Personal Safety and The Abyss

I was reading an article that was comparing murder rates in different countries.  They were trying to imply that because our murder rate by handgun was so much higher than the other country, CLEARLY, handguns were the reason for the murders.  Ban 'em all!

I knew this was garbage.  Societal problems cause murders, not the tools the murderers use.  So I went and found the overall murder rates (here).  If you look at the list, almost all of the 40+ countries with higher murder rates have outlawed the private ownership of handguns.

Kinda punches a hole in the ol' gun grabbers argument, no?

Anyways, I saw something that was interesting.  Just below the US is Argentina.  Here's the data I saw -

From left to right, the blue columns are for 2000, 2001, 2002, etc.  The last column on the right being the latest data that is available.

What interested me is that in Argentina in 2001, they saw a pretty significant spike in the murder rate.  Again in 2002.  Then it began a fairly steady decline.

Hmmmm.  What happened in Argentina in 2001 and 2002?  Oh, I remember:  It's when their economy imploded.

Considering that we are doing the exact same things that caused the Argentinian economy to crater, if you don't think violence will break out when the American "public safety net" gets shredded, you're not in touch with reality.

Get training or practice the skills you've acquired.  Now.
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Want to stay up at night?

Take a look at this article ("John Williams:  Approaching The Abyss").  A friend of mine sent it to me.  It's an interview of the owner of ShadowStats.com.  They're the guys that take the government financial statistics that have been doctored beyond recognition, and tell us what the numbers really mean (or should be).

Take the time to read and digest the whole thing.

A snippet -

Nevertheless, on a quarter-to quarter-basis, I think we'll see GDP down again in the third quarter. With the bulk of the reported GDP in the first half due to inventory building, the stage for renewed contraction has been set. By then we'll find the consensus pretty much in the camp that we're in a double-dip recession. The popular press will describe it as a double dip, but we never had a recovery. Actually, this is just a very protracted, very deep downturn that has had a pattern of falling off a cliff, bottoming out, having a little bit of bump due to stimulus and then turning down again. Sort of shaped like the path of a novice skier going down a jump for the first time. Speeding sharply down the hill, he goes up in the air and starts spinning wildly as he tries to figure out which end is up with his skis. Then he takes a pretty bad tumble. We're beginning to spin in the air.

Get your financial house in order.  Be prepared to take advantage of a sharp price decline (deflation) which will be followed by ugly, ugly price spikes (inflation).

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Wow, the markets are being turned on their heads right now.  As I write this, the Dow is down over 230 points.  The Federal Reserve came out yesterday and said the economy might not be quite the bed of rose petals the administration is making it out to be.

Well, there's a shock!  Who'd a-thunk it?  Uhm, all of us that have two brain cells to rub together, that's who.

I'm sure the Plunge Protection Team is on stand-by.

I expected to see a huge up-tick in the price of gold.  Nope.  It is slightly down.  Why might that be?  From the front page of Kitco.com -

For some unfathomable reason, the dollar is getting stronger.  Well, not unfathomable, just one based on fairy tales, unicorns and cute little puppies.  I know, I know, this is based on the dollar's relative strength to other world fiat currencies.  But still, really?!

What I found very interesting is that most of that decline is being offset by people buying gold.  They're taking their money out of the stock market and putting it in to gold.

It's a Mad, Mad, Mad, Mad World.  Maybe some sanity is returning...
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We've had a great start to our One Bucket Per Month Challenge.  Those of you still on the sidelines, get crackin'!  There's silver in them thar ideas!

Accept The Challenge

If you believe the pablum being fed to us about the economy by the administration, just move along.  I think there's a PeeWee's Playhouse marathon being run on PBS that you'd find more to your liking.

For the rest of you, it seems like things might be coming to a head.  I've been hoping that this serious downturn would wait for 2 more years, but it's beginning to look like things might decline more quickly.  Six months to a year?  I don't know.  I need to digest all of this for a bit.

Check and double-check your supplies.  When was the last time you rotated your food supplies?  When was the last time you checked the condition of your equipment?  Practiced your life saving skills lately?

I just did an inventory of my ammunition, and found - to my horror - that my usage has seriously exceeded my replacement, especially with my primary handgun round.  I will be correcting that in short order.

Get as "cash heavy" as you can.  With the upcoming deflationary price drops, this will be an excellent opportunity to stock up on the food, supplies and equipment you may not have had the chance to buy before.

Make your list, and start scanning Craigslist now.  Take a look at a post from back in March ("Efficient Use Of The Online Marketplace") and see how you can set up RSS feeds to track your wishlist.

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Win Some Silver - The One Bucket Per Month Challenge

An anonymous poster made a suggestion in a comment to a post ("Focusing Your Skills Building") that I want to follow-up on.   The comment said,

I have been trying to find the ideal contents for a 5 gal bucket cache of food for one person for one month. The easy to prepare foods that store a long time and provide the primary calories for a meal. The intent is to hunt and gather greens, fish, small game, roots, etc. to supplement the cache. It would be an interesting post for your blog to open it up for discussion. One bucket = one month. 12 buckets = 12 months. Simple, repeatable and invaluable. I could easily dig 12 holes outback to protect my food in case I am forced to leave my home either temporarily or long term. But a years supply on shelves is problematic if someone is breaking down the front door or you have to bug out for any reason. Any ideas?

