all other forms of transportation fail. To those areas serviced by hydroelectric power or that have the potential to once again be dammed. From cities to the surrounding areas to farm the land. Away from highly populated areas to almost anywhere else regardless of its suitability. And from infertile areas to farms or potentially farmed areas. Thus, after waves of crimes, you can see waves of refugees and then waves of immigrants. You need to be aware if your area is a target, since all your careful plans can be disrupted if too many walking mouths move in next to you. To help visualize the scale of this, just think of Hurricane Katrina. Half the city of New Orleans took up permanent residence in other areas. And most of those people were life time welfare recipients with no skills and poor attitudes, thinking the government owed them a living and that crime was both recreation and if incarcerated their lifestyle would improve. Some areas such as Houston Texas were negatively affected by this influx of useless demanding refugees. Now multiply these tens of thousands at least several thousand times, and make it nationwide. This is what you can look forward to. Without much law and order, with no welfare system and not enough food even for the locals already there.

Warmer areas are naturally going to attract those needing to survive winter. There are plenty of hardy folk, braving out winters by storing up wood and food during summer. They like to live this semi-independent style as their ancestors did. But for every one modern pioneer, there are tens of thousands who live in normally frigid areas yet have no idea how to live with the cold. They go from natural gas heated dwellings where they wear the thinnest clothing, scurry hurriedly to their petroleum warmed cars and drive to work where central heat continues to comfort them. They expose themselves to a mere few minutes of cold a day, a thick synthetic jacket covering their torso, with tennis shoe clad feet, bare hands and not much else differentiating their clothing from what they wear in the summer. They are totally dependant on fossil fuels and a functioning infrastructure during the winter. They won’t be able to adapt to lack of oil. They will head south. Modern homes are largely not made to withstand the cold without petroleum inputs. Nor are southern dwellings made to be inhabited without air conditioning. This itself could be a life threatening situation, but that will seem a minor problem when the southeast reverts to its true habit of killing off its population with tropic diseases. On top of disease caused by improper sanitation, expect the return of things such as malaria. The northerners will discover their new home is a pestilent swamp which, without modern pest control and drug deliveries, will kill them off as quickly as the cold would have up north. The southwest will offer nothing more than starvation as the power fails and irrigated farms dry up as the water is no longer available. Even if a few wells still stay in production, the new population will overwhelm its capacity. If the newly empowered Mexican Rights advocated don’t go on a White killing spree as they quickly try to give back several western states to Old Mexico ( they will soon find it was the Yankee wealth that was coveted, not more desert, something Mexico already has enough of ). And water availability, already a life and death struggle, will just get worse with no oil and new state un-cooperation.

Most of the US population already lives close to a waterway. Partially, this is a holdover from when water was the only reliable and affordable transportation. As trade is essential to life, the waterways will take on increased importance. If certain areas still have desirable farmland, such as the plains states ( that which can be sustained by rain alone and not irrigation ), you might still see depopulation if their links to other areas are severed. At first, rail will hold an advantage over road freight, being much more energy-efficient. But in time, as infrastructure fails and fuel dries up ( as well as spare parts ), rail will fail and ancient waterways will become the only way to move goods. In the newly primitive state of existence, the level of technology will dictate this. Ocean front inhabitants may or may not see a continuation of trade. It depends on location, if they can offer an outlet to needed goods. For instance, Southern ports might be viable if tobacco becomes a new cash crop again. Los Angeles should not survive. It has little natural water available and is a thoroughly modern port. Unless the Long Beach port continues to receive container cargo from China, what is the point of it? Unless, somehow, paved over areas are exploited for their oil pumping potential, you will see very little L.A. has to offer that others need. And if water can’t be imported from the Sierra’s ( assuming its snow pack doesn’t shrink too much), forget the crop potential from the San Fernando valley. Even if they continue to grow, expect fighting over its resources to disrupt things anyway.

Sacramento has potential, with its delta watering crops and that outlet to the Pacific. But, expect levee breaks and flooding. What is currently there will be vastly altered. Yet, the thing to keep in mind about California is it is so overpopulated it will have major conflicts from now until it is largely depopulated. It will not be a pleasant place to live. Far down the future, after modern life and its supports have been erased, most freshwater and some seawater areas will be where most of the population live. Without pumping water by artificial means, man must accept those areas Mother Nature offers to live. For trade and for the life water makes possible. And a last word about population shifts and California. Much is made about the Golden Hoard, the masses of refugees moving from California out to all other surrounding states in times of disaster. The same can be said about the northeast corridor. Huge numbers of people with no means of support after oil. They won’t have any good place to go. But they will go there anyway, as anyplace will seem advantageous compared to the gang warfare, the militia fights, the cannibals and the racial conflict. The mass starvation, out of control fires, the water supplies being disrupted. Beware the arrival of these desperate people with insatiable demands and nothing to offer. Hope your community has an easily blocked, minimal amount of entrances.

In the 1970’s, as commercial survivalism reached its zenith, too many books to recount gave the same good advice. Get out of the cities, the urban areas, the ghettos. They told you to pick any city over a certain size on the map and then draw a circle around it for three hundred miles. This was the death zone.
You didn’t want to live anywhere near an area a car load full of gasoline and Angry Armed Minorities could travel to in the event of a disaster. The three problems with this advice were that,
1)  the cars could only travel along roads so that a lot of those drawn circles were still habitable,
2)  if you avoided all circles, there was maybe two areas you could retreat to and they had no stores or water for a hundred miles, and
3)  as the car loads of hostiles drove towards you, mechanical difficulties and the fact that not everyone had a full tank of gasoline meant that the immediate areas surrounding a city were much more dangerous than those a little bit further along (in other words, the danger dropped rapidly).

This did expand your options slightly, enabling you to choose a spot closer to work or affordable housing. But of course, this only addresses the immediate danger in the event of calamity. I think most philosophies were heavily influences by the Cold War, nuclear weapons and their fallout and the ability to live normal until the very end. This is simply wishful thinking, but to this day the ‘bug out’ is discussed and adhered to as a viable strategy.

Recently, after the nation as a whole has switched over to ‘just in time’ inventory where as soon the continually moving replenishment system hits a snag supplies dry up as no one carries excess inventory, hurricanes have shown how roads turned into instant parking lots and gas deliveries are severely disrupted. That alone should keep people from trying to work in one place and live a self sufficient lifestyle elsewhere. Yet, they simply carry more gas cans and map out alternate routes on minor roads. But, regardless of short term problems, the long term is what we are concerned about. Even out of shape people can walk at least twelve miles a day (the California missions were located twenty miles apart along the coastal chain, telling us this was the norm for encumbered travelers back before cars). It won’t take that long before all areas that are deemed desirable see the refugees show up there. So, if you do get caught up in mapping evacuation routes and population centers, follow the roads rather than a drawn circle surrounding a city. You are a lot safer, at first, away from the cities, even closer than three hundred miles. But in the end, those on foot will find your area if it is desirable. My strategy is to live far away from everyone, where few will want to go. Of course, it has its own set of problems.

There is a potential monkey wrench in the normal perceived flow of refugees. Global warming. Now, I hate Al Gore. I’m convinced that he didn’t contest the skewed Florida election results so the Supreme Court could crown Bush the new king in record time. As a result he was rewarded financially in a rather handsome manner (W. Bush is a total moron that needs help completing a coherent sentence, proof positive moneyed interests were behind both his election and the Gore buy off). After the election, he becomes, in effect, new global weather czar. He and his traveling circus travel the globe (in carbon spewing planes) trying to alarm everyone about global warming. He made a lot of money on his lecture circuit. So much so that he can drive his huge carbon spewing SUV’s from the airport to his huge country home, using more polluting natural gas to heat his several thousand square foot office space each month than the average American uses to heat their dwelling all year. So I am not totally sold on the concept of global warming. Rather, I should say I have problems accepting global warming is man-made, or that we can do much about it. When there is money to be made, place your hand firmly over your wallet. The scores of scientists genuflecting before their new idol, lashing themselves with branches, their mouths foaming in ecstasy as they proclaim everlasting devotion and fidelity, all this leads me to wonder if global warming isn’t full of crap. We do have the new solar cycle starting, promising colder weather as sunspot activity is down sharply. Yet, colder weather can lead to less moisture. And those pictures of retreating glaciers are pretty convincing. In the end, unfortunately, you must decide these things for yourself. No one, especially not me, can know enough about your circumstances to guide you through more than superficial preparedness. It is all fine a well to give advice on the basics such as food, water and weapons. It is quite another to give advice that effects your family. No author knows your circumstances, so all the posturing, positions and philosophy must be taken with a grain of salt. We present an argument, you decide if it has merit. Myself, personally, put enough stock into the possibility of rising sea levels that I never bought property in Florida. I left there for Nevada, higher and drier and so many less population. I made the right decision, for me.

Now, come rising sea levels, if they indeed occur, you are going to have the opposite problem of refugees. Rather than heading towards warm climates, they will be headed away from them. Or, headed from warm and wet climates to both colder climes and those warm but dry such as the southwest. I love the desert, personally. Mostly the fact that it is quiet and peaceful and lacking of hoards of slack-jawed mindless humanity. If this eventuality occurs, you might wish to be far away from seawater flooded areas. You look at a sea of starving humanity in refugee camps and you think of passive people glad to get their small cup of gruel every day. That is not what American refugee camps will look like. They will be short on weapons, since the politically correct police will disarm before allowing entrance, but attitudes can’t be checked at the door. To a man they will be belligerent and nasty, hostile and demanding and full of a sense of entitlement. They will demand full supplies (food cooked by others and available menu fashion to allow individual choice) and will put forth no effort for it. In fact, I would wager that in the act of wiping themselves after the digestion process in complete, they rue the effort involved on their part in that. The refugees on the road will have the same attitude. Our government long ago chose to pacify the mobs by allowing them to live off of a lavish welfare state. At the same time the government, as it was doing to everyone else, encouraged a sense of outrage at others. The divide and conquer routine. The young resent the old for their Social Security. The poor resent the rich. The ghetto dwellers resent anyone working. It works great to deflect anger from the government while also forcing a dependence on them. It is a win/win for those in power. After the system comes unglued, it spells trouble for the survivors. You have untold multitudes unable to take care of themselves and quite willing to band together to take what is yours. They are, after all, an exploited minority and deserve to be taken care of since they were oppressed and unable to fend for themselves

(as a good example of this, look to whites in South Africa today, after the blacks took over and started to loot the old western nation ). Fear their arrival as waves of refugees….”

If you’d like to read the entire book, Life After the Collapse by James M. Dankin
Click here to order the eBook version: http://www.lulu.com/shop/james-dakin/life-after-the-collapse/ebook/product-4419799.html
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End of article (Survival Manual/2. Social Issues/Life After The Collapse, 2-2)

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Life After The Collapse, Part 1 of 2

Survival Manual/2. Social Issues/Life After the Collapse, Part 1 0f 2)
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Part I.  Life After the Collapse (a sample from the e-book)

Life After The Collapse © 2009, by James M. Dakin
Click here to order the eBook version: http://www.lulu.com/shop/james-dakin/life-after-the-collapse/ebook/product-4419799.html
Click here to order the Paper book version: http://www.lulu.com/shop/james-dakin/life-after-the-collapse/paperback/product-11179055.html

A.  Introduction
What will life be like after a collapse? This topic has been addressed by scores of fictional works, both the written novel and in movies. Many more short stories dwelt with various aspects of the topic. This also might be thought of as a work of fiction, because it is just like all the others, a WAG (wild ass guess). The only reason I think I might even have something remotely valid to contribute is I focus mainly on life after the Age Of Oil ends, and my guess is it ends badly. I could be totally wrong. I really hope so.
As badly as our current system is, the majority of us are either exploited poor or wage slaves encumbered with a pair of golden handcuffs, it still beats living a barbaric existence of dog eat dog, hands down. But I don’t think I am wrong. I’ve spent a great deal of my time, my effort and even my savings both studying and preparing for just such an occurrence to rudely alter my life. I don’t delude myself thinking that just because I’ve done this that I will be right. I am merely gambling. Just as I believe those that don’t are also entering their wager in this great game.
It is all a game, because none of us can know for sure. But only the blind or the blindly optimistic don’t plan for it one way or another. If you think things will continue as normal (at this point, a multi-generational slow decline) you invest your time and money in a college education, an automobile and a mortgage. If you think things will end badly you strive to insulate yourself somewhat by preparing for collapse. Obviously, you aren’t reading this as a part of your higher learning coursework.

I hope this humble work is more detailed and comprehensive than others of its kind. I hope I give you much more to think about than what end of the world fiction has. Fiction is a great vehicle, in that we think visually. Fiction plays into that medium. But I’ve yet to become proficient in fiction, so this booklet is what I offer. I’m going to cover the collapse in a quick overview. Not because I’m trying to fluff up this work. If I wanted to do that I would cover the multitude of reasons why collapse could occur. The end of oil isn’t the only possibility. No, I want to go through the collapse period because most likely this is going to effect you. I wish I could live on a remote mountaintop, enough supplies to divorce myself from society secured away. I wish I could avoid the coming messy business of society self destructing. I’m not that lucky and neither are you. So I won’t completely ignore what is likely to happen. But I promise not to spend too much time there. I have a burning desire to know what things will look like in our brave new world. As I imagine you do. By trying to spell it out I help myself as well as you. It won’t be perfect. It is just my best guess. I do know it won’t be pretty.
This is not a book destined to sell a lot of copies. I don’t include the required happy ending. Most authors seem to think they need to devote half the pages to giving you a glimmer of hope. A course of action to stop the insanity. Perhaps thirty years ago whining to your Senator produced change (or perhaps that change was for the worse, such as squandering our last giant oil fields on business as usual ). Today our Empire is on course to crash and burn. There is no going back since the vested powers won’t change. We are as the Roman Senators, working the last of the land for the last of the wealth, regardless of loss of soil fertility.

Why write this at all? Even writing short booklets is a lot of work. My financial gains will be minimal. The reading might well be interrupted by grid failure, as this will most likely never see past the electronic version. As I said, laying this out in semi-coherent thought helps me myself visualize what lies ahead. And, I like to think I am also helping those that want to think rationally. Those that don’t need a sugar-coating with their message. Perhaps seeing clearer will increase the odds of survival. That’s as happy an ending as it gets.

B.  Why a collapse?
Why am I convinced a collapse will occur? Why won’t we just see a gradual decline of our fortunes, as has usually occurred throughout history? After all, the average span of a historic collapse has been hundreds of years. Rome took 300 years to wind its way down. The Mayans saw 150 to 200 years from glory to jungle overgrown pyramids. My short answer is energy. Think back to the rapid advances we’ve seen since coal was first used, then oil. All these dizzying economic and technological advances were against the backdrop of an ever-growing pool of energy. Today, the entire economic foundations we enjoy are oil based. There are no more animal powered farms. No more agriculturally advanced armies. No more solar-powered industry. Not in any dominate form. That is only at the margins of society. You don’t revert suddenly to the forms of social and economic activity that sustained you one hundred years ago. All that activity rests on a slow laboriously constructed infrastructure. It takes many lifetimes of blood, sweat and tears to build anything the next generation can advance from. When you totally replace that infrastructure, you can’t magically go back to that place and time again. And we’ve replaced it all with petroleum energy.

We don’t even own the means of production anymore. Our industry is now overseas, mainly in China. What is left is all high technology and oil dependant. It’s not like we have the factories to start producing animal powered farm implements. Or the knowledge to do so even if the factory was there. Or the credit and financing to do so if we could. Hundreds of years previously, at least in some cultures, those illiterate peasant knew how to farm the land and built all their tools from what nature provided. Today, something as simple as building a bow and some arrows is a lost art. It is a simple concept, and those with the time can relearn the art. But without new training and the time to do it, you can’t suddenly master that task when your center fire rifle uses its last round. Now multiply that simple trouble by several orders of magnitude. Who knows how to convert a diesel train back to a wood fired boiler? Who can feed more than themselves when commercial fertilizers are no longer produced from natural gas? Who gets food from that hypothetical farm using that hypothetical train? I’m sure in hobby form all the lost arts of bygone eras are mastered and practiced today. But the numbers are minuscule. And who’s to say they won’t be casualties during the coming die-off? Or that they won’t live an impossible distance away?

Things aren’t so simple that we can revert to an economy based on less or no oil. Every activity in an economy is dependent on an infrastructure. Without the underlying support system, you can’t do anything. You need an industry, an educational system, a system of law and order, a transportation system, a system of payment and credit. Look at most of Africa today. They have vast treasures of natural resources in the ground. Yet, a corrupt system of rulers, a lack of a justice system, lack of a sound currency all keep those resources locked away. No one will invest and work without a guarantee that their efforts will not be subject to theft. Others countries all have an infrastructure where the opposite occurs. Investment is encouraged and rewarded. Look at oil. It doesn’t just appear at your gas station. There is a vast system that brings it from the ground to a distillery to you. It took a lot of time, effort and investment to put that system into place. It didn’t happen overnight, but over generations (with a lot of war and other calamities interrupting the process). The same must happen in reverse. In order to put a system into place that allows another system of energy or economic activity to happen, time and effort must be invested to build that system. The infrastructure of yesteryear is no longer in place. It was replaced and dismantled. Without a sound system to rebuild it, you end up with only the current dysfunctional system until the end.

In the 1970’s, we were rudely awoken to the need to replace our current reliance on petroleum. No widespread system for an alternate source of energy was introduced. Rather, conservation was used. We learned to be more efficient with less energy. But we didn’t replace petroleum. Lucky for us at the time, we went back to a glut of oil from Alaska and the North Sea, as well as replacing our currency backing with Saudi Arabian oil instead of gold. That saved us. But now, all those sources of oil are pretty much used up. Britain has gone from an energy exporter back to an importer, Alaskan crude is down significantly and is staying there and the Saudi fields are in permanent decline. And there will be no large fields to replace them. There hasn’t been a major oil field discovered for almost fifty years, and not for lack of effort. Coal will not last long if used to replace oil, nuclear fuel is not infinite, all hydro sources are already tapped. Ethanol seems to be a net energy loser, as well as doubling our food prices by using edible corn. Tar sands are also a net energy loser. We had nowhere to turn thirty years ago, and no where today. Petroleum was the only answer. Because it provides so much energy in such a compact space, no other energy source could compete. All others fell by the side. We have no other wide-spread source of energy available. And there is no incentive to provide one. All powerful and rich entities reliant on oil have vested interests in keeping things the way they are. They will go down with the oil powered ship.

Civilizations decline with the economic and energy system in place that brought them to power. There might be a few exceptions over time such as Japan. But they are the exception to the rule. Most civilizations follow a similar road. They do something right, that at the time brings them to power. Those in charge got rich following that path. They won’t give up that source of wealth. Usually as the system starts to decline, centralization keeps things running by bringing efficiencies of scale. In time, between the powers that be gripping their wealth and the lack of resources to keep the existing structure maintained or to devolve back to a decentralized form of production (even assuming the rulers would allow that), they collapse. In the end, ninety some odd percent of the population is dead or immigrated and the area is left fallow to replenish itself (in solar-powered civilizations, soil fertility is used up and produces collapse by hunger- a fate we will only avoid as long as oil fertilizes the soil we’ve used up). When our oil runs out, we all die. The soil stops producing food. We are no different from ancient civilizations other than we were able to grow much bigger and postpone collapse longer because of our one time use of petroleum.

      And we don’t need to get to the point where we run out of oil. All that is necessary is that we run out of enough. Oil production follows a bell curve. Rapid increase, a slowing to a plateau, then a drastic decline. Oil fields, oil regions, or global oil all follow this pattern. Not only is that bad enough, where we have nothing to take the place of petroleum, but here in the US it is even worse. We have built our entire system on not just oil but cheap and abundant oil. Where most other nations have never had the luxury of their own supplies, we have been cursed with an over abundance. We were blessed with one of the worlds largest supplies of petroleum, to the extent that we were the global leading exporter of oil until after the second world war. That allowed our economy to explode. But as oil reaches its global peak (the top of the plateau was reached in 2005) our dependence on cheap and abundant petroleum turns into a curse. Our economy, even our political system in the form of a generous welfare state to placate the masses, is based on lots of oil at essentially free prices. Nuclear power never reached its promise of “too cheap to meter”, but oil was always essentially at that point. That concentrated energy source was the equivalent of dozens, hundreds or even thousands of man hours of labor in every unit. And most of our existence has been dedicated towards making that labor as cheap as possible. Gold, a mineral so scarce that all of it ever mined could fit in a small building, buys dozens or scores of barrels of oil which is a non renewable resource. We invade countries to keep oil cheap. Political fortunes turn on the price. We burden our grandchildren with unplayable debt to devote military and intelligence resources to keeping the price low. All told, the sweat and treasure put towards stealing the global oil output is extremely high. That is the hidden cost. But the up front cost is kept low to keep the economy running. When oil reached a reasonable cost of $150 a barrel in the summer of 2008, our economy started to tumble. I say reasonable due to the limits of global daily output being reached and the inflation of the dollar. And the economy would have started to crumble sooner or later due to the massive over subscription to the derivatives market. But the timing is interesting none the less. We absolutely must have cheap, abundant oil for our economy to survive.

