Tag Archives: precious metals

The amount of gold or silver savings you should have

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

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

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.

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Filed under Survival Manual, __7. Warehouse

Prepare with Cash and Equivalents

(Survival Manual/2. Social issues/Prepare with cash and equivalents)

Prepare with Cash and Equivalents

 Our financial system needs growth to sustain it, so that loans can be paid back with interest. Once  peak oil hits, growth will be gone. Economic growth may even be replaced with economic decline. It is not clear our financial system can handle this.

When it becomes serious, you have to lie”, Jean-Claude Juncker, Chairman of the Euro zone finance ministers and the currency union’s key spokesmen, May 2011.

Projection from early 2005
Today’s fiat money system is in joint peril with other paper assets during the upcoming worldwide depression. Unlike the last depression, our Federal Reserve paper money is backed by nothing but
air, hot government air, redeemable in like units. And nearly as cheap as air to give to the body economic, Rubin and Greenspan (Plunge Protection Team) will work like crazy to inflate the bursting economic bubble with huge quantities of this air.
•  I would expect the discount rate to drop to near 0% enticing us to borrow more, refinance again and to help them float the market and the world on the sinking U.S.S. Titanic. [Local bank interest rates 0.1% in 2009-2010, 0.05% during 2011.]
•  But eventually this ploy will become unworkable as we find ourselves mortgaged to the hilt and questioning our ability to repay. (July  2011]
•  Mass bankruptcy will follow and the good faith and credit of the U.S.A. will look to be in real trouble to the rest of the world. [First international bankruptcy 2010-2011]
•  There will be a flight to quality, dollars around the world will be sold at any price as they go through a confidence crisis. This is the reason that the next depression will eventually end up being inflationary
and not deflationary. [Gold started its long-term rapid rise in the summer of 2008. Silver ‘took off’ in April 2010]
•  Money then is a commodity (pretty printed paper, cheap metal slugs, barter items, and/or precious metal coins) that you can use in trade for other commodities you would like. You choose each day what you will trade your labor or stuff for, to use as money.  You are wealthy only if you own and control the means to sustain life for yourself and possess items that can be traded with others.
•  Paper assets are about to be destroyed in the upcoming years during a stock market crash. These overvalued pieces of colorful paper, with the engraved images of our national forefathers, will not feed or take care of you because nobody will be willing to trade anything worthwhile for them. These include Stocks, Bonds and any other debt based paper asset like Federal Reserve Notes and your bank account valued in Federal Reserve Notes.
Additionally copper-clad coins will eventually be viewed for what they are –  Slugs – imitations of the real thing. What then will be used as money?

Four Characteristics of Money
1)  It must be divisible.
2)  It must have high value in relation to its volume and  weight.
3)  There must be widespread recognizability.
4)  It must have transportability.
Gold and silver coins satisfy all these requirements.

A.  How much and what kind of money should I own?
To prepare for the  coming depression please consider the following:

1)  Newer Coins
You will want to have on hand a significant amount of pennies, nickels and copper-clad dimes and quarters.  This is for when limits on bank withdraws begin and cash is scarce. You do not want to use your gold and silver coins then, they are to be used when things start leveling out and the economy restarts. Most people will not initially know the value of gold and silver. Therefore, use the copper-clads until the populace gets educated. If you are on a budget, start by collecting a few hundred dollars face value. A wealthy individual could have thousands of dollars face value of copper-clad coins
tucked away.

2)  Paper Money
You will want to start by having enough paper cash money on hand to cover at least one month’s
personal expenses: mortgage payments, car and truck, taxes, utilities, household supplies, etc. If you are well enough off I would recommend that you have much more. According to the experts you must have cash on hand, not in the bank, to satisfy your obligations or you may be forced to forfeit your assets. Also, as the stock market crashes and banks suspend withdraws, you will be able for a  short time to buy pennies on the dollar. Additionally, banking services will be non-existent and checks, credit cards, etc. will be useless. An assortment of $1, $5, $10 and $20 bills is recommended (it may be difficult to get change for larger bills). The amount you feel comfortable storing is up to you. Keep the cash where you can easily get your hands on it.
You may not have access to your safe deposit box because of an extended bank holiday.

3)  The Transition Period Between Fiat Money To Real Money
Eventually, the liquidity crises, during and after the bank limits will pass, and paper dollars will be devalued (they become worthless), the federal government will begin taking over the failed banks, they will make good on the FDIC and FSLIC government bank guaranty and other government commitments by printing new larger denomination paper money.
$500, $1,000, $5,000 and then $10,000 bills will be reissued by the federal reserve in huge quantities, and/or they will circulate a new type of currency. Copper-clad coins, and small bills will become worthless, unless you have wheel-barrels full of them. Run-away Inflation. This will be a hyper-inflationary period for people holding paper assets, paper money and copper-clad coins. When you get wind of the coming currency devaluation dump your paper and copper-clad money for anything of real value. This is the time to already have your silver, gold and any other items you will want and to barter with.
Look for a new National Value Added Tax (V.A.T.) on all purchases and services. Government-controlled rationing will be setup and the Black Market will be in operation.

4)  Silver Coin
Now the importance of having gold and silver coin is evident after seeing the stock market crash scenario and the destruction of paper assets. The only money that is real is that which has intrinsic value. Currency like gold and silver money will be the only real store of money value. The wealthy individuals to emerge from the coming stock market crash and depression that follows, will be the ones who have preserved their wealth during the destruction of paper assets. Face it, after having a roof over your head, food to eat and clothes to wear, you will be wealthy only if you have things of real value to others and if you can turn that into opportunity for yourself. Barter any commodity that you can but the two commodities historically that always become real money and a reserve of value are gold and silver.

You will want now to buy as much silver as you can, before the VAT becomes law, and while the rest of the world is chasing after paper assets. Today, silver is a good value compared to how it will appreciate. Although you will want to acquire gold, silver is better suited for small exchanges and will be used more for the day-to-day purchases. Get plenty of junk silver, pre-1964 dimes, quarters and half dollars by the bag ($1000. face value), 1/2 bag or smaller amounts. You are basically getting old U.S. silver coins that have been picked through to remove the rare pieces. The price is currently about 5 times the face value. Old silver dollars are much more expensive costing about 30.88per dollar (based on 39.90 spot price of silver, 29 July 2011). Your best value for silver dollars is to get newly-minted US American Eagle silver dollars, the US mint has been minting the new silver coin since 1986 and they are about $44.60 each (29 July 2011) and contain 1 troy ounce of 99.9% silver, this is about a 0.3 ounce more silver than carried by the old silver dollars (0 .714 troy oz.).
All these coins contain a specific amount of silver and are recognized by the whole world as to their size and weight. U.S. coins are better than other coins or bullion because of their recognizability, so don’t hold anything, but U.S. gold and silver coins.

5)  Gold Coin
The best value in U.S. gold coins are the ones minted by the U.S. Government. US American Gold Eagle coins are currently minted, ranging from about $180, May 2011, for the 1/10 oz. coins to about $1,627, July 2011, for the 1 oz. coins. There are also 1/4 oz. and 1/2 oz. coins, but I prefer either the 1/10 oz. or the 1 oz. coins.
•  1/10 oz. gold coins should be used to barter on small items; items that are larger than what you can buy with your 1 ounce silver coins.  The 1/10 oz. coin is ‘valued/stamped’ at $5.00 and would be an easy way to buy something worth a fraction of  the 1 oz. of gold.
•  The 1/4 oz. gold coins are improperly valued at $428, May 2011 because of their weight;  the 1/2 coin is not a good value because of its increased commission.
•  The 1 oz. coin is the best way to store large quantities of gold and is the most cost-effective method.
Each coin contains 1 oz of 91.6 pure gold in troy ounces plus a small amount of hardening metal to strengthen the coin, each coin weighs slightly more than its stated value.

After socking away new copper-clad coins, paper money and silver coin, you will want to buy as much gold coin as possible. You will preserve your wealth through the coming paper asset destruction and will emerge as a rich individual.

My advice
(Note: Do your own research and come to decisions that fit your personal circumstance. I’m not a qualified financial advisor. Mr. Larry)
If you are financially capable of storing (your long-term ‘savings account’) gold  and silver, you should have different types of gold and silver holdings. I would suggest starting your bullion holdings with cash and junk silver, then progressing to American Eagle silver and gold bullion coins.
Besides being  the historical standard for money, silver and gold are also barter commodities.
You will want to have the right denominations/weights of silver and gold coin to transact business. Which silver or gold coin you will use, depends on the cost, situation and who you are working with. People familiar  with the old ‘junk silver’ coins would rather trade with them than with bullion coins. Some people will see your US gold or silver Eagles and feel secure that they can count on that coin to be what it  says it is and will be more willing to make a trade with you.

During shortages and government controlled rationing, a store keeper may have a limited supply of a desperately needed item like medicine that he can only sell at the government set price. Who will get
this item? The person next to you with a 50 dollar bill of questionable value, or  you with 50 dollars in silver or gold coin – the store keeper or trader will recognize that your coin has a much higher intrinsic value. Of course you will get the medicine; however, if you only had an unrecognized bullion coin or a ‘junk silver’ coin from another country you may not.

Buy as much junk silver and American eagles as you have the means for. The bullion coins will preserve your wealth through to the other side of the collapse of paper assets and you will have the means to get going financially.
Old junk silver coins are meant for dealing with local stores for small transactions during and after the upcoming paper asset collapse. Deciding what and how much to store all depends on your situation, will you have the desired money medium for the opportunity/life style you are pursuing?

You only want enough cash on hand to sustain yourself in the event of bank withdraw limitations, and until worldwide dollar confidence crashes and the world dumps dollars on the market in a race
to get any value they can from it. Other than a pile of small bills to see you through a crisis, cash is a bad thing to hold because of possible hyper-inflation and the fact that it is backed by practically nothing.
Obviously the bulk of your investment money placed in a good fund tied to the performance of the stock market is the best place to be right now; long if you see the market rising and a ‘short’ ETF (DXD and others) if you see a decline coming.


B.  Forces which cause gold and silver to rise in value.
•  Bank Failures
•  Rising inflation or the expectation of rising inflation
•  Devaluation of the dollar
•  Other currency-related crises
•  Increased Industrial and Investment demand for gold
•  Price increase in other commodities
•  Stock and bond market collapse
•  A New World War
•  International tensions

Gold serves as an increased hedge, though volatile in the short-term, against the erosion of the purchasing power of paper money. This is why you want to hold your portable gold coins for 3 – 7
years on the average. However, if a deal or situation presents itself that is extremely advantageous such as gold appreciating in value to quadruple or more what you paid for it–consider selling– you can always buy property with the proceeds.

Just before the peak of another depression, gold, is estimated to possibly rise to $3000 – $6000 an ounce. And if the President bans gold altogether; then places the U.S. back on the Gold Standard—as it is felt in many of the bearish financial newsletters, gold could a lot higher!
Spot silver prices are closely  connected to the same factors as those driving gold; however, because of  the low supply of available silver, it may become nearly as valuable as Gold.

You have five things working to drive the price of gold up:
1.  Increasing Gold Lease Contracts
2.  Increasing Consumer Demand- in China and India, as well as Europe.
3.  Gold Investors Needing Gold- international banks
4.  IMF: “By the IMF’s [International Monetary Fund] own documentation, the international banking community is trying to create a new global currency that will be backed by gold valued at between $3,000 to $5,000 per ounce.” –The Economic Outlook; Vol. 7. #1. January 1998.
5. Deflation: “To avoid outright economic collapse-Asian governments are devaluing currencies. Currency devaluation is a hidden form of hyper-inflation–the last desperate act before outright economic collapse. How do you protect yourself from currency devaluation? Gold &  silver.”
–The Economic Outlook; Vol. 7. #1. January 1998.

The following table provides my personal thoughts on the way to split up assets in order to cover most contingencies. I recommend you set aside the cash mentioned in the top half of the table first, and when this is done, do what you can to develop the funds to buy some combination of the bullion listed below.

Number to have on hand(minimum) Item cost
in each denomination
$50 bills none
$20 bills 200 $20 $4,000
$10 bills 50 $10 $500
$5 bills 50 $5 $250
$1 bills 300 $1 $300
$1 coin $1 none
Quarter (25¢)
10 rolls $10 $100
Dime (10¢) coin 10 rolls $5 $50
Nickel (5¢) coin 10 rolls $2 $20
Penny (1¢) coin 10 rolls $.50 $5
Currency   & coin• $5,150
Pre 1965 ‘junk -90% silver coins $200 face
$2844 $2844
Silver Eagle 1 oz 500 ea $19.87 $9,935
Bullion bar, 100 oz none
Gold Eagle 1/10 oz 20 ea $138 $2,760
Gold Eagle 1 oz 8 ea $1295 $10,360
Bullion $25,899
Currency, Coin and Bullion ‘On Hand’ $31,049

Table above updated on 16 Oct 2014

When faced with hyperinflation or other major calamities, you should have a pre determined  list of items to purchase ‘at the last-minute’ and/or items to invest your  cash in, things that will survive the
currency collapse or become more valuable in the post disaster period. When the window of opportunity is seen about to close, you must immediately transfer the bulk of your extra cash into some combination of ‘commodities’, such as; food, land, housing, other real estate, and barter items.

The totals shown in the table above are approximately the current annual gross wage of a mid level
US worker. With slightly reduced circumstances, this sum will provide 1) Four to five years of  supplemental income, or 2) in a severe depression it would provide about two years worth of 50% pre-crisis  income, or 3)  in a catastrophe, provide one full years income.

Coupled with your food  and water storage plan, as discussed in, 1) Survival Guide/ Food&Water /Develop a Survival Food List, and in 2) Survival Guide/Warehouse/Food, you should have the capacity to weather a serious dislocation.
With the adoption of other support systems, discussed and enumerated in Warehouse/… your resilience and survivability  should see you through most of the abrupt physical catastrophes that may impact a region or a national or global economic collapse.

While watching the short term, keep in mind that there are very long term cycles of human conduct and behavior toward one another, in our exploitive relationship with  the natural environment, our  modern civilizations energy use and resultant population numbers, as well as environmental ‘black swans’. The interplay of flux and flow between these relationships, trends and surprise events show themselves in the changing levels of human prosperity.

During the late 20th Century the world was very prosperous, we all poured our wealth into entertaining material goods, desiring ‘thing’s more than the traditional stores of value, gold and silver, hence the price of silver was the cheapest it has been in almost 700 years (Google ‘650  Years of Silver Prices’ or see http://goldinfo.net/silver600.html)

On 19 April 2011, the spot price of silver reached $43.07 and began an overdue correction. As technology developed the steam engine and later, our petroleum-based civilization with electricity, mining technology brought about an easier extraction of minerals. Now, as we moving through the brief peak oil plateau period, our open-pit mines have grown huge and underground mines extend for miles.
There are no more easy surface ‘finds’ of most of our civilizations industrial mining needs. When our oil supply declines there will be a diminished amount of minerals extracted from mines and at higher real prices (above what ever inflation will be). There will be less because the huge quantity of almost free labor provided by oil driven machinery will be declining, but also because we will have already extracted the bulk of the available resources.
The coming extended rise in silver prices will reflect not only scarcity, but difficulty and cost of extraction. The same shadow will fall across
all mined minerals, lumber, paper products, aluminum, rare earths and uranium. Costs will rise rapidly during the coming few years irrespective of whether there is inflation or deflation. The things we have grown accustomed to around the turn of the 21st Century will become increasingly difficult to obtain at ‘reasonable’ prices, the cost of ‘things’ will go up in real terms.
The decade from 2011 to 2021 will be wild.

