We’re rapidly moving past the point where studying the finance scenario matters much.  Even the Federal Reserve took 2 years (from 2006 till late in 2008) to recognize that the Housing bubble would impact the economy.  With 2+ years of notice ignored, you can bet that the notice for essentials like food and power will be worse.

It’s time to consider how to secure food in an economy turning upside down rapidly.

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Resistant versions of Influenza are now the norm and not the exception.  Drugs created to combat the flue, seem to have actually made the ‘flu’ (influenza Viruses) stronger.  This year almost all strains of the Flu are resistant to the treatments available.  All those stockpiles  of drugs created to fight a possible pandemic like the one seen just over 09 years ago that killed about one third of the people in the Western world are probably junk.

The first in-depth analysis of Tamiflu resistance during last year’s flu season found that about 12% of people with one of the three strains that caused the most illness, influenza A/H1N1, were infected with resistant viruses. One in five of last year’s patients caught the strain, doctors reported Monday. This year, Tamiflu resistance in that class of viruses has reached almost 100%, turning the tables on a drug designed to defeat resistance. "They’re the most common viruses circulating this year," says flu expert William Schaffner of Vanderbilt University. "There are calls coming in from all over the country to infectious-disease doctors and public health specialists asking them how to proceed.

Flu viruses growing resistant to key weapon Tamiflu – USATODAY.com

Your best bet is to try and find ways to keep distant from population centers and people that might be exposed to them.  This is a tactic right out of the 1800’s, but currently modern science has done just enough to make things worse and pushed are safety net back over a hundred years.  The drugs that have been created so far have temporarily helped people heal and recover, but in the long run have worked like steroids for viruses making them stronger, while humans on the whole are now weaker almost crippled by our reliance on drugs that no longer work.

Odds are you are not going to buy a new car, truck, SUV or van this year. Most people are getting their vehicles repaired instead of just replacing them with easy credit like they have for years now. The credit has dried up and we don’t have that option as a country any more.

The good news is that vehicles are lasting on average up to 8 years these days. With tender loving care, regular maintenance and a major repair or two, those vehicles can last 3 – 4 times as long. Taking your vehicle to the shop to get it fixed, might not be an affordable option or might not be an option at all if the economy continues to evolve so here’s what you need to do to prepare now.

• Get a repair manual for each of your vehicles so that if you need to make basic repairs you have a guide in your hands. (don’t count on the internet, you may end up without a connection or even a home!)
• Stock up on some essential parts for your vehicle such as: oil, gas & pcv filters, stock up on a full set of gaskets and several sets of air filters and spark plugs, plus a set or two of spark plug wires. Buy an electric gas pump in case yours dies. Also get some patch kits for your tires, and an air pump. Then buy several cases of oil and some antifreeze. This is the basic stuff you need to be prepared for the long haul if you have that luxury.
• Buy a set of tools! You are going to need them, you should have them already, get them if you don’t have them already. Bonus if you have a toolbox that can be carried in your vehicle or SUV, you now have a critical tool that is mobile.
• Stock up on fuses for your vehicle – Especially if you are a cigarette lighter happy user that likes to plug inverters or other gadgets into your car, those things kill fuses quickly!
• Cargo Gear – Make sure you have hitches, trailers, tie down straps, nets what ever it might take for you to transport your worldly possession in case you have to hit the road (not talking Armageddon but you might be faced with a sheriff with a foreclosure eviction notice L don’t wait till it is too late)

Consider a future where you are out of work, your neighbors are out of work, and most of your town or city is out of work. How do you survive? How do you support your family? How do you eat or stay warm in the winter?

We do not live in an age of self sufficiency. We do not make or create all of the things we need to survive. We are specialists.

As a global depression sweeps the land, it will not be easy to un-specialize. But we may have to. We will need to raise part of our own food. We will need to collect wood for fire and warmth. We will need to make modifications to our homes to switch from a heavy energy consumption household to one that can keep us safe and warm without electricity or gas arriving with dependable regularity.