C.  PODA  (Post Oil Dark Ages)
PODA is my whimsical and witty title for the coming collapse and its aftermath. Post Oil Dark Ages. In a few generations when our grandchildren are scratching fleas under their animal skins while living in the basements of crumbling skyscrapers, there will still be oil in the ground. Granted, it will be that which was uneconomical to pump out. All oil is not created equal. The stuff close to the surface and without a lot of additional material costly to distill out is what we have mostly been living on. Not that which is two miles under the ocean and hard to get out. It all goes back to cheap and abundant. So we won’t actually run out of petroleum or other carbon fuels. But the consequences will be equal to running out. When the cheap stuff runs out, or it takes as much energy to pump the oil left as that oil yields, it is game over. Things start to fall apart. Crops don’t get planted or harvested, or that food doesn’t get shipped, or both. Essential trade goods don’t make it to our shores. The Age Of Oil ends, the Age Of Scarcity begins. When the military starts taking its dwindling share to take the last of the oil, and that leaves less than enough for food or transport or heat, things start going to hell. It will be a bit of a process, not everything stopping at once. But here is something important to keep in mind. It might take a civilization two centuries to fall into ruin, but that is everything averaged out. In the meantime, even from the first, individuals are adversely affected. When it takes ten years for employment to fall in half, you could be one of the first ones with a pink slip. When it takes twenty years for the death rate to double, you could be one of the first corpses. Averages look good on paper. In person they are a lot more deadly. This is how you need to look at the oil running out, depopulation, the economy falling and other aspects of society unraveling. It might take until your children’s old age for the last of the Petroleum Age to end, but you will be hurt much sooner than that.

      Some theories point to the end of the 1970’s as the start of the end. That is when the per capita amount of energy available started to decline. We don’t see that, being sheltered here in America. But plenty of the world’s population suffers while we fiddle in an orgy of gluttony. It is that average number. We do great, others live on almost no oil, on average the world economy looks good if not perfect. Looks can be deceiving. We are just masking reality. We will eventually see those low numbers. If we survive the unraveling. We will reach the point of less oil. I focus mainly on oil. There will of course be other factors. The credit crisis that started in the fall of 2007 and started to be felt a year later. That is sure to be a lot worse by the time you read this. The natural tendency of governments to hyper-inflate the currency when there is no other way to pay the bills. Our long vanished national grain stockpile and the idiocy of just-in-time inventories (great for saving money short term, suicide come any supply disruptions). Our declining soil fertility due to artificial fertilizers made from natural gas substituting for proper nutrient management. Over population encouraged by corporations as a downward force on real wages. All these things make it worse. But they are not the primary cause of our civilization collapsing. Energy is fundamental to life and an economy. The oil has already started to decline globally. We are making up some of the shortfall with less than ideal substitutions that are big picture energy net losers, such as ethanol and shale oil. Stay tuned. At first it will be easy. Less driving for the holidays. Turn the thermostat down, add insulation. Then, it becomes a lot harder. Rationing, learning to do without. Readjusting. Then it gets hard. Martial law, unrest, skyrocketing crime. Less than enough calories. Than it gets life threatening.
Ready for that journey?

D.  Life during the collapse
So far we have followed trends already occurring. Now we move into murkier waters. The next phase, life during a collapse, is pretty straight forward. We have countless examples during the last century of war and conflict. Our situation will differ slightly, as we are not used to invasion or being an exploited colony. But we can guess at a lot of it. Remember, America was special at one time. We had the best government and the best society, despite a lot of flaws such as slavery, Jim Crow laws, Native American genocide and the like.
Sadly, we are reverting to typical heavy handedness as our resources run down and most likely will become just like any other fascist hell hole in time. The window dressing given our current government transformation should fool no one. Just because you call ‘water boarding’ or rendition Constitutional doesn’t make it any less like torture. Get used to it. It will get worse, not better. All societies decaying get a centralized government to manage the same in the economy. It doesn’t matter who is elected anymore. Not that elections are even fair or just. They are surely rigged. More of the same from now on. Czars will guide the Homeland. We are and will remain a curious American mixture of Nazi Germany and Soviet Russian and will be until the nation breaks apart. To think otherwise is to ignore history.
America was special, but will follow the path of past nations collapsing. We were blessed with natural resources which allowed us to share the wealth. These resources are now gone and as we fight for pieces of the diminishing pie the fight will get ugly. Free men were allowed to remain armed, almost uniquely American in practice. That abundance of personal weapons will make for a very bloody end. That is about the only way this collapse will differ from any other. Men will fight in a more decentralized fashion rather than being dependant on fewer sources for their weapons.

E.  Economic collapse
The collapse starts economically. It already has. Many people think this is a replay of the Great Depression of 1929 to 1942. Understandable as that is the only model on display. So, they believe this is another power grab by the bankers. Before, there were independent banks, not beholden to the new central bank, the Federal Reserve. In 1913 Congress slipped in its creation in a slow holiday period. Those banks that engineered and “solved” a previous bank panic pushed for its creation under the guise of stability. One imagines this was one of the cheapest national and economic power grabs ever. The bribes paid must have been mere pocket change compared to what followed. The banks then loaned money to the Allied powers during the First World War and pushed for our involvement when they were in danger of defeat and hence default. The German reparations also benefited the banks. Which paved the way for Hitler (also thought to have banker backing).
The easy credit of the 1920’s was courtesy of the Federal Reserve, which led to gross over extension and the Wall Street crash. Then, the Fed mopped up by buying failing banks that weren’t part of the central banking system, foreclosed on hard assets such as businesses, homes and farms, plus engineered FDR’s gold devaluation and confiscation to assure its printing press monopoly. It was in effect a decades long coup de ta. So, obviously, the banks know no limit to greed and want even more. Yet, what is there to gain this time? We were the global oil exporter, the globes premiere manufacturing economy. We were the global breadbasket. Today, we have no real economy other than a consumer economy with imported Chinese goods.
We import seventy percent of our oil, so there is a doubt we can even have enough for a bare minimum life support system.
We import twenty percent of our food, with domestic production endangered by water supply problems, oil dependency for fertility and transport and our ethanol program competing for stomachs.
There can be nothing but Monopoly money for anyone trying to win these spoils. I don’t think that this is a banker manipulated problem. It would be stealing gold trim off a sinking Titanic. I think this is the real deal. God, but I wish this was one conspiracy theory I would love to be right. It might mean we wouldn’t collapse in my lifetime. But this does line up with petroleum draw down. So let’s go ahead assuming this is really an economic collapse.

This is just the start of our problems. Normally, a few extra barrels of food, a couple of solar panels, some extra ammunition and a few silver coins would see us through until normalcy returned.
I’ll go ahead and cover the economy, then we can move into the much larger problems of system wide collapse. Those that make the economic collapse a warm up. Economic collapse makes matters worse for everyone, for obvious reasons. With soaring unemployment those households with diminishing income will immediately see petroleum shortages, regardless of outside supply. And when international trade starts to freeze up our nation will face oil shortages regardless of where international supply is at that point. An economic collapse will actually help in the oil run down since far less will be used. Less economic activity will see less energy use.
One the other hand, diminishing demand will scale back exploration, pipeline construction, new field development or even existing infrastructure upkeep. So the effects all in all will be to magnify oil shortages. Already in the winter of ’08 international trade in goods is down sharply, simply from the freeze up in credit. Gasoline prices at the pump were down to the levels not seen for five years (those five years saw doubling prices of everything due to inflation and a weakening dollar). Yet the economic downturn is well under way and decreasing energy prices are not boosting activity. This is the interplay between economics and energy. It looks as if the collapse will continue, mostly economic rather than from oil shocks. Is there a correlation between the three year long drop in oil supply and the economy? Global oil supply fell around five percent. Imported oil to the US fell eight percent. Most likely this was the trigger setting off the financial time bomb that grew larger since the Tech Wreck at the turn of the millennium. For seven years the economy was not allowed to falter due to easy credit creation. Housing bubbles fed the economy. This has faltered drastically and the financial house of cards seems to be going up in smoke.

As employment falls, housing loses value. Less jobs, more foreclosures, less value on homes as values drop as housing inventories explode. Credit is squeezed everywhere. There are no more home equity loans. Personal credit cards are seeing shrinking credit limits. Between the two, no one can make ends meet on credit. Businesses fail as their credit dries up. For a long time, business activity was not much more than buying out your rivals and acquiring its customers. Without credit to expand, business activity shrinks. Driving up unemployment. It is a vicious cycle.
Big businesses with high legacy costs are desperate. When vehicle sales drop due to rising unemployment and shrinking credit, Detroit can’t meet current retiree costs. Bankruptcy looms. If you think Detroit is bad now, with slum homes for sale for $600 in back taxes and an unemployment rate double that of most other areas, wait until the auto makers go belly up. And don’t think Toyota will rescue them. It is seeing sales fall over thirty percent in one year. Japanese companies are very well run, but their biggest customer is the US. Falling demand effects everyone.
Commodities stop their recent drive upwards. Gold companies close due to credit problems. Increasingly, people and businesses look for federal government help. As the government sees overseas loans dry up, hyperinflation is just over the horizon. There will be no other way to pay for the increased need for the welfare state. We will see a short period of declining prices as inventories soar and the remaining businesses are desperate for sales. Then we will see prices go insane as Washington turns on the printing presses (a lot easier now with computers replacing a lot of paper currency).

Remember, the economy is the result of cheap and abundant energy. Nothing else made it possible for our bloated welfare state and empire spanning military to function. Yes, the economy is going to be very important to you as it implodes. After a time, it won’t matter about global oil reserves. The price of gas is unimportant if you repoed your car and the electric company shut off your power. But it is important for a very simple fact. Declining global supplies of petroleum mean that the economy won’t recover. We will have ups and downs, false recoveries and periods of slowing decline. But long-term, we will not see the old days return. It is the beginning of the end. Don’t mistake this for a simple economic Depression. It is also coupled with oil draw down. Decline is here for good. The severity and timing are the only questions.

F.  Oil run down
Oil draw down is the process of running out of petroleum. Oil production is a bell curve. Sharply up, a plateau is reached, the numbers level off and then we start on the down side. A sharp downturn of oil production. Currently we are at the plateau where we have global oil production leveled off. How long this lasts is anyone’s guess. It won’t be that long however. Some very educated guesses have our oil age at about a hundred years. Take 1930 as a start, when oil really started to dominate rather than being a source of illumination only. By the end the 1970’s per capita global energy use started to decline, the half way point. In 2030 we will be back to the level of one hundred years previously in total oil use ( yet with a much larger population and no other way of powering the food and production like we had in 1930 ). But don’t think we have until 2030. The availability of oil is already starting to suffer. All of the king size fields are in decline, including Saudi Arabia. And no large fields have been discovered in fifty years. There will be no Alaska or North Sea oil to save us from the next oil shock. And, least you think cheap gas is a great Christmas present for 2008, this economic disincentive will discourage smaller fields from being exploited. Those would have smoothed out the large field slowdown. Right now the only thing smoothing it out is the fact that economic activity in the worlds largest oil user is in a tailspin. Less US oil use is helping to disguise oil draw down. Enjoy $1.50 a gallon gas, because it will be the last time energy is going to be cheap. We are, simply, running out of energy on a global scale. It wouldn’t be too bad if we only had to turn down the thermostat and stop driving our SUV’s so much. But, we will soon discover to our dismay, cold houses and weeds growing up the wheels of our thirty thousand dollar sheet metal monster are the least of our problems. Oil, today in our country and most other places outside Third World peasant fields, is food. Without oil there is no food. Without food there is famine.

G.  Famine
Famine is not something most of us ever consider. This country has been the bread basket of the world for over a century. The Ukraine used to be the bread basket of Europe before collectivism introduced by the communists. It isn’t that the soil isn’t still fertile, but back again to infrastructure, you need a stable system to reap resources. In America’s case, we are not only farming on infertile soil due to corporate profit being put ahead of maintaining the most strategic resource we used to command, but the only way to continue farming enough to feed the population we have is to pour oil into the process. Most of our fertilizer is not renewable animal manure, but non renewable artificial fertilizer derived from natural gas. We can’t use animal fertilizer as manure, or non mechanized machinery to farm because they don’t work for corporate farming. They are financially inefficient. Corporate farming is our main source of food, and they can’t function without oil. Or, for that matter, easy and cheap credit which may or may not be available in the near future. Now, it is true that there is enough widespread knowledge about intense labor organic farming that we will be able to switch to that form of food production when needed. However, that depends on government no longer favoring large corporations with taxes and subsidies. We can’t go back to decentralized, low lost farming without the government stepping out-of-the-way. Mainly by eliminating high property taxes. As suburbs have encroached on farmland, farmers have seen their land values skyrocket. So their taxes go up. Yet, grains are a commodity sold by volume by the big players. The little farmer can’t compete. The system favors the corporate farmer.

Now, by the time the government no longer favors the rich corporate lobbyist and allows small farms to proliferate, we might already see cracks appearing in the food supply chain. Governments move slowly. Especially if re-election money from deep pockets is at stake. However, our food supply is now on a just-in-time inventory system. We harvest it and ship it out. There are no longer any months long supplies of grain stockpiled, as was the case during the Cold War when it was felt feeding the population in an emergency was a good thing. Now, any widget sitting on store shelves is considered as lost profit to our bankers and corporations. Come any calamity, there is no stockpiled supply to see us through. And even if there were, you need to take into account our transportation system and our banking system. Less oil will also affect our ability to ship crops. And any problems with our credit system will halt shipping anyway. American business (I have left out of the equation our imported food- it constitutes 20% but is mostly processed or luxury goods and can be survived without) are used to ninety day credit. They buy on credit, then pay after they sell the item. This poses a potential problem. So, again, we see both oil and economics as a problem. Food should not be assumed to remain a gluttonous American birthright. We can see a famine, and since none of us remain farming the land it could be as bad as any African calamity or even worse. We have no cushion against shortages. And no stockpile to see our transition from mechanized corporate farming to decentralized local labor intensive organic farming.

H.  Military dictatorship
With both a shock to the economy from dwindling oil supplies and a potential of famine bringing on heavily armed civil unrest, we can be assured that government will at some time or another impose martial law. Whether we see a military dictatorship or not is not even very important. Whatever cosmetics they put on the pig to make it look like something else, the outcome to civilians is going to be the same. Whatever illusion you have that the Constitution will help you will finely be shattered. We don’t have a Constitutional Republic anymore. You can argue we haven’t had one since the War Of Northern Aggression. When a sovereign state which voluntarily joined a Union is forced at gunpoint from leaving same, you can call that a pretty firm break with the document that is supposed to protect our natural rights and limit the power of the government. But, barring that, perhaps because you are a Damn Yankee and won’t confess to a social crime committed by your ancestors like Southerners are supposed to do with slavery, you could at least make a good case that our Republic was sold out by creating the Central Bank in 1913. He that controls the purse strings controls the politicians. Even if that isn’t good enough for you, you have to admit that FDR (may his twisted foul soul be damned for all eternity) took whatever restraints on Federal government there were and wiped his liver spotted ass with them. After him, we had full blown socialism and an out of control military industrial complex along with unbridled bankers and corporate stoolies help them out to rape and pillage what was left of our nation. So, don’t think that quaint piece of paper is going to protect you. It hasn’t and it won’t. The only question we have to ask ourselves is, when and how bad. It is guaranteed to happen. All declining civilizations become despotic at the end. Centralization helps then survive and thrive. But you need a strong government to go from local, decentralized production to centralized control. For a time the economics of scale feed yet more population and bring ever more treasure to the king. When disaster strikes and resources start to run out (fertile soil, neighbors to conquer, rainfall, mild weather, mineral deposits, etc.) you can’t go back, as there are not enough resources to rebuild the old decentralized infrastructure. The only thing you can do is to tighten your control. Try to extract more resources from the profit takers. Try to prevent disorder and rioting as resources run out.

So, don’t think of the power grabbers introducing more fascism as just greedy and controlling. They are, but that is not the point. They are being played by events out of their control, just as you are. Resources run out and the government becomes stronger. They need to keep themselves running, not only to keep order so as to stay in power, but also because those benefiting from the old system won’t allow them to do it any other way. As the system crumbles, those benefiting economically from practices now harming things can’t give up what made them wealthy. They need that wealth to survive.

So, Roman Senators allowed their estates to play out of fertile soil just as there was no more fertile lands to take militarily. Southern plantation owners did the same, just as there were no more states to enter the Union as slave holders. New soil was needed to keep the rich wealthy since they had used theirs up, and there was no more to be had. It is going to be the same with the wealthy of today, those that buy and control politicians. Highly leveraged financial gambles will continue to be sold to the last sucker before the whole economy implodes. The last tanks using the last gasoline will fight over the last oil field, more than likely illuminated by radioactive glows from the distant city sites. No one is going to seriously push for independently owned cheap solar panels on every rooftop. The only serious solar (as far as supplying any large percentage of energy) will be centrally located and controlled by major utilities.

Martial law is as inevitable as the sun rising. No one voluntarily gives up power and wealth. When people begin to starve, they revolt. To keep the revolutionaries from sharing their wealth, the rich use the government to control the population. Luckily for use, our government can’t put many resources into this proposition. There is no real wealth behind them, just printed dollars backed by the ( dwindling supply from ) oil fields of Saudi Arabia. Economics also effects the government’s ability to pay for people and supplies. I’m not saying they won’t steal what they need, just that a broke and weak government is going to be trying to pacify a three thousand mile long nation at a time when transportation is not as easily fueled. As long as the oil flows, a relatively small government and military can control us. In fact, most of us want to be controlled. When that runs out, it will be a long-term losing battle to control us. Small consolation to concentration camp victims or tortured dissidents. I can’t see more that is going to be added from the long sorry history of martial law by us. We will start out being pretty brutal. When you don’t have a lot of resources to control people, you start out trying to terrorize them so most offer no resistance. This is how the Japanese controlled large areas of land with few soldiers. You give that crazy little bastard a bayonet and instructions to chop suey anything less than perfectly obsequious. I can’t see Americans anywhere close to as effective as the Japanese at pacification. We might have a few folks like Janet “BBQ” Reno able to torch small children or jack booted thugs willing to stomp kittens to terrorize a family, but they belong in the psycho wards to begin with. Normal folks have no ability to do these things, let alone to their own countrymen. Plenty can be brainwashed, but not enough to control all of us for very long. Yes, it will be brutal and bad at first, but the few thugs the Feds have will quickly lose control. There will not be enough of them to control the millions too hungry and cold to care anymore. Desperation will help the government for a time, then it will turn things against them. We will happily turn in our neighbors for unpatriotic thoughts, in return for bread and circuses. When that is no longer provided, the ‘narcs’ and stooges will turn on their handlers. Which is when we will see race wars on our way towards the national breakup.

I.  Race wars
The truly ignorant actually try to see a difference in people by their skin color or their religion. This can be pretty comical at times, if you are outside looking in. Such as the Nazi’s and the convoluted racial classifications trying to protect “pure” whites while discriminating against Jews or Slavic’s. Is a White Russian okay, but a Ukrainian not? Or a gypsies bad, even if they are mostly from Aryan stock? Why is a Jew impure if he is from a long line of Germans? Is the picture perfect white German less pure if his great-grandmother one-third Jew? Etcetera. My view is that skin is really not much more than adaptation to environment, but I’m sure that view will get me on a few elimination lists if the three members of the American Nazi party can get a few meth addled skinheads to assassinate me. Well, add the fact that I’ve been married to more than one Mexican gal. I sure wasn’t worried about protecting the purity of my race those times, even if I did practice birth control. Most people, despite the continual indoctrination of our public school systems (the ones controlled by white politicians that send their kids to private schools charging enough tuition to eliminate most of those of a darker hue) still have a certain problem with other races, even if they don’t know why. Typically, I hear racist attitudes along the lines against those types they didn’t grow up around. I have no problem with Mexicans, growing up in Southern California. But to be honest the majority of blacks are like foreigners to me. The reason is not skin color. That is a cop out for those not wishing to think the matter through. It is simply about tribal identity. And fear of the unknown. But mostly tribal. Humans belong in social groups. It is a survival mechanism. And we automatically identify with our tribe and against others. We are usually lazy and rather than rationally voice this, we spew some crap about skin color (and you all know the “colorful” terms used to describe other races). That is a mental shortcut. Give it any amount of thought and you can see what I’m talking about. Tribe equals safety. Other tribal members equal the enemy. Whether they are different skin colored or not is not the main issue, other than that is a sign of their tribal identity.

Multi-racial nations rarely work out long term. The tribal marks are not overcome in difficult times by national identity. During safe, economically easy times, we can all get along. As soon as times turn tough the old tribal markers mean a great deal more. We will have racial conflict. Not because blacks are evil, or whites are superior. It doesn’t matter. You can be any color. Others will turn against you. Skin color is just another excuse to exclude you from another’s tribe. Religion will also be dividing. But with the long history of conflict between the colors in this country, it will be easy to justify unpleasantries against others due to their skin. Blacks have a long grievance against whites, whites have always feared blacks because of this. Mexicans have been exploited economically, and we did steal a lot of their land (although to be fair they stole it from the Indians). Indians were nearly wiped out through germ warfare and have a lot of justifiable issues. I sure wouldn’t want to be living near any fair sized reservation come hard times. Nor near any ghettos, regardless if it is black or Mexican. A wouldn’t want to be a white living in Hawaii for that matter. Living in northern Nevada with a clear majority of whites is not preferred because I am racist. It is because I am trying to be on the local winning tribes side. Simply self preservation. You might give it some thought. Do you trust other tribes to treat you fairly when times get tough and they have an economic incentive to expel you ( less mouths at the limited trough )? And they won’t be offering a first class ticket on Amtrak to leave town. Far easier to attack you with ball bats and tire irons and throw you in a shallow mass grave.

Look at the tribal conflicts in eastern Europe or Africa. Skin color doesn’t come into play as much as actual tribes going back centuries. But the dynamic is the same. Starvation looms and one tribe turns against another. That tribe which eliminates the other survives on the limited resources available. This is human nature and explains why there are conflicts. I’ll cover this more later on, but it is pretty simple. Group identity is a survival mechanism, safety in numbers. And stealing another groups resources guarantees one group will survive in lean times. No one joins hands and sings about one world and helps those less fortunate in times of hunger. Not when both groups are starving. Charity is only possible when one group has a surplus. Without that, one groups kills off another to survive with full rather than half rations. And they will justify it in many ways, racial, tribal, vendettas, etc. Race wars will happen in this country as soon as times get genuinely tough. Count on it or you will belong to the body count.