Sounds like Contest Time, to me!

I'm going to change the rules just a bit, and provide some guidelines:

• The contents of the bucket have to provide food for one person for one month. 
• Assume it is the dead of winter, and you can ONLY survive on the supplies in the bucket.  The one exception is, you can assume you have unlimited access to clean water.
• The bucket will be a 6-gallon bucket.  For general guidelines, these will hold about 40 pounds of dry rice or beans, leaving you with a bit of head room.  The food you store must be able to have a shelf-life of at least 5 years.  If you want to use mylar bags, FoodSaver bags, desiccants, oxygen scrubbers or anything else to promote longer life, go right ahead.
• Expect to need 2,000 calories a day.  That would be approximately 60,000 calories for a 30-day bucket.  I know, I know, it may be more or less than that, but we need to add some number to at least have a starting place.
• It should come close to the USDAs Recommended Daily Allowances (PDF) numbers for protein (91g), carbohydrates (271g) and fat (65g).  Think about vitamins and minerals as well.
• Equipment available to you to cook/prepare the food:  Whatever you want.  If you want a full-blown kitchen, or a standard camping set-up, that's your call.  Design your bucket accordingly.  And NO, the cooking equipment doesn't also have to fit in the bucket!
• Price is no limit.  Like the food prep guidelines, spend in whatever price range as fits your lifestyle.
• Include the item, amount, calories and grams of protein, carbs and fat.

Post your ideas in the comments section.  Be sure you have an email address attached to your post or your profile so I can contact you to arrange delivery (which I'll pay, of course).

Alternatively, if you want some privacy, you may send me a private email to the "info @ BisonRMA.com" email address with any code you'd like - say "12345" or "Big Ears" or whatever you'd like.

This email must be time stamped BEFORE your post in the comments section.  When you post your entry, just start or end it with "code 12345" or whatever you chose.  That way, I'll have a way to contact you if you win.  Any email addresses I receive will be used for this contest ALONE.  I hate spammers, and I won't be one!

I'll run this until Sunday, 8/15 at 11:59pm, then pick a winner.  Picking the winner is my decision, and mine alone.

The winner will receive a one ounce .999 silver bullion coin.  This one, in fact -

The one with the Bison, of course!

Here's my entry to get you started (no, I can't win!) -

Powdered eggs, white rice, pinto beans, 30 multi-vitamins.  I'd add as much salt, pepper and other spices in ziplocks and/or FoodSaver bags as would fit in the bucket after the food.

With the powdered eggs, I'd need 4 of the #10 cans.  I'd transfer each can to a FoodSaver bag.  Each of the 15 pounds of rice and beans would be in separate mylar bags, each with 2-500cc oxygen scrubbers.

Packing the bucket would take a couple of days.  I'd start with 15 pounds of beans in a mylar bag and then I'd seal it up as shown in this video.  After the air had been evacuated, I'd place another mylar bag on top of the beans, fill it with rice, and repeat the process.  The powdered eggs in the 4 FoodSaver bags, along with the vitamins in a ziplock would then be placed on top, and the lid would be pounded on.

Here are the stats -

Spartan?  Boring?  Yep, but you'd be alive after a month.  The cost for the food would be about $135 for the eggs, $12 for the beans, $7 for the rice and (I'm guessing) $5 for the vitamins = $159.  The bucket, gasketed lid, mylar bags, FoodSaver bags and oxygen scrubbers would run less than $20.

Accept The Challenge

Now get to it!  I really like this idea, especially the thought of a full month of food in a nice, compact, easily transportable container.

Be creative.  Maybe sneak in some sweets, different whole grains, more spices - whatever.  Just remember:  That's all you'll be eating for a whole month...

Enjoy!

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Another Letter To My Congressman

The Buying Precious Metals series will continue tomorrow.  Until then, I just "penned" this letter to one of my federal representatives (the other two being Babs Boxer and Diane Feinstein - do ya feel my pain?!).

My congressman is named Jerry McNerney.  He lied to us to get in, and he's lied to us to stay in.  I'm working hard to get him voted out of office this next term.  If he doesn't get re-elected, he won't get the sweet congressional health and retirement benefits.

I'm working really hard on this.
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Mr. McNerney,


Two comments on your latest newsletter -


The Stop Outsourcing and Create American Jobs Act of 2010 is nothing more than "feel good" legislation. The plan is to tax those evil corporations? As I'm sure you're aware, not a single corporation in America pays one cent of tax. Every dollar you tax or fine them gets passed back to the consumer.

How do you think big businesses will respond to such foolish legislation? They've already moved much of their operations because the cost of doing business here is too high. Ya think they might move everything else?

If you really wanted to, "get the economy moving and create high quality jobs for California families," you'd work to reduce the tax burden on business.

LOL! Great chance of THAT ever happening from you.

My other comment is on the Financial Reform bill. Tell me: How many of the 2500+ pages did you read before you voted for it? Not a one, I'd guess.

Would you mind explaining to me how granting the SEC an exemption from FOIA requests makes our money any safer? The Bernie Madoff's of the world will certainly sleep better.

Me? Not so much.

Would you like to tell me how having small businesses have to complete IRS form 1099 for every single purchase over $600 will help to strengthen our financial system?

