Tuesday, November 25, 2008

First hand account from SHTF in Iceland

I found a blogger in Iceland who is giving firsthand insights to what he's going through as his country goes through extremely hard times. Just a few years ago they seemed to be on the fast track to become the shining example of what a socialist country with the means to become energy independent could aspire to. They were on the verge of having the means to manage all of their own affairs while being beholden to no one. Now we're seeing exactly why socialism can never work. No matter what goes on inside of your own country you still have the rest of the world to deal with. If you're not prepared to deal with the fact that someone, somewhere can find a way to take advantage of you or your leaders then you're either destined to failure or you truly have nothing that benefits anyone. It's unfortunate that this guy has to live with the horrible choices that his leaders made but at least we can perhaps glean some useful insight from him for as long as he decides (or is allowed) to post. Go check him out at this link. You can also find it under my "links to live by in "Iceland Survival".

Sunday, November 23, 2008

Home made wine

I just finished bottling my first attempt at home made wine. I've been making beer for a couple of years now (although I still buy most of what I drink at the store) but I never really bothered with wine. I'm no wine connoisseur so it wasn't a top priority. During the spring I decided to try a dandelion wine, though. I don't remember the exact recipe but it basically consisted of pouring a LOT of dandelion blossoms into some boiling water along with some raisins and orange peels. I spent all morning filling up a grocery bag full of dandelion blossoms and then that afternoon was spent picking the petals out of the stems. After all of that was finished I filtered the must into a 5 gallon carboy and let it cool overnight. The next morning I pitched the yeast and forgot about it for a while. I did rack it a few times hoping that it would clarify but after several months and transferring it into a clean carboy at least 3 times it still looked like opaque sludge. It smelled awesome, though, so it was off to the homebrew store I went to get some advice on salvaging it. I came home with a clarifier and after just a few days it was looking great. Unfortunately, I only got 4 bottles out of it. That's mostly because I kept racking it which uses 1/3-1/2 a gallon at a time.

I did pour myself a glass of what was left over and I must say that it's not bad. It's got a subtle sweetness to it and the alcohol taste is kind of strong. That should mellow out after a year or so on my wine rack. It's got a weird, sweet aftertaste that kinda tastes like dandelions with absolutely none of the bitterness. It tastes very different from any other wine that I've ever had. I've been told that dandelion wine is best after several years of aging so I probably won't even open the first bottle for a few years at the very least. I'm saving one of them for my nephew's 21st birthday. It'll be as old as he is.

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I've got 6 gallons of merlot brewing in the basement right now. That batch will yield more than 30 bottles. This spring I plan on trying a couple more wild wines but this time I'm going to go with something a little more simple. Learn how to make this stuff yourself and you'll suddenly realize how easy it is to make sure that you never have to go without no matter how hard things get. Whether you plan on drinking it yourself, using it for barter or both it's a useful skill to have. Some fruit juice and bread yeast left in a bucket for a week is enough to get you hammered but if you learn how to make it well then you can make something that anyone can appreciate. That just makes it all the more valuable.

Thursday, November 20, 2008

Socialism vs capitalism

Capitalists tend to be few and far between even in a capitalist society and a lot of capitalists just want what's best for themselves. They don't care how well (or badly) everyone else is doing. Some of them will step on whoever they need to or whoever gets in their way to accomplish whatever it is that they want to accomplish. There are a lot of capitalists who recognize that they're doing well and want to help out some of the people who aren't doing so well, though. On a very basic level this is why a capitalist society works so well. Limited government involvement, through taxing everyone on things that they utilize and benefit from (gas tax which pays for our highway, sales tax that pays for most of our government workers, etc) ends up benefiting everyone. Anyone with some ambition and a halfway decent business mind can put together something that works, profit from it and hire some people to help them out. Give them enough leeway and they start giving their excess to help the less fortunate via charity.

Socialists have an entirely different philosophy. They don't believe that anyone deserves to do any better than anyone else. They think that, despite how exceptional an individual is, that everyone should benefit the same from society. The guy pushing a button in a factory should get everything that the guy who's in charge of that company gets. Why should the guy who intelligently put together a business, ran it exceptionally and employed a lot of people get to live in a bigger house than the guy who he just hired, who is sick every couple of weeks and can't make it to work on time because of all of the unfortunate circumstances that always seems to befall him?

