Category Archives: Economics
By: Tom Chatham
Rural America is dying a slow and miserable death but only the local inhabitants seem to notice. It was happening slowly but now it is happening faster. The crown jewels of the rural areas, the graduating children, are leaving and taking their potential with them. As rural businesses shut down and opportunities dwindle, younger people are leaving to seek out greener pastures. That is a travesty for small towns and the traditions they have maintained for generations.
There are two main reasons why the youth of America are leaving small towns. One is the economy and the other is the social environment. There are no good jobs and there is nothing to do outside of work. Growing youth need to be kept busy with something and lacking that they will seek out excitement. When the community they grow up in fails to provide them with the opportunities they need they eventually leave and never come back. This is leading to ever smaller towns that are beginning to disappear as the older generation dies off.
If rural communities want to reverse this trend they will have to solve those two problems. They will need to promote locally owned businesses to provide the jobs needed to keep people from moving to cities and they will need to provide a certain amount of entertainment to keep the youth happy.
Multinational companies have stripped the economic base out of small towns as the profits from these businesses get sent to wall street instead of being held locally providing capital for growth and innovation. Smaller local operations employing 5 to 10 people can capitalize on local resources to provide good paying jobs to entice the youth so they can stay local and start a family there. Replacing a few multinational companies with dozens of local operations will make the local area more resilient during economic downturns and insure local access to products produced there.
This type of return to a local economy will happen eventually anyway if economic conditions deteriorate to the point of cutting off goods and services to rural areas. Out of necessity these areas will reconstitute an economic base to provide necessities to the population unless government gets in the way. Multinational companies will pull out and go to where the money is in the world leaving the impoverished towns in their wake after having stripped them economically.
At that point the only question is whether the town is still big enough to rebuild a local economy or if the aging population will simply see the end of the community. With no youth to help rebuild the economy it will likely signal the end.
It has been said that the most important thing a farmer raises are a set of children with a good work ethic and a set of moral values. These two things are something that the current youth is desperately missing in America. As more people migrate to larger cities to find the life they seek, their urban children are left to their own devices as both of their parents work full time to provide a home where children no longer need to have a job and are entertained by the moral codes prevalent in the urban areas. This is creating a generation of entitlement minded youths that provide little value to their communities.
With fewer of these youths growing up in rural areas, the values that helped build this country are becoming obsolete. A new paradigm is building that will ultimately tear this country apart as the old world with its traditions and the new world with its entitlements fight for control. As the song says, you’ve got to stand for something or you’ll fall for anything, is a lesson today’s youth will have to learn through bitter experience.
As rural areas go, so goes the nation. The destruction of our rural heritage will signal the coming of a new paradigm that is not sustainable and will provide no hope for future generations. Unfortunately, that is what certain groups are hoping for. The destruction of the nuclear family will provide a future of chaos and confusion and allow a select few to maintain power over the many. Unless there is a shift back to rural communities and local production soon, the future of this country will be very different from the past, and not for the better.
By: Tom Chatham
The black market is merely the free market operating in the shadows when government rules and regulations become so oppressive that everything begins to seize up and all commerce and production stop. People can be very creative when there are needs to be filled but government has a way of destroying that potential as they try to maintain control as they slowly lose power.
As the government destroys the economy, people will only play along for so long before they seek out the things they need from any source, legal or not. This is where the free market rises up in the shadows to fulfill those needs. Rules and regulations are no substitute for actual goods and services but this is a notion that is lost on politicians.
When goods begin to disappear from the marketplace, people will try to cope until things get better. But as goods get harder to find, not easier, people will seek them out from those that have them to offer. Those with the resources to provide these goods will soon appear in back alleys and the back of vehicles to sell their goods to anyone with the means to buy them.
Prices will often be higher than before due to supply and demand principles. If you have excess resources at this time you will be in a position to operate an underground business that can likely provide you with a good living. For those that desire those resources, a means to pay for them will be required. In most cases the paper currency normally used may be worthless at some point. Those that do not possess an alternative form of money will likely be left in want. This is the cold hard reality we must live with.
For those that do no see potential supply disruptions soon enough and lay in a supply of goods or alternative payment means, they will suffer from lack of goods they need for their very existence. Unfortunately this will be the fate of a majority of the population that expects things to always be as normal or the government to care for them. You do not want to be one of these people.