It's going to bury businesses of all sizes in unnecessary paperwork. I think the estimated tax revenues from this are something like $1.7 billion a year ($17 billion over 10 years). The cost to business to comply with this law will be unimaginable.

If I've done my math right, that $1.7 billion will run our $3.5 trillion government for about 4.25 hours. Woo hoo! We're on the road to recovery!

Is that how you're helping to, "get the economy moving and create high quality jobs for California families?"

American business is already in a hole, and you're giving us more shovels.

Thanks, but no thanks.

Accept The Challenge

We've got to scream and yell while it's still allowed, folks.  This blog post would probably have been disallowed (as political advertising or some other such garbage) if it were done too close to election day, had the DISCLOSE Act - which McNerney also voted for - passed.

Scream and yell, folks.  Scream and yell.

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Stuff I Can't Explain

I have lots of questions - 

Why gold is suddenly trading at incredible volumes.  This image of Comex gold sales volumes is from Kitco.com.  It is part of a technical analysis chart service.  As I've noted before, I am clueless over most of the "technical" precious metals analysis techniques, but this caught my eye because it is such a divergence from the norm (click to enlarge) -

Is this good or bad?  I dunno.  Seems odd, though...  You can see the technical charts each day by going to this site, and clicking Gold2 at the bottom of the page.  Silver2 and Platinum2 will give you similar data, but for those metals.
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As noted in the last post, the SEC is now exempt from Freedom of Information Act requests.  In scanning all of the major online news services, I am unable to find a single article on this subject written since early this week.

Why isn't the press in general going bat dung crazy over this?  Not just the financial press, but ALL of the press.  Don't they see this as setting a precedence that when one government agency gets granted super-secret cloaking powers, other agencies are likely to jump on the bandwagon?

Seriously, all of the American press should be rioting over this.  Yet they're quiet as church mice.  Why dat?
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Bloomberg financial press is unable to find the resources to report on the SEC getting granted secrecy powers, but they DO find the resources to write a story about the wife of an ex-employee of the NY Mets baseball team -

The owners of the New York Mets should be responsible for reimbursing more than $16 million in pension benefits invested on behalf of their workers in Bernard Madoff’s Ponzi scheme, according to a lawsuit filed by the widow of an employee.

Elyse S. Goldweber, the beneficiary of her late husband’s 401(k) plan, filed suit yesterday against Sterling Equities Inc., which owns the Major League Baseball team, in the U.S. District Court in Manhattan. The lawsuit, which also named Mets Chief Executive Officer Fred Wilpon, said most of the couple’s $280,420 retirement fund was “wiped out.”

It sucks to be this woman, but does it justify an article in Bloombergs?  Really?  Maybe they could do a hard-hitting story about how the lady's pet poodle has been forced to eat canned dog food as a part of their forced austerity plan.

Hey wait a minute.  Isn't the SEC the governmental agency that was given detailed information about the Bernie Madoff scheme WAY before it blew up?  Hmmmm.  I wonder if they would have had to disclose their incompetence if this story broke today...
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Why doesn't Arizona just tell the federal government to "shove it" and take matters into their own hands?   They passed a law, go ahead and enforce it.

What will the feds do?  Arrest the whole state?  Perhaps the whole executive office of the state government?

Go ahead, punk.  Make my day...


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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Hear, Speak, See and Report No Evil

I had planned to do a post about some very good news that's happened in my life.  I'm going to share it, at the bottom of the post, but I heard the following information, and it cast an ugly pall on my mood.

It is going to be interesting how all of the parties involved in this bastardization of America try and slime out of this.  Hell, they probably won't even need to try.  It was a bear trying to find stories in the press about this.

No one seems to give a damn.

First, a little reminder -

My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government.

Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing. Information maintained by the Federal Government is a national asset. My Administration will take appropriate action, consistent with law and policy, to disclose information rapidly in forms that the public can readily find and use. Executive departments and agencies should harness new technologies to put information about their operations and decisions online and readily available to the public. Executive departments and agencies should also solicit public feedback to identify information of greatest use to the public.

The Obama Administration posted this on the Whitehouse.gov site - it's still there, in fact - at the beginning of their tour of duty.  He even commanded the government's chief technology officer to build systems within 120 days to git 'er done.

I've kept a copy of the website page, in PDF form, because I'm guessing they'll remove or update it pretty soon.

Why?  Because of this -

The Securities and Exchange Commission apparently no longer has to comply with requests for information from the public, including those filed under the Freedom of Information Act, because of a little-noticed provision in the new financial regulations that became law last week, the Fox Business Network reports.

The law exempts the S.E.C from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.” Given that the S.E.C. is a regulatory body, the provision covers almost every action by the agency, lawyers told Fox Business. Congress and federal agencies can request information, but the public cannot.

Wow.  Kinda goes 180 degrees opposite from what they promised, huh?

I seem to be saying this a lot lately, but, how can this be?  This is not America.  This is some bad parody of the former Soviet Union or Communist China.

We have states and cities passing laws making it illegal to photograph and video police officers - our employees - while they are doing their jobs.  We've been told for years that the reason the government can put video cameras wherever they wish is because we have no expectation of privacy while in public.  Yet those same rules don't apply to government officials.