I can think of countless examples of people who started with nothing and worked themselves up to a success (myself included although I don't really consider myself to be very successful). Had the incentive for them to be a success been taken away they would still be at the bottom of the totem pole doing only what was asked of them so that they could take home their fair share. Incentive is one of the most important things that we can implement into the economy. Why bother working harder if it doesn't do you any good?

We keep seeing more and more socialist ideals implemented into our economy. At first glance and on the surface it seems like a great idea. It's hard for someone who doesn't know the consequences to read a book on socialism and not come to the conclusion that it's a great idea. How could taking from rich people who can do whatever they want and giving to people who have "practically nothing" be a bad thing? What's so scary is that we keep inching closer and closer to full blown socialism. It seems like every inch of ground that "they" (socialists) gain "we"(capitalists) never get back. I keep hearing about this pendulum theory. I understand it completely but it's strange how every time that it swings in the socialists favor that it never seems to swing back ANYWHERE NEAR as far into the capitalists favor. I can sit here and talk about why that is all night but I'd rather just go to bed. After all, why should I work so hard to convince anyone that one way is better than the other when it's so obvious that so many people are already convinced which way is the "correct" way?

Sunday, November 16, 2008

Inflation or deflation?

This is one of the big questions that I see people asking these days. Everyone knows that something really bad is going on but there's a lot of debate about what's really happening. First you have to understand how our financial system works. Credit is really the driving engine. It allows people to buy things that they can't normally afford. If you only make x amount of dollars then obviously it'll take a while to save up enough money for that house, new (or newer) car or that big screen tv. You might not be able to afford to buy it outright but if you can convince someone to loan you the money then you can get it now and make payments on it over a period of time. Someone with a huge surplus of cash can take their money that they don't need right now and get a monthly income by loaning it to someone who can afford to pay back slowly over time. By the time that loan is paid back they get a lot more money than they loaned out in the first place. You have things like credit scores and past credit records that allow people who have money to loan to feel confident that they'll actually be paid back if they loan it out. It allows people who don't have the cash on hand to get the "money" to buy things that they need or want right now. The system works great when everything is working as intended.

Unfortunately, in recent years the government has stepped in and implemented systems that take away risk from borrowers to make sure that people who probably won't be able to pay back their loans can make the biggest purchase in their lives whether they can pay back the money or not. By creating Fannie and Freddie and allowing borrowers to sell the risky loans that they made to them they essentially allowed people with the capital on hand to make loans to risky borrowers and then sell those loans to Freddie and Fannie and eliminate the risk that they'd default.

By now everyone knows that the housing crisis is what has caused the monumental mess that we're dealing with today. The government basically told everyone that it was OK to give anyone who wanted money to buy a home that they had nothing to worry about by loaning out that money. It was even OK to push that loan through by any means possible via temporary, artificially low interest rates or even outright fraud. After all, the economy was doing so well that it couldn't possibly start to get any worse. Meanwhile, while it was so easy to get a loan for hundreds of thousands of dollars to buy a new house because it would assuredly be worth double that in just a few years credit card companies were seizing the opportunity to extend people thousands of dollars in credit to buy whatever they wanted to furnish those houses. Even if the person doesn't own a house what's the big deal? After all, they're still making money and even if they loan out too much they'll still get SOMETHING back when the defaulters go to bankruptcy court and all the while they'd keep getting paid by the people in houses that would assuredly keep gaining value who could just keep pulling equity out of their houses to pay their bills.

It would be one hell of a deal if it could keep working like that. It's too bad that the guarantee that the government was making by backing those bad loans is tied to our dollar that the world uses as the defacto currency. As the rest of the world watches all of these home values that our dollar is essentially backing go in the toilet they're starting to lose some confidence. Now people with money don't want to make loans to people with less than stellar credit, anymore. So the government wants to loan those people (ie banks) money at a very low interest rate so that they can take that money and loan it out again. That doesn't do much good when no one thinks that anyone will be able to pay it back, though.

