Part 2
Part 1

Peter Laskowski stacks firewood at his remote home in Waitsfield, Vt., Friday, April 11, 2008. Convinced that the planet's oil supply is dwindling and the world's economies are heading for a crash, people around the country are moving onto homesteads, stocking up, conserving fuel and learning to live off their land, . (AP Photo/Talbot)

Energy fears looming, new survivalists prepare By SAMANTHA GROSS, Associated Press Writer Posted Sat May 24, 2008 11:12am PDT BUSKIRK, N.Y. - A few years ago, Kathleen Breault was just another suburban grandma, driving countless hours every week, stopping for lunch at McDonald's, buying clothes at the mall, watching TV in the evenings. Breault cut her driving time in half. She switched to a diet of locally grown foods near her upstate New York home and lost 70 pounds. She sliced up her credit cards, banished her television and swore off plane travel. She began relying on a wood-burning stove.

" I was panic-stricken," the 50-year-old recalled, her voice shaking. "Devastated. Depressed. Afraid. Vulnerable. Weak. Alone. Just terrible."

Convinced the planet's oil supply is dwindling and the world's economies are heading for a crash, some people around the country are moving onto homesteads, learning to live off their land, and conserving fuel.

The exact number of people taking such steps is impossible to determine, but anecdotal evidence suggests that the movement has been gaining momentum in the last few years.

These energy survivalists are not leading some sort of green revolution meant to save the planet. Many of them believe it is too late for that, seeing signs in soaring fuel and food prices and a faltering U.S. economy, and are largely focused on saving themselves.

Some are doing it quietly, giving few details of their preparations — afraid that revealing such information as the location of their supplies will endanger themselves and their loved ones. They envision a future in which the nation's cities will be filled with hungry, desperate refugees forced to go looking for food, shelter and water.

"There's going to be things that happen when people can't get things that they need for themselves and their families," said Lynn-Marie, who believes cities could see a rise in violence as early as 2012.

Lynn-Marie asked to be identified by her first name to protect her homestead in rural western Idaho. Many of these survivalists declined to speak to The Associated Press for similar reasons.

These survivalists believe in "peak oil," the idea that world oil production is set to hit a high point and then decline. Scientists who support idea say the amount of oil produced in the world each year has already or will soon begin a downward slide, even amid increased demand. But many scientists say such a scenario will be avoided as other sources of energy come in to fill the void.

On the PeakOil.com Web site, where upward of 800 people gathered on recent evenings, believers engage in a debate about what kind of world awaits.

Some members argue there will be no financial crash, but a slow slide into harder times. Some believe the federal government will respond to the loss of energy security with a clampdown on personal freedoms. Others simply don't trust that the government can maintain basic services in the face of an energy crisis.

The powers that be, they've determined, will be largely powerless to stop what is to come.

Determined to guard themselves from potentially harsh times ahead, Lynn-Marie and her husband have already planted an orchard of about 40 trees and built a greenhouse on their 7 1/2 acres. They have built their own irrigation system.

The couple have gotten rid of their TV and instead have been reading dusty old books published in their grandparents' era, books that explain the simpler lifestyle they are trying to revive. Lynn-Marie has been teaching herself how to make soap. Her husband, concerned about one day being unable to get medications, has been training to become an herbalist.

By 2012, they expect to power their property with solar panels, and produce their own food. When things start to fall apart, they expect their children and grandchildren will come back home and help them work the land.

So can Peter Laskowski. Living in a woodsy area outside of Montpelier, Vt., the 57-year-old retiree has become the local constable and a deputy sheriff for his county, as well as an emergency medical technician.

"I decided there was nothing like getting the training myself to deal with insurrections, if that's a possibility," said the former executive recruiter.

Laskowski is taking steps similar to environmentalists: conserving fuel, consuming less, studying global warming, and relying on local produce and craftsmen. Laskowski is powering his home with solar panels and is raising fish, geese, ducks and sheep. He has planted apple and pear trees and is growing lettuce, spinach and corn.

Whenever possible, he uses his bicycle to get into town.

"I remember the oil crisis in '73; I remember waiting in line for gas," Laskowski said. "If there is a disruption in the oil supply it will be very quickly elevated into a disaster."

Breault said she hopes to someday band together with her neighbors to form a self-sufficient community. Women will always be having babies, she notes, and she imagines her skills as a midwife will always be in demand.

For now, she is readying for the more immediate work ahead: There's a root cellar to dig, fruit trees and vegetable plots to plant. She has put a bicycle on layaway, and soon she'll be able to bike to visit her grand kids even if there is no oil at the pump.

Whatever the shape of things yet to come, she said, she's done what she can to prepare.

MSNBC.com

Food price hikes changing eating habits
More people say they are eating at home, buying food in bulk
MSNBC staff and news service reports updated
8:28 a.m. PT, Tues., April. 1, 2008

Melissa Marks didn’t used to give much thought to her trips to the grocery store — if she needed a gallon of milk or a carton of eggs, she’d just hop in her car and get it.

These days, Marks, a single mom with three kids, is tying her grocery store trips to the day she gets her paycheck.

Steadily rising food costs aren't just causing grocery shoppers to do a double-take at the checkout line — they're also changing the very ways we feed our families.

The worst case of food inflation in nearly 20 years has more Americans giving up restaurant meals to eat at home. We're buying fewer luxury food items, eating more leftovers and buying more store brands instead of name-brand items.

At $1.32, the average price of a loaf of bread has increased 32 percent since January 2005. In the last year alone, the average price of carton of eggs has increased almost 50 percent.

Ground beef, milk, chicken, apples, tomatoes, lettuce, coffee and orange juice are among the staples that cost more these days, according to the federal Bureau of Labor Statistics.

