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The Breakdown Draws Near

Tuesday, April 19, 2011, 12:22 PM

Things are certainly speeding up, and it is my conclusion that we are not more than a year away from the next major financial and economic disruption.

Alas, predictions are tricky, especially about the future (credit: Yogi Berra), but here's why I am convinced that the next big break is drawing near.

In order for the financial system to operate, it needs continual debt expansion and servicing. Both are important. If either is missing, then catastrophe can strike at any time. And by 'catastrophe' I mean big institutions and countries transiting from a state of insolvency into outright bankruptcy.

In a recent article, I noted that the IMF had added up the financing needs of the advanced economies and come to the startling conclusion that the combination of maturing and new debt issuances came to more than a quarter of their combined economies over the next year. A quarter!  

I also noted that this was just the sovereign debt, and that state, personal, and corporate debt were additive to the overall amount of financing needed this next year. Adding another dab of color to the picture, the IMF has now added bank refinancing to the tableau, and it's an unhealthy shade of red:

Banks face $3.6 trillion "wall" of maturing debt: IMF

(Reuters) - The world's banks face a $3.6 trillion "wall of maturing debt" in the next two years and must compete with debt-laden governments to secure financing, the IMF warned on Wednesday.

Many European banks need bigger capital cushions to restore market confidence and assure they can borrow, and some weak players will need to be closed, the International Monetary Fund said in its Global Financial Stability Report.

The debt rollover requirements are most acute for Irish and German banks, with as much as half of their outstanding debt coming due over the next two years, the fund said.

"These bank funding needs coincide with higher sovereign refinancing requirements, heightening competition for scarce funding resources," the IMF said.

When both big banks and sovereign entities are simultaneously facing twin walls of maturing debt, it is reasonable to ask exactly who will be doing all the buying of that debt?  Especially at the ridiculously low, and negative I might add, interest rates that the central banks have engineered in their quest to bail out the big banks.

Greek T-Bill Sale Fails to Allay Fear

Greece's Public Debt Management Agency paid a high price to sell €1.625 billion of 13-week Treasury bills at an auction Tuesday, amid persistent speculation that the country will have to restructure its debt.

The 4.1% yield paid by Greece, which means it now pays more for 13-week money than the 3.8% Germany currently pays on its 30-year bond, is likely to increase concern over the sustainability of Greece's debt-servicing costs.

Greek debt came under heavy selling pressure Monday after it emerged that the country had proposed extending repayments on its debt, pushing yields to euro-era highs.

Greek two-year bonds now yield more than 19.3%, up from 15.44% at the end of March. 

With Greek 2-year bonds now yielding over 19%, the situation is out of control and clearly a catastrophe. When sovereign debt carries a rate of interest higher than nominal GDP growth, all that can ever happen is for the debts to pile up faster and faster, clearly the very last thing that one would like to see if avoiding an outright default is the desired outcome.  How does more debt at higher rates help Greece?

It doesn't, and default (termed "restructuring" by the spinsters in charge of everything...it sounds so much nicer) is clearly in the cards.  The main question to be resolved is who is going to eat the losses -- the banks and other major holders of the failed debt, or the public?  I think we all know the most likely answer to that one.

"Contagion" is the fear here. With Ireland and Portugal already well down the path towards their own defaults, it is Spain that represents a much larger risk because of the scale of the debt involved. Spain is now officially on the bailout watch list, because it has denied needing a bailout, which means it does.

Spain is now at the 'grasping at straws' phase as it pins its hopes on China riding to the rescue:

European officials are hoping that the bailout for Portugal will be the last one, and debt markets have broadly shown both Spain and Italy appear to be succeeding in keeping investors' faith.

Madrid is hoping for support from China for its efforts to recapitalize a struggling banking sector and there were also brighter signs in data showing its banks borrowed less in March from the European Central Bank than at any point in the past three years.

(Source)

If Spain is hoping for a rescue by China, it had better get their cash, and soon. As noted here five weeks ago in "Warning Signs From China,"  a slump in sales of homes in Beijing in February was certain to be followed by a crash in prices. I just didn't expect things to be this severe only one month later:

Beijing March New House Prices Plunge 26.7% M/M

BEIJING (MNI) - Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission.

Average prices of newly-built houses in March fell 10.9% over the same month last year to CNY19,679 per square meter, marking the first year-on-year decline since September 2009.

Home purchases fell 50.9% y/y and 41.5% m/m, the newspaper said, citing an unidentified official from the Housing Commission as saying the falls point to the government's crackdown on speculation in the real estate market.

March Home Transactions in 30 Major Cities Fall 40.5% Y-o-Y

Housing transactions in major Chinese cities monitored by the China Index Research Institute (CIRI) dropped 40.5% year-on-year on average in March, a month when home buying typically enters a seasonal boom period.

Transactions rose month-on-month in 70% of the cities monitored, including five cities where transactions were up by more than 100% on a month earlier, secutimes.com reported on Wednesday, citing statistics from the CIRI. [CM note: month-on-month not useful for transactions as volumes have pronounced seasonality]

Beijing posted a decrease of 48% from a year earlier; cities including Haikou, Chengdu, Tianjin and Hangzhou saw drops in their transaction volumes month-on-month, according to the statistics.

Meanwhile, land sales fell 21% quarter-on-quarter to 4,372 plots in 120 cities in the first quarter of 2011; 1,473 plots were for residential projects, the statistics showed.

The average price of floor area per square meter in the 120 cities dropped to RMB 1,225, down 15% m-o-m, according to the statistics.

Real estate is easy to track because it always follows the same progression.  Sales volumes slow down, and people attribute it to the 'market taking a breather.'  Then sales slump, but people say "prices are still firm," trying to console themselves with what good news they can find in the situation. Then sales really drop off, and prices begin to move down. That's where China currently is. What happens next is also easy to 'predict' (not really a prediction because it always happens), and that is mortgage defaults and banking losses, which compound the misery cycle by drying up lending and dumping cheap(er) properties back on the market.

In that report back in March, I also wrote this:

If China enters a full-fledged housing crash, then it will have some very serious problems on its hands.

A collapse in GDP would surely follow, and all the things that China currently imports by the cargo-shipload would certainly slump in concert.

This is another possible risk to the global growth story that deserves our close attention. How this will impact things in the West remains unclear, but we might predict that China would cut way back on its Treasury purchases if it suddenly needed those funds back home to soften the blow of an epic housing bust.

If a more normal ratio for a healthy housing market is in the vicinity of 3x to 4x income, then China's national housing market is overpriced by some 60% and certain major markets are overpriced by 80%.

Which means that the entire banking sector in China is significantly exposed.