Setting aside extra supplies is a reasonable thing to do in these uncertain times. Having excess in a few items will allow you to trade for items later that you had not planned on or for services that cannot be stored for later use.
When systems collapse and black markets arise a good means of exchange can be found in gold and silver. These metals are universal stores of value and can be used to get many types of goods and services in desperate times. Those storing even a few silver coins will be in a better position to deal in the black market for items than someone with household items to trade. In desperate times some things are just worth more than others.
By understanding the dynamics that take place in a functioning black market you can position yourself to function with it and insure access to the things you need. Those selling on the black market are providing goods that are difficult to obtain in the legal marketplace. For this reason you will pay a premium for what you want
The prices may not seem fair to you but this is how the free market works and that is what you need to be prepared for if you want to get what you need. That is why you need to store some gold and silver for trade if you ever have to deal on the black market.
Why gold and silver? Because they are already recognized as a universal medium of exchange. Gold and silver are the best all around mediums of trade because they are compact wealth that can be stored for as long as you need.
There are other goods you can store that will be valuable depending on the specific circumstances. Things like storable food, medicine, booze, fuel, tobacco products and chocolate have proven to be good trading mediums in some cases. It all depends on the prevailing circumstances you find yourself in and how long the troubles persist.
When the current bubble economy collapses there will be a transition period between the time the bubbles burst and the time that prices stabilize with the introduction of a new currency. It is in this period that you need to have the means to acquire the goods you need. You must have a physical medium of exchange that exists outside of government and banking control. The current war on cash is a way to stifle any black market activity following a currency crisis keeping people dependent on banking services under government control.
Gold and silver provide a means to operate within a black market but outside of government controls. Those holding gold and silver will also find some very good deals that could set them up for success following stabilization if they have the means to take advantage of these deals during the turmoil. When the normal market collapses for whatever reason, you need to be in a position to function in the world that follows.
By: Tom Chatham
One thing many homesteaders and farmers need is extra income, especially if they are new to the area. It can be difficult getting a market established if you have to compete with others that are veterans to the local market. Producing a product is usually easier than finding enough return customers to make the farm sustainable. In this situation you need to think of unconventional services and products you can provide to fill the financial gap.
Rent RV storage space- There are many people that have RV’s or camper trailers for traveling or even bug out use if the need arises. These people may not have the room to store these items where they live or an economical place to store them. By providing a few parking spaces in an out of the way area on your land you can give them a cheap alternative.
Rent storage lockers- It seems everywhere you go these days you see storage units. One way to separate yourself from the pack is to offer these services to urban and suburban preppers that may not have a place to bug out if things get bad in the cities and need a place for their extra stuff. A 20’ cargo container makes a great storage locker and a potential temporary shelter.
Sell bulk grains to individuals- If you only grow a few acres of grains you want to get the maximum price for them so why not sell directly to people who want to store bulk grains. These people are usually willing to pay prices that are premium for the farmer but still lower than people can get from retailers. If you can process these grains as well into flour, cornmeal or rolled oats, you can get even better prices from potential customers.
Make your farm a vacation destination- If you have sufficient area to park a few RV’s or camping sites, your farm could become a seasonal vacation site for some people. If you can also offer things like a small store, horseback riding, swimming pool, fishing or hiking then you have something to draw people in. You could even offer the “farm experience” where they help slop the pigs, collect eggs or milk the cow.
Bug out site for urban dwellers- You could go one step further with the RV parking space and allow extra footage so a person could park their RV, have a storage unit and have room to plant a garden. This might be very appealing to many preppers that see the need to get out of the cities at some point but have no place to go long term.
Just over an acre of land can provide 12 50’x75’ blocks for rent. A road down the center of the area with blocks on either side and a gravel pad down one side of each block to place the storage container and park the RV is all that is needed. At $75 per month per block, a farmer could potentially make $10,800 per year if all blocks are rented. For the price of a monthly cable bill you could provide someone with storage space and a place to camp anytime they wanted.
When you have to compete with others in a small market, it may be necessary to find that niche that others do not see that you can fill. With the large number of preppers scattered around the country, this segment of society may be a good demographic to target for services they cannot find elsewhere.
We see offers for food storage and survival land for sale but seldom do you see anything in between that people with limited funds can afford. A bugout camping site on a farm may look very appealing to many on a limited budget that see the need. If the need ever arose the farmer would have likeminded people on site that would be of great benefit to him. If the world suddenly turns into a lemon, it would be good to have people around to help make lemonade.
