Wednesday, October 30, 2013

Daily Briefing For Thursday, October 31, 2013

A Foray Into The Other Side Of The Paradigm

Earlier this week, we learned from that the head of the Food Bank for New York City raised the specter of riots stemming from the upcoming cuts to the food stamp program, set to go into effect on Friday.  I bring up the Salon story because a) Salon is not your typical purveyor of doom news, and b) the article reflects my belief that a nation with so many on public assistance will face tremendous challenge for economic growth and for its well being.  In response to this threat, the Department of Homeland Security is spending $80 million dollars to prepare for the possibility of food stamp riots in New York:


Couple that with this piece in the New York Times, cheering on, of all things, inflation:

“Weighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about,” Kenneth S. Rogoff, a Harvard economist, wrote recently. “It should be embraced.”       

Juxtapose those stories - and their implications for society - to the other branch of the "Should I Be Concerned About What's Going On In American And Getting Prepared For Same?" flowchart.  I've spent a lot of mental bandwidth the last couple of days on this subject, after a lengthy discussion with my wife about the articles to which I linked here on Monday.  Her comments have really helped shape my thoughts on the reasons why people don't buy into the argument that our nation faces significant challenges and our need to be prepared for them.

I'd like to share with you three distinct mindsets I believe permeate the collective thinking of those on the other side of this issue.  Before I get into this, I should disclose I've never taken a psychology course in my life.  I hold no special training or skill set to speak with authority on matters of the mind.  I'm sharing my observations, and nothing more.

First, there's the I have no idea what you're talking about crowd.  Many in this crowd are just clueless or apathetic.  Others are very bright but lack any interest in following the news or current events for whatever reason.  Many times, these people can tell you who is on American Idol or the current win/loss record of their favorite sports team.  They can't name their U.S. Senators or provide insight to any current news story beyond something they saw on TMZ. 

Next, there's the I don't trust the media; I only trust what people whom I know and respect have seen with their own eyes crowd.  This section of the Venn diagram puts MSNBC, Fox News, the New York Times, Breitbart, Bill Moyers and Rush Limbaugh into the same Jeopardy trivia category of "What are news sources that lie constantly and thus should not be trusted?"  This amalgamation of skeptics consumes little to no news, other than to be on the lookout for possible trends and discussion topics at work. 

That brings us to our third category: Yeah, I know things are troublesome but I don't want to think about it team.  These folks consume a fair amount of news and information from a variety of sources, but the prospect of our society declining keeps them from focusing on the issues and making any meaningful preparations for that possibility.

At this point in my mental gymnastics on this subject, I have two questions with which I am wrestling:

  1. How do we convince these people they should be more concerned about the issues we've identified?
  2. Should we even spend our time doing so?

Let's start with the first question.  I've addressed this in the past, but just as a refresher, there are some strategies you can use when urging others to prepare.  Some of these include:

  • Sharing news stories with them from the main stream media.  The strategy I like to employ is to share an article and then ask the person "What do you make of this?" or "I'm seeing more articles like this lately; are you?"  By asking the person a question, rather than telling them what you think, you are a) giving them permission to share their opinions with you, b) demonstrating to them that you value their insights, and c) encouraging them to read a news article they might not have read on their own. 

    In order to get someone thinking about this stuff, it's imperative that the individual be the one to connect the dots on their own, at their own speed, and in their own way.  I can't tell you how many times people have dismissed news stories I've shared with them, only to have those same people come back to me a year later and ask me questions about the same exact subject matter.  You telling them the news often won't work; you sharing news articles with them and asking them to draw their own inferences and conclusions allows the individual to come to terms with what is admittedly disturbing information in their own way.

    On a side note, I tend to shy away from sharing alternative media reports.  Many times they are not well written or sourced.  That's not so say they aren't accurate (they often are), but if you have the opportunity to use a household name media outlet, by all means do it.
  • Using social media to report what you're seeing and experiencing.  If a friend I trusted told me they'd experienced something troubling, I would tend to believe them.  You need to be reporting what you're seeing and hearing.  Media such as Facebook, YouTube and Twitter enable you to share your experiences widely and quickly.  You never know when your observation or experience confirms something a friend heard or motivates them to take action.
  • Work your preparedness efforts - and your reasons for preparing - into your daily conversation.  Right now, there are many of you shaking your head or even talking into your monitor, telling me what a horrible idea this is.  If you're not comfortable doing this, then don't.  I make it no secret (obviously) that I am doing this; I do so in large part because I feel called to share my experiences with the hope that it helps someone else who is thinking along the same lines.

    Many of you are change leaders, whether you know it or not.  There are folks who respect you, your family, and your opinions.  If they hear that you're concerned and are taking steps to address the possible perils we face, they may take that as validation of their own concerns and decide to take action, too.  Never underestimate the sphere of your own influence.  (The corollary to that is never overestimate your own importance.)