Now, if you raise food, a garden you may find yourself in a position of having extra food to barter with at the end of the growing season. In the early years, you will not be expert at understanding how much food you can truly can, store or keep through the winter. Apples and Potatoes can keep for a long time if stored in a cool relatively dark location free of vermin. Other vegetables will need to be canned.

Canning vegetables does take as much work as growing and harvesting vegetables so prepare yourself for a lot of work. It also takes some skill, so while you still have some credit left on your credit card invest in some books that can help you learn how to can those vegetables that you may need to survive and possibly even barter with.

Alcohol also is a commodity that has a high value in a barter economy. It can be used both for medicinal purposes (cleaning wounds and preventing infection) as well as for the type of consumption we are more familiar with today. Once you distill alcohol or brew beer, it becomes relatively portable. It can also be stored for a significant period of time. While it can be relatively easy to make alcoholic beverages, it is not always as easy to make ‘safe’ alcohol, which is why many people suffered brain damage from alcohol in previous centuries. So again, if you are going to consider making alcohol for a bartering commodity make sure you learn how to do it right, and buy a couple of the many guides available today that explain the how to of distilling alcohol or brewing beer.

It is all to easy to get caught in a debate over the causes of the current global depression instead of doing something to fix the economy or even protect yourself and your family so that you can survive the recession, and the perils to surface next.

Years ago I served in the Army. One of the first lessons that I learned in the Army is that there are people that talk about how to do something and there are people that DO something.

The people that do things and avoid talking about things too much are the ones that thrive and survive. The ones that talk about things are bureaucrats and usually cause more harm than good.

The world is rapidly falling into a global depression. When this site was started, that was not a fact and more of a speculation on the future. Now, there are few people that would argue to the contrary.

Unfortunately, the people that used to throw up walls about the reality of what was happening to the global economy are now all to quick to stand there and do nothing. They choose to belabor the question of “How did we get into this mess?”

Well the answer is that it doesn’t really matter too much. We are here and the situation is so dire that there is not time to stand around debating it. If you must debate it at all, then plug your ear into a ear bud on a cell phone and work while you complain and debate.

This is no time for anyone to sit still, sit at home, or mill around without a purpose. If you have a job, make sure you are spending your spare time tightening up your home, your apartment, your car, your possessions. Stock up on food, on batteries, on necessities. If you do not have a job, spend time finding a job, but do not neglect to make some money while you are doing it.

Think that President Obama or the US government is going to solve your problems for you?  Consider that the smartest people in the world just reviewed his plans over the last few weeks and no one thinks those plans are good nor sufficient. 

Need more proof? Here’s a simple number.  The US government has given or promised almost $3 trillion dollars to Wall Street.  This was for the mortgage melt down.  This week President Obama rolled out his BIG plan to bail out people with problems with their mortgage or home value.  It was $75 billion.  That’s $8k for the 9 million people that Obama thinks have financial problems with their mortgage.  That number is so pitifully small that it is insulting. 

Your average person that did nothing wrong and bought an average priced house in the last 8 years, has lost more than 5 times that amount already!

(more…)

Hurricane Katrina made believers out of many people in the United States and around the world. If there’s a big enough problem, the United States government can not solve it.

The unfolding global depression is rapidly turning into a problem that the United States government can not solve.

Congress is barreling towards gridlock over a stimulus package that even if passed seems to be utterly devoid of any real stimulus. There are many notable and worthy social programs in the package but rarely any economic stimulus segments that will put people to work or back to work in the United States and nothing that seems to be strong enough to turn the economy around or turn the tide of the financial collapse that grows daily.

In fact if anything the stimulus plan seems to be both a step in the wrong direction and an expensive one at that that might just waste the governments remaining financial ammunition.

This is why the US savings rate has gone from negative to 4.6% and why many economists expect that rate to double or even go into double digits. People are learning to hoard their money and in some cases they are doing that literally in cash. There comes a point where if you know that the banks are corrupt and incapable of managing their money and that the government is incapable of supporting those banks or helping them recover, then it doesn’t make sense to leave your money in the bank.