Our employees at the SEC can now do as they please, and not have to worry about having their (in)actions reported to the world (I'm sure the porn industry is glad to hear this, though...).  We, on the other hand, have reports sent to some government bureaucrat when we take out more than $10,000 of our own money from our own bank account.

Mark my words - this continued usurpation of our freedoms coupled with an ever expanding and secretive government, is going to result in violence.  I don't know if it's going to pop this year, next year or sometime after that. 

But I fear it won't be long.
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Now, for the happy-feet news - puttin' my money where my mouth is!

I've long been a proponent of having multiple streams of income.  If you can swing it, have as many sources as possible so that you are not out on your butt if one of them goes away.

Well, I'm putting that to practice.  In addition to my Emergency Prep/Personal Safety/Firearms training biz, I and a couple of partners are opening a business that is near and dear to my heart:  Precious metals.

We've negotiated the lease and should have our doors open by the first of September.  We've already got some business lined up (yes - all permission licensing is in place) and are expanding and firming up our business contacts.

I'm not going to go into great detail about where our business will be located, and the details of what we'll be doing.  I need to keep a "firewall" between the two different businesses for a number of reasons. 

I'll continue to talk a lot about PMs on this blog, but they'll all have a footnote about the business.

Now, if I can turn my 30-year beer brewing hobby into a business, I'll have a trifecta!  Bullets, Bullion and Brew?

Accept The Challenge

I must say, I'm at a bit of a loss about what to do with this continual growth of government and the chipping away of our rights.  I worry that we're past the point of recovering our Constitutional Republic.  We're devolving deeper and deeper into an oligarchy that has limitless powers.

I'm a bit numb.  Regardless of how we vote, regardless of what we're promised, regardless of the fiery speech and protestation, the downward spiral continues.

Hope for the best, prepare for the worse. It sounds so trite, but it's the starting point for a plan.  Assume that government growth and control will continue.  Assume that if the Republicans regain power in Congress, nothing will change. 

Assume your taxes will increase.  Assume your buying power will be decreased. 

Assume you'll need to recognize and deal with dangerous situations you never dreamt you'd see.  Assume 9-1-1 won't be answered.

Assume family and friends will never be more important.  Build or rekindle those relationships.

Get yourself mentally prepared.  Head on over to Behind The Parapet and read MikeH's 4-part series (I, II, III,IV) on The Warrior Spirit. 

Time to saddle up, folks.  And bring a cushion, 'cuz it's gonna get bumpy...

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Focusing Your Skills Building

What do YOU do to determine the skills you want to acquire?

If it's a hobby skill, you might want to learn how to do something more efficiently, or in an entirely different way.  Many years ago, this is what I did with my brewing hobby - I went from simply mixing up a batch of prepared malt syrup to extracting the sugars  from whole grain (mashing).

At work, you might want to acquire additional skills which will make you more valuable to your employer.  You might see an area of the business that is having difficulties, and learn the skills to help make that area work more smoothly.

How do you do this for emergency preparedness skills?  It should be a two-pronged approach:  Life Sustaining skills and High Demand skills.

The first step - and perhaps the most difficult - is to predict our future!  Are we going to have a crash-and-burn collapse and end up in a Mad Max or Book Of Eli society?  Will we end up in an Argentina-like economy?  Or will we get through this rough-patch, and pretty much return to normal?

Your answer to that question will drive your priorities.

Personally, I think we're headed towards an Argentina-like collapse.  Our dollar will be further debased, there will be shortages in almost all commodities, crime will increase and more and more industries will be nationalized - resulting in greater inefficiencies in getting most things done.
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Just like the Great Depression and the Argentinian depression, individual citizens can have no impact on whether it occurs or not.  It is out of our hands.  All we can do as individuals is to work NOW to lessen the impact if it does happen.

In the Great Depression, what was in short supply? 

Food, certainly.  The ability to obtain a steady supply of food was significanly impacted.  Our government actually paid farmers to reduce their planted acreage and slaughter animals to help increase prices.

Tangible wealth - currency, stocks and bonds all evaporated.  Those with precious metals and real property got through the difficult times more easily (even though much gold was seized by the government).

Jobs - the ability to provide your talents in exchange for cash payment.  People without the skills in demand were reduced to having to live in food lines, or literally selling pencils and apples on the street corner.
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In Argentina, crime is an ongoing problem as well.  If this was the case during the Great Depression, is was not widely reported.  If we go down the same path as Argentina, I think we'll have the same crime problems but on a much more significant scale. 

We have a huge portion of our population that has no idea how to care for themselves.  If our "safety net" is torn, all hell will break loose.  They WILL come for your stuff.  Knowing how to provide for your personal safety and to protect the assets you possess will be paramount.

World War II was a direct result of economic difficulties.  Germans felt they had been wronged by having to pay reparations as a result of WWI, and Hitler was able to ride that wave of anger into power.  We all know how that ended.  But it's important to understand that a terrible economy and stifling debt were the precursors to war.  Hmmmm.  Sound familiar?

Thrown into the equation are external forces influencing our decisions.  The US military came out in April and said they believe we're going to have oil shortages -

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

Is Peak Oil real?  I really don't know.  I do think, though, that like any commodity, oil will be more difficult and more expensive to acquire.  If Peak Oil is in fact a reality, it will negatively impact virtually every aspect of our lives.  Oil drives our economy.

