Wednesday, March 2, 2011

The Slow Decline Starts Spiralling....and Thoughts on What to Do

Last Thursday I filled up the gas tank at $3.02 a gallon.  Yesterday morning I noticed that gas was $3.13 a gallon.  I had to take a trip out to the Lincoln County Courthouse yesterday.  Gas was $3.32 a gallon at one station I passed in Lincoln County.  When I got back to River City, the place I usually stop at was $3.29 a gallon.  Quite an increase in a short period of time.  Despite the MENA turmoil, there is a gas glut in this country.  I fear what will happen when the supply glut is gone.

Gold is hovering over $1,430 an ounce.  Silver is over $34 an ounce.   The copper and nickel in our five-cent coins is worth more than the face value by over two cents.  It appears that a lot of the recent increase in metals prices is related to global political instability, particularly in the MENA region.  This is, of course, on top of the increase due to weakening of fiat currencies.  I don't expect either the political instability or weakening of fiat currencies to abate anytime soon.

The stock market looks like it wants to dive again, but is being propped up by who-knows-what.  I don't think the stock market will be indicative of anything until it crashes again and confirms an all-out calamity.

I have seen more home foreclosures cross my desk in the last two years than I had seen in all fifteen years prior to 2009.  Combined.  Despite the promise of fraudulent foreclosures threatening to take down the big banks, there is little effect here where most foreclosures are non-judicial.  The lender takes back the property by buying it at the trustee's sale.  The former homeowner just walks away.

Surprisingly, food is still relatively cheap.  I don't expect this to last.  I have been noticing price increases of ten to twenty percent on a lot of items over the past few months.  Usually the name brands.  I think that food prices will markedly increase in the very near future as the price of food commodities is added to production costs and passed along to the consumer.  I think that food commodity prices will continue to increase due to the increase in price of oil-based fertilizers and production methods and also due to decreased global production.  A double-whammy we will soon be seeing in grocery store prices.

Unrest is increasing in our own country and there are few leaders who are capable of recognizing and dealing with the threat.  The entitlement class is at war with the middle and upper classes.  Welfarites, professional disabled, pensioners, public servants, and the union thugocracy are all gunning for the last Bernankedollars in the trough.  Will this lead to civil war?  Who knows?  We are staring straight into the abyss of a financial collapse and so far the only leaders who see the threat are Governors Christie, Daniels, Kasich, Scott, and Walker.  On the national level we are toast.  The measure to keep the fedgov funded for two more weeks tells it all:  Political willpower only exists to cut $4,000,000,000, or $104,000,000,000 annualized.  That is not nearly enough when we are in the hole for $1,700,000,000,000 this year alone.

With the country, if not the world, spiralling down the commode, here are my thoughts on what to do right now.

First, as Ol' Remus frequently tells us:  Stay away from crowds.  No matter how strongly one feels about current circumstances or the need to confront the union/communist/fascist thugocracy, it just is not worth it.  This house of cards is coming down like a ton of bricks.  Best not to be under it.

Second, food is relatively cheap, but won't be for long.  Stock up.  Buy things you will eat based on your current diet, but only things that will keep for at least a year.  At this point I don't think true LTS (long term storage) foods are necessary.  If inflation comes on as strong as it appears, we will be eating out of our stocks before too much longer.  However, there is probably enough time to stock up on "loss leaders" over the next month or two so that paying regular price isn't necessary.

Third, do you have some water stored just in case of a power outage or in case things get so bad you can't pay your water bill?  Have the capability to store at at least five gallons per person in your household plus the ability to produce more (filtration, rain catchment, etc.).  At least five gallons at any time.  A person needs to consume at least a gallon a day just to stay alive and dirty.

Fourth, can you keep your house warm?  Again, think power outage or inability to pay the utilities.  For the short term, something like a kerosene heater may work for you.  Longer term, a wood-stove, manual pellet stove, or waste oil burner is a better bet.  The best method is one for which you have a ready and steady supply of fuel.

Fifth, can you go anywhere.  Do you have a means of transportation you can count on and sufficient fuel?  Most of us have at least one form of transportation and likely more.  Besides keeping the gas tank no less than half full, it is a good idea to store at least another full tank's worth of stabilized fuel.  Fuel may become unavailable all of a sudden or the price may be exorbitant or you may just need the extra fuel at a time when putting food on the table came first.

Sixth, but not last for preparedness, can you defend what you have?  Many firearms are still affordable and as of this writing ammunition is plentiful and not too expensive.  I believe that every able-bodied person in the household should have a personal firearm and the training to use it.  Even if you have to buy a Hi-Point pistol and Mosin-Nagant rifle for each person in your household, you would be out only about $400.00 per person with a reasonable amount of ammunition.

The foregoing are my thoughts on what to do if a person stays in place.  I don't think many of us are actually going to bug out to some other location or otherwise abandon our homes during the coming crisis.  I expect that many will continue to go to work or continue to look for work, requiring us to have a home to start out from and return to each day.   Additionally, many of us have children that we take to school five days a week (except in Wisconsin).

What I am expecting in the near future is marked inflation in the prices of food, energy, and other necessities.  I also expect a huge increase in government taxes and fees.  The powers that be simply will not cut spending in any significant amount and will be looking for additional revenue from any and all sources.  For example, just this year in River City I have watched the city utilities (water, sewer, garbage) increase in price and the city tack on a $20.00 per vehicle licensing fee in addition to state fees.

It is foreseeable that we will find the costs of living increasing while our wages do not, with the result that some current necessities become tomorrow's luxuries.  It may become necessary to forego electricity in favor of food, and paying the mortgage instead of having city water and garbage pickup.  Walking instead of driving.  Circumstances could become that dire.

Better to prepare for such adjustments than to be forced to make the adjustments. Or worse, to become a ward of, and be at the mercy of, the state.

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