By: Tom Chatham
Many Americans have been in dire straits for the past 8 years since the last economic implosion. Many still do not have full time jobs and some do not even have part time jobs. These people have been left behind while Washington plows ahead as if everything is just fine. To those with government jobs life is just fine. When times are bad it helps to have a guaranteed paycheck regardless if you produce any meaningful work in society.
For those that need employment all they are greeted with is a chorus of go get a job from elitists. That is easier said than done in many cases. When you are confronted with a need to earn money, you need a plan to make it happen. When jobs are hard to find then you need to think outside of the box and create a job for yourself. Having good luck is great but for the rest of us brainstorming is a must to find a niche to fill.
To brainstorm, all you need to do is take a sheet of paper and pencil and begin writing out a list of things you know how to do, things you have the tools to do it with and things you think are an unserved need in your area. Once you have a good long list start looking over it and assess the potential of each item.
Typical ways to make extra money are to offer a service that people in your area may need such as lawn maintenance, tree trimming, small engine repair, auto repair, welding or handy man services. These are some tried and true jobs that work just about anywhere. This is a way to cash in on some of your hobbies or special talents such as wood working, sewing, riding lessons or teaching a musical instrument.
For the last two decades, the internet has provided people with ways to earn extra money through web design, web sites and e commerce sites to name a few. New technology is always welcome when making extra money requires new ideas.
One problem many people will run into these days is the fact that many ways of earning extra income are service related jobs that depend on a good economy and people that have money to spare. When the economy gets bad the types of jobs will shift to things that people must have or will save them money by having you do it.
In a bad economy certain things happen like cars and homes get repossessed. The people who end up with these items may need someone to clean them up for resale, repair items or maintain the location until it is sold. You can sometimes find these kinds of jobs by talking to your local banker. Many people may find these types of jobs distasteful but if you need the money you’ll have to make a decision.
The first things people will seek to satisfy are food, shelter and clothing. These are the primary needs of humans. So in a bad economy something that fills one of these needs is a good choice if you can provide an economical price in your location. Growing some food to sell, converting your garage into a small apartment to rent out or mending clothes are good examples. If you are good with cars you might be able to buy cheap cars to fix up and resell for a small profit. In a bad economy many people will be looking to get a cheap car because they need transportation but cannot afford a newer one.
What services or products do you look for when your money is tight and you need to stretch it out? Is there something there that you can provide for others? We all hope things get better but if history is any indicator, things will likely get much worse before they improve substantially. The west line has shifted from North America to Asia. The west line indicates where the shipping center of the world is at any given time. Once it shifts away from a country that location will suffer the types of economic degradation we are now witnessing in the U.S. We can try to get some of our jobs back but that ship has sailed so we must learn to work with a smaller, slower economy if we are to survive as a nation.
Many people will not want to hear that but the truth hurts. Those that understand the dynamics of this phenomenon will be better able to cope with the new reality and plan their future to deal with it. This means understanding what products and services people will need and having a plan to provide them as the economy continues to be unstable for years to come until some type of equilibrium is achieved.
Many people have dreamed of being their own boss and running their own business. The economy we see unfolding will make it imperative for you to have more control of your income opportunities. Taking some time now to evaluate your current finances and developing a plan to insure your family has the things they will need will determine your standard of living in the coming years. Failure to plan now will likely end in a lower standard of living for you and force you to navigate the many difficulties ahead with far fewer resources.
By: Tom Chatham
We are heading into a new depression. It is not coming. It is already here but we are only in the beginning so it may not be easy for many people to see just yet. Once it is easy to see it will be too late for any meaningful actions to mitigate the effects. Just as you must prepare for a tornado ahead of time, you must prepare for economic conditions early.
We have 20 trillion in debt, over 200 trillion in unfunded liabilities and over a quadrillion in derivatives held by the banks. Our GDP is only about 17 trillion a year and world GDP is only about 60 trillion. It does not take a math wiz to realize that even if we are not paying any interest at all on this massive debt, there is no way to ever pay it all back short of some type of default.
That is what depressions do. They wipe out all of the misallocation of resources and bad debt and provide a reset for the economy. These resets can be relatively easy or they can be very destructive depending on the amount of misallocation that is present in the system. The amount of debt, brought on by decades of unrestricted credit creation, is the largest in history. That means we are in for a very bad ride in the near future.