Overall, food prices rose nearly 5 percent in 2007, according to the U.S. Department of Agriculture. That means a pound of coffee, on average, cost 57 cents more at year's end than in 2006. A 12-ounce can of frozen, concentrated orange juice now averages $2.53 — a 67-cent increase in just two years.

And a carton of grade A, large eggs will set you back $2.17. That's an increase of nearly $1 since February 2006.

In 2007, the FMI survey showed the average number of weekly shopping trips falling below two per household for the first time.

March 24, 2008

There is Hope...

A Greenhouse Gusher

Algae oil could well be the fuel of the future, according to Glen Kertz, principal scientist for Vertigro Energy, a joint venture that is growing oil-rich algae by pumping it through clear plastic bags suspended in a greenhouse. The algae produced by this closed-loop bioreactor process is then siphoned off so that lipids can be extracted and refined into fuels like biodiesel.

The El Paso, Texas facility is also conducting sophisticated algae research. Kertz expects that the project will soon be able to identify which algae are best suited for specific uses. Kertz says the process can produce 100,000 gallons of algae oil per acre, per year.

That compares to corn, which yields only about 20 gallons per acre. What is the potential impact? Take one-tenth of the state of New Mexico and convert it to greenhouse algae production, and the result would be enough oil to meet the transportation needs of the entire U.S., he says.

***

And There is also Gloom...

By Paul Steinhauser
CNN Washington Bureau
March 17th 2008

(CNN) -- Nearly three-quarters of all Americans think the economy is in a recession, according to a national poll released Monday.

Seventy-four percent of those questioned in a CNN/Opinion Research Corp. survey say the economy has entered a recession.

That figure is up from 66 percent who felt that way in a similar survey last month. The number stood at 61 percent in January and 46 percent in October.

It's no surprise then that the economy remains the key issue in the public's mind.

By a 2-1 margin, it tops the Iraq war as the No. 1 issue for Americans in their choice for president.

Load Up the Pantry
"says Manu Daftary, one of Wall Street's top investors"
by Brett Arends
Wednesday, April 23, 2008

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

Write to Brett Arends at brett.arends@wsj.com

Copyrighted, Dow Jones & Company, Inc.

Wednesday, May 28, 2008 Buffett: A Long and Deep Recession Hyde Park's Corner Blog posted by Greg Billionaire Warren Buffett, "the Oracle of Omaha," has been saying lately that for all practical purposes we are already experiencing a recession. And more than that, as he told the German magazine, Der Spiegel, this recession will likely be much worse than people expect: "This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think." The housing market. The subprime mortgage debacle. The lack of financing capital. The price of oil and gas. The price of food. Inflation. And the problems and burdens on the economy continue to proliferate. When Buffet talks, I listen... but I don't think you have to be an oracle to see where all this is going. http://www.usatoday.com/money/economy/2008-04-28-buffett-recession_N.htm

What an Economic Collapse Looks Like:
How to be a survivalist in an economic decline.

It is a review of survivalist preparations one can make, based on the real-life situation in Argentina.

The author provides advice for personal and family survival in a situation of severe economic and social collapse and chaos. We can easily make preparations for a recession both as individuals and as a society, but when violence starts to erupt, then it is a question of individual survival and then societal choices are no longer possible.

Very interesting account of life after economic collapse in Argentina.

BEGINS:

My brother visited Argentina a few weeks ago. He’s been living in Spain for a few years now.
Within the first week, he got sick, some kind of strong flu, even though climate isn’t that cold and he took care of himself.
Without a doubt he got sick because there are lots of new viruses in my country that can’t be found in 1st world countries.

The misery and famine lead us to a situation where, even though you have food, shelter and health care, most of others don’t, and therefore they get sick and spread the diseases all over the region.

What got me started on this post is the fact that I actually saw this coming.
So I started thinking about several issues, what I learned after all these years of living in a collapsed country that is trying to get out an economical disaster and everything that comes along with it.
Though my English is limited, I hope I’m able to transmit the main ideas and concepts, giving you a better image of what you may have to deal with some day, if the economy collapses in your country.
Here is what I have so far:

URBAN OR COUNTRY?

Someone once asked me how did those that live in the country fare. If they were better off than city dwellers.
As always there are no simple answers. Wish I could say country good, city bad, but I can’t. Because if I have to be completely honest, and I intend to be so, there are some issues that have to be analyzed, specially security.

Of course that those that live in the country and have some land and animals were better prepared food-wise.

No need to have several acres full of crops. A few fruit trees, some animals, such as chickens, cows and rabbits, and a small orchard was enough to be light years ahead of those in the cities.
Chickens, eggs and rabbits would provide the proteins, a cow or two for milk and cheese, some vegetables and fruit plants covered the vegetable diet, and some eggs or a rabbit could be traded for flower to make bread and pasta or sugar and salt.
Of course that there are exceptions.
For example, some provinces up north have desert climate, and it almost never rains. It is almost impossible to live off the land, and animals require food and water you have to buy. Those guys had it bad, no wonder the northern provinces suffer the most in my country.
Those that live in cities, well they have to manage as they can. Since food prices went up about %200-%300. People would cut expenses wherever they could so they could buy food. Some ate whatever they could, they hunted birds or ate street dogs and cats, others starved.

When it comes to food, cities suck in a crisis. It is usually the lack of food or the impossibility to acquire it that starts the rioting and looting when the economy collapses.

When it comes to security things get even more complicated.
The best alarm system anyone can have in a farm are dogs. But dogs can get killed and poisoned. A friend of mine had all four dogs poisoned on his farm one night, they all died.
Big cities aren’t much safer for the survivalist that decides to stay in the city. He will have to face express kidnappings, robberies, and pretty much risking getting shot for what’s in his pockets or even his clothes.
So, where to go? The concrete jungle is dangerous and so is living away from it all, on your own.
The solution is to stay away from the cities but in groups, either by living in a small town-community or sub division, or if you have friends or family that think as you do, form your own small community.
Some may think that having neighbors within “shouting” distance means loosing your privacy and freedom, but it’s a price that you have to pay if you want to have someone to help you if you ever need it.