This was one of the lessons learned during the former Great Depression. True, it did make things worse for financial markets, but there is a big difference between helping financial markets survive when they are corrupted to the point of failure in all circumstances and your own personal survival or the survival of your family.

This is the thing that is causing Americans to save money and in some cases even saving money at the expense of paying their medical bills, their house payments, and their credit card debt.

Let’s face it if you don’t have 6 months of emergency funds on hand in the form of cash, you are not in a good position to survive a Katrina like economic disaster. If 99% of your earnings are going out the door to pay bills and monthly expenses, then you can not save up 6 months of emergency cash.

This catch 22 can only be canceled out by paying yourself first and paying your bills later. Sometime later, assuming the banks are still in business to receive your payments after you have protected yourself.

Nicole Cutting Firewood | Originally uploaded by pompivia

Americans are not stupid and they are starting to get the fact that we are in a very very serious situation. As a country we have seen the savings rate go from negative to positive but it is still in the single digits, hovering at around 3.7%.

Now a big reason why the rate is at 3.7 and not 50.7 is due to the fact that Americans are still very strapped with debt. They are essentially now paying minimum payments on all their bills and hoarding any extra money they can.

That is a good thing, but we all have to do more!

We all have to tighten our budgets even more. There are many ways that we can do this, but I’d like to focus on our utilities for a moment.

If you have a fireplace or wood burning stove you are ahead of the game. If you do not, you better get one installed and fast, but that’s an article for a different day.

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If you are not burning wood to heat your home, then you are wasting money on either electricity or gas that you do not need to waste. Now, there is a caveat here. If you are using your free time to earn extra money to either hoard more cash, buy critical necessities for when things get really bad, then you are OK.

But if you are sitting around on weekends watching football or not earning more money, then get outside and collect some wood. Go buy a used chainsaw and get a good axe for splitting wood. Then go cut some wood!

Now, we don’t want to jump out of one frying pan and into another. So focus on cutting wood off trees that have already fallen. First, this is easier and faster and more likely to provide you with wood that can actually be burned this year.

Green wood doesn’t burn terribly well. Cleaning up some of the fallen trees is not harmful to the environment. It is safer to cut fallen trees for people with less experience with cutting trees and will help you develop your skills more if you are unskilled or out of practice.

Don’t neglect the small branches either. Consume and collect everything, because the day may come where you may not have extra paper coming in that you can use to start the fire.

Start burning that wood now to help reduce your heating bill so that you can save more money. Plus, those ashes can help you as you prepare for the spring planting season when it will be time to get that garden going in full force!

If you can save $50 a month in heating expenses for the rest of the winter and spring, you could pocket $200 more than you would have. You might also be able to stock pile some easy cutting wood for next fall early so that you can focus on other necessities when the weather improves. $200 might not seem like a lot but in this world right now, every dollar matters and for a lot of people, $200 is the equivalent of a weeks worth of unemployment, and $200 in savings is tax free!

Fire Wood Utilization Resources

Tutorial on Cutting Firewood

How To & Help – Firewood: Cutting, Splitting and Stacking It Safely

Wood Cutting & Splitting Tools

Even today, while we are in the midst of the worst real estate crisis to hit the world in close to one hundred years, people still feel relatively secure about their shelter or home or town home or condo.  In preparing for the global depression, we need to look at things a bit more realistically. 