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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
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
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…

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

“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

“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
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
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
“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
“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
“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

“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
•  “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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On being prepared

On being prepared

A. How to Survive Societal Collapse in Suburbia
Excerpt pasted from: http://www.nytimes.com/2012/11/18/magazine/how-to-survive-societal-collapse-in-suburbia.html?pagewanted=all&_r=2&amp;


Photograph by Dwight Eschliman for The New York Times

The Douglas Family Stockpile
1.  Staples in 6-gallon buckets include: rice, beans, nuts, sugar, salt, matches, wheat, flour
2.  Freeze-dried meals
3.  Assorted canned foods: cheese, butter and meat
4.  Water-bath canner
5.  Vacuum sealer
6.  Pressure canner
7. Pot
8. Canned meat: red is pork, green is turkey
9. Broth: beef and chicken
10.  Salt: 25-pound bags
11.  Aluminum foil
12.  Portable first-aid kits, lighters, U.V. light sticks, fast-acting glue
13.  Candles
14.  Sunflower seeds
15.  Cough drops
16.  Canned turkey
17.  Stackable containers of canned food
18.  72-hour backpacks
19.  Charcoal chimney
20.  Potatoes
21. Grill
22.  Solar oven
23.  Beef jerky
24.  Vinegar, white and cider
25.  Olive oil in cans
26.  Wall-mounted first-aid kit
27.   Canned staples: rice, dried carrots, dried onions
28. Powdered milk and eggs
29. Laundry detergent
30. The Douglas family
31. Heirloom seed bank
32. Bleach
33. Pasta
34. Dehydrated mashed potatoes
35. More assorted staples
36. Miscellaneous canned goods
37. Stackable containers of canned food
38. Powdered hot chocolate
39. GeneratorNot pictured: juice, apple and grape; fortified water; hand sanitizer; laundry bucket; jars of bouillon; canned apple-pie filling; filtered-water bottles.
40. Propane burner
41. Water filter
42. Hand warmers
43. Surgical masks
44. Empty Mason jars for canning
45. Jars of roasted peppers
46. Rifle, shotgun and pistol
47. Buckets of honey
48. Cans of sardines
49. Foldout tent
50. 5-gallon gas cans
51. Solar panels
52. Plastic hose


B. Survival In A Big City After Disaster
12 November 2014, Modern Survival Blog, by Ken Jorgustin
Pasted from: http://modernsurvivalblog.com/systemic-risk/survival-in-a-big-city-after-disaster/

The issue of survival in a big city following a major disaster is a serious one. In 1800, only 3 % of the world’s population lived in cities. Today, about half of the world’s population lives in urban areas, and in developed countries up to 70 % or more live in larger cities. New York and Los Angeles are among the top 10 most populous cities in the world. There are 30 MSAs (Metropolitan Statistical Areas) within the United States which have 2 million people or more.

What could possibly go wrong?

Hopefully nothing… however don’t count on it. A microcosm of what could go wrong already happened years ago in New Orleans. Remember Katrina? What about Hurricane Sandy not that long ago in the heavily populated Mid Atlantic region of the Northeast? Does anyone remember the LA riots? What about Ferguson MO?

There are all sorts of natural or man-made events which could spell disaster for the big cities.

What about this one… There are approximately 50 percent of Americans who get some sort of government benefits and there are 82 million households on Medicaid. The amount of people on SNAP (food stamps) has nearly doubled since 2006. And this is only from 2011 Census data. There’s little doubt the numbers are even worse today. How many of these people live in the cities or metropolitan areas? I would suggest that the majority do.

What happens if government assistance is reduced via a financial collapse, or perhaps by a devalued dollar through price inflation – which buys less product? What happens if EBT cards stop working or are ‘worth’ much less than before? I will tell you what happens… The dependent class will revolt.

Without going further down that rabbit hole (I digress), let’s think about survival in the big cities. Let’s face it. There are lots of you who live in the cities or heavily populated MSAs.

When considering one’s preparedness and/or how to survive in the city after a disaster – the thought processes, the plans, and the resulting actions will depend (very much) on the circumstances that one is preparing for. In other words, how bad of a disaster scenario and how long might it go on. These are judgment calls which are made during the event and are preconceived “what if” scenarios based on your own risk tolerance.

The first thing that many people will think to do (following a disaster while living in the city) is to simply ‘bug out’, get-out-of-dodge, leave the city to greener pastures. The problem is, many people really do not have another realistic place to go than where they are now. Unless you truly have a willing friend who lives away from the city, then you will need to think about Plan B. Besides, who’s to say that you could even get out of the city during certain disasters? For an obvious short-term localized disaster you could certainly try to get out and stay in a hotel somewhere out of the region. Traffic will certainly be snarled.

Plan B is to face the very real possibility that you will be stuck right there where you are now. In the city. This is a very bad situation for some disaster circumstances, however for other scenarios it is survivable. Much depends on initial severity as well as the expected length of time in which you will be adversely affected.

If any of the city infrastructure is severely damaged, you will probably be facing a relatively long time to recovery and some very serious problems. If the water and/or sewage is affected, then you are in big trouble. This could be the result of physical damage (e.g. a major earthquake, attack, etc..) or it could be the result of regional (or wider) power outage. If it’s the later, then you will need to understand the cause of the power outage so that you can reasonably determine the expected length of time until it’s re-established (very important to discover and know). A battery powered portable radio is an essential item to get news and information about the disaster.

A major electrical grid power outage could be caused by storm damage. Ice storms are particularly notorious for this, as well ask hurricanes which wreak wide spread damage. Often these types of weather related outages will be resolved within days or weeks because the power company brings in multitudes of crews from other regions to help with the repairs.

On the other hand if the power outage has been caused by a worse enemy, such as a ‘Carrington Event’ solar flare & CME, or by an EMP (electromagnetic pulse) attack, then this could be a life-ending event for many millions. How will you know? Some or all things ‘electronic’ may not be operational (fried). An entirely different approach must be taken to survive this. But that’s another subject.

Having said that, I believe that the biggest (general) factors to survival in the city is:
– the condition of the electrical grid
– the condition of the infrastructure
– the condition of the distribution networks which bring food & supplies
– the condition of the chaos and your security

For starters, while considering how to prepare for disaster while living in the city, figure out how you will survive based on the four previously mentioned factors. Since most (typical?) disasters are relatively short lived (hours, days, maybe a week or two), then the foremost important thing to do is determine what you will need (in your city apartment or home) to survive without these things. In other words, you’re on your own (completely) for a day or two, maybe a week, or maybe even two.

We’re talking about some of the basics such as water, food, sanitation, keeping warm (during the winter) or keeping cool (summer), and your personal security. Although depending on exactly where you live, your personal security should not (generally) be an issue at first, given a short term disaster. Just keep in mind that when it begins to go on past day-3, then there will be increasingly desperate unprepared people – at which time security will become an increasing issue.

Water can easily be procured and stored. Figure at least 1 gallon of water per day per person. More is (always) better in this regard. You can stock up on cases of water bottles and/or fill up some water storage containers. Get yourself a quality drinking water filter. Most people forget the water when thinking about preparedness. If you’re reading this, there’s no excuse now…

Store some foods which do not require cooking (important). Remember, you can safely eat grocery store canned foods without cooking (even though you’re used to heating them up first). Don’t forget the manual can opener. There is literally no excuse for anyone not to have enough food storage to survive several weeks.

Imagine the scenario without running water. Consider keeping a quantity of ‘wet wipes’ or some such disposable cleaning wipes for hands or other duties. Know that you can flush a toilet without running water. If the power is out for long, this could become a big problem in the city if their generators are not working (or run out of fuel). Pumps are required to water to your faucets and to move sewage – which might ‘back up’ into buildings. Don’t laugh but a 5 gallon bucket (or your existing empty toilet) lined with a heavy duty trash bag (use kitty litter to pour over afterwards) is better than nothing. You could then tie and dispose of used bags somewhere outdoors (although it will be another difficult issue in the city).

Heating & Air Conditioning (Shelter)
A big issue for survival in the city following a disaster is the potential lack of HVAC (heating and air conditioning). Air (or lack thereof). Most apartment buildings (and large buildings in general) are designed to produce a climate controlled environment (which requires electricity). Many buildings do not even have windows which can be opened. Even if they do, it won’t be enough during the summer to prevent a virtual ‘cooker’ in such a building. And if during the winter, you will need to find a way to stay warm without the HVAC system (safely). Mostly, this means wearing warm winter clothes, jackets, hats, gloves, thermals, and having a cold weather sleeping bag. You can survive this way without heat – so long as you have adequate clothes and protection (shelter).

Personal Security
Your personal security will potentially be at risk in the city if the disaster looms long. Face it – most people are not prepared whatsoever for disaster. These people will be ‘screwed’ in a moderate or long term event. Coupled with the dangers of desperate people doing desperate things will be the city gangs of thugs who will take advantage of the chaos. Avoid confrontation by being prepared ahead of time and staying home while you secure your own perimeter and go about the task of survival. For anywhere it is legal, I suggest owning a firearm. Learn how to use it at the range (most people who’ve never shot a firearm before are surprised at how much fun it is when they finally do ). The longer the disaster scenario plays out in the city, the more dangerous it will become for you. Know this and prepare for it accordingly.

Apart from water, food, shelter, security, there are countless other considerations and supplies which will help during a time of disaster. Browse this site (http://modernsurvivalblog.com) and others for lists and ideas. Some of the ideas are obvious ‘no-brainers’ such as a flashlight and extra batteries, while other ideas may really help you in other less obvious ways…

In conclusion, let me say this… during a complete collapse of society and/or SHTF, the cities will not survive. Today’s ‘Just In Time’ distribution will collapse and leave the cities as wastelands of descending chaos. When the trucks stop, it’s over. IF you sense that the disaster is leading towards complete collapse, then I would do everything in my power to get out of there.

By the way, the top 30 Metropolitan Statistical Areas (MSA) in the United States are as follows:
1. New York
2. Los Angeles
3. Chicago
4. Dallas-Fort Worth
5. Houston
6. Philadelphia
7. Washington
8. Miami
9. Atlanta
10. Boston
11. San Francisco
12. Riverside
13. Phoenix
14. Detroit
15. Seattle
16. Minneapolis-St.Paul
17. San Diego
18. Tampa-St.Petersburg
19. St. Louis 20. Baltimore
21. Denver
22. Pittsburgh
23. Charlotte
24. Portland OR
25. San Antonio
26. Orlando
27. Sacramento
28. Cincinnati
29. Cleveland
30. Kansas City

(Prepper articles/ Readiness in suburbs and city)

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After peak oil

(Survival manual/2. Social issues/After peak oil)

1.  Peak Oil facts
2. When the lights go out
3. Depletion of key resources
4. Peak oil info and strategies
5. Urban vs. Rural Sustainability
6. Cities, Peak Oil and Sustainability
7. Surviving Peak Oil, The Economic Meltdown and A Possible New Great Depression

Oil is the fuel that enabled the growth of modern civilization, and all industrialized countries now rely on it to an extraordinary extent.
Oil provides 40 percent of all primary energy, and 90 percent of our transportation energy.
It is furthermore critical to industrial agriculture, the chemical and pharmaceutical industries, much of the clothing industry, and a vast array of others.
The physical and chemical versatility of oil, combined with its high energy density, are such that no other known energy source can serve as a full or even adequate substitute. In short, oil is the lifeblood of the industrial world.

Once peak oil hits, economic growth will  be gone. Our financial system needs growth to sustain it, so that loans can be paid back with interest. What has been economic growth may be replaced with economic  decline.

1.  Peak Oil Facts & What They Mean to You

Pasted from <http://www.energytrove.com/peak-oil-facts.html>
The peak oil facts are undisputed despite the raging debate over when it will actually occur. This page summarizes peak oil theory, facts and what it all means to you…
•  Undisputed facts about peak oil
•  Peak oil: taking the facts one step further
•  Projections about peak oil’s timing
•  Boiling it all down & next steps

Undisputed Peak Oil Facts
There are widely opposing viewpoints about peak oil. When will it happen? How much oil is left? How will renewable energy reduce its demand? What will be the impact to the national and global economy?

Before you can consider these questions, their implications and what they mean to you, you must first establish a foundation of the undisputed peak oil facts accepted by all viewpoints…

Fact #1 of 11 Peak Oil Facts:
Oil is a nonrenewable resource, which means that it can’t be reproduced for use by humans (it is made over millions of years). In other words, once it’s gone, it’s gone.

Fact #2: Peak oil occurs and can be confirmed when the rate at which oil is taken from the ground worldwide hits its high point and starts to decline.

Fact #3: There are a finite number of oil reserves on the planet. Regardless of technological advancements that allow us to find and extract what’s there, eventually existing reserves will be depleted and there will be no more oil to find.

Fact  #4: All individual oil fields (and therefore all nations’ and the planet’s oil production) inevitably peak, decline and are depleted. For example, the United States reached peak oil production in the 1970’s which has been in decline ever since.

Fact #5: One or both of two things must occur after peak oil is reached and the decline in oil production continues:
•  The price of oil will go up
•  The demand for oil will go down

__Peak Oil Facts In Context: Canadian Tar Sands
Canada has about 178 billion barrels of proven oil reserves (2nd only to Saudi Arabia), over 95% of which are in the form of oil sand deposits. If it could be easily extracted, it would still only add about another 5- 1/2 years to the world’s oil supply at the current rate of consumption. However…
The amount of oil able to be extracted per day from tar sands: About 3.5 million barrels or roughly 4% of the world’s daily consumption

__Environmental impact of tar sand oil extraction:
•  By 2012, the Canadian tar sands operations are expected to  use as much gas as is needed to heat all of the homes in Canada.
•  Extracting oil from tar sands causes as much as 3 times the greenhouse gas pollution as a regular barrel of oil.
•  Canadian tar sands production methods do not comply with many U.S. environmental laws.
In either  case, all but the wealthiest individuals must reduce their dependence on oil as the price increases.

Fact  #6: Our current prevailing culture is utterly dependent on oil.Oil makes the modern world tick… not only does it fuel our cars, trucks, trains, boats and planes but it is used to produce the materials they are made up of.

It’s also extensively used during every step of the food process up to the point that the food enters your mouth… oil’s products are used to plant seeds, fertilize crops, kill bugs and weeds, harvest crops (which are also fed to the animals we eat) and to preserve, package, ship and refrigerate our food. Fully one-fifth of the United States’ oil consumption is used to produce and transport our food.

Oil is also used directly or indirectly to create the utensils, plates, pots, pans, counters, stoves, dinner tables and chairs that we use when cooking and eating…not to mention part of the electricity used to cook our food and to keep the lights on while we eat.
Rather use candles? Most are made of paraffin wax which is made from refined oil.
Countless oil-derived products are used in our everyday lives. See some common examples in the table above:

Fact  #7: Demand for oil is overtaking the speed at which we can produce it, regardless of peak oil’s timing, which will ultimately prevent oil prices from falling.
If demand continues on the same long-term trajectory — which appears to be the case outside of intermittent fluctuations caused by economic factors — there is no end in sight to rising oil prices.
The 2008 “Great Recession” caused a reduction in the demand of oil which caused its price to drop, but oil’s price must resume its increases for two main reasons:
1)  As illustrated in Fact #6 above and Fact #8 below, oil is used in too many aspects of our lives for us to reduce our consumption past a certain point and there is not enough energy available from alternative sources to make up for a significant shortfall.
2)  If oil’s demand drops for a long enough period of time, either production will slow down and bring prices back in line or production will continue at its current pace thus getting us closer to depleting the world’s oil (and therefore reducing oil’s supply which will eventually bringing its price back up). At best, reduction in the demand of oil would only serve to push back the timing of peak oil.
For a case in point about our world’s unquenchable and growing thirst for oil, consider that the United States and its 311 million citizens currently consume about 25% of the world’s oil and increase their demand every year.

__Chinese Oil Flow
China, the most populous country in the world with 1.3 billion citizens, currently consumes 9% of the world’s oil. It is increasing its oil consumption at a rate of 7.5% per year, 7 times faster than the U.S.
According to the International Energy Agency, by 2030 world energy demand will be 40% higher than it was in 2007: “Price volatility will continue, but the days of cheap energy are over.”

The United States Joint Forces Command concludes, “Assuming the most optimistic scenario for improved petroleum production through enhanced recovery means, the development of non-conventional oils (such as oil shales or tar sands) and new discoveries, petroleum production will be hard pressed to meet the expected future demand of 118 million barrels per day.”

__Peak Oil Facts In Context: New Oil Discoveries
The 10 largest oil discoveries from 2000 – 2010 combined (including Brazil’s 2010 discoveries) amount to about 48 billion barrels.
•  The world’s 2010 oil consumption per day was 87.4 million barrels
•  Number of days these combined discoveries will last at current rate of consumption: 549 (about 1.5 years)
In a typical economic scenario, when a  price point gets too high consumers simply shift their buying over to another good or service. But what happens when our infrastructure, products and services
don’t have a viable replacement?

Fact  #8: On the global scale, renewable energy sources and non-conventional oil will come nowhere close to offsetting our dependence on oil through 2030 and beyond.
According to United States Joint Forces Command, even taking into account all other available energy sources, oil will still need to satisfy the majority of our energy needs through 2030.
ExxonMobil, the largest oil company in the world, agrees: “80% of global energy needs through 2030 will continue to be met by oil, natural gas and coal.”

