“From Jan 1, 2011, every transaction above 1500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards.”

LATOC Comment: “Welcome to the NWO. Coming to a country near you soon.”

Until next time; Keep your eyes on the horizon as the weathers changing fast.

Iran Again: A weather report attempts to give an idea of upcoming/incoming weather in order for its viewers/listeners/readers to have some advance notice of the coming weather conditions and events, especially those that could produce dangerous results, and prepare accordingly. Here’s a bit of weather PrudentHome thinks is worth watching for:

• “US raises stakes on Iran by sending in ships and missiles” is the title of this Chris McGreal piece from The Guardian (guardian.co.uk/world/2010/jan31) made available via Drudge Report (drudge report.com) on 2/1/10. Here are some of its key points:

• “Tension between the US and Iran heightened dramatically today with the disclosure that Barak Obama is deploying a missile shield to protect American allies in the Gulf from attack by Iran. The US is dispatching Patriot defensive missiles to four countries — Qatar, United Arab Emirates, Bahrain and Kuwait — and keeping two ships in the Gulf capable of shooting down Iranian missiles. Washington is also helping Saudi Arabia develop a force to protect its oil installations.”

• KEY POINT: “Washington is also concerned at the threat of action by Israel, which is predicting that Iran will be able to build a nuclear missile within a year, a much faster timetable than assessed by the US, and is warning that it will not let Tehran come close to completion if diplomacy fails”

In an economically/financially  fragile world, a major war in the Middle East, with its almost certain effect of reducing oil availability, could/would be devastating to the industrialized nations of the world and their peoples: that includes the USA and us.

Until next time; keep your eyes on the horizon as the weather’s moving fast.

More Middle -East Tensions: We spoke a short while ago about the oil-critical Strait of Hormuz and  now we see this headline over at newsmaxworld.com on 12/14/09: “Iran Working on Secret Nuclear Trigger”. Here are some of the articles key points:

• “LONDON – Confidential intelligence documents obtained by The Times show that Iran is working on testing a key final component of a nuclear bomb.” The notes, from Iran’s most sensitive military nuclear project, describe a four-year plan to test a neutron iniator, the component of a nuclear bomb that triggers an explosion. Foreign intelligence agencies date them to early 2007, four years after Iran was thought to have suspended its weapons programme.”

• “The technical document describes the use of a neutron source, uranium deuteride, which independent experts confirm has no possible civilian or military use other than in a nuclear weapon. Uranium deuteride is the material used in Pakistan’s bomb, from where Iran obtained its blueprint.”

And this from foxnews.com on 12/16/09: “Iran Test-Fires Its Longest-Range Missile” (from 12/16/09 AP):

• “TEHRAN, Iran — Iran on Wednesday test-fired an upgraded version of its most advanced missile, which is capable of hitting Israel and parts of Europe.”

• “LIVESHOTS: Important Points About Iran’s Missile Test”

• “The two-stage Sajjil-2, and is powered entirely by solid-fuel while the older, medium-range Sahab-3 missile uses a combination of soild and liquid fuel in its most advanced form.”

• “Defense Minister Gen. Ahmad Vahidi  … He said the new version (the Sajjil-2) can be fueled more quickly and flies faster than previous ones making it harder to shoot down … ”

• “Solid-fuel missiles like the Sajjil-2 are more accutate than the liquid fuel missiles of similar range currently possessed by Iran. They are also a concern because they can be fueled in advance and moved or hidden in silos.”

PH Comment: The net-same as our last comment on the Strait of Hormuz situation: If we had to place a bet, it would be placed on war.
Prepare families, prepare.

Conversations With ‘Pop’ Smith: PH Question – ‘Pop’, a lot of prepping/posting folks are making                                suggestions for preparedness items as gifts during this holiday season. Any thoughts here?
‘Pop’: It’s a great time for giving preparedness gifts, what with the sales and all, as they’re sure to stimulate focus and interest on/in  preparedness. That’s especially important in these times. Here are a couple of inexpensive gifts (“stocking stuffers”) that should always prove useful:

1. A good-quality manual can-opener

2. A pair of good-quality toenail clippers

3. An eye glasses repair/maintenance kit with added spare parts (screws, etc.).

Also, I haven’t seen it mentioned much but this a great time to acquire/expand your stores with “seasonal” food items that are especially offered for holiday use at very cheap prices. Here are some of the items that I take advantage of:

1. sugar

2. baking soda

3. baking powder

4. hard candy

5. canned yams

6. cranberry sauce

just to name a few. Keep seasonal foods in mind (they can be eaten any time of year) and watch your expiration dates.
Merry Christmas!