Much of the money that people think they have is really only made up of digits in some computer somewhere. The banking industry has already taken this money for its own use. To eliminate the need to ever give it back to the rightful owners they must destroy these digits. That is what the new bail-ins are all about. They can at some point just wipe all of those digits out of existence and say tough luck suckers.
The depression of the 1930’s was a deflationary one in nature. People lost their jobs, prices fell and cash was king. People holding bonds did very well. In an inflationary depression, prices rise, people will get paid in increasingly worthless paper and bonds will collapse. Banks will enact bail-ins to stay solvent and people will go broke while holding piles of cash.
In the end the inflationary depression will end with the currency collapsing and people losing everything they have that is not fully owned. Eventually we will see deflation as prices fall due to the destruction of the monetary system. At this point most people will be financially devastated. Those that make it to this point with their wealth in tact will be the new wealthy class.
So how can a person survive something like this? You simply need to focus on the needs of your family over this period of time. If you can provide the needs of your family regardless of the prices at the time, you will make it through the worst of times, This means you need a plan to provide these items to your family whether prices are rising or falling. If you have a years supply of food, it does not matter what the current price is, you will have the means to feed them.
If your home is paid for, your car is paid for and you have a supply of energy or a way to produce it yourself, it will not matter to you how fast prices are changing or how much money you bring home every week. You will be able to live outside of the rapidly changing economy. The rapid changes that will destroy others will only provide you a glancing blow.
Those that survive on credit will be devastated as their access to credit is cut off and they become unable to continue making payments on their possessions. They will be devastated even if they still have a paying job. For those that expect to survive on their savings and pensions, they will find those accounts empty following any bail-ins.
Where you live will also play a major role in how well you survive the depression. What do you think will happen when those dependent multi generational families lose their welfare and food stamps following the breakdown of the credit system and prices rise faster than benefits? The ability to produce some items yourself will also depend on your location and the ability to stay safe.
The whole of the production and distribution system depends on 30 day credit. When the credit system ceases to function, goods will stop being produced and transported. This will lead to high prices and few goods to buy. So even if you have a bag full of money you may not be able to buy what you want at some point.
Just like a tornado that tears through a community, a depression can leave the people without the resources they need unless they have them hidden away safely for future use following the event. This is why having resources, real physical goods, put away now will allow you to thrive when the system fails. When the system resets, you will not get a second chance to do it right. You only have one shot and that requires you to finalize your preparations now while you still can make a difference.
The whole point of preparing for this type of upheaval is to maintain a standard of living that you find acceptable. Lack of preparation in this type of event will likely find you living much poorer than you would like. If you are successful in maintaining your standard of living and preserving your wealth throughout this event you will have won the battle and set yourself up for a better future when things stabilize.
By: Tom Chatham
The people that are preparing for some sort of chaos in their future are only doing the prudent thing considering the environment we are now living in. Those with growing piles of supplies for disasters, war or some type of collapse have made the mental leap that is required to prepare themselves for unknown eventualities that can be life altering. These people have made a plan to survive the difficult times that come and live to tell of it.
What many of these people have not contemplated is the day when the chaos is over and life begins to return to some new type of normalcy. Most people simply plan for chaos and never think about coming out of the other side at some point. While chaos can leave you in an unknown place you should have some idea what you will do when normalcy begins to return to society.
If you planned ahead you probably have a plan to provide necessities such as food and water for the duration of the chaos. Ultimately you will have a plan to provide these things in a sustainable way since you do not know how long the crisis will last. Once society begins to reestablish some sort of order you need to have some type of idea what your next move will be.
If you already have the means to produce food and water sustainably you may then want to move into excess production to trade to others as a way to get other things you need. If the local market is saturated with others like yourself there may not be a big demand for food so you need some other product to trade. These are the things you need to think about for after the chaos.
When society begins to stabilize and rebuild itself people will want many of the things they have been deprived of for the duration of the crisis. As society begins to build up there will be a need for people to produce these things either on a small scale or a large scale depending on the item. This is what your post crisis plan needs to take into account.
The ability to produce these items will require infrastructure of some type. Depending on the type of crisis you went through, many of the resources you may need to produce things will likely have been destroyed. In a worst case scenario you need to have either production equipment that survives the chaos or the ability to make new equipment yourself. This is how a production base will be reestablished in a post crisis era. Those that have this production capability will be very important persons in the community.
