Category Archives: Economics

Paying in a Broken World

By: Tom Chatham

It is a common reaction to ask, how much is that, when we see something we want or need. The question is answered with some monetary figure that people will recognize and use to determine if they can afford it. But what happens when the monetary system we know becomes so dysfunctional that common monetary values mean little.

This could happen due to massive inflation, currency collapse or a frozen banking system that prevents you from accessing your funds. If you have no way to pay for something, it does not matter how much or little it costs. It will be out of your reach unless you have some means to pay.

Some people keep cash on hand for just such a problem. They know they will be able to pay cash when everything else stops working. That will work for a time but eventually paper currency will be looked on as a diminishing asset as physical goods become more valuable to those that need them. Paper currency is not much different than a check you write on your account. If the account is empty your check is no good.

The same can be said for those entities that issue paper money. If they are bankrupt or shut down, the value of their printed certificates will be worth the same as the bad check. Nobody will want to accept it after they realize it may not be honored for the value it supposedly holds. While a local store may accept it out of habit, eventually businesses will figure out the truth.

In times like this alternative forms of money may become more viable to local individuals such as gold and silver. But, that may take some time and most people will not own any of these precious metals for trade. Some may resort to direct barter with some of the things they have amassed over the years to get the necessities they need and under these circumstances values will be variable and disconnected from reality at times.

Some people have stored barter items for this eventuality rather than precious metals and there is nothing wrong with that if it gives them the feeling of safety they desire. One of the reasons they desire goods instead of metals is the fear that governments will call in precious metals as they did in 1933 and that is a legitimate fear but must be taken with some reflection on the facts.

In 1933, gold and silver coinage was the circulating currency in the nation meaning most people had some in their possession. That is not the reality today as very few people have any knowledge of the value of metals and do not have them in their possession. The fact that the government can call in metals does not mean they will be able to relieve you of them.

In 1933, on the river where I grew up, there was a store on the bank of the river that did a good business with all of the ships that came by. When the gold was called in in 1933, the store owner did not want to turn it in so he kept it hidden away. At the time he had a small chest full of gold coins. He kept that chest of coins until the 1970’s when gold was legal to own again and then he sold it for a good profit. This is a true story and just one example of how hard it would be for the government to call in all of the metals in private hands.

It does not matter what you hold your savings in only that it will retain value when conventional paper currencies become a despised possession. When that happens you need the ability to buy the things you need with what you physically have on hand. The question you must answer is what will you have on hand when that day comes.

Local Production Means Jobs and Prosperity

By: Tom Chatham

With over 93 million unemployed working age adults in America and the economy beginning to go negative again, if you are fortunate enough to have a job it may not last much longer. It is easy to keep a positive attitude about the economy when you get a paycheck every week but life after the paychecks stop will change your outlook a great deal. That is the reality that is about to overtake the working class in the coming months.

The primary mechanism that has tipped the economy onto a downhill trajectory is the route that circulating money has taken in the past few decades. In the past much of the money was kept in circulation in the local economy resulting in the creation of many local jobs. With the new corporate model, most of the profit is siphoned out of the local economy and goes to wall street profiteers. This has resulted in the destruction of many local jobs while the few at the top of the wealth pyramid get richer much faster as time goes on.

The only way a nation can maintain a middle class is to keep money circulating in the local arena. The lack of this local circulation has finally caught up to the middle class and it has begun to shrink at an alarming rate. If the corporate model plays out to the end, it will mean the total destruction of the middle class and the beginnings of a two tiered system where there are a few very wealthy persons lording over a very large poverty stricken majority. That is where we are heading.

When this happens the only thing that will restore a functional middle class is the recreation of the local economy where the vast majority of the money remains in the local economy. This will require the reestablishment of local businesses and craftsmen to create the items needed by the local community.

In most cases the service sectors of the economy can only function when sufficient excess wealth exists in the hands of workers that seek to improve their living conditions. Basic needs must be met first before persons will seek any improvement in living conditions. This provides a road map of sorts for those that seek to create a stream of income in the local economy. The creation of physical goods that people need must be satisfied before the economy will demand the lesser wants of society.

As the basic needs of society are fulfilled, the income from these goods will slowly create more jobs and more demand from society. As the cycle continues it will slowly lift the economy and the living standards of the people. This is how the American economy was created from the beginning of settlement to the industrial base that we once had.

Wealth is created by raw materials, labor, skills and demand for goods. The corporate model has pushed the small businessman out of the market by utilizing mass production and cheap labor combined with cheap transportation systems to provide cheap goods to the masses. This model is destined to collapse at some point due to rising costs of labor, rising energy costs and unsustainable production systems.