SERVICES

Whatever sort of scenario you are dealing with, services are more than likely to either suffer in quality or disappear all together.

Think ahead of time, analyze possible collapse scenarios and which service should be affected by it in your area.
Think about the most likely scenario but also think outside the box. What’s more likely? A tornado? But a terrorist attack isn’t as crazy as you though it would be a few years ago, isn’t it?
Also analyze the consequences of those services going down. If there is no power then you need to do something about all that meat you have in the fridge, you can dry it or can it. Think about the supplies you would need for these tasks before you actually need them.
You have a complete guide on how to prepare the meat on you computer… how will you get it out of there if there is no power? Print everything that you consider important.

WATER

No one can last too long without water. The urban survivalist may find that the water is of poor quality, in which case he can make good use of a water filter, or that there is no water available at all.
When this happens, a large city were millions live will run out of bottled water within minutes.
In my case, tap water isn’t very good. I can see black little particles and some other stuff that looks like dead algae. Taste isn’t that bad. Not good but I know that there are parts of the country where it is much worse. To be honest, a high percentage of the country has no potable water at all.
If you can build a well, do so, set it as your top of the list priority as a survivalist.

Water comes before any thing else, medicines and even food.
Save as much water as you can.

Use plastic bottles, refill soda bottles and place them in a cool place, preferably inside a black garbage bag to protect it from sun light.
The water will pick some plastic taste after a few months, but water that tastes a little like plastic is far way better than no water at all.
What ever the kind of collapse scenario you are dealing with, water will suffer. In my case the economical crash created problems with the water company, that reduces the maintenance and quality in order to reduce costs and keep their income in spite of the high prices they have to pay for supplies and equipment, most of which comes from abroad, and after the 2001 crash, costs 3 times more.
As always, the little guy gets to pay for it.
Same would go for floods or chemical or biological attacks. Water requires delicate care and it will suffer from disaster in one way or another.
In this case, when you still have tap water, a quality filter is in order, as well as a pump if you can have one. A manual pump would be ideal as well if possible.

Estimate that you need a approximately a gallon per person per day.

Try to have at least two-four weeks worth of water.
More would be preferable.

POWER

I spent WAY to much time without power for my own taste. Power has always been a problem in my country, even before the 2001 crisis.
The real problem starts when you spend more than just a few hours without light. Just after the economic collapse in 2001 half the country went without power for 3 days.
Buenos Aires was one big dark grave. People got caught on elevators, food rot, hospitals that only had a few hours worth of fuel for their generators ran out of power.
Without power, days get to be a lot shorter. Once the sun sets there is not much you can do.
I read under candle light and flashlight light and your head starts to hurt after a while. You can work around the house a little bit but only as long as you don’t need power tools.
Summarizing, being in a city without light turn to be depressing after a while.
I spent my share of nights, alone, listening to the radio, eating canned food under the light of my LED head lamp. Then I got married, had a son, and found out that when you have loved ones around you black outs are not as bad. The point is that family helps morale on these situations.
A note on flashlights. Have two or three head LED lights. They are not expensive and are worth their weight in gold. A powerful flashlight is necessary, something like a big Maglite or better yet a SureFire, specially when you have to check your property for intruders. But for more mundane stuff like preparing food, going to the toilet or doing stuff around the house, the LED headlamp is priceless. Try washing the dishes on the dark while holding a 60 lumen flashlight on one hand and you'll know what I mean. LEDs also have the advantage of lasting for almost an entire week of continuous use and the light bulb lasts forever.
Rechargeable batteries are a must (ed. Get a solar powered battery charger) or else you'll end up broke if lights go out often.

Have a healthy amount of spare quality batteries and try to standardize as much as you can.

I have 12 Samsung NM 2500Mh AA and 8 AAA 800mh for the headlamps. I use D cell plastic adaptors in order to use AA batteries on my 3 D cell Maglite. This turned out to work quite well, better than I expected.
I also keep about 2 or 3 packs of regular, Duracell batteries just in case. These are supposed to expire around 2012, so I can forget about them until I need them.
Rechargeable NM batteries have the disadvantage of loosing power after a period of time, so keep regular batteries as well and check the rechargeable ones every once in a while.
After all these years of problems with power, what two items I would love to have?
1) The obvious. A generator. I carried my fridge food to my parents house way to many times on the past. Too bad I can’t afford one right now.
2) A battery charger that has both solar panel and a small crank. They are not available here. I saw that they are relatively inexpensive in USA. Do yourself a favor and get one or two of these. Even if they don’t charge as well as regular ones, I’m sure it will put out enough power to charge batteries for LED lamps at least.

GAS (For cooking)

Gas has decreased in quality as well, there is little gas.

Try to have an electric oven in case you have to do without it.
If both electricity and gas go down, one of those camping stoves can work as well, if you keep a good supply of gas cans.
The ones that work with liquid fuel seem to be better on the long run, since they can use different types of fuel.
You can only store a limited amount of compressed gas and once you ran out of it, you are on your own if stores are closed of they sold them out.

Anyway, a city that goes without gas and light for more than two weeks is a death trap, [because of rioting and looting] get out of there before it’s too late.

A DIFFERENT MENTALITY.

I was watching the People & Art channel with my wife the other night. It was a show where they film a couple for a given period of time and some people vote on who is the one with the worst habits, the one they find more annoying.
We were in our bed, and this is when I usually fall asleep but since the guy was a police instructor I was interested and managed to stay awake.
At one point the guy’s wife said that she found annoying that her husband spent 500 dollars a month on beauty products for himself. 500 USD on facial cream, special shampoo and conditioner, as well as having his nails polished!
If you are that guy and happen to be reading this, or if you know him, I’m sorry, but what an idiot!!
“ 500 USD, that’s a small generator I told my wife.
“ That’s two months worth of food” she said.
We were each thinking of a practical use for that money, the money this guy was practically throwing away.