Ask yourself these questions and consider your true relative security in your choice of shelter or your shelter options:

1. Do you own your home outright?
2. Is your mortgage paid off?
3. If you lost your job today, could you continue to make your mortgage payment?
4. If you lost your job today, could you continue to pay your property tax?
5. Could you pay your property tax bill, if it increased ten fold(for example if the local economy sales tax based collapsed).
6. Do you live near a large population center?
7. Is your home in the center of a large population center?
8. How much has crime increased in your area in the past during increases in unemployment?  What might crime against property look like with unemployment levels twice what we have seen historically?
9. Have riots been a factor in your area in the past?  Riots in recent history have been more likely to occur as the result of racial tensions, but during a depression, a financial collapse knows no color.  While unemployment rates for minorities do tend to increase faster, it could also be a misconception to think that minorities might riot first in a depression.  In some regards, people that are already poor may be better equipped and prepared to handle a depression. Regardless, do not make the mistake in assuming that anyone can handle a depression well, we mention these items here only to illustrate that situations will be volatile and there will be no stereotype and likely no historical correlation either.
10. The subprime mortgage melt down was triggered largely by loans that went into default 2 years after they were written (the peak for sub prime mortgages sold in 2005 and defaulted typically in 07 and 08).  Alt A and 3 to 5 year ARMs are just starting to reset interest rates on these mortgages, which are raising home payments for Americans.  Many of those Americans have homes that are or will be underwater (their home has a value lower than the amount they owe on their mortgage).  The subprime mortgage melt down has taught us that people that are underwater do not pay their mortgage.
11. Do you rent a home, condo, or apartment?
12. If you rent, is your landlord paying their mortgage on the property you live in?  People in the Chicago area are being evicted even though they have made their rent payments on time.  Unfortunately, their landlords have been forced to rent these properties out at rates that are set by very low market prices and those market prices are below the mortgage prices.  They are forced to either rent at below the mortgage level themselves or not rent at all.
13. If you lost your home or apartment today, where would you take your stuff?  Do you have a storage plan?  Do you have vehicles available to move your belongings to a safe area quickly?
14. If you lost your home or apartment today, where would you and your family live?
15. Would your children be able to attend the same school or would they have to change schools?
16. If you moved in with close family members, do they live in a home or apartment that has a safe mortgage?  Could you afford to help them out, paying part of their mortgage?
17. Do you have a PO box to forward your mail towards if you lose your home?  If you do have to leave your home make sure your mail is forwarded to a safe place where your personal information will be safe.  Forwarding mail only lasts for 6 months, so proactively get your addresses changed after the move.
18. Do you know how the bankruptcy laws in your state work?  If you lose your home and you are forced to move, consider moving to a state with more favorable bankruptcy laws, such as Florida, but beware there are laws in some areas that prevent bankruptcy carpet bagging there may be a time limit that you have to survive before you can file for bankruptcy and that time limit can be as much as 2 years.

These are just some things that you should consider.  This list is designed to get your brain working so that you can start conceiving a new financial reality for yourself such that you and your family might survive the global depression.

Now is the time to start stocking up on food. You should focus on purchasing canned goods first. There is no need to go out and buy everything all at once, but you should deliberately by additional canned good items.

As you purchase canned goods, focus on things that will complete an entire meal. Purchase canned meats, and canned vegetables both.

Your goal should be to purchase at least six months worth of food and canned goods. Do not buy food that you or your family will not eat. Instead focus on the food that you will eat, and it is okay for you to start eating this as you buy it.

Where they apply, pay attention to expiration dates on the canned goods and organized your canned goods in a pantry so that you can identify those items that will need to be eaten first.

If you have experience in investing, you can look at your canned goods purchases as an investment in the future. In fact, the reason why you should buy canned goods over a period of time, as opposed to all at once, is for two reasons. For one reason, this will ensure that you have a wide range of products and canned goods for that will have differing expiration dates. You do not want to have all of your food go bad at the same time!

The second reason for purchasing canned goods over a period of time to prepare for the global depression involves investment concept known as dollar cost averaging. Essentially the idea is that you do not want to purchase something all at once, instead you purchase it over time and the average cost that you will pay for the items that you buy should ensure that you pay on average the best price available, as opposed to paying too much during a spike in prices.

There could also be a third reason.  We do not want to trigger a food panic.  Cover yourself gradually, but do not go crazy or over board. 

In our next article, we’ll talk about other food items that you will need to focus on next after you have your canned goods taken care of. We’ll give you two hits, gardening, fishing and hunting.