Keeping these things in mind, if you need a job where one does not exist, you must create a job that produces a product that society must have to insure demand. As the basic needs of society are met, you can move into goods and services that are less of a need and more of a want by society. To become a successful independent businessman you must listen to the community and access its needs and wants to have the right products to sell.

The amount of destruction caused by the corporate model will determine where the starting point will be when a reset is required. It is also important to keep in mind that the lack of a rebuilt local economy will lead to a feudal type of society where the poor become serfs controlled by the few wealthy lords that control the wealth.

When a community lacks the ability to provide the things people need, they become easy prey for those that can get the goods society needs. People today are held captive by the financial system created by those with wealth. Debt is the control mechanism and when the current debt based system fails those with the remaining wealth will create another system to keep the poor subdued. It is inevitable unless communities do the hard work of creating their own economy and goods to maintain individual freedoms and keep the wealthy in their proper place.

For a community to recreate the local economy it must determine what resources it has, what resources it must get and what skilled labor they have in order to devise a functional system they can control. Much of this will be done on the individual level as people seek to use the resources and skills they have to provide for their families. This is the foundation of free market capitalism.

In 1776 America about 40% of men worked their own farm. Another 30% worked as laborers on farms. About 20% owned large farms or plantations. The remaining 10% or so who were professional businessmen frequently owned modest farms where they might raise a cow, some chickens and have a garden to provide for the home table. Even those townspeople that had no farm usually had a cow, some chickens and a kitchen garden for home use.

In those days nobody was completely self sufficient. Some people worked metal. Some grew fiber crops and others turned the fibers into cloth. In the process of providing for their families and selling any excess they produced, these people created the local economy. In early America unemployment was an almost unknown concept. Now, the social programs available to people make unemployment not only possible for the masses but it has become a socially acceptable situation. You must think in these terms if you desire to recreate the local economy not only for your benefit but for the benefit of the community as a whole.

To create your own job you must determine what skills you have that can be utilized for your benefit as well as can be sold for income. This will also entail an assessment of your available resources. To work for yourself you must also be ready to take advantage of any opportunities that present themselves.

Recently there has been an outbreak of avian flu in the poultry flocks in the upper Midwest. Millions of birds including many laying hens have been destroyed resulting in a disruption of the egg supply nationwide. As a result of this a person with even a modest layer flock might find sale in the local economy where there once was no demand. The drought conditions in California are beginning to increase prices in produce grown there providing the local producer in other sections of the nation the opportunity to fill the local demand for some of those items.

Beef cattle numbers are at a 50 year low because of the drought conditions forcing ranchers to sell their herds. Last year a disease moved through the pig population in the central U.S killing millions of hogs meant for consumption. These problems provide the small local producer the opportunity to get back into the game locally where before they were unable to compete with the corporations.

In the event that the dollar crashes as many have predicted, it will make many of the imports we depend on too expensive for persons to buy. This would allow someone with some metal working and welding ability to make items now mostly imported such as garden tools.

A good businessman looks ahead to see what is coming and takes actions to utilize that knowledge to create wealth. The problems previously listed can provide the local businessman the opportunity to create local supply and develop markets during this time of disruptions to move the production base of the nation back to the local area where it belongs.

These are only some of the business opportunities that can be taken advantage of right now locally that can provide the local economy the ability to establish local markets and production assets that will benefit the community especially if things continue to deteriorate nationally in the future.

The failure to move production back to local communities will result in foreign corporations moving in when things deteriorate and establishing their own production systems that will once again siphon wealth out of the local community and send it to overseas entities. The buying spree by the Chinese in the past few years is proof of this possibility coming to pass.

The need for local production is more relevant now than it has ever been. Only those that make the leap now will have the opportunity to make a difference when things take a turn for the worse and people become desperate.

Small Towns and Local Currency

By: Tom Chatham

The idea that life is about to take a turn for the worst is taken as a foregone conclusion by those tracking current events. It has been a long time coming and we are not at the end of the beginning yet but it is coming into view. In the days ahead two of the items you need to plan for are where you will live and what medium of exchange you will use.

Many have taken the stance that you should move to a small town to ride out the events that may unfold. This is not a bad idea but simply moving to a small town is not a cure-all for what will likely unfold. In many cases, the small towns in America are merely smaller versions of the city in many ways.

The small towns have a smaller population that allows many of the people to actually know their neighbors which in times of chaos can help due to the cohesiveness of the neighborhood. This is only one aspect that many people think of. A more serious aspect that needs to be examined is the production capability of the community.

If the distribution system stops for any reason, the small towns will lose their supplies just like the major cities will. Most small towns today are far different from the ones just a few generations ago. These small towns rely on a constant supply of goods from all over the world to maintain normalcy just as their city cousins.

Long gone are the days when many of the goods needed by the community are made in the local area. When the distribution system stops, the availability of local goods will be a primary factor in how well the community weathers the emergency.