Until next time; keep your eyes on the horizon as the weathers changing fast.

The Dollars Decline: Today’s post headline comes to us from the Financial Times (ft.com) of 11/29/09  via survivable.com of 12/01/09. The article is by Jeffrey Garten and is entitled “We must get ready for a weak-dollar world”.

Photo Credit: SqueakyMarmot

Here’s a portion of this important piece:

• “The roots of this situation are well known. The American budget deficit of this past fiscal year reached 10 per cent of gross domestic product, the largest since the aftermath of the second world war. Meanwhile, the net external debt of the US nearly tripled last year. To $3,500bn and it is projected to increase by nearly $1,000bn every year for the next decade. All this underestimates the problems of a country where unfunded liabilities for baby boomer entitlements are in the stratosphere, infrastructure deterioration is scandalous and many large states are out of money. To close the gaps. Taxes would have to be raised to sky-high levels and spending brutally slashed. It would take a miracle if America’s political system – one rife with vicious partisanship and riddled with well-financed special interests – could do either, let alone both.
• Washington will therefore have little choice but to take the time-honored course for big-time debtors: print more dollars, devalue the currency and service debt in ever cheaper greenbacks. In other words, the US will have to camouflage a slow-motion default because politically it is the easiest way out.”

U.S. Government Failure: To hand-in-glove the above piece, this observation from yesterday’s Of Two Minds blog (oftwominds.com) post by Charles Hugh Smith entitled “The Grand Failure of Government to Limit Concentration of Power”:

• “This, then, is the grand failure of government: due to the concentration of power accumulated by those with asymmetric stakes in the game, any attempt to limit a concentration of power is thwarted by status quo. All the issues which so worried Madison in “The Federalist Papers” have come to full flower: the power of the State has been legally channeled into Elites which have nothing to fear from any branch of the State because they are the State.”

PH Comment: So here we are. “We The People” are on our own. No one is coming to rescue us and the boats have all been taken or burned. We build from here.

Until next time; keep your eyes on the horizon as the weathers changing fast.

Our posting and commentary on the foregoing is the product of: a conversation with an older acquaintance with degrees in economics, business (and more than 30 years national and international business experience) as well as some re-reads. Our acquaintance is negative and nervous and so are we.  Here’s why:

• “Societe Generale has advised clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.”
• “ In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders creating a fresh set of problems.
• Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years.”
• “Governments have already shot their fiscal bolts.”
• “The underlying debt burden is greater than it was after the Second World War … Ageing populations will make it harder to erode debt through growth. “High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt,” it said.”
• “Inflating debt away might be seen by some governments as a lesser of evils.”
• “Private debt is also crippling. Even if the US savings rate stabilizes at 7pc, and all of it is used to pay down debt, it will take nine years for households to reduce debt/income ratios to the safe levels of the 1980’s.”

PH Comment: In the conversation with our acquaintance referenced above, I said that from an average mans observation I would have to ask the question, “How could America possibly pay all of her debts and promises?”. My acquaintance just smiled and said, “We can’t.”

Conversations With ‘Pop’ Smith:

PH Question – “’Pop’, The last time we talked you gave us an idea of what you were working on now to prepare this week and this quarter. Could you give us an idea about how you set these weekly and quarterly projects up?”

‘Pop’: I use a notebook and a pencil or ballpoint pen and set up a week, say 11/10 to 11/17. Then I write down three projects I want to get done during that week.

It’s as important to write down the dates/time frame as it is each of the three projects because it’s the writing down of these things that makes them a personal commitment to yourself to try and get them done and on time. When I get one done, I mark it off. If I don’t get but say two of them done this week, then I circle the unfinished project and make it number one or two next week.

OBTW, I leave a couple of lines clear below each project to comment on how it went, how to do it better next time or why I didn’t complete it. Also, I’ve learned not to beat myself up over not completing a project if there’s a good reason; I just write the reason down and move on.

OBTW again, by keeping a record of your projects along with comments, you eventually get a pretty good idea of what you can get done and you then tend to make your projects more realistic in terms of both your time and talents.

I set my quarterly projects the same way save for a bit more space left for comments.