Accept The Challenge

What every-day functions do most Americans have no idea how to do?  We don't know how to repair anything!  If it breaks, we buy a new one.  That will change.  Repair skills will be in huge demand.  Small engines, small appliances, electronic devices, computers, knife and tool sharpening, tool making, welding, making/repairing clothes, roofing a house, building a wall, etc.

Buying broken down appliances/electronic devices then repairing them and selling them for well below new prices might be a profitable venture as well.

Each geographic region of the US will be a bit different.  Here in the SF Bay Area, there is little need for someone that can clear snow (since it doesn't snow here), but a lot of need for learning how to shoot (since most folks are gun adverse and government dependent).

Growing and foraging/hunting your own food, and knowing how to preserve it will be huge.  It could also become a money-making proposition.  Or, as discussed in a past post, it can be used to reduce your cost of food by doing a bartered preservation-for-a-portion-of-the-product deal.  Smoking, dehydrating, canning, pickling, curing.  Learn how to do these things with as few store-bought supplies as necessary.  For instance, make jam without buying pectin.

Along these lines, learn how to make alcohol.  In trying times, people need to catch a buzz once in a while!  Beer, wine, mead, cider, etc.  Learn to ferment grains and fruits that are indigenous to your area.   I have two projects on my To Do list in this regard:  Malt my own grain (malt is needed to convert starches into fermentable sugars) and to do an Open Fermentation where wild, open-air yeast do the fermentation for me.

Alcohol can also be turned into vinegar.  Learn how to do this, and you have a skill and a commodity.

If you own a home, I would start putting some money into solar energy systems.  Both photovoltaic and hot water systems.  At this point in time, the government is still dumping big bucks into subsidizing these things, and you might as well get your piece of the pie while there's still some pie left.

At a minimum, move away from oil-based systems and towards alternative or renewable sources.  I've been doing a lot of reading on wood gasification, and prices for these power generation systems are coming down from the clouds.  Victory Gasworks is a good place to start to get some education on the subject.  If you have access to wood or other combustible materials, it might be a good option for you.

Learn how to shoot.  Plain and simple, it is the only way you will be able to protect yourself through any sort of large scale civil disturbance or rioting.  It gives you the ability to extend your defensive perimeter.  Martial arts, pepper spray/stun guns and other options require you to be in (literally) striking distance of your attacker.  If there's more than one of them, you're toast.

Be proficient in handguns, shotguns, carbines and long rifles.  Each has a purpose.  Practice, practice, practice.

Be sure you have plenty of ammunition, cleaning supplies and spare parts for each type of firearm you own.  Have the repair manuals and the tools to make your own repairs.  Learning how to re-load your own ammo might not be too bad of a skill to have...

Along these lines, look at your health.  Get off or reduce your dependence on medications.  Obviously, don't go cold-turkey and kill yourself, but try and reduce your dependence if possible.  Lose some weight, get your teeth fixed, exercise regularly, improve your lifestyle.


Read the Surviving In Argentina blog.  This guy, Ferfal, has lived there since their society crashed in 2001.  It gives you great insight into what day-to-day life is like under such a system.

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Article 1, Section 9: Limits On Congress

I was going to save this for a Grumpy Sunday post, but this is just burning my butt.  Not surprisingly, it has to do with the Congress spending more and more of our money, and making a mockery of the Constitution.

Not only have they gone nuts by interpreting the Commerce Clause of the Constitution as giving them carte blanche to spend our money on whatever they wish, in the past week, they have TWICE decided to ignore a portion of Article 1, Section 9 of the Constitution.  In part -

No bill of attainder or ex post facto Law shall be passed.

Hmmm.  Ex post facto.  What might that mean?

An ex post facto law (from the Latin for "from after the action") or retroactive law, is a law that retroactively changes the legal consequences (or status) of actions committed or relationships that existed prior to the enactment of the law.

Simplified:  No retroactive laws.

Obviously, this happens all of the time.  In the Wikipedia link above, if you click, "United States," they give you a rash of high-profile laws that have been passed and retroactively enforced.

Look what has happened just this week:  Both houses of Congress and the president signed the Unemployment Benefit extension bill.  It's not Constitutional all by itself (unless I missed the "extend unemployment benefits" article in the Constitution).  To make matters worse, they made it a retroactive law -

The House voted 272 to 152 earlier in the day to extend unemployment insurance through November for those who have not exhausted up to 99 weeks of aid. The payments are retroactive to late May.

OK.
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Earlier in the week, the president signed the financial reform bill.  I even discussed it in the last post.  I described how the FDIC deposit insurance was increased from $100,000 per depositor to $250,000 per depositor.

What I haven't talked about is a press release from the FDIC that came out a few hours later.  That $250,000 per depositor threshold was raised, retroactively, all the way back to January of 2008.

The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Barack Obama today permanently raised the maximum deposit insurance amount to $250,000. In addition, the Act made this increase retroactive to January 1, 2008.

Six banks had failed in 2008 prior to the FDIC limit being temporarily raised to $250k in October of 2008.  The press release says that there were 10,000 depositors that had accounts in excess of the old $100k limit.  Those companies and individuals took a loss on that difference.