Because of this, it is necessary to not only look for a small town but one that has a host of local production assets that will allow the citizens to maintain a certain degree of commerce of necessary items such as food, clothing, energy and medical care. Just because there are a lot of farms in an area it is not an indicator of sufficient local production. Many farmers rely on the grocery store for most of their food needs because many farms are mono crop farms now not the small diversified farms of yesterday.

A town may be surrounded by thousands of acres of wheat but what is their capability to convert that wheat into flour. This can be said for any type of grain produced in the area. Butchering a deer during hunting season is one thing but how about a few dozen beef cattle per week? Are there any chicken houses in the area and what is their ability to provide enough chicken and eggs to the community? Are there any dairy farms around and what is their production ability? Can the local farmers produce another crop after supplies are cut off? Do they have the capability to produce their own seeds and fertilizer? These are just some of the things a small town will need the ability to do to be a good place to stay after something happens.

The other issue is what medium of exchange you will use. It is now evident that banks and government entities are pushing us towards a cashless society. Chase will begin to charge large depositors a 1% fee for bank deposits in the near future. Some smaller banks around the country have sent notices to their business customers informing them that they will be charged a fee for bank deposits in the near future.

Negative interest rates are now here and it will only get worse. When banks start charging their customers for the privilege of holding their money, the system is seriously broken. This is one way the bankers are trying to induce spending into the broken economy. People will be forced to spend their money as fast as possible to avoid bank charges.

At the same time cash is becoming the new threat. Remember the alerts from the government implying people that use cash may be terrorists. This is the set up for removing cash from the system. That will allow the government to track all purchases you make and even freeze your account if you become a naughty person by utilizing your free speech or other rights against the government. If there is no cash to be used it will make being on the run from authorities almost impossible. It will be the end of anonymous purchases.

Because of this it will be imperative to have some type of medium of exchange to conduct business with other individuals if this comes to pass. The most obvious types of currency will be gold and silver coins. These items will be out of the reach of the government in most cases. They are not the only types of currency though. Other types of currency can take the form of local script, certain foods, salt, tea, ammo, spices and sugar to name a few. The commodity may be different from one community to another depending on the location and availability of common items.

Knowing now what types of production are available and what types of alternative mediums of exchange would work best in a particular community are two of the things you need to keep in mind as you plan alternatives to your current lifestyle. A small town will only be as good as its people and its production capability in the days to come.

Surviving In A Collapsing Economy

By: Tom Chatham

The bulk of humanity living in the western world are used to a life of comfort and leisure. This has been made possible by the production of cheap goods and a debt based economy. When this system fails it will cause much discomfort and even death for some that are not able to adapt to the changing times.

The ways of the modern western world are to work and save during the early working years in order to retire during the less productive older years. The act of retirement is a relatively new phenomenon for the working class. Until the 20th century, the only people able to cease working and enjoy their elder years were the rich among us. This changed with mass production and massive debt creation.

In the 1930’s the poor in America were thrown a lifeline in the form of social security. This program was meant to prevent some of the hardship for those struggling to survive. This program was never meant to replace savings and provide for a comfortable retirement all by itself. Over the years the political gerrymandering of politicians seeking reelection have sold the people on the notion that social security is an all encompassing retirement plan they can expect until they die.

The expectation of this program is one of the Achilles heels of the American culture. Very few save for retirement and many can not afford to with the ever increasing prices they must pay for necessary items. Many have no hope for the future except for this underfunded and soon to be extinct Frankenstein monster. When the government can no longer provide this and other programs to people barely surviving today as it is, hardship that is unknown to most will fall upon them like a pile of bricks.

When this happens these people will have no where to turn to ensure they have the items to survive daily life. This is the socialist bomb that is about to explode and very few want to acknowledge it and prepare for the inevitable problems that will occur.

When this house of cards collapses it will require every person to have a plan to maintain some semblance of a standard of living. This will require individuals to have one of two options available to them. They will either need to have sufficient funds to care for themselves or have the ability to earn a living and produce the things they need for themselves in the aftermath of this event.

Having sufficient funds to live on will necessitate having a medium of exchange that will survive the destruction of paper wealth. This will mean wealth in the form of precious metals or other similar options that will retain their buying power over the long term.

Those that work for others and depend on a paycheck to buy the things they need will suffer when that job no longer exists and they can not find another. This is a situation that is prevalent today with upwards of 94 million people in America. These people are non-persons according to the government as none of them are considered unemployed. Ignoring this problem will not change things when the number reaches the tipping point where these people have no option but to prey on those that still have the ability to provide for their families. This is where the golden hoard becomes mobile and begins to move across the land reaping a deadly harvest.