Until next time, keep your eyes on the horizon as the weathers changing fast.

“A report by University of California, Berkley economics professor Emmanuel Saez concludes that income in the United States is at an all-time high, surpassing even levels seen during the great depression.

The report shows that:

• Income inequality is worse than it has been since at least 1917
• “The top 1 percent incomes captured half of the overall growth over the period 1993-2007”
• “In the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.”
• As others have pointed out, the average wage of Americans, adjusting for inflation, is lower than it was in the 1970’s. The minimum wage, adjusting for inflation, is lower than it was in the 1950’s. …”
• “Of the 535 members of Congress, over 44% – 237 to be exact – are millionaires. …”

U.S. Moving to 3^rd World Status?: On November 16^th, 2009, Mike Folkerth – King of Simple  (mikefolkerth.com) gave us this guest post by Greg Chadwick under Mr, Folkerth’s post title “A One-Way, Non-Stop Ticket to 3^rd World Status On A Slow Train”. It seemed to us insightful and at least as good a guess concerning an economic collapse coming to/in America as any we’ve read recently. Here are some of Mr. Chadwick’s views:

• “First, we need to understand that collapse isn’t coming, it’s already here. Large numbers of people are already unemployed, homeless, and hungry, for them, depression has already arrived. Virtually everyone in the US has experienced a significant erosion of purchasing power since the Seventies. But notice it didn’t happen overnight. We lost a little here and there; nothing sudden or dramatic.”
• “One day soon the dollar will no longer be the world’s reserve currency and we will need to pay for oil with something other than dollars. Our largely worthless dollars won’t give us a favorable exchange rate in the way of purchasing power so we will learn to drive and eat less and walk more. …”
• “The government and the mainstream media will acknowledge that we are going through a rough patch. However, they will assure us that recovery is just around the corner, just like nuclear fusion, which has been just around the corner for the past fifty year, and most will believe them. They will do their best to distract us with nonsense. …”
• If we expect to live well in the coming years, we need to take action now . This is no different than buying homeowners insurance. Anyone who waits until his house is on fire to buy a policy could find himself living under an overpass. …”
• “What does the future look like? Just like today, except that it will be a little worse. There will be relentless deterioration, mostly imperceptible, too slow to cause alarm, and certainly not enough to trigger a flight or fight response. For most people the alarm will never go off.”

PH Comment: Mr. Chadwick makes some solid points concerning our economic history – recently. What we feel he may not be considering are possible events along the lines of a war in the middle-east, civil unrest in the US, or terrorism here in America – another more deadly strike. Any of these, or other events, could produce rapid deterioration and/or worse.

For the prudent family, it would appear to us that a strong program of preparation (water, food, medicine, self-protection, etc.) for harder times is in order. This program would, as we have said in the past, center around faith, family friends, and neighbors. We need to get to work on this as the time may very well be short.

Until next time; keep your eyes on the horizon as the weathers changing fast.

• “Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher.”
• “An editorial in the medical journal (the November issue of Archives of Pediatrics and Adolescent Medicine/PH) agreed.
• “The current recession is likely to generate for children in the United States the greatest level of material deprivation that we will see in our professional lifetimes,” Stanford pediatrician Dr. Paul Wise wrote.”
• “… other recent research suggesting that more than 40 percent of U.S. children will live in poverty or near-poverty by age 17; and that half will live at some point in a single-parent family. Also, other researchers have estimated that slightly more than half of adults will use food stamps at some point by age 65.”

PH Comment: What the above article and information suggests to us here at PrudentHome is that America is in rough shape economically and socially. A lot of the statistics used to develop just the numbers PrudentHome has presented have been based on several decades worth of research  with a clear implication that things are getting worse not better. This is something that the preparing family needs to keep in mind as it works toward greater independence. This situation looks like a long haul at best and a sustainable preparation program is going to be required.

Conversations With ‘Pop’ Smith:

PH Question – “ ‘Pop’, we’ve been talking about a good general, in- depth family preparation program as being a base for dealing with almost any specific crisis-event coming down the road but do you see any problems on the near horizon that we might want to keep our eyes pealed for?

‘Pop’ Smith: While nobody can predict the future, all of us would want to be keenly aware of the direction our economy is taking. We’re at real unemployment at close to 20% with about 70% of our economy depending on near-full employment. Credit is tight and the people and the country owe more than they can pay back. This in a context of nervous creditors, national and international, wondering if we’re going to outright default on our debt or our country is going to print a lot more money with no backing and default that way. Either way things don’t look good.