Continued in (Survival Manual/2. Social Issues/Life After the Collapse, Part 2 of 2)

If you’d like to read the entire book, Life After the Collapse by James M. Dankin
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City Survival: Stay (Part 1 of 2)

(Survival Manual/ Prepper articles/ City Survival: Stay (Part 1 of 2))

A.  Letter Re: Hunkering Down in an Urban Apartment in a Worst Case Societal Collapse
25  Dec  2007, Survivalblog.com, blog author James Wesley Rawles
http://www.survivalblog.com/2007/12/letter_re_hunkering_down_in_an.html

city3 neighborhoodHello,
In the event of a disaster (I live in New York City) I intend to shelter in place until all the riotous mobs destroy each other or are starved out. I am preparing for up to six months. I have one liter of water stored for each day (180 liters) and about 50 pounds of rice to eat as well as various canned goods. I have not seen on your site anything about heat sources for urban dwellers who intend to shelter in place. I’m assuming that electricity would go first soon followed by [natural] gas and running water. Do you have any recommendations for cooking rice and other foods in this event.
I am considering oil lamps or candles, methane gel used for chafing dishes, or small propane tanks. Because of the small size of my apartment and potential hazards of storing fuel I’m unsure which would be best. Please advise. Thank You, – Michael F.

JWR Replies: I’ve heard your intended approach suggested by a others, including one of my consulting clients. Frankly, I do not think that it is realistic. From an actuarial standpoint, your chances of survival would probably be low–certainly much lower than “Getting Out of Dodge” to a lightly populated area at the onset of a crisis. Undoubtedly, in a total societal collapse (wherein “the riotous mobs destroy each other”, as you predict) there will be some stay-put urbanites that survive by their wits, supplemented by plenty of providential fortune. But the vast majority would perish. I wouldn’t want to play those odds. There are many drawbacks to your plan, any one of which could attract notice (to be followed soon after by a pack of goblins with a battering ram.) I’ll discuss a few complexities that you may not have fully considered:

Water. Even with extreme conservation measures you will need at least one gallon of water per day. That one gallon of water will provide just enough water for one adult for drinking and cooking. None for washing. If you run out of water before the rioting ends then you will be forced to go out and forage for water, putting yourself at enormous risk. And even then, you will have to treat the water that you find with chlorine, iodine (such as Polar Pure–now very scarce), or with a top quality water filter such as a nKatadyn Pocket water filter.

Food. For a six month stay, you will need far more than just 50 pounds of rice! Work out a daily menu and budget for an honest six month supply of food with a decent variety and sufficient caloric intake. Don’t overlook vitamin supplements to make up for the lack of fresh fruit and vegetables. Sprouting is also a great option to provide vitamins and minerals, as well as aiding digestion. Speaking of digestion, depending on how your body reacts to the change in diet (to your storage food), you may need need a natural laxative in your diet such as bran, or perhaps even a bulk laxative such as Metamucil.

Sanitation. Without water for flushing toilets, odds are that people in neighboring apartments will dump raw sewage out their windows, causing a public health nightmare on the ground floor. Since you will not want to alert others to your presence by opening your window, and no doubt the apartment building’s septic system stack will be clogged in short order, you will need to make plans to store you waste in your apartment. I suggest five gallon buckets. A bucket-type camping toilet seat (a seat that attaches to a standard five or six gallon plastic pail) would be ideal. You should also get a large supply of powdered lime to cut down on the stench before each bucket is sealed. You must also consider the sheer number of storage containers required for six months of accumulated human waste. (Perhaps a dozen 5 gallon buckets with tight-fitting o-ring seal lids would be sufficient.) Since you won’t have water available for washing, you should also lay in a supply of diaper wipes.

Space heating. In mid-winter you could freeze to death in your apartment without supplemental heat. As I will discuss later, a small heater or just a few candles can keep the air temperature above freezing.

Ventilation. If you are going to use any source of open flame, you will need lots of additional ventilation. Asphyxiation from lack of oxygen or slow carbon monoxide (CO) poisoning are the alternatives. Unfortunately, in the circumstances that you envision, the increased ventilation required to mitigate these hazards will be a security risk–as a conduit for the smell of food or fuel, as a source of light that can be seen from outside the apartment, and as an additional point of entry for robbers.

Security. The main point of entry for miscreants will probably be your apartment door. Depending on the age of your apartment, odds are that you have a traditional solid core wood door. In a situation where law and order has evaporated, the malo hombres will be able to take their time and break through doors with fire axes, crow bars and improvised battering rams. It is best to replace wooden apartment doors with steel ones. Unless you own a condo rather than lease an apartment, approval for a door retrofit is unlikely. However, your apartment manager might approve of this if you pay for all the work yourself and you have it painted to match the existing doors. Merely bracing a wood door will not suffice. Furthermore, if you have an exterior window with a fire escape or your apartment has a shared balcony, then those are also points of entry for the bad guys. How could you effectively barricade a large expanse of windows?

If you live in a ground floor apartment or an older apartment with exterior metal fire escapes, then I recommend that you move as soon as possible to a third, fourth, or fifth floor apartment that is in a modern apartment city4 socialbuilding of concrete construction, preferably without balconies, with steel entry doors, and with interior fire escape stairwells.

Self Defense. To fend off intruders, or for self defense when you eventually emerge from your apartment, you will need to be well-armed. Preferably you should also be teamed with at least two other armed and trained adults. Look into local legalities on large volume pepper spray dispensers. These are marketed primarily as bear repellent, with brand names like “Guard Alaska”, “Bear Guard”, and “17% Streetwise.” If they are indeed legal in your jurisdiction, then buy several of the big one-pound dispensers, first making sure that they are at least a 12% OC formulation.

If you can get a firearms permit–a bit complicated in New York City , but not an insurmountable task–then I recommend that you get a Remington, Winchester, or Mossberg 12 gauge pump action shotgun with a SureFire flashlight forend. #4 Buckshot (not to be confused with the much smaller #4 bird shot) is the best load for defense in an urban environment where over-penetration (into neighboring apartments) is an issue. But if getting a firearms permit proves too daunting, there is a nice exemption in the New York City firearms laws for muzzleloaders and pre-1894 manufactured antique guns that are chambered for cartridges that are no longer commercially made. It is not difficult to find a Winchester Model 1876 or a Model 1886 rifle that is in a serial number range that distinguishes it as pre-1894 production. (See: Savage99.com for exact dates of manufacture on 12 different rifle models.) You will be limited to chamberings like .40-65 and .45-90. You can have a supply of ammunition custom loaded. A Winchester Model 1873 or and early Model 1892 chambered in .38-40 might also be an option, but I would recommend one of the more potent calibers available in the large frame (Model 1876 or 1886 ) rifles. Regardless, be sure to select rifles with excellent bores and nice mechanical condition.

For an antique handgun, I would recommend a S&W double action top break revolver chambered in .44 S&W Russian. None of the major manufacturers produce .44 S&W Russian ammunition. However, semi-custom extra mild loads (so-called “cowboy” loads, made specially for the Cowboy Action Shooting enthusiasts) in .44 S&W Russian are now available from Black Hills Ammunition. The Pre-1899 Specialist (one of our advertisers) often has large caliber S&W double action top break revolvers available for sale. The top breaks are very fast to load, and you can even use modern speed loaders designed for .44 Special or .44 Magnum cartridges with the stumpy .44 S&W Russian loads.(It has the same cartridge “head” dimensions.)
Firearms training from a quality school (such as Front Sight) is crucial.

Fire Detection and Contingency Bug-Out. A battery-powered smoke detector is an absolute must. Even if you are careful with candles, lanterns, and cook stoves, your neighbors may not be. There is a considerable risk that your apartment building will catch fire, either intentionally of unintentionally. Therefore, you need to have a “Bug Out” backpack ready to grab at a moment’s notice. Although they are no proper substitute for a fireman’s compressed air breathing rig, a commercially-made egress smoke hood or a military surpluss gas mask might allow you to escape your building in time. But even if you escape the smoke and flames, then where will that you leave you? Outdoors, at an unplanned hour (day or night), in a hostile big city that is blacked out, with no safe means of escape. (This might prove far too reminiscent of the the 1980s Kurt Russell movie Escape from New York.”) By the time this happens, the mobs may not want just the contents of your backpack. They may be sizing you up for a meal!

Fuel storage. Bulk fuel storage has three problematic issues: 1) as a safety issue (fire hazard), 2) as a security issue (odors that could attract robbers), and 3) as a legal issue (fire code or tenant contract restrictions). I suspect that New York City’s fire code would not allow you have more than a week’s worth of propane on hand, and completely prohibit keeping more than just one small container of kerosene or Coleman fuel. From the standpoint of both safety and minimizing detectable odors, propane is probably the best option. (The odors of kerosene and chafing dish gel are both quite discernable.) But of course consult both your local fire code and your apartment lease agreement to determining the maximum allowable quantity to keep on hand.

Odds are that there will be no limit on the number of candles that you can store. If that is the case, then lay in large supply of unscented jar candles designed for long-burning (formulated high in stearic acid.) I suggest the tall, clear glass jar-enclosed “devotional” candles manufactured in large numbers for the Catholic market. You can even heat individual servings of food over these if you construct a stand with a wide base out of stout wire. Watch for these candles at discount and close-out stores. We have found that the large adhesive labels slip off easily if you soak the jars in water for an hour. Since their burning time is approximately 24 hours, and since you might need two of them burning simultaneously for sufficient light and to stay warm, that would necessitate laying in a supply of 360 candles! (This assumes that the worst case, with the outset of a crisis in October, and your having to hunker down for a full six months.)

Fire fighting. Buy at least two large multipurpose (“A-B-C”) chemical fire extinguishers

Cooking odors. In addition to the smell of fuel, cooking food will produce odors. I recommend that you store only foods with minimal spices. In situation where you are surrounded by starving people, just frying foods with grease or heating up a can of spicy chili con carne could be a death warrant.

Noise discipline. Just the sound of moving around your apartment could reveal your presence. For some useful background, see if your local library has a copy of the best-selling memoir “The Painist”, by Wladyslaw Szpilman. (If not, buy a copy through Amazon or request a copy via inter-library loan. It has been published in 35 languages. The US edition’s ISBN is 0312244150.) The book describes the harrowing experiences of a Jewish musician in hiding in Warsaw, Poland, during the Second World War. Following the 1943 Warsaw Ghetto uprising and forced deportation, Szpilman spent many months locked in a Warsaw apartment, receiving just a few parcels of food from some gentile friends. In his situation, the power and water utilities were still operating most of the time, but he suffered from slow starvation and lived in absolute fear of making any noise. His survival absolutely defied the odds. There was also an excellent  2002 movie based on Szpilman’s book, but the memoir provides greater detail than the film.

Light discipline. If you have any source of light in your apartment, it could reveal your presence. In an extended power blackout, it will become obvious to looters within a couple of weeks who has lanterns or large supplies of candles and/or flashlight batteries. (Everyone else will run out within less than two weeks.) And I predict that it will be the apartments that are still lit up that will be deemed the ones worth robbing. So if you are going to have a light source, you must systematically black out all of your windows. But sadly these efforts will be in direct conflict with your need for ventilation for your heating and/or cooking.

Heat. With the aforementioned restrictions on fuel storage, heating your apartment for more than just a few days will probably be impossible. Buy an expedition quality sleeping bag–preferably a two-bag system such as a Wiggy’s brand FTRSS. Under the circumstances that you describe, don’t attempt to heat your entire apartment. Instead, construct a small room-within-a-room (Perhaps under a large dining room table, or by setting up a camping tent inside your apartment, to hoard heat.) Even if the rest of the apartment drops to 25 or 30 degrees Fahrenheit, your body heat alone will keep your demi-room in the 40s. Burning just one candle will raise the temperature another 5 or 10 degrees. For the greatest efficiency at retaining heat, your demi-room should be draped with two layers of  mylar space blankets.

Exercise. While you are “hunkered down”, you will need to maintain muscle tone. Get some quiet exercise equipment, such as a pull-up bar and some large elastic straps. Perhaps, if your budget allows in the future, also purchase or construct your own a quiet stationary bicycle-powered generator. This would provide both exercise and battery charging.

Sanity. .Hunkering down solo in silence for six months would be a supreme challenge, both physically and mentally. Assuming that you can somehow tackle all of the aforementioned problems, you also need to plan to stay sane. Have lots of reading materials on hand.

In conclusion, when one considers the preceding long list of dependencies and complexities, it makes “staying put” in a worst case very unattractive. In less inimical circumstance, it is certainly feasible, but in a grid-down situation with utilities disrupted and wholesale looting and rioting in progress, the big city is no place to live. But, as always, this is just my perspective and your mileage may vary (YMMV).

.
B.  Cities – A Prepper’s Nightmare & Solutions
10 April 2012, SHTFplan.com, contributed by Jessica Hooley
Pasted from: http://www.shtfplan.com/emergency-preparedness/cities-a-preppers-nightmare-solutions_04102012

city1The following article has been generously contributed by Jessica Hooley of the Salt n’ Prepper web site.
Is it a coincidence that all of my nightmares occur in big cities? While it may be a personality glitch, I find that considering the dangers you face in the event of an emergency while living in a city, my nightmares may be justified. If you live in a city – buckle up. As a prepper you will have to work extra hard to make your emergency plan viable. And while I make no judgments on city dwellers, I must say – MOVE! For your own safety – MOVE! Move, move, move, move, move. Okay. I think I got it all out.

Now I understand that not everyone can just pick up and move because some lady on the internet says so. So if you are in the situation where you must stay in the city here are a few things you MUST have in your emergency preparedness plan.

Define Your Strategy
One of the biggest problems with cities are the fact that they aren’t self-sustaining. They rely on outer communities to supply them with food, water and often times electricity. The second biggest issue with cities is the space. Most homes/apartments/condos don’t have the space needed to store supplies for 6 months to a year. And even if they did there is a severely high probability of civil unrest, leading to looting and robbery. In short – you need a plan. The three questions to ask yourself:
1.  How long will we stay – As I said before, in a city you must resign yourself to the fact that you will have to leave if the situation escalates to a point where you either have no supplies or your safety is in jeopardy. Decide with your family how long this period is going to be. After the power is out, the food is gone, and the shelves are empty in the grocery stores of all liquid – how much longer will you hold down the fort. Too short and you may have bugged out too soon. Too long and you risk the possibility of not being able to get out.
2.  How will we get out – Your exit strategy needs to be well planned out. Come up with a minimum of three routes out of the city. You’ve seen how a couple thousand people can shut down a road. Imagine the magnification of that situation when millions are out looking for food and water. You need to be able to navigate your way through the mess and be prepared to defend you and your family. I’ll go into further detail later.
3.  Where will we go – Once again, come up with a couple places as a destination if possible. Think of relatives out in the “boonies”. Anyone that you consider as being in a safe part of the world. If you don’t know anyone within a reasonable distance (you may run out of fuel) start thinking of areas that you could stay. Hotels. Camp spots. Some place to “ride it out”.

Make Connections
As we’ve pointed out before, the population of cities can quickly turn into one of your biggest challenges. So it’s up to you to change that. Build your community into your own personal defense. Help those around you prepare. Educate them about emergency preparedness. You don’t need to reveal all of your prepping secrets but by preparing others you are ensuring help in the event that looting reaches your neighborhood. If everyone has something to defend they are more likely to band together. By not including your neighbors you are making them a potential threat to you. And the last thing you’ll want is to have to pull a gun on your neighbor if they are trying to take your supplies out of desperation.

Get the Gear
__Bug-Out Gear
Although it may not seem like “gear” – a truck may likely be the most important bug-out necessity for someone in a big city. Reasons why:

  • Capable of hauling ALL of your bug-out supplies
  • You will need something capable of maneuvering around rubble, waste, people and stalled vehicles on the road.
  • Able to store extra fuel in the bed to get further away.

Outside of an off road vehicle, you will also need the following items:

  1. 96 hour kits for each person      in the family
  2. 7 days of water – 1 to 2      gallons of water per person per day
  3. A full gas tank and 40 extra      gallons to haul

Make sure in your plan to bug out, you have someone armed. When trying to leave the city there will be plenty of people outside waiting to stop you and take what you have. You must be prepared to face the realization that you may have to defend yourself with force.

__Water
No matter where you live, water is the basis to sustaining life. If you are planning to stay in your house longer than a week (after water is unavailable) you need to make storing water a big priority. Get creative with your water storage. As you can find in my other posts, polycarbonate containers are great for water storage. If you are crammed on space, I highly recommend “WaterBricks”. You can store upwards of 60 gallons underneath your queen size bed alone with them. No matter what you decide for a storage system – make the most out of it. You’ll want to store 1-2 gallons for each person in your family for every day you plan on staying in your home.

__Food Storage
Food storage goes along the same lines as water. Make a food storage list to last your family the time you will be staying in your home. The key to your food storage is making it secret. In cities, food is likely to completely run out within 3 days. People will get really hungry really fast. And if someone remembers seeing that stack of food storage in your garage, or remembers you saying something about having 6 months in your basement – you’re their first stop. Don’t put yourself in the situation where you are more likely to have to defend your storage by shouting it from a mountain top. Once again, get creative and bury it in your yard if you must.

__Lighting
In the event of an emergency, you will likely be facing a powerless situation. During the day you’ll just have to get used to being without certain luxuries like powered kitchen gadgets and television. But at night, no power can turn into a psychological battle. Especially for children. Have plenty of snap lights, flashlights and lanterns to keep it bright when the sun goes down so the little ones (and maybe even you) can relief during the night.

TIP: In most cities, homes and other living spaces are close together. When using your evening lighting make sure to draw the shades. Test your emergency lighting during peacetime and see which places in the house you can use them without it being seen from the outside. Light will draw more than just bugs during a power outage. And the result could end up in self defense.

__Warmth
Without electricity you may be in for some cold nights. Be prepared with some down blankets and 4 season sleeping bags. You can also get some indoor kerosene heaters. And if you are lucky enough to have a wood burning fireplace, put it use! Get stocked up on firewood and use it when necessary.

Defense
__
Weapons
The terrible truth is that most places in this country where self-defense is needed most, it’s unavailable to law abiding citizens. I’m talking about guns. Big cities, despite their soaring crimes rates, seem to find rationale in banning guns whenever possible. And while free speech is still available – I’m telling you to get your hands on a gun no matter what it takes. As long as you are an otherwise law abiding citizen and you don’t hear voices in your head telling you to kill people – you need the ability to defend your property and more importantly your family.

Other fantastic weapons to have stored for self-defense include:
•  Pepper spray
• Taser
• Trip wires
• A guard dog – a really mean looking one

These other defense tools are great to get someone off your property initially but keep in mind that they’ll get away and may come back with the knowledge that this time they’ll have to kill you to get your food.

__Fortifications
If you plan to stay in your home for more than a month before bugging out, you need to consider investing in fortifications for your home. This includes making some changes that are more functional than pretty. This includes things like plexiglass windows, steel doors, removing landscaping features that people can easily hide in, blacking out windows, etc. Anything that can make your home more secure makes you less of a target.

So for all you city dwelling preppers, I hope this helped. Make your plan bullet proof. You are already at a disadvantage so have a process in place for everything you need to do. Good luck and happy prepping!

CITY10 EVAC[Consider the evacuation concepts shown above and begin to impliment.  Mr. Larry]

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Filed under Prepper articles, Survival Manual

The coming chaos

(Survival Manual/2. Social issues/The coming chaos)

THE COMING CHAOS: PART I

Planning and puzzle solving
Trends, expectations, and the  daily events of life can be thought of like scattered colored pieces of a jigsaw puzzle. From your experience and the short historical perspective of your life, you form an idea of the current and probable security provided by your environment. You look at the assembled parts of the picture and develop a general idea of the completed future image and your place in it.

 In good times, there are fewer puzzle pieces and each seems big, so putting a few parts together allows you to easily imagine the larger-view of the future.
In harder times, when nations and huge international (food, banking, energy) industries have financial, political and military reasons for hiding their ‘game hand’, the important pieces of information become numerous and small.
As global and national economic times deteriorate and you continue about your daily life, you have an ever decreasing  intuitive  understanding of conditions and less accurate view of the big picture, resulting in a diminished capacity to carry about your long term life business effectively.  The ebb and flow of your stored money, your potential energy is generally: Where to store these hard-earned savings? How much to save over any given period of time?  What is the best long-term manner in which to spend or store large blocks of value when a given need is seen  arising?

During increasingly difficult economic times, you still put those pieces of the puzzle together in your mind, the same as you always have, but the scale and quality of the information you receive, has changed.
Think of this as somewhat related to inflation. When inflations first begins, no one sees it for what it is, but as prices creep up, inflation slowly becomes visible and irritating to everyone, only then do people individually begin to change their behavior in self-interest.
Meanwhile, the entities causing the inflation want to cover their tracks, so information given to the public is doctored, altered and diminished, official news bites are false, designed to keep the populace calm, to keep them from acting in their own best interest.

Because the normal indicators are not functioning in the accustomed way, you have to rely on other lagging indicators to replace the ones previously used. This requires work, so most people, being busy, go with the flow and in doing so no longer have that ‘more accurate’ larger-view of the future which they once held.

It’s all about money, and if not money, power. What can you lose by not adjusting your view of the future to fit the current cycle of economic reality? You can lose: the value of your 401K, value in your Treasury notes and bonds, long-term stock valuations, your home equity, interest from saving in bank instruments, while paying higher local-state-Federal tax rates, food, energy, maybe even a Value Added Tax.