The Deagel.com site shows the population of America dropping from 316 million in 2015 to approximately 69 million in 2025. This has been characterized as a mass exodus from the U.S. to other nations as the working and living environment becomes untenable in America and people relocate to more hospitable locations. This is one possible scenario that we may see in the future if Americans fail to plan for disruptions to the economy and have no way to take care of themselves.

In a nation like America with all of the natural resources that we have available to us, it need not come to that. The one thing that we lack today is the motivation to do something positive about our looming situation. The current inhabitants of America no longer have the moral fiber that was common in the 1930’s when we last went through something like this. That will have to change or some other factor will have to be utilized to stabilize the population in the future. A mass exodus out of the country is just such a factor.

For those that have the moral fiber to make a stand and provide for their family it will be a trying time and a dangerous one for many years. Those that have the will to work through the problems will need to have either funds or resources to get them through. Simply having several months of food and supplies will not be enough. It will take a plan that spans two or three decades that you can enact to provide the things you and your family will need.

Something this encompassing will require many resources and the know-how to use them. The amount of resources can be a stopping point for many due to lack of funds to acquire them now but that is all the more reason to make plans and work towards a goal that you can accomplish. Many of the resources you may need can likely be made from scratch that can provide you with the things you need and even something to sell. It is not that hard to build a spinning wheel and floor loom to make cloth from raw cotton or wool. It just takes time and patience. The old ways are not fast or efficient by today’s standards but they allow you to produce something from the raw materials you can obtain. This is just one example of how you need to think in the days ahead.

You need to utilize the time, funds and skills you can obtain now to construct a plan to deal with the future and overcome the problems. If you need to house your family it is now common to get a loan and be in debt for 30 years. In the future it may be necessary to provide that home with what you have on hand to build it. That may entail using a few hand tools that you have and the available natural resources around you. A home made from sod, cobblestone, adobe or logs can be utilized to provide the shelter you need. It may not be pretty or what you are used to but our forefathers utilized this type of construction as a stepping stone to better things.

When the economy as we know it fails, the only thing you can do is to return to an earlier point in time that depended on a simpler more functional system and utilize the available resources. When mechanized farming fails it may be necessary to return to less mechanized methods and cheaper alternatives to grow the food and fibers we need for survival. The thought of having to go backwards to get to the future is not pretty and will likely be difficult but sometimes that is the only way to move forward.

Surviving during a collapsing economy where systems we depend on cease to function requires individual actions to reduce the hardship that will ultimately overwhelm society and cause societal breakdown on most levels. Skills to lessen the hardships are critical to stabilization and recovery. These skills are the only way to utilize available resources to provide the necessities of society. The first things individuals strive to produce are food, shelter and clothing. These are the very basic things people need to survive over time. Later, other things such as security, medicine, communication and transportation become necessary to form a more cohesive community.

The skills to grow and store food, purify water, build shelter, make clothing, produce heat and light, produce energy to power machines, produce medicines and administer healthcare, harvest and move raw materials and communicate over long distances are skills necessary today and will continue to be vital in times of economic distress.

The skills and resources to provide these things are the foundation of a functional society. The lack of these things results in chaos and anarchy that prevents the construction of sustainable systems that a functional society needs to grow. The special skills needed to utilize available resources depends on the location of the person and the natural resources available for development. Because of this, different locations may develop along somewhat different lines but the destination is the same.

The need to know or learn these skills is necessary now while the social situation is stable enough to enable persons to plan and prepare for the hardships we will ultimately face as the economy fails due to fraud and mismanagement. Those with a lack of skills and resources will be a detracting factor on society as hardships increase and constitute an ever present danger for those with the resources to survive the times. These are the things that everyone must prepare for now while the system is still intact. There are no guarantees for tomorrow.

What Comes Next for American Job Destruction?

By: Tom Chatham

Since the 1970’s the job opportunities in America have slowly dwindled to the point of total economic collapse, at least for the blue collar worker. No longer can a person expect to go out and get a job at will in the field of his choice. The jobs are now far and few between and they are mainly service related and part time at best. While there are still good jobs to be had in some sectors, these are highly specialized and very competitive. Only a few lucky individuals get them. It leaves very little for the bulk of the job seeking public. Over the years we have seen a gradual decay of the job market from one sector to another.

First agriculture jobs gave way to manufacturing jobs. Then manufacturing jobs gave way to service sector jobs. Then full time jobs gave way to part time jobs. The problem with service related jobs is that you must have a productive economy where people have large mounts of excess, spendable income to support the service economy. Most people no longer have the excess money to spend on less critical items. So what comes next in the great American job game?

That can only be one thing. Part time jobs will give way to no jobs. The day when Americans can no longer work for others to create income is fast approaching. This means many will need to take matters into their own hands and create their own jobs. When the economy becomes dysfunctional only small business will be able to pull it out. That means more individuals taking the risk to produce products that society needs on the local level.