This production capability does not have to be a large scale proposition. It can be as simple as a floor loom and spinning wheel to make clothing, a grinder to make flour and meal, wood working tools to make furniture, metal working equipment to make tools or equipment to produce some type of fuel such as alcohol. This production capability also extends to services that people need such as medical services or transportation.
Having some type of production capability is not only good for surviving the crisis but also to have the means to improve living conditions after the worst is over. At some point you will want to once again ply a trade to generate income for your family.
Two hundred years ago many small communities were largely self sufficient. You had farmers producing food, blacksmiths working metal, individuals making cloth, coopers making barrels and wheels and mills grinding wheat and cutting lumber. The whole community worked as a self sufficient unit.
There are those today calling for people to create small groups or communities to ride out any chaos that may come in the future. The primary reason is for collective security in the event society becomes violent and uncontrollable. This same small group can provide the basis for a self sufficient community following an event.
An individual can become self sufficient to some degree but there are only so many hours in a day and many types of basic production requires many hours of work to produce a product. This means that an individual is very limited in the amount of goods he can produce in a given amount of time and thus is limited to the amount of excess production he can produce. With a community of producers, every person can work in the field they are most productive in and increase the overall supply of goods. It is for this reason that small groups will be valuable after an event as well as during.
If each of the members of this group can provide different capabilities to the group as well as production equipment, it will enhance the overall standard of living of the entire group. Maintaining a production capability during the crisis that can be ramped up once conditions have stabilized will benefit those in and around the community and greatly improve conditions in the months following.
While conditions can be violent during a crisis, the lack of resources following the crisis can extend it longer than necessary as people fight for the limited supplies. When people have the things they need they are easier to live with and infighting is greatly reduced. It is for this reason that the ability to produce following a crisis is just as important as during . Having a plan to insure production capability for necessary goods following an event can help to stabilize the situation and eventually normalization to the local area. The Marshal Plan that helped to rebuild Europe following WWII did just that.
For those that believe we are headed for difficult times, they need to think up their own type of local Marshal Plan to help rebuild following an event that could fracture the country and leave behind a third world country in its wake.
By: Tom Chatham
Many people today know there is danger on the horizon and want to do something to prepare for it but lack substantial money to buy what they think they will need. They have scanned many good lists online and know what others are stocking up on. There are many good ideas out there but most of them take a conventional stance in preparing. When everything goes wrong with the economy and you can no longer depend on a regular income you must have a plan to maintain a decent standard of living.
If the day ever comes that you suddenly have no job, your savings and retirement are gone and you have no source of income, what will you do? If you can no longer make your monthly rent or mortgage payment, do you think you will be able to continue living there and for how long? This is a serious question that many people have not contemplated and refuse to even think about. When the greater depression picks up speed, your whole world can be turned upside down overnight.
Those that have made the decision to store emergency supplies may not have contemplated losing their dwelling when it hit’s the fan. Even if you have supplies for your family where will you take them if you lose your home? Have you planned for that eventuality? Even if it is remote you need to think about it.
The first three things people need to satisfy are shelter, food and clothing. Regardless of the situation, these are the first things people will try to get before moving on to other needs such as transportation, security and sanitation to name a few.
As a minimum your 72 hour kit should be upgraded to a two week kit with a good four season tent and cold weather sleeping bags for each person. This will provide you with the minimal level of food and shelter that you should be prepared to provide for your family. Adding to this, you should increase your food reserves to the amount you could transport if you had to move. This should be the minimum resources you have to take care of your family if it all falls apart.
In the event you lose your home and have no place to go you should plan on a more permanent type of shelter that you can feasibly pay for on a limited budget. The following are the six items you should try to acquire to care for your family in a worst case scenario. Even if you declare bankruptcy, in many cases the homestead act will allow you to keep up to $5,000 worth of property. The following list will fall far below that threshold with a little shopping around.
Older pickup truck- You should have a vehicle that is fully owned so there is no chance of losing it if all of your financial assets are lost. You want an older vehicle so you can maintain it yourself to a large degree. Newer vehicles since the mid 1980’s have fuel injection, computers and many electronic sensors that make diagnosis and repair difficult for anyone without the proper equipment. You also want a vehicle that can pull a trailer which leads us to the next item.