So now we've got banks that are afraid to loan people money because they know that they probably won't be able to pay it back. At the same time they've got the federal government shoving money down their throats thinking that they'll take that money and loan it out like they've been doing. Why would they? Even with the full faith of the United States Government behind them they're still losing a ton of money because of all of the easy money that they were giving everyone. Banks are failing left and right and the big banks are just using the money that the government gave them to buy up those smaller banks. Now all of a sudden the government wants to buy up stock in those big banks that will probably end up surviving all of this mess?

The good news is that all of this money that's being "printed" is only really replacing the money that the big banks have lost. The government just thinks that it'll be a wash. This won't result in massive inflation. It'll result in massive deflation where normal people can't just buy a $1000 big screen TV, anymore. It'll mean that someone with no money down or a car that they financed 2 years ago that they're now upside down in won't be able to buy a brand new $40,000 car without taking a big hit. You already see cars that were selling for $30k a year ago selling for thousands less now (to those that can actually get the credit to buy them or who have a big enough down payment IN CASH to finance them). When any Tom, Dick or Harry could walk into a dealership a year ago and walk out with a new car with a reasonable monthly payment the economy was doing great because companies could keep making their products, charging whatever they cost with a decent profit attached and they'd get their money because some lending institution was willing to give any Tom, Dick or Harry with so so credit the money to buy it. Now all of a sudden that aint happening. The only recourse that the companies selling these high end products (from houses, to cars, to big screen TVs) have is to keep lowering their price until they can get SOMETHING for what they made and still have enough left over at the end of the day to maybe break even. This is deflation.

Here is where inflation will come into play. The only answer to this problem is to start giving money to the people. Obama has already made it perfectly clear that that's exactly what he wants to do. He wants to give "tax credits" to 95% of the "working class". That's funny, though, considering that 30% of that "working class" doesn't pay taxes in the first place. Another thing that I can see him doing is finding a way to make sure that anyone who wants a loan gets a loan. This will allow people to start making loans again. Unfortunately, in today's economic climate it will just empower people who can't pay back those loans in the first place to keep making loans that they can't afford in the first place. The government will just have to keep making money easier to get by giving handouts and by raising the minimum wage. This will destroy the middle class (honest, working class folks) who are just doing what they have to do to get by as it is because as the big "greedy" corporations who had to stretch themselves farther than they themselves could afford to be have to keep raising prices to keep up.

It's a vicious circle and a hole that keeps getting deeper the harder we try to dig it. This will be our ultimate downfall. We'll keep racing to keep up while other parts of the world who were already much worse off than we are see an opportunity to point the blame at us and earn credentials in the process. As the rest of the world loses confidence in us we'll continue on our decline and it won't be long before we have no other choice than to do things the way that other governments want us to do them.

Right now your best bet is to start to do the hard thing. Start scrimping and saving wherever you can (in tangibles). Make sure that your community is tight. Make sure that your food stash is squared away. Personally, I've been looking at foreign real estate but I don't make a whole lot of money and the good locations are relatively expensive (I REALLY like Costa Rica). Hopefully we'll pull an ace and still manage to stay on top despite all of the cards that are stacked against us right now. God knows that we have them with all of the natural resources that we still have and all of the rights that are granted to us via the constitution. I don't have a whole lot of faith in our "rights", though, since they're really just privileges that our government allows us until they decide that it's in our best interest to take them away. The only way to prove to them otherwise is with force and in that case we still actually have to beat them. If it ever comes to that then we're really screwed.

As far as our natural resources go it's not a far stretch to look at those as collateral. You know that foreign governments are looking at them that way. We're on top because we do have all of those natural resources. We've got the largest gold reserves in the world. We've got enough natural gas to power our country for generations if we make the necessary adjustments. We're still the bread basket of the world. Yep. Those things are all just collateral for all of the loans that the rest of the world has been making us via treasury bonds for years. When they decide that our dollar isn't worth enough to pay those back then they're going to come for our resources. Our government won't have any choice but to agree to those terms unless they want to incite a full scale war on our soil. When the world finally decides that they're sick of our shit and that they want what we've got then we're going to be hurting whether we try to fight them off or not.