In todays context, if you knew how these broad investments were falling out of favor, you’d have begun putting your savings into other assets, ie., certain foreign currencies, gold, silver, precious metals stocks, energy production and infrastructure, a little more food in the back of your cupboard before prices rose, maybe cash in the cookie jar.
Believing there would always be plentiful oil and gasoline, maybe you bought a large auto– without  the  knowledge that within a few years gasoline would be  much more expensive in real terms and there might even be rationing. By then, with the economy, still in a recession, with everyone seeing higher gas prices and few having cash to spend, you would have to take a major loss on trading in the ‘gas hog’ vehicle for a smaller more gas efficient model.
Perhaps, with  better information you might have bought a townhouse close to your local shopping district, instead of a stand alone house in the suburbs, ‘gas-miles’ from the shopping district.
Rather than buying a recreational vehicle, you might have bought a small parcel of rural property for camping or a cabin, and used a car top carrier or utility trailer to carry gear to your private bit of nature. The rural property could also be used if for a while, things grew unsafe in the city.

Money is also supposed to be a store of wealth and accountability.
It’s not that ‘prices are going up, the value of your money is going down.
Note: 50 years ago, in 1961, the price of one gallon of regular gasoline cost 31¢, that would be a quarter, a nickel and a penny, 31¢ . The quarter you would have paid for the gas with, was what we now call a ‘silver quarter’ containing 0.18084 ounces of silver. Real money-silver coinage was discontinued by 1965, where upon, nearly valueless copper clan coins were issued and which we still use today.
The current value of that common old 25¢ coin is now $7.05 (silver spot price= $39.01). Today, 10 August 2011, a gallon of local regular gasoline costs $3.59, so that silver quarter would buy practically 2 gallons of gas,  2 gallons x $3.59/gallon=$7.18, while the value of the silver quarter is $7.05.
And this is why during the last 70 years we’ve gone from a condition where one worker could support his family, to a time when it took both Mom and Dad to support the family, and now takes Mom and Dad, credit cards, and  maybe a 2nd home mortgage to provide the same.

At some levels of societal organization, it’s all about money or power; on lower levels it’s about not being robbed and left to face the economic winter (depression, unemployment or old age) with out the safety net provided by your savings–the product of your labor.
In the deep past, when men depended directly on the land for their livelihood, when a robber Prince took part of that property the peasant family had less resilience to survive. Today we don’t have ‘land’, per sae, we have money and investments, when the modern version of the robber Prince takes your property, they take your money or your future claim to the things money can buy, leaving you less resilient to survive.

If you prepare for a man-made crisis, you will be on the same path as some one preparing for natural disasters: hurricanes, power outages, etc. Man-made vs. Natural disasters differ mostly by scale and duration. [Mr Larry]

The Coming Chaos, will turn over a few pieces of the puzzle, ones that you may not have seen, ones that give you a somewhat larger view.  Be aware, that sometimes its better not seeing to your life’s horizon.

The world is in a state of constant flux and continuous change and there is nothing so certain in life as uncertainty. None of us know what the coming years will bring. One must be wary both of the innocent and rose-tinted view that the US and hence the global economy are just fine and the good times are about to roll again and of fear mongers and prognosticators of doom whose only message seems to be ‘resistance is futile’.
Meanwhile, with the evolution of electronics into computer, satellite, Internet, and digital information technologies, the recent decades have created a web of global interdependence, of ‘just-in-time’ supply, transportation, international banking, a layering of complex financial interactions and the immediate spread of information. Globally, human society has accumulated such complex interdependencies that it has affectively become like a spider’s web – where a disturbance of one strand shakes the entire web. Further, this intertwined body of global humanity has reached critical points in its equilibrium. It is at a point of dynamic, critical vulnerability; and at such moments the slightest of impacts in one sphere of global concern can set into motion an unpredictable chain of events across the interconnections.
It is only common sense, with the fragility of our system, to prepare for any disturbance with supplies. How long could you survive with what is on hand? Think about storing extra food, water, fuel, and whatever you think you need to get through. If one very large, or several moderate to large (Volcanic Explosivity Index) volcanoes go off, we may experience very muted daylight for several seasons to a year and unable to grow enough food for even the prosperous nations. Are you even prepared for the possibility that your communities electric power could go out for a week or more, during the summer, during the winter?

Why We Need Insurance
Many of us have never had to make a claim on our insurance. Therefore when we continue to write an insurance payment check month after month, we feel as if we are pouring money down the drain. Even though you’ve never had to make a claim on your insurance, there is a good reason that it’s there. Naturally, insurance is there to protect your you, your family and your investments, but let’s face it; many of us wouldn’t bother with insurance if it wasn’t required by law, or the bank.

How we buy insurance
First, we decide which threats to protect ourselves from, then we find a way of doing so at the lowest possible cost.
Survivalism is basically the same. I’ve created a list of survival threats at the side of the page. Some events are so destructive that they are not worth worrying about and have not been included, i.e., multiple impacts from a fragmented comet, or a ‘nearby’ star emitting a planetary sterilizing gamma ray burst.. There is no way of protecting yourself against Hollywood style events so there is no point in spending money on them. The best value for your money is to identify threats that you think are moderately likely and that may be dealt with easily. Most threats require the same core defensive measures with varying specifics.
Everyone should take some simple steps to protect themselves and their families from potential real risks that are on the horizon, but don’t take my word for it. Answer the following questions:
1. Is your job & income 100% secure?
2. Would you be able to have the basic necessities (shelter, food, water) if you lost your income for a prolonged period of time?
3. Would you be ok if your local grocery stores didn’t have an inventory resupply for a few weeks?
4. How would your finances hold up in a currency crisis where the dollar rapidly lost much of its value?
5. Would you be able to protect your family in the event of increased crime and decreased police presence?

Ready America
From the FEMA ‘Ready America’ website:
“…Each person’s needs and abilities are unique, but every individual can take important steps to prepare for all kinds of emergencies and put plans in place. By evaluating your own personal needs and making an emergency plan, you can be better prepared for any situation. A commitment to planning today will help you prepare for any emergency situation. Preparing makes sense. Get ready now.
• Consider how a disaster might affect your individual needs.
• Plan to make it on your own, at least for a period of time. It’s possible that you will not have access to a medical facility or even a drugstore.
• Have a week or longer supply of medications and medical supplies
• Identify what kind of resources you use on a daily basis and what you might do if they are limited or not available.
• Buy or make an emergency supply kit.
• Have copies of emergency documents
• Create a support network…”

Headline: “15 Million Americans Infected with Xyz- Flu”
“You just heard it on the evening news. It’s now a reality. Your city has been locked down. There are roadblocks on all arteries in and out of the city. No one can come in or go out of the area.
The grocery stores, the gas stations, and all other public facilities are closed. Everyone has been told to stay in their homes.
Your family has five days of food left. Seven days, if you and your wife eat much less, and give it to the kids. Water is only sporadically available when you turn on the faucet.
You realize you should have thought about the news, what it might mean, but you remained a spectator of the events unfolding around yourself and in the world. You wonder how you missed the signs. You feel guilty and powerless because you don’t know how you will feed your family.”

Things you should know
• Don’t rely on the government to help you. As big as they are, when disaster hits they’re both: 1) too big a bureaucracy, 2) with too few people on the ground, to help a large number of people in a reasonable amount of time.
• Don’t rely on utility companies to help you. They will have priorities and will be working almost around the clock, to get things restored, but, a) it won’t be fast enough no matter who you are, and b) you’re probably not a priority. Don’t complain about it – be prepared for it.
• Don’t rely on your Insurance company for anything more than a check. Insurance is about money, it’s not their job to repair your home or put your life back in order. While some might refer you to local contractors, many do not, and in times of overwhelming need, both adjusters and contractors are going to be hard to come by.
• Know what your area is at risk for (i.e. Seattle has a major earthquakes every 100 years or so, and moderately damaging windstorms every 10 years) and be prepared to take care of yourself for awhile.
• The government’s, ‘Three Days of Self Sufficiency’ campaign, is woefully inadequate.
• Mankind endures ‘an episode of great wealth destruction’ at least once every century. People should prepare to ride out a disaster, be it a tsunami, a market meltdown, an EMP grid down scenario, volcanic winter, deadly pandemic or Islamic terrorists with a dirty (radioactive materials) bomb.
• The rich (all of us in the Western world) get complacent, assuming we’ll have time “to extricate ourselves and our wealth” when trouble comes. The rich are mistaken, as ‘the Holocaust’ proved.
• People generally do not feel the unthinkable will happen to them. However, many times there are situations out of our control that affect us in a big way. Major events that affect the food supply are especially troubling.
• Events move much faster than anyone expects’ and the barbarians are on top of you before you can escape.

The times that we endure today will be the history that others will read tomorrow. History has shown us events that have destroyed some societies and created new ones to take their place. Those who rise to power often decide the fate of millions. And there have been times when a people rise up as a nation, united to achieve mutual goals of prosperity and hope for a better future.
Today as a nation, Americans must uphold their moral convictions and beliefs that a nation of people who stand united will not perish. There are events occurring in this country that could change the very existence of our nation as we know it. And no one person or political party can decide the best course of action to ensure our prosperity and hopes will not be taken away from us. The answer to our problems is right in front of us, and we must cling to it as if it is our only hope, because it is the only thing ‘We The People’ have left: The Constitution of the United States of America .

Our policy makers are in a Catch 22. It’s checkmate, and the only thing that we can do is delay… to a point.
We need austerity measures, much more severe than those of France, Greece and the rest of Europe, but mass cuts in entitlement programs that tens of millions of Americans have come to depend on will lead to serious problems, not just for our economy, but on a social level as well. What happens if 40 million people were to lose their food stamps, or 20 million people lose their unemployment benefits? Many are already at the breaking point, if the government were to stop the gravy train, as Chapman puts it, the system would get very chaotic, very quickly. Thus, we just don’t see something like that happening anytime soon. But make no mistake, the current entitlement system, driven mainly by US government borrowing, is unsustainable. So, whether we like it or not, the cut to entitlement programs is coming one way or the other.
Politicians are just not going to do it. For many, it would be political suicide.
The end result we foresee is, as Chapman points out, ‘a high inflationary environment that will make it impossible for the average food stamp, unemployment or welfare recipient to purchase essential goods like food, energy and shelter’.
We’re seeing it in Social Security already, albeit in limited form. The government has not re-adjusted social security payments higher because the CPI inflation index has not shown an increase over the last couple years. However, the CPI does not include calculations for food and energy because our government says those are highly volatile and should not be counted. Thus, Social Security recipients are now paying more for food than they were two years ago, but there has been no adjustment made in their benefits. They’ve essentially taken a mandated pay cut as the US dollar has lost value.
This is exactly what we will see in other entitlement programs. Now imagine for a minute what it will look like if/when inflation is running rampant at 10% – 15% per year, and entitlement adjustments only account for 1% to 3% increases.
A lot of people will go broke a whole lot faster.
We’re not talking about people not being able to buy iPads, new home decor, or Christmas presents for the kids. No, we’re talking about being able to put food on the table, paying the rent for shelter and putting gas in the car.
This can get very ugly. As Peter Schiff previously pointed out, ‘a great number of Americans will be impoverished’ and, according to Gerald Celente, ‘many may take to the streets in riots and protests circa 2011 and beyond’.

 40 ways to lose your future
June 2009, TheAutomaticEarth.com
People have been asking how we see the future unfold. Here is a brief summary (in no particular order and not meant to be exhaustive) of the ground we have consistently covered here at TAE over the last year and a half, and before that elsewhere.
1.  Deflation is inevitable due to US financial Ponzi dynamics
2.  The collapse of credit will crash the money supply as credit is the vast majority of the effective money supply
3.  Cash will be king for a long time
4.  Printing one’s way out of deflation is impossible as printing cannot keep pace with credit destruction (the net effect is contraction)
5.  Debt will become a millstone around people’s necks and bankruptcy will no longer be possible at some point
6.  In the future the consequences of unpayable debt could include indentured servitude, debtor’s prison or being drummed into the military
7.  Early withdrawals from pension plans will be prevented and almost all pension plans will eventually default
8.  We will see a systemic banking crisis that will result in bank runs and the loss of savings
9.  Prices will fall across the board as purchasing power collapses
10.  Real estate prices are likely to fall by at least 90% on average (with local variation)
11.  The essentials will see relative price support as a much larger percentage of a much smaller money supply chases them
12.  We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits
13.  Real interest rates will be even higher (the nominal rate minus negative inflation)
14.  This will cause a tsunami of debt default which is highly deflationary
15.  Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure
16.  Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)
17.  Centralized services (water, electricity, gas, education, garbage pick-up, snow-removal etc) will become unreliable and of much lower quality, or may be eliminated entirely
18.  Suburbia is a trap due to its dependence on these services and cheap energy for transport
19.  People with essentially no purchasing power will be living in a pay-as-you-go world
20.  Modern healthcare will be largely unavailable and informal care will generally be very basic
21.  Universities will go out of business as no one will be able to afford to attend
22.  Cash hoarding will continue to reduce the velocity of money, amplifying the effect of deflation
23.  The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates
24.  Eventually the dollar will collapse, but that time is not now (and a falling dollar does not mean an expanding money supply, i.e. inflation)
25.  Deflation and depression are mutually reinforcing in a positive feedback spiral, so both are likely to be protracted
26.  There should be no lasting market bottom until at least the middle of the next decade, and even then the depression won’t be over
27.  Much capital will be revealed as having been converted to waste during the cheap energy/cheap credit years
28.  Export markets will collapse with global trade and exporting countries will be hit very hard
29.  Herding behavior is the foundation of markets
30.  The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists
31.  A sense of common humanity will be lost as foreigners and those who are different are demonized
32.  There will be war in the labor markets as unemployment skyrockets and wages and benefits are slashed
33.  We are headed for resource wars, which will result in much resource and infrastructure destruction
34.  Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously
35.  Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years
36.  Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)
37.  Political structures exist to concentrate wealth at the centre at the expense of the periphery, and this happens at all scales simultaneously
38.  Taxation will rise substantially as the domestic population is squeezed in order for the elite to partially make up for the loss of the ability to pick the pockets of the whole world through globalization
39.  Depressive political structures will arise, with much greater use of police state methods and a drastic reduction of freedom
40. The rule of law will replaced by the politics of the personal and an economy of favors (i.e., endemic corruption)

We Have Some Hard Decisions Ahead
The economy has taken a dramatic turn for the worse for many Americans. While many individuals and households have had the financial resources and good fortune which will allow them to weather economic uncertainty, many will simply not be able to maintain their standard of living. Many two income households are now one income households and that income may have decreased due to companies cutting back on work hours. This situation has been occurring for many Americans for many, many months, forcing people to assess what is important and downgrade their lifestyle. The time to make hard decisions has arrived, and will dramatically alter the lives of many for years.
People who relied on spouses to pay the bills are now paying the bills. Those who have relied on savings and unemployment benefits to maintain their standard of living are now faced with the reality that those resources are exhausted. Bills are not being paid. Healthcare premiums are not being paid. Automobile and household maintenance is being neglected, which will create costlier repairs down the road. Simply put:
•  You might have to stop making your car payment and save those payments up to buy a used car. The car you currently have financed will be repossessed.
•  You might have to stop paying your mortgage and save those payments up to move into an apartment.
•  You might have to give up your healthcare, your magazine subscription, your club membership, your vacation plans, your charitable donations, your cell phone, your internet access or home phone service, your lawn care service, your financial support that you provide to friends and family who are having financial problems themselves, and many more expenditures not listed here.
•  You might have to contact an attorney to discuss bankruptcy.
•  You might have to sell off your possessions and assets.
•  You might have to move in with other families, friends, relatives, or shelters provided by the government or charitable organizations.
•  You may come to realize that what you thought was valuable and important to you has no value or significance at all.

Basic human needs will become the biggest priority in your life after you shed (lose the use of) the things that have merely brought comfort and convenience to you. You may be forced to downscale your lifestyle so dramatically that it will cause you to question your own intelligence and hindsight for not planning for such a life changing event.
The things that you have always taken for granted could become difficult to obtain now that there is no longer enough money to buy those things. Basic needs become vital issues that need to be addressed:
•  Food and ‘non-electric’–with the means both to prepare it and store it.
•  Portable water filtering devices and containers to store water for drinking, cooking, and bathing.
•  Over the counter medicines, vitamins, supplements, first aid supplies, and some basic health and first aid literature in book form. Individuals using prescription medications, or require medical attention, will need to determine their best course of action during a period of financial distress.
•  The need for shelter may require the purchase of a tent, camper trailer, and other camping equipment if you can no longer provide an actual roof over your head and have no one to turn to.
•  The need for personal protection will become more obvious as desperate people begin to take desperate actions to provide basic needs for themselves and their families. The level of security you choose will be determined by your location, your finances, and your personal views and beliefs. If chaotic conditions occur, lawless activity will surely follow. Past incidents of disaster and mayhem give much testimony to this.

A look at the civil unrest that can arise when a government just ‘proposes’ austerity measures
“French gov’t undercuts Senate on retirement bill
Oct 21, 11:40 AM (ET), By ANGELA CHARLTON
PARIS (AP) – The French government is short-circuiting a protracted debate in the Senate on a bill raising the retirement age to 62, brushing aside some 250 amendments.
Faced with widespread protests against the bill, the government is ordering Senators to vote on a package of its own design, using Article 44-3 of the Constitution that allows it to step into the parliamentary debate.
PARIS (AP) – Protesters blockaded Marseille’s airport, Lady Gaga canceled concerts in Paris and rioting youths attacked police in Lyon on Thursday ahead of a tense Senate vote on raising the retirement age to 62.
A quarter of the nation’s gas stations were out of fuel, despite President Nicolas Sarkozy’s orders to force open depots barricaded by striking workers. Gasoline shortages and violence on the margins of student protests have heightened the standoff between the government and labor unions that see retirement at 60 as a hard-earned right.
Shopping streets stood nearly empty Thursday in central Lyon. The Bistrot de Lyon didn’t put tables outside as usual out of fear of clashes. “We’ve seen a reduction of 30-35 percent of business overall, for the last few days with the rioting in town. Lunchtime, nothing is going on, we’ve no one. It’s more than calm,” said restaurant manager Philippe Husser.
In Nanterre, the scene of running street battles between masked and hooded youth and riot police in recent days, the scene Thursday morning was calm, said Mehdi Najar, one of a few dozen red-jacketed mediators organized by the city hall to try to keep the peace.
In Marseille, hundreds of workers blocked all access to the main airport for about three hours early Thursday. Passengers tugged suitcases along blocked roads as they hiked to the terminal, before police came in and the protesters dispersed.
Wildcat protests blocked train lines around Paris on Thursday. Protesters in cars and trucks blocked several highways around the country, from near Calais in the north to the Pyrenees in the south, according to the national road traffic center.”

Coming Chaos: No Banks, No Public Facilities, No Food and Rampaging Gangs of Desperate People
Bob Chapman, of The International Forecaster, says it’s time to prepare for the worst, comparing our impending economic crisis to that which was experienced at the onset of 1348 and the following century and a half.

Flashback to 1348:
The Black Death is estimated to have killed 30% to 60% of Europe’s population, reducing the world’s population from an estimated 450 million to between 350 and 375 million in 1400. This has been seen as creating a series of religious, social and economic upheavals which had profound effects on the course of European history. It took 150 years for Europe’s population to recover. The plague returned at various times, resulting in a larger number of deaths, until it left Europe in the 19th century.
While Chapman does not suggest we will experience our own black plague pandemic, he predicts that the consequences of our economic collapse may lead to total destabilization and wars, much like post-plague Europe.
As you are now well aware Fannie and Freddie are going to punish people who have stopped paying their mortgages, who can pay them, and who are paying other bills instead. This leaves lenders with foreclosures and much more inventory than they ever imagined. This additional problem will bring on the double dip that Wall Street and Washington so fear.
As a result of this and other failures we are about to experience the worst economic collapse since 1348. The stock market is topping out readying itself for its most disastrous fall in history. The fall will be followed by years of depression, all of which has been deliberately created to bring the world economically and financially to its knees in an attempt to bring about world government by Illuminists.
Some market analysts understand where the market is headed, but most who do understand, write and talk about the mundane observable trappings and not what the situation is really all about. We have several analysts talking about a market collapse. They do not talk about the real forces behind our misfortune.
There are always these lone voices in the wilderness, which at best – some 15% of the populace – listens too. You had better listen this time because it could well cost you not only your assets, but your life, especially when another war is being prepared for you to engage in. Nothing is really as it seems to be and there are no coincidences. You are about to enter a world of chaos from which few will survive unscathed. A world of no banks, no public facilities, no food and rampaging gangs of desperate people. Unemployment of 50% and little law and order. Violence will be rife. This is not a pretty picture, but we have spared you the details. The world had better wake up fast so they’ll be prepared to deal with what is to come. If you were not aware of it the dark side really exists.
We are now entering the next to last phase of our journey. The wanton creation of wealth, inflation and perhaps hyperinflation, which will rob you of your assets. A stealth attack on what you have left by the people who control your government. Such monetary creation is the only way these people can keep the game going. They know it won’t last, but they proceed anyway. For awhile they’ll keep the multitudes at bay with extended unemployment and food stamps, but that will fade in time for lack of financial control, as the system begins to break down.
You already see all fiat currencies under fire, as is sovereign debt. Can it get any worse? Of course it can, and it will. Implosion is the word everyone is going to discover and understand.
The picture Bob Chapman paints is one that may lead to an initial reaction of, “What? No way that can happen.” Perhaps it can’t happen. Perhaps, it really is different this time and our benevolent leaders and the powers that be are capable of managing this crisis. Perhaps they will restore jobs to pre-crash levels. Perhaps home prices will go back up to record 2006 levels because tens of thousands of buyers will appear in the market. Perhaps the Federal reserve will be able to sell of their toxic assets, not have to print more money to bail anyone out, and the world will demand that the dollar remain the reserve currency of choice. Perhaps all of these people in delinquency on their mortgages will be able to catch up on those late payments. Perhaps governments will stop spending more than they take in and all of their debts will be paid off. Perhaps the globe’s top financiers will figure out a way to deleverage the trillions of bad debt currently working its way through the system.