Camper trailer- Living in a tent is better than nothing but is still miserable in very cold weather. Having a hard shelter is far more comfortable especially if you have children. You can maintain a good deal of normalcy with a camper and you still maintain your mobility. Trailers can be found very cheaply today and the longer you have to look for one the more likely you will find a good deal.
Food supply- With a hard shelter that is mobile you maintain the ability to store several months of food and move it quickly if needed. You should acquire at least a years food supply even before you have a trailer to carry it all. If you plan to set up for long periods of time at a stationary location you would also benefit from having some basic garden tools and a supply of seeds to extend your food supply.
Energy systems- In a long term depression you will still need a certain amount of energy for certain systems. A wood gasifier will allow you to power your vehicle when fuel is hard to find or too expensive to buy. Your vehicle will also provide you with a power source for electrical power. Solar panels will also prove useful for electrical power over the long term crisis. For heating and cooking, wood stoves are good to have since wood is available in most locations and relatively cheap.
Security- Having a means to protect your family will become necessary if the social conditions deteriorate to the point that large numbers of people seek out resources for survival. A good pump shotgun and at least 500 rounds of ammo will give you a basic level of protection in most circumstances. It will also provide you with the means to hunt for food should it become necessary. A shotgun is a good entry level weapon for someone with little or no experience handling weapons. If finances permit a good pistol and a rifle with a good supply of ammo would be a good investment as well.
Silver-Some wealth preserved in the form of precious metals will give you the ability to buy items in the future that are truly needed. Paper money can lose it’s value in a national crisis but gold and silver will maintain their purchasing power over the long term and provide you with options you would not have otherwise. Having at least $20 face value in junk silver coins is a good start but more is better based on some of the economic signs we are now seeing.
These six things are only one type of plan but they provide you with the means to provide the basics no matter how disruptive things get. If you are unable to service your debts in the future you may end up with only those things you fully own and have physical control over. Regardless of your plans you need to analyze your current situation very carefully to insure you will have the means to provide the basics to your family.
It may be thought as premature by some to make such drastic plans at this time but once crisis strikes it will be too late to get the things you will need to ride out the social disruptions. If the government continues to print money we will eventually lose our reserve currency status and the petrodollar will be destroyed. When that happens inflation will run rampant until the dollar that we know disintegrates into nothing. Before that happens you need to ask yourself some important questions and have good answers now.
What will I do if I lose my job and cannot find another?
How will I continue to pay for food, rent, energy, clothing or medications if my income is cut off?
What will I do if inflation destroys my wages, savings and retirement accounts leaving me with nothing?
Will I be able to stay at my current home if I no longer have any money?
Where will I go if I am forced to leave my home?
What assets do I have that are fully owned?
How can I preserve my wealth if the dollar hyper inflates to nothing?
How will I take care of my family if the banks are closed?
What can I do to earn money if we have another great depression?
This is just a sample of some of the things you will need to know if the worst happens and judging from the current economic numbers we are getting very close to a terminal situation that will destroy most of the wealth that exists in paper and digital form. Continued money printing will only make the situation worse but that is the path of least resistance and the one we are likely to take as a nation of economically illiterate stooges.
If you do not have your economic survival strategy operational at this time you are playing with an economic fire that will burn everything you have in short order. You should not complain about your preps if it does not happen next week or next month. The longer it takes to happen gives you that much more time to make the necessary preparations so use this time wisely.
By: Tom Chatham
If we follow the premise that all things on Earth are finite such as the physical resources we use then we must assume that at some point we will begin to run out of these resources as they are more heavily utilized. Our use of energy is one such item that should be addressed by the average person before we hit the wall of limited and then lack of these resources.
There are those that think solar and wind will be the salvation of our energy problems but these people fail to take into account the limitations of these energy sources. It still requires energy to extract the raw materials needed to build solar panels and these must be replaced at some point. Wind turbines require steel, concrete, fiberglass and copper just to name a few of the resources needed to make these things work and they too must be replaced every few decades as they wear out.
One problem with solar that I have talked about to people is the fact that massive amounts of energy must be stored in order for it to power the grid continuously. One person recently calculated that batteries to store enough energy to power the U.S for one day would require batteries covering 923 sq. miles and costing 41 trillion dollars. While I am an advocate of wind and solar I do not believe they are capable of powering our grid reliably. I think their benefits can only be utilized as stand alone systems on individual buildings.
