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Survivalism, Empire of Lies, the Dollar, housing and more
  (week of August 4, 2008)


RE: How Goes the Dollar? (August 7, 2008)

RSD

I would be VERY surprised at a skyrocketing dollar in the environment where other nations are both quietly dumping some dollars, e.g. S. Korea, but are also beginning to protect themselves with a basket of currencies in transactions. But then I was married twice and very surprised both times.

RE: The Carp Culture (Rene Andre, August 4, 2008)

R.M.

Enjoy your site and blog very much, and most of your guest essayists; I hope that you will pass along Mr. Jim Rawles’ Survialblog.com site to Rene Andres, as it meets ALL of his criteria for a ‘popular mechanic’ survivalist-type site.

Additionally, as someone ‘in the business’ [but yet, like Mr. Andre’, definitely a ‘carp’] I am aware of most of the internet sites; Mr. Rawles is not ‘among the best’, it IS the best. And for exactly the reasons Mr. Andre’ outlines. Certainly, products are available [mine included] but concentration is, has been, and will undoubtedly continue to be, on the ‘make it yourself’, ‘how to’, ‘what to consider’ aspects of the ‘re-countrification’ for all us ‘carps’ out here.

It should be noted that there are numerous sites dedicated to making the average ‘carp’ truly independent by learning and working, rather than marketing to him…and Mr. Rawles’ site references fully 90% of them. Perhaps you would be kind enough to pass along this information to Mr. Andres’, as he may find ‘hope’ in the fact, as well as Rawles’ [free] gold-mine of information on preparedness.


D.E.

just read the 'carp' vs. 'creamers' post and i admire your latitude in printing it. the fellow does imply some thin advocacy of the 'we all need to pull together' stance that you, and i, take, but i fear he is barely on the table.

i would call him an in-betweener. his knowledge of the food, building site and equipment preferences of the creamers rather amazes me. i have to pause when i note the fervor with which he derides their choices. i almost detect a note of envy as he compares his corrugated shelter stocked with expired food to the creamer's fortress-mansion. what i am wondering is why he spends so much time on fretting over their plans. the injustice (?) of their having the means to provide for themselves in grand manner seems to me problematic. given the choice i think he would much prefer to have that food, that equipment, that land. given that he does not have the means i find his ability to make-do very admirable. there is a new england saying that goes something like this: use it up, wear it out, and then fix it.

he mentions doing recon on a creamer in his redoubt, rifle in hand, hidden from view, as if his intention were no different from that of the man on the hill: to kill and take. I would contend that you will have both mentalities, givers and takers, in both parties. some creamers will be an asset to their area, and some chicken farming liberals will shotgun intruders. i simply cannot see making the critical distinctions that the carp does based on wealth.

i have as little use for those who work solely upon a faith-based ideal as any, but that does not mean that there will not be people of faith who are also an asset to their community. i really don't like most christians, particularly the very vocal holier-than-thou, but i modify that by saying i know christians i would want beside me in troubled times.

i hope carp doesn't take this as a personal attack; it is not meant that way. my thought is that he might want to expand his thinking a bit, moving from a poor-suvivalist blasting rich-survivalist toward the idea of community. a community which might actually be benefitted by having folks with wine cellars and fancy binoculars included. envy alone is not a firm basis for distrust. gotta look into the heart. i feel this is what you, chas., advocate: we look into our hearts, and others', and we do the best we can to support one another.

as a slight aside i don't deny that there will be mean-spirited, graspy people who simply need to be shown the exit, and i don't deny that showing someone the door might be rather nasy and awkward. but having gourmet tastes or nice duds isn't reason enough to make such choices.


SJR

Great slew of essays today. Rene's stark, but not necessarily inaccurate, portrait of the survivalism pedigree struck a chord in me. I too am a bottom feeder. I would add to his portrayal, that, like the creamers, we bottom feeders do not care so much about money either, because as we know, it is nowhere near as valuable as the lessons we have learned in surviving on their middens.

Also, I believe the main difference between the creamers and us more resourceful survivalists, is that selection pressures have endowed our branch of the family with an abundance of creativity.