Fact #9: Everyone will eventually be forced to reduce their consumption of oil and its byproducts. Whether oil price increases make it unaffordable or government policy requires less consumption, as oil production continues to decline every single person will be affected at some point.

__Energy Per Barrel: Pros & Cons
One barrel of oil is equivalent to about 25,000 hours of human labor. Assuming weekends off, no vacation time and a 40 hour work week, that’s equivalent to over 12 years of work from one person.
That much work packed into one barrel of oil has enabled humans to accomplish amazing feats, ultimately allowing us to grow our global population 575% since 1857 when the first large oil refinery was built. That’s a growth of 5.8 billion people over the last 150 years compared to 1.2 billion over the previous 2,000. What happens as that amazing energy source starts to go away?

Fact  #10: Those people that have permanently adopted the use of less oil-dependent products, services, forms of energy and lifestyles will be less affected as the availability of oil declines and its price increases.

Fact  #11:  On the individual level, reducing dependence on oil is affordable and requires only minor changes to lifestyle. There are hundreds of ways to reduce your dependence on oil and the other finitely-available fossil fuels, many of which are either completely free or very affordable.
For example, replacing just one incandescent light bulb with an energy-efficient compact fluorescent bulb and always turning it off when it’s not in use can save up to $75 or more per year (this is after taking the higher cost of the fluorescent bulb into account). And that’s just the very tip of the energy-saving, oil-dependence-reducing iceberg.

More on what can be done on the individual level in a moment. First, let’s discuss how these peak oil facts will affect the oil-dependent…

Taking the Peak Oil Facts One Step Further & What it Means to You
As  illustrated above, oil is intimately connected to almost every aspect our culture. So what happens when the price of oil increases? History has shown the following three effects:

1)  Inflation goes up proportionately. According to the U.S. Department of Energy (DoE), “inflation, measured by the rate of change in the consumer price index (CPI), tracks movements in the world oil price.”
What this means to you: A little inflation is a good thing. By encouraging people to outpace it, low inflation (as opposed to 0% inflation or deflation) leads to additional investing and borrowing thereby creating jobs, additional spending and an improved economy.
But rising inflation is bad for several reasons. In general, it means that the money you earn today (or saved in the past) will not buy you as much tomorrow… especially if your employer’s pay raises don’t keep up. For example, a 5% pay raise alongside 2% inflation means that you’ll be able to buy 3% more stuff with your money than you could previously. But that same 5% pay raise alongside 10% inflation has the opposite effect: a reduced standard of living.
It’s also bad news for retirement accounts since higher inflation makes it more difficult for your investments to outpace it, ultimately leaving you with a difficult decision: make riskier investments in an attempt to outpace higher inflation or remain in safer investments and watch your money lose value.
Higher inflation also leads to higher interest rates which makes borrowing money more expensive.

2)  The price of oil-dependent goods and services increases. Not surprisingly, when the cost of a good or service’s underlying expenses go up, the price of those goods and services must go up as well.
What this means to you: Every oil-dependent product or service that you currently use will go up in price. In general, the more oil that a product or service uses, the more dramatic its price increase will be.
For example, the price of corn keeps pace with the price of oil since so much oil is used in its production and because ethanol, an alternative energy source, is made from corn. Organic crops, on the other hand, use much less oil and are therefore less affected.

3)  Recession occurs. The DoE also points out that since the 1970s there have been “dramatic changes in GDP growth as the world oil price has undergone dramatic change.”11 More explicitly, as the price of oil and inflation (CPI’s rate of increase) go up, the economy goes down.
What this means to you: Recessions cause obvious hardships… unemployment rises, employer pay falls or remains stagnant, housing prices fall and inflation becomes more painful.

To recap what we’ve established so far…

1)  Oil will eventually run out. As it does, the price will continue to go up.
2) If demand outpaces supply before oil runs out, the price will go up in a similar fashion since oil is unique in its energy-producing capacity and because…
3) On a global scale, oil will be still be required to provide as much as 80% of our energy needs by 2030; there will not be enough power available from alternative sources to reduce our projected dependence on oil much below this.
4) On an individual scale, reducing oil dependence is relatively easy and affordable.
Before getting into ways to reduce our individual oil dependence, the next question should be obvious: when will peak oil – or the time when demand outstrips supply – occur? In other words, how much time do we have?

Boiling down the Peak Oil Facts & Next Steps
Oil is going away eventually for all of us – either because we’ll use it all up or because it will become too expensive as its demand outstrips its supply.

Rising oil prices will cause a severe and compounding downward spiral in a world that is dramatically underprepared with alternative energy sources; The inevitable oil-induced inflation increases, the higher cost of oil-dependent goods and services and an ongoing recession that is in lock-step with rising oil prices will eat away at more and more of our paychecks and savings.

When evaluating predictions from the US and international governments to the largest oil companies to organizations specifically focused on analyzing the data, it appears that if the scales have not tipped already, at the latest they will have by the time our babies are out of college.

This all may come as a shock. (Why hasn’t the media at-large assembled and communicated the research and opinions? Why isn’t the government acting more aggressively on the opinions of the organizations that they themselves have charged with compiling the research?)

Regardless of who’s right about the timing or how quickly the data will make its way into the minds of the masses, the peak oil facts should leave you asking three important questions first over all others:
1) When (not if) oil peaks or its demand outstrips its supply, how will the rising cost of oil affect you and your family?
2) What is the worst thing that can happen by beginning a transition to a less oil- and fossil-fuel-dependent lifestyle? (Here’s part of the answer: it will permanently reduce your expenses, freeing your money up for use elsewhere)
c) What can you do now to begin the transition?
Fortunately, the transition –- and where it leads — is neither all that bad nor expensive.
Pasted from <http://www.energytrove.com/peak-oil-facts.html>

First, about 2008-2010, global oil use per capita (purple bell curve on bottom) is seen just beginning to decline from its peak plateau. It’s use per capita declines at a rate of about 20% per decade so that in 50-60 years there is very little being used

Coal quickly peaks after oil and by 2025, it too is in decline.

The Human population has exploded as a result of the energy bonanza provided by petroleum and coal and their generation of electricity, resource extraction and transportation. The population numbers steeply declines when the free lunch diminishes.

2.  When the Lights Go Out

When the Lights Go Out
10 January 2010, by Peter Goodchild

When fossil fuels begin to vanish, the first sign of the times will not be made of cardboard and propped up in front of an empty gas pump. The sign will be the flickering bulb in the ceiling, because electricity is always the weakest link in the synergistic triad that includes fossil fuels and metals.

When the lights go out, so does everything else. The house or apartment will be largely non-functioning. Not only will there be darkness throughout the dwelling between sunset and sunrise, but all the sockets in the wall will be useless. The “four major appliances,” stove, refrigerator, washer, and drier, will be nothing more than large white objects taking up space, so there will be no means of cooking food or preserving it, and no means of doing laundry. There will be no heating or air-conditioning, because these are either controlled by electricity or entirely powered by it. For the same reason, there will be no plumbing, so clean water will not be coming into the house, and waste water will not be leaving it.

And that is only one’s own habitation. The entire country will be affected, the whole world will be affected. Computers will cease to operate, and computers have insinuated themselves into almost every device we use. There will be no long-distance communication: no telephones, no Internet, no transmission of data from anywhere to anywhere.

Money will largely cease to exist, because there will be no electronic means of sending or receiving it, and no way of balancing accounts. In fact money nowadays is not reckoned as coins or bills, but as data on a screen, and the data will no longer be there. All bank accounts will cease to exist.

Modern medicine will vanish. Doctors will have almost no means of taking care of their patients. Hospitals will be burdened with the sick and dying, and there will be no means of taking care of them. There will not even be a means of removing and burying the dead.

The police will be immobilized, because they will have no means of sending or receiving information. Since police forces anywhere have only enough personnel to deal with normal crises, it will not take long for officers to realize that they are powerless to do anything, but stay home and protect their own families.

For anyone, it will be impossible to jump into a car and get help, because cars require gasoline, and the gas pumps are run by electricity. In any case, the oil wells and the refineries will have ceased operation. The biggest “vicious circle” will have taken place: no electricity means no fossil fuels, and no fossil fuels means no electricity.

For a while, people will try to get by with emergency devices and equipment. Backup generators can save lives for a while, but those generators are not meant to be running for more than a few weeks, because they themselves require fuel. On a more primitive level there will be battery-powered devices, and even simple oil lamps and candles, but these will not last very long.

“When the lights go out” is mainly a synecdoche, of course, because the incandescent or fluorescent light bulbs in a house will not be the major concern: in the daylight hours, one does not need light bulbs. But the flickering of bulbs will nevertheless act as an early-warning system, the canary in the coal mine. During a severe storm, it is the flickering of light bulbs that indicates that it is time to get to whatever emergency supplies have been put aside: bottled water, canned food, and in winter warm clothing. The unsolved problem, however, may be that the concept of “emergency” is usually regarded in terms of a short period of time. There is always the spoken or silent refrain of “until the authorities arrive.” But those authorities will be waiting for other authorities to arrive, and so on ad absurdum.

On a more optimistic note, nevertheless, it must be said that there is a great deal that can be done. Of all the resources one can accumulate, the most important are those that are stored inside one’s own head: knowledge, skills, wisdom. “Knowledge” is perhaps not the right word, though, because to have read or heard a particular fact does not automatically grant the ability to deal with particular issues.

Even more important than mere “knowledge” is practice. For example, I used to read a great many books on vegetable gardening, but when I owned and ran a market garden for several years I was constantly mumbling, “Why isn’t this information in the books?” And there were several answers to that question. In the first place, the books were badly written. Secondly, it is not the overall principles that count, but the minutiae. Thirdly, those particulars often cannot be put into writing or even into speech: “I can’t explain it, I can only show you” is an expression I often heard. A good gardener knows a thousand tiny tricks that lead to success, and it is those particulars that matter, not the general statement that one does not sprinkle seed in a snowstorm.

The skills needed for country living are rarely the same as those needed in the city, although anyone who has built up experience in what the books call “home repair and improvement” will be ahead of those whose knowledge consists of more ethereal matters. Hunting and fishing are not taught in academia.

When I say, “When the lights go out, so does everything else,” I mean “everything in the city.” What matters is not to be in the wrong place at the wrong time. Living in the city will certainly be a case of the wrong place at the wrong time. There will be no food and no water, and no mans of dealing with the victims of famine and disease. When there is an inkling that the light bulbs everywhere are about to fail, the answer is to be well outside the city limits. One should either be living in the country or at least have some property in the country and a well-tested means of getting there.

Even a plan of that sort, however, involves a few caveats. “Property” in the modern world is nothing more than a convenient legal fiction. If a gang of outlaws moves in next door, or even if there is a single oppressive neighbor to be dealt with, then the whole concept of “property” can vanish into thin air. I have known several cases in which people gave up house and land because they could not deal with troublemakers. What will it be like when the troublemakers are doing something more unpleasant than a little trespassing? So it is good to own property, but it is better to realize that ownership, in the modern sense of the word, might be nothing more than a scrap of paper.

Getting out of the city means knowing the roads ― not the main highways, but the back roads. In an emergency of any duration, the main roads become jammed, partly because of the volume of traffic but also because of accidents. In more severe situations, vehicles will even be abandoned, either because they are out of gas or because the passengers have discovered that it is quicker to walk. Knowing the back roads, and even knowing alternative routes among those back roads, means freedom of choice in one’s movements.

The last matter is that of community. As mentioned above, the concept of property can be illusive, but there is more to consider in the question of who lives in the general area. Neighbors who take pleasure in noisy dogs, loud radios, or heavy drinking can make proximity unpleasant nowadays, but such people may not prevail in the kind of “natural selection” that will take place, where common decency will be everyone’s concern. In any case, the greatest blessing of the post-petroleum age will be the demise of all-terrain vehicles, electronic amplifiers, and the other technological marvels with which people now ruin one another’s enjoyment of “cottage country.”

Even then, the trouble of having a neighbor may be less than the trouble of not having one. It has often been said, correctly, that in reality the loner will not survive. If such a person is the hero of a Hollywood movie, it is only for the sake of a story, for the vicarious excitement of defying the odds. No one can stay awake for a month, cradled in a corner with a gun. Without a family, a band, a tribe, there will be no means of distributing the tasks to be done.

It is not reasonable to expect a perfect neighborhood. Within the happiest band of jungle-dwellers there is gossip, discontent, jealousy, manipulation. Troubles and troublemakers can be dealt with in such a way that the community itself does not fall apart. In a primitive community, ostracism, for example, can be an effective means of resolving a problem. A community leader who lacks what we now call “managerial skills” can be replaced by one who does a better job. It is largely a myth to say that country people are nicer than city people; in any setting, neighbors are merely human, with common desires and antipathies and fears. What is important is not to wish for angelic neighbors but to have enough daily contact with them to anticipate how they will respond in a difficult situation.

When the lights go out, so does everything else, but that is not entirely true for those who are far from the city. Living out in the country when the lights go out means getting a better look at the stars.

3.  Depletion of Key Resources

Depletion of Key Resources: Facts at Your Fingertips
27 January 2010, by Peter Goodchild

The author presents a definitive essay. Learn why,
•  “Those who expect to get by with ‘victory gardens’ are unaware of the arithmetic involved.”
•  “There are already too many people to be supported by non-mechanized agriculture.”
•  “To meet the world’s present energy needs by using solar power, then, we would need… a machine the size of France. The production and maintenance of this array would require vast quantities of hydrocarbons, metals, and other materials — a self-defeating process. Solar power will therefore do little to solve the world’s energy problems.”
•  “In a milieu of social chaos, what are the chances that the oil industry will be using extremely advanced technology to extract the last drops of oil? “

 Modern industrial society is based on a triad of hydrocarbons, metals, and electricity.
The three are intricately connected; each is accessible only if the other two are present. Electricity, for example, can be generated on a global scale only with hydrocarbons. The same dependence on hydrocarbons is true of metals; in fact the better types of ore are now becoming depleted, while those that remain can be processed only with modern machinery and require more hydrocarbons for smelting. In turn, without metals and electricity there would be no means of extracting and processing hydrocarbons. Of the three members of the triad, electricity is the most fragile, and its failure serves as an early warning of trouble with the other two.

Often the interactions of this triad are hiding in plain sight. Global production of steel, for example, requires 420 million tons of coke (from coal) annually, as well as other hydrocarbons adding up to an equivalent of another 100 million tons. To maintain industrial society, the production of steel cannot be curtailed: there are no “green” materials for the construction of skyscrapers, large bridges, automobiles, machinery, or tools. But the interconnections among fossil fuels, metals, and electricity are innumerable.

As each of the three members of the triad threatens to break down, we are looking at a society that is far more primitive than the one to which we have been accustomed.

The ascent and descent of oil production are those of the famous promontory known as Hubbert’s curve. The back side of the mountain probably does not greatly resemble the front. It is likely that the descent will be rather steep, again because of synergistic factors. As oil declines, more energy and money must be devoted to getting the less-accessible and lower-quality oil out of the ground. In turn, as more energy and money are devoted to oil production, the production of metals and electricity becomes more difficult. One problem feeds on another. The issue can also be described in terms of sheer money: when oil production costs about 4.5 percent of the economy, the latter begins a downward spiral.

There is a final piece of ill luck that occurs after the peak. When individual countries such as the USA begin to run out of domestic oil, depletion can be mitigated by the importation of oil from other countries, so the descent is not as troublesome as it might have been. When the entire planet begins to run out of oil, however, there will be nowhere to turn in order to make up the difference. We cannot get oil from outer space.

Global Energy per Capita
Global consumption of energy for the year 2005 was about 500 exajoules (EJ), most of which was supplied by fossil fuels. This annual consumption of energy can also be expressed in terms of billion barrels of oil equivalent. What is more important in terms of the effects on daily human life, though, is not consumption in an absolute sense, but consumption per capita, which reached what Richard C. Duncan calls a “rough plateau” in 1979.

Use of electricity worldwide rose by 70 percent from 1990 to 2008 [1]. This means an increase per capita of 41 percent. Since global energy per capita is not increasing significantly, there may come a point at which there is insufficient energy to prevent widespread brownouts and rolling blackouts [6, 7].