Those that think solar and wind can replace oil do not understand our energy requirements at the present time and certainly do not understand the power requirements of things such as ships, trains and semi trucks that move the bulk of our commodities around the world. Cheap oil has made the current world trade system possible and the lack of cheap energy will cause a collapse of the status quo. The collapse of our current energy system will cause widespread chaos and depressed living standards if we do not address this issue now. It is for this reason that we need to look forward to the energy we will use in the future.
Hydrogen is more akin to a storage battery as it takes energy to separate the hydrogen from other elements to utilize in most cases. Fusion is still a promising energy source that we still do not know how to produce and maybe in the future if we figure it out it will change things but that is some time off. Things such as oil, natural gas and coal are heavily used today but they will only last so long and a growing population is using them at a faster rate as time goes on insuring their demise at some point. Nuclear power plants are filled with controversy and their future is uncertain unless something changes.
If our fossil fuel system begins to erode we will have to fall back on what we know. In this case the most available source of energy available to the population is that age old element, wood. As archaic as it sounds if our energy grid begins to shut down wood may be the go to system for individuals at the local level. A mature wood lot can produce about ¾ of a chord of wood per acre per year. When utilized within these limits it becomes sustainable for the long term.
A small homestead with a good woodlot and some solar and wind power may be the future we are forced to embrace until some new energy source becomes available in large enough quantities to fulfill our needs on a large scale. Now is the time to begin this conversion before we are forced to do so when the materials we need are no longer available to the masses. There are many people that have made this change and live off the grid today and are very happy about it.
Wood is also a viable source of energy for vehicles utilized in the local area. Wood gas can provide the energy to power much of the agricultural equipment we need to maintain the food supply. While this is a step back it will likely become a necessity at some point if we wait too long. With wood gas a conservative estimate of wood power indicates about 20 pounds of wood equals a gallon of gasoline when utilized in a motor vehicle. There is some power loss with wood and production efficiencies vary from system to system.
Much of the population growth of the world has been made possible by the availability of cheap energy and the loss of this cheap energy will cause a drastic adjustment to the population on this planet as we run into resource scarcity. The abundance of food we now produce depends on vast quantities of cheap, available energy. Nature has a way of balancing things out if we refuse to do so on our own. People need to understand this.
While a small homestead with solar and wind power and equipment powered by wood may not be the ideal plan, it is one you can be working towards while you can do so with minimal disruption to your lifestyle. In the near future if energy prices and availability should become more of an issue than it is now, having alternative energy systems will minimize the effect on your quality of life. I suggest you have a plan that works for you and your family before you are forced into one by events.
A plan to deal with an energy shortage will not only protect you from a shortage but also from manmade and natural disasters that would curtail or eliminate the timely delivery of energy to the masses. The ability to provide the majority of your own energy needs makes you less vulnerable to shocks that can send society into panic and disrupt many lives. Over time things change. This can be beneficial or detrimental to our well being and your ability to adapt to those changes will determine your quality of life in the years to follow.
Our energy resources may be stable for many years to come. Then again they could change drastically in a matter of weeks. Walking into the future with your eyes closed knowing full well you could fall off a cliff is a dangerous way to live, especially when you could take steps to minimize the dangers and insure your quality of life if something does happen.
By: Tom Chatham
The prosperity we once knew as a nation was made possible because of cheap oil. When the EROI, Energy Returned On Invested, was at 30/1 we had unprecedented prosperity. The EROI is now falling below 10/1 and is taking prosperity with it. The EROI is the amount of energy we expend to get energy, in this case oil, out of the ground. We are getting 10 units of energy for every unit we expend to get it. Shale oil production results in 5 units of energy for every unit we expend.
This matters because everything we use depends on cheap energy to maintain the status quo. An EROI of 10/1 is necessary to maintain our current standard of living. The Hills Group project oil will drop to $11.76 by 2020. This may sound good on the surface but cheap oil will not mean much if you have no job and no money to buy it. As the next depression sets in many more people will lose their job and as a result prices will collapse. They project by 2020 we will have 75% fewer gas stations as a result of collapsing oil.
Today most of our population lives in the city. When jobs see their final collapse those people will have no way to survive. Living in the city requires stuff being brought in from other places. Those living in the city must pay for this stuff with the pay they earn. No jobs mean no pay and no goods.