The major impediment to that type of recovery is the government itself. The mass of bureaucracy now in place is meant to stifle any individual productive effort. If government cannot control it, it kills it. This must change and will change once Americans feel enough pain and begin to defy the government.

In the early to mid 20th century, mom and pop operations littered the highways of America. Small stores sold many assorted items that allowed families to survive and prosper even in difficult times. This entrepreneurial spirit is what made America what it is or at least what it was.

The days of producing products for a worldwide market are largely over for the U.S. which means many of those manufacturing jobs will not come back because we can no longer compete economically. This will force society to embrace former economic models that worked, at least enough for society to survive. This means small scale production directed at local markets.

As I stated in Rebuilding the Republic, we will be forced to go back to a society where about 20% of the population lives and works on small diversified farms. This will provide stable working and living conditions for a substantial percentage of the population no matter what the economic conditions are.

This will take 20% of the population out of the job market allowing less competition for the few manufacturing jobs that exist. There will also need to be a shift from large corporate systems to smaller local systems. This will spread the profits from sales more evenly across the nation and allow a smaller economy to sustain the population as it once did. Instead of corporations getting the lions share of the profits it will be left in the hands of local merchants and producers who spend it locally.

Lets not live under any delusions. The west line has moved to the far east and China will be the next industrial power. America will never again be as it once was. This means we will need to focus on building a smaller more efficient economy that provides the basic necessities for the nations people. That also means the many social programs that many now enjoy will have to go out of financial necessity. We will not be able to afford them in the future. Many will not like to hear that but that is the cold hard reality we must face as a nation.

You may not like my conclusions, but do not think that money printing and government controls will solve everything because we already know they don’t. Americans need to realize that the nation as we know it must change the current dysfunctional model if we are to survive as an entity. Change is coming and ignoring it will not do any good.

Disaster Proofing Your Life

By: Tom Chatham

If you are reading this then you understand the danger we face or at least want to understand it. The daily assurances by the government and MSM are all that most people need to relieve them of the burden of individual responsibility. Ultimately, the buck stops with you when the welfare of your family is at stake.

In The American Dream Lost I outlined a simple strategy to disaster proof your life if everything falls apart in society. For the benefit of those that have not read it before I will outline the basic strategy here. Time is getting critical and decisions need to be made. The strategy is designed for those with minimal savings to draw on but can be used by those with substantial assets as well.

It does not matter if the emergency is loss of employment, natural disaster, civil unrest or economic collapse. The results are similar. Your ability to care for your family is hampered to some degree and life can become difficult very fast. The credit system we rely on can break down and leave you with few or no resources to continue normal daily living.

As many in the preparedness community have stated many times before, there are certain things you need to have to get by in difficult times when you cannot afford them or possibly find them. Food is universal in all lists but that is not the only critical item to have. Food will keep you fed but there are other environmental conditions that need to be addressed.

Here is a list of critical items you need to have covered no matter what happens.

Food & household items
Water
Shelter
Clothing
Security
Energy
Transportation
Silver

These are not the only things you should have covered but they are the top of the list.

You need to store enough basic foods to feed your family at least two good meals a day for one year. Three meals a day is better but two is a minimum to prevent starvation and desperation. Basic, inexpensive foods should be emphasized such as flour, cornmeal, beans, rice, oats, pancake mix, cooking oil, powdered milk, canned vegetables, canned fruit, syrup, honey, potato flakes, gravy mix, canned meats and pasta. Cooking essentials should also be included such as granulated sugar, brown sugar, salt, pepper, corn starch, baking soda, baking powder, yeast, cocoa and spices. You also need to store basic household items such as dish soap, washing powder, toilet paper, toothpaste, soap, shampoo, razors, shaving cream, sponges and scrubbing pads.

Water filtration is essential where water sources are suspect. Either portable filters or countertop models will insure you can maintain good health during difficult times when potable water is not readily available from the usual sources.

Shelter is a critical element and can determine the quality of life of your family over long durations. If you do not fully own your present shelter you are in danger of losing it if you are unable to maintain payments at some future time. Even if you own it the location may present security problems in the future so other alternatives must be available. A good used camper trailer allows you the ability to shelter your family year round and also provides you with mobility when you need it. A good used camper trailer can be found today for under $3,000 dollars and some for much less but you will have to shop around. The sooner you start looking, the more time you will have to find good deals.

Clothing is an essential need of humans. While most people have ample supplies of clothing to get them through several months, it is good to have a backup supply of some basic clothing for each family member just in case the difficulties last longer than expected or you lose most of your clothing due to disaster. You should buy two complete sets of clothing for each family member and store them in your trailer.