After the collapse, money is no longer measured in money, but you start seeing it as the necessary goods it can buy. Stuff like food, medicine, gas, or the private medical service bill.

To me, spending 500 dollars on beauty products, and to make it worse, on a guy? That’s simply not acceptable.
The way I see it, someone with that mentality can’t survive a week without a credit card, no use in even considering a economic collapse scenario.
And this guy is a policeman?
Once you experience the lack of stuff you took for granted, like food , medicines, your set of priorities change all of a sudden.
For example, I had two wisdom tooth removed last year. On both occasions I was prescribed with antibiotics and strong Ibuprofen for the pain.
I took the antibiotics( though I did buy two boxes with the same recipe just to keep one box just in case) but I didn’t use the Ibuprofen, I added it to my pile of medicines.
Why? because medicines are not always available and I’m not sure if they will be available in the future.
Sure, it hurt like hell, but pain alone isn’t going to kill you, so I sucked it up. Good for building up character if you ask me .
Make sacrifices so as to ensure a better future, that’s the mentality you should have if you want to be prepared.
There’s stuff that is “nice to have” that has to be sacrificed to get the indispensable stuff
There’s stuff that is not “basic need stuff” but it’s also important in one way or another.
My wife goes to the hairdresser once every month or two. It’s not life or death, but it does make her feel better and it boosts her morale.
I buy a game for the Xbox or a movie to watch with my wife every once in awhile, just to relax. 7 or 10 dollars a month are not going to burn a hole in my pocket.
Addictions such as alcohol, drugs or even cigarettes should be avoided by the survivalist.
They are bad for your health, cost a lot of money that could be much better spent, and create an addiction to something that may not be available in the future.
Who will have to tolerate your grouchy mood when your brand of smokes is no longer imported.

PART II

GRAY/BLACK MARKET

Once the economy collapses the black/grey market will take no time to appear all around you.

In my country, grey markets were even accepted in the end.
At first it was all about trading skills or craft products for food. Districts and towns would form their own barter markets, and created their own tickets, similar to money, that was used to trade.
This didn’t last long. Those tickets were easy to make on your home computer, there was no control and eventually people went back to paper money.
These markets were usually placed in warehouses or on empty land, and were managed by some wise guy and a few thugs or hired security.
Anyone can go rent a kiosk inside these markets for about 50-100 pesos (about 20-30 dollars) a day and sell his goods and services.
Piece within these markets is usually respected… lets just say that these managers don’t call the police if someone tries anything funny, like stealing, fighting or taking advantage of women. That’s not good for their business and anyone that tries to mess with their business finds out how much pain the human body can actually experience.
Sometimes even uniformed cops manage security on these markets, for a small fee of course.
As always, you still have to be careful. They may still try to pick your pockets or even attack you once you leave the market. Once you leave the market, you are on your own, as always.
This markets evolved and now a lot of different products are available.
Today I visited my local market, a warehouse that is fairly well set up and cleanly managed. They had problems for selling stolen merchandise and fake Brand name clothes a few days ago.
What can be found at a local markets? Mostly food and clothing. Some have more variety than others but cheese, canned food, spices, honey, eggs, fruits, vegetables, beer, wine and cured meat are generally available, same as bakery products and pasta. These are less expensive than those found at supermarkets. Fresh fish is sometimes available but not always, people don’t trust much products that need refrigeration, and they get those at supermarkets instead.
Clothes are also popular and you can find copies of brand name clothes, imitations, or even original stolen new clothes, the same goes for shoes and snickers. Children clothes, underwear, socks, sheets and towels are all very popular.
Some sell toys, but they are always China made, mostly poor quality though there are some few exceptions.
Others sell tools, also made in China can be found as well, but they are of poor quality.
Some offer their services and repair stuff or offer work as handyman.
You would be amazed of the junk that these guys manage to fix: TVs, CD players, Power tools, etc. They even manage to solder the small integrated circuits boards sometimes. Give one of these guys a screw driver and a bar of chocolate and he will fix a nuclear submarine.
After food and clothes, the 3rd most popular item has to be CDs and DVDs, movies, music, play station 2 and Xbox games, programs, it all ends up there just one or two days after the official release in USA. Seems that they have e guy hidden under Bill Gate’s desk or something.
Anyway, almost everything can be found there, and if you want, you can ask around, talk to the right guy and buy illegal stuff like drugs. The quality of the drugs is questionable, of course, and a lot of addicts die from the mixtures these guys sell.
Conditions isn’t very good but if you have money you'll be amazed of what you can end up with.

GOLD!!

Someone hit me in the head please because I messed up about the gold issue.
Everyone wants to buy gold! “I buy gold. Pay cash” signs are everywhere, even on TV! I can’t believe I’m that silly!
I just didn’t relate it to what I read here because they deal with junk gold, like jewellery, either stolen or sold because they needed the money, not the gold coins. No one pays for the true value of the stuff, so big
WARNING! Sign on people that are buying gold coins.
Since it is impossible to determine the true mineral percentage of gold, small shops and dealers will pay for it as regular jewellery gold.
What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewellery. They should be less expensive than gold coins, and if the economic collapse is bad, you'll not be loosing money, selling premium quality gold coins for the price of junk gold.
If I could travel back in time, I’d buy a small bag worth of gold rings.
Small time thieves will snatch gold chains right out of your neck and sell them at these small dealers found everywhere. This is VERY common at train stations, subways and other crowded areas.
So, my advice, if you are preparing for a small economical crisis, gold coins make sense. You'll keep the value of the stuff and be able to sell it for its actual cost to gold dealers or maybe other survivalists that know the true value of the item.
In my case, gold coins would have been an excellent investment, saving me from loosing money when the local economy crashed.