To answer Rene's question:
'Where in Hell is the SURVIVALIST WEB SITE that is AKIN TO the old POPULAR MECHANICS MONTHLY? A down and dirty, nitty gritty, no punches pulled, this is how it works, how you do it, blueprints included, handyman's haven of information and knowledge?'---

Try Mother Earth News. There is an online version too. Lets not forget that earlier revolution of the 60's 70's and 80's. The counterculture had glimpsed an interesting fold in time. For a very brief instant, a deep appreciation for the technology of the early 1900's was rekindled. Many of those technologies and apparatus were much better suited to a world made by hand. Survivalism is the only evolving branch of the human family tree. We survive because to the extent we are able to avail ourselves of any ancient and emerging technology that is sustainable with respect to the resource base.

As for survival behavior's? We should apply a similar test. Certainly the world can ill afford the creamers. Nature will deal them out due either to the affront of their conduct or the preposterous extravagance of their enterprise. I submit that the most appropriate behavior for the Great Unwind is tolerance in grand proportions, and vigilance in only slightly greater measure. That is a tough balance to maintain. But it is only in the balance that Liberty is maintained.....


RE: Empire of Debt, Empire of Lies (August 6, 2008)

K.J.

RE: today’s excellent post, you wrote:

"if the con is monumental enough to threaten the "system", then you will not just go scott-free, you will be rewarded and recapitalized."

It made me think that small and medium cons have also been tolerated with only the occasional sacrificial lamb offered up as atonement for Wall Street’s sins (Martha Stewart.) This systemic meltdown is the logical conclusion of years of those in power gaming the system for every loophole and insider advantage they could get. It’s as cyclical as the seasons. Each time it blows up publicly, outrage is feigned and each time, ‘The American People’ are promised reform.

Now the fraud has become big enough that the entire system (of bribes) is threatened and the public is told that the bail-outs are for our own good. The parasites sitting on the top of the financials-skimming pyramid can no longer hide their deception so, in true shameless fashion, they just continue to do their worst right out in public.

Capitulation is coming for the American ‘consumer’ and he may, in a pensive moment, wish he’d been less of a consumer and more of a citizen. Soon he’ll be too busy just trying to eat and retain a little human dignity that he won’t care any more. A lot of those who will complain bitterly about the lowering of their lifestyle are the same ones who were shopping like kids in a candy store while their ‘homes’ were ringing like a cash register. The fact that it is all changing so quickly tells us it wasn’t different this time. The only difference was that the average guy was invited to this party. He just didn’t know he would end up with an apple in his mouth.

As far as China and others calling the US on it’s chicanery – don’t count on it. All these global markets will be propping each other up soon. They’re all too big to fail each other. Mish and Denninger had a column a couple days back explaining that the $800b Fannie/Freddie bailout is actually for the Chinese govt’s benefit.

Thanks again for the very thoughtful and often ‘contrarian to the contrarians’ posts. Your new book offerings look good too.


a CPA

Nice piece on Empire of Debt supported by Empire of Lies. I am a CPA and spent 10 years with the now infamous Arthur Andersen. I saw things changing when positions started getting flooded with MBA’s. Before that a lot of finance officers spent long periods with the Big 8 CPA firms where you went through a long grind of conservative accounting. Then the MBA’s started flooding into the accounting firms and “Marketing” started to become important.

I can still remember one time I got a new client as a manager, but the client had been with the firm for a number of years. The client started telling me if we were going to qualify our opinion they were going to change accounting firms. I was thinking, oh crap! Here I get this client and I lose them. I call the partner and he growls over the phone, if they want to change firms tell them to go $%@% ahead and hangs up on me. You will not hear that now days.

I recently, had lunch with one of the top partners with one of the largest international accounting firms. I was in my usual bitchy session of why I have to be more conservative than the large accounting firms and that the accounting firms are setting themselves up for failure with the accounting going on. He put down his fork, looked at me and said, "that is the reason I am getting out of this business."


Paul T.

"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works."
- John Stuart Mill

I recall a reader taking you to task for opining that the (housing bubble) money was essentially "gone" and it was time to move on. Well, Mill's quotes elucidates the point well: the money was blown when the Potemkin villages were erected, not when the wind blew them down.