Or, perhaps they will not be able to reverse course. Let’s assume that they can’t reverse course. How bad can it really get? This is something that our elected officials and those at the Fed, Treasury and large institutions will not overtly discuss. But clues have been dropped throughout the last several years. And, you need to look no further than those very same officials.

President Obama, during the green shoots recovery of 2009 and 2010, told the American people
that a depression was avoided. Thus, we can assume that a depression is a strong possibility if we are in fact about to see another economic collapse. In 2008 and 2009, former Secretary of Treasury Henry Paulson said that we were “on the brink,” in fact, after he left his position with Treasury, he wrote a book with this very title. The brink, from what we can surmise, meant a complete collapse of our financial, economic and political systems. The result would have been martial law. Hard to believe? Yes. Impossible? No:

THE COMING CHAOS: PART II

Are some popular movie and television images from the end of the first decade of the 21st century, a harbinger of less severe, but rhyming themes to come? Movie entertainment themes are a fulfillment of consumer curiosity and expression of the sediment of the times.

Movie image, I Am Legend (left). Disease has almost eradicated mankind, only a few random survivors exits in decaying cities.
Movie, 2012. Earth crustal shifts with continents sinking into the ocean. Several thousand people escape drowning aboard huge ships.
Movie, The Road. A catastrophe has almost wiped out mankind. Survival is harsh in a barren land of armed scavengers.
Movie, The Book of Eli.  Most of Man destroyed by calamity, there are few survivors, much chaotic lawlessness is pervasive.
TV series, The Walking Dead. Brain disease reduces most of mankind to zombies, a few healthy survivors gather and try to eke out an existence without becoming infected.
TV series, Falling Skies. Aliens attack Earth; humans are slaughtered and small remnants driven from cities. Survivalist lifestyles develop as ragged groups try to feed themselves and resist the aliens.
Movie, Contagion. Earth population depleted by fast acting virulent disease. Chaotic conditions develop.

Real life images
Garbage lined streets (right) : During the (2011) snowstorms that hit the NYC, the Sanitation Department suspended garbage collection for days at a time in order to use trucks for snow removal, which meant about 11,000 tons of trash per day didn’t get collected. Granted, the mess has been caused by more than just missed collections. People have been tossing loose trash onto the bags, and it’s winding up on the sidewalks and streets. Plastic McDonald’s cups. Broken bottles of Budweiser and empty cans of Four Loko, cigarette butts, smashed umbrellas, sheet music, soggy gloves, old newspapers, and damp, dirty sofas — all left out in the open, as if they, too, will just melt away. And thanks to pet owners, who got a little lazy in the bad weather, many city streets are now shellacked with dog feces.  Crumbling Detroit, 2010.
In the late nineteenth century Detroit (left)emerged as a major transportation hub along the Great Lakes.  Gilded Age mansions and other grand buildings spawned the city’s nickname “Paris of the West.” The gasoline crises of the 1970s impacted heavily on the car industry, while racial tensions and increasing drug-fuelled crime spurred the beginning of the end for Detroit’s industrial supremacy.  As the city descended into high unemployment, many of its finest buildings, including theatres, hotels, offices and apartments, fell into ruin.

Our Jig Saw Puzzle:
The parts that go bump in the night, the parts that can trigger the coming chaos, are:

1.  Peak Oil
(Think broadly: ANY energy crisis.)
The world is rapidly approaching Peak Oil production and will be at an inflection point soon, if not already, after which, real prices will (or already have) begin a long rise. Price inflection is possible before the next economic recovery, but will certainly come with a recovery, which will then be short-lived, because rising energy prices will channel money away from other discretionary expenditures.
During the years, 2009-2010, the USA and Europe were in recession with lower oil requirements, which have skewered the associated 2007 chart by extending the plateau top and pushing the ‘decline in production slope’ (with subsequent increase in prices) into the future another couple of years past the original 2007 projection. Whether we are out of the recession or not by 2015, production declines and the resultant rise in petroleum prices will probably have become an unpleasant factor in our national and personal, financial lives.

Official Peak Oil reports
Saturday, 4 Sep 2010, FinancialSense.com weekly, ‘News Hour’ podcast, gave leads to the Peak Oil reports listed below. These articles (only the lead paragraphs have been re printed here) seem to be telling a story, a story which has not yet been shared to any degree with the American people by either the Government or the news media. Furthermore, there is not just one news item, but increasingly frequent, almost monthly reports issued by responsible, main stream institutions in Europe, the USA and the Middle East.
Europe is currently advancing on a continent wide program toward fossil fuel independence; its estimated that in 10 years, by 2020, 20% all of Europe’s energy, not just its electricity, will be derived from renewables. What is happening in the United States? Nothing that I’ve heard of or seen. Maybe the government is waiting for a ‘Peak Oil-Pearl Harbor’ type crisis to create a popular mandate for action—as opposed to making plans and choosing an intelligent path while there is more time and opportunity to implement and mass test renewable systems.
The energy transition from one type energy to an alternative, historically, only happens about once per century and does so with momentous consequences.  We will begin to move away from fossil fuels quite rapidly from here on forward. Business, families and individuals who can adapt to the charge and manage risk will gain an advantage with the shrinking energy pie. (See also ‘Survival Manual/1. Disasters/Peak oil and energy crisis’)

The reports:
a)  London, 10 February 2010: UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) study on peak oil was released: “Business calls for urgent action on ‘oil crunch’ threat to UK economy”. A group of leading business people today call for urgent action to prepare the UK for Peak Oil. The second report of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price volatility will destabilize economic, political and social activity potentially by 2015.
b)  March 2010: Telegraph.Co.UK, “Oil reserves ‘exaggerated by one third’. The world’s oil reserves have been exaggerated by up to a third, according to Sir David King, the Government’s former chief scientist, who has warned of shortages and price spikes within years. Published: 9:51PM GMT 22 Mar 2010, by Rowena Mason, City Reporter (Energy)
c) March 2010:  heatingoil.com, Kuwait University and Kuwait Oil Company’ Peak Oil report: “Kuwaiti Researchers Predict Peak Oil Production in 2014, Posted by Josh Garrett on March 10, 2010
d)  “A new study published in the Journal Energy & Fuels predicts that world conventional oil production will hit its peak in the year 2014.
e) April 2010: guardian.co.uk, “US military warns oil output may dip causing massive shortages by 2015” by Terry Macalister. The Shortfall could reach 10 million barrels a day, report says, while the cost of crude oil is predicted to top $100 a barrel.
“The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact. The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.
f) June 2010: Guardian.co.uk, news article posted 11 July 2010, “Lloyd’s adds its voice to dire ‘peak oil’ warnings”, by Terry Macalister. “Business underestimating catastrophic consequences of declining oil, says Lloyd’s of London/Chatham House report. One of the City’s most respected institutions has warned of “catastrophic consequences” for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy. The Lloyd’s insurance market and the highly regarded Royal Institute of International Affairs, known as Chatham House, says Britain needs to be ready for “peak oil” and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming. “Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences,” says the Lloyd’s and Chatham House report “Sustainable energy security: strategic risks and opportunities for business”.
g) August 2010: Spiegal Online International, posted 4 September 2010, “German Military Study Warns of a Potentially Drastic Oil Crisis“, by Stefan Schultz “A study by a German military think tank has analyzed how “peak oil” might change the global economy. The internal draft document — leaked on the Internet — shows for the first time how carefully the German government has considered a potential energy crisis.
The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the “total collapse of the markets” and of serious political and economic crises.

The news report from Spiegal Online was specific about their study’s socio-economic findings, pointing out that:
•  “Shortages in the supply of vital goods could arise as a result, for example in food supplies.
•  Oil is used directly or indirectly in the production of 95 percent of all industrial goods.
•  Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain.
•  In the medium term the global economic system and every market-oriented national economy would collapse.…
•  (Relapse into planned economy) Since virtually all economic sectors rely heavily on oil, peak oil could lead to a partial or complete failure of markets. A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis….
•  (Global chain reaction)  A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil. It is likely that a large number of states will not be in a position to make the necessary investments in time, or with sufficient magnitude.
•  If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it’s so tightly integrated into the global economy….”
•  The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil “as a general systemic crisis.” This would create “room for ideological and extremist alternatives to existing forms of government….”

2.  Real Food Price Increases
Another sign of the times and portent for the near future burden of costs falling on household budgets is shown in the New York Times news article dated, 5 August 2010:
•  “MOSCOW — Prime Minister Vladimir V. Putin on Thursday banned all exports of grain after millions of acres of Russian wheat withered in a severe drought, driving up prices around the world and pushing them to their highest level in two years in the United States…Russia is suffering from the worst heat wave since record-keeping began here more than 130 years ago…Wheat prices have soared by about 90 percent since June because of the drought in Russia and parts of the European Union, as well as floods in Canada, and the ban pushed prices even higher. Exports from Ukraine, another major exporter, are down sharply this year…Before this year’s drought, yields had risen steadily, and Russian grain exports totaled 21.4 million metric tons last year, about 17 percent of the global grain trade.
But on Thursday, rail cars heaped with fresh grain came to a halt around Russia, stopped in mid-journey from the country’s fields to the main exporting ports on the Black Sea. The order covered a variety of grains, including barley and corn, but will have its greatest impact on wheat exports…”
Global food supplies will be tighter and more costly in the last half of 2010 and into 2011. Beyond fall 2011 prices may not return to lower levels, because energy input costs from gasoline, petroleum, fertilizer costs, harvest, packaging and shipping will be tightening with the approach of peak oil.
See at right, the 2007 U.S.A. ‘Grain Stock to Use Ratios’ chart, projected to 2016. Note, that during the decades when the country was at its wealthiest, we had twice the ‘Stock to Use Ratio’ as when the current recession began. Rather than build and maintain reserves during good times, we have depleted reserves.
•  Globally, 2008 saw record lows in global grain stocks. When commodity prices reached their peak, average global grain stocks reached 18.7% of annual global utilization, equivalent to 68 days worth of supply, well below the long-term average.

Where are food prices going?
When combining: 1) globally reduced food stock supply plus, 2) increasing demand from a growing world population; 3) increasingly demand from affluent Asian markets wanting higher quality foods; 4) higher priced agricultural fuel & fertilizer, 5) higher priced packaging, and 6) more expensive transportation costs,m 7) devaluation of the US dollar, it points toward an escalating Real Cost of food across the coming years.

3.  National energy grid at threat from EMP disruption
“Civilization is like a great web upon which all things are connected. Bop one strand of the web and the whole thing jiggles. Perhaps no other country on earth is more enslaved to conventional, fuel burning transportation than the United States. Transportation is the lifeblood of the economy, which would quickly collapse if the means for transporting needed supplies were disrupted in any way. With our just-in-time inventory management system, grocery stores commonly carry only a three-day supply of food. This statistical three-day supply would disappear within a few hours during an emergency situation; a panicked populace would make sure of that.”

EMPact America, Inc. Conference, 8-10 September 2009, Niagara, NY, conference speakers pointed out:
•  “An electromagnetic pulse, or EMP, is a super energetic radio wave that’s immediately harmless to people, but it’ll burn out all the critical electronic systems that sustain human economic activity and human life across vast areas, including the entire continental United States.” Dr. Peter Vincent Pry, President, EMPact America
•  “It’s not a secret. You can’t do anything about something that’s this broad in impact and still keep it a secret. So in order to get anything done you actually have to acknowledge we have a weakness. And, we worried about the fact that if we acknowledged that we had a weakness, how damaging will that be since we will inform our adversaries. We came to the conclusion that our adversaries are really quite well-informed already.”-Robert Hermann, Commissioner, Congressional EMP Commission
•  “I have believed for a long time that EMP or electromagnetic pulse may be the greatest strategic threat we face, because without adequate preparation its impact would be so horrifying that we would, in fact, basically lose our civilization in a matter of seconds.”-Newt Gingrich, Former Speaker of the US House of Representatives

A)  Solar Flare produced EMP
The magnetic pulses from solar flares can fry microchips and disrupt any electronic devices. A solar flare disrupted primitive electronics such as telegraphs in 1859 and another one occurred in 1989 as well. One of the most serious solar flares took place in 1921 and disrupted communications in the U.S. An EMP from the sun in the 21st century could be devastating and wipe out any system using electricity or microchips.”
In 2008, the National Academy of Sciences produced a report for NASA that confirmed the EMP Commission’s warning that a “great” geomagnetic storm could have catastrophic consequences for modern civilization.  According to the NAS report, if the 1859 Carrington event happened today, it could destroy nationwide the electric grid, collapse the critical infrastructures and take 4-10 years to recover – if recovery is possible at all. In June 2010, the Department of Energy and North American Electric Reliability Corporation released a joint report that, again, confirmed the EMP Commission’s warning about the catastrophic threat from a “great” geomagnetic storm.
So it is incomprehensible why the Senate Energy and Natural Resources Committee on Aug. 5 – just days after NOAA warned about the possibility of a severe geomagnetic storm actually striking our planet – would gut H.R. 5026, The Grid Reliability and Infrastructure Defense Act, that is designed to protect the United States from the effects of a geomagnetic storm.  H.R. 5026 would protect the national electric grid from “all hazards” – including EMP from geomagnetic storms, nuclear EMP from terrorists or rogue states, cyber threats, sabotage and natural disasters.  H.R. 5026 embodied the recommendations of the EMP Commission, the National Academy of Sciences and the Department of Energy.
The revised H.R. 5026 does nothing to protect the United States from EMP from geomagnetic storms, or nuclear EMP from rogue states and terrorists, from sabotage or from natural disasters.  The Senate gutted H.R. 5026 despite the EMP Commission’s recommendation that protecting the grid against “all hazards” is technologically the best and most cost-effective strategy.  For example, an “all hazards” strategy could mitigate the worst threats to the grid from natural and nuclear EMP and cyber threats for $100 million – and possibly save the lives of millions of Americans.
But the Senate Energy and Natural Resources Committee chose to ignore the EMP Commission, the National Academy of Sciences and the Department of Energy.  Every member of the Senate Energy and Natural Resources Committee received a personal appeal from the EMP Commission and other prominent experts to pass H.R. 5026 with its provisions for protecting against EMP and “all hazards” intact – but those appeals were ignored.
Fortunately, Earth dodged the bullet from the August 6, 2010 solar flare.  Fortunately, NOAA’s estimated 10 percent chance of a severe geomagnetic storm did not materialize – this time.  We may not be so lucky next time.

B)  Nuclear EMP attack against the US electrical grid
“Wednesday, 18 August 2010, TVC Special Report: Electromagnetic Pulse (EMP) weapons pose a serious and growing threat to our national security. Rogue nations and terrorists are working to develop EMP devices to attack the United States and other developed nations. These include North Korea, Iran and China. Once North Korea and Iran have missiles capable of reaching the U.S., they can use an EMP burst over our nation to destroy us.
1) A high altitude nuclear blast above middle America
A nuclear blast 200 miles above the U.S. could wipe out every electric grid in the country, plunging our nation into darkness. It would literally send our nation back to the 18th century. (A powerful X15+ class solar flare would have the same impact.) An EMP blast from a nuclear bomb would shut down devices, and our vehicles using microchips. Planes would stop flying; banks and hospitals would cease operation; trains would stop running; tractors, trucks and cars would cease working. Elevators would malfunction; subways would stop. All commerce would cease. A blast like this could not only wipe out the electric grid in the U.S., but in Canada and Mexico. The more technologically advanced a nation is, the more vulnerable it is to an EMP attack.
2)  What Can Be Done?
The United States must take seriously the threat posed by EMP attacks. The military has already taken measures to shield its systems from EMP attacks, but little has been done yet to shield our electric grid system from such an attack. This includes banks, water treatment plants, planes, hospitals, schools and any other facility that relies on computers. All of these must be shielded from the potential of an EMP attack or a solar flare.”
3)  If the power ever goes off for an extended period
• 
50% of the people will just sit down and wait for someone to come and help them, and if no one does, they’ll just die. 10% of the people know what to do and do what is needed in a logical way. 5% of the people become extremely dangerous almost immediately.  About 33% of the people  feel that they’re entitled to electric power and when they don’t get it they go nuts and will bring down the social system.
•   James Rawles interview by The Watchmen Radio Station, 3 Sep 2010:
“…If we were to have the onset of an EMP collapse in summertime we’d see a public health crisis very quickly. If it were to happen mid-winter we’d actually see more people dying of exposure, dying of the cold, than we would of dying of disease, especially in the Eastern United States and the North East. It doesn’t take too long a period before blankets are insufficient – people don’t have any alternate source of heat they’ll be freezing to death in large numbers. In a ‘grid down collapse’ that goes on for more than a year, we literally could see a 90% population loss in the big cities, and a 50% population loss in the suburbs and as much as a 40% loss in non-viable rural areas – I’m talking desert regions or other areas where there’s not a lot of agriculture that goes on.”

4.   US Debt:
As of this morning, ~ 4:05AM, Thursday, 9 September 2010, the Outstanding US National Debt is $14,278,946,101,012 dollars—that’s $14.2 trillion dollars and constitutes 93% of the national Gross Domestic Product. With the current US population of 310,383,941 the National Debt comes to $46,004 per person.
The Outstanding US National Debt is the sum of all outstanding debt owed by the Federal Government and includes: Social Security and Federal retirement programs, other trust funds, US Treasury Securities, and Savings Bonds.
Organizations loaning money to the US Government through US Treasuries include: state and local governments; individual investors, including brokers, public and private; pension funds; mutual funds; holders of US savings bonds; insurance companies; banks and credit unions; and foreign investors.

Add the GSE (Freddie/Fannie) debt to that and we are over 18 trillion.
Pile on the unfunded liabilities hidden on the government’s ‘off balance sheet ledgers’ and you will find these figures:  Social Security (14.6 trillion), Prescription Drugs (19.2 trillion), Medicare (76 trillion). You owe, your kids owe, all of us owe about $400,000 each.
Considering the median home price on the east-coast is $205,000.00, you now owe for two homes, in addition to anything that you may owe on your existing home, and it’s at a variable rate loan. In fact, principle and interest are subject to change. This debt is just like some toxic negative amortization pay-what-you-can-add-more-to-principle mortgage.”
http://www.financialsense.com/contributors/d-sherman-okst/mutant-rat-epidemic-spreading-economic-black-plague

Considering our economy (and the World’s too)
The annual US Budget Deficit is about $1.4 trillion. The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. In order to get an idea how much $1 trillion is, if you counted one dollar every second, you’d need to count for 31,000 years to go through the $1 trillion pile of dollars. About 31,000 years ago the Neanderthal died off across Europe. Our stone age ancestors were just beginning to make engravings on cave walls.
“The downside to increasing deficits and a rising national debt is that public sector spending “crowds out” more and more private sector investment spending. If you like the idea of Congress and the president playing a growing role in the nation’s allocation of resources, then I suppose that should be of little concern. On the other hand, if you think government leaders are far more likely to make bad investment decisions than are private decision-makers, then crowding out is of considerable concern.
The fallout will not be in the form of an unfair tax increase on our grandchildren when the associated debt is paid off because, it will never be paid off. The fallout will come in an increased drift toward an economy increasingly controlled by the federal government.”
“The debt merry-go-round cannot go on forever. When the average consumer runs out of credit, when the US Treasury itself is no longer considered creditworthy, and when the US dollar is recognized for what it really is, then things will get ugly. If you stop making payments on your car, the banks send a repo man to tow your car away. And when entire nations go in to default, it usually signals cataclysmic events. Be prepared.” James Wesley Rawles in How To Survive the End of the World As We Know It

China Syndrome
Today the United States has become so reliant on the largesse of foreigners that its needs are now larger than all the savings in the Western world. Someday soon, those foreigners will grow cautious about lending to a country with no self-discipline and demand instead higher interest rates to protect them from a depreciating dollar. Or they could, as hinted recently, insist on lending in Euros or Renminbi, currencies that the American government cannot print.
The unprecedented expansion of central bank liabilities, has made China nervous about holding more dollars and China has begun to dump dollars, driving up prices of dollar based hard assets. China is so concerned about America’s dollar inflation that it has reduced its treasury holdings to $776 billion from $801 billion in May. China has also bought more gold as a hedge against the debasement of the dollar.

5.  Then comes hyperinflation – spend it now!
“Hyperinflation is not just an increase in the money supply, after all the central bank increases the money supply all the time, a phenomenon we know as simple inflation and which we come to expect as a constant. Hyperinflation, however, happens when uncertainty in the future worth of the currency causes people to start trading it for things of actual utility and more reliable stores of value as soon as they can, as soon as they’re paid. The velocity of paper money moving through the system increases as people seek to get rid of it.
So hyperinflation isn’t just the expansion of the monetary base, though the expansion is at the root. The expansion is fuel, but the conflagration doesn’t start till the herd panics.
Hyperinflation takes off when the entire population gets wise. The money supply might have been growing in fits and spurts for decades, but the hyperinflationary storm happens when that money really starts to move around as people try to get rid of it. The prices of useful goods get bid up to mind boggling levels. The process accelerates when governments try to stabilize markets…often by adding more paper…because honestly, what else can a government do? Mismanagement and fraud are the only things governments really get right consistently. So, for the government, a problem that’s caused by the theft of inflation can only be solved by…more mismanagement and fraud. The entire process is self-reinforcing and results in the hyperinflationary death spiral to which all currency is heir.