Fossil Fuels
The entire world’s economy is based on oil and other fossil fuels. These provide fuel, lubricants, asphalt, paint, plastics, fertilizer, and many other products. In 1850, before commercial production began, there were about 2 trillion barrels of oil in the ground. By about the year 2010, half of that oil had been
consumed, so about 1 trillion barrels remain. At the moment about 30 billion barrels of oil are consumed annually, and that is probably close to the maximum that will ever be possible. By the year 2030, some analysts say, oil production will be down to about half of that amount. [Editor’s note: we must consider the factor of oil-industry inflexibility to contract and to maintain extraction if collapse has already hit the economy.]

A vast amount of debate has gone on about “peak oil,” the date at which the world’s annual oil production will reach (or did reach) its maximum and will begin (or did begin) to decline. The exact numbers are unobtainable, mainly because oil-producing countries give rather inexact figures on their remaining supplies. The situation can perhaps be summarized by saying that many studies have been done, and that the consensus is that the peak is somewhere between the years 2000 and 2020. Within that period, a middle date seems rather more likely. Among the many who have contributed to that debate are Kenneth S. Deffeyes, Colin J. Campbell, Jean Laherrère, Dale Allen Pfeiffer, and Matthew R. Simmons, and the Association for the Study of Peak Oil has done its own appraisals.

The quest for the date of peak oil is somewhat of a red herring. In terms of daily life, what is more important is not peak oil in the absolute sense, but peak oil per capita. The date of the latter was 1979, when there were 5.5 barrels of oil per person annually, as opposed to 4.5 in 2007. This per-capita date of 1979 for oil consumption is the same as that noted above for per-capita consumption of energy in general.

Coal and natural gas are also disappearing. Coal will be available for a while after oil is gone, although previous reports of its abundance in the US were highly exaggerated. Coal is highly polluting and cannot be used as a fuel for most forms of transportation. Natural gas is not easily transported, and it is not suitable for most equipment.

Solar Power
The world’s deserts have an area of 36 million km2, and the solar energy they receive annually is 300,000 EJ, which at a typical 11-percent electrical-conversion rate would result in 33,000 EJ.

(EJ=exajoule;  1 EJ = 1018 joules.
Electrically, one joule is the work required to produce one watt of electric power for one second. Mechanically , one joule is the energy expended in applying a force of one newton through a distance of one meter.  [The United  States uses  roughly 94 exojoules per year, so 1 exojoule is about 1% of the US energy needs.]

As noted above, annual global energy consumption in 2005 was approximately 500 EJ. To meet the world’s present energy needs by using solar power, then, we would need  an array (or an equivalent number of smaller ones) with a size of 500/33,000 x 36 million km2, which is about 550,000 km2 — a machine the size of France. The production and maintenance of this array would require vast quantities of hydrocarbons, metals, and other materials — a self-defeating process. Solar power will therefore do little to solve the world’s energy problems.

Minerals Other than Petroleum
Depletion of other minerals on a global scale is somewhat difficult to determine, partly because recycling complicates the issues, partly because trade goes on in all directions, and partly because one material can sometimes be replaced by another. Figures from the US Geological Survey indicate that within the US most types of minerals and other nonrenewable resources are well past their peak dates of production. Besides oil, these include bauxite (peaking in 1943), copper (1998), iron ore (1951),
magnesium (1966), phosphate rock (1980), potash (1967), rare earth metals (1984), tin (1945), titanium (1964), and zinc (1969). The depletion of these resources continues swiftly in spite of recycling.

In the past it was iron ores such as natural hematite (Fe2O3) that were being mined. For thousands of years, also, tools were produced by melting down bog iron, mainly goethite, FeO(OH), in clay cylinders only a meter or so in height. Modern mining must rely more heavily on taconite, a flint-like ore containing less than 30 percent magnetite and hematite.

Iron ore of the sort that can be processed with primitive equipment is becoming scarce, in other words, and only the less-tractable forms such as taconite will be available when the oil-powered machinery has disappeared — a chicken-and-egg problem. To put it more bluntly: with the types of iron ore used in the past, a fair proportion of the human race would have been able to survive; in the post-industrial world, with only taconite, it will not.

Annual world production of grain per capita peaked in 1984 at 342 kg. For years production has not met demand, so carryover stocks must fill the gap, now leaving less than 2 months’ supply as a buffer.
Rising temperatures and falling water tables are causing havoc in grain harvests everywhere, but the biggest dent is caused by the bio-fuel industry, which is growing at over 20 percent per year. In 2007, 88 million tons of US corn, a quarter of the entire US harvest, was turned into automotive fuel.

The production rate of fresh water is declining everywhere. According to the UN’s Global Environment Outlook 4, “by 2025, about 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world population could be under conditions of water stress ― the threshold for meeting the water requirements for agriculture, industry, domestic purposes, energy and the environment. . . .”

Arable Land
[While reading this section, remember that 1 acre is about the area as a football field and that 2.5 acres is the area of 1 hectare]
With “low technology,” i.e. technology that does not use fossil fuels, crop yields diminish considerably. The production of so-called field or grain corn (maize) without irrigation or mechanized agriculture is only about 2,000 kilograms per hectare (10,000 m2), about a third of the yield that a farmer would get with modern machinery and chemical fertilizer.

Yields for corn provide a handy baseline for other studies of population and food supply. More specifically, corn is one of the most useful grains for supporting human life; the native people of the Americas lived on it for thousands of years. Corn is high-yielding and needs little in the way of equipment, and the more ancient varieties are largely trouble-free in terms of diseases, pests, and soil depletion.

[A hard-working (i.e. farming) adult burns about 2 million kilocalories (“calories”) per year. The food energy from a2.5 acres of corn is about 7 million kilocalories. Under primitive conditions, then, 2.5 acres of corn would support only 3 or 4 people. [2.5 acre or about an area about 208 ft x 520 ft – lfp]

Even those figures are rather idealistic. We are assuming that people will follow a largely vegetarian diet; if not, they will need even more land. We also need to allow for fallow land, cover crops, and green manure, for inevitable inequities in distribution, and for other uses of the land. On a global scale a far more realistic ratio would be 2 people to each 2.5 acres of arable land. [Or about 1 person/1.25 acre just for food]

The average American house lot is about 900 square yards, i.e. less than a tenth of a hectare, including the land the house is sitting on. Those who expect to get by with “victory gardens” are unaware of the arithmetic involved.

In the entire world there are 15,749,300 square yards of arable land. This is 11 percent of the world’s total land area. The present world population is about 6,900,000,000. Dividing the figure for population by that for arable land, we see that there are 438 people per km2 of arable land. On a smaller scale that means about 4 people per hectare. Less than a third of the world’s 200-odd countries are actually within that ratio.
In other words, there are already too many people to be supported by non-mechanized agriculture. [Currently, with fossil fuels, fertilizer and mechanized farming, there are globally, 4 people receiving food from each hectare arable land. Without fossil fuel inputs, ie no gas/oil, no fertilizer, and without modern farm mechanization, global arable land will only support 2 people/hectare – lfp]

The UK, for example, has a population-to-arable ratio of slightly more than 10 people per hectare (2.5 acres or 2.5 football fields]. What exactly is going to happen to the 8 people who will not fit onto the hectare? But many countries have far worse ratios.

The world’s population grew from about 1.6 billion in 1900, to about 2.5 in 1950, to about 6.1 billion in 2000 and in  Nov 2011 has become 7 billion. It has often been said that without fossil fuels the population must drop to about 2 or 3 billion. The above figures on arable land indicate that in terms of agriculture alone we would be able to accommodate only about half the present number of people.

Another calculation about future population can be made by looking more closely at Hubbert’s curve. The rapid increase in population over the last hundred years is not merely coincident with the rapid increase in oil production. It is the latter that has actually allowed the former: that is to say, oil has been the main source of energy within industrial society. It is only with abundant oil that a large population is possible. It was industrialization, improved agriculture, improved medicine, the expansion of humanity into the Americas, and so on, that first created the modern rise in population, but it was oil in particular that made it possible for human population to grow as fast as it has been doing. It is not only fossil fuels that form a bell curve: there is also a bell curve for human population.

Of course, this calculation of population on the basis of oil is largely the converse of the calculation on the basis of arable land, since in industrial society the amount of farm production is mainly a reflection of the amount of available oil.

If we look further into the future, we see an even smaller number for human population, still using previous ratios of oil to population as the basis for our figures. But the world a hundred years from now might not be a mirror image of the world of a hundred years in the past. The general depletion of resources could cause such damage to the structure of society that government, education, and intricate division of labor no longer exist. In a milieu of social chaos, what are the chances that the oil industry will be using extremely advanced technology to extract the last drops of oil? Even then we have not factored in war, epidemics, and other aspects of social breakdown. The figure of 1 to 3 billion may be wildly optimistic.

Looking Forward
A great deal of silliness goes on in the name of preparing for the future. Global collapse should not been seen in terms of middle-class country elegance. At present there are no “transition towns” that acquire food, clothing, or shelter without large quantities of fossil fuels somewhere in the background. The post-oil world will be much grimmer than most people imagine, and that is partly because they are not looking at the big picture. Hydrocarbons are the entire substructure of modern society. The usual concept of “transition towns” evades the sheer enormity of the problems.

Whatever a “transition” polity might be, it most certainly will not be a city or town. Those who are living at the end of all the bell curves will prosper only if they are far from anything resembling an urban or suburban area. It has always been possible for small rural communities to live close to the land, somewhat avoiding the use of fossil fuels, metals, and electricity, but modern large centers of population are founded on the premise of an abundance of all three. Urban areas, in fact, will be experiencing the worst of each form of depletion described above.

In view of the general unpopularity of family-planning policies, it can only be said euphemistically that nature will decide the outcome. Even if his words owe as much to observation of the stages of collapse as to divine inspiration, it is St. John’s ‘Four Horsemen’ of war, famine, plague, and death who will characterize the future of the industrial world. Nor can we expect people to be overly concerned about good manners: although there are too many variables for civil strife to be entirely predictable, if we look at accounts of large-scale disasters of the past, ranging from the financial to the meteorological, we can see that there is a point at which the looting and lynching begin. The survivors of industrial society will have to distance themselves from the carnage.

The need for a successful community to be far removed from urban areas is also a matter of access to the natural resources that will remain. With primitive technology, it takes a great deal of land to support human life. What may look like a long stretch of empty wilderness is certainly not empty to the people who are out there picking blueberries or catching fish. That emptiness is not a prerogative or luxury of the summer vacationer. It is an essential ratio of the human world to the non-human.

4.  Peak Oil Info and Strategies

Peak Oil Info and Strategies
The world is not running out of oil itself, but rather its ability to produce high-quality cheap and economically extractable oil on demand. After more than fifty years of research and analysis on the subject by the most widely respected & rational scientists, it is now clear that the rate at which world oil producers can extract oil is reaching the maximum level possible. This is what is meant by Peak Oil. With great effort and expenditure, the current level of oil production can possibly be maintained for a few more years, but beyond that oil production must begin a permanent & irreversible decline. The Stone Age did not end because of the lack of stones, and the Oil Age won’t end because of lack of oil. The issue is lack of further growth, followed by gradual, then steep decline. Dr King Hubbert correctly predicted peaking of USA oil production in the 1970’s on this basis.

We have taken our lifestyles and the cheap & abundant supply of oil all for granted. We expect the pumps will run to supply us with fuel to drive our SUV’s to run around town, work and school and we cannot accept an alternate future. But when oil becomes more scarce, it is very likely that these pumps will be the first to run dry, because they are at the end of the supply chain. But implications will be much worse than that.

It is not a question if but when the world economy will be confronted with a major shock that will stunt economic growth, increase inflation, and potentially destabilize the Middle East. It will make the Great Second Depression look like a dress rehearsal and may change the world as we know it today.

It is a coming crisis that few understand, but with far reaching implications. Nations will fight over the remaining oil. Without hydrocarbons, this planet can only produce enough food to sustain a population of 2.5 billion. The current world population is in excess of 7 billion and growing (UN projection: 7.3 billion by 2050). In the US, without industrial agriculture, it is estimated that only 2/3’s of the current population can be fed (D. Preiffer). Fossil fuels effectively temporarily raised the carrying capacity of the earth.
__A.  Peak Oil Imminent
While there is no agreement yet on the exact date that world oil production will peak, the degree of consensus among them is quite remarkable. Out of 21 studies, the statistical mean date is 2013 (excluding some of the biased oil company estimates), suggesting that the world may be facing shortfalls much sooner than expected.
Recently, CNN and Britain’s Independent also point out the reality of Peak Oil, acknowledging that world oil and gas reserves are as much as 80% less than predicted.

__B. The fallacy of Alternatives
The public, business leaders and politicians are all under the false assumption that oil depletion is a straightforward engineering problem of exactly the kind that technology and human ingenuity have so successfully solved before. Technology itself has become a kind of supernatural force, although in reality it is just the hardware and programming for running that fuel, and governed by the basic laws of physics and thermodynamics. Much of our existing technology simply won’t work without an abundant underlying fossil fuel base. In addition, physicist Jonathan Huebner has concluded in The History of Science and Technology that the rate of innovation in the US peaked in 1873, and the current rate of innovation is about the same as it was in 1600.
According to Huebner, by 2024 it will have slumped to the same level as it was in the Dark Ages. Hence, without sufficient innovation and a comfortable surplus of fossil fuels, we may simply lack the tools to move forward.

With this energy base dwindling, there is simply not enough time to replace a fluid so cheap, abundant and versatile. It is rich in energy, easy to use, store, and transport. Nothing has the bang for the buck of oil, and nothing can replace it in time – either separately or in combination. Wind, waves and other renewables are all pretty marginal and also take a lot of energy to construct and require a petroleum platform to work off.
•  Natural gas is a diminishing resource as well and cannot satisfy the growing demand for energy. US Gas supplies were so low in 2003 after a harsh winter that to preserve life and property supplies were close to being cut off to manufacturers, electric plants and lastly homes.
•  Ethanol has a net energy value of zero (not accounting for soil and water damage and other costs due to unsustainable agricultural practices) – it is subsidized as a boon to agribusiness and would have a negligible effect (Prindle, ACEEE).
•  Solar energy produces marginal net energy, but are still decades away at best from being a viable substitute given the recent rate of progress in efficiency and costs (averaging about five percent a year) and is nowhere ready to meet the world’s energy needs. More importantly, solar photovoltaic cells (PVC) are built from hydrocarbon feed stocks and therefore require excess resources. It is estimated that a global solar energy system would take a century to build and would consume a major portion of world iron production (Foreign Affairs, Rhodes).
•  The widespread belief that hydrogen is going to save the day is a good example of how delusional people have become. Hydrogen fuel cells are not an energy source at all, but are more properly termed a form of energy storage. Free hydrogen does not exist on this planet. It requires more energy to break a hydrogen bond than will ever be garnered from that free hydrogen. The current source of hydrogen is natural gas – that is, a hydrocarbon. In the envisioned system of solar PVC & hydrogen fuel cells, every major component of the system, from the PVC to the fuel cells themselves will require hydrocarbon energy and feedstocks. The oil age will never be replaced by a hydrogen fuel-cell economy.
•  Coal is abundant, but its net energy profile is poor compared to oil and its conversion process to synthetic fuels is very inefficient. Coal would have to be mined at much higher rates to replace declining oil field. In addition, coal production is extremely harmful to the environment. One large coal burning electric plant releases enough radioactive material in a year to build two atomic bombs, apart from emitting more greenhouse gases than any other fuels.  Coal is implicated in mercury pollution that causes 60.000 cases of brain damage in newborn children every year in the USA. Resorting to coal would be a very big step backwards and what we may face then may be more like the Dim Ages. More importantly,  coal is distributed very unevenly with the top three countries (China, USA, USSR) possessing almost 70% of total. Much of the current oil and gas supply is in low-population countries, such as Saudi Arabia, that cannot possibly use all of the production for themselves. They are hence quite willing, indeed eager, to sell it to other countries. When oil and gas are gone, and only coal remains, and the few (large-population) countries that possess it need all of it for their own populations, it will be
interesting to see how much is offered for sale to other countries.
•  Obtaining usable oil from tar sands requires huge amounts of energy, as it has to be mined and washed with super hot water. From an energy balance, it takes the equivalence of two barrels of oil to produce three, which is still positive but poor in terms of energy economics. In the early days of conventional oil, this ratio used to be one to thirty.
•  Nuclear power plants are simply too expensive and take ten years to build, relying on a fossil fuel platform for all stages of construction, maintenance, and extracting & processing nuclear fuels. Additionally, uranium is also a rare and finite source with its own production peak. Since 2006, the uranium price has already more than doubled.
•  Nuclear fusion is the kind of energy that the world needs. However, mastering it has been 25 years away for the past 50 years, and still is…

Fossil fuels allowed us to operate highly complex systems at gigantic scales. Renewables are simply incompatible in this context and the new fuels and technologies required would simply take a lot more time to develop than available and require access to abundant supplies of cheap fossil fuels, putting the industrial adventure out of business.