RE: Should I Buy or Sell? Seven Considerations (August 4, 2008)

I'm not Potus

I am not sure colleges, as a whole, will do well. The vast majority of students attend on the basis of debt funding. The student loan market was as lacking in good judgment just as much as the housing loan market. Add in all the recent growth of HELOC funded student enrollments and the carrying capacity of higher education in a credit crunch contracts as hard as the housing. These student loans carry bankrupt proof cloaks of burden that will follow them everywhere. What happens to the motivation for enrollment if all of your friends who finished college are unemployed and trapped by a permanent student loan? Are you going to sign up?

Sure, you will have top tier campuses that can survive on the vast endowments, but how well will these portfolios fair in the equity markets? I am pretty sure that USC could stand to lose 50% of their investments because rich people will always be willing to pay for their children's education. They can raise tuition easier than a state campus. The rich kids at UCLA will suffer a loss of quality and migrate to USC. This just makes things worse for the state run schools, public schools will see fewer and fewer cash funded students. The federal government will have to create a new "GI bill for the GED" just to keep the doors open. That will further increase the irresponsible public debt in the name of the public good.

I suspect that the top tier institutions will enjoy a massive influx of dollar rich/campus poor Chinese/Arab/Russian/Brazilian/etc. You will see student visa "armies", larger than any seen before, filling up dormitories from countries with US dollars shipped over to an American school as a more beneficial use than if it sat in an electronic account collecting more shiftless dollar roommates. Do you think we will turn them away if they are the only thing that will keep the doors open?

You could even see a place like Dubai pay for MIT or CalTech in cash and move the brain power and books over to a brand spanking new campus with every little thing a professor could desire and eager subsidized students, free of debilitating fears of debt and funding issues. What is the point of having your own Louvre and Guggenheim if no one is educated enough to appreciate it.

And last but not least, the only reason college is expensive is because they can charge that much in a cheap money environment. If tuition does not collapse then the return on investment has to materialize, otherwise the debt will kill the graduate. Higher learning institutions will have to consolidate and become efficient suppliers of services that actually enjoy a demand. Say good buy to the masters degree program in 18th century French literature. Humanities will shrink away and colleges that teach you something that will earn you a living will survive and flourish. Too bad though, for the average American graduate of public education high school, they won't have the necessary skills to out qualify nor out borrow against a foreign student paying cash up front.

You can also say goodbye to all the sports factories masquerading as institutions of higher learning. They depend on cash from boosters, broadcasting fees and advertising. Professional teams will undercut schools to stay alive with sponsorships/advertising/ESPN markets. The NBA can slash payrolls, what can Duke do? Boosters will be cash poor and greatly reduced in number. Sporting revenues will plummet and the justification for keeping them will disappear. Super stars like Kobe Bryant can "retire" to Monaco in a blink of an eye and never be missed. The "Final Four" will morph into the "Only Four". Professional sports will devolve into a subsistence level entity. Out of "work" student scholarship athletes will flood the professional markets, willing to work for nothing. I wouldn't be surprised to see the USC football team spun-off to become the Los Angeles "NFL" expansion team.

I would qualify your statement by limiting the sure bets to schools that focus on or have the capacity to expand the sciences, medicine and engineering. Everything else is on a prolonged sabbatical.

pharside


Burning Daylight

If you got no debt, and nothing to lose, hell, life is wonderful. Tell them about how happy they are going to be, when the illusion of wealth is stripped away. They were happy in the 60s to be poor and free, and dance in the streets. Think of it as Born Again only now "They" are in their 60s poor and free. Life is great. The universe laughs at us.

Wayne

During the last Depression many lost their homes and farms. Why? A huge number of people were simply unable To Pay Their Taxes. No jobs, savings, or assets; together with a clueless public sector that took a dozen years entering WW2. Another point: Agricultural America had it's own depression from early/mid 20's to the crash, exacerbating the farm economy plight.

Fredrick Lewis Allen wrote two books: Only Yesterday: An Informal History of the 1920's covering the period 1919-30, and Since Yesterday: The 1930's in America, September 3, 1929 to September 3, 1939 covering 1929-39. Your site may have mentioned Allen.....however, these books are accurate and revealing especially since nearly all the old ones have passed on. Thank you, if you were the source last year...and/or thanks for your site too!