Common threads during a Hyperinflation:
•   Early on, leaders see their popularity wilt when public anger over spending increased.
•   The banking system soon becomes an instrument of the government.
•   The printing of money becomes a priority, the hyperinflation may come in two waves   separated by a short, slower inflationary period.
•    The government may increase minimum wages by 75 percent.
•   Up to 80 percent of the population may become unemployed.
•   Living standards may fall 35-40 percent.
•   Some stores may sell goods in a reputable foreign currency.

When it’s all said and done, realize this:
Industrial society is built on, 1) a foundation of an organized social structure with feedback loops, 2) an  interdependent infrastructure of transportation, homes and utilities,  3) and a massive, energy driven commodity flow that processes materials from the mine, timber and field to operate; diminish any link and the size of the system must shrink, break any link and the system collapses.


Things to keep in mind:
•   Where ever you live– the greater the population density of your community and surrounding communities, the greater the resource requirements are, and the faster the breakdown will occur when the supply infrastructure (money, food, water, electricity, auto gas, etc.) is stopped.
•   Once the Welfare and Medicare checks stop ‘the poor will take care of their own family’ by taking from the people with an apparent wealth of material goods, people who are perceived to be their oppressors anyway.
•   Once you lose that sense of community, it’s basically every man for himself.

Comments Off on The coming chaos

Filed under __2. Social Issues

Financial collapse

(Survival Manual/1. Disaster/Financial Collapse)

The great play

‘The Coming Liquidity Tsunami Into Something Real’
14 May 2011, Gold Eagle editorial, by Mark J Lundeen
<http://www.gold-eagle.com/editorials_08/lundeen051411.html> and <Mlundeen2@Comcast.net>
“I was once told, by someone who’s name I’ve long since forgotten, that the ancient Greeks once pondered death from a scientific perspective: One day Pericles was manning the walls of Athens against the Spartans. The next day a plague came and Pericles was gone, though his now room-temperature body was still in Athens.

Question: what changed?

Maybe warming his now cold body would cause Pericles to return; and then again, maybe not! But who can say until we try?

If I were to write a script for a play, using the Peloponnesian War as a motif of the current financial situation, the US financial system would certainly be Pericles: glorious and powerful one day, and somewhat else the next.

If asked, I’m sure the academics from our Ivy-League schools of social sciences would demand to play the part of the old Greek philosophers. But I see them more as the vectors of “policy” that has pulled our poor hero down to his lamentable state. That leaves us with what to do with the politicians?

Well no one would ever mistake these corrupt, baby-kissing sycophants for Greek philosophers! So, I guess the politicians will have to play the part of the vectors of “policy” and I’ll let Doctor Bernanke dress up like Socrates.

In the opening scene, Pericles lays still on a marble slab, at room temperature, when Doctor Bernanke orders members of the AMA (Athenian Medical Association) to warm poor Pericles’ human remains to that of the living. He steps back into the gloom of the Parthenon, as a Greek choir (played by the financial media) then lets loose a mournful chant, 3 times:
“Woe unto Athens! Though the philosophers have warmed worthy Pericles until his toes smoke, still neither does he move nor speak!”

A brilliant spot light cuts through the gloom of the scene, highlighting the noble presence of Socrates (played by Doctor Bernanke) as he brings the Greek Choir to silence with a sweep of his arm, and proclaims to the audience (played by everyone who still believes their pension fund and social security will be worth something ten years from now):
“Pericles needs not move nor speak to serve Athens well. A pulse he needs not. As long as the wise men of “policy” can maintain his body temperature above that of the marble slab on which he rests, all will be well!”
The spot light fades to black, the curtain closes, and all educated and respectable people are happy with the performance, and will continue to be until dear Pericles begins to reek more than “policy” predicted. This is as good a way of understanding the current state of the debt markets as any you’ll  see on TV or in the papers. Think of structured finance, using derivatives in the hundreds-of-trillions, as “policy’s” method of giving trillions of dollars in dead assets the appearance of being alive, though a closer inspection shows they are merely warm and motionless.

The secondary market in American mortgages stopped trading several years ago, so for what purpose are these dubious derivatives still serving? I suspect someday we will discover that this is the “policy makers” chosen method to enable trillions of dollars of worthless mortgage assets held by large banks, to continue generating income for the financial system.
[Image above right: Pericles,  495-429BC]

The show goes on
Derivatives are simply another form of margin, the nemesis which caused the last great market crash. This time though it’s “different enough from the last time so no one realizes what is happening.” Use this analogy: “…it is like the floor show in a seedy nightclub. A sequence of girls trots on the scene, first a collection of Apaches, then some ballerinas, then cowgirls and so forth. Only after a while does the bemused spectator realize that, in all cases, they were the same girls in slightly different costumes.” In other words, “the so-called hedge fund actually is an excuse for a margin account.”
Pasted from <http://www.usagold.com/derivativeschapman.html>
.

Act 1:  We go broke

 It Is Now Mathematically Impossible To Pay Off The U.S. National Debt
4  Feb 2010, The Economic Collapse
<http://theeconomiccollapseblog.com/archives/it-is-now-mathematically-impossible-to-pay-off-the-u-s-national-debt>
A lot of people are very upset about the rapidly increasing U.S. national debt these days and they are demanding a solution. What they don’t realize is that there simply is not a solution under the current U.S. financial system. It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

And the U.S. government would still be massively in debt. So why doesn’t the U.S. government just fire up the printing presses and print a bunch of money to pay off the debt?  Well, for one very simple reason. That is not the way our system works.
You see, for more dollars to enter the system, the U.S. government has to go into more debt.
The U.S. government does not issue U.S. currency – the Federal Reserve does.

The Federal Reserve is a private bank owned and operated for profit by a very powerful group of elite international bankers. If you will pull a dollar bill out and take a look at it, you will notice that it says “Federal Reserve Note” at the top. It belongs to the Federal Reserve.

The U.S. government cannot simply go out and create new money whenever it wants under our current system. Instead, it must get it from the Federal Reserve. So, when the U.S. government needs to  borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds  for themselves (which happens a lot these days).

So that is how the U.S. government gets more green pieces of paper called “U.S. dollars” to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on. Every time the U.S. government does this, the national debt gets even bigger and the interest on that debt gets even bigger.
Are you starting to get the picture?

[Image at left: $1 trillion in $1 bills would fill the interior of the Empire State building.
The current $14.3 trillion debt (May 2011) would fill a 3/4 mile high block, 50% higher than the green block shown in  the picture at left.
Consider this: One hundred dollars in one dollar bills, pressed down, measures about ½ of an inch. One million, 100 dollar bills, measures four feet in height. One billion 100 dollar bills is 4,000 feet high, almost three Sears Tower buildings tall.
$1 trillion $100 dollar bills measures 789 miles, or one hundred and forty four Mt. Everests stacked on top of each other. Our national debt is more than 14 times THAT… ]

As you read this, the U.S. national debt is approximately 12 trillion dollars, although it is going up so rapidly that it is really hard to pin down an exact figure. So how much money actually exists in the United States today? Well, there are several ways to measure this.

The “M0” money supply is the total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks. As of mid-2009, the Federal Reserve said that this amount was about 908 billion dollars.

The “M1” money supply includes all of the currency in the “M0” money supply, along with all of the money held in checking accounts and other checkable accounts at banks, as well as all money contained in travelers’ checks. According to the Federal Reserve, this totaled approximately 1.7 trillion dollars in December 2009, but not all of this money actually “exists” as we will see in a moment.

The “M2” money supply includes everything in the “M1” money supply plus most other savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000). According to the Federal Reserve, this totaled approximately 8.5 trillion dollars in December 2009, but once again, not all of this money actually “exists” as we will see in a moment.

The “M3” money supply includes everything in the “M2” money supply plus all other CDs (large time deposits and institutional money market mutual fund balances), deposits of Eurodollars and repurchase agreements. The Federal Reserve does not keep track of M3 anymore, but according to ShadowStats.com it is currently somewhere in the neighborhood of 14 trillion dollars. But again, not all of this “money” actually “exists” either.
So why doesn’t it exist?
It is because our financial system is based on something called fractional reserve banking.

When you go over to your local bank and deposit $100, they do not keep your $100 in the bank.
Instead, they keep only a small fraction of your money there at the bank and they lend out the rest to someone else. Then, if that person deposits the money that was just borrowed at the same bank, that bank can loan out most of that money once again. In this way, the amount of “money” quickly gets multiplied. But in reality, only $100 actually exists. The system works because we do not all run down to the bank and demand all of our money at the same time. [All going at the same time  is what a ‘bank run’ is]

According to the New York Federal Reserve Bank, fractional reserve banking can be explained this way….”If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”
So much of the “money” out there today is basically made up out of thin air.
In fact, most banks have no reserve requirements at all on savings deposits, CDsand certain kinds of money market accounts. Primarily, reserve requirements apply only to “transactions deposits” – essentially checking accounts.

The truth is that banks are freer today to dramatically “multiply” the amounts deposited with them than ever before. But all of this “multiplied” money is only on paper – it doesn’t actually exist.
The point is that the broadest measures of the money supply (M2 and M3) vastly overstate how much “real money” actually exists in the system.

So if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this….
1)  If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.
2)  The only way to create more money is to go into even more debt which makes the problem even worse.
You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.
If you owe more money than ever was created you can never pay it back. hat means perpetual debt for as long as the system exists.
It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.
We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that. So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.
.

Act 2:  They go broke

What happens when Greece defaults?
25 May 2011, The Telegraph, By Andrew Lilico
http://blogs.telegraph.co.uk/finance/andrewlilico/100010332/what-happens-when-greece-defaults/
It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

What happens when Greece defaults. Here are a few things:
•  Every bank in Greece will instantly go insolvent.
•  The Greek government will nationalize every bank in Greece.
•  The Greek government will forbid withdrawals from Greek banks.
•  the Greek government will declare a curfew, perhaps even general martial law.
•  Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)
•  The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting on 50 per cent or more of all Greek euro-denominated debts.
•  The Irish will, within a few days, walk away from the debts of its banking system.
•  The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.
•  A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.
•  The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.
•  The French and German governments will meet to decide whether (a) to recapitalize the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)
•  They will recapitalize, and recapitalize their own banks, but declare an end to all bailouts.
•  There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.
•  This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalizing a number of banks via debt-equity swaps.
•  Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.
•  Attention will turn to the British banks.

Then we shall see…

Ilargi:
What I think is important is to connect the dots here. Greece is but a two-bit player relatively speaking, but the effects of a default in Athens, and the haircuts it would force upon financial institutions (and dare we even consider pensions funds?!), would -make that will- be felt across the world. For one thing, it would substantially weaken banks and economies pretty much around the globe. Just Greece alone.

It all comes back all the time to the dreaded mark-to-market theme. The last thing anyone wants is to let anyone else know what the paper they’re holding is truly worth. But it will be done.
.

Act 3: All go broke

Derivatives: The Quadrillion Dollar Financial Casino Completely Dominated By The Big International Banks
<http://theeconomiccollapseblog.com/archives/derivatives-the-quadrillion-dollar-financial-casino-completely-dominated-by-the-big-international-banks>

“If you took an opinion poll and asked Americans what they considered the biggest threat to the world economy to be, how many of them do you think would give “derivatives” as an answer? But the truth is that derivatives were at the heart of the financial crisis of 2007 and 2008, and whenever the next
financial crisis happens derivatives will undoubtedly play a huge role once again. So exactly what are “derivatives”?
Well, derivatives are basically financial instruments whose value depends upon or is derived from the price of something else. A derivative has no underlying value of its own. It is essentially a side bet.
Today, the world financial system has been turned into a giant casino where bets are made on just about anything you can possibly imagine, and the major Wall Street banks make a ton of money from it. The system is largely unregulated (the new “Wall Street reform” law will only change this slightly) and it is totally dominated by the big international banks.

Nobody knows for certain how large the worldwide derivatives market is, but most estimates usually put the notional value of the worldwide derivatives market somewhere over a quadrillion dollars.
If that is accurate, that means that the worldwide derivatives market is 20 times larger than the GDP of the entire world. It is hard to even conceive of 1,000,000,000,000,000 dollars.
Counting at one dollar per second, it would take you 32 million years to count to one quadrillion.

So who controls this unbelievably gigantic financial casino? Would it surprise you to learn that it is the big international banks that control it? The New York Times has just published an article entitled A Secretive Banking Elite Rules Trading in Derivatives. Shockingly, the most important newspaper in the United States has exposed the steel-fisted control that the big Wall Street banks exert over the trading of derivatives. Just consider the following excerpt from the article….

“On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.”

Does that sound shady or what?
In fact, it wouldn’t be stretching things to say that these meetings sound very much like a “conspiracy”. The New York Times even named several of the Wall Street banks involved: JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup. Why does it seem like all financial roads eventually lead back to these monolithic financial institutions?

The highly touted “Wall Street reform” law that was recently passed will implement some very small changes in how derivatives are traded, but these giant Wall Street banks are pushing back hard against even those very small changes as the article in The New York Times noted….

“The revenue these dealers make on derivatives is very large and so the incentive they have to protect those revenues is extremely large,” said Darrell Duffie, a professor at the Graduate School of Business at Stanford University, who studied the derivatives market earlier this year with Federal Reserve researchers. “It will be hard for the dealers to keep their market share if everybody who can prove their creditworthiness is allowed into the clearinghouses. So they are making arguments that others shouldn’t be allowed in.”

So why should we be so concerned about all of this?
Well, because the truth is that derivatives could end up crashing the entire global financial system.

In fact, the danger that we face from derivatives is so great that Warren Buffet once referred to them as “financial weapons of mass destruction”.

In a previous article, I described how derivatives played a central role in almost collapsing insurance giant AIG during the recent financial crisis….

Most Americans don’t realize it, but derivatives played a major role in the financial crisis of 2007 and 2008. Do you remember how AIG was constantly in the news for a while there? Well, they weren’t in financial trouble because they had written a bunch of bad insurance policies. What had happened is that a subsidiary of AIG had lost more than $18 billion on Credit Default Swaps (derivatives) it had written, and additional losses from derivatives were on the way which could have caused the complete collapse of the insurance giant. So the U.S. government stepped in and bailed them out – all at U.S. taxpayer expense of course.

As the recent debate over Wall Street reform demonstrated, the sad reality is that the U.S. Congress is never going to step in and seriously regulate derivatives. That means that a quadrillion dollar derivatives bubble is going to perpetually hang over the U.S. economy until the day that it inevitably bursts. Once it does, there will not be enough money in the entire world to fix it.

Meanwhile, the big international banks will continue to run the largest casino that the world has ever seen. Trillions of dollars will continue to spin around at an increasingly dizzying pace until the day when a disruption to the global economy comes along that is serious enough to crash the entire thing.

The worldwide derivatives market is based primarily on credit and it is approximately ten times larger than it was back in the late 90s. There has never been anything quite like it in the history of the world.

So what in the world is going to happen when this thing implodes? Are U.S. taxpayers going to be expected to pick up the pieces once again? Is the Federal Reserve just going to zap tens of trillions or hundreds of trillions of dollars into existence to bail everyone out?

If you want one sign to watch for that will indicate when an economic collapse is really starting to happen, then watch the derivatives market. When derivatives implode it will be time to duck and cover. A really bad derivatives crash would essentially be similar to dropping a nuke on the entire global financial system. Let us hope that it does not happen any time soon, but let us also be ready for when it does.”
.

Act 4:  The citizens speak


The Depression Of 2011?: 23 Economic Warning Signs From Financial Authorities All Over The Globe
28 May 2010, Daily Markets.com, by Michael Snyder
<http://www.dailymarkets.com/economy/2010/05/28/depression-in-2011-23-economic-warning-signs-from-financial-authorities-all-over-the-world/&gt;

“Could the world economy be headed for a depression in 2011? As inconceivable as that may seem to a lot of people, the truth is that top economists and governmental authorities all over the globe say that the economic warning signs are there and that we need to start paying attention to them. The two primary ingredients for a depression are debt and fear, and the reality is that we have both of them in abundance in the financial world today. In response to the global financial meltdown of 2007 and 2008, governments around the world spent unprecedented amounts of money and got into a ton of debt. All of that spending did help bail out the global banking system, but now that an increasing number of governments around the world are in need of bailouts themselves, what is going to happen? We have already seen the fear that is generated when one small little nation like Greece even hints at defaulting. When it becomes apparent that quite a few governments around the globe cannot handle their debt burdens, what kind of shockwave is that going to send through financial markets?

The truth is that we are facing the greatest sovereign debt crisis in modern history. There is no way out of this financial mess that does not include a significant amount of economic pain.

When you add mountains of debt to paralyzing fear to strict austerity measures, what do you get?
What you get is deflationary pressure and financial markets that seize up.

Some of the top financial authorities in the world are warning us that unless something substantial is done, that is exactly what we are going to be seeing as 2010 turns into 2011.

Of course some governments around the world could try to put these economic problems off for a while by printing and borrowing even more money, but we all know by now that only makes the long-term problems even worse.

For now, however, it seems as though most governments are opting for the austerity measures that the IMF seems determined to cram down the throats of everyone. So what will austerity measures mean for the global economy? Think “stimulus” in reverse.
Yes, things are going to get messy. It looks like there is going to be a great deal of economic fear and a great deal of economic pain in 2011 and the years beyond that.

So are we headed for “the depression of 2011”?
Well, let’s hear what some of the top financial experts in the world have to say….
1)  Economist Nouriel Roubini:
“We are still in the middle of this crisis and there is more trouble ahead of us, even if there is a recovery. During the great depression the economy contracted between 1929 and 1933, there was the beginning of a recovery, but then a second recession from 1937 to 1939. If you don’t address the issues, you risk having a double-dip recession and one which is at least as severe as the first
one.”
2)  Bank of England Governor Mervyn King:
“Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there’s no backstop.”
3)  German Chancellor Angela Merkel:
“The current crisis facing the euro is the biggest test Europe has faced for decades, even since the Treaty of Rome was signed in 1957.”
4)  Paul Donovan, the Senior Economist at UBS:
“Now people are questioning if the euro will even exist in three years.”
5)  Michael Pento, Chief Economist at Delta Global Advisors:
“The crisis in Greece is going to spread to Spain and it’s going to be very difficult to deal with. They are bailing out debt with more debt and it isn’t sustainable. It’s a wonderful scenario for gold.”
6)  LEAP/E2020:
“LEAP/E2020 believes that the global systemic crisis will experience a new tipping point from Spring 2010. Indeed, at that time, the public finances of the major Western countries are going to become unmanageable, as it will simultaneously become clear that new support measures for the economy are needed because of the failure of the various stimuli in 2009, and that the size of budget deficits preclude any significant new expenditures.”
7)  Telegraph Columnist Edmund Conway:
“Whatever yardstick you care to choose – share-price moves, the rates at which banks lend to each other, measures of volatility – we are now in a similar position to 2008.”
8)  Peter Morici, an Economics Professor at the University of Maryland:
“The next financial tsunami is emerging and will ripple to America.”
9)  Bob Chapman of the International Forecaster:
“The green shoots of recovery have now turned into poison ivy. The abyss has again been filled with more debt and more fiat currency. In the process the Fed and now the ECB have lost all credibility.”
10)  Telegraph Columnist Ambrose Evans-Pritchard:
“The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.”
11) Professor Tim Congdon from International Monetary Research: “The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly.”
12)  Reuters Columnist  Iliana Jonas:
“The default rate for commercial mortgages held by banks in the first quarter hit its highest level since at least 1992 and is expected to surpass that by year-end and peak in 2011, according to a study by Real Capital Analytics.”
13)  Paul Krugman, a Nobel Prize-winning Economist:
“It’s not hard to see Japan-style deflation emerging if the economy stays weak.”
14)  Stan Humphries, Chief Economist for Zillow.com:
“Anyone expecting a robust rebound in the housing market … will be sorely disappointed.”
15)  Fox News:
“As the national debt clock ticked past the ignominious $13 trillion mark overnight, Congress
pressed to pass a host of supplemental spending bills.”
16)  Bloomberg:
“The U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce projected record budget deficits, according to Moody’s Investors Service Inc.”
17)  Peter Schiff:
“When creditors ultimately decide to curtail loans to America, U.S. interest rates will finally  spike, and we will be confronted with even more difficult choices than those now facing Greece. Given the short maturity of our national debt, a jump in short-term rates would either result in default or massive austerity. If we choose neither, and opt to print money instead, the run-a-way inflation that will ensue will produce an even greater austerity than the one our leaders lacked the courage to impose. Those who believe rates will never rise as long as the Fed remains accommodative, or that inflation will not flare up as long as unemployment remains high, are just as foolish as those who assured us that the mortgage market was sound because national real estate prices could never
fall.”
18)   The National League of Cities
“City budget shortfalls will become more severe over the next two years as tax collections catch up with economic conditions. These will inevitably result in new rounds of layoffs, service cuts, and canceled projects and contracts.”
19)  Dan Domenech, Executive Director of the American Association of School Administrators:
“Faced with continued budgetary constraints, school leaders across the nation are forced to
consider an unprecedented level of layoffs that would negatively impact economic recovery and deal a devastating blow to public education.”
20)  Mike Whitney:
“Without another boost of stimulus, the economy will lapse back into recession sometime by the end of 2010.”
21) Kevin Giddis, Managing Director of Fixed Income at Morgan Keegan:
“There is big money making big bets that at a minimum we we’ll have a recession if not a depression that could last for years.”
22)  John P. Hussman, Ph.D.:
“In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we’ve observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle.”
23)    Richard Russell, the Famous Author of the Dow Theory Letters:
Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the
stock market told him.”