In a recent interview with The Times, Shell CEO Jeroen van der Veer calls for a “reality check” and warns that the world’s energy crisis cannot be solved by renewables. “Contrary to public perceptions, renewable energy is not the silver bullet that will soon solve all our problems. Just when energy demand is surging, many of the world’s conventional oilfields are going into decline. The world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and
placing too much faith in renewable sources of power”, according to van der Veer.

Nobody knows exactly what will happen. We have never seen a situation like this where the excesses have been so extreme. It is difficult to see how it will resolve itself. What is terrifying is that when you get excesses this bad you get results you can’t expect.

Highlights of what to expect:
•  Oil extraction from wells will be physically unable to meet global demand
•  Alternative energy sources will fall far short of compensating for expected shortages of oil. There is simply not enough time to convert over to them and all require an underlying fossil fuel platform.
•  Disruptions to transportation and the economy are expected as the global decline of petroleum begins.
•  Gradual, permanent cut-off of fuel for transport and for industrial machinery. Global trade will greatly
•  Food shortages; agrobusinesses would not be able to operate without the supporting fossil fuels
•  Resource scarcity; most products depend on fossil fuels
•  Reduction of virtually all business and government activity and very serious unemployment
•  Social unrest
•  Resource wars

Dr. Smalley, in the February 2005 issue of Discover magazine gave the following prognosis as a result of the energy shortage brought on by peak oil and the fact that the world cannot produce oil as fast as the world’s growing economies demand it: “There will be inflation as billions of people compete for insufficient resources. There will be famine. There will be terrorism and war.”

__C.  Rising Oil Prices
The inexorable tightening of supply is destabilizing oil markets, which now exhibit extreme price responses to the smallest of disturbances. Higher oil prices are hurting economies by increasing the cost of consumer goods while simultaneously reducing disposable income. Sharply rising oil prices have always preceded economic recession and plummeting stocks.

Analysts predict that market-based panic will drive prices skyward. And as supplies can no longer slack daily world demand, the market will become paralyzed at prices too high for the wheels of economy and even daily living in ‘advanced’ societies”. No region in the world would be able to rely on distant energy supplies and they would have to fall back on their own resources.

One economic aspect of oil is that its demand is very price inelastic in the short term, meaning that it would require a large price increase to cause a significant reduction in demand. Prices at the pumps in the USA have almost doubled in recent times, yet gas-guzzling Hummers and other SUV’s are still purchased like there is no tomorrow. Industry experts say massive effects on behavior will only happen if supplies are disrupted or prices hit $5-a-gallon.

Another complication is that in the more developed countries the services industry has replaced much of their traditional oil dependent industries. This is why I don’t believe that the oil prices will stop at $100 a barrel, like some financial experts predict. In the short term, they would probably have to increase in excess of 300% or so to have the desired effect. This uptrend would then eventually be (temporarily) interrupted by slowing economic growth and from efforts of conservation.

Rising energy prices would spur overall price increases, causing inflation. Energy costs will then become an increasingly bigger part of the economy, and the same % increase in oil prices that once had a negligible economic effect will suddenly be significant. At the same time, higher prices will cause a fall in demand and a stagnating economy. This is called ‘stagflation’ and is exactly what happened during the 1973 oil crisis.

Debt in many countries like the USA and the United Kingdom are at record levels, and strong economic growth then becomes essential. Falling home prices would threaten the foundations of those economies. Therefore, efforts to curb inflation by raising interest rates would hit house prices, which in a leveraged economy would cause a devastating downward spiral, pulling down businesses, consumers and banks. Policymakers will therefore be powerless to fight inflation that will then soon become widespread. Prices of food and manufactured goods will shoot up.

The world will first enter a recession followed by a very deep Depression that may well be greater than the 1930’s Great Depression. Stock markets may plunge, businesses will go bankrupt and huge job losses will follow. Eventually, economic growth will cease or continue only in a few places at the expense of other places. The economic stress among almost all nations, advanced and developing, rich and poor will be considerable and is certain to lead to increasingly desperate competition for diminishing supplies of oil. The world will become a larger place again with less and less globalism.

Resource Wars
Many countries have become heavily reliant on Middle Eastern oil, and the geopolitical stakes of conflicts in this region have risen to all-time highs.

Indeed, the worst case scenarios are terrifying: genocide on a scale never before seen, as control of the remaining oil divides along racial, ethnic and national boundaries. Even the best-case scenarios, all of which require unprecedented levels of international cooperation, political courage and public participation, offer grim life-and-death choices. (Richard Heinberg)

So far, only the United States have ventured into the Middle East. But what is to stop China from continuing into Iran, Iraq and even Saudi Arabia as China will be energy starved in the foreseeable future. A military contest over oil could eventually spread war from the Middle East to Southeast Asia, and it could leave the oil production infrastructure of many countries severely damaged in the process. Such a conflict may be the Third World War.

Some Latin American countries may find themselves combatants in their own oil wars. Australia and New Zealand may fall victim to desperate Chinese adventuring or to anarchy emanating from Southeast Asia.

Social Chaos & Dark Ages
The European fuel protests of 2000 were an excellent example of what will happen when we are deprived of our the fuel powering our artificial lives. The implications of just this minor shortage
caused by blockades of fuel depots was tremendous. Naturally, there were huge lines at petrol stations to refuel, but there was also panic buying at the shops. Some ran out of bread and milk. Postal collections were suspended on Sundays to conserve fuel. Farm animals were threatened with starvation because
the feed was unable to be delivered. Schools closed down and hospitals cancelled all but emergency operations. And all this from two and a half weeks. Similar events happened in the USA during the 1973 Oil Embargo.

The impending fuel crisis will be permanent though and the trucks will no longer pull into the Wal-Marts or supermarkets. The freighters bringing cheap and disposable household products from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence, and chaos. For only a short time will the police and military be able to maintain order, if at all.”

When worldwide oil production starts to decline considerably, countries will be competing aggressively for fossil fuels as  difficulties will start with even keeping electricity plants running.

The blackouts that hit the eastern USA and Canada in August 2003, and the lesser failure that hit London’s Underground system shortly afterwards shows the how totally dependent we are on electricity power and the dramatic effects that its absence causes.

Reduced food supplies will also comprise immune systems and set up refugee camps will lead to diseases. New strains of the age-old human enemies such as tuberculosis, malaria, cholera and others will be on hand while vaccines will be ineffective and out of reach.

It may come as a surprise to many that the world’s industrial food supply system is one of the biggest consumers of fossil fuels. Vast amounts of oil and gas are used as raw materials and energy in the manufacture of fertilizers, herbicides and pesticides and as cheap and readily available energy at all stages of food production. Fossil fuels are also essential in the construction and the repair of equipment and infrastructure needed to facilitate this industry, including farm machinery, processing facilities, storage, ships, trucks and roads. Just consider that currently agriculture accounts for 17% of the US annual energy budget.

Industrial, ‘green revolution’-style agriculture is particularly energy intensive. Every calorie of food produced today requires between 10-16 calories of hydrocarbon energy (from planting, irrigation, feeding and harvesting, through to processing, distribution and packaging). This style of agriculture increased world grain production by 250%, and was almost entirely attributable to fossil fuel input.

Food  production will become a problem of extreme urgency
Modern agriculture is merely a way of converting petroleum into food. Without energy, food supplies decrease and the current world population of 7 billion has no hope whatsoever of sustaining itself at current levels.

It has been estimated that, without hydrocarbons to provide energy, fertilizers and pesticides, agriculture could not support a population greater than two billion. This reduction would take us back to pre-20th century levels but the disruption to society and its infrastructure would probably mean a reversion to pre-industrial revolution.

The example of North Korea shows us what happens to agriculture when oil products are removed. After the Korean war, it had developed a modern farming system depending on machinery and oil-based fertilizers. After the Soviet Union fell, Communist aid to the country stopped and they were unable to purchase oil and supplies. Without oil, farm machinery was sitting idle and large proportions of the people had to return to the agriculture. Unfortunately the soil had been drained of nutrients over the
years and, without fertilizers, it was unable to produce the same output as before. Crop yields fell by 60% over the period 1989-1998. US congressmen and others who have visited North Korea tell stories of people eating grass and bark. Other reports talk of soldiers who are nothing more than skin and bones.
Throughout the country, there is starvation to rival the worst found in Africa.
 Chronic malnutrition has reached the point where many of the effects are irreversible. Unless it can get access to oil and fertilizers again, the population will decline until it reaches a sustainable level and civilization will be faced with the delicate task of determining who survives. The history of North-Korea (DPRK) demonstrates how an energy crisis in an industrialized nation can lead to complete systemic breakdown.

Mitigation Strategies?
Peak Oil represents a unique challenge and unlike 1973, peaking won’t be brief but permanent. The inescapable conclusion is that the scale and complexity of the problems that must be resolved to avert a permanent crisis are enormous and almost inconceivable. More than a decade will be required, under the most favorable circumstances, for the collective contributions of substitutes to produce meaningful results. Understanding Net Energy is crucial. Optimists may argue that technology, the market, brilliant scientists, and comprehensive government programs are going to hold things together. However, with an acute lack of awareness, time, knowledge, capital, energy, political will, and international collaboration, it is difficult to see how business can continue as usual. This is a startling conclusion, but it would be the most logical and likely outcome of a process that has been building for decades. Addictions are hard to shake…
You cannot solve this world’s problems with the same thinking that created them,” Albert Einstein

“You must not only be able to survive the crash, but continue afterward”
“… it’s easier to put off dealing with problems that seem just too complicated and unpleasant to fix now (because of human nature).”

September 27, 2010, Fortune.., by Becky Quick
The experts and politicians have no plan B to fall back on. On a global scale Peak Oil is a problem without a solution. No amount of savings will help us if there is no more oil to purchase. We need to
start planning for alternative sources of energy now. If we wait until we are given no other option, it could be chaos.

It is extremely difficult to gather and process the enormous amount of information available and figure out what to do about it. Is it not a problem with an immediate solution or as some say, a condition without a remedy. You must not only be able to survive the crash, but continue afterward.

We must shortly choose a new path, or one will be forced upon us.

In the short time available, attempts to make collective changes are most likely to fail. Energy expert Simmons says that once energy peaks, the shock will be greater than anyone could imagine, while there is no solution to the problem other than to pray.

However, on the level of the individual/family there is much that can be done at relatively low cost to not only prepare for an economic crash, but to leapfrog past it to a post oil paradigm. While the present infrastructure continues to function you still have vast resources disposable that are only a click away.  Once a crisis begins, it may be too late.

There is probably no cluster of solutions which do not involve some major changes in lifestyles, especially for the global affluent. Peak Oil presents the potential for quite catastrophic upheavals, but also some more hopeful possibilities, a chance to address many underlying societal problems, and the opportunity return to simpler, healthier and more community oriented lifestyles.

Hope for the best, Prepare for the worst, and Accept whatever comes.
The majority of the preparation (perhaps as much as 2/3) is mental  preparation. Acceptance of a new future is crucial and knowledge about Peak Oil will give you a new perspective on life and the future and will serve as an excellent guidance when making important decisions in areas such as careers, real estate and retirement, even absent a well defined ‘plan B’.
•  Protection of your wealth is a crucial step, and having many of your assets hedged against inflation, in my opinion, is never going to hurt you, even if a peak oil crisis fails to materialize in the short or medium term future. Purchasing power will most likely have a positive impact on survival chances during a crisis.
•  If you think the crisis is going to be severe, if you can afford it, it would be a good idea to plan some sort of safe haven, at least 200 miles or so from any major city / metropolitan area.

I am fairly pessimistic about the feasibility (especially long-term) of isolated retreats. It is going to involved extensive, informed planning tailored to the precise needs of the people who will use it. The problems that you must resolve in making such an arrangement viable are enormous and most likely unachievable. Land ownership laws may become meaningless in a post-oil world.
•  It is useless to be well prepared if you are in the wrong place to start with. Some countries around the globe will without doubt suffer much more than others as a result of a Peak Oil crisis. The odds of eventually being discovered are not negligible and will go up as a function of general population density. And then, once you have been discovered, the chances of you becoming a target of jealous & needy thieves, mobs or organized gangs much depend on how relatively well-off a country is as a whole during a global crisis. As an example there is the story about a village in India during a famine. After a while, the starving villagers noticed that some villagers did not seem to be as starving as the rest of them. The end result was that the well off who had stored food were killed and the food stolen. [Killed by the ‘Zombies’- Mr Larry] You may be better off ill-prepared, but in the right place than vice-versa. There are going to be some countries that may remain relatively immune, based on their geographic position and potential degree of self-sufficiency, where ambient chances of survival are relatively higher. This is why the focus of my research & planning is on individual countries.
•  When considering strategic relocation and you want to also take into account climate change, an excellent and very recent source of information on average predicted temperature changes is the BBC site that ran an experiment involving millions of computers from around the world. In its conclusions, countries like New Zealand will be relatively unaffected, while other areas like Asia and Central America will be greatly affected.
•  You can never be sure what will happen, and it is extremely difficult to cross that mental barrier to jump into action. Any life impacting decision you make, you must be able to live with until the crisis unfolds, even if this is still a decade away.

__D.  History As A Guide To Survival….
For a year, five experts ditched theory for practice, running a Welsh farm using 17th Century methods. What lessons for modern living did they learn? The BBC series Tales from the Green Valley follows historians and archaeologists as they recreate farm life from the age of the Stuarts. They wear the clothes, eat the food and use the tools, skills and technology of the 1620s.

It was a time when daily life was a hard grind, intimately connected with the physical environment where routines were dictated by the weather and the seasons. A far cry from today’s experience of the countryside, which for many involves a bracing walk ahead of a pub lunch.

While few would choose to live a 17th Century lifestyle, the participants found they picked up some valuable tips for modern life.
•  Know thy neighbor’s. Today it’s possible to live alone, without knowing anyone within a 20-mile radius (the same goes for townies). That was simply not possible in the past – not only did the neighbors provide social contact, people shared labor, specialist skills and produce. “And women were judged on good neighborliness,” says historian Ruth Goodman. “If you were willing to help others – particularly during and after childbirth – then others would be more prepared to help you in times of need.”
•  Share the load. It was nigh on impossible to run a 1620s farm single-handedly, and the family – either blood relatives, or a farmer, his wife and hired help – had to be multi-skilled. Labor, too, was
often divided along gender lines, but at busy periods, such as harvest time, it was all hands on deck.
•  Fewer creature comforts have some benefits. No electricity meant once daylight faded, work stopped in favor of conversation, music-making and knitting. And no carpets meant fewer dust mites,
which are linked to asthma and allergies. “They scattered herbs on the floor which released scent when trodden on – this drove out flies and other insects,” says Ms Goodman.
•  Eat seasonally. Today it’s because of “food miles” and the inferior quality of forced products. In the 1620s, it was because foods were only available at certain times of year – and not just fruit and veg. Mutton, for instance, was in abundance in spring, soon after shearing time. This was because a sheep’s wool quality plunges after eight years – thus animals of that age were killed after their final fleece was
•  Tasty food comes in small batches. Today farmers’ markets are a tourist attraction and many delight in regional specialties. For these producers play to the strengths of their ingredients, unlike, for instance, the makers of mass-produced cheese. This has to taste the same year-round, despite seasonal variations in milk quality. “So high-quality milk in the spring is downgraded so the finished product is consistent throughout the year,” says Ms Goodman.
•  Reuse and recycle. Today we throw away vast mountains of packaging, food, garden waste and other materials. In 1620s, there was a use for everything, with tattered bed linens made into fire-lighters and animal fat into soap. Even human waste had uses. Faeces was a fertiliser, and urine was stored to make ammonia to remove laundry stains.
•  Dress for practicalities. Today fashion and social convention dictate our wardrobes. While polar fleeces and high-performance tramping boots may be all the rage when going rural, the wardrobe of 400 years ago proved more comfortable. “While the crew shivered in their modern garb, we never felt the cold in just two layers – a linen shirt and woolen doublet,” says archaeologist Alex Langlands.
Breeches meant no wet and muddy trouser legs, and staying covered up – rather than stripping off in the heat – prevented bites, stings, sunburn and scratches.
•  Corsets, not bras. “By that I don’t mean Victorian corseting,” says Ms Goodman. “Corsets support your back as well as your chest, and don’t leave red welts on your skin like bra elastic does. They made it hard to breath walking up hills, but I get short of breath doing that anyway. And most people feel sexy in a corset.”
•  Biodiversity protects against unforeseen calamity. While the developed world no longer counts the cost of crop failure in starvation and mass migration – the result of Ireland’s Great Potato Famine in 1845 – the 2001 foot-and-mouth crisis decimated farms up and down the country as animals, the farmers’ livelihoods, were put to death. The 1620s farm had grains, fruit and vegetables, and a range of animals – if one failed, alternatives were available.
•  Reliance on any one thing leaves you vulnerable. Hence the country ground to a halt during the petrol blockades of 2000, and a shortage of coal during 1978-9’s Winter of Discontent caused electricity shortages. On the 1620s farm, when oxen used to plough fields fell ill, the implements were reshaped and horses did the job instead.
•  No pesticides means a richer variety of birds, butterflies and other insects, many of which feast on pests – a result as desirable for the gardener as the farmer. And the hedgerow and fields of wild flowers of the past are today making a comeback, as these provide habitats for these creatures and allow edible plants to flourish.