Thursday, November 13, 2008

Canning...old school style

Canning is something that I think any self respecting survivalist should be able to do. In most parts of the US it's impossible to grow crops year round. If things get so bad that the supply lines shut down then there will probably be several months out of the year where the grocery stores just don't have much produce on the shelf. The months when they DO have plenty on the shelf are the months when your gardens should be in full swing, anyway. The same goes for meat. Not everyone can raise their own meat animals thanks to ridiculous local laws and hunting ends up costing more than what it would cost to just buy the meat at the market at today's prices. With prices getting more and more expensive, canning is becoming all the more viable. A year ago you could fill up a pantry with canned meat and vegetables from the grocery store for half of what you can today. I went to Wal-Mart today and canned TUNA was $1 a can. A year ago it regularly went on sale for 3 for $1. This stuff is just going to keep getting more expensive.

So what can you do about it? Can it yourself! It costs a little bit to get things started but once you get things rolling most of the stuff is paid for and it becomes really cheap. A couple of months ago I decided that my garden was producing more than I'd be able to eat so I went ahead and invested in some canning jars and a water bath canner. My water bath canner was $20 and the jars were about $10 for a dozen. These are brand new prices. That was a pretty good start but it didn't take me long to realize that I'd need more. Luckily, the jars will last you forever as long as they don't break and new lids are only a couple of bucks for a dozen (stock up now). The biggest downside to water bath canning is that most recipes call for distilled vinegar which may be hard to come across during a major emergency. Luckily, it's ridiculously cheap and relatively easy to stock up on.

Once you realize how easy it is it becomes obvious that a pressure canner is where it's at. I lucked out and found an old canner at a thrift store that cost me $20. It uses weights instead of a pressure gauge and it doesn't use any rubber seals. Everything I've read on the internet said DON'T USE IT OR IT'LL BLOW UP AND KILL YOU AND YOUR FAMILY. Me being me I went ahead and tried it out anyway. Interestingly enough it works perfectly. I've eaten jars of chili that sat on my shelf for a month after the canning process with no issues. The good thing about canners that have a good metal on metal seal and that use weights instead of gauges is that you should never have to replace anything. Obviously, you have to be very careful if you go this route. If you want to be safe then get a newer model All American Pressure Canner. They start at about $200 and you're sure to end up with a high quality pressure canner that will last you and your family several generations. Replacing the gauges is the only thing that you'll have to worry about but if you're really concerned with safety then this is very important. If you're lucky enough to find a flex-seal canner that's in good shape with all of the weights in tact (what I was lucky enough to find) then I'd have a hard time not recommending it. If it was abused then it could potentialy explode in your kitchen and cause some serious damage but if you're diligent about testing it before you use it then you should be just fine.

Canning has practically become a lost art. That's a little ironic because a $10 Ball Canning book that's available at any Wal-Mart will tell you everything that you need to know, whether you're water bath canning or pressure canning (yes I'm telling you to buy this book). We've become so dependent on our economy to keep us fed that, as far as I'm concerned, you'd be a fool not to learn ways to preserve food on your own to make sure that you can preserve some food in case the economy does actually fail.

Tuesday, November 11, 2008

The ATF

Let's look at the ATF for a moment. It's the Bureau of Alcohol, Tobacco and Firearms. These are the three things in the economy that aren't affected by recession. The people that smoke are going to keep smoking as long as tobacco is available. I was at a cigarette store the other day. The guy was obviously hurting but he was going to walk out with a carton of something. I walked out with a box of 200 filtered tubes for $1.70. He walked out with a carton of cigarettes for $35. A few months ago I bought a pound of tobacco that cost about $20. It's still about the same price and I still have enough for a lot left. Eventually these smokers are going to figure it out and get on the ball.

I've been brewing my own beer for years. I also make wine when the juice becomes available. I have the diagrams for a simple still and I know how easy it would be to go that route if I decided to. I will always have alcohol as long as farmers are growing and selling grain. Anyone can make more than enough alcohol to get drunk and stay drunk if they just do a little bit of research. My favorite beer is still cheaper to buy than it is to brew, though, so it'll be a while before I have to resort to that.