During the last great depression many city dwellers had family in the country to move back in with to stay fed but most city dwellers today are several generations removed from the country life and no longer have living family members in the country to move in with.
Many of the farms that were left to city dwelling children after the parents died were sold and the money either spent or put into paper assets for retirement. When those paper assets evaporate those people will have nothing to fall back on.
I have said before that when this next depression hits it will devastate everyone and the only way people will be able to get by is if they produce most of their basic goods themselves. This will require a small farm and a family to help run it.
The U.S labor department has reported that productivity has declined for the third straight quarter. The real hourly wage increase reported in the first quarter at 4.2% has been revised to a decrease of .4%. GDP growth annualized for the first two quarters is 1%. S&P 500 companies are reporting declining earnings for the fifth quarter in a row. Economic growth is at its weakest rate since 1949. Gold is up 25% this year so far. All of these metrics are indicative of a stagnant or declining economy at a time when we are told everything is doing great.
The massive amount of money being printed is the only thing holding the economy in place right now but we are now moving beyond the point where that is even effective. From here on out more money will only cause more damage and it will compound the effects when the economy finally fails in earnest. Those that do not see this train wreck coming will still be sitting calmly as everything falls apart around them. They will be lucky to survive the impact and will be totally helpless in the days following. Those that see the danger will have gotten off a long way back and will be in a better position to help themselves and their family.
It is good to help others but you can only do so after you have taken steps to help yourself. The carnage we are about to see in world markets will affect everyone in some way. The best way to help is to understand what is coming and be prepared to deal with the realities that will follow. Global markets will revert back to local markets and those prepared for these changes will survive the initial collapse and thrive in the aftermath.
You can read more about EROI at https://srsroccoreport.com/the-coming-breakdown-of-u-s-global-markets-explained-what-most-analysts-missed/
By: Tom Chatham
It has been a long wait for the silver bugs but the future may indeed see them richly rewarded for all of their patience. Those that have held on are now about to see the end game unfold.
There have been many projections on the highs that silver could hit in the future ranging from a low of $100 to highs of $1,000.
It should be noted that much of the above ground silver has been used in the past few decades for industrial purposes that leave most of that silver not reclaimed due to the small amounts used in individual products. The plans of China to increase solar production will take a great deal of future silver production to power their energy grid.
The current production has silver at about a 10 to 1 ratio of gold. On the surface this means that silver should be valued at least at the 10/1 ratio. The current disproportionate ratio of 78/1 will insure silver rises at a higher percentage than gold during the current bull market.
If current projections of $10,000 gold are anywhere near correct that would put silver in the $1,000 range. Regardless of the ultimate price, gold and silver will rise substantially as chaos enters the markets. It is this chaos that will also require people to store the necessary resources to care for their families until the chaos subsides. Gold and silver holdings do not insure access to resources during chaos but will be valuable afterward to take advantage of good deals due to revaluations in the economy.
In times like this when most people are at risk of losing much of their wealth, the current low price of silver can help the average person not only preserve what little wealth they have but even increase it many fold to offset the failure of incomes to keep up with real inflation over the past few decades.
This is a once in a lifetime opportunity to beat the bankers at their own game. When the economic leverage shifts back from the paper wealth to real money those holding real money will reap the benefits. Even small holdings of silver will help individuals to insure their wealth will remain in tact after this economic cycle comes to an end.
Gold and silver are a form of escape hatch in the banker controlled economic system we are forced to play in. When they pull the plug on the current paper wealth, those that know no better will cling to those worthless paper assets to the very end never dreaming they will someday be totally worthless. The very few that understand what is taking place will use that escape hatch to save what they have so they can continue to prosper in the future.
The bankers know of this escape hatch but they have few ways to close it without alerting the people so they use their position and trust to convince the population this doorway is dangerous. They call it a barbarous relic that has no place in a modern society. They do this because they know the truth. If they can convince the people long enough, by the time people know the truth it will be too late to exit this door.
Those that have already taken this door out of the system are now looking in at the fire that is about to burn the house down. When the rush to the exits happen, many will not make it out. There is still time to get out ahead of the crowd but time is now very short. Any more procrastination on your part will likely be lethal to your economic health. On this Independence day free yourself from the banker controlled system by purchasing some real money and renew your declaration of freedom.