(...)

The reason we care if China experiences a housing bust is the turmoil that will result in the global commodity and financial markets as a result. Everything is tuned to a smooth continuation of present trends, and China experiencing a housing bust would be quite disruptive.

If Spain is hoping for a big cash infusion from China and/or Chinese banks, it had better get its hands on that money quick. China is barreling toward its own full-fledged real estate crisis, which will drain its domestic liquidity just as surely as it did for the Western system, and probably even more quickly, given the stunning drop-offs in volumes in prices.

However, I should note that the United States housing market hit its peak (according to the Case-Shiller index) in July of 2006, and it was a year and a month before the first cracks appeared in the financial system, so perhaps there's some time yet for Spain to cling to its hopes.

The larger story here is how a real estate slump in China will impact global growth, which absolutely must continue if the debt charade is to continue.

Who Will Buy All the Bonds?

With Japan now focusing on rebuilding itself, and China seemingly now in the grips of a housing bust that could prove to be one for the record books, given the enormous price-to-income gap that was allowed to develop, it would seem that the financing needs of the West will not be met by the East.

One important way to track how this story is unfolding is via the Treasury International Capital (TIC) report that comes out every month. The most recent one came out on April 15th and was quite robust, with a very large $97.7 billion inflow reported for February (the report lags by a month and a half).

On the surface things look 'okay,' although not especially stellar, given a combined US fiscal and trade deficit that is roughly twice as high as the February inflow. But digging into the report a bit, we find some early warning signs that perhaps all is not quite right:

Net foreign purchases of long-term securities totaled a lower-than-trend $26.9 billion in February, reflecting $32.4 billion of foreign purchases offset by $5.5 billion of domestic purchases of foreign securities. Inflows slowed for both Treasuries and equities with government agency bonds and corporate bonds posting outflows.

When including short-term securities, the February data tell a different story with a very large $97.7 billion inflow. Country data show little change in Chinese holdings of U.S. Treasuries, at $1.15 trillion, and a slight gain for Japanese holdings at $890 billion. It will be interesting to watch for change in Japanese Treasury holdings as rebuilding takes hold.

(Source

Only $26.9 billion, or 28%, of that $97.7 billion, was in long-term securities, reflecting a trend first outlined for us in our recent podcast interview with Paul Tustain of BullionVault whereby fewer and fewer participants are willing to lend long. Everybody is piling into the short end of things, not trusting the future. The concern here is that when interest rates begin to rise, financing costs will immediately skyrocket, because too much of the debt is piled up on the short end.

Also in the TIC data cited above, we need to reiterate that it is for February, and the Japanese earthquake hit on March 11. The next TIC report will be somewhat more telling, but even then only partially, and so it is the report for April (due to be released on June 15) that we're really going to examine closely. Our prediction is for a rather large dropoff due to Japan's withdrawal of funds.

With the Fed potentially backing away from the quantitative easing (QE) programs in June, the US government will need someone to buy roughly $130 billion of new bonds each month for the next year. So the question is, "Who will buy them all?"

Right now, that is entirely unclear.

Budget Fiasco

Sadly, the budget 'cuts' proposed so far in Washington DC are too miniscule to assist in any credible way, and they practically represent a rounding error, given the numbers involved. The Obama administration has proposed $38 billion in spending reductions. (I hesitate to call them 'cuts' because in many cases they are merely lesser increases than previously proposed).

Congress OKs big budget cuts — bigger fights await

April 14, 2011

WASHINGTON – Congress sent President Barack Obama hard-fought legislation cutting a record $38 billion from federal spending on Thursday, bestowing bipartisan support on the first major compromise between the White House and newly empowered Republicans in Congress.

The Environmental Protection Agency, one of the Republicans' favorite targets, took a $1.6 billion cut. Spending for community health centers was reduced by $600 million, and the Community Development Block Grant program favored by mayors by $950 million more.

The bipartisan drive to cut federal spending reached into every corner of the government's sprawl of domestic programs. Money to renovate the Commerce Department building in Washington was cut by $8 million. The Appalachian Regional Commission, a New Deal-era program, was nicked for another $8 million and the National Park Service by $127 million more.

For the record, these 'cuts' work out to ~$3 billion less in spending each month, or less than the amount the Fed has been pouring into the Treasury market each business day for the past five months.

The fact that a major write-up on the budget finds it meaningful to tell us about specific $8 million cuts (that's million with an "m") tells us that we are not yet at the serious stage in these conversations. After all, $8 million is only 0.0005% of the 2011 deficit, and even the entire $38 billion is just 2.3% of the deficit and slightly under 1% of the total 2011 budget.

How much is $38 billion?

  • Less than 2 weeks of new debt accumulation (on average)
  • About 2 weeks of Fed thin-air money printing, a.k.a. QE II

In other words, it's a drop in the ocean.

It is this lack of seriousness that is driving the dollar down and oil, gold, silver, and other commodities up. It is the reason we will be watching the TIC report for clues that foreign buyers and holders of dollars are getting nervous about storing their wealth with a country that is increasingly seen as unable or unwilling to live within its means. It explains why the IMF has been finger-wagging so much of late.

Somehow the US federal government managed to increase its expenditures by 30% from 2008 to 2011, but is now struggling to reduce the total amount by just 1%.

That, my friends, is an out-of-control process, and the 1% in 'cuts' is simply not a credible response to a very large problem.

Conclusion

There are two entirely, completely, utterly different narratives at play here. One of them is that the economy is recovering, policies are working, and the vaunted consumer is either back in the game or close to it. The other is that the world is saturated with debt, there's no realistic or practical model of growth that could promise its repayment, and the level of austerity required to balance the books is so far beyond the political will of the Western powers that it borders on fantasy to ponder that outcome.  

If we believe the first story, we play the game and continue to store all of our wealth in fiat money. If we believe the second, we take our money out of the system and place it into 'hard' assets like gold and silver because the most likely event is a massive financial-currency-debt crisis.

The IMF, the World Bank, the BIS, and numerous other institutions with access to $2 calculators have finally arrived at the conclusion that there's still 'too much debt' and that it cannot all be paid back. And they are now alert to the idea that the predicament only has two outcomes: either the living standards of over-indebted countries will be allowed to fall, or the global fiat regime will suffer a catastrophic failure.

China is unlikely to ride to the rescue of the West, although it may have some time yet to help out a few of the smaller and mid-sized players, such as Spain.

In Part II of this report, How This Will Play Out, we explore in detail the likely triggers for a financial breakdown, what market signals to watch for, and what individuals can do to defend themselves against such a collapse. The risks are now higher than at any time since I began analyzing this predicament.  I invite you to plan accordingly.