From a one room school house in the late 40's to City Planning & Model City's, to Off-shore rigs on all coasts, to Farming these past 25 years, I feel unqualified to stick my beak into most issues. Having had early success in life does make it easier to pick manure with the chickens though.

A Korean War friend, a POW captured when the 82nd dropped into Seoul, would occasionally lightly mention that he had 'good teachers'. Less than 20% of that battalion returned.....my friend spent 56 months somewhere in Manchuria. Every 10 miles or so, the column would halt for rest, while secured together with barbed wire. Usually, an enemy officer or non-com moved down the line, drop his trousers and demanded satisfaction.

Refusal earned a shot in the head, unwire the dead, move to the next man. Birthday Joe, for that was his name, was an Airborne Drop Sgt. Surviving two and a half month march earned captivity and 5 years of mock hangings with.......more barbed wire. Sodomy became less useful, as a cup of rice and fish heads kept his energy level quite low. A 72 lb skeleton somehow wasn't that pretty anyhow.

His girl friend...later his wife, sneaked him out of a Colorado Springs military hospital & they made their way back to Chicago together. MP's & Fed marshals tried to arrest him in Chi-town for return to CO. By then he was packing heat, and he ran them all off, swearing to kill anyone threatening to take his freedom away. The aArmy left him alone after that.

This man said he had good teachers.

Do Americans have good teachers?


Michael S.

I have progressive friends who keep asking me: "but what about those who won't succeed?" and they don't like my answer: "my life doesn't revolve around anxiety but I will keep 'those in distress' in my prayers."

as the poets say: "life is life because it found a way to live!"

thus, aligning our identies to "work" and "wealth" is demeaning since we're part of a bigger conciousness!

so getting trapped in "gloom and doom" is like getting trapped in hell.

and, FYI, I learned this from the baby ducklings at the lake near my house this spring!

and, as Wordsworth wrote:

"for oft when on my couch I lie,
in vacant or in pensive mood,
they flash upon that inward eye,
which is the bliss of solitude,
and then my heart with pleasure fills
and dances with the daffodils."

yes, life is so beautiful that we don't see it at first!


R. Christoffersen

The inspiration for researching/writing Astounding Facts of Hidden History (R. Christoffersen, August 4, 2008) arose when a friend of mine (who is a Bishop) were discussing economics, history, and religion. In that discussion I broached the conspiracy issue, which he chastised me lightly, "Oh Randy, you don't believe in that stuff do you?"

I have learned it is impossible to overrule a lifetime of established beliefs with the few soundbytes of evidence afforded in a typical conversation. So I ventured to prove to my friend (and others) from a host of the highest authorities of history, many of the wisest men that have lived, giving compelling testimonies on this point. I don't claim the essay to be infallible but merely that one who would know the general truth of conspiracy theory that is uncommon among the masses, one that is disguised and hidden in plain sight, is truly knowable.

Responses to it have been far ranging, both positive and negative, and there is always contrary evidence available for whatever a man wishes to believe. But I've discovered that just as men are inclined to shape God into a convenient mold, they also accept or reject other issues to fit their comfort zones or established beliefs. Truth is often a "burden of knowledge" so in this way, "Vulgas vult decepi" - "the people wish to be deceived" --Phaedrus. Conspiracy theory is a frightening concept, most prefer the false security of evening TV while their liberties are slipping away.


Chris H.

Another great piece ( Oversupply and Compression: How the Median House Price Will Fall from $215K to $70K (July 30, 2008)). Your points re: the long-term trend of interest rates and varying density of residential occupancy are excellent points. Anecdotally, here in the Bay Area where I live, a news story recently appeared about 'homeowners' renting out more rooms in their homes to hold on to their 'ownership'.

I think of the US housing market in terms of a hated communist central committee dictating that everyone go grow more wheat or the Japanese government's encouragement of its citizens to collect pine roots during WW II in order to produce an aviation fuel/gasoline substitute from it. Only difference is our idiotic scheme has actually paid off for over a generation thanks almost wholely to the fact that the USD has been the post WW II reserve currency and the rest of the world supported us.