Even though things are bad, I can go to a bank down town and get paid for what a gold coin is truly worth, same goes for pure silver.

But where I live, in my local are small time dealers will only pay you the value of junk gold, no matter what kind of gold you have. So, I’d have to say that if the collapse is bad, gold jewellery is a better trade item than gold coins.
Forgive me for not talking about this before, but I didn’t realize this until today, when I visited my local market warehouse and saw a “Buy Gold” sign.
More on Argentina collapse: http://www.guardian.co.uk/Archive/Article/0,4273,4400898,00.html
[Bold emphasis mine. Pete]

END

Email from Sarajevo...

1. Stockpiling helps. but you never no how long trouble will last, so locate near renewable food sources.

2. Living near a well with a manual pump is like being in Eden.

3. After awhile, even gold can lose its luster. But there is no luxury in war quite like toilet paper. Its surplus value is greater than gold's.

4. If you had to go without one utility, lose electricity - it's the easiest to do without.

5. Canned foods are awesome, especially if their contents are tasty without heating. One of the best things to stockpile is canned gravy - it makes a lot of the dry unappetizing things you find to eat in war somewhat edible. Only needs enough heat to "warm", not to cook. It's cheap too, especially if you buy it in bulk.

6. Bring some books - escapist ones like romance or mysteries become more valuable as the war continues. Sure, it's great to have a lot of survival guides, but you'll figure most of that out on your own anyway - trust me, you'll have a lot of time on your hands.

7. The feeling that you're human can fade pretty fast. I can't tell you how many people I knew who would have traded a much needed meal for just a little bit of toothpaste, rouge, soap or cologne. Not much point in fighting if you have to lose your humanity. These things are morale-builders like nothing else.

8. Slow burning candles and matches, matches, matches.

9. More matches

"Walking Liberty"

1oz. $1 Enameled Silver Eagle
(About actual size)
8-24-08 spot $13.35

Barter Economics 101
“ The Practical Application of Gold and Silver in the Coming Barter Economy.”
By
Michael Trudeau

As I sit before my computer reading yet another story of how “due to rising costs,” or “due to world wide shortages,” or due to something else out of my control, Americans are stockpiling or “hoarding food,” it dawns on me that people are beginning to quietly panic.

It used to be that when I read something like that, it would have been published in the Conspiracy Daily News or some other “not to be believed by normal folks” publication. Today, such articles are being published by Reuters, the Wall Street Journal, and other mainstream publications. And as the media industry saying goes, “the story has grown legs.”

I am now hearing on every TV and radio station, and I am reading in every newspaper how Americans are beginning to hoard foodstuffs. I’m hearing it from my farmer neighbors chatting at the feed store and from other patrons at a café I frequent. It’s not bad advice considering we are already experiencing shortages of basic staples such as rice and wheat. The rationing of food has begun right here in America.

“ Hoard food, gold and guns!” has been the battle cry of many a weary doom-and-gloomer over the years. This is a cry heard many times before. First it was the Y2K event that never happened. Since then we’ve had SARS, Bird Flu, Peak Oil, New World Order, banking collapse (who knew,) the dollar’s collapse, and the threat and actual act of terrorism given as reasons to hoard gold, food, water. These are all very credible threats and good reason to be prepared at all times.

Being prepared is perhaps what sets me apart from most of my peers. I was a Boy Scout and apparently this is where I began to run astray of the collective. Like the Boy Scouts motto suggests, “Be Prepared,” I have pretty much always been preparing.

I didn’t run out and buy long-term storable foods, duct tape, plastic sheeting or water purification tablets prior to Y2K, I didn’t have to. I watched the “panic” quietly develop around me, but there was no panic at our house because we had already been preparing for a time without. In recent days, however, it would seem that the collective is catching on.

Should you prepare? That’s a question best answered by ones own self, but I can certainly say there are a myriad of threats facing us right now that could very easily disrupt, or worst case scenario destroy our nations infrastructure or at the very least, our transportation system.

Currently the country runs on a system of supply known as JIT or “Just in Time” inventory. This means that when a store is about to run out of a product, there is a truck offloading that very product at the store’s loading dock to renew the supply, “just in time.” Any disruption to the system and the end result is no more supplies.

One of the reasons we began to prepare at our house was the demise of the Soviet Union. I remember watching the nightly news reports of Russian grocery stores running out of food, while the ruble was being reduced to rubble and people were trying to trade anything of value left in their possession for loaves of bread.

As a kid, I had always viewed the Soviet Union as our equal in size and economy so I figured, if it could happen to the Russians, one of the worlds two accepted “superpowers,” then it could surely happen to us here.

Another reason is the knowledge that our fiat currency is losing value at a rate unprecedented in our history. When I was a kid, candy bars were a nickel and I could get twenty Hershey bars for either a paper dollar or a silver dollar.

Today, my paper dollar buys only one Hershey bar; however my silver dollar (based upon its silver value), still buys me all twenty. I think we can all draw a basic conclusion on this; paper dollars are not long for the world.

I also had read Dr. Franz Pick’s book “The Triumph of Gold” about how his father kept his family alive during Germany’s infamous Weimer Republic with links from a gold chain.

During a very brief period of only nine years, Germany’s currency experienced a period of hyperinflation. Beginning in November of 1914, the German mark could be exchanged at a rate of approximately four marks to the dollar. By 1923, the exchange was four trillion marks to the dollar.

Reading Pick’s book was enough for me to employ some common sense and to become prepared for a “time without plenty.” It’s uncanny how closely our current monetary policy mirrors the Weimer Republic.

I have had innumerable conversations with those who have for one reason or another decided to begin preparing for a “barter economy” or rather a world without regularly stocked grocery stores, or for that matter, regularly stocked anything else. In fact, this is the reason for my writing this article.