Click here to access Part II (free executive summary; paid enrollment required to access).

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80 Comments

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2115
I knew....

...what with the events of the week thus far that we'd be hearing from you! Thanks as always for the trenchant and timely analysis. I wouldn't have a clue what was really going on if it wasn't for this site. I and my ever-more-valuable bag of clues thank you.

Viva-- Sager

PastTense's picture
PastTense
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Posts: 47
"Who Will Buy All the

"Who Will Buy All the Bonds?"

The Fed and the other central banks.

OctoberLandon's picture
OctoberLandon
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Posts: 23
Debt Restructuring will probably lead to Deflation not Inflation

Recently I suggested the the creditors of the United States will probably be forced to "restructure" its debt - meaning, we all know there is no way the U.S. can pay it all off. The important thing to remember here is that the U.S. is not alone. Many countries are in the same fix and the debt is probably going to be restructured for them, so why not the U. S.??

If much of this debt is defaulted upon, money will disappear from all over the world!  Wouldn't this create massive deflation instead of inflation??  Isn't this outcome possible??

buzzfuzzel's picture
buzzfuzzel
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One question, what is to

One question, what is to keep the Fed and similar institutions in other countries from continuing QE?

Your commentary makes perfect sense in a normal global economic environment but we are not in a normal environment.

They are getting away with printing money now.  What will happen to cause that to no longer work?

Mark_BC's picture
Mark_BC
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Posts: 243
OctoberLandon wrote:   If

OctoberLandon wrote:

If much of this debt is defaulted upon, money will disappear from all over the world!  Wouldn't this create massive deflation instead of inflation??  Isn't this outcome possible??

FOFOA recently addressed this.

http://fofoa.blogspot.com/2011/04/big-gap-in-understanding-weakens.html

Jager06's picture
Jager06
Status: Gold Member (Offline)
Joined: Dec 2 2009
Posts: 395
Prep Issues...

Chris if you have a recommendation I would sure like to hear it.

I am wondering if I should go into debt to finish my preps?

I have everything covered except the solar system, no debt other than the mortgage.

I have the gasifier set up for emergency use, a generator that still needs to have the carburator torn off and another built for the gasifier, but no battery bank, charge controllers or inverters.

I reduced my total system costs $25k by implementing all the recommended reduction methods, but still need to cough up $30k for an off grid system.

I have PMs, but I am loathe to part with them. Are we at the point where it is wise to pull fixed interest rate loans and gain sustainability or buy PMs/ productive real estate with the note?

Just thinking out loud. If anyone has an idea or opinion I am all ears.

Jager06

Arthur Robey's picture
Arthur Robey
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Posts: 2374
My memes.

Wouldn't this create massive deflation instead of inflation?? Isn't this outcome possible??

I am at one with you there.October. I am planning on catastrophic deflation in the short term. A world of sellers and no buyers.

Exhibit  1. The real estate market.

I hold silver for the long term.

One thing thing is for sure. it is not steady as she goes. Even the (content free) mainstream media is begining to worry.

The news from Australia is that we have had our 4th, yes 4th major flood event this year.

The carbon tax debate rages on. The coal companies are appealing to our Nationalism, not to impose a carbon tax. The terms they couch their argument in is that it will make us less "competitive". ie it is not in our National Interest. Proving that the last refuge of the scoundrel is an appeal to Nationalism.

I just love the Carbon Tax. It allows me to escape the yolk of my tax burdon. (In calculating how much to tax poor old Arthur, the taxman will assume that I have a much greater carbon tax burdon than I have. This will cause him to miscalculate my donation.)

Arthur Robey's picture
Arthur Robey
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Debt.

If anyone has an idea or opinion I am all ears.

I have a strong opinion about debt. It is excellent if it is carried by others.

I would approach debt as one might approach a big black snake on the kitchen floor.

If too many people default, the Lawmakers might make bankruptcy illegal again. In which case you will be handing your debt on to your decendants.

Dont do it. (Think indentured servitude or drummed into the military to kill people you dont even know.)

Jager06's picture
Jager06
Status: Gold Member (Offline)
Joined: Dec 2 2009
Posts: 395
Totally agree

I am in complete agreement with you about the debt Arthur. The wife and I did a lot to get out of debt, including going further into productive debt, businesses and such. It is all paying off now, but now seems to be the last stop on the Keynesian Line.

Which is why my question is so very loaded for us. We are damn close to being off grid. Energy is the final hurdle for us. We have gotten just about everything set up, from water to food storage, chickens to gardening and built a community of "teams" who are all along for the ride here in our area.

We simply do not have the electrical sustainability yet. It is THE last thing.

There is no way to change where our money is being used right now to over come that last $30k within 60 days.

If there is a drought on the horizon then I need to get to digging my well with whatever tools I can find, even if it means borrowing the last necessary tool.

I am the total anti debt slave. But if it means that I have the last of my preps in and working, and I will be paying the debt off with debased currency (Fed money printing), and there is a time compression that prevents these things from being done later due to fuel shortages (Saudi Arabia), manufacturing (Japan) and potential social unrest or other causes....why not now?

Jager06

xraymike79's picture
xraymike79
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buzzfuzzel wrote: One

buzzfuzzel wrote:

One question, what is to keep the Fed and similar institutions in other countries from continuing QE?

Your commentary makes perfect sense in a normal global economic environment but we are not in a normal environment.

They are getting away with printing money now.  What will happen to cause that to no longer work?

-- Massive global unrest from Fed-induced food and commodity inflation, as what we've been witnessing recently.

V2's picture
V2
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Posts: 31
Gold or "things"?

Thanks for your analysis, Chris.

To anyone: Is it worth buying one ounce of gold? Just one American Eagle. That's all my budget can afford. Or, in that case, is it better to turn that cash into useful, durable things, i.e. canning equipment? I have some silver on the side, so not totally without PMs. Also already acquired some "things", but could always use more. This is a difficult debate that has been raging in my head. Maybe the answer is obvious to others.

Thanks...as Chris says, it's like the ground is constantly shifting under our feet. Very difficult to get a grasp on things.

HarryFlashman's picture
HarryFlashman
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Posts: 30
V2's comment

' it's like the ground is constantly shifting under our feet'

.......Sounds like the situation in Japan just at the moment.......

mohan_nano's picture
mohan_nano
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--

--

mohan_nano's picture
mohan_nano
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Posts: 4
S&P negative outlook

How difficult is it for U.S. government to influence the credit rating agencies?