The second question above is more difficult for me.  I must admit there are many days I think I should stop blogging, stop Facebooking about this stuff, and just prepare on my own, giving nothing back to the body of prepper knowledge.  There's plenty of information out there for you.  You don't need me telling you what or where it is.

I don't have any good answers for this question.  I do, however, have some thoughts for those of you (or your spouses) who think my concern about the future is unwarranted.

For starters, don't be fooled into thinking things will always turn out well for our country.  Yes, we survived the Great Depression and a Civil War and World Wars 1 and 2.  But there are two interesting phenomena that applied to all of those milestones in our nation's history.

Notice that GDP growth preceded these events Look how unemployment can be really low before an event (the Great Depression) or really high (World War 2).  In other words, the current economic conditions we're experiencing may or may not be good indicators of what's to come.  Simply because we are in a period of relative peace, improving unemployment figures, and climbing stock market does not mean we'll remain on that course or avoid future world wars, depressions or civil unrest.

Perhaps more importantly is the human toll these events had on our nation.  How many died during:

These events from which we "recovered" came at a extraordinarily high human cost.  And so I don't know that it's wise for us to look back and say "Well, we overcame X, Y and Z, so anything we face in the future is manageable as well."  While the U.S. may very well survive such events in the future, the financial and human cost will be astronomical.  Just for some scale, note that 2.7% of our current population - the same percentage of people who died during the Civil War - is 8.5 million people (using today's Census numbers).  That's roughly the entire population of New Jersey. 

In short, just because we will eventually recover doesn't mean we shouldn't take steps now to help soften the blow we might face in the future. 

I may look back one day and say my blogging and preparing were a colossal waste of time and money.  I freely admit I am taking that risk, and that the fear of being wrong about all of this isn't squelched by even the most dire predictions of doom and gloom in the main stream media. 

Yet when I look at the data - not each point individually - but as a whole, I see:

  • A powerful nation with an ever growing debt to GDP ratio;
  • Which relies on a fiat currency;
  • To fund massive entitlement programs which are unsustainable by any calculation;
  • Resulting in class warfare;
  • Fueled by an ever encroaching government telling those who shoulder the lion's share of the tax burden that "they aren't paying their fair share;"
  • Prompting our law enforcement agencies to purchase massive amounts of ammunition and military-style equipment;
  • In order to provide public safety of citizens whose civil liberties continue to erode at alarming rates;
  • Leading to a movement to brand Christian evangelicals, Libertarians, Ron Paul supporters, and the nation's founding fathers as terrorists.

I don't know how anyone looks at this and doesn't walk away saying "what the hell?"  And yet that's the situation in which we find ourselves.

Here's the good news.  And yes, I mean that sincerely.  Do you know how this story turns out in the end?  No, you don't. And nor do I.  Because we are writing the story's ending every day.  The pages of the Book of The Future remain blank.  We get to decide how this ends.  It's not pre-determined for us. 

And that, friends, is why we must push on.  We must continue to alarm others and equip them with the information and knowledge they need to join us in our efforts.  We must continue to prepare for hard times with the hope they never come.  We must continue to engage our political leaders and insist they set us on a better course than the one we're on now - a course that maximizes freedom and liberty.  And dare I say it - we must continue to seek God's wisdom and guidance in our efforts to do so.

Be the leader you want others to read about in the future.  That is our calling.

Monday, October 28, 2013

Daily Briefing For Monday, October 28, 2013

The Jig Saw Puzzle That Is Our Current Situation

As a kid, people would give me jig saw puzzles as gifts.  Honestly, I didn't like them.  I still don't.  I suspect it's because I can't pay attention long enough to actually complete one.  Plus, it seems rather mundane to me.  Sorting all the little pieces based on their color, looking for border pieces, and to what end?  Just so you can say you spent hours of your life - hours you will never get back - piecing it all together?

Other types of puzzles can be quite enjoyable.  The second best thing about being a trial lawyer was trying cases in the courtroom.  The best thing about being a trial lawyer, for me, is the puzzle of trial preparation.  I absolutely loved it.  Going into a conference room, closing the door, spreading the entire litigation file over the table, and scribbling notes on a white board about strategies, themes, and specific tactics to use during a given situation in the court room - that was awesome.  I learned early on that it's okay to lose in court, provided you didn't lose because you weren't prepared.  That would be inexcusable.  I also learned that most lawyers didn't prep to the extent I did, which gave me a tremendous advantage in front of the jury.

My wife is also a lover of puzzles - even jig saw ones.  And she's one of the smartest people I know.  I'm talking SAT-and-ACT-scores-in-the-stratosphere/full-ride-to-college/passed-the-entire-CPA-exam-on-the-first-try kind of smart.  So it's no wonder that she likes puzzles such as Sudoku and Words With Friends. 

What she will be quick to tell you is that she isn't a big consumer of news.  She overloads on financial reporting, SEC regulations (and I don't mean the South Eastern Conference) and FASB accounting standards all day long, and so when she's done she'd rather not spend time digesting news and information.  That is left to me, and I am to feed her important news from time to time as I see fitting.