I will try to set the record straight and offer up a basic understanding as to just how things might work in such a system of commerce. I will also address some of the more common mistakes I have seen too many people make as they add gold and silver to their positions for barter type transactions.

For my family’s barter material, I have several basic but very important criteria that I meet before I add gold or silver to the coffers. First, I try to own only metals that do not have dealer reporting requirements. Dealers are required to report the sale of most bullion type items. A bullion item is an item that’s only value is the intrinsic value or value of the metal itself.

Second, is it a product that would be protected against government confiscation? The government seized all privately held gold in 1933 when President Franklin Roosevelt signed Executive Order 6102 outlawing the hoarding of gold and gold coins.

In the Executive Order several exemptions were noted for such amounts of gold as required for industry, profession or art. For example, jewelers were allowed to own enough gold for jewelry purposes. Dentists were allowed to have gold on hand for their practice and collectors were allowed rare or unusual coins having a recognized special value to collectors. Collector coins or “numismatics” are coins that have a value or premium above its intrinsic or metal value.

Third, I must (and you should) own a product that is readily recognizable by most everybody in the land. This criterion is very important. For a moment imagine a world where the grocery stores have all been emptied and no one will accept a paper dollar in exchange for goods or services.

I imagine by this point, we’ll be seeing armed home invasions by roving gangs stealing food as well as people trying to swindle or cheat others out of their food. We may find ourselves under martial law, but no matter the scenario, you are better off having a product recognized by the average citizen to use for barter.

Plenty of people have told me that they have purchased South African Krugerrands, the Canadian Maple Leafs, or American Eagle gold coins for the purpose of barter. Although they all have their good points, i.e., more gold for the dollar, a higher level of purity, or they’re just “darn pretty.”

None of these coins would be readily recognized by the average person. How many people do you suppose have ever held a South African Krugerrand? The Krugerrand is probably one of the most popular gold coins in the world, but again, how many of your neighbors do you think have ever held one? The same problem exists with the Maple Leaf or American Eagle.

Fourth, I want a product that can be exchanged for goods and services without creating the problem of “making change.” Again, this would prove problematic for the Krugerrand, Maple Leaf and American Eagle in making change after a purchase.

Take for example; you’d like to trade some gold for a few chickens with an area farmer. How could he make change? As I write this, gold is trading around $850 per ounce. I along with many of my contemporaries feel that a collapse such as we’ve described here could easily push gold over $4000 an ounce. That could be like going to the hotdog stand today with a thousand dollar bill and expecting them to readily make change.

Lastly, after I’ve met the first four criteria, I simply want to get the most metal for my money! Having said that, there are two products that I recommend above all others for use in a barter economy. First, for day-to-day transactions, I recommend the old U.S. silver dollars. Almost everyone has seen an old silver dollar at one time or another, so having people recognize them will not be an issue.

The US minted two varieties of silver dollars: (1) the Morgan dollar, minted from 1878 through 1921, and (2) the Peace dollar minted from 1921 through 1935. I recommend them in a circulated condition where the premium above the silver content is minimal. Either one would be recognized by most any farmer in the land (most of them used to spend them) and with a relatively low value (at this time approximately $20 or so each), making change is no longer an issue.

Since they are classified as collectables, they trade without any form of dealer reporting requirement, so the transaction is completely private, which is not so with bullion products like the Krugerrand or Maple Leaf.

My second recommendation for use in a barter economy is the gold Modern Commemoratives put out by the US Mint. Started as a series of “collectable” coins, several of the coins in the series now trade just above their melt value so they offer a tremendous amount of gold in a coin that has been defined by the treasury as “collectable.”

They trade privately, and would be exempted if the government calls in the bullion again like they did 1933. The Modern Commemoratives come in either a half-ounce piece or several varieties of quarter-ounce pieces.

Gold should be used more as a store of wealth, or as a medium of exchange for larger purchases as opposed to day-to-day barter. Many of our clients have traded in their bullion products for products that have a more practical application in an economy as described here.

A few words on gold confiscation. The U.S. government confiscated gold from the citizens in 1933 as noted above. The premise for such a confiscation of the people’s wealth is actually covered by the “Eminent Domain” clause in the Fifth Amendment of the U.S. Constitution.

It basically states that the government can take anything they want from us after they meet two specific rules. First, they must demonstrate that it is for the good of the country and they must give “fair market value” before they can seize our possessions.

How does the government benefit from calling in the gold if they must compensate us for it at fair market value? Here comes an interesting, if not alarming bit of information. The governments “official” price for gold is $42.22 per ounce. You read the price correctly, just $42.22 per ounce!

This price has been upheld by a Supreme Court decision as recent as 1984 in the case of TWA vs. Franklin Mint, and the official gold price listed on the U.S. Treasury’s website is $42.22 per ounce. This is no throwback from some bygone era, these guys mean business.

The government need only state that the gold is needed to “shore up the weak dollar” meeting rule number one, (that it is for the good of the country), and to give us a check in the amount of $42.22 for each ounce of gold confiscated meeting rule number two (fair market value).

This, however, is exactly what protects the “collectable” coins from being confiscated. If the government uses eminent domain to legally take bullion at $42.22 per ounce, they cannot then use the same law to take the collectable coins because each collectable coin trades at a different value and would need to be independently evaluated. Therefore, the fair market value would be different for each and every coin.

I can’t stress enough that the time to prepare and protect ourselves and our families from the threats discussed in this article, is now. Silver dollars are finite in supply. They are definitely becoming harder to find in quantity as the state of the economy continues to deteriorate.

1oz. $50 Gold Buffalo
(About actual size)
8-24-08 spot $822.90

Is demand growing for gold coins as a store of wealth?
Los Angeles Times, August 22, 2008
by
Tom Petruno

" U.S. Mint Runs Out of 1-ounce Gold Coins as Demand Jumps."