Is it really possible for them to downgrade U.S. treasuries?

mohan_nano's picture
mohan_nano
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Default causes inflation

OctoberLandon wrote:

If much of this debt is defaulted upon, money will disappear from all over the world!  Wouldn't this create massive deflation instead of inflation??  Isn't this outcome possible??

If the borrower spends the borrowed money and defaults on the debt, only the debt agreement disappears; not the borrowed money, which will still be circulating in the economy. It is only when the debt is repaid, money dissapears. So defaults should cause inflation.

ReginaF's picture
ReginaF
Status: Bronze Member (Offline)
Joined: Jan 16 2009
Posts: 90
"Off Grid" without much money?

Hi Jager06,

I feel, that I'm in the same situation as you: last obstacle (and not enough money to do it) is installig a solar system. The last days I feel that the overall situation is tightening - and was a bit fearful, because of Energy preparation - and decided to look, what I m essentially need:
Heating in Winter: No problem, have a good woodstove
Refrigerator: In wintertime no problem, store it outdoors on balcony. In Summertime: Hanging a basket over my well.
Cooking: In Winter no problem, because of the woodstove & in Summer  solar cooker or coleman cooker
Information: Hand cranked radio

Only Problems: Light: candels and petroleum light are too dim - have tested it in the last Winter - and Laptop/Mobile. Solution: Batterie powerd LED Lightening, with 4 AA Batteries one of my lights shine + 30 h - doing the mathematics I need for our winter here in northern Germany 2 good batterie powered LED lights - and 160 full accus. So I ordered 80 good enelope accus, two more led powered lights (costs all less than 100 Euro) and am looking now for a Solar Solution to fill the batteries expecting, that it cost about 200-300 €.

Best from Germany

Regina

Jager06's picture
Jager06
Status: Gold Member (Offline)
Joined: Dec 2 2009
Posts: 395
Solar...

Thanks Regina, that reminds me.

We do have a couple 15 watt panels I wired together and one deep cycle marine battery, and a 1000 watt inverter. So we can run the computer and recharge our flashlight batteries.

I had not though of using the well as a place to keep food refridgerated. Nice!

Thanks,

Jager06

PS- I think you might be the only one here who understands most of the meaning of my screen name, although I did leave off an "e"

Bruce C.'s picture
Bruce C.
Status: Member (Offline)
Joined: Feb 4 2011
Posts: 5
If you'll need your preparations debt will be your least concern

It sounds to me like you have been riding the fence pretty well so far, preparing for the worst yet remaining responsibly balanced - so far. But given CM’s excellent summary in his Conclusion, you seem to be expecting things to go south rather than muddle along, if not recover. The fact that you are willing to spend an additional $30k to prepare for that is a significant wager. 

What is not so clear to me is your attitude about defaulting on your own personal debts. If you borrow money to complete your preparations and nothing dire happens then you will have effectively wasted that capital and will have a $30k debt to repay, and you probably should since defaulting on it during “normal” economic times would be a legal hassle, if not "immoral". However, if the economy does crash, it would probably be deflationary, as other commenters have mentioned, and so - ironically - dollars would be effectively more valuable, and debts effectively more expensive. However, in that environment debt defaults are almost expected. Basically, “everybody” will be doing it, including the banks, governments, institutions, etc. whether “strategically” (by choice) or not (by necessity). In that scenario everything will break down and eventually have to be rebooted and zeroed out. Also, if massive debt defaults do occur then hyperinflation is likely to follow as the CBs will have no reason to not use their “nuclear option” to desperately try to save the system. In that case dollars will lose value and your debts will start to look very cheap, and I wouldn’t be surprised if just a few (one?) PM coins could retire it all, if you wanted to do that. It would just be a matter of waiting for the deflationary phase to pass. All of this is doubly true if your residence is protected from forfeitures to recover debts, like it is in Florida, for example. Also, if hyperinflation occurs without a deflationary phase then you would really be in the cat bird’s seat. 

Jager06's picture
Jager06
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Posts: 395
Excellent points

Bruce, thanks for the reply.

I have no intention of defaulting, $30k is not enough to break me. I simply do not have the cash right now. I am 95% PM and 5% business cash/ operating expenses. I can have it in 6 months on the outside time frame. My concern is that if we are within weeks, or  a couple months.....do I violate my rules about debt to gain the final bit of security?

I have backed my business debt with PMs already. So I may go for it by spending some cash to be my own Central Banker and purchasing an ounce of silver for every $1000 in debt for use in an inflationary crash.

Best Wishes,

Jager06

Doug's picture
Doug
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Joined: Oct 1 2008
Posts: 2745
alt energy

I'm in somewhat the same position as Jager and Spectrabil.  I'm in the process of negotiating with contractor to get a system installed.  My reasoning is that my "liquid assets" are about 40% PMs and 60% cash.  No securities.  I'm watching the USD drop like a rock and don't particularly want to acquire anymore PMs at the moment.  Sinking that depreciating cash into a system that will provide a little income through grid tie-in, having the alt energy available in a shtf situation and putting depreciating dollars into something that isn't going to lose value and will make my life more resilient seems the right thing to do.  Plus, it'll change my cash/PM balance  more toward 50/50 which is where I want it for now.

Doug

nickbert's picture
nickbert
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Posts: 1121
new debt

Jager06 wrote:

Bruce, thanks for the reply.

I have no intention of defaulting, $30k is not enough to break me. I simply do not have the cash right now. I am 95% PM and 5% business cash/ operating expenses. I can have it in 6 months on the outside time frame. My concern is that if we are within weeks, or  a couple months.....do I violate my rules about debt to gain the final bit of security?

I have backed my business debt with PMs already. So I may go for it by spending some cash to be my own Central Banker and purchasing an ounce of silver for every $1000 in debt for use in an inflationary crash.

Jager,

If you can pay it off in 6 months AND you're pretty sure your income is safe for that time period even in a financial crash, then it MAY be an acceptable risk.  I'm not sure I'd take out any larger loans that'd take more than a year to pay off though. 

I'm of a like mind with Arthur on the possibilities of the rules being changed for debt against our favor.  Or perhaps more likely, if the system crashes a lot of this debt may hang in Limbo, until a decade later you get called by some government or corporate entity you've never heard of that says they own your debt now.  Even if you actually paid it off!  (You say you paid off the loan X years ago to Y company.... they say they have no record of that, and you are going to have to try to prove it to their debt collection specialists and lawyers... Surprised).  Stuff like that happens now, and I see it more likely to happen (and harder to prove one's case) with a fractured or collapsed financial system. 

- Nickbert

shudock's picture
shudock
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Joined: Mar 14 2010
Posts: 37
I think you should reconsider

All I can say is, never in a million years will I spend that kind of money on a solar system for our house, even if I didn't have to borrow for it. (I might, however consider investing in a masonry heater.)