The other night, we were talking about the news and current events, and I told her how alarmed I was to see how much our government is growing, how our nation's finances are in peril and how our civil liberties have been eroded over the last twenty years.  I shared my thought that the pace of this growth and erosion has picked up considerably since 2001.  She responded by saying that she isn't fully aware of what I was talking about (an intellectually honest answer) and asked me to pull together some articles highlighting my concerns.  I suspect her lack of information on these issues stems largely from the fact that it requires people to put pieces of a puzzle together - news articles, government documents, and data - from a large number of sources.

I started pulling information together on Saturday evening (because my life is just that exciting...I surf the net on Saturday nights, looking for gloom and doom articles), and by Sunday evening, I had amassed a number of stories to share with her.  It dawned on me this compendium might be of some help to you as you discuss these matters with your friends.

I set two rules for myself to follow during this exercise:

  1. To the extent possible, I would only cite to mainstream media sources.  I've been fairly successful in that regard.
  2. I would not editorialize or share my opinion on the pieces.  I want her to draw her own conclusions without suggestions from me.
Below I cite to ten articles or government documents which I find chronicle in large part what ails our nation: an ever-expanding government, with the concomitant burgeoning sovereign debt, elimination of liberties, and increased dependence on entitlements, subsidies and cronyism.  I don't know that I can describe it any more succinctly or accurately than that; perhaps you can.

It's my hope you can find some use for these articles as you discuss our current affairs with your friends and family.  I know there are many wonderful and bright Americans out there that, for one reason or another, aren't really aware of what we are facing.  We need to help them get up to speed.  And if they are aware but feel too paralyzed to take action, we need to encourage them to do so.  It's my hope and prayer that all of us, irrespective of political orientation, can agree on the nature and scope of the problem and set ourselves on a course to remedy what ails us, sooner rather than later.

And what if I'm wrong?  What if the Paul Krugmans and Bernie Sanders of the world are right, and that we just need to spend more and tax more to fix our problems?  What if unemployment drops so dramatically over the next two years that more people re-enter the work force and successfully find good paying jobs?  What if we're able to generate so much tax revenue that we eliminate the deficit and start making progress on the reduction on our national debt?

Just typing those hypotheticals and re-reading them makes me more confident that those things cannot - and will not - happen without a dramatic course change in our nation's future direction.

Read these stories below.  Share them as you see fit.  Please understand that there's not a seminal book or treatise out there - and if there is, please tell me - that puts all of the pieces of the puzzle together.  That's for us to do on our own.  I wish you well in your efforts.

From Fox News – “Army halts training program that labeled Christians as extremists.”  From the article:

“The Camp Shelby briefing was one of a number of incidents on Army bases around the nation where soldiers were instructed that groups like the American Family Association and Family Research Council should be considered domestic hate groups because of their support for traditional marriage.

Last week soldiers at Fort Hood were warned that participating in or donating money to evangelical Christian groups or Tea Party groups could result in military punishment.

And last May an Army Reserve training brief listed Catholics and Evangelical Christians as examples of religious extremism. That incident prompted 34 members of Congress to raise objections.”


“Why, indeed, should the federal government not be deploying armored personnel carriers and stockpiling enough ammo for a 20-year war in the homeland?  Because it’s wrong in every way.  President Obama has an opportunity, now, to live up to some of his rhetoric by helping the federal government set a noble example in a matter very close to his heart (and that of his Progressive base), one not inimical to the Bill of Rights: gun control.  The federal government can (for a nice change) begin practicing what it preaches by controlling itself.”

From The Blaze – “Homeland Security-Funded Study Lists People ‘Reverent of Individual Liberty’ as ‘Extreme Right-Wing’ Terrorists.”  From the report written by the University of Maryland and paid for by the Department of Homeland Security:  the authors of the report deem those who are extreme right-wing as likely terrorism perpetrators.  In their estimation, those who are extreme right wing are those in

“groups that believe that one’s personal and/or national "way of life" is under attack and is either already lost or that the threat is imminent (for some the threat is from a specific ethnic, racial, or religious group), and believe in the need to be prepared for an attack either by participating in paramilitary preparations and training or survivalism. Groups may also be fiercely nationalistic (as opposed to universal and international in orientation), anti-global, suspicious of centralized federal authority, reverent of individual liberty, and believe in conspiracy theories that involve grave threat to national sovereignty and/or personal liberty.”

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros told Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”


From Newsweek:  "George Soros on the Coming U.S. Class War."  From the article:

“'At times like these, survival is the most important thing,' he says, peering through his owlish glasses and brushing wisps of gray hair off his forehead. He doesn’t just mean it’s time to protect your assets. He means it’s time to stave off disaster. As he sees it, the world faces one of the most dangerous periods of modern history—a period of “evil.” Europe is confronting a descent into chaos and conflict. In America he predicts riots on the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties. The global economic system could even collapse altogether."