1oz. $50 Gold American Eagle
(About actual size)
8-24-08 spot $822.90

Gold-market bulls couldn't buy publicity much better than this: The U.S. Mint says it has run out of 1-ounce American Eagle gold coins because of rocketing demand.

That may have helped fuel a sharp rebound in gold futures prices Thursday, although the metal also got plenty of help from rising U.S.-Russia tensions, a falling dollar and renewed buying of commodities across the board.

The Mint told coin dealers last week that its inventories of 1-ounce Eagles had been temporarily depleted because of 'unprecedented demand.' The Mint sells only to a small number of dealers, which then distribute the coins to other sellers, such as coin shops. The prices retail investors pay change daily and are based on the market price of gold plus a small premium.

The government has sold 60,000 1-ounce gold coins this month, up from 47,500 in all of July and just 13,000 in June. Sales of U.S. silver Eagle coins, meanwhile, have been hot all year, leading to rationing of those coins by the Mint.

Coin dealers confirm that they've been swamped with orders over the last month as the price of gold dived from $977.70 an ounce on July 15 to $786 last Friday, the lowest since December."

***

Ten Commandments For Buying Gold & Silver
by
Franklin Sanders

I. Always take delivery.

II. Never buy premium if you can avoid it.

III. Buy bullion for business, numismatics for fun.

IV. Buy silver first, then gold.

V. Buy small gold first, then large.

VI. Never buy exotic coins or modern rarities
or anything you don't understand.

VII. Know your dealer.

VIII. What governments can't find, they can't steal.

IX. Never swap bullion coins for U.S. $20 gold pieces.

X. Never break the law.

Economic Collapse Survival Guide
Courtesy Of The Preparedness Center

REDUCE YOUR DEBT: Reducing ones debt to as close to zero as possible is essential. That may involve selling off some of your real estate investment, moving to a smaller home, refinancing your home mortgage to a 15-year loan, and eliminating your credit cards. Stop paying interest.

Do not be dependent on the government for your well-being. Try an be as independents and self reliant as possible for your income.

Take control of your own finances. Read many alternate sources of information. Do your homework. Be careful to understand what is going on. Avoid states of denial. Become as independent as possible.

Make yourself save as much as you can. Most people live above their means. Learn to live below your means. If you save a minimum of 10% per month, you can grow your wealth very safely. Some can save 20%-25%.

Diversify your investments, include investing in Swiss money instruments, silver, gold, different currencies:
http://cmi-gold-silver.com/small-survival-gold-silver-coins.html

Avoid weak financial institutions. Get out of harm's way. Many banks, brokerage house, S & Ls and insurance companies are tottering on the brink of disaster or close to it in the event of a market downturn. And in spite of the perception to the contrary, there is no substantive insurance safety net under these institutions.

Avoid popular investment markets. There are few goof opportunities for conservative investors. Stocks are overvalued. If you own stocks have stops in place. Corporate bonds are vulnerable and will drop as U.S. interest rates rise. Be very selective in investment real estate. Commodities are out of favor and at bargain prices. All things are cyclical and go from being under valued to over valued.

Find investment safe havens. The three best and most conservative investments to put your money into over the next few years are gold and silver, foreign government bond funds, and U.S. Treasury bill money market funds. Don't announce to the world what you are doing; keep a low profile.

Legally bulletproof your business and personal matters. America is the most litigious country in the world, with 700,000 lawyers and 187 million new civil lawsuits per year. Every doctor, professional business person or business owner has a nightmare about being sued into ruin.

Change your mind set about the news, about investments and about your financial security. To survive the coming hard times, you must change the way you do things, the way you think, and the way you invest. You must read between the lines in today's news reports ... find alternative investments and financial institutions ...and plan for the future.

Purchase a one-year food supply and have a large water source, such as 55 gallon water barrels. Own tangible assets or commodities that can be bartered or traded.

Buy real estate in a small town or rural community that can serve as a retreat or place of refuge.

Subprime mortgage crisis
From Wikipedia, the free encyclopedia

[Home foreclosure filings up 55 percent in July-Story filed Aug. 14, 2008 YAHOO NEWS]
http://news.yahoo.com/story//nm/20080814/bs_nm/usa_foreclosures_dc

The subprime mortgage crisis is an ongoing economic problem manifesting itself through liquidity issues in the global banking system owing to foreclosures which accelerated in the United States in late 2006 and triggered a global financial crisis through 2007 and 2008.

The crisis began with the bursting of the US housing bubble and high default rates on "subprime" and other adjustable rate mortgages (ARM) made to higher-risk borrowers with lower income or lesser credit history than "prime" borrowers.

Loan incentives and a long-term trend of rising housing prices encouraged borrowers to assume mortgages, believing they would be able to refinance at more favorable terms later.

However, once housing prices started to drop moderately in 2006–2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically as ARM interest rates reset higher.

During 2007, nearly 1.3 million U.S. housing properties were subject to foreclosure activity, up 79% from 2006.

The mortgage lenders that retained credit risk (the risk of payment default) were the first to be affected, as borrowers became unable or unwilling to make payments. Major banks and other financial institutions around the world have reported losses of approximately U.S. $435 billion as of July 17, 2008.

Owing to a form of financial engineering called securitization, many mortgage lenders had passed the rights to the mortgage payments and related credit/default risk to third-party investors via mortgage-backed securities (MBS) and collateralized debt obligations (CDO).

Corporate, individual and institutional investors holding MBS or CDO faced significant losses, as the value of the underlying mortgage assets declined. Stock markets in many countries declined significantly.

The widespread dispersion of credit risk and the unclear effect on financial institutions caused lenders to reduce lending activity or to make loans at higher interest rates. Similarly, the ability of corporations to obtain funds through the issuance of commercial paper was affected.