Wages look like they’re going to hold steady at best for a while so with everything costing more (not just in the stores but in all your local and state taxes and “fees”), look for a lower standard of living for the average American in the short haul at best.

Also, you’re going to want to keep a sharp watch on the middle east. If Israel and Iran go at it, then all the bets are pretty much off the table. The bad now will seem good then

Don’t forget terrorism and civil unrest. Both of those are nearly sure bets pretty soon.

Bottom line: You’ve probably heard about the “Long Emergency” and the “Long War”, well I’d bet that you’re going to begin hearing about the “Long Recovery” pretty soon now. That’s what I’m preparing for: sustained hard times.

Until next time; keep your eyes on the horizon as the weathers changing fast.

The Economy – Recession Over?: “Recession declared over” is the title of the 10/27/09,Tom Raum post  at beitbart.com (via lifeaftertheoilcrash.net on 10/28/09). Please note these interesting portions of the article:

• “The government will release figures this week expected to show that the economy has awakened from the deepest slump since the 1930’s and is in the early stages of a recovery. But the following week, the government will issue another set of figures expected to show unemployment continuing to rise toward and possibly above a clearly recessionary 10 percent.”
• “Many companies let inventories run down so much that when they ran out, orders picked up. Home resales ticked up as buyers scrambled to complete their purchases before the tax credit for first-time owners expires, And U.S. exporters have benefited from a relentless decline of the dollar that has made U.S. goods cheaper and more competitive overseas.

But none of this adds up to a sustainable upswing.

• “Absent robust job growth, it is not a true economic recovery,” said White House economic adviser Jared Bernstein.”

Food – Future Costs Up: “Food will never be so cheap again” says the title of Ambrose Evans-  Pritchard’s piece of 10/25/09 at the telegraph.co.uk/10-28-09 (via survivalblog.com on 10/28/09). Here’s some of the “why”:

• “Biofuel refineries in the US have set fresh records for grain use every month since may. Almost a third of the US corn harvest will be diverted into ethanol for motors this year, or 12pc of the global crop.
• The worlds grain stocks have dropped from four to 2.6 months cover since 2000, despite two bumper harvests in North America. China’s inventories are at a 30-year low. Asian rice stocks are near danger level.”
• “The world population is adding “another Britain” every year. This will continue until mid-century. By then we will have an extra 2.4bn mouths to feed.”
• “A report by Standard Chartered, “The End of Cheap Food” (quotation marks/PH), said North Africa and the Middle East have already hit the buffers. The region imports 71pc of its rice and 58pc of its corn, It lacks water to boost output. The population is growing fast. It will have to import, and cross fingers.”

Conversations With ‘Pop’ Smith: PH Question – ‘Pop’, any thoughts on preparations for specific events like catastrophic weather (hurricanes, etc.), terrorist attacks, or maybe oil embargo ?

‘Pop’ Smith: First, let me just say that your best preparation is a strong general level of preparedness. Being able to provide for you and yours, and maybe a few others, the basics in water, food, shelter, medical care and security for a time. It’s a base to build on, or adjust on, to specific circumstances.

Two or three things come mind here in addition: First, if you know ahead of time that a hurricane, flood or world class snow fall/winter is approaching then you have time to do things like add extra water or food or fuel for your vehicles or stoves/heaters or pet food, etc.

Second, if the world situation appears to be breaking bad then you might do all the things just mentioned and maybe add some extra cash to your stash for a longer period of difficulty and maybe get your doctor to write some extra Rx’s for any critically necessary medicines a family member might need. Third, preparedness is a process toward greater independence and sustainability during hard times. You have to keep the process in motion and direction in times where resources are readily available so that when the hard times do arrive, you’ll be as ready as you can be.

Figure you’ll never be perfectly prepared but you can/will be prepared enough to adjust, function and get through/on.

Until next time; keep your eyes on the horizon as the weathers changing fast.

• “As the global and U.S. economies emerge from the downturn, economists predict that there is going to be some sticker shock at the checkout line. Food prices, they say, are heading higher and when you combine that with an unemployment rate that’s expected to linger near a three-decade high for at least another year, it’s even more unwelcome news.”