5.  Urban vs. Rural Sustainability

Urban vs. Rural Sustainability
Published Dec 25 2004 by Permaculture  Activist
by Toby Hemenway
“Over ten years ago my wife and I moved to the country. One of our many reasons for leaving the city was to finally pursue the dream of self-reliance: to create a permaculture homestead that would trim our resource use and let us tap in more fully to nature’s abundance. And in the back of my mind was the quietly nibbling worry that someday the overconsumption party would end—the oil would run out, and things might get ugly. I wanted to be settled where we could be less dependent on the fossil fuel umbilicus when the cord finally snapped.

We went a good way toward making that dream come true. The red clay of our former clearcut turned, in places, to chocolate loam, though I noticed that even as our trees matured I still seemed to be needing more wood chips from the electric company or manure from a stable two miles away. From the garden flowed a steady procession of fruit and vegetables, but I confess I tried to ignore how much well-water we were pumping once our rain catchment ran dry partway through Southern Oregon’s four-month dry season.

We became involved in the local community: Master Gardeners, an environmental group, town meetings. Although we were busy in regional life in the beginning, eventually I found I preferred to drive the hour to see friends in progressive-minded Eugene than fight the pro-logging consciousness that permeated our county. Over the years my few local friends fell away as I became more drawn to the mind-set of those in Eugene, and as the local economics made it necessary for me to be away for weeks to teach and do design work. We were on good speaking terms with all our neighbors, but never found much common ground with them. Local parties began with watery beer and often ended in drunken fights, and neither was to our taste.

Slowly a mild paranoia set in. I started to wonder whether, if the Big Crash came, I was really in the right place. We had the best garden for miles around, and everyone knew it. If law broke down, wasn’t there more than a chance that my next door neighbor, a gun-selling meth dealer and felon, might just shoot me for all that food? How about the right-wing fundamentalists past him, who shot Stellar’s jays for fun and clear cut their land when they suspected spotted owls lived there? Or the two feuding families beyond them—one had fired a pistol during an argument, and neither would give way when their cars met on the road. I began to sense the outlines of a pattern that replicated one in society at large. We have the technical means to feed, clothe, and house all humanity. But legions starve because we have not learned to tolerate and support one another. People’s real problems are not technical, they are social and political. Down in Douglas County, I’d solved most of the technical problems for our own personal survival, but the social hurdles to true security were staring me in the face.

Our isolation also meant we were burning a lot of gas. A simple drive for groceries was a 40-minute round trip. Fortunately we both worked at home and had no children, so we could go for days without using the car. But the odometer was whirling to higher numbers than it ever had in the city. A couple of families had moved off our hill because they were exhausted by two to four round trips each day down our steep, potholed gravel road to work, school, soccer practice, music lessons, and shopping.

We cherished our decade-plus in the country, but eventually the realities began to pile up. There wasn’t a local market for the work we did. Community events left us saddened by the gulf between our way of life and theirs. And we were still tethered to the fossil-fuel beast, just by a much longer lifeline of wire, pipe, and pavement. That the beast looked smaller by being farther away no longer fooled us.

There was a positive side, too. We had achieved what we’d set out to do: to make sense of our lives, find the work we loved, and grow into ourselves. The portents now spoke clearly. It was time to return to where the people were, and to be in the thick of things once more.

So we have moved to Portland, and into the heart of town. We love it. The first of many good omens was the bio-diesel Mercedes across the street sporting a Kucinich sticker. And it’s a pleasure to be within walking distance of a bookstore, good coffee, and Ben and Jerry’s.

During the first few days in the city I would stand on the back porch, eyeing our yard with permaculture dreams in my head. The sole tree is a sprawling European prune plum. Other than that, the yard is a blank slate, dominated by a brick patio, a lawn, and an old dog run. And it’s small. I wondered how I would I fit all my favorite fruit trees in that tiny space.

The answer soon came. The plum tree straddles the fence we share with our neighbor Johnny, who has lived next door for 55 years. One day, on opposite sides of the fence, Johnny and I were gathering a small fraction of the branch-bending loads of plums when he called out, “Do you like figs?” I said I did, and soon a tub of black mission figs wobbled over the fence toward me.

We kept returning the basin to Johnny, but it found its way back almost immediately, full of figs. “You weren’t here in time for the apricots I’ve got,” Johnny told us, “But next year you’ll get your fill of them.”

As the buckets of plums began to fill up the yard, I tried to unload some on Theressa across the street. “Oh, no,” she said, “I’ve got my own tree. But when the Granny Smith’s come on, you’d better help me with them. And next year’s peaches will knock you out.”

When I met our neighbor Will, he begged me to take some of the pears that were plopping onto his yard. The American chestnuts up the street are bearing heavily, although the Asian community is all over them each morning before I wake up. I’ve cracked a few of the local walnuts, and they’re pretty good. And yesterday I discovered a nearby strawberry tree dotted with creamy mild fruit.

This informal assessment of local resources has revised my mental landscape design. I don’t need to grow all my favorite trees, only the ones that my neighbors lack (I’m thinking Asian pears, persimmons, and some early and storage apples). My neighbor’s yards are my Zones Two and Three. [Ed’s note: a common feature of permaculture design is the zoning of a property up into areas, numbered one through to five or so, relating to proximity to the house and levels of required maintainence. -AF ] Plus, Stacey and Troy on the next block have persuaded the owner of a vacant lot to let eight families create a community garden on the site. A local tree service will soon be dumping chips there for sheet mulch, and next year we’ll be awash in food.

The Big Rural Footprint
I had always assumed that cities would be the worst place to be in bad times. I’m revising my opinion. Granted, Portland is an exceptional city. (Shhhh! Don’t tell anyone!) But I can’t help comparing this neighborhood to our old one. There, we were twelve families on two miles of road, driveways hundreds of feet long, all served by long runs of phone and electric wire, individual septic systems and wells, each commuting long distances. And with political and social views so divergent that feuds, gossip, and awkward conversations about safe topics were the norm.

In the city, an equal group of twelve families use 10% of the road, wire, and pipe needed in my old neighborhood. Many neighbors bus or bike to work, or at worst, drive single-digit mileages. And our social and political views are close enough that I am fairly confident we can work in mutual support if times get tough.

This is not the place to go deeply into the question of whether cities are more sustainable than contemporary American country life, but at each point where I delve into the issues, I find suggestions that urbanites have a smaller ecological footprint per capita.

Over the last two decades, millions of people have moved out of cities. Many of them are people of modest means, driven out by the high costs of urban life. Unfortunately, they have brought their city ways with them. Our neighbors in the country all clear cut their land and planted acres of grass. Many built enormous houses, since low interest rates made more square footage affordable. Some put up
glaring streetlights in their front yards. They bought boats, ATVs, RVs, and other gas-guzzling toys. Unlike earlier self-reliant country folk, these are simply city people with really big yards. And there are millions of them.

Sociologists Jane Jacobs and Lewis Mumford have each noted that during the Depression and other hard times, urban residents have generally fared better than ruralites. The causes mainly boil down to market forces and simple physics. Since most of the population lives in or near cities, when goods are scarce the greater demand, density, and economic power in the cities directs resources to them. Shipping hubs are mostly in cities, so trucks are emptied before they get out of town.

In the Depression, farmers initially had the advantage of being able to feed themselves. But they soon ran out of other supplies: coal to run forges to fix machinery, fertilizer, medicine, clothing, and almost every other non-food item. Without those, they couldn’t grow food. Farmers who could still do business with cities survived. Those too remote or obstinate blew away with the Kansas dust.

Survival Skills
Today the situation for farmers has worsened. Few farmers grow their own food. Agribusiness has made them utterly dependent on chemicals and other shipped-in products. The main lack of cities compared to farms is food-growing, but farms lack nearly everything else—and most of that comes from cities. Setting aside for the moment the all-important issue of social and political cohesion, for cities to survive a peak-oil crash, the critical necessity is for them to learn to grow food. For country people to survive, inhabitants will need to provide nearly every single other essential good for themselves. And since many country people are simply transplanted urbanites lacking gardening or other land skills, but having the isolation that makes social cohesion unnecessary to learn (for now), their survival is even more doubtful. If catastrophe comes, the cities may be unpleasant, but I fear the countryside may be far worse off.

One important tenet of permaculture is to design for disaster. While giving a talk on the wildfire that destroyed his cabin at the Lama Foundation, Santa Fe designer Ben Haggard was asked what his biggest lesson was. “Plan for disaster,” he said. “Whatever is the likely catastrophe at your site, count on
it happening. Because sooner or later, it will.”

A technique displayed in good design that also happens to be a way to deter disaster is to meet destructive forces with mechanisms or attitudes that transform them into productive, or at worst, harmless energies. When this machinery of transformation is missing, even seemingly mild events wreak havoc. A gentle rain falling on bare ground will quickly sluice away topsoil and wash downhill in gullies. If instead plants carpet that same patch of earth, the rain becomes not an erosive force, but life-giving moisture whose energy is damped and welcomed by the vegetation. Instead of gullying, the water is held by the plants, stored over a longer time for them and for the animals that feed on or live among the vegetation. This is one of nature’s secrets: knowing how to create structures and systems that convert gales to refreshing breezes, change baking sun into sugars and living tissue.

What nature doesn’t do, and humans attempt so often, is to treat large forces as enemies to be vanquished and destroyed. This summer, as hurricanes repeatedly battered the Caribbean, ridiculous proposals appeared in letters-to-the-editor columns: Let’s build giant fans on the Florida coast
to blow away the storms. Pour oil over the Atlantic to smooth out the waves. And (inevitably), why can’t we toss a few nukes into those pesky hurricanes? (Whether it’s replacing the Panama canal or toppling Saddam, someone always seems to propose atomic bombs.)

Sector Acceptance
The conceptual tool offered by permaculture in these cases is to view large forces as sector energies: influences from off the site that are beyond the control of the designer. We deal with sector energies by designing systems or placing elements to deflect, absorb, or harvest these forces, or allow them to pass unhindered. This is nature’s way as well, and how she does it offers, as usual, some profound lessons.

As ecosystems mature, biomass and complexity increase. Ecologist Ramon Margalef, in his landmark 1963 paper, “On Certain Unifying Principles in Ecology” (American Naturalist 97:357-374), suggests we think of biomass as “a keeper of organization, something that is proportional to the influence that an   actual ecosystem can exert on future events.” In other words, we can think of biomass, complexity, and the other indicators of maturity as measures not only of the resilience of a system, but as a form of wisdom. That’s because as ecosystems mature, the aftermath of environmental tumult such as storm or
drought depends more on the richness of the ecosystem than on the nature of the disturbance. A drought that withers a weed lot doesn’t faze an old-growth forest—the forest has learned what to do with drought. It has grown structures, cycles, and patterns that convert nearly any outside influence into more  forest, and that protect key cycles during bad times. It has become wise.

Nature uses two principal tools to achieve this  protection from catastrophe.

1)  The first is diversity in space—in size, shape, physical pattern, and composition. If all the pieces of a system are at the same physical scale—all the same size, or the same genetic makeup, for example—a disturbance occurring at that scale will wipe out the whole system. Diversity in scale brings protection. When a hurricane hits a trailer park, the trailers blow away, but the bacteria, mice, and other elements of very different size escape damage. A plague of cats, on the other hand, strikes at the scale of the mice, leaving the trailers and bacteria unscathed. Mature ecosystems have enough diversity in space that any catastrophe may knock out the pieces living at that particular scale but will almost never destroy the whole landscape.

2)  The second protective tool of mature ecosystems is diversity in time—in rate, frequency, and schedule. Understory shrubs often leaf out earlier in spring than canopy trees, which lets the shrubs grab enough light to build plenty of leaves. Then when the trees grow leaves, the shrubs have the photosynthetic area to gather ample light in the dappled shade. Another classic example of diversity in time is the hatching cycle of locusts. Timed to emerge at intervals of years having prime numbers such as 13 and 17, they frustrate the predators whose more regular breeding period requires their food to arrive  more predictably.

Permaculture designers use similar approaches to design for disaster. Instead of using concrete embankments and other brute-force tactics to resist flood, we place fences that can lie down, reed-like as rushing waters advance and then can be easily set up afterward. Rather than gouging enormous barren firebreaks into their hillside, Lama Foundation stacks roads, swales, and plantings together in
a multiply functioning firebreak. When monsoon downpours arrive in Tucson, instead of standing by as flooding street runoff pours down sewers, Brad Lancaster harvests the water with cleverly placed curb cuts that lead to mulched food-tree basins. All these examples are detailed in Permaculture Activist #54 (November, 2004).

By observing nature’s wisdom, permaculturists follow nature’s lead and use patterning, succession, edge, and cyclic opportunities to convert large pulses of energy into smooth generators of structure, harvest, and nutrient flow. Permaculture design inquires into the nature of some of these “large pulses” and shows how they can teach us to use their energy, aikido-like, to benefit ourselves and the larger ecosystem.”

6.   Cities, peak oil, and sustainability

Cities, peak oil, and sustainability
Energy Bulletin, Published Dec 25 2004, by Permaculture Activist by Toby Hemenway
In  mid-August I drove to a party in the country outside of Portland, Oregon. Twenty miles of freeway took me to a two-lane road that wound ten miles up steep forested hills and down through remote valleys. As the roads grew narrower and less traveled, I began to wonder how, if gas hits $5 or $10 a
gallon, people and supplies will reach these isolated spots. What kind of post-oil vehicle will climb this hilly, winding road that quite literally goes nowhere—a converted truck run on home-made biodigested methane? Then, after I arrived at the secluded acreage, I questioned whether my hosts could really supply most of their own needs, just the two of them and their kids.

I think these isolated places will disappear the way that Roman outposts in Britain and Gaul did during the empire’s decline.

In a recent issue of this magazine (Permaculture Activist 54 p. 2, “Designing Beyond Disaster”) I wrote that when I moved to the country 11 years ago, I assumed that rural people use fewer resources than urbanites, but now that I’m back in the city I can see that isn’t true. That article [“Urban vs. Rural Sustainability.”-immediately above this article-lfp] has generated more response than any other I’ve written, and has been reprinted around the Web many times, often with some furious comments. Obviously, a lot of people are thinking about the same topics. I’d like to re-visit the subject, respond to some of the commentary, elaborate on my reasoning, and describe some new thoughts on the subject.

First, a clarification on word usage. When I speak of rural, I generally mean places where people live on acreage outside of towns, with most services too far to walk to. Small towns decreasingly can be called rural, as their takeover by chain stores, engulfment by sprawl, and reliance on non-local goods renders many indistinguishable from suburbs.

•  I’m not a believer in the Peak Oil “end of the world” scenario, where decreasing oil production somehow mutates into the sudden, permanent shutoff of urban water supplies, and contented suburbanites are transformed overnight into looting gangs. Yes, fossil fuels surely will become much more expensive in the next decades, and scarce soon after. I don’t doubt that several tipping points will be broached along the way, with rapid and unexpected changes cascading through society. But civilization won’t end. People have repeatedly predicted the apocalypse: in millennial 1000, again in 1666 (the number of the beast), and many times between and since. Is our memory so short that we have forgotten the foolishness around Y2k? Or are we so wedded to the delicious notion of our annihilation that we grasp at any possibility? Why do we hunger so for our own extinction?