From Fox News – “Cloward, Piven and the Fundamental Transformation of America.”  This is an opinion piece written by Glenn Beck.  It does a good job of explaining “the concept that there are people in this country who want to intentionally collapse our economic system.”

From The Atlantic – “No Taxes, No Travel: Why the IRS Wants the Right to Seize Your Passport.”  From the article:

“A new bill, quietly making its way through Congress, allows the federal government to stop people with unpaid taxes from leaving the country-- even if they haven't been charged with tax evasion or any other formal crime.”


From Forbes – “The National Defense Authorization Act is the Greatest Threat to Civil Liberties Americans Face.”  From the article:

“A law recently passed by the Senate which would place domestic terror investigations and interrogations into the hands of the military and which would open the door for trial-free, indefinite detention of anyone, including American citizens, so long as the government calls them terrorists.  So much for innocent until proven guilty. So much for limited government. What Americans are now facing is quite literally the end of the line. We will either uphold the freedoms baked into our Constitutional Republic, or we will scrap the entire project in the name of security as we wage, endlessly, this futile, costly, and ultimately self-defeating War on Terror.”



From the US Department of Defense -   Military Training Manual Calls Founding Fathers “Extremists.”  You can read a Russia Today news article about the story here; you can read the actual allegations in the training manual here.  From the manual:

“In U.S. history, there are many examples of extremist ideologies and movements. The colonists who sought to free themselves from British rule and the Confederate states who sought to secede from the Northern states are just two examples….. Nowadays, instead of dressing in sheets or publicly espousing hate messages, many extremists will talk of individual liberties, states’ rights, and how to make the world a better place.”

From the Cato Institute - "The Damaging Rise in Federal Spending and Debt."  From the article:

"Federal spending is soaring, and government debt is piling up at more than a trillion dollars a year. Official projections show rivers of red ink for years to come unless policymakers enact major budget reforms. Unless spending and deficits are cut, the United States is headed for economic ruin as growth falls and rising debt threatens further financial crises.


"Some analysts worry that spending cuts would hurt the economy, but other high-income nations have cut spending with very positive results. In the mid-1990s, for example, Canada faced a debt crisis caused by runaway spending — similar to our current situation. But the Canadian government changed course and slashed total spending 10 percent in just two years — which would be like us chopping annual spending by $360 billion in two years. Total government spending in Canada was cut by more than 10 percentage points of GDP over a decade. The Canadian economy did not sink into a recession as Keynesian economists might fear, but instead was launched on a 15-year economic boom."

In my next blog entry, I will address what we in the preparedness community should take from this and what we should be doing as a result of it.

Tuesday, October 22, 2013

Daily Briefing For Tuesday, October 22, 2013

Today's Economic News

So last night I made a SWAG - a Scientific Wild Ass Guess - as to the September non-farm payroll number that came out today.  The consensus was for 180K jobs.  I pared that back a bit, guessing 174K.  The actual number paled in comparison: 148K jobs with a slight dip in U3 unemployment to 7.2 percent.  Regular readers know I prefer to look at the U6 unemployment number, which came in at 13.6 percent.  That's the lowest U6 has been since December 2008. 

There's more.  Over 90 million Americans are not in the labor force - a new record.  Female participation in the labor force reached a low last month not seen since 1989.  The National Journal proclaims our economy is stalling.

Meanwhile, one of my Five Most Interesting People On The Planet, Veronique de Rugy, wrote a piece today for the Mercatus Center* in which she compared the debt to GDP ratios of the most populous countries on Earth.  Fortunately for us, we are not number one.  That dubious distinction goes to our friends in Japan, a nation my generation was led to believe would own America by the mid-1990s.  de Rugy goes on to state the obvious, because, well, it's pretty damn obvious: "The CBO predicts that US public debt levels will approach those of Japan by 2038. While there are differences between countries, the data suggest that the United States relies excessively on debt to fund public expenditures."

Thus stories like this one should not come as a surprise to us.  Atlanta Jeff shared the news with me today: China and the European Central Bank inked a currency swap deal which would stabilize the exchange rate between the yuan and the euro.  The practical effect? "Such agreements mean the central banks can exchange currencies and firms can settle trade in local currencies rather than in US dollars."  Simplified even further: this agreement will lead to decreased demand for the dollar, making it worth less.

And while off topic, I thought I would include one more story for your edification: Slate ran an opinion piece trumpeting the death panels of the Canadian health care system.  Lest you think I engage in hyperbole, check out the headline for yourself: "Canada has death panels, and that's a good thing."  From the article: "When humanity demands haste, and justice demands expert knowledge, Ontario’s death panels offer a solution."  Hmm.

*Disclosure: I am a regular financial contributor to the Mercatus Center.

You People Are Smarter Than The Elite Think.