With this retroactive law, 9,500 of them are going to get all of their money back.
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Are there absolutely no consequences for our individual actions?  Even my mother - who has no idea what is going on in the world of finance - knows that you don't keep more than $100k in any one bank.  Ten thousand depositors at 6 banks either didn't know or didn't care about the law.

You and I now get to pay for their ignorance.

My guess is that these 9,500 depositors were getting a sweet interest rate.  Perhaps double or triple the going rate.  That is very common for banks to do that are in financial trouble.  Bring in as many deposits as you can, and hope for the best.  Pay whatever it takes.

These depositors got greedy and didn't review the financials of the bank in question.  They saw the up-side, and it blinded them to the down-side. 

Just like all of the Too Big To Fail banks should have been allowed to fail because of their risky banking practices, these individual depositors should have taken the loss for breaking or ignoring the rules.

Shoulda, coulda, woulda...
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So, how can our government get away with this?  How can they blatantly write ex post facto laws?

Now, I'm sure some lawyer will pop off with some sort of convoluted logic along the lines of, "Ex post facto laws are prohibited with regards to punishment.  These weren't punishment, they were benefits."

I just went back and read the sentence in Article 1, Section 9 and it makes no such distinction.  It just says Congress can't do it.  Really.  Scroll back up to the top of the page and check for yourself.

How can they limit who will be rescued?  Why not make it retroactive to depositors who had losses with prior bank failures?   Hell, at least take it back to the S&L Crisis - most of those folks would still be alive.

Does stupidity have a Statute of Limitations?  Apparently so, since every stupid depositor isn't being saved.

Apparently, though, they WERE smarter than the rest of us.  They got the great rates AND they're getting their money back.  Must be nice to have the government accept your risk.

Accept The Challenge

So what do we do?  The easy answer is to vote the bastards out.  Not some of them - all of them.  This group of "leaders" must chuckle to themselves each night:  "Limits on Congress?  Surely you jest!"

I'm not going to go down "the dark road" alternatives - at least not right now.

At this point in time, we're not going to see the direct, immediate impact from these and similar government actions.  The government will continue to pump funny-money into the economy in an attempt to save it. 

Sometime in the not-too-distant future, our bankers - China et al - are going to require we raise taxes and cut expenses, or our national line of credit will be cut off.  We all know that the bill WILL come due and the price will be higher than if we had just taken our lumps 3 years ago.  The gravy train will run out, and all hell will break loose. 

Plan for:

Finance - we've discussed, ad nauseum, about the need to reduce or eliminate debt, and to get as "liquid" as possible.  When the economy falls apart, being able to take advantage of opportunities will mean the difference between just surviving, and thriving.

Personal security - work on your home security plans and seriously work on a civil disturbance/riot plan.  When the money dries up, all hell is going to break loose.  We're already seeing individuals that have been pushed too far going over the edge.  Once those that are dependent upon the state for their "livelihood" have their payments stop, we'll have whole groups going over the edge - all at the same time.

Food/equipment preps - it looks like we're going to have a deflationary period.  Take advantage of it.  Food, medicine, equipment are all slowly dropping in price.  Use this time to complete your "must have" and "want to have" lists while you're still able.

Skills - if we end up with an Argentina-like economic crash (this is my belief), knowing how to stretch a buck and make a buck will be very important skills.  Learn how and what to forage from nature.  Learn how to preserve what you've foraged.  Make it known that you will home preserve any meat, fruit or vegetable in exchange for half of the "haul".  Your time, fuel, jars, lids, rings and skill are valuable.  Take advantage of it.

Learn how to convert starches into alcohol.  Learn how to weld.  Learn how to repair small engines.  Learn how to lay a foundation.  Learn how grow veggies, trap and clean an animal for food, or cook with only basic materials.

Get movin'!
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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Preps, Rats, Totalitarians and Crashes

One of my fellow contributors at the California Prepper's Network, Catman, has put up a post with a great resource.  It is an index of emergency prep/survival articles from Outdoors-Magazine that have been converted to PDF files.  Click here for the index.

If you haven't started a Survival Bible or have some holes in the one you've got, this is an excellent place to visit.
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Wow, are the rats scampering, or what?

Tucker Carlson has cracked open a story about a group of liberal-leaning journalists (and their supporters) - from some of the biggest online and print publications around - that openly colluded to manipulate the news.  They discussed and planned their strategy on a chat-room of sorts called, "JournoList".

There's a shock, huh?

The big story had to do with these vermin trying to bury the Jeremiah Wright/Candidate Obama story.  Their plan was to ...... wait for it...... use the Race Card to sully the reputation of a number of conservative pundits.

"Journalists" from the Huffington Post, Salon.com and a butt-load of other sources are now in major-league Damage Control mode.  It is such a pleasure to watch!

I'm not going to provide links to the articles on their sites - I don't want to directly help to increase their ad revenues.  There are enough articles on the Internet right now for you to get a flavor of what's going on.  Pick a couple of the offending sites and read their articles if you want a real good chuckle.
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One thing that was incredibly disturbing - once you connect a couple of dots - was a suggestion from these socialists that the federal government take steps to shut down Fox News.  When their license came up for renewal, simply don't give them a new one.

Guardian columnist Daniel Davies, who said he was "genuinely scared" of the network, reportedly said "peer pressure" and "self-regulation" were not working.