We are in much the same position that a couple of you are: lots of preparation already: no debt, garden, animals, PMs, tools, skills, community, etc., but however still tied to grid electricity. I would encourage you to look at this whole thing differently. First, a solar electric system will be nice and spanky new for awhile, but will, far far sooner than you would like, begin to break down and lose efficiency - it is a common complaint right now, while it is still easy to order new parts, panels, and labor. It will not be so easy to order, install, and repair those things later on in a chaotic society. And then there is the sustainability argument: if it needs manufacturing, thousands of miles of transport, the mining of rare earths, the technical expertise of many, and has also the predisposition to break-downs... then is it really the panacea you think it is? I say it isn't.

Some other considerations: It is not all about taking care of yourself and yours only. You likely view it as your responsibility to do everything you can, but be careful, because others may come to view your preparations as selfish, however unfair that may be.

If the kind of breakdown in society occurs that we think will, the grid itself could easily become unreliable, which is likely one of your main reasons for wanting solar in the first place, no? You may say, "well I don't care if it becomes unreliable because I have solar power for my laptop and lights."  I worked for years as a computer network engineer - it takes legions of skilled techs and an unbelievable, staggering amount of always-always-ON power to keep the Internet from doing Very Bad Things from a network standpoint. I ask you to think about that for a moment. What good is a powered up laptop if the Internet - the same Internet that depends completely upon that grid, itself fails?

If electricity becomes unreliable and expensive as it is likely to, most of the people in your community will NOT have solar electricity. Do you see the problems that will arise from your plan? Most of them will have to get used to going to sleep when it gets dark and reading a book or telling stories by the fire, while you... create Word documents on your laptop at home?

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The retail sales numbers are

The retail sales numbers are a lie.  They will be revised soon.   Every sector but manufacturing is doing badly.   I have been in a few cities around the US lately for enough time to see that main street is just hanging on.   Can a sector that is 10%-15% of GDP pull us through?  Or will the 85% that will crash again overwhelm the little engine?   Think of Japan and the Wave.

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HarryFlashman wrote: ' it's

HarryFlashman wrote:

' it's like the ground is constantly shifting under our feet'

.......Sounds like the situation in Japan just at the moment.......

That is it!   The FED can sink Gold if it has the guts to raise Fed Fund Rate by .25%.   It is a Casino!

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Feedback

V2 wrote:

Thanks for your analysis, Chris.

To anyone: Is it worth buying one ounce of gold? Just one American Eagle. That's all my budget can afford. Or, in that case, is it better to turn that cash into useful, durable things, i.e. canning equipment? I have some silver on the side, so not totally without PMs. Also already acquired some "things", but could always use more. This is a difficult debate that has been raging in my head. Maybe the answer is obvious to others.

Thanks...as Chris says, it's like the ground is constantly shifting under our feet. Very difficult to get a grasp on things.

V2,

No one else has answered your question so I'll give it a shot. A single ounce of gold won't do much one way or the other. If you have other areas that could use fortifying, put the money there. I've found really nice canning equipment at garage sales for pennies on the original dollar. I've picked up canning jars for free because the folks just wanted them out of the garage. I always like the "How To" books, regardless of what they are about. You can find all kinds of useful items that others think they've outgrown. I look at it as a form of mining.

Jager06,

Remember that an electric light can be seen for up to 50 miles. If the SHTF, do you really want to advertise that you aren't in the same boat as everyone else? I can see a solar panel keeping the fridge/freezer working. That would always be a positive result. Running the well would be really nice. Water heater? Furnace? What other items do you think you'll want to have running? How many watts will it take to power these appliances? What reasonable alternatives exist?

You're considering taking on debt for an item that you may choose not to use fully. Take a realistic look at how much you need under various circumstances and then adjust accordingly. As noted earlier, deflation makes debts more expensive.

Good luck with the decision,

Grover

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Re: reconsider use of a solar system

Here's another possibility for a solar system (in order or priority).  It would be less expensive, use power only where it really counts and perhaps include neighbors to solve the community relations problem.

  1. well pump - my shallow well can pump about 1200 gallons on 1 KWhr - 1-2 kw hr per month would be all I needed to save a lot of hauling.  Spare parts (or a spare pump) and some spare water line to fix or replace the line (the well is 400 feet from the house) are relatively cheap and could keep the pump going for years.  The only challenge would be making repairs without a backhoe - lots of hand digging.
  2. circulating fan and ceiling fan to distribute wood stove heat - mid winter would use would be about 50W x 200 hrs/month = 10 KWhr/month or 0.33 KWhr per day.
  3. Very limited lighting with a few LED lights - perhaps 30 Whr per day.
  4. Limited use of a few power tools. For example, a high quality electric chain saw (assuming gasoline is not available for a gas powered saw) uses about  1 KWhr per hour of use.  It would be easy to generate enough power in the summer to use for an hour or two a day.  It would be nothing like a good gas powered saw, but a lot better than cutting by hand.  Of course this would attract attention and might be available only for AC power.
  5. Refrigeration - widely available models use just over 1 KW hr per day.  Expensive brands like Sunfrost use less and can run on DC.

The well could be replaced by a hand pump, but I would need to drill a new well near the house since our shallow well is 400 feet away and down the hill at the edge of the swamp.  A hand pump would not pressurize the plumbing system, so some sort of storage tank up in the attic to get at least minimal pressure would be helpful.

These seem to be the applications where a little electricity would go a long way.  Most of them could run on DC to remove the cost and limited lifespan issues of an inverter.  All but refrigeration would use very little power (the saw might need to be limited to 1 hour per day on sunny summer days) and could get by with a very small low-cost system that is oversized enough so that the reduction in efficiency with time would not be an issue for many years.

Going in with neighbors to create a joint system that can provide power for their well pumps and a few other basics could solve some of the problems associated with being the only one in the neighborhood with power.

Steve

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Chainsaw

Hello Steve,  I am with you in pondering how much Solar I need... but I don't plan on giving up my Stihl (gas/oil mix) chain saw.. .it's just too critical to my house heating plans.  I bought a serious (14 gallon) gasoline storage carboy tank, and have a few extra 5-gallon tanks as well.. and this is all about the chain saw.

http://www.northerntool.com/shop/tools/product_200325161_200325161

I bought a bunch of extra chains, and am thinking of getting myself a sharpening kit too.  I may even buy a second, duplicate Stihl chain saw as a backup.  I suppose the electric chainsaw could come in handy as a last resort... but I should be able to get through two winters with the gas I have stored.     