Speaking of death panels and the name calling of those who decried them years ago, get what a professor writing for the Yale Law School - which is effectively the University of Miami School of Law of Connecticut - Cultural Cognition Project had to say about most of you.  After determining that  "identifying with the Tea Party correlates positively ....with scores on the science comprehension measure," (emphasis original)  Dan Kahan goes on to say:

"I've got to confess, though, I found this result surprising. As I pushed the button to run the analysis on my computer, I fully expected I'd be shown a modest negative correlation between identifying with the Tea Party and science comprehension.

But then again, I don't know a single person who identifies with the Tea Party.  All my impressions come from watching cable tv -- & I don't watch Fox News very often -- and reading the "paper" (New York Times daily, plus a variety of politics-focused internet sites like Huffington Post & Politico).

I'm a little embarrassed, but mainly I'm just glad that I no longer hold this particular mistaken view."

To be fair, five days after he wrote the feces cyclone-inducing article referenced above, he penned an epilogue which you can read here where he expanded on his remarks.  Draw whatever conclusions you want from these articles.  Here are mine:

  1. If you are a Tea Party member, you are not an idiot.  Despite what some on the left would have you believe.

  2. Give credit where it's due:  Kahan is intellectually honest enough to say "I'm a little embarrassed, but mainly I'm just glad that I no longer hold this particular mistaken view."  We should follow his example.  We should always challenge our preconceived notions on everything.  And when we are proven wrong, we should not see that as a source of embarrassment or failure, but instead be thankful we were enlightened.

  3. Keep an open mind.  Don't be afraid to test things.  Don't be afraid of finding out your opinion isn't well grounded in fact or logic.   

I've pointed out countless times: the world is full of experts who are often wrong.  Do your own homework; reach your own conclusions.  And then challenge those beliefs regularly.

Sunday, October 20, 2013

Daily Briefing For Sunday, October 20, 2013

The Questionnaire Of Death
I'm getting to the point in my life where I am helping in the end of life discussions and decisions of family members.  A dear friend and regular reader of this blog is in hospice now, having fought cancer despite extensive chemo.  His wife summoned me to Memphis last month to help with the logistics and decision making.
Having gone through that with them, I realized I need to have some extensive conversations with my parents, as well as Kendel's, about their desires and resources to pay for end of life care.  It's difficult to make those decisions when you're dealing with a terminally ill family member.  To the extent you can make plans and decisions when everyone is healthy, it will reduce your stress level exponentially.
In the next few weeks, our parents will be getting a questionnaire from me, designed to elicit critical information to help us make end of life decisions for our parents.  I mentioned I was doing this to a friend of mine, and since she's dealing with this herself, she asked me to provide her a copy of what I came up with. 
Below is a list of things I want to know.  This is a working draft, so if you have suggestions, please leave comments below or on the Facebook page:
Questions regarding medical treatment and facilities

What facility would you like to use for hospice care?  Nursing home care?

Have you visited these facilities? 
How do you plan to pay for their services?  Do they accept your current insurance?  What is the current daily out of pocket expense? Where is your current health insurance information located?

Questions regarding your finances

If we need to quickly access bank accounts or investment accounts to pay for your care, where can we find the account information with which to do that?

What non-liquid assets should we liquidate first to pay for your care?
Do you have life insurance?  Long term care insurance? If so, what is the name of the insurance company?  What is your policy number?  Who is your insurance agent?

Do you have a safe or lock box, at home, the bank, or at your office?  If so, where are they located?  How can we make access to them?

Questions regarding legal documents

Do you have a durable power of attorney?  Where is it located?  When was it last updated?

Do you have an advanced directive?  Where is it located?  When was it last updated?

Do you have a will?  Where is it located?  When was it last updated?

Where can we find your social security number?  Passwords and PINs for your various accounts?

Questions regarding the winding up of businesses

What are your instructions on how to wind up your business?

What sort of end of employment compensation would you want us to provide to your employees?

It's my hope you find some of these questions useful.  While the upcoming holidays are meant to be fun and festive, they may also be times of reflection and planning for the future.  A few minutes working through this exercise can save you a lot of time and aggravation in the future under more stressful circumstances.

Remember: preparedness isn't a fetish for MREs, guns and freeze dried ice cream.  It's a mindset that a few minutes of time and a few investments now can make your life much easier down the road.

Friday, October 18, 2013

Daily Briefing For Friday, October 18, 2013

Note: I'm experimenting with the use of a bigger font for the blog.  For whatever reason, the font size in the drafting is much larger than when it's published.  Let me know what you think of the larger font size in the comment section below.

Cash Money.  Or More Like Crash Money.

The recent announcement by Chase Bank has some preparedness commentators/doom porn purveyors speculating as to what we should expect in the future regarding the stability of the financial system.  Here's one take on what it all means.  From the article:

This is nothing short of a capital control, which is an economic strategy designed to limit the transfer of money. It is a strategy implemented only during times of economic or financial distress, most often as a precursor to wealth seizures by the state.

Be warned, Chase bank is the first of likely many banks to begin the lock-down of the financial wealth of private individuals in the United States of America.