Firearms are still accessible by just about anyone. If you're not a monumental fuckup then you can still walk into a gun store, fill out a form and buy a gun. Even if you're a bonofied, monumental fuckup and you've got a criminal record you can still find someone who's willing to sell you a gun via private party if you have any internet savy or you know how to open a newspaper and you live in a free state. I can honestly say that any time I go into a private party gun sale I try to measure up the guy that I'm selling or buying the gun from. Do you really think that the gang bangers can just throw on a polo shirt and khakhis and suddenly start talking like a normal person when they decide that they want to buy a "legal gun"? Do you even think that they care if the gun is legal or not when they have intentions to use the gun that they're buying for illegal purposes? The "legal gun" will probably cost them more than an illegal gun from some jackass who smuggled a truckload of guns across the border, anyway.

So now we're looking at three of the major industries that will do well in a bad economy. People will smoke whether the economy is good or not. When things start to get worse people start looking for people that know how to make some booze. When things start to get so bad that the government doesn't even matter anymore then the firearms that are already in the hands of normal citizens will start to worry everyone who are still trying to figure out how the government lost power in the first place. With all of this in mind I can understand how the ATF got so much power in the first place. They have quite the monopoly on the three parts on the economy that don't actually care about the economy in the first place.

Sunday, November 9, 2008

Inflation, deflation and printing presses

A lot of people seem to be confused lately by what's going on in the economy. I am most definitely among them. When you stop and take in the big picture, though, then some of the actions of the government start to make some sense. Obviously, we have a fiat money system as does the rest of the world. There are a lot of reasons for this which I don't really feel like getting into. Basically, though, we were forced to switch to a fiat system because, at the time, the rest of the world was moving towards doing the same and if we hadn't done it then the rest of the world would have been able to purchase our gold backed dollars with their fiat money and then cashed them in, thereby stealing all of our wealth. I read somewhere that South Africa has recently stopped production of krugerands. Do you really think that most of South Africa's krugerands are still in South Africa?

Thanks to a relatively recent and massive furthering of technology our system has become increasingly globalized. With the advent of the computer, the internet, databases and information technology in general it's become easier and easier to separate the money supply from the credit supply. You can deposit your paycheck into a bank and the bank now gets to spend $10 for every $1 you deposit. Recently, you could spend $10 on a share of stock and watch with glee as the value skyrocketed in a few years. Even if the stock shot up to $500 that money was never added to the money supply until you decided to cash it in, though. When it suddenly dropped back down to $5 before you decided to cash it in then only $5 was added to the money supply.

So now we've got the MOAB (thanks Rawles) going on. Hundreds of billions of dollars are now being pumped into the economy. Where is that money going, though? It's not being printed. Physical dollar bills aren't being printed and handed to anyone. As wall street is collapsing and home values are plummeting the government is just trying to supplement the banks' balance sheets by giving them "money" that won't ever reach the hands of the average person. So while the value of your house goes from $200k to $150k the government is just trying to make up the difference so that the banks feel confident enough to loan some money to other banks. Money is the lifeblood of our economy. Once it stops flowing then the body dies. The idea is to stop the banks from losing money so that things get stimulated again and the values of homes and wall street once again start to increase. It aint working so good, though.

Inflation won't start hitting us until Obama decides to implement his stimulus packages. When every Tom, Dick and Harry on main street suddenly has a few extra grand to blow then we'll really start to see inflation rear it's ugly head. Do you really think that people are going to run out and buy a big screen TV or put a down payment down on a brand new car when they're not sure if they'll be able to feed their families in a few months? When consumer confidence is at the point that it's at now the last thing that you want to do is start handing people money. It'll only take a few stimulus packages until everyone in America has real cash that was literally printed and handed to them for us to be standing in bread lines with wheel barrows full of cash hoping that there will be enough left for us and our families when we finally get to the front. On a lighter note gold and silver are both pretty cheap right now. Spot silver is almost at the point where it was at before all of the economic turmoil started to show itself. Good luck finding someone willing to sell physical silver (or gold) at spot price right now, though. Expect to pay at least $15-$20 an ounce for silver and $1000 an ounce for gold.