Now 2 generations of Americans have it firmly ingrained into the reptilian parts of their brains that 'housing just goes up and is always a good investment'. I, like youself no doubt, have grown hoarse trying to explain simple ideas like the gross rent multiple and compounding interest to my peers to show that even with the recent boom, real estate was not all that great if you're still holding on. People seem completely blind to the costs of ownership. And many of these otherwise seemingly intelligent people are now chattering about the buying opportunities in real estate now appearing!

I recently read 'A Connecticut Yankee In King Arthur's Court' by Twain. The transferability of that story to today is stunning! Really makes you see how effective the American propaganda machine has been. The housing-related wealth and income afforded to many in the past 2 generations of Americans is money stolen from current citizens from all over the world and stolen from future generations of Americans.

I profoundly believe it should have been unconstitutional to run a regular structural budget and trade deficit and build up the debt level to what it is. Perhaps the next revolution will take care of that little oversight by our founding fathers. Well, maybe it wasn't an oversight so much as we were just convinced to ignore it.


Arthur V.

I've been thinking a lot about the "rugged individualist" myth lately - the notion that somehow a bunch of hardened and determined men went out and built America with nothing more than the sweat from their brows and the strength of their backs. Rubbish, of course. But it is interesting to me how the perpetuation of this myth makes Americans uncomfortable with the notion of community effort - whether it be a simple thing like helping out a neighbor or a larger thing like doing something for the town.

I think there is a happy medium somewhere between the rugged individualist and the nanny state, where people act in community interest rather than self or national interest. It seems to me that acting in this way will turn out to be best for both individuals as well as the nation. As I am discovering as I tentatively embrace this new approach, there are rich resources quite literally to be found just over the fence.


Robert T.

Oversupply and Compression: How the Median House Price Will Fall from $215K to $70K (July 30, 2008) was thoroughly excellent.

One point I hope you will make in the future pertains to savings- in econ 101 it is taught that "savings is the engine of investment." When the government consistently lies about the true extent of inflation, which is obvious to everyone, there is really no incentive to save, at a negative real rate of interest, and thus investing to repair a crumbling infrastructure and to create new jobs suffers.

This is not to say that individuals will not opt for a free lunch when they can get it (no-doc., interest only, etc. etc. mortgages) but as opposed to what we are fed in the media (one can only surmise that reporters' salaries are somehow supplanted with lotus or something else clouding their minds, pretending as they invariably do that Fannie Mae is some kindly old lady baking pies for everyone when she is a gimlet-eyed for-profit whore taking a cut out of every mortgage issued) the deck is stacked against even the most prudent individual- he is charged 20-30% if he needs to use his bank card, but the bank gets away with paying him 2-3% interest on his savings. Congress turns a blind eye to out and out usury.

It is a crooked system. Did you know that a representative serving as little as a single term gets a lifetime pension with medical benefits? These are public servants? It might be more accurate to characterize them as the Lapel-Pin-Patriot-Actors's-Guild. (?the Axis-of-See-no-Evil).


Michael S.

I was commenting on: "I personally am persuaded that offshore drilling can be done with sufficient precautions with current technology to render it a low-risk activity. With gasoline at $4/gallon, a number of citizens who were adamantly against the idea for legitimate environmental concerns about spills and coastlines are now open to the idea."

IMO, it's not a bad thing if offshore oil never happens; That's because the problem isn't oil but, rather, folks buying houses that come with long commutes and inefficient cars.

Thus, if you're worried about gridlock, you must be impressed that oil prices "broke the gridlock of stupidity!" GM, for example, is now stuck with "SUV inventory" it can't sell so their stock price is in the toilet!

If you think the "risk" is acceptable, consider these headlines:

---| #1 - Aug 4, 2008 A $16 Billion Problem: "Chevron hires lobbyists to squeeze Ecuador in toxic-dumping case."

---| #2 - July 26, 2008 Massive oil spill clogs Mississippi River

---| #3 - November 30, 2000 Crews on Mississippi tackle largest oil spill since Exxon Valdez

The 800-foot tanker Westchester trails a containment boom in the Mississippi River after losing power Tuesday evening and spilling 554,400 gallons of crude oil




Thank you, readers, for such thoughtful contributions.





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