The new restrictions are particularly ironic because JP Morgan Chase (along with other large banking conglomerates) is a primary shareholder, and thus owner, of the Federal Reserve, which has been responsible for sending trillions of freshly printed dollars outside of the country over the last several years.

There is absolutely no legitimate reason for why one of the world’s biggest banks just restricted the outward flow of cash from domestic businesses to their international contacts, especially considering that we are repeatedly told we live in a globalized world where we need to learn to work with our foreign partners.

It makes no sense.

Unless, of course, you stop to consider that the United States is and has been on the brink of collapse, literally, for nearly a decade. This was first confirmed in January of 2011 in a letter to Congress by then Treasury Secretary Tim Geithner when he spoke of the U.S. debt ceiling.

Just last weekend, the EBT system went down for nearly a day.  On Wednesday, we came within hours of a possible default on our national debt.  We've postponed the risk of that happening again until early 2014, barring another agreement to kick the can further down the road.

I don't know the probability of a major disruption in the banking system.  But perils far less severe, such as power outages and severe weather, can prevent us from accessing our funds at the bank.  Make plans to be able to buy things without relying on your local ATM or credit card.

Fellowship Among Believers

Back during Texas' frontier days, travelers commonly found presidios dotting the landscape.  These structures provided security from a variety of threats facing the pioneers struggling to make a living in their new country. 

There's much discussion in the preparedness community as to whether there's a market for planned developments  - modern day presidios of sorts - designed to be self sustaining.  Think about it:  a developer designs a community with its own water supply, security features, energy efficient housing with alternative energy features built in, and peril resistant construction. 

Would something like this work?  My concerns include:

  1. Your hood just became a high value target.  Thugs, ne'er-do-wells, Call of Duty veterans and everyone in between will know your neighborhood houses some really cool stuff; being the baddest kid on their cul de sac means taking over yours.  Are you inviting trouble by living in a development that markets itself as a grid down oasis?
  2. Just because you're a nice person and team player doesn't mean the family next door to you is like minded.  The Mormons do a fantastic job with this.  That's because they adhere to a common doctrine that permeates every aspect of their lives.  Unless there's a vetting process which allows existing residents to vote new members in (much like a Dallas area hunting and fishing club), I'm not sure how you get the right kind of people.  And by "right kind of people," I mean those who are committed to be team players and who will help the entire community during times of crisis, rather than hole up in their own McBunker and free ride on their neighbors' efforts.
  3. "My HOA dues are going to pay for WHAT?"  The HOA meetings in places like this (and I think a HOA would be mandatory, given the development's purpose) would be surreal to outsiders.  To those of us who are into this sort of thing, it would be a meeting of kindred spirits.  Yet this cause tends to attract a lot of Type A personalities, and I could see a lot of debate between those who just wanted to live in a safe, self sustaining community and those who buy the proverbial Kool Aid by the barrel. 
In the end, I think you have to do this on a membership basis.  If you aren't vetting folks somehow as they come in, I think you are asking for a lot of headaches in this type of community.

(Thanks to Mark for input into this discussion.)



Wednesday, October 16, 2013

Daily Briefing For Wednesday, October 16, 2013

Major Data Dump Today.

I'm not going to process much of this for you, because a) you don't need me to, and b) there's a lot here to run with.  Here we go:

Math's A Bitch.  Dave Ramsey breaks down public finance.  The 7:52 mark is genius.

Investing In A Deflationary Market.  It's hard to say what we should expect in the future.  One theory is that we will experience both an inflationary and deflationary market, one right after the other.  What is your plan to protect your investments in the deflationary scenario?

Soldiers at Ft. Hood Preparing For Riot Control In The United States.  Two years ago, I would not have believed this story.  And yet, from the article: "The potential use for crowd control [for which the soldiers are training] ranges from peaceful protesters to full on riots to a scenario such as Hurricane Katrina, where thousands of people were being relocated."  Since when do "peaceful protesters" require Army soldiers to quell them?  

And Here's A Former Navy SEAL Who Says We Should Expect Martial LawAnother idea I wouldn't have believed not so long ago.  And yet more people are coming forward expressing concerns like the ones enunciated by this gentleman. 

This May Be The Biggest Story TodayForget about the debt deal or shutdown resolution for a minute.  Chase Bank is prohibiting certain customers from wiring money - their own funds - overseas.  Further, it's limiting business customers to $50,000 of cash transactions per statement cycle.  Think about the small businesses across this country that deal primarily in cash; how can this possibly be a good idea?

There is growing support for cops to wear on-body cameras.  This is good for both citizens and cops. 

Just How Much Debt Is $17 Trillion?  I have a hard time conceptualizing numbers beyond a few million; billions and trillions boggle the mind.  This article helps put it into perspective.

What Is The True Cost From The Fiscal Impasse?  Look at me! I'm linking to the New York Times!  Things were better when Jayson Blair was still there.  Assuming the data in the article is correct (I don't have any reason to doubt it), remember: there are bigger issues here than just the shutdown and Obamacare.  This is about the proper role of government and the money required to fund it.  A more concise version can be found here.  Thanks to Hayes for sharing.   