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Jager's solar

Jager06-

As an immediate temporizing solar option I've been toying with a smaller complete solar kit like this:

http://www.northerntool.com/shop/tools/product_200441246_200441246

from Norther Tool for $2,000 USD.  Seems like better than nothing and better than a 30K debt.  Could do the basic smaller tasks listed by others above.  When you get your 30K system later you could have this one as a back up or install it at the barn/shop.

Wayne

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Excellent ideas

The excess energy (beyond the two freezers and fridge) is to power tools. To build things with, like welding bicycle frames, or building simple cabinetry. Fixing stuff for other people mostly.

I am very aware of the tactical issues surrounding light discipline and saw some highlights of all the American expeditions from Somalia to Iraq. I have a child for each combat tour....haha! (Beats a T-Shirt) Security is paramount, but it cannot happen alone. If I have the fixes for things people find themselves using and breaking and still needing, then I have my place.With a productive and necessary place in society, security becomes more of a social benefit.  With my bit of excess electricity, I plan on building more gasifiers, which will generate more electricity, run cars and trucks, which will make more people better off and increase their productivity, security, and well being.

I did buy a single and a two man cross cut hand saw, to back up the four chain saws that I am sure will run out of fuel before I run out of need for firewood.

I like the 1800 watt system shown above. If it really is 1800 watts worth of panels it will meet my minmum calculated emergency needs. I plan on reading over that in the next few minutes to see what it can do!

Best Wishes,

Jager06

EDIT- The 1800 Watt system is a 220 watt system, with an 1800 watt inverter/ charge controller. I don't think this is a good deal. I need to do more research on smaller systems, but $2k for 220 watts? The total system I am looking at costs $5 a watt, complete including labor and batteries. 220W * $5= $1100. This Northern Tool system is a little rich for the performance.

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Little system, big price....

Jager06 wrote:

I like the 1800 watt system shown above. If it really is 1800 watts worth of panels it will meet my minmum calculated emergency needs. I plan on reading over that in the next few minutes to see what it can do!

It is not 1800W of panels, it is 200W of panels (2x100).  It's an 1800W inverter and total battery capacity of about 2.6kWh (12v*110Ah*2).    So assume you live in a bright sunny place, you might be able to count on 6-7x the rated output of the panels with stationary mounts (that's about what we are getting right now). 

With this system, that means it would take a little more than 2 days of bright shinny weather to charge the batteries from empty (2600Whr/(200*6)).  It means that with fully charge batteries and draining them (you never want to do this) you could keep a 12-15cuft energy star freezer running for about 3 days.

This system is pretty small and it's about $10/W w/battery backup.  It seems a bit expensive considering it's just the equipment and no installation, fancy mounting, etc.   Our system ran about $8.25/W w/battery backup (24kWh) and installation.

Something else too keep in mind, I'm not sure this would qualify for any of the incentives - such as the 30% federal tax credit, state incentives, or utility incentives.  Those help to lower costs considerably.  In our case just the federal and state incentives brought the cost down to just under $5/W, or about 1/2 the price.  Without the expensive mounting, it would have been closer to $4/W.

If I were in your shoes I would spend a bit more and get a larger system even if it meant taking out a short term loan.  You might also check with some of the vendors, I know last year some of them around us were offering 1 year same as cash.

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Jim Hannah wrote: Hello

Jim Hannah wrote:

Hello Steve,  I am with you in pondering how much Solar I need... but I don't plan on giving up my Stihl (gas/oil mix) chain saw.. .it's just too critical to my house heating plans.  I bought a serious (14 gallon) gasoline storage carboy tank, and have a few extra 5-gallon tanks as well.. and this is all about the chain saw.

http://www.northerntool.com/shop/tools/product_200325161_200325161

I bought a bunch of extra chains, and am thinking of getting myself a sharpening kit too.  I may even buy a second, duplicate Stihl chain saw as a backup.  I suppose the electric chainsaw could come in handy as a last resort... but I should be able to get through two winters with the gas I have stored.     

Jim, I'm with you.  I have two 20" bar chainsaws, a smaller electric chainsaw, a 50 gal gas tank and a couple 5 gal cans (actually plastic).  Also, I got one of these sharperners:

http://www.northerntool.com/shop/tools/product_351245_351245

They run on 12 V DC and can just plug into a (what used to be called) cigarette lighter in your car or you can use the clips to hook up directly to a battery.  Stock up on stones relatively cheaply.  Although your first impression, like mine, may be that they are cheaply made, they work great.  I also have a fancy hand sharperner, but this is much faster and easier.  For $30, its totally worthwhile.

I also have a 1000W generator that I can carry around in the trailer behind my tractor to use the electric saw for tree pruning in places where there's no electricity.  True, this is all rather dependent on gas, but I have enough stored that I can keep cutting for quite a while.

Doug

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http://www.simplepump.com/

Don't mean for this to sound like an advertizement, but the above link is a manual/DCmotor pump that will pressurize you home system. 400 feet is not too far. One of mine is rigged for livestock yet to prove its ability i connceted the outlet to a garden hose which went to a standalone hydrant and back pressurized our house. Outside of the d/c motor i see no place where service would be needed in my lifetime. (i have about 15yrs left)

robie 

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Wood Cutting Solar

I think todays $ action is going to seal the deal. That, the price of gold and silver, and now China stopping all oil exports:

http://www.zerohedge.com/article/oil-crisis-just-got-real-sinpoec-cuts-o...

And for those of you who, like me, have to cut wood to stay warm, and maybe produce electricity via gasification:

http://www.traditionalwoodworker.com/Log-and-Timber-Saws/products/308/

They also have a booklet that teaches how to set and sharpen hand and chain saws. I grew up cutting firewood and have been running my own chain saw since about 12, but I have never set or sharpened a hand saw.

I will be having the solar company over to finish the site survey this week and hopefully have it all in before interest rates get forced up.

Those of you with access to forest or who use firewood can use some of the trimmings, wood chips and even construction site leftovers to run a generator. Great Britain ran the whole country that way during WW 2. It is relatively simple, you can build it yourself with a small welder and some basic tools. Attaching it to a 5 HP lawnmower, a 12 volt car generators and a charge controller, battery bank and inverter and you have got yourself a home made generator that is completely green.

And to drive down to the farmers market to buy and sell your garden delights?