"In order to have even a semblance of control, you need a tough legal framework," he said.

According to the report, UCLA law professor Jonathan Zasloff urged the federal government to stop the network.

"I hate to open this can of worms, but is there any reason why the FCC couldn't simply pull their broadcasting permit once it expires?" he wrote.

Does anyone else remember when the White House was shutting Fox out of interviews and the like?  From October 2009 -

Last week, White House communications director Anita Dunn said Fox News operates "almost as either the research arm or the communications arm of the Republican Party."

On Sunday, Rahm Emanuel, President Barack Obama's chief of staff, said, "It is not a news organization so much as it has a perspective."

The tactic blew up in their face, since most liberal journalists acknowledged that Fox was a news organization, and they recognized how wrong and dangerous this could be.

Still, the Executive Office of the United States Of America was actively trying to take Fox out of the equation.  They were attempting to discredit the credibility of the most successful cable news network in the country.  Get them discredited, and you can pull their credentials.

Viola!  No more "mean" press.

Wow, just like the JournoList guys suggested.  Very totalitarian-like, huh?
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I don't understand Technical Stock Analysis very well.  They use historical charts and trends, plug the information into proprietary algorithms.  It is one of the tools that big-time investors use to make their buy/sell decisions.

Over the past few months, I've been seeing a number of articles on smallish web sites talking about how things don't look so good.  Apparently, the charts and trends look an awful lot like they looked just before the Great Depression.

No one in the MSM was talking about this.  Until now -

The crash of the Dow Jones Industrials in 1929 was signaled by the development of a well defined head and shoulder pattern, seen most clearly in its monthly chart. It is a reliable pattern that captures the behavior of investors who are becoming increasingly disillusioned about the future prospects for economic growth.

I've been out of the stock market for almost 3 years now.  I've got no skin in that market.  What is important about this is that the Dow is kind of the bellwether that most of America uses to determine how the economy in general is performing.

They hear about the Dow being up or down every day on the nightly news.  For many people, it is their ONLY connection to economic news.

If the Dow crashes like these Technical guys are saying, Main Street America is going to panic.  Big time.
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In totally unrelated news - I'm sure - the FDIC has permanently increased the deposit insurance level from $100,000 per depositor to $250,000 per depositor.

Ya think they might be worried about a run on banks in the event of a crash in one or more financial markets?

Accept The Challenge

If you haven't put together a Survival Bible - a printed list of skills and emergency information - PLEASE do so now.  Have a copy on your computer, on a thumb drive off site, and a hard-copy that is protected from water.

Remember PACE - Primary, Alternate, Contingency and Emergency:  Have multiple plans, sources and OPTIONS for each item in your emergency plan.  Assume failure for at least each of your primary plans.

PLEASE keep in tune with what is happening economically.  Along the lines of PACE, have multiple sources of information.  Don't just read the Main Stream Media, read opinions from all viewpoints - good, bad and ugly.  Sometimes the "tin-foil hat" guys get it right!

Sort through the information, decide for yourself what makes sense and what seems like a logical trend, and act accordingly.  "Act" being the operative word.  Passivity right now is not a good trait to have.

Remember our little motto at the top of this page:  Audentes Fortuna Juvat - Fortune favors the bold.

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Closing Loopholes

Most folks have heard that the recently passed health care bill contained all kinds of non-health care related garbage.  One of the items that got a good deal of attention was the fact that starting in 2012, all business purchase transactions of $600 or more must now be reported on an IRS form 1099.

In the past, if a business had some sort of independent contractor do some work, the business had to report the payment (if over $600) on the 1099.  Under the new law, ANY money a business spends in excess of $600 must be reported.

If a business buys $600 worth of paper for their printers, they have to crank out a 1099.  Buy a new phone system, security cameras or new furniture and you have to complete a 1099.  It's insane.

Obviously, this is going to impose a huge burden - and expense - on business.  Of course, that expense will be passed along to the consumer.

That's not the real "ugly" part of this, though.
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Historically, individuals and companies that sold precious metals had a requirement to report their own sales transaction when it reached certain thresholds.  As you can see (click), they were pretty high thresholds.  YOU had to report the sale of YOUR precious metals, not the buyer of your PMs.

That is all going to change.  Radically.

Going forward, as with any purchases made, the precious metals buying business will be required to report the transaction if it is in excess of $600. 

The responsibility for issuing forms kicks in at $600 for coins or bullion – not a very high level and one that has already started sounding alarm bells. It doesn’t matter in what form payment is made, whether cash, check, credit card, or Yap stone money, the $600 threshold applies.

Disturbing, to say the least.

Uhm, does anyone think that the IRS will focus extra attention on the 1099's produced by coin shops, pawn shops and jewelry stores?

Yeah.  They're going to want to know of anyone that had money come their way.
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So, what will the reaction be by business and the American public?

The most obvious will be the sudden explosion of the black market.  If people need to sell a bunch of PMs, they'll do it off the books.  These people know that if they sell $12,000 in gold, the IRS is going to want their piece of the pie.  They'll sell their gold and silver under-the-table at a discount to market prices, but that discount will be less than what they would have to pay in taxes.

Expect some sort of crack-down on places like Craigslist or other similar sites.

You'll also see an increase in the number of transactions that are under $600.  It will be like the $10,000 cash transaction limit at banks right now.  People will do what they need to do to "stay off the radar".