Security is important and its relevance depends on your location. Those in a remote area will have fewer security problems than someone in an urban area depending on the disaster and its aftermath. The ability to defend your family is critical depending on events and you need to have a plan and equipment to take care of unfolding situations. If you do not currently own a gun and have limited gun knowledge a pump shotgun and 500 rounds of ammo would be the best thing to start out with. It will provide you with good defensive capabilities and the ability to hunt.

Energy is a critical element and the longer you must care for yourself, the more critical it becomes. You must have the ability to provide conventional energy for short durations and have an energy plan to cover needs for longterm situations. Propane and a generator work well for short term but once you run out of fuel you will suffer. You must have a way to provide alternative energy for your systems regardless of the situation. One good alternative is to build a wood gassifier unit. You can use this to run your generator and your truck. With a sufficient wood supply you can run most of your items for months or even years on locally available wood supplies. Other systems such as solar, wind or wood stoves are good but they are limited to only a few things where a gassifier can be utilized to provide power for most of your energy needs. A combination of these energy systems would be best if you can afford it.

Transportation is critical if you are not in a safe location when everything destabilizes. If you have a camper trailer you will also need something to pull it. Older pickup trucks can be found for under $1,500. When combined with a wood gassifier, you have a transportation system with almost unlimited range when conventional fuel supplies are cut off or unavailable.

Silver is a good commodity to have when the economic system is not functioning as it should. Holding at least $30 dollars in face value of junk silver coins provides you with the ability to buy items when money is scarce or not accepted. It also provides you with a way to save money over the longterm until it is needed. If you have sufficient financial means, larger amounts of gold and silver provide a medium that is easily stored and transported.

With a fully stocked camper trailer and truck, you have the means to get out of harms way very quickly and maintain a reasonable quality of life wherever you go. If you lose your job and home to economic disruptions, it is good to know you can still care for your family properly until you can improve your situation. This is something many people do not think about until it is too late.

Most people like to run things out until they have no resources left to take care of their family. They ignore the threat and then must rely on government assistance to provide the things they need. What happens when you lose everything and there is no government assistance available to you? That is a problem that many will have to deal with in the future and when it happens it will be too late to do things differently. The disinformation coming from multiple sources in the government and media are setting people up for disaster and the people will suffer horribly for it for years to come.

If you have the means to buy a small property in a rural area that you can live on in your trailer that would be ideal but many may not have the resources for that so what can you do? If you live in the city and determine you may need to relocate during some type of disaster you need a preplanned destination. Simply driving around in a collapsing environment will likely end in tragedy.

One thing you might want to do is make friends with a farmer in a rural area. In the event you need to relocate, you may be able to park your trailer on his property in trade for helping him around the farm and keeping an eye on things if the situation deteriorates. If you are already friends with him he is more likely to help you when the time comes.

For those that already have a plan, you are ahead of the curve but for others that have not thought about it this should give you something to think about and begin the process of disaster proofing your life when things go wrong in society. Take this basic plan, adjust it to your needs and abilities and make a plan that works for you. It is your responsibility to care for your family no matter what happens. This is not a responsibility you can farm out to government agencies so get busy now.

No Goods For You

By: Tom Chatham

As many have pointed out over the past few days, the port shutdown on the west coast will have longterm effects. There has been a slow down at the ports for a few months but now the work has stopped completely. What many do not understand is that the retailers in the U.S. must make their orders months in advance in order to have the product on the shelf when they need it.

Even if the shutdown only lasts a few weeks, it will cause ripples through the distribution system for months. Even if we are still getting goods in the stores now, when the supply system runs out, the shelves will go empty. Even if the goods are put back into the system within a few weeks before the shelves go empty, there will likely be a dead zone where the products have not had time to make it through the system to the stores. That means a temporary disruption of supply on the shelf.

Many in the preparedness community have talked about supply disruptions as one possible danger that can leave society in need of everyday goods. It does not matter if there are shiploads of goods sitting in the port. If it is not on the shelf when needed it might as well be on the moon. When the shelves start to go empty it will not matter if it is just a temporary problem. People will start to panic buy and exacerbate the problem.

One problem is that if this goes on long enough, the seasonal goods that are needed in stores will not arrive in time to be sold when in demand. This delay will carry on for multiple seasons until the distribution system catches up to the supply. It takes time to unload each ship and transport that cargo to its destination. If it carries on long enough, the transport system will not be able to overcome the backlog of goods. You can only transport so much at one time with the available carriers in the system. As the shutdown goes on it could cause more longterm problems if transportation systems go out of business as a result of the shutdown.