Best Wishes,

Jager06

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I get what you are saying

Jager06 I get what you are saying. I understand about keeping things going through an emergency, keeping gasoline stored, etc. I suppose I am thinking far more long term than that. I guess I just don't like putting money into things like solar panels that need so much outside support, repair, and manufacturing to keep it going. I might consider a solar water pump, but even that I think of in terms of "for awhile." I wouldn't feel like I had truly solved the problem until a manual pump was also put in. Having worked in technology for a long time, I see that any of its currently popular solutions have one big incredibly glaring disadvantage - they require a functioning society to support them, period. Low-tech now, that shows a lot more promise to my mind (such as the masonry heater mentioned previously, which can be also retrofitted for cooking, baking, and water heating as well.)

In my opinion, much of this discussion smacks of "keeping the cars running at all costs" and prioritizing gas-powered devices instead of using our human ingenuity to figure out how to live without it. We will all have to do it at some point. The coming changes will require us to not just adjust to less convenience. It will require us to change our way of thinking about how we live.

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Jager06
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Growing Up

I grew up in a remote area, our nearest neighbor was 2 miles away cutting cross country. They had no electricity until they finally put in their solar system and batteries. I took a great interest in this and walked over to check it all out and help where I could. I was a junior in high school at the time.

So that was over thirty years ago. The ranch is still running fine. I have been back to speak with the new owners and they have replaced the original batteries about 9 years ago.

The solar system still works, although the trackers have had to be fixed and one of them eventually replaced. The key was never to let the battery bank run down to below 10 Volts. No matter what. That and regular battery maintenance.

Will this too eventually fail? Yep, it sure will. Will another form of energy be replacing the simplistic systems we are developing now? Probably. Look at what Robie has been keeping us all up to date on. Cold Fusion that looks viable and is now being sold into the market place.

But if it doesn't work, no problem. I have returned home after a few wars and some world travel and adventures. Folks here live remotely. We speak to each other over the gas pumps and at the grocery store. We aren't afraid of each other and we don't ignore each other. We help ourselves and we are a community. We don't need a government solution, we don't need a manager. We have been miners and loggers since the 1840's, through boom and bust and bad political ideology and fractional reserve banking. I do not see those independant attributes changing because things got a little tougher for the softies down in the cities, or becasue someone decided to turn the lights out. I don't see it as keeping the cars going at all costs. Hell, we still have a couple blacksmiths and folks who make their own gunpowder. I see it more as common sense.

Gasifier? Check.

Solar? Coming right up.

Hydropower? Check.

Ability to haul hay, fix tools and run the freezer? Check.

Local ranching and farming? Check.

Community of 20K that "get it" and have a 150 year history of working together through thick and thin? Check.

What part of that doen't make sense?

Best Wishes,

Jager06

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Mad Max ahead?

shudock wrote:

The coming changes will require us to not just adjust to less convenience. It will require us to change our way of thinking about how we live.

While I don't disagree, it's the timeline that is the problem.  If you believe that sometime in the near future we will come to a dead stop - their will be no gas, no electricity, no manufacturing, in other words the Mad Max scenario then I think you have to prepare to live in an agrarian pre industrial manner. 

However, I don't think the SHTF is the Mad Max scenario.  Rather I believe things will get expensive, we will have electricity and gas, just much more expensive and maybe intermittent supplies.  So I'm preparting for that reality and watching to see how things play out.  Maybe the cold fusion will be a solution, maybe we will get much more innovative/efficient in our use of power...  I have no illusion that stuff I buy now will last forever, but I figure it only has to last 10-20 years, which buys time to adjust to the new reality much more gradually.

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China exports oil? I

China exports oil? I thought they were importers.

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  rhare wrote: However, I

rhare wrote:

However, I don't think the SHTF is the Mad Max scenario.  Rather I believe things will get expensive, we will have electricity and gas, just much more expensive and maybe intermittent supplies.  So I'm preparting for that reality and watching to see how things play out.  Maybe the cold fusion will be a solution, maybe we will get much more innovative/efficient in our use of power...  I have no illusion that stuff I buy now will last forever, but I figure it only has to last 10-20 years, which buys time to adjust to the new reality much more gradually.

Exactly!!

I notice an incongruity of thought sometimes in these discussions. For example, folks will prepare for a caveman existance in a post meltdown world, while at the same time worry about having credit card debt. If there is no one to repair our PV systems or maintain the grid or make parts for various devices, then how is B of A going to collect on your VISA card. If there's no grid, no trucks to deliver for UPS etc., then how is the banking system going to maintain offices and deliver collection notices?

While I think our economy will suffer a major body blow, it will still function though at a much lower, less complex level. We still produce things and grow food. A paradigm shift doesn't mean the end of civilization.

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Agree with earthwise. Last

Agree with earthwise.

Last night I plunked down $4000 on some solar panels - 6 X Kyocera 185 W, and a Xantrex charge controller. Those I should go pick up from the States in a week or two, then bring them back up to Canada. Then locally I'll buy a 3000 W inverter and battery bank and wires. So all in all it should probably come to about $8000, pretty good if you ask me.

We recently got a Prius and a separate aftermarket plugin conversion kit. This will allow us to drive gasoline-free 50 miles per trip. We live in BC with tons of hydro so I don't see electricity disappearing but it may be intermittant. But in a hyperinflation scenario it will become expensive so we might as well buy the solar system now and then be able to produce our own electricity for "free" later on when rates jump to $4 million a kW-hr.

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Gold

I agree with you that the financial situation of the USA is very serious and that the major foreign creditors of the huge federal debt do not want to buy any more American T bonds for fear that they might never be refunded. Thus, as unemployment is rising , homes foreclosed and debts never refunded, several states such as California are on the verge of bankruptcy and so is the Federal State with no real solution in sight.

But we must remind investors of a historical event mentioned by only a few History books, the worst trick a former US president could play on the American citizens :

           “The Gold Confiscation Of April 5, 1933

From: President of the United States Franklin Delano Roosevelt
To: The United States Congress
Dated: 5 April, 1933
Presidential Executive Order 6102

Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled

An Act to provide relief in the existing national emergency in banking, and for other purposes~',

in which amendatory Act Congress declared that a serious emergency exists…”

 

In 1933, gold was confiscated from the citizens  for a small money compensation, reduced to nothing by inflation, and the country’s economy could rebound at the expense of the citizens .

Today, the US economic circumstances are the same as in 1933 when they encouraged the American citizens to buy gold until its price was the highest and suddenly President  Roosevelt decided to confiscate all the gold privately owned by the American citizens, as a serious emergency existed : the country was on the verge of bankruptcy.

In 2011, the economic and financial situation of the USA and all the Western countries is similarly in danger and Roosevelt’s Gold Confiscation Act is still in use ..The question is not whether the Federal Government will use it but when they will use it .

Should sensible investors buy gold with the threat of confiscation at any time ?...

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Whoa!