•  Neither the mega-cities nor the survivalist’s bunker will be viable in a post-oil future. The places with the best chance of surviving an oil peak will be cities of less than a million people, ranging down to well-placed smaller cities and towns. Cities of a million or so existed before fossil fuels—ancient Rome proper held roughly a million people—thus they are clearly possible in a limited-oil era.

Scale works to the advantage of sensibly sized cities. For example, Portland’s 500,000 people are served by two sewage treatment plants that use about 2000 miles of pipe to reach every home. Building this cost in the low hundreds of millions of dollars (exact figures don’t exist). Compare this to the sewage system for 500,000 rural people. That’s roughly 125,000 septic tanks, each with 300 or more feet of drain-field pipe, plus trenching and drain rock for all. A septic system costs about $10,000 to build, so the cost of 125,000 of them is $1.25 billion, several times that of the urban system, and the ruralites need 7000 miles of pipe compared to Portland’s 2000 miles. Of course, composting toilets and graywater systems would obviate the need for both of those unsustainable, resource-intensive methods of waste treatment, but I’m talking about what exists right now. Virtually any service system—electricity, fuel, food—follows the same brutal mathematics of scale. A dispersed population requires more resources to serve it—and to connect it together—than a concentrated one. That fact cannot be gotten around.

•  One of the most common responses to the Peak Oil panic is, “We’re planning on moving to the country with our friends and producing everything we need.” Let me burst that bubble: Back-to-the-landers have been pursuing this dream for 40 years now, and I don’t know of a single homesteader or community that has achieved it. Even the Amish shop in town. When I moved to the country, I became rapidly disabused of the idea of growing even half my own food. I like doing one or two other things during my day. During my life…” [Having ‘been there and done that’ myself, with 27 years experience on 29 acres of rural MN acreage, I agree. Mr. Larry]

7.  Surviving Peak Oil, The Economic Meltdown and A Possible New Great Depression.

Surviving Peak Oil, The Economic Meltdown and A Possible New Great Depression: Hypothetical Scenarios and Crazy Ideas For a Crazy New World.
The following survival strategies are for the possibility a post peak oil  world that is truly in chaos. No one knows if we will see such a scenario come to pass and I hope that they won’t.  As a self described “survivalist” and a Red Cross Volunteer who has spent time at the epicenter of category 5 hurricanes,  I have firsthand knowledge of what you need to stay alive. You need: 1) clean water, 2) food, 3) shelter, 4) medicines and 5) communications, basically in that order and last but not least, 6) a good plan.

If you are one of the lucky ones and can afford to keep your home during the current financial crisis or an even worse one that could happen, what kind of neighborhood will your home be located in? Already, in the early stages of the mortgage meltdown some of our suburbs are turning into suburban slums as the homeless and criminals occupy foreclosed homes and mosquitoes breed in abandoned swimming pools. There are nearly 12 million U.S. homeowners who owe more on their homes than those homes are worth and many people are walking away, bad credit be damned because they can now rent for a fraction of what they were paying the bank.  For those who choose to hang on to their homes it will be a challenge to keep that home safe as the crime rate increases.

 Strategy # 1: Standing Your Ground In The City
If you are able to hold onto your home and can find work in the area where you live then your home will become your fortress against the increasingly dangerous urban world around you. Residents of “bad neighborhoods” such as parts of East Los Angeles already have experience in protecting their castles against invaders. But for those of us accustomed to living in “nice” neighborhoods the learning curve will be steep.

a) You can start by spending some of the money you might have left on security bars for your windows, shotgun, and a fence for your yard. By this time property associations will be bankrupt and won’t be able to enforce rules so make your fence as high as possible. You’ll be building the fence to keep thieves out and a dog in. Dog food is an added expense but a good watchdog can be worth their weight in gold.
b) See the book, The Secure Home for more ideas on how to protect your property.
c) You’ll need a backup source of power since the power grid will become increasingly unreliable  and power may only be available for certain hours of the day. A tri fuel generator that runs on natural gas, propane and gasoline is a good choice. So is a diesel generator since you can store barrels of diesel more safely than gasoline. Ideally a large propane tank, in an area away from thieves, is the best way to go. You can run a tri-fuel generator several days straight on a 150 gallon propane tank. You will need at least 5000 watts of power to run your appliances.
d) A more lasting solution is to invest in a solar power system of at least 500 watts for battery charging and to power an inverter to run small appliances. If you can afford a larger backup solar power system of at least 3KW, with multiple deep cycle batteries now is the time to buy one before prices skyrocket. An Air Marine wind generator can provide additional power when the sun is not shining.
e) A wood stove can burn waste wood and lumber  to keep your home warm in winter. Choose one that has a cooking surface. You will need  a flue cleaning kit to clean your smokestack regularly when burning anything other than clean firewood.
f) For water you can divert your gutters into a 1000 gallon or larger fiberglass tank and use a solar panel and RV type demand pump to pressure up your plumbing if city water is interrupted. Broken water mains will be a frequent problem as cities go bankrupt and can’t afford to pay for repair crews.
g) If your yard is big enough you will want to replace much of your existing lawn with food producing
plants including fruit trees.
There are many varieties  of greens such as mustard, collard and kale that grow in marginal soil and shade. You can plant pinto beans, straight from the pantry to produce green beans in spring and summer. Choose hardy varieties of plants such as hybrid tomatoes that are resistant to blight and fungus.  Plant the eyes of russet potatoes in deep flower beds or stacked up tires filled with soil. You can kill pests with diluted dishwashing soap and by picking them off by hand. It is unlikely that you will be able to produce enough food on your own city lot to feed your family but your garden will fill in when other sources are scarce. You can also trade for different varieties of vegetables with your neighbors.
h) Since food supplies will be disrupted having a good supply of food on hand is a must. Buy canned
staples such as corned beef, evaporated milk, brown rice and beans and keep them in airtight containers such as Rubbermaid trash cans. Rust is the enemy of canned food so add dehydration packets which are available at boating supply stores. Keep a stock of dehydrated and freeze dried food for more long term storage. One good tasting brand is made by a company called Mountain House. Also keep a good supply of multivitamins to supply the nutrients you may be missing. Body-builder’s protein powder made from soy or whey also keeps well.
i) Skills like sewing will be needed again to mend items. Get a good quality sewing machine, a supply of thread and spare parts for it.
j) You’ll need a source of news and  it is unlikely you will be able to afford or even get cable at this point.  A simple solar powered radio may become your entertainment center. A small portable TV that operates on 12 volts can be operated from your solar battery bank.
k) You may not be able to afford medical care. Keep a good supply of  broad spectrum antibiotics such
 as Cipro and pain killers. You may want to consider stocking up on essential prescription medicines that you need but do so with caution and always store medicines in a cool dry place sealed in airtight containers.

Communications Gear For Survival
It is unlikely that you will be able to afford cell phone service in a severe depression if it is even available. Instead you can utilize long range handheld radios to keep in touch with  family around your neighborhood. There is a new type, that blows away the previous GRMS/FRS radios and gives about the same range. It is called  a 900MHz FHSS 2-Way Radio and it uses a new type of frequency hopping to provide up to a billion privacy codes so your transmissions are just between you and the other party.

High power SSB CB and ham radios can reach out for thirty miles under the right conditions and using “skip” or bouncing the signal off the atmosphere can talk around the world. Unlike some peak oil “doomers” I don’t see high tech going away in the near term.
There are enough garage inventors out there to scavenge and come up with all kinds of technology to fill in the gaps when the grid goes down as we have seen in third world countries.

In Thailand  entrepreneurs pedal around neighborhoods with solar powered Wi-Fi.  As in India, neighbors may also agree to set up and share a single secure wireless connection across several  city blocks with long range wi-fi antennas. Internet telephony services like Skype may replace traditional phones as land based networks become increasingly unreliable. There are now handheld phones that allow you to talk on the Skype network for free with any open WiFi connection in the world. Read more about how to set up a free internet connection with super long range WiFi antennas and boosters:

Someday you may have to decide to either hit the road or stand your ground.

Should you start buying guns? Should you start a neighborhood watch organization or patrol? Should you put in a garden for extra food or buy emergency rations? What about the infrastructure? Will power keep flowing down the lines with no money to fix our upgrade our electrical grid? Should you put in an auxiliary power supply such as solar panels or a generator? Maybe you should just pack up and hit the road.

Strategy #2: Going Mobile, Mad Max Style
For each of us our personal survival strategy may be different. For some it may mean leaving the home behind and taking to the road to find a less violent place to take shelter or an area where work can still be found. An RV, travel trailer or even a large tent  might become your new residence as they have become for so many evicted homeowners recently. For those who choose the mobile path traveling smart and light are essential.

You’ll want a good supply of freeze dried food or MRE’s, tools, a  multi – fuel generator for power and some communications gear such as a ham radio or CB in your vehicle for emergencies. You’ll also want a number of water storage containers and a pump system for filling from streams. You will need a good water purifier to deal with contaminated sources.   You will need a means of buying food so you will want a hiding place in your vehicle or RV for cash and small denominations of silver and gold coins in case the dollar becomes worthless.  A versatile gun that can also be used for hunting, such as a shotgun is a must . You’ll want a good supply of ammunition. Just remember to keep that gun in a safe place, both from thieves and your kids.

“Here’s your burger sir, that’ll be two twelve gauge shells and five 22 calibers please”. It is very possible that ammunition will become a currency itself so carry a large supply of the most commonly used sizes including 12 gauge shotgun shells and 22 caliber bullets.  The barter system may replace currency for most transactions. Items such as disposable razors, cigarettes and hand tools will be good for trading for gas and food. Sticking with a group of like minded people will be good insurance against trouble. This means finding safe RV parks and campgrounds where law and order still prevails. You’ll need good neighbors to watch your things while you leave to find work, if there is any.

For those without a car you’ll need a good frame backpack and everything you need to survive in miniature. Weight is your enemy so choose lightweight tents, sleeping bags, water purifiers and take along freeze dried food and MRE’s to live on. Carry your cash, silver and gold in a money belt or shoe hiding place. You’ll want to avoid crime ridden cities and find shelter and camping in safe campgrounds or on farms where you can find work. Setting up camp near a body of water has advantages for bathing and catching fish.  Since you may be crossing many jurisdictions carrying a pistol may not be wise. Consider large pepper spray – dye spray containers instead. You’ll need a lightweight crank or solar powered radio for news and if traveling with family a couple of GMRS radios to keep in touch with each other plus a solar battery charger. Consider a high power SSB CB radio for long range communication.

There are other options. A small sailboat is one of them. A self contained sailboat can provide shelter and mobility without the use of fuel. It can allow for movement to areas where there is work and safety along the vast Intercoastal Highway and navigable rivers as well as a way to leave the U.S. if necessary. There are many books that have been written about self-sufficient living aboard sailboats. In a post peak oil world sailboats may be one of the only affordable means of covering long distances. A fuel efficient motorcycle is another. The same packing strategy for backpacking applies to traveling by bike. Carry spare motorcycle parts, tire tubes, a good toolkit and extra gas.

Strategy #3: Rural Survival
If you are lucky enough to own your own farm you will be in the best position of all for survival in a post peak or post economic meltdown world. You will be able to produce not only enough food to supply yourself but also for trade. Since the supply chain will be disrupted and parts hard to find you will want to have spares of everything and the means to can and store your own food. Farmers will undoubtedly form closer alliances with other nearby farmers and cooperative groups  for tasks like  firefighting and crop harvesting. Home canning and self sufficiency skills as described in the aforementioned books apply both to urban dwellers and rural residents.   It will be essential for small farmers to re-learn the  ways and the wisdom of the old timers  before they pass on, such as growing crops without expensive chemical fertilizers.

Take The Middle Path, Be Prepared In The Early Stages Of The Crisis
I have met quite a few other individuals who call themselves “survivalists” in the hurricane ravaged areas where I have volunteered with the American Red Cross.  Although it is never a good idea to try to ride out a hurricane, the ones that made it had electricity, water, food and medicine plus communication gear such as CB or Ham Radio. Unlike the common image of survivalists as gun toting hoarders, these individuals often became excellent volunteers, helping their less prepared neighbors and beginning the rebuilding of their community.

A total economic meltdown caused either by peak oil or something else will bring out both the best and the worse in people. I’d like to think that most will choose to work to keep their community intact but those who are inclined to take advantage by looting and stealing instead of cooperating will do so.  I believe, cynically perhaps, that many of our citizens would react differently than they did in the Great Depression of the 1930’s because now many of us see having certain possessions and lifestyles as a right and therefore any means of getting them is justified.

I think that we would seem like a spoiled nation to those people of the 1930’s if they could have looked into the future and seen us now and the excessive energy wasting lifestyle that we take for granted. Once this is ripped away from us how will Americans react and who will they blame? Surely not ourselves. When the full blown crash comes there will be calls for more government bailouts or even wars to punish whoever caused us such hardship. Few will realize that it was living beyond our means and failing to have a plan of energy self sufficiency behind it all.

The current economic situation could go either way. There are many signs that point to it getting worse and all it will take is some type of unpredicted event to send the economy spiraling downward toward total collapse. The best thing to do right now is to prepare for the worst case scenario that could happen. Tailor your personal survival plan to either one of staying put or going mobile, based on your home ownership situation. You may want to prepare on both fronts, by having a ready pack of supplies in case you are forced to leave and at the same time preparing your home for a long term crisis.

Start by preparing your home to be a safe place when outside support systems fail. If you can afford to add things like solar backup power and rainwater collection now is the time to do it, not when it is too late. Invest in things that make your home more energy efficient and vehicles that use less fuel.  Stock up on freeze dried food and MRE’s now before they become unavailable or extremely expensive and have things like home medical kits and supplies already in place. In case paper money becomes worthless you should keep a savings of small denomination gold and silver coins in a good hiding place to buy food with.

Whether our nation turns a corner and is able to establish a renewable energy future and avoid a severe peak oil crash remains to be seen. Yet investing in home energy efficiency and more efficient vehicles is a win-win way of preparing. Having a stockpile of food and supplies is a cheap peace of mind insurance policy, regardless of how things turn out.
Ultimately it all comes down to preparedness and keeping one step ahead of the tide. Those who make fun of your survivalist ways will be the ones coming to you for help when the poop hits the fan.

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Filed under __2. Social Issues

Gettin’ by when supplies tighten

(Survival Manual/ 2. Social Issues/ Gettin’ by when supplies tighten)

A.  Report: Farmers Hoarding Food To Protect Against Currency Collapse
29 Apr 2013, SHTFPlan.com, by Mac Slavo
Pasted from: http://www.shtfplan.com/headline-news/report-farmers-hoarding-food-to-protect-against-currency-collapse_04292013

Which asset is more secure than money in the bank?
The answer is simple.
It’s the asset that will still have value when the money or the bank collapse.

All over the world, when people have been faced with the prospect of having their savings wiped out or confiscated they have turned to hard assets – physical goods they could hold in their possession and trade if necessary – as protection.

Argentina, a country that is no stranger to economic hard times and hyperinflation, gives us a prime example of what becomes money when the system collapses.

At an inflation rate of 25%, while their currency loses significant purchasing power, Argentines have made a mad rush into gold, silver, and other tangible goods that retain their barterable value.

Like many Greeks, who have headed to the countryside to grow their own food in the midst of complete economic destruction, farmers in Argentina are hoarding the one tangible investment they know will not lose value, no matter what their currency does.

With world food demand on the rise, growers in the Pampas grain belt are filling their silos with soy rather than converting their crops into pesos, a currency that hit a new all-time low in informal trade this week.

Considering Argentina’s high inflation, clocked at about 25 percent by private economists, “money in the bank” is not as secure as storing soybeans next to their fields, many say.
“We are going to hang onto our soy. One can see higher prices ahead,” said Jose Plazibat, a partner with the firm of Bandurria and Plazibat Brothers, which farms more than 3,000 hectares near the town of Chacabuco in Buenos Aires province.

With their currency in meltdown and food demand around the world rising, these farmers understand where real value comes from.
1.  Their food can’t be lost in the stock market.
2.  It’s intrinsic worth cannot be vaporized in a banking collapse.
3. And they do not need to wait for anyone to deliver it to them, as they hold it in their personal possession.

Hoarding commodities – not the paper receipts that represent your ownership, but the actual physical good – is a powerful diversification strategy, and one that is a natural response to times of uncertainty and government run amok:

Argentina is going through the classic stages of economic collapse.

The government seized all pensions. They are destroying everything that gives the people incentive to be a society that emerges from the cooperation of everyone.