• “The U.S. Department of Agriculture expects overall food prices to rise as much as 4 percent in the U.S. by the end of 2010. Yet, some economists think they will climb by as much as 5 percent.”
• “The end result? Consumers should keep an eye on oil prices, which not only impact what they pay at the pump but also what they pay at the checkout counter.”

PH Comment: In the first quarter of this year PrudentHome made five predictions for 2009. Three of them were: 1.Expect higher oil prices by years end., 2. Expect higher food prices before next year. and 3. Average Americans will experience a lower standard of living this year. All of those things have and are coming to pass and we expect the same for 2010. Prepare.

Conversations with ’Pop’ Smith:

PH Question: “ ‘Pop’, one of the most prevalent lines of thought today  is in regards to  folks responding to some sudden/catastrophic event by throwing prep gear into their vehicle and making a run for their retreat. Any thoughts?

‘Pop’ Smith: “First, a place to go that’s out of the mainstream and self-sustaining if things get really bad in the country is  really ideal. That said, getting to that place/retreat if things suddenly, or even gradually, get really bad is highly problematic. If the retreat is close, say within a tank of gas, and you leave early enough then things should work out pretty well. But if your having to wait until the “balloon goes up” before you strike out then you have some really bad potential problems.

First, do a quick review in you mind regarding the travel conditions that existed during nearly any of the last decades major hurricanes remembering that travel then was essentially unopposed by state of federal governments (time here to review two of the last presidential directives/orders signed by President Geo. W. Bush in about his last year in office and note that these give the president nearly absolute power over the entire country in a national emergency that he would unilaterally define and declare. What if he decided to restrict all interstate transportation immediately upon declaration of an emergency? Think not, then refer back to what happened to all U.S. air travel right after 9/11.)

Second, consider this: when you leave your place, for a short or long run after an event, you immediately become a refugee for the time you’re in transit. That’s the bottom line. Leave early.”

Until next time, keep your eyes on the horizon as the weathers moving fast.

The above headlines paint a grim picture of American unemployment “ But wait!” as they say in the TV commercials, “There’s more!”

The more is structural unemployment.

Structural unemployment by one definition runs along the lines of “Unemployment caused by changes in the structure of occupational opportunities, such as when a steel factory closes …”

We might add: such as when they’re no longer making Pontiac’s or Saturn’s (in the context of reduced U.S. auto manufacturing as a whole) or closing the washing machine factory and shipping the jobs to Mexico. But maybe it’s the poet, as is often the case lately, that really has it nailed: “The steady jobs are leavin’ boys and they ain’t coming back – to your home town.”

We here at PrudentHome, wouldn’t be surprised to see “civil unrest” right here in “ …  you home town.” (or in a home town near you) by Christmas and almost certainly within the next year.

Conversations With ‘Pop’ Smith: continued from last week – We were talking about family preparation being geared to roughly four levels of challenge:

1. General Preparation for standard/short-term events such as bad seasonal weather
2. Medium-term events such as a “Hurricane Katrina” or a deep recession
3. Long-term events such as a hard depression or a long term oil embargo
4. War and/or social breakdown.

Again, none of these events are mutually exclusive.

All of the events discussed above require that you prepare to provide your family with shelter, water, food, medical care at some level, and security at a minimum.

This all sounds like quit a bit of effort, and it is, but if you prepare the basics for level one, you have then established a base upon which to build for the greater challenges level two will demand. This follows through using the new, expanded base for number two to prepare for the increased challenges demanded by level three, etc. etc.

We’ve now slipped into a new understanding of preparation: preparation isn’t a static condition but very much a dynamic process.

Just like owning a house or a boat, you have to maintain them and adjust you maintenance, and perhaps expansion, to changing conditions and your changing needs.

As you’ve probably guessed by now, you’re never going to be 100% prepared for any event; you’re going to have adjust to learning to adjust. It’s kind of like a retired Marine Corps (special ops) buddy of mine says: adapt, improvise, and overcome. Sound advice and sound attitude.

Oh, there’s one other thing along the line of adjusting; you might notice that with each increased level of challenge, comes an increased level of stored goods – both in quantity and quality. The very same thing can be said for your skill levels: e.g., while a very basic level of first-aid might get you by in level one or two, you’ll probably want something more for level three and as much as you can acquire for level four.

This is a real general overview of family preparedness but I hope it’s helped a little.

Until next time; keep your eyes on the horizon as the weathers changing fast.