I am not sure what to think now. I just got lost in the weeds.

I am preparing for hyperinflation and loss of production and distribution chains due to energy shortages. I have read the military's "islanding" plan for post peak oil and choose not to participate because I like being right here just fine.

Debts will still be collected, but paying off fixed interest debt during a hyperinflation would be  like winning the lottery when it comes to screwing the bankers.

I think my views on Chris's recommendation to get the last bit of prep work done have perhaps hijacked the thread to a degree.

What is everyone else doing with this latest warning/ situation report from Chris?

Best Wishes,

Jager06

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A. M.
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Last Warning

Jager,

Praying and buying metals.
That's about all I can do.

Praying we've got enough time for me to finish out a degree, to get some land together. 
That things hold together *at least* until January of 2012.

Don't think I'm not going to take you up on a cold beer.

Cheers,

Aaron 

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nolas wrote:Should sensible

nolas wrote:
Should sensible investors buy gold with the threat of confiscation at any time ?...

The government doesn't need to confiscate gold. It would be more efficient for govenments to limit where gold can be exchanged to enable them to collect a transaction fee or tax at the time of the exchange.

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Doug
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What are we doing?

Quote:

What is everyone else doing with this latest warning/ situation report from Chris?

Stepping up plans to install solar/wind power.  Working with group to stock up on food.

Doug

Oh yeh, built chicken coop and got a small flock.  So far so good.  Now the wife is lobbying for goats.  I dunno about that.

edited for chickens

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how to prepare?

Jager06 wrote:

I am not sure what to think now. I just got lost in the weeds.

I am preparing for hyperinflation and loss of production and distribution chains due to energy shortages. I have read the military's "islanding" plan for post peak oil and choose not to participate because I like being right here just fine.

Debts will still be collected, but paying off fixed interest debt during a hyperinflation would be  like winning the lottery when it comes to screwing the bankers.

I think my views on Chris's recommendation to get the last bit of prep work done have perhaps hijacked the thread to a degree.

What is everyone else doing with this latest warning/ situation report from Chris?

Best Wishes,

Jager06

Jager,

I'm working at perfecting the art of multitasking if it can be perfected! I have my projects, daily routine tasks and community building activities laid out by folders and review them twice a day to remind myself of the various things I need to get done each day. That helps me coordinate trips to town, supplies, etc that have to be picked up and so on and conserves energy and time.

The major difference I have noticed since doing the CC 2-1/2 years ago is that changing my priorities has resulted in a change in activities and skillsets I want to either learn more about myself or help others learn about. Bottom line is that life has become much more fun and interesting and I have met many new people that I would not otherwise have met or made acquaintences with.

Those efforts are paying off in spades now because the events of the day do not really catch me by surprise although I do get a bit anxious at times when I look at the length of those lists!!

Coop

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Jager06
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My Brother

Beer is standing by.

We have room for you and yours, as you know.

Not much better place to base from than one that is already set up for visitors like yourself.

See you soon,

Jager06

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Jager06
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Coop..

Good work. I continue to hear good things about your progress!

But you bought all the Lister engines!! I got there like a week after you had cleaned them out.

How is your donation gathering going?

Best Wishes,

Jager06

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islanding plan?

Jager06 wrote:

I am preparing for hyperinflation and loss of production and distribution chains due to energy shortages. I have read the military's "islanding" plan for post peak oil and choose not to participate because I like being right here just fine.

So what is the military's "islanding plan" for peak oil?  I don't think I've heard that term before and am wondering if this is open knowledge or hush-hush. 

Quote:
Debts will still be collected, but paying off fixed interest debt during a hyperinflation would be  like winning the lottery when it comes to screwing the bankers.

Just be ready to pay it off in full when the banksters start making noises about changing the rules!  I doubt it would happen anytime very soon and we'd probably have some warning, but it would be prudent to have cash or PM's ready to pay it off.  I'll start worrying about this when real inflation gets over 15-20%, or if the dollars value plunges by 25% or more in the space of a few weeks.

Quote:

What is everyone else doing with this latest warning/ situation report from Chris?

Really I don't have a whole lot I can do at the moment that I haven't already done as a response to the last Alert.  Not owning a home gives a lot of flexibility, but at the same time it limits self-sufficiency options.  As far as purchases go, I will be buying a scooter as well as some solar PV equipment for a small personal project I have planned, but other than continuing our storable food accumulation that's about it.  As for other things, I've recently received my concealed handgun permit and will be taking a couple defensive handgun courses in June, and picking up where I left off with martial arts now that I'll be home full-time.  Also, my dad and stepmom just moved into a new house and I will be helping them with the hard labor for any gardening setup and home resiliency projects.  But all this stuff I really planned on doing anyway. 

If there is any recent response we're taking to the developments and this latest info, it's that we're holding onto even more cash savings than we usually do.  We have been planning a move overseas later this year (or possibly early next year) to pursue some business ventures, but depending on how events transpire there is a small probability that we may need to move earlier than planned and on very short notice.  And speaking more generally, the way I figure it this looming crisis or leg-down can go any number of ways, but liquid cash would appear to be useful in almost all of them.  Maybe not the most optimal for some probabilities (for example I missed out on the chance to increase my silver holdings a little bit), but for covering all probabilities as a whole I see it as a good strategy.

- Nickbert

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2115
What are we doing?

Like nickbert, my wife & I are mostly nibbling at the edges of ongoing preps (food storage, small resilience-related items like hand-cranked LED flashlights, etc.). The only big/new item on the docket is a CCW firearm, and that's been stalled for a bit. Unless I course-correct on the current plan it could take month or two to complete and as this week wears on I like the feel of that less and less so I'm contemplating an accelerated sked/plan B. Otherwise, we just put our house back on the market as FSBO and therefore at a hopefully more compelling price point (since we don't have to pay a broker fee). Feels a bit like selling sno-cones on the deck of the Titanic in terms of timing but it only takes one buyer from NYC who'd like a lovely little BOL/weekend home in the country. And oh yes, we're expanding our garden by 50%, although we mostly cannot plant for another few weeks (radishes, peas & spinach already in).

Viva -- Sager

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1840
I Hope The Breakdown Distances Itself

I sure hope nothing major happens yet for quite some time.

As some of you already know: I rent, it's a small place with little storage space, I have a wife who is not on board.

A Few Positives

  • No debt to worry about.
  • If gas prices shoot through the roof, being one mile from work will definitely remain advantageous.
  • We have numerous relatives in the county, so that is good.
  • Our twin baby boys are a "liability" right now but hopefully in a decade they'll start making a difference. I plan on taking them shooting as soon as they are mature enough to handle firearms.

Poet

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