I'm guessing this may lower the price of gold and increase the price of silver.  Not by huge amounts, but I see a narrowing of the Gold To Silver Price ratio (right now it's about 67:1 per ounce).

It will clearly increase the premium paid for  "fractional gold" - 1/10, 1/4 and (maybe) 1/2 ounce gold pieces.  As long as the piece of gold is less than $600, it will be more desirable.  The one ounce coins might take a bit of a beating.

My guess is that the IRS will eventually require the "taking of seller information" for all PM transactions, regardless of the amount.  The government needs to know how all forms of money are used.  If they can't track the money, they can't get their taxes.  They can't do that with cash or with PMs - for now.  Expect them to fix that oversight.
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A congressman from California, Dan Lungren, is trying to get this law changed for precious metals.  I don't give him a high likelihood of success, since the IRS believes this will be a $17 billion per year tax bump for the feds.

Accept The Challenge

You, as a purchaser of precious metals, need to keep good records.  Every time you buy PMs, be sure you retain the receipt.  That is the "basis" the IRS will use for determining any taxes owed.  Sales price minus purchase price (basis) equals taxable income amount.

I'm guessing that without the ability to show the basis for the purchase of the PMs, the IRS would hit you for taxes based on the entire sales prices.

Honestly, I'm still trying to digest this and come up with a strategy.  I want to assume - at least for now - that this law will be enacted with no changes.

Any thoughts on the subject would be appreciated.

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Conveniently Unreported News

Gulf oil spill:  Hey, did ya hear?  The US government has decide it doesn't need the services of the A Whale oil skimmer.

The Coast Guard said “thanks, but no thanks” to the superskimmer “A Whale” Friday, as the 1,100 foot-long converted iron ore freighter failed to make a sizeable dent in the Gulf oil spill during a 24-hour testing period.

Where was all of the press on this?  I had to dig like hell to find any information on what was going on with this thing.  The basic "excuse" was that it wasn't able to suck up enough oil to make the feds happy.

Geez, I wonder why that might be -

Although the ship was the only vessel collecting oil during a period of stormy weather, the amounts ultimately didn't justify the expense.

WTF?  You test them during a period when no one else is out sucking up oil due to bad weather, and you THEN call the test a failure?  Again, WTF?

The owner of the ship doesn't seem to be making too much of a stink about this.  I'm guessing they had an anonymous deposit made to their checking account...

I can't figure out what the game is that the Feds are playing, but I'm sure there is some strategic plan in play that ties into the upcoming elections.  Call me jaded...

Shouldn't someone that works at a newspaper ask a couple of questions about this?  Right.  Never mind.
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Gold and silver have been getting hammered the last few sessions.  It NOW comes out that the minutes of the June Federal Reserve Bank meeting were released last week -

Gold prices have edged lower Monday as investors continue to digest information from minutes of the Fed's June 22 to 23 meeting, which were released on Wednesday and suggested the possibility of deflationary pressures.
...
The Fed's minutes indicated that "several participants noted that a continuation of lower-than-expected inflation and high unemployment could eventually lead to a downward movement in inflation expectations that would reinforce disinflationary pressures."

Ah.  Those deflationary pressures that result from a flat and declining economy?  Would those also be the same deflationary pressures that PRECEDE a high inflation period?

Still, some officials had noted during the meeting the possibility of a potentially unsustainable fiscal position, and that the size of the Federal Reserve's balance sheet could boost inflation expectations and actual inflation over time.

Yeah.  Well, it clearly makes sense to keep all of the Fed's actions under lock-and-key.  Their policies sure seem to be working like a charm...

The Fed is giving major hints about the downward spiral of our economy, and there's not a single byte written about this outside of some technical financial sites.  Unreal.
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So, we have a double-hammer of inflation to look forward to.  The first blow coming from the "free market" deflation (product on-hand, no demand, slash prices to move inventory) which then turns inflationary once the producers cut back production and Supply and Demand move to equilibrium, raising prices.

This is in concert with the Fed monetary polices which reduce the value of the dollar as they continue to print up money out of thin air ("quantitative easing" is the fancy term).

Throw in the metaphysical certitude of new taxes from Obamacare, Cap and Trade and Financial Reform.  Local and state taxes sure to go up because they're all dying.

Good Times ahead.

If you've got all of your preps taken care of, buy gold and silver during this period.  It's impossible to tell how long this period will last.  The only thing we know for certain is that it won't last forever.

Accept The Challenge

I have no clue what's going on with the oil skimmer.  There is some Major League gamesmanship going on right now between BP and the administration.  Nothing seems to make any sense...

Buying gold and silver has risks.  No doubt about it.  Although I personally buy them as an inflationary hedge, you need to have it in your mind that you are making an investment.  And sometimes, investments loose value.

I don't think they will (over the next few years at least), but this is something YOU need to understand and accept BEFORE you spend your hard-earned dollars.

I suggest anyone who is consider this type of investment spend sometime reading articles about what types of entities are buying gold.  China, India, Russia.  Mind-boggling sums.

Billionaire George Soros says publicly that he believes there is a "gold bubble", yet he DOUBLED his stake in gold last year.  Why might that be?

Trust your gut.

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Copyright 2010 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com