When government turns against its own people, even as the USA is currently doing, you end up with deflation insofar as the economy collapses and wages are not available, while hoarding emerges as does barter.
……….source: Martin Armstrong

This strategy of buying commodities at lower prices today to consume at higher prices tomorrow can be implemented on a micro-economic personal scale in your own home. Doing so, especially with health and nutrition considerations, will not only provide you with long-term cost savings as global currencies continue to lose purchasing power, but insulate you against the possibility of a rush for food in the event of an emergency or widespread economic instability.

Whether you choose to stock your long-term food pantry by going to a grocery store, grow your own food in your traditional or aquaponics garden, learn to preserve it yourself, or prefer to do your own food storage packing, the key is to develop a plan and implement it now.

The US dollar isn’t getting any stronger over the next 10 years.
But the rice, beans, wheat, and pasta you stockpile will still have the same exact intrinsic value a decade from now as they do today.


B.  Bartering Supplies That You Haven’t Thought Of; And Some You Have!
29 Apr 2013, American Preppers Network, by Jalapeno Gal77
Pasted from: http://americanpreppersnetwork.com/2013/04/bartering-supplies-that-you-havent-thought-of-and-some-you-have.html
gettin by tradeWhen I think of bartering supplies my mind automatically goes to a SHTF scenario.  There are a lot of lists out there for such scenes, but ultimately what you choose to barter is up to you.  Many people stock things like silver, gold, cigarettes or alcohol or coffee.  While these can be great items, they are also expensive.

I will admit, stocking up on cigarettes, coffee and alcohol do go against my health and religious beliefs, but it doesn’t stop me from storing it.  I would much rather barter an item that I will never use or need, than to barter precious items I do need.  In the end, what you decide to spend money on is your choice.

 Below is a list of items I feel would make good barter items if, and only if, I have enough extra to get away with it:
Salt:  We store a LOT of salt.  It has multiple purposes and back in the day, people actually used salt as currency because it was considered such a high trade value and hard to find.  Salt can/was used to preserve food and it helps to eliminate the season availability of certain foods and allowed long distance travel.
• Toilet paper:  Take the cardboard out and put them in a large vacuum sealed bag storage bag.
• Kitty litter or dehydrated lime for sanitation or easy clean up of human waste in buckets.  Can you imagine what someone would trade for this?
• Matches/lighters
• Bleach
• Sugar
• Feminine supplies
• Flu/Cold Medicine
• Allergy Medicine
• Antibiotics/ Pain killers / fever reducer
• Bar Soap
• Seeds
• Toothpaste/toothbrushes
• First aid bandages
• Hydrogen peroxide (You could trade this by the cup or half cup.)
• We store small bottles of alcohol for trade.  We also have bigger bottles for refills if they want to bring it back for more.
• Coffee: We vacuum seal coffee in smaller portions with 1-2 coffee filters in each bag of coffee.  We also have 2 percolators to prepare the coffee if the person has no way to do so.
• Cigarettes: We do not store these but many people use them as barter items.
• Pipe Tobacco: Vacuum seal it to keep it fresh longer
• Spices
• Ramon Noodles: Very cheap and if someone is hungry then this would be good trade value.
• Beans: We stock the 15 bean soup because it comes with a spice packet in the soup.  You could trade these by the bag or by the cup depending on the size family they have or if it’s an individual.
• Razors
• Coats/Warm Clothing: We purchase used coats at goodwill and thrift stores.  All different sizes but especially kids coats.  These can be stored in large vacuum sealed storage bags and hardly take up any room.
• Small candles (or wax , wicks and wick tabs for making candles.)
• Chickens: Chickens produce meat and eggs, both of which people will want.
• Fly tape/mouse traps
• Pesticides
• gel, diapers, formula
• Socks/underwear
• Information on growing food or slaughtering animals.  You could print off some easy instructions and place them in binders.
• Fish hooks, weights, fishing line, bait
• Glow sticks
• Laundry soap powder
• Measuring spoons

These are just a few ideas to help you get started.  Notice, I did not put silver or gold on the list.  While this is a great item to have, I believe that if we are in a grid down situation, not many people are going to barter for something they cannot eat or use to stay alive.  Please don’t misunderstand me, it is alright to have these items for yourself, but for bartering, I just don’t feel it will be helpful in that area.

gettin by battery

[Mr. Larry ideas:
_a) If you develop or buy a 12 volt battery bank (several deep cycle 12 volt batteries) and a couple hundred watts of  PV panels (150-300 watts), solar charger,  inverter, and  a battery charger for AAA and AA rechargeable batteries, you would continue to use your personal electronics during a local disaster or SHTF event.
_b) Additionally, if you stock  an extra 50 to 100  AA and AAA Sanyo Enloop batteries, you would be set to operate a local “rent and recharge” battery service, thereby developing a “for food” customer base during a grid down scenario; it would only take recharging the batteries of maybe a half dozen families batteries to provide a significant portion of your “daily bread” or for the accumulation of other barter/trade items/services.]

C.  40 Items to Barter in a Post-Collapse World
28 Aug 2012, Backdoor Survival.com, by__
Excerpt pasted from: http://www.backdoorsurvival.com/41-items-to-barter/

There are a lot of different opinions as to what items will be best for barter in a post-collapse world where the underground economy may be the only viable economy for the passing of goods and services.  That said, consider this a starting point as you begin to acquire goods for barter.

In no particular order, consider accumulating some of the following items for barter purposes.  And keep in mind that in a post-collapse world, the items do not necessarily have to be new, but simply serviceable.

  • Water purification supplies including purification tabs and filters, household  bleach.
  • Hand tools including hatchets, saws, machetes and general fix-it tools
  • Fire making supplies, including lighters, matches, flint fire steel
  • Sanitary supplies including toilet paper, feminine products and diapers
  • Disposable razors and razor blades
  • Fuel, any and all kinds (gas, diesel, propane, kerosene)
  • Prescription drugs, painkillers, and antibiotics
  • First aid remedies such as cough syrup, cortisone cream, boil-ese, calamine lotion and topical pain relievers
  • Spirits such as bourbon, rum, gin, and vodka
  • Coffee and tea (instant coffee is okay)
  • Solar battery charger and rechargeable batteries
  • Standard Batteries
  • Reading glasses
  • Paracord
  • Bags, including large garbage bags as well as smaller zip-close bags
  • Plastic sheeting
  • Duct tape
  • Tie Wraps
  • Heavy plastic sheets and tarps
  • Toiletries including toothpaste, dental floss soaps, shampoo (tip: save those small sized toiletries that are provided by hotels and motels)
  • Condoms
  • Latex or Nitrile gloves in a variety of sizes
  • Hard candy
  • Fishing supplies
  • Knives  of various types including fixed blades, kitchen knives, and box cutters.
  • Condiments and Spices
  • Paperback books on a variety of subjects
  • Tobacco and cigarette rolling supplies
  • Amusements such as playing cards, crossword puzzle books, Sudoku
  • Pencils & paper
  • Pepper spray
  • Garden seeds
  • Flashlights
  • Vinegar  and baking soda to use in DIY cleaning supplies
  • Empty spray bottles and squirt bottles
  • Hand pumps for both air and liquids
  • Mylar blankets and tents
  • Hand warmers
  • Sewing  and mending supplies
  • Knitting  or crochet needles and yarn

One thing you will notice that I have not included firearms or ammo and for good reason.  In a post-collapse society, you might not know your barter partners well and may run the risk that they will use these items against you so that they can steal the rest of you stuff.  One person’s opinion, anyway.

. .
C.  10 Forms of Currency if Paper Money Becomes Useless in Any Crisis.
18 Mar 2013, EmergencyHomesteader.com, by katalystman
Pasted from: http://www.emergencyhomesteader.com/10-forms-of-currency-if-paper-money-becomes-useless-in-any-crisis/

gettin by dollar burns


gettin by PM & ammo

..gettin by water food.
gettin by seeds medical



.gettin by liquor light




gettin  by camping knowledge

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The art and maintenance of dictatorship

(News & Editorial/The art and maintenance of dictatorship)

 comentator2This Anti-Federalist paper about presidential power from 1787 will give you goosebumps
13 Feb. 2014, The Blaze.com, by Benjamin Weingarten
Pasted from: http://www.theblaze.com/blog/2014/02/13/this-anti-federalist-paper-about-presidential-power-from-1787-will-give-you-goosebumps/

In light of President Obama’s “I’ve got a pen, and I’ve got a phone” comments followed by calls for direct executive action in his State of the Union, Senator Rand Paul’s 4th Amendment suit being filed against the President over NSA surveillance, the recent controversy over perceived pay-to-play appointments of U.S. ambassadors and the President’s joke about being able to do whatever he wants to French President Francois Hollande at Monticello, we found the below excerpt particularly striking.

fedpaper O

President Barack Obama delivers his State of the Union address on Capitol Hill in Washington, Tuesday Jan. 28, 2014. (AP Photo/Charles Dharapak)

The following excerpt comes from Cato’s Letter IV of the “Anti-Federalist Papers,” dated November 8, 1787:

 “It is remarked by Montesquieu, in treating of republics, that in all magistracies, the greatness of the power must be compensated by the brevity of the duration; and that a longer time than a year, would be dangerous. It is therefore obvious to the least intelligent mind, to account why, great power in the hands of a magistrate, and that power connected, with a considerable duration, may be dangerous to the liberties of a republic–the deposit of vast trusts in the hands of a single magistrate, enables him in their exercise, to create a numerous train of dependents–this tempts his ambition, which in a republican magistrate is also remarked, to be pernicious and the duration of his office for any considerable time favors his views, gives him the means and time to perfect and execute his designshe therefore fancies that he may be great and glorious by oppressing his fellow citizens, and raising himself to permanent grandeur on the ruins of his country.–And here it may be necessary to compare the vast and important powers of the president, together with his continuance in office with the foregoing doctrine–his eminent magisterial situation will attach many adherents to him, and he will be surrounded by expectants and courtiers–his power of nomination and influence on all appointments–the strong posts in each state comprised within his superintendence, and garrisoned by troops under his direction–his control over the army, militia, and navy–the unrestrained power of granting pardons for treason, which may be used to screen from punishment, those whom he had secretly instigated to commit the crime, and thereby prevent a discovery of his own guilt– his duration in office for four years: these, and various other principles evidently prove the truth of the position– that if the president is possessed of ambition, he has power and time sufficient to ruin his country.

 Though the president, during the sitting of the legislature, is assisted by the senate, yet he is without a constitutional council in their recess–he will therefore be unsupported by proper information and advice, and will generally be directed by minions and favorites, or a council of state will grow out of the principal officers of the great departments, the most dangerous council in a free country.

 The ten miles square, which is to become the seat of government, will of course be the place of residence for the president and the great officers of state–the same observations of a great man will apply to the court of a president possessing the powers of a monarch, that is observed of that of a monarch–ambition with idleness–baseness with pride–the thirst of riches without labor–aversion to truth– flattery–treason–perfidy–violation of engagements–contempt of civil duties–hope from the magistrate’s weakness; but above all, the perpetual ridicule of virtue–these, he remarks, are the characteristics by which the courts in all ages have been distinguished.”

[Question: How do you deal with and control your enemies and others who it become expedient to persecute? Answer: Train your troops to fight, not in foreign fields, but for combat and suppression in your cities. Is this what is being suggested in the following articles? Mr. Larry]

B.  U.S. Army Builds ‘Fake City’ in Virginia to Practice Military Occupation
14 Feb. 2014, SHTFPlan.com, by Paul Joseph Watson (Infowars.com)
Pasted from: http://www.shtfplan.com/headline-news/u-s-army-builds-fake-city-in-virginia-to-practice-military-occupation_02142014

fedpaper fake city1

The U.S. Army has built a 300 acre ‘fake city’ complete with a sports stadium, bank, school, and an underground subway in order to train for unspecified future combat scenarios.
The recently opened site is located in Virginia and was built at a cost of $96 million dollars, taking just two years to complete.

While the city was ostensibly built to prepare U.S. troops for the occupation of cities abroad, some will undoubtedly fear that the real intention could be closer to home. Although the site includes a mosque, the town looks American in every other way, with signs in English.
The fact that, as the Telegraph reports, “The subway carriages even carry the same logo as the carriages in Washington DC,” could suggest that the site was built to double both as a foreign city and a mock domestic town.

fedpaper fake city2

According to Colonel John P. Petkosek, “This is the place where we can be creative, where we can come up with solutions for problems that we don’t even know we have yet….This is where we’ll look at solutions for the future–material solutions and non-material solutions…anything from how you’re going to operate in a subterranean environment to how you dismount a Humvee to avoid an IED strike.”

The increasing demonization of domestic political groups as extremists has prompted numerous scenarios where commentators have suggested that U.S. Army and National Guard personnel could be needed to quell civil unrest.

In 2012, an academic study about the future use of the military as a peacekeeping force within the United States written by a retired Army Colonel depicted a shocking scenario in which the U.S. Army is used to restore order to a town that has been seized by Tea Party “insurrectionists”.

The study dovetailed with a leaked U.S. Army manual which revealed plans for the military to carry out “Civil Disturbance Operations” during which troops would be used domestically to quell riots, confiscate firearms and even kill Americans on U.S. soil during mass civil unrest.

The manual also describes how prisoners will be processed through temporary internment camps under the guidance of U.S. Army FM 3-19.40 Internment/Resettlement Operations, which outlines how internees would be “re-educated” into developing an “appreciation of U.S. policies” while detained in prison camps inside the United States.

Fort Hood soldiers are also being taught by their superiors that Christians, Tea Party supporters and anti-abortion activists represent a radical terror threat, mirroring rhetoric backed by the Department of Homeland Security which frames “liberty lovers” as domestic extremists.

Last year, former Navy SEAL Ben Smith warned that the Obama administration is asking top brass in the military if they would be comfortable with disarming U.S. citizens, a litmus test that includes gauging whether they would be prepared to order NCOs to fire on Americans.
During a recent Ohio National Guard exercise, Second Amendment proponents were portrayed as domestic terrorists as part of a mock disaster drill.

See US Army Builds ‘Fake City’ in Virginia to Practice Military Occupation on YouTube at:


  C.  Local Police Train With Special Forces To Raid Farm Houses, Conduct Domestic Raids
17 February 2014, TheDailySheeple.com, by Brandon Turbeville
Pasted from:  http://www.thedailysheeple.com/local-police-train-with-special-forces-to-raid-farm-houses-conduct-domestic-raids_022014

fedpaper job morph

By Brandon Turbeville

 On January 20, I wrote an article entitled, “Upcoming Military Drill Off Limits To Reporters,” in which I reported on the announcement that South Carolina’s Richland County Sheriff’s Office would be engaged in joint training exercises with unidentified units from Ft. Bragg.

 The official Richland County Sheriff’s Department’s press release stated that “Citizens may see military and departmental vehicles traveling in and around rural and metropolitan areas and may hear ordinance being set off or fired which will be simulated/ blanks and controlled by trained personnel.”

 The release also stated that the exercise was being held “Due to Sheriff Leon Lott’s longstanding commitment to making sure that deputies are trained and prepared for every event and potential threat and his desire to assist the military to ensure their preparations.”
It is worth noting that Ft. Bragg hosts some of the U.S. Army’s more elite units such as Special Forces as well as more elite airborne and aviation support units. Ft. Bragg is also home to the elite Delta Force.
Beyond this information, however, very little was known about the drills. That is, until now.

 According to independent sources, Special Forces were indeed involved in the drills in concert with local civilian police forces.
Civilian police and military units worked together in practice for setting up and maintaining checkpoints as well as other checkpoint-related drills. Both police and military also worked together to practice chopper insertion – the deployment of troops/operatives by way of helicopters.

 What is most disturbing, however, is that, according to sources, both the civilian police and U.S. military forces were also training to raid farm houses and engage in domestic raids.

No wonder the Richland County Sheriff’s Department was so tight-lipped about the operations they were taking part in during the process of these joint drills.

 The fact that the police and military are engaging in joint drill exercises in violation of Posse Comitatus and a long-standing American tradition of separation between domestic policing and military activity is concerning enough. However, the fact that they are training for domestic operations such as raiding American farm houses, setting up domestic checkpoints, and conducting other related raids on the home-front should be terrifying to every single American that desires to keep what little shred of freedom they have left.

If the reports of these sources are accurate, the American military and indeed the Richland County Sheriff’s Department clearly see the American people and the people of South Carolina as the enemy.

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