Other words of wisdom and woe…
1)  Jean-Claude Juncker,  Chairman of the Eurozone finance ministers and the currency union’s key spokesmen, 7 May 2011: “When it becomes serious, you have to lie”.
2)  George Orwell: “During times of universal deceit, telling the truth becomes a revolutionary act”
3)  Mark Twain: “There are three types of lies: Lies, Damned Lies, and Statistics.”

≈ Intermission ≈ 

 

Why The U.S. Economy Is Not Recovering
21 May 2011, Economic Crisis Writings, by Dick Kazan
http://economiccrisiswritings.blogspot.com/2011/05/why-us-economy-is-not-recovering.html
“20 million people unemployed, underemployed or no longer counted because they have been unemployed too long.
Falling home prices with no bottom in sight and foreclosures and notices of default mounting, as half of all home sales are now foreclosures or short sales in which owners lose their equity and lenders forgive some of the mortgage amount.

This is today’s American economy. Add to that young people also having trouble finding jobs including recent college graduates. And many people are defaulting on their credit cards, student loans and other financing. This is not what economists and pundits predicted. Why is this happening? What’s gone wrong? The answer is simple: 

1)  We are now a military industrial economy.
Coast to coast we produce weapons of mass destruction and delivery systems, including jet fighters, and for the 1st time in our history, we are now fighting perpetual wars. Before World War II, we had about 14 military bases and today we have well over a thousand all over the world. We spend as much on our military as the rest of the planet combined spends on theirs, and all of what we spend is at tax payers expense. It is draining the life out of our economy.
2)  Including its military expenses, and its refusal to tax the people to pay for it, the U.S. brings in only 59 cents for every dollar it spends. This in itself is a formula for financial disaster.
3)  Our finances are so dire, we are willing to slash our Medicare, Medicaid, Educational System (our children’s future) and Social Security (whose funds are now mostly a government IOU) and police and
fire protection in order to support our military industrial complex. Why?
Because they are a massive source of jobs. “Defense” is the one part of our economy that is booming [which includes Homeland Security].
4)  Wall Street and the stock markets are doing well because giant companies have shipped much of their manufacturing overseas and their profits are up. And stocks trade on profits, not on American jobs.
5)  Speaking of being up, gas prices are up as are food prices, clothing prices, doctor and hospital prices, college tuition and the cost of most everything else, as inflation is beginning to take hold. This
is a result of the Fed’s stimulus plans in which they print and circulate large sums of money in the vain hope we can spend our way out of this mess.

No my friend, we cannot solve a debt crisis by spending our way out of it. We will have to confront our problems and solve them, starting with ending our three wars. Then we must slash our military spending, which will bring hardship but hardship is coming anyway as we are going broke. Clearly the two political party monopoly under the control of lobbyists is failing us and it is long past time we
Americans raised our voices and got involved. This was a great nation and it can be great again. We must restore it for ourselves, for our children and for the world.

≈ The show resumes ≈

Act 5:  Consulting the Oracle

Predicting date of economic collapse (TSHTF)
2 Feb 2010, Gold Eagle editorial,  by Ray Elliott
<http://www.gold-eagle.com/editorials_08/elliott020210.html>
“The event that many would like advance warning on is economic collapse. It is an event that most informed economists say is inevitable due to U.S. deficits that are too large to be paid back. Yet, those of us that must work and pay our bills cannot stop what we are doing and dig a hole to hide in every time a new event happens that appears to be the beginning of the Economic Collapse.

We must first make assumptions on what Economic Collapse is. History tells us. All paper money falls into one of two categories, those that have failed and those that are going to fail. They failed in the past (including United States currency) in a spiral of constantly losing value. The federal government continually increases the obligations that it must pay for.
Buyers of federal debt slowly back away from buying long term debt and later will not purchase even short term debt. The government begins buying its own debt by issuing new paper money. As more paper money is issued it loses more and more of its value. When the public becomes aware that the issuance of paper money is out of control, and that holding it weeks or days will result in a loss of
value, they attempt to convert the paper money that they have into assets that retains some value. To do this, they have to remove any cash they have from banks and other institutions and convert it to something else. What ensues is a run on the banks.

When will this happen? We have some clues because of the process that will take place prior to
the event.

The Main Stream Media (MSM) generally is in favor of big government spending and supports the
socialistic policies of the Obama administration. The problem with socialism is that eventually you run out of other people’s money.  At the point that MSM begins to see the hazards of the uncontrolled printing of money, the beginning of the end is near. Then the Main Stream Media will begin to report the REAL MONEY CRISIS. For those that ask, “When will the SHTF?” That is when.

The events that follow this are events that you will not want to be a part of.
•  Long lines will appear at banks for those trying to get their money out while it still has some value.
•  Paper money will be issued in greater and greater denominations.
•  Food and other necessities of life will skyrocket in price.
•  Soon a bank holiday will be declared while the government attempts to control the panic.
•  Rules will be enforced that restrict how much money may be withdrawn at a time.
•  Attempts will be made to “freeze” food prices.
•  Payment for all goods and services will be turned upside down.
•  Everything will rapidly increase in price. Soon, the paper money you have will not buy the things that you need. At some point, $1,000 will not buy a pair of shoes.

The events that follow this are also predictable because they have happened before.
•  Gold and silver become extremely valuable. Pre 1965 silver coins (they still have some silver in them) will become a known standard of value that is accepted by those that still have something to sell.
•  The barter system for goods and services will return.
•  People that want to eat will grow gardens.
•  Most people who have had life savings in 401Ks will be poor again.
•  The winners are the ones that have planned in advance and the ones that still have outstanding loans or mortgages. The mortgages will no longer have any value. Homeowners will be able to send a million dollar note to a mortgage holder and tell them to keep the change. The change will not buy a loaf of bread.
•  Large cities will become dangerous places to be.
•  Those that plan ahead can avoid the most severe aspects of this scenario. It is up to each individual to plan ahead early enough to survive. A following article will outline some suggested courses of actions that any individual can implement.

.

Act 6:  The Public makes sacrifice

Personal Actions You Should Take Before the TSHTF!
Ray Elliott
<http://www.silverbearcafe.com/private/03.11/actions.html>
“In a previous article I discussed when the financial collapse will occur. This report will review some steps each individual should take in advance of the difficult days that are coming. Before going into the details, it is important for you to judge the necessity of following these steps. If you follow them and no collapse occurs, you have lost very little. If you follow them and the collapse occurs, these steps may save your life. If this discussion seems unreal, think about how unreal the world will be when the U.S. cannot pay its bills. Treasury Notes are no longer being purchased by China or Japan. Both are now selling (just like PIMCO). The Fed’s printing press is becoming the sole buyer.

Think about what your days are going to be like when paper money has no value. People that depend on government jobs, Social Security, food stamps, welfare, retirement checks or unemployment checks will no longer receive them. As the system winds down, some checks may be mailed, however; they will have little or no purchasing power. A new method of exchange will begin taking place.

Money in 401K’s will be gone. Money in banks will be worthless. Some people will benefit from the
collapse. Some that have mortgages will find that they now own the property, but no longer have a burdensome loan payment. Larger and larger denomination currency bills will drive out smaller denominations. You will be able to wipe out your mortgage by simply sending your mortgage company a million dollar bill and tell them to keep the change. The change will not buy a loaf of bread. The
banks know this and are making very few loans while foreclosing on others before TSHTF.

Silver coins (pre 1965 have silver in them) will be valuable for purchasing necessities. Gold coins will have great value, but will not be useful for small purchases. One or two ounces of gold may purchase a
home. Other basic necessities will be used for bartering to acquire goods that you need. In Russia, after 1989 or in Argentina, in the late 90’s, liquor was used as money to acquire goods. Producing alcohol requires having a small, home still (for distilling alcohol). Food items that you have stored or produce from your garden, sometimes gets too old for consumption (such as potatoes) and can be converted into alcohol with a still. Alcohol can be used for trading, for powering your generator or even fueling your vehicle. In post World War II Germany (during the German Occupation), poverty was widespread. A pack of cigarettes would purchase several hours of labor. Five gallons of gasoline was
worth a week’s supply of food. These days, medicines will be in demand (even outdated ones). Storing a quantity of aspirin will be useful for trading. Salt will also be used for money (as it was thousands of years ago).

Many have reviewed the need for storing sufficient food supplies. The amount depends on you and how many you need to sustain. Canned goods can be kept for two or more years. Rice and pasta in large bags can be kept in plastic storage boxes in a cool location. A water source and a method of sterilizing water are essential. Water disinfectants cost about one half cent per quart of water. Having a small garden will help feed your family. Storing good quality seeds is essential.

Finding a safe place for your family is more difficult to solve. Large population centers will not be safe. Those that have not prepared will begin taking from those that have prepared. Law and order will be sporadic because few in law enforcement will be paid. You should keep your survival supplies in or near the vehicle you plan on using when you leave. Getting out of town before TSHTF will be much easier than trying to leave later. Quickly relocating to a small town in a farming community will be much safer than remaining in a suburban home near a large city. Visit a small community near you now and set up a safe haven. See if you can arrange a garden and/or camping site. Small rural towns have lots for sale that can be acquired for very little. A small deposit can secure an option to purchase a lot in a small town that will give you a place to park your vehicle (a small motor home would be ideal) and a place for a garden. One quarter acre is more than you will need. Be careful about locating in a more remote location because it can be dangerous. In Argentina, roving bands of thieves routinely raided remote ranches and homes, inflicting both financial and physical harm. A small community is safer and may have an organized defense.

Last, but certainly not least is personal defense. Weapons are required. They can be used for both hunting and defense. Using the same caliber for both hand guns and long guns will save on the types
of ammunition needed to be stored. Nine millimeter is a good choice. A shotgun is both a good hunting weapon and a defense weapon. A 22 rifle is a good weapon to harvest small game for your family. A compound bow also serves both purposes. Having a plan of action when strangers appear is a necessity. In the meantime, you may ask yourself, can you defend your current home? Do you have a safe room? Do you have a guard dog? Do you have a warning system? Do you have friends nearby that would help you? How do you contact them?

As I stated in the beginning, you may never need to use any of these tactics. I pray that you do not. However; if and when TSHTF, you and your family will have a far better chance to survive than those that do not prepare.”

.

Act 7:  and with the Ides of March, the winds blew cold…

The Coming U.S. Depression of 2011/2012: Full of  homelessness, hunger, street  and the emergence of a 3rd party
7 Feb 2011, PBT Consulting
<http://tommytoy.typepad.com/tommy-toy-pbt-consultin/2011/02/the-coming-us-depression-of-20112012-full-of-homelessness-hunger-street-violence-and-the-emergence-o.html&gt;

“The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting a revolution in America, food riots and tax rebellions – all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.

Gerald Celente, the CEO of Trends Research Institute, is publisher of the Trends Journal which forecasts and analyzes business, socioeconomic, political, and other trends, and is renowned for his accuracy in predicting future world and economic events which can send a chill down your spine.

Celente says that by 2012 America will become an underdeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

“We’re going to see the end of the retail Christmas… we’re going to see a fundamental shift take place… putting food on the table is going to be more important than putting gifts under the Christmas tree,” said Celente, adding that the situation would be “worse than the great depression.”

“America’s going to go through a transition the likes of which no one is prepared for,”said Celente, noting that people’s refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.

Celente, who successfully predicted the 1997 Asian Currency Crisis, the sub-prime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as “The Panic of 2008,” adding that “giants (would) tumble to their deaths,” which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others.

He also said that the dollar would eventually be devalued by as much as 90 per cent. The consequence of  what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.

[Movie image above: Bartertown where futureworld power structures fought over ‘pig shit- methane energy’; a time and condition which brought about roving, mobile gangs that killed and plundered their way across  the land.   This is the view of ‘collapse’ at the grass roots, an image from the movies.]

The prospect of revolution was a concept echoed by a British Ministry of Defense report last year, which predicted that within 30 years, the growing gap between the super-rich and the middle class, along with an urban underclass threatening social order would mean, “The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest,” and that, “The middle classes could become a revolutionary class.”

In a separate recent interview, Celente went further on the subject of revolution in America.There will be a revolution in this country,” he said. “It’s not going to come yet, but it’s going to come down the line and we ‘re going to see a third party and this was the catalyst for it: the takeover of Washington, D.C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen.”
Internet image: This is how marginal people are affected – before the ‘main event’ unfolds; its what we see at the grass roots, this is reality.]

“The first thing to do is organize with tax revolts. That’s going to be the big one because people can’t afford to pay more school tax, property tax, any kind of tax. You’re going to start seeing those kinds of protests start to develop.”
“It’s going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more.”
“We’re going to start seeing huge areas of vacant real estate and squatters living in them as well. It’s going to be a picture the likes of which Americans are not going to be used to.
It’s going to come as a shock and with it, there’s going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people’s minds weren’t wrecked on all these modern drugs, over-the-counter drugs, or crystal meth or whatever it might be..

So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension.
Above left, territorial boss ‘Humongous’ from movies. Right: territorial bosses- the Council on Foreign Relations.
Below left, citizen Mad Max, just struggling to stay alive from the movies. Below right, a suburban family with short term survival supplies. Reality.

The George Washington blog has compiled a list of quotes attesting to Celente’s accuracy as a trend
forecaster.
•  “When CNN wants to know about the Top Trends, we ask Gerald Celente.” – CNN Headline News
•  “Gerald Celente has a knack for getting the zeitgeist right.” – USA Today
•  “There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about.” – CNBC
•  “Those who take their predictions seriously …consider. Gerald Celente and the Trends Research Institute.” – The Wall Street Journal
•  “Gerald Celente is always ahead of the curve on trends and uncannily on the mark … he’s one of the most accurate forecasters around.” – The Atlanta Journal-Constitution
•  “Mr. Celente tracks the world’s social, economic and business trends for corporate clients.” – The New York Times
•  “Mr. Celente is a very intelligent guy. We are able to learn about trends from an authority.” – 48 Hours, CBS News
•  “Gerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing.” – The Detroit New
•  “Gerald Celente forecast the 1987 stock market crash, ‘green marketing,’ and the boom in gourmet coffees.” – Chicago Tribune
•  “The Trends Research Institute is the Standard and Poor’s of Popular Culture.” – The Los Angeles Times
•  “If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.” – New York Post
So there you have it – hardly a nut job conspiracy theorist blowhard now is he? The price of not heeding his warnings will be far greater than the cost of preparing for the future now. Storable food and
gold are two good places to make a start.”

≈≈≈  ≈  ≈≈≈
While the future seldom unfolds the way we imagine, it may come in a  flavor that is not surprising. We may not know the exact height a tide may rise to on the beach, but we can certainly tell the direction the water is flowing; similarly, without seeing the wind, we can feel its pressure and see its effects. Even within a decade, the U.S.A may not experience literal secession as predicted by the Russian professor, but several regions may suffer patchy, severe economic depression, areas within other regions  may become wracked by moderate scale social/racial upheaval requiring federal military support…
.

“Dark clouds gather on the global horizon, the wind direction is changin’.
 Flashing light in the darkening sky, promise storms gale soon rising ”.
5-29-2011 Mr. Larry]

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Filed under Survival Manual, __1. Disaster

Global Cooling

A. Earth heading for ‘mini ice age’ in just 15 years, scientists say
11 July 2015, upi.com, by Doug G. Ware
Pasted from: http://www.upi.com/Top_News/World-News/2015/07/11/Earth-heading-for-mini-ice-age-in-just-15-years-scientists-say/2751436649025/

cooling iceSolar scientists predict that the Earth will enter a “mini ice age” around 2030 due to decreased activity by the sun, which will bring with it frigid cold winters. The last time the Earth experienced a similar situation occurred between 1645 and 1715. Photo: Albina Tiplyashina / Shutterstock

LLANDUDNO, Wales, July 11 (UPI) — Solar scientists, armed with the best data yet regarding the activities of the sun, say the Earth is headed for a “mini ice age” in just 15 years — something that hasn’t happened for three centuries.

Professor Valentina Zharkova, of the University of Northumbria, presented the findings at the National Astronomy Meeting in Wales this week, Britain’s Independent reported Saturday.

Researchers, saying they understand solar cycles better than ever, predict that the sun’s normal activity will decrease by 60 percent around 2030 — triggering the “mini ice age” that could last for a decade. The last time the Earth was hit by such a lull in solar activity happened 300 years ago, during the Maunder Minimum, which lasted from 1645 to 1715.

Scientists say there are magnetic waves in the sun’s interior that fluctuate between the body’s northern and southern hemispheres, resulting in various solar conditions over a period of 10 to 12 years. Based on that data, researchers say they are now better able to anticipate the sun’s activity — which has led to the Zharkova team’s prediction.

“Combining both [magnetic] waves together and comparing to real data for the current solar cycle, we found that our predictions showed an accuracy of 97 percent,” Zharkova said. If the “mini ice age” does indeed arrive, scientists say it will be accompanied by bitter cold winters — frigid enough to cause rivers, like the Thames in London, to freeze over.
.

  B.  Ice Core Analysis Shows Fastest Decline in Solar Activity for 10,000 Years
18 January 2014, The Daily Sheeple, by Chris Carrington
Pasted from: http://www.thedailysheeple.com/ice-core-analysis-shows-fastest-decline-in-solar-activity-for-10000-years_012014

Solar physicist Richard Harrison says he has never seen the sun this quiet in more than 30 years of studying it.
“If you want to go back to see when the Sun was this inactive… you’ve got to go back about 100 years,” he says.
At this point in the solar cycle the sun should be a hive of activity, popping off flares and dotted with sunspots.

cooling solar flareProfessor Mike Lockwood, a space environment physicist at Reading University UK has studied ice cores going back tens of thousands of years. He thinks there’s a very good chance that the Sun is heading for an extremely quiet period. Speaking to the BBC  he said that it was
“…an unusually rapid decline. It’s a very active research topic at the present time, but we do think there is a mechanism in place where we should expect more cold winters when solar activity is low.”

He went on to explain how Europe would bear the brunt of the change he believes is afoot.
“There are large meanders in the jet stream, and they’re called blocking events because they block off the normal moist, mild winds we get from the Atlantic, and instead we get cold air being dragged down from the Arctic and from Russia,” he says.

“These are what we call a cold snap… a series of three or four cold snaps in a row adds up to a cold winter. And that’s quite likely what we’ll see as solar activity declines.”

“If we take all the science that we know relating to how the Sun emits heat and light and how that heat and light powers our climate system, and we look at the climate system globally, the difference that it makes even going back into Maunder Minimum conditions is very small.
“I’ve done a number of studies that show at the very most it might buy you about five years before you reach a certain global average temperature level. But that’s not to say, on a more regional basis there aren’t changes to the patterns of our weather that we’ll have to get used to.”

The Maunder Minimum was a period of intensely cold winters during the 1600′s. If Lockwood and his colleagues are right this is yet another indicator that points towards global cooling. Although the effects of the jet stream are predominantly felt in Europe the overall temperature drops caused by a cessation of activity on the Sun will be felt across the Northern Hemisphere.
As the warnings about global cooling and it’s connection to lack of activity on the Sun continue to gather pace, we need to start thinking about a world where the summers are cooler, where growing zone boundaries are changing due to the weather.

The government, backed by their butt buddies at the IPCC are not going to warn us, they are not going to admit that global warming was flawed science at best and an out and out con at the worst.

C. The Number Of Volcanic Eruptions Is Increasing And That Could Lead To An Extremely Cold Winter
16 Sep 2014, theeconomiccollapseblog.com, by Michael Snyder
Pasted from: http://theeconomiccollapseblog.com/archives/the-number-of-volcanic-eruptions-is-increasing-and-that-could-lead-to-an-extremely-cold-winter

The number of volcanoes that are erupting continues to rise, and scientists cannot seem to explain why this is happening.  In 2013, we witnessed the most volcanic eruptions worldwide that we have ever seen in a single year, and this increased activity has carried over into 2014.  In recent months, we have seen major volcanoes roar to life in Russia, Peru, Hawaii, Reunion Island, Indonesia, and all over Alaska.  It is highly unusual for so many volcanoes to all be erupting at the same time.  According to Volcano Discovery, a whopping 34 volcanoes are erupting around the globe right now.  This is sending a massive amount of dust and ash into the upper atmosphere, and it may explain why many parts of the planet are experiencing strangely cold weather at the moment.  If this trend continues, we could potentially be facing years of crop failures and widespread famines all over the world.

And what we have witnessed already may just be the beginning.  There are several more very large volcanoes around the globe that scientists are extremely concerned about right now.

For example, just check out what is going on in the Philippines…cooling volcanic activity
Mayon Volcano in the province of Albay was placed on “Alert Level 3” on Monday evening, September 15, after showing signs of “relatively high unrest,” the Philippine Institute of Volcanology and Seismology (PHIVOLCS) said.
In a bulletin issued at 10:00 pm, PHIVOLCS observed 39 rockfall events from 5:00 am to 8:00 pm on September 15, symptoms of the build-up of magma at the summit dome. At least 32 low frequency volcanic earthquakes were also recorded, indicating magma intrusion or volcanic gas activity.
PHIVOLCS-DOST raised the alert status of Mayon Volcano from Alert Level 2 to Alert Level 3 which is equivalent to a “Critical Alert” in the agency’s 5-level alert system. This means that the volcano is exhibiting relatively high unrest, magma is at the crater, and that an eruption is possible within weeks.