In the shipping industry, when the industry slows down owners tend to sell older, marginally productive ships to the ship breakers. This reduces the number of transports over time and when the economy picks back up the ships are not available to use so new ones must be built. This creates a lag in the industry for a few years until the ships can be built. It is a repeating cycle that the shipping industry operates on. Anyone keeping up with the Baltic Dry Index knows it is now at multi-decade lows which is more incentive for owners to sell. This slowdown will likely exacerbate the reduction of shipping available as ships are sold to maintain bottom lines.

This will also put stress on the credit system as goods are not unloaded and sold so retailers can pay for the products. The 30 day credit system that is the mainstay of our economy will breakdown as we know it. It will ripple all the way from the retailer locations to the producers overseas. This is true of the whole distribution system including the transport sectors like trucking companies and railroads. Companies that are marginal will likely go out of business as everything stagnates.

One good aspect of a long shutdown is the fact that many people will then realize how dependent we are on imports and that may spur a call for more local production, but don’t count on it. Americans have a short attention span and once the supplies are back on the shelf they will likely go back to their iphones and sports channels and forget about any problems in the past.

This will likely resolve itself soon but it may be months before we are able to evaluate the damage that is done to a system that is already hanging by a thread. This is just one more reason to be less reliant on the system as it is. A distribution shutdown means lost revenue for companies and lost pay for all those affected by it. In a time when large numbers of Americans are unemployed and the rest are struggling, it does not bode well for the future.

Wealth Trumps Income

By: Tom Chatham

Richard Russell made an interesting statement recently. He believes wealth trumps income and after thing about it, I have to agree. Many people today do not understand the difference between wealth and income. They think one equates to the other.

When people look at someone else today they immediately try to determine how much they make as a way to determine how wealthy they are. While it is true that the more you make, the easier it is to accumulate wealth, that is not a guaranteed outcome. What you do with your money is more important than how much you make in most cases.

The psychological aspect of income is all most people immediately respond to. A recent study indicates that most women will not even consider dating a man that does not have a steady job. While there are exceptions, this indicates that most women see income as the most important element when it comes to finding a mate. While having a job is one indicator of potential wealth, it is not the only defining one. There are many people today making over $100k per year and find it difficult to survive because they spend more than they make.

On the flip side, how many wealthy old men do you see with beautiful young wives? If you see a well dressed man throwing around hundred dollar bills and getting into a limo, few people ask if he has a job. They only see a wealthy person and respond to that perception. This is getting off the track a bit but is something to think about.

Wealth is a matter of what manages to “stick” to an individual over the course of time. I actually know someone that inherited around 50 million dollars some years ago. Within 10 years it was all gone and he had nothing to show for it. As unbelievable as that sounds, it is a true story.

Someone that makes $10k a year and is careful with their funds can actually have more wealth within a few years than someone making $50k a year and spending freely trying to live like their neighbors. As I have said before, wealth is not the paper assets you have but the physical things you buy with it. This includes knowledge. As Benjamin Franklin once said, “when a man pours his wallet into his head, no one can take it from him”. Knowledge is a form of wealth that you can spend over and over again and never run out.

Getting back to the wealth trumps income statement, it is obvious over time that the amount of money that sticks to you is independent of income and ultimately determines your wealth. This is why wealth is ultimately more important than income on many levels. Your income can be cut off at any time and leave you with nothing but bills you cannot pay but wealth is already in your hands and being used every day in the form of physical goods to maintain your current standard of living.

You don’t need income when you have sufficient real wealth. Real wealth is what allows you to sleep at night no matter how good or bad the economy is. That is something someone with a safe full of gold or a self sufficient homestead knows. Granted, some income is necessary these days if for nothing more than to pay taxes but the need for income is greatly reduced when you have real wealth that provides the things you need to survive from day to day in a nominal state of comfort.

For those that contemplate the future with dread as the economy sinks ever lower, it is important to realize what has the most impact on your economic future. Making sure that much of the income you get will stick will make a larger impact on your standard of living than anything else. You can try to wing it through life as most people do or you can sit down and decide how to leverage the funds you get and amass true wealth to insure you can take care of your family no matter what the economy does in the future. How much you make is not as important as what you do with it.

How Much Are You Worth?

By: Tom Chatham

On the surface that question may make some examine how much wealth they have but in the context of this article it means, how much are you worth in the job market. It is a foregone conclusion that the more a person knows, the more they are worth when it comes to getting a particular job done.

If you wanted to be a high paid athlete, movie star or brain surgeon you must first prove your skills and worth. You cannot expect to start out at the top in most cases. There are a few exceptions from time to time but for most people you need to prove your worth before the big payday comes. This requires knowledge and training.

Government shills keep telling the people that if only they had more education they would be able to find a good job. This is the sick joke that insiders already know and laugh about. Upon closer examination of the current job market you will find that those businesses willing to hire are with few exceptions, looking for cheap labor not necessarily the most educated. Hence the immigration problems we now have. Why move a factory to another country when you can just bring the slave laborers here.