Can We Please Get A True Sense Of How Big These Entitlement Programs AreTwo days ago, I shared this article stating that our unfunded liabilities, of which Social Security and Medicare compose a large portion, compose about 550% of our GDP.  This article claims the Social Security and Medicare obligations will only be 20% of GDP some seventy years from now.  It's hard to be able to have any meaningful discussion about our nation's balance sheet if we can't agree how much is on it.  I am not looking for a particular answer; I just want to know the right one.

Tuesday, October 15, 2013

Daily Briefing For Tuesday, October 15, 2013

You Can Run, But You Can Also Hide.

I guess we need to revisit this topic again - the notion that going offshore to hunker down is a good idea.  I have friends who continue to explore the option.

Antigua announced recently it will hand you a passport for a "donation" of $250,000.  For that price, you get the ability to call Antigua home in the event the good ol' U.S. of A. turns into a coast-to-coast EBTs-are-down-at-the-local-Wal-Mart riot. 

I discussed this back in July.  I reached the conclusion that

"In the end analysis, being prepared to bolt off shore if things here got really bad would require a tremendous amount of resources.  And in the end, I'm not convinced you would come out ahead, given the fact you'd be a guest in another country, subject to their laws and whims."

If you have a bunch of money lying around, you're squared away in every other aspect of your preparedness, and you like the idea of having a second passport, then by all means go for it.  On my scorecard, however, I don't see how this is a viable strategy for most of us.

And If You Run, Will You Be Hit With The Eurozone Household Savings Tax?

What would you do if one day you woke up to find that 30% - or even just 10% - of your bank accounts had been taken by the government overnight?  Sounds crazy, I know.  And yet your friends at the International Monetary Fund are toying with that very idea.

Keep this on your radar.  Because you don't have enough to do.

Monday, October 14, 2013

Daily Briefing For Monday, October 14, 2013

More On Your Favorite Topic

In many respects, blogging about our debt situation is a lot like blogging about the George Zimmerman/Trayvon Martin matter.  Most of you have reached your own conclusions, and so anything I write really won't move the needle on your opinion meter.  So I'm not trying to do that.  Instead, I'm providing you with information which you can use to help refine your opinion or bolster your own position, whatever that might be.

Tonight, I'd like to share with you the latest missive from Larry Summers, the former Secretary of the Treasury for President Clinton and the former Director of the National Economic Council for President Obama.  By pedigree, Summers ranks among the most qualified voices on our nation's debt situation.  By reputation, his comments leave something to be desired.  He once blamed the shortage of women "involved in science and engineering fields was partly due to the 'intrinsic aptitude' of the gender."  Others on the left side of the political spectrum distrust Summers due to his alleged role in Clinton-era financial deregulation (y'all know President Clinton enacted the repeal of the Glass-Steagall Act, right?) 

So what does he have to say about our financials?  Summers' position can be summarized into two points:

  1. Quit worrying about budget deficits; focus on growing our way out of our problems.
  2. We're not spending enough money to stimulate the economy.

To be fair, I do agree with Mr. Summers that we need economic growth - and lots of it - really fast.  And he does make some fair points about the need to decrease regulatory barriers that choke off private investment, for increased accountability in our education system, and for more self-reliance on our own energy assets here in the United States. 

Since this is a preparedness blog and not a policy or political blog, let me share with you three thoughts on this kind of thinking from a prepper perspective:

  1. Those who focus solely on debts and deficits completely ignore the tsunami that are unfunded liabilities.  Think about it: if the American people knew that "the actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP," the discussion we'd be having right now in Washington would look much different. 

    I love it when Summers says in his article to which I linked above: "Given the magnitude of forecast uncertainties there is a chance of close to 40 per cent that with no new policy actions the ratio of debt-to-GDP will decline over 25 or 75 years."  Really?  A 40% chance it will decline over 75 years?  And you haven't even factored in the 86 trillion dollars we owe for the off balance liabilities?  Where can I buy this guy's investment newsletter?

    You need to plan your finances with this information in mind.  You need to take whatever precautions you feel are necessary knowing that the liabilities of the government far, far exceed that of the official balance sheet.
  2. Growth alone cannot save us.  If and when our political leaders ever figure that out, it will likely mean reduced benefits for Social Security, Medicare, and federal pensions.  If you have people in your family who are relying on these benefits to sustain them, you need to start thinking about how to help them - or how they can help themselves - if we see dramatic cuts in these areas.

    In fact, we're already seeing this at the local level.  Police forces nationwide are curtailing their services due to the fact that unlike the Feds, they cannot print money to pay their bills.  And as a result, we get messages like this from our local law enforcement:

  3. This entire discussion misses a much larger problem that only a handful of Americans fret over.  I talked about this last night - government spending fuels things that infringe on our liberty.  Spending less on government means we necessarily have a smaller government - one that is not hell bent on regulating every aspect of our lives.  The "modern" approach I see touted from time to time - tying the debt ceiling to a certain debt to GDP ratio - misses the point.  The goal isn't just better stewardship of our public finances; it's also about financing the optimal amount of government.