But of even greater concern is Bardarbunga.  It is the largest volcano system in Iceland, and a major eruption could potentially be absolutely catastrophic…
This time the threat of an eruption – potentially even more powerful than the one in 2010 – is posed by Bardarbunga, the biggest of Iceland’s 30 or so volcanic systems. Located roughly at the country’s centre, the volcano’s 10-kilometre caldera lies several hundred metres beneath Vatnajokull, Europe’s largest glacier by volume.
Scientists are taking the latest rumblings seriously: roughly 8000 years ago, after all, the volcanic leviathan let rip with the largest eruption of the past 10,000 years.
“It is very difficult to predict exactly what will happen with an eruption,” says Monash University vulcanologist Professor Ray Cas, who is president of the International Association for Volcanology and Chemistry of the Earth.

Scientists tell us that over the last 10,000 years Bardarbunga has produced “more lava than any other volcano on the planet.”
If we witness a full scale eruption at Bardarbunga, the cancellation of a few thousand flights may be the smallest of our concerns.
The truth is that we might be looking at the coldest winter that any of us have ever seen in the northern hemisphere.

But don’t just take my word for it.  The following is from a British newspaper article entitled “Icelandic volcano could trigger Britain’s coldest winter EVER this year”…
Depending on the force of the explosion, minute particles thrust beyond the earth’s atmosphere can trigger DECADES of chaotic weather patterns. Tiny pieces of debris act as billions of shields reflecting the sun’s light away from earth meaning winter temperatures could plunge LOWER THAN EVER before while summer will be devoid of sunshine. The first effect could be a bitterly cold winter to arrive in weeks with thermometers plunging into minus figures and not rising long before next summer.

If this did happen, there is nothing that we could do to change it. We would just have to deal with it.

This is a kind of “climate change” that everyone can agree on.  It is well known that volcanic eruptions can substantially lower global temperatures.  In fact, some global warming theorists are already blaming increased volcanic activity for why temperatures have not been rising in recent years…
“In the last decade, the amount of volcanic aerosol in the stratosphere has increased, so more sunlight is being reflected back into space,” said lead author Benjamin Santer, climate scientist at Laurence Livermore National Laboratory, in a press release. “This has created a natural cooling of the planet and has partly offset the increase in surface and atmospheric temperatures due to human influence.”

But if Bardarbunga fully erupts, we could be looking at something a lot worse than a little “global cooling”. We could potentially be facing winters that never seem to end. It has happened before in recorded history many times.  The following list comes from Wikipedia…
The effects of volcanic eruptions on recent winters are modest in scale, but historically have been significant. Most recently, the 1991 explosion of Mount Pinatubo, a stratovolcano in the Philippines, cooled global temperatures for about 2–3 years.
In 1883, the explosion of
Krakatoa (Krakatau) created volcanic winter-like conditions. The four years following the explosion were unusually cold, and the winter of 1887-1888 included powerful blizzards.  Record snowfalls were recorded worldwide The 1815 eruption of Mount Tambora, a stratovolcano in Indonesia, occasioned mid-summer frosts in New York State and June snowfalls in New England and Newfoundland and Labrador in what came to be known as the “Year Without a Summer” of 1816.

A paper written by Benjamin Franklin in 1783 blamed the unusually cool summer of 1783 on volcanic dust coming from Iceland, where the eruption of Laki volcano had released enormous amounts of sulfur dioxide, resulting in the death of much of the island’s livestock and a catastrophic famine which killed a quarter of the Icelandic population. Northern hemisphere temperatures dropped by about 1 °C in the year following the Laki eruption.

In 1600, the Huaynaputina in Peru erupted. Tree ring studies show that 1601 was cold. Russia had its worst famine in 1601-1603. From 1600 to 1602, Switzerland, Latvia and Estonia had exceptionally cold winters. The wine harvest was late in 1601 in France, and in Peru and Germany, wine production collapsed. Peach trees bloomed late in China, and Lake Suwa in Japan froze early.

The possibility of volcanic eruptions substantially cooling our weather is the biggest “climate threat” that we are facing by far.
Without warm summers and plenty of sunshine, our crops will not succeed. And global food supplies are already stretched to the limit.  Just this week we learned that one out of every nine people in the world does not have enough food to eat. What would happen if global food production was cut by 10 or 20 percent for a few years?

So keep an eye on Bardarbunga and the other major volcanoes around the planet that are rumbling right now. They may just play a major role in our immediate future.

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D.  Global Cooling: Is an Ice Age coming?
7 Jan 2014, Scottnet, from YouTube
Pasted from: http://www.sott.net/article/271736-Global-Cooling-Is-an-Ice-Age-coming

YouTubeVideo: Global Cooling: Is an Ice Age Coming?

The climate is changing, but it’s not changing the way the climate change crowd predicted it would. Nature has made a mockery of global warming, so who are the real climate deniers?

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E.  Heaviest snow in 50 years blankets most of Iran
5 Feb 2014, Posted by EU Times
Pasted from: http://www.eutimes.net/2014/02/heaviest-snow-in-50-years-blankets-most-of-iran/

cooling Iran snowRescue operations are underway in different parts of Iran as the heaviest snowstorm in five decades has blanketed the country’s northern provinces, leaving many people without power and running water.

The Iranian Red Crescent Society says teams have rescued over 10,000 people caught in the heavy snow in 18 different provinces.
Rescue operations are also underway in the northern provinces of Gilan and Mazandaran. Thousands of people are reportedly trapped on the roads of the two provinces.

The Islamic Revolution Guards Corps (IRGC) and army troops have been sent to help people. Water and power supplies were cut off in the remote regions, but reports say electricity is mostly restored. Schools and universities have been shut down because of the heavy snow. There have been no official reports of casualties. Iranian President Hassan Rouhani has formed an emergency ministerial team to supervise relief assistance to provinces.

(News & Editorial/ Global Cooling)

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The Tragedy of the Commons

(News & Editorial/The Tragedy of the Commons)

What & who we are
(Excerpted from http://en.wikipedia.org/wiki/Homo_sapiens)
“Humans are bipedal primates belonging to the species Homo sapiens (Latin: “wise man” or “knowing man”) in Hominidae, the great ape family. They are the only surviving members of the genus Homo. Humans have a highly developed brain, capable of abstract reasoning, language, introspection, and problem solving. This mental capability, combined with an erect body carriage that frees the arms for manipulating objects, has allowed humans to make far greater use of tools than any other species.

Like most higher primates, humans are social by nature. However, humans are uniquely adept at utilizing systems of communication for self-expression, the exchange of ideas, and organization.

Humans create complex social structures composed of many cooperating and competing groups, from families to nations.

Social interactions between humans have established an extremely wide variety of values, social norms, and rituals, which together form the basis of human society.
Humans have a marked appreciation for beauty and aesthetics which, combined with the human desire for self-expression, has led to cultural innovations such as art, literature and music.

Humans are noted for their desire to understand and influence their environment, seeking to explain and manipulate natural phenomena through science, philosophy, mythology and religion. This natural curiosity has led to the development of advanced tools and skills, which are passed down culturally; humans are the only species known to build fires, cook their food, clothe themselves, and use numerous other technologies…”

“In humans, behavioral innovations are usually passed down culturally from one generation to the next through social learning. For many, the existence of culture in humans is the key adaptation that sets us apart from animals.” However,

Humanity’s Archille’s Heel:
“The greatest shortcoming of the human race is our inability to understand the exponential function.” – Dr. Albert Bartlett, physicist.
All species expand as much as resources allow and predators, parasites, and physical conditions permit. When a species is introduced into a new habitat with abundant resources that accumulated before its arrival, the population expands rapidly until all the resources are used up.”  – David Price, Energy and Human Evolution 

.The tragedy of the commons
Pasted from http://en.wikipedia.org/wiki/Tragedy_of_the_commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone’s long-term interest for this to happen. This dilemma was first described, in modern times, in an influential article titled “The Tragedy of the Commons,” written by ecologist Garrett Hardin and first published in the journal Science in 1968.

Central to Hardin’s article is an example (See a similar cartoon below in this post. Mr Larry] of a hypothetical and simplified situation based on medieval land tenure in Europe, of herders sharing a common parcel of land, on which they are each entitled to let their cows graze. In Hardin’s example, it is in each herder’s interest to put the next (and succeeding) cows he acquires onto the land, even if the quality of the common is damaged for all as a result, through overgrazing. The herder receives all of the benefits from an additional cow, while the damage to the common is shared by the entire group. If all herders make this individually rational economic decision, the common will be depleted or even destroyed, to the detriment of all.

[The behavior of ‘Self interest vs. The Commons’ is a  common flaw in Man’s mental abilities and has been with us for thousands of years, if not since our dawn. You can see it today during the recent financial crisis where banks, whom during good times privatized their profits and in bad times spread their losses to the public.]

Thucydides (ca. 460 BC-ca. 395 BC) stated: “They devote a very small fraction of time to the consideration of any public object, most of it to the prosecution of their own objects. Meanwhile each fancies that no harm will come to his neglect, that it is the business of somebody else to look after this or that for him; and so, by the same notion being entertained by all separately, the common cause imperceptibly decays.”

Aristotle (384-322 BC) similarly argued against common goods of the polis (city-state)  of Athens: “That all persons call the same thing mine in the sense in which each does so may be a fine thing, but it is impracticable; or if the words are taken in the other sense, such a unity in no way conduces to harmony. And there is another objection to the proposal. For that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few.”

Psychologist Dennis Fox used a number, what is now termed “Dunbar’s number”, to take a new look at the tragedy of the commons. In a 1985 paper titled “Psychology, Ideology, Utopia, & the Commons”, he stated “Edney also argued that long-term solutions will require, among a number of other approaches, breaking down commons into smaller segments. He reviewed experimental data showing that cooperative behavior is indeed more common in smaller groups. After estimating that “the upper limit for a simple, self-contained, sustaining, well-functioning commons  may be as low as 150 people”.
[If Fox is right and Dunbar’s number for cooperative behavior in a Commons is around 150, then our global political subdivisions of nation, state and county, municipality, are wholly wrong for long term human sustainability. When was the last time you found any personal democratic power in a group of about 150, or of any larger size. Casting our votes on election day really has little to do, ever, about The Commons which we all inhabit. Mr. Larry]

Cartoon illustrating The Tragedy of the Commons
From http://www.garretthardinsociety.org/info/cartoon_commons1.html

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The Tragedy of the Commons, becomes a problem of Exponential Growth
<http://www.webpotential.com/ambiente/exponential_growth.htm&gt;

In America, growth is seen as American as the flag and apple pie. But there is trouble in paradise. The flag that flies for growth is a noose and the apple pie of expansion is laced with cyanide. But it’s not just America that has this unhealthy relationship with growth it’s the majority of the world and its economies. As our populations, economies, and resource use grow exponentially, so do our environmental problems and the potential for collapse of the earth’s ability to sustain human life. Growth as we know it cannot continue.

As the primary proponent of growth worldwide, business must adjust to the reality of the problems created by growth. Because our current systems of business rely upon continuous growth and development they can not survive in their current form. As Paul Hawken writes in, The Ecology of Commerce, “Just as internal contradictions brought down the Marxist and socialist economies, so do a different set of social and biological forces signal our own possible demise. Those forces can no longer be ignored or put aside”. The internal contradictions that Hawken is speaking of are creation of waste, unsustainable uses of resources, environmental degradation, a disparity of wealth, and a plethora of other unsustainable business practices.

The most important foundation of all of these problems is exponential growth in human population and resource use. Hawken states, “The problems to be faced are vast and complex, but come down to this: 5.5 billion people are breeding exponentially [the population is 7 billion now, the article pasted here was written a few years ago. Mr. Larry]. The process of fulfilling their wants and needs is stripping the earth of its biotic capacity to produce life; a climactic bust of consumption by a single species is overwhelming the skies, earth, waters, and fauna”. Hawken relates this to business practices by showing that business relies on and creates unsustainable growth. Hawken seeks to answer, as did the United Steelworkers of America (USWA) Task Force on Environment, “What kind of jobs will be possible in a world of depleted resources, poisoned water and foul air, a world where ozone depletion and greenhouse warming make it difficult even to survive.”.

What exactly is exponential growth, and is exponential growth in population and resource use really unsustainable? Much of the public and by many of our policy makers do not understand exponential growth. Unfortunately, this lack of understanding has not keep exponential population growth and resource use from becoming a problem.
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The possible origin of chess shows a striking example of exponential growth.
Legend has it that chess was invented by a mathematician who asked a king for what seemed to the king like a small price for the game. He asked that the king pay him in wheat. He asked the king to place 1 piece of wheat on the first square of the board, two on the second and that he continue to double the grains of wheat for all the squares on the board. The king agreed to pay the price, but it’s quite impossible that he held up his end of the bargain.
The amount of wheat needed is enormous. With 64 squares on a chessboard, the king needed 263 grains of wheat to pay the mathematician. This is roughly 400 times the 1990 worldwide harvest of wheat, and could be more wheat than has been harvested in the history of humanity! This is exponential growth. The king was probably thinking of linear growth, where the number of grains would grow by one for each square, when he made the deal. Linear growth would give 2048 grains of wheat in total. Enough grain for a few meals perhaps, but nothing compared to the amount of wheat harvested in human history.

Many things other than that cunning mathematician’s grains of wheat grow exponentially. Human population, resource use, and the waste that accompany them are growing exponentially. While many types of resource use are growing at over 5% per year, the human population is growing at about 1.6%. 1.6% does not seem too like an unacceptable rate of growth to many. In economic terms 1.6% growth is downright horrendous. The Japanese declare their economy is in recession if it grows less than 3% per year.
Although 1.6% does not seem like much to some of the kings and economists of the world, applied to human population it can yield huge numbers. While it took 2 million years for us to reach a population of 1 billion, we will add another billion to the earth’s population in just the next 11 years. If we calculate 1.6% growth out another 600 years, we find that there would be one person for each square yard of the dry land surface of earth, and in 1800 years the mass of humans would exceed the mass of the earth. Clearly human population growth will stop. But it’s not just our population that is growing, it’s also our use of natural resources.

Most types of resource use are growing faster than population. Although many associate growth in resource use with population growth, growth in resource use can also be independent of population growth. Resource use can grow even without population growth, although the reverse is hard to imagine. An example of what exponential growth means in resources can be seen with US coal reserves.
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Coal is the US’s most abundant fossil fuel.
In 1991 the US Department of Energy reported that at current rate of use US coal reserves could last almost 500 years. But the caveat here is current rate of use. Between 1971 and 1991 the use of coal grew 2.86%. With this rate of growth US coal could last about 94 years if we could use it all, but more likely 72 years of coal would be.
[That means we could be out of coal by 2063 (1971+72 years), just 30 years after the decline from current Peak Oil has greatly reduced gasoline consuming private automobiles. Mr. Larry. See also the 4dtraveler Post: (News& Editorial/ Exponential Growth)

The lack of understanding of how long coal could last, comes from people’s lack of knowledge of exponential growth. In 1978, Time Magazine reported that there is “enough coal to meet the country’s energy needs for centuries, no matter how much energy consumption may grow. This is clearly untrue. If we look just at the amount of electrical energy the country uses and its historical growth over the last 40 years, we see that coal could meet that need for just 36 years. Remember, coal is our most abundant fossil fuel. This utter lack of understanding of the results of exponential growth isn’t limited to Time — it’s pervasive in our government, media, and general public.

Coal is just one example of the larger issues surrounding resource use. No one knows if we’ll be able to discover enough resources to maintain our level of growth, or if the social, human, and environmental costs of using these resources will be too high to use them if they are found. If one understands the way exponential growth works it becomes clear, as it is to most that study the issue, that population and resource use growth cannot continue. The manner in which these will stop is unknown. We seem to have two basic choices: we can decide how to stop the growth of population and resources use, or we can let nature do it for us.

Petroleum is another example of the larger issues…
http://nymoral.blogspot.com/2009/12/greatest-shortcoming-of-human-race.html
In 1974, Dr Hubbert predicted that the peak of world oil would occur around 1995, so let’s see what’s happened. We have to go to the geology literature and ask the literature,
“What do you think is the total amount of oil we will ever find on this earth?”
The consensus figure in the literature is 2000 billion barrels. Now, that’s quite uncertain, plus or minus maybe 40 or 50%.
That would mean the peak is this year (2004). If I assume there is 50% more than the consensus figure, the peak moves back to 2019. If I assume there’s twice as much as the consensus figure, the peak moves back to 2030.

So no matter how you cut it, in your life expectancy, you are going to see the peak of world oil production. And you’ve got to ask yourself, what is life going to be like when we have a declining world production of petroleum, and we have a growing world population, and we have a growing world per capita demand for oil. Think about it.

[The problem of Mankind dealing with exponential growth leads back to the Tragedy of the Commons. In order to satisfy the needs and appetites of an exponentially growing population, exponential consumption is required, unless we each incrementally accept less and less.
We seek to satisfy our needs, and appetites individually, and on a family scale, meanwhile, considering any resultant problems as being the responsibility of The Commons.
Human beings will not search for, much less reach a consensus on how to equally share the responsibility of The Commons, in a multi-national environment; it’s our Human Nature to continue with new civilizations, with booms and busts.
Unfortunately, the petroleum, coal and commodity fed boom of the 20th Century will lead to a quite stellar bust in the 21st Century. Mr. Larry]

A few words of wisdom
•  “The greatest shortcoming of the human race is our inability to understand the exponential function.” – Dr. Albert Bartlett, physicist.
•  Can you think of any problem in any area of human endeavor, on any scale, from microscopic to global, whose long-term solution is in any demonstrable way aided, assisted, or advanced by further increases in population, locally, nationally, or globally?” – Dr. Albert Bartlett, physicist.
•  Bartlett’s law will result in the exhaustion of petrochemical resources due to the exponential growth of the world population in line with the Malthusian Growth Model. – Dr. Albert Bartlett, physicist.
•  “The extinction of the human race will come from its inability to emotionally comprehend the exponential function.”- Edward Teller, American nuclear physicist, known as “the father of the hydrogen bomb.”
•  “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” – Kenneth Boulding, economist, system scientist, educator, author, poet.
•  Thomas Jefferson, in a 1787 letter to Peter Carr, made a profound observation about human nature that only now is being verified by neuroscience and behavioral genetics studies. “Man is”, Jefferson wrote, “a social animal and is endowed with a sense of right and wrong. If one would State a moral case to a ploughman and a professor … the former would decide it well, and often better than the latter, because he has not been led astray by artificial rules.”

Haiti and the Dominican Republic – comparing potential futures

[Photograph below: The border between Haiti (left) and the Dominican Republic (right) on the Caribbean island, Hispaniola. Policies that  led to deforestation practices in Haiti vs. the Dominican Republic, show that decision making, can and does make a difference in the condition of The Commons.

Centuries of man-made deforestation have reduced forest cover to about 2%  in Haiti, and 21% in the Dominican Republic.
The Dominican Republic constructed, dams to generate hydroelectric power. They launched a crash program to spare forest from being  use for fuel, by instead importing propane and liquefied natural gas. Haiti’s poverty forced its people to remain dependent on forest-derived charcoal from fuel, thereby accelerating the destruction of its last remaining forests.
Dominicans like the Haitians, have experienced a great deal of corruption and instability, but since 1970 the country has maintained the transition of power through peaceful elections. The continuity of the Dominican government made possible a set of economic reforms in 1990 that led to a decade of steady growth.
In the Dominican Republic, average life expectancy is nearly 74 years, in Haiti, it’s 61 years. [Photograph at right, farm community in the Dominican Republic.]

Haiti provides a dim image of an overpopulated, degraded world, where material things are scarce, where The Commons were ignored until it was too late.

What has come to Haiti in the 200 years, since her colonial days, pre 1804?
The Haitian environment has become a severely degraded ecosystem; her wildlife habitats have been destroyed or seriously damaged, with 25 to 30 watersheds largely degraded or altered. Because most of the trees have being cut, there is increased soil erosion and flood damage from storms, crop losses are greater.

 The countryside is already barely able to provide minimal living standards for the people. Those who lose their entire crop often end up living in a shanty in Port-au-Prince.
About three in four Haitians (73%) say there have been times in the past year when they or their families have gone hungry. Globally, only Africans in Chad (76%), Malawi (76%), and Niger (74%) are as likely to say they experienced food deprivation.
A majority of Haitians (57%) say there have been times in the past year when they did not have enough money to provide adequate shelter for themselves.
In Haiti, chronic political instability and corruption have combined with poverty, illiteracy, and racial discrimination to pose insurmountable barriers to modernization.
Meanwhile, Haitians are far more likely than Dominicans to say they’ve been assaulted in the past year. A full 30% of Haitians say they have been assaulted or mugged in the past 12 months, nearly three times the percentage of Dominicans who say the same (11%). In fact, among residents of more than 100 countries surveyed worldwide, only Burundians in central Africa (33%) are more likely than Haitians to say they’ve been attacked in the past year. [Photograph at right, farming community in Haiti.]

 Much of the rest on the planet could experience conditions somewhat similar to Haiti – 100 years from 2012. Considering that  petroleum and coal resources will  have been fully exploited and reduced to exhaustion within about 50 years (but 50 before that hypothetical 100 years has passed). Considering that other easily mined natural resources that we use in our civilization, will have  similarly been mostly extracted, it simply defies explanation where the energy will come from. If we do manage to overcome the energy challenge with a technological tour de force, starting immediately, where will the mines and minerals,  revitalized carbon depleted farm soil, restocked global fisheries, below ground  recharged water aquifers, and new surface fresh water resources come from?

All these problems are of course ‘in the future’ meaning… it’s going to ultimately be someone else’s responsibility…  [smile to yourself and think,  The Commons]. From your family’s view, the reality of peak oil is arriving now, along with increasing costs from food, medical care, college expenses… add your observations to the list. However, as a society, we’re seeing a decay in public infrastructure; diminishing economic returns; a long term continuing increase in social subsidies, income disparity, sub inflationary wage increases; no interest gained from our savings; political unrest is spreading at home and abroad.
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This then, is the coming of the Tragedy of the Commons.

Mr. Larry

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