The job situation in the U.S. will not get any better in the years to come and will likely get even worse. Those with the least value in society will have a hard time getting by. By value I mean abilities. This is what people need to focus on if they want to maintain some semblance of a decent standard of living in the future.

Your value in society in the future will depend on the skills and knowledge you have that society will need to get by. Your ability to convert those skills into real goods and services will determine your worth. You need to forget about working for some large company that sees you as expendable and take your value directly to the end user in society. That is where we are headed and the sooner you acclimate your thinking to this type of economy the better off you will be.

It is easy to teach someone to put rod A into slot B on an assembly line but those that can think and be creative in an ever changing environment will be the most sought after by people that need things. Those that can grow healthy food, build furniture and buildings, make cloth and clothing, work metal, butcher meat, heal wounds, make alternate power systems, fix vehicles and a hundred other jobs that are necessary in local communities, will be the people with true worth to society in the future.

When the economy finally gives its last sigh and rolls over in complete dysfunction, those with actual skills will stand alone among the rubble with the knowledge to function. That is where our economy is headed and the more knowledge and skills you have the more likely you will be to continue earning a living. The current economy built on crony capitalism and fiat money has almost come to its inevitable conclusion. When it ends the people will once again look for real things that they need and those that can provide them will be king.

When that day arrives you will be judged by what you can do and sadly many people will have no real value in society. Many of those people will likely meet with a bad end as a result. You have more control over your future than you may think but only if you take the necessary actions and give yourself some value. You determine how valuable you will be in the future and any failure to instill that value will be entirely on you. So, how much are you worth now?

Will They Index Debts?

By: Tom Chatham

For those keeping up with the economic game of bumper cars we are playing, it seems likely that money printing will continue to the point of possible hyperinflation at some point. It is not a foregone conclusion but it seems likely. In that event what is the individual to do?

Some that have seen this possibility have come to realize that holding large amounts of debt before hyperinflation hits would allow them to pay off this debt with basically worthless currency and come out way ahead in the wealth game. That works in theory but how about in reality?

The bankers and politicians control the money supply and are even now cashing in their paper wealth for tangibles that are actually worth something. These people want it all and you can be assured of one thing. They will take the people to the cleaners before they are done with their redistribution of wealth.

Some may find themselves in a position to come ahead during any hyperinflation but they will be few and far between. The majority will not be allowed to come ahead at the bankers expense. The bankers after all created all of this easy credit that everyone uses and the sole purpose is to use it to separate the population from the hard assets that exist.

For those with substantial wealth accumulated, the first priority is to steal that paper wealth from the people. With that wealth gone they will not be able to preserve the hard assets they have that are not fully owned yet. Once that paper wealth is gone the bankers will need to inflate the money supply and force the majority into default on their assets. In a hyperinflation paychecks will not be able to keep up with rising prices and people will slowly fall behind until they lose it all.

For those that continue getting paid every week, the inflating pay will eat away at the debts faster and faster. To avoid losing real money, the bankers may index debts in order to prevent losing the leverage they created from nothing. When you index you basically increase the value of the debt at the same rate as inflation.

For those that say this will not work because they have a contract with the bank fixing the payment I can only say, do you really think these people will let you get over on them. These are the people that own the government and change the rules on a daily basis when it suits their needs. All that needs to happen is the government pass a law allowing the banks to index all debts and it will be a done deal.

I am not saying this will happen, but it could happen so you need to think about that and incorporate it into any plans you make to get through a currency collapse. If your plan is simply to pay off debt with devaluing currency and they index, you will not be in any better position than everyone else.

One way some will come out ahead is by having their excess wealth in precious metals. These assets will increase at or above the rate of inflation and allow the holders to maintain their buying power. The U.S. called in the gold in 1933 and could do it again but it is not likely. The main reason is that in 1933 gold was still part of the money supply and was held by the general population in large amounts. Very few people hold gold today and most of the ones that do are the very people that make the laws and they will not shoot themselves in the foot.

They may place a tax on any precious metals that are sold and use that as a way to control the smaller holders of metals but a house to house confiscation is not likely unless they just happen to target you for some other reason and find some in your possession and decide to take it. Ultimately, any paper currency only has the value that those printing it will give you. Metals can be used worldwide and have universal value. That is what makes metals more appealing than paper.

If currencies are destroyed in the future you can be assured that the perpetrators have a plan in place to prevent the majority from profiting from it on any large scale. Those that create the credit only care about owning everything they can get their hands on. Their greed knows no limits. With ownership of all assets comes complete control of the population. That is the end game for many. For those that see danger on the horizon it only makes sense to look ahead and plan for any contingency that may cost you everything you have.

Follow

Get every new post delivered to your Inbox.

Join 116 other followers