Sunday, October 13, 2013

Daily Briefing For Sunday, October 13, 2013

Happy 25th!
This weekend, my classmates from Shelbyville Central High School gather celebrate the 25th anniversary of our graduation.  I wish them well.

"You don't want children going hungry tonight because of stupidity."

Just ask Barbara Colman of Saco, Maine.

As many of you are probably aware, the electronic benefits transfer (EBT) system which puts the money on the debit cards used for welfare benefits crashed Saturday.  For several hours, EBT users in 17 states could not access their benefits.

The cause of the crash, according to the AP story, "stemmed from a power failure at a data center."

While this glitch no doubt inconvenienced recipients, it stimulated much discussion among the preparedness community this weekend.  Some have speculated that in a situation where we are grid down - leaving tens of millions of Americans who rely upon public assistance without the means to acquire basic necessities - we should expect civil unrest within 72 hours.  London rioters from a couple of years ago gave us a glimpse of what austerity measures - which need not be the result of a grid problem - might look like:


We ignore things like glitches in the banking system and EBT system at our peril.  Currently, the big banks are freaking out over a possible default by the U.S. government if we hit the debt ceiling.  You can make up your own opinion as to what will happen, but we owe it to ourselves to know what the stakeholders are saying.

Speaking Of The Financial System, What IS Our Debt Situation, Anyway?

We owe it to ourselves to understand, to the best of our abilities, our nation's debt situation.

First, some news from Saturday: "American companies and consumers are....running up record amounts [of debt] in 2013."  You read that correctly.  In the four short years since we bottomed out from the greatest recession since the 1930s, individuals and companies are getting into debt to finance purchases and expansion at 2007 levels.  Meanwhile, our economy grew at a mere 2.5% last quarter; that's not a rate at which we'd call a barn burner.

So what's our debt situation?  I think it largely depends on what chart you want to use.  Here's a tour of a few:

The "It's Private Debt, Not Public Debt, That Got Us Into This Mess" Chart

The left loves this chart; sadly, they do so for the wrong reasons.  You'll note that private debt - credit cards, mortgages, corporate bonds - far exceeds public debt.  I should point out the chart is a bit dated, as public debt to GDP ratio is now at 73%, which is "higher than any point since around World War II, and twice the percentage it was at the end of 2007."

"The Atlantic Wouldn't Lie To Us" Chart

The Atlantic - which no one will confuse for the National Review - ran this piece illustrating the nation's debt from 1790 to November 2012.  Their analysis in this piece seems to be fairly objective.

The "America Is Not Drowning In Debt" Chart

The contrarian view is that all is well and that there's nothing to fear.  I suspect these are the same people who subscribe to the Paul-Krugman-Works-For-The-New-York-Times-And-So-He-Is-A-Genius school of economic thought.  You know, the one that says "Just Mint A Trillion Dollar Coin To Pay Off Our Debts" and that "Death Panels And Sales Taxes" are the way to go.  In short, the theory here goes something like this: since our assets far exceed our debts, everything is good. 

So what's the answer?  I think it largely depends on your political bent.  While I don't try to hide my own political leanings, they are not pertinent here.  I'm more concerned what we in the preparedness community should take away from the discussion, and what steps we should take as a result. 

From a preparedness perspective, let me share a few thoughts.  First, here's what one former U.S. statesman said about our national debt situation:

“[Our federal debt] undermines our capacity to act in our own interest, and it does constrain us where constraint may be undesirable. And it also sends a message of weakness internationally. It is very troubling to me that we are losing the ability not only to chart our own destiny, but to have the leverage that comes from having this enormously effective economic engine that has powered American values and interests over so many years. So I don’t think we have a choice – it is a question of how we decide to deal with this debt and deficit…. There is no free lunch, and we cannot pretend that there is without doing grave harm to our country and our future generations.”

And who said this, you ask?  That would be former Secretary of State Hillary Clinton.  And she's not alone.  Other key leaders have called our national debt situation the biggest threat to our national security.  Let that sink in for a moment.  The biggest thing that threatens our country's security right now isn't Syria or Al Qaeda or an EMP attack from the Russians.  It's our own balance sheet.

Second, there are collateral issues surrounding our debt situation.  For those of us who think our government spends too much money on the war on drugs, the war on terror, entitlement programs that are not means tested, corporate welfare, corporate bailouts and the militarization of our police forces, the best way to reign much of that in is to stop spending money on it.  Less government spending yields less government.  And for those of us who think more government isn't a sound plan for the future viability of the nation, it's paramount that we manage not only our nation's debt, but also its spending.

Third, the debt will drag down the economy.  Here's how.

My final thought: be aware, do your own homework, and prepare for the possibility of an economic emergency.  That's not being paranoid; it's simply good stewardship.