This aspect of the crisis is consistent with a credit crunch. The liquidity concerns drove central banks around the world to take action to provide funds to member banks to encourage the lending of funds to worthy borrowers and to re-invigorate the commercial paper markets.

The subprime crisis also places downward pressure on economic growth, because fewer or more expensive loans decrease investment by businesses and consumer spending, which drive the economy. A separate but related dynamic is the downturn in the housing market, where a surplus inventory of homes has resulted in a significant decline in new home construction and housing prices in many areas.

This also places downward pressure on growth. With interest rates on a large number of subprime and other ARM due to adjust upward during the 2008 period, U.S. legislators, the U.S. Treasury Department, and financial institutions are taking action.

A systematic program to limit or defer interest rate adjustments was implemented to reduce the effect. In addition, lenders and borrowers facing defaults have been encouraged to cooperate to enable borrowers to stay in their homes.

Banks have sought and received over $250 billion in additional funds from investors to offset losses. The risks to the broader economy created by the financial market crisis and housing market downturn were primary factors in several decisions by the U.S. Federal reserve to cut interest rates and the economic stimulus package passed by Congress and signed by President George W. Bush on February 13, 2008. Both actions are designed to stimulate economic growth and inspire confidence in the financial markets.

Background information

The term subprime lending refers to the practice of making loans to borrowers who do not qualify for market interest rates owing to various risk factors, such as income level, size of the down payment made, credit history, and employment status.

The value of U.S. subprime mortgages was estimated at $1.3 trillion as of March 2007, with over 7.5 million first-lien subprime mortgages outstanding.

Approximately 16% of subprime loans with adjustable rate mortgages (ARM) were 90-days delinquent or in foreclosure proceedings as of October 2007, roughly triple the rate of 2005. By January 2008, the delinquency rate had risen to 21% and by May 2008 it was 25%.

Number of U.S. Household Properties Subject to Foreclosure Actions by Quarter Subprime ARMs only represent 6.8% of the loans outstanding in the US, yet they represent 43.0% of the foreclosures started during the third quarter of 2007.

During 2007, nearly 1.3 million properties were subject to 2.2 million foreclosure filings, up 79% and 75% respectively versus 2006.

Foreclosure filings including default notices, auction sale notices and bank repossessions can include multiple notices on the same property.More homeowners continue to receive foreclosure notices, with one in every 519 households receiving a foreclosure filing in April, 2008.

The estimated value of subprime adjustable-rate mortgages (ARM) resetting at higher interest rates is U.S. $400 billion for 2007 and $500 billion for 2008.

Reset activity is expected to increase to a monthly peak in March 2008 of nearly $100 billion, before declining. An average of 450,000 subprime ARM are scheduled to undergo their first rate increase each quarter in 2008.

Understanding the causes and risks of the subprime crisis

The reasons for this crisis are varied and complex. Understanding and managing the ripple effect through the world-wide economy poses a critical challenge for governments, businesses, and investors.

The crisis can be attributed to a number of factors, such as the inability of homeowners to make their mortgage payments; poor judgment by the borrower and/or the lender; and mortgage incentives such as "teaser" interest rates that later rise significantly.

Further, declining home prices have made re-financing more difficult. As a result of innovations in securitization, risks related to the inability of homeowners to meet mortgage payments have been distributed broadly, with a series of consequential impacts. There are four primary categories of risk involved:

1. Credit risk: Traditionally, the risk of default (called credit risk) would be assumed by the bank originating the loan. However, due to innovations in securitization, credit risk is frequently transferred to third-party investors.

The rights to mortgage payments have been repackaged into a variety of complex investment vehicles, generally categorized as mortgage-backed securities (MBS) or collateralized debt obligations (CDO). A CDO, essentially, is a repacking of existing debt, and in recent years MBS collateral has made up a large proportion of issuance.

In exchange for purchasing MBS or CDO and assuming credit risk, third-party investors receive a claim on the mortgage assets and related cash flows, which become collateral in the event of default.

2. Asset price risk: MBS and CDO asset valuation is complex and related "fair value" or "mark to market" accounting is subject to wide interpretation. The valuation is derived from both the collectibility of subprime mortgage payments and the existence of a viable market into which these assets can be sold, which are interrelated.

Rising mortgage delinquency rates have reduced demand for such assets. Banks and institutional investors have recognized substantial losses as they revalue their MBS downward. Several companies that borrowed money using MBS or CDO assets as collateral have faced margin calls, as lenders executed their contractual rights to get their money back.

There is some debate regarding whether fair value accounting should be suspended or modified temporarily, as large write-downs of difficult to value MBS and CDO assets may have exacerbated the crisis.

3. Liquidity risk: Many companies rely on access to short-term funding markets for cash to operate (i.e., liquidity), such as the commercial paper and repurchase markets.

Companies and structured investment vehicles (SIV) often obtain short-term loans by issuing commercial paper, pledging mortgage assets or CDO as collateral. Investors provide cash in exchange for the commercial paper, receiving money-market interest rates.

However, because of concerns regarding the value of the mortgage asset collateral linked to subprime and Alt-A loans, the ability of many companies to issue such paper has been significantly affected.

The amount of commercial paper issued as of October 18, 2007 dropped by 25%, to $888 billion, from the August 8 level. In addition, the interest rate charged by investors to provide loans for commercial paper has increased substantially above historical levels.

4. Counterparty risk: Major investment banks and other financial institutions have taken significant positions in credit derivative transactions, some of which serve as a form of credit default insurance. Due to the effects of the risks above, the financial health of investment banks has declined, potentially increasing the risk to their counterparties and creating further uncertainty in financial markets. The recent demise and bailout of Bear-Stearns was due in-part to its role in these derivatives.

See complete article: http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

Part 1, Part 2