Archive for Articles
Feb
18
Now what?
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I wanted to start today’s post with a brief set of articles that I found with just a quick search of the recent headlines. I think that our most important information comes through alternative sources but the tone of the mainstream news is indicative of the underlying trend that I’ve been discussing with you here. I’ve linked just 5 articles concerning the coming change in the Fed’s policy surrounding their various interest rates, there are dozens more if you care to do a little poking around for yourself… It’s apparent that they are easing all of us up to the idea of these rate increases coming in the next few months. Take a look and then read today’s post following the links…
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The following link is to a San Francisco Chronicle article on the coming Mortgage rate increases -
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/15/MNSP1BVILP.DTL
An MSNBC article on the state of home values in 143 markets as tracked by Zillow…
http://www.msnbc.msn.com/id/35335957/ns/business-real_estate/
Article from Bloomberg again stating that the fed interest rates are going to be going upward in the near future.
http://www.bloomberg.com/apps/news?pid=20601087&sid=afLtoLSxKSKc&pos=1
The LA Times is expecting an increase of 4 million foreclosures this year…
http://www.latimes.com/business/la-fi-mortgage-mods17-2010feb17,0,7573498.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+(L.A.+Times+-+Business)
The NY Times says that the many are worried that the fed rate changes will be the final straw for real estate!
http://www.nytimes.com/2010/02/15/business/15housing.html?pagewanted=1&source=patrick.net
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Look familiar?
So? Future looks bright huh… Seriously, it does appear that the interest rates about to be increased rumor has some validity to it… We’ll just have to wait and see what happens, I told you I feel blessed to live in interesting times!
The other day I was grumbling about the similarities between the soup lines of yester-year and the politically correct version we are seeing today. Along those same lines, I was thinking about the people in the photo I attached to that same post… The free coffee and doughnuts were for the “Unemployed”, right?
Why were there places setup like that? Was it because there were masses of unemployed workers out looking for jobs? I think that it was. I remember seeing pictures of the road signs telling the unemployed to keep walking and that there were no jobs available… I haven’t seen anything like that around here yet but what comes next in this charade of normalcy?
Let’s not argue about what the actual unemployment figures are, we can all agree that they’re large. We have so many that the government can’t continue to carry them all indefinitely. Eventually we will see the available benefit extensions come to an end. This will force both men and women to start hitting the streets in earnest, actually seeking employment. Not to say that they haven’t been looking for work but lets face it as long as that check keeps coming in the mail, many people are happy to keep their butts parked on the sofa and just wait-n-see what happens.
I have had my ear to the ground for many months trying to follow what the job market is looking like. I’ve heard all the same stories that you have… Starbucks coffee posts an opening for an entry-level barista position and has several hundred applicants… Retail opportunities are few and far between and layoffs are continuing at many of the big companies we have in the greater Pacific Northwest region.
I feel fortunate to still have my business hanging on in this real estate market so I can’t speak about un-employement, first hand. However, unless the job market is completely, like 180 degrees off from the reports we’re all hearing, many of these job hunters will come up empty handed… What will they do then?
I for one have found that I can do a lot more of the office work than I have previously done and therefore will delay any hiring for quite a while, even after we see an improvement in the real estate business. If that indeed does happen at some point in the future. So where are all the new jobs going to come from? Are these folks going to be able to stay in their homes while they search for these elusive jobs? I’m not sure that the old standby of living in ones automobile is even a sure thing anymore… Many people haven’t owned a car in a long time, at least in the sense that it’s not going to be repossessed by the bank due to non-performance on the loan.
Where does this leave us? I suspect that we might again see the unemployed hitting the roads looking for whatever work they might find. During the depression men would follow the harvest and do the migratory farm work… Wait, I thought the undocumented workers had that industry all hemmed up as work that Americans would not do? I wonder if that will still be the case when the home finally gets foreclosed on and the options get real thin? I know I’d pick apples before I’d let my family go hungry and I’d be willing to work harder than the next guy if that secured me a picker position. The free-market will set the wage for this work and with a lot of competition for these and every other job, wages will certainly be going down. Again, I would like someone to show me where I’m wrong in my assumptions?
One thing that I heard the other day about a government agency that is adding to their employment roles… Anyone able to guess which agency this might be?? It was the IRS… Care to guess what this means… More audits, too many good Americans playing tax cheat, I guess! I have no doubt that this up-tick in auditors will be to get out and beat the bushes looking for the funds to keep paying for government bail-outs of the special companies that are to big to fail… May I make a prediction, it won’t be just the bushes that take a beating at the hands of these auditors!
On one hand, these economic times create an atmosphere of dedicated hard working employees that aren’t eager to loose their jobs. In addition to that we see plenty of evidence that employers will be offering lower wages for any positions that they are able to provide. It appears that the economic indicators are still pointing South with more people going to be laid-off and those still working making less than they did previously. Top all of this off with an energized tax enforcement squad on patrol for both those employees and their employers, we see a self perpetuating decline that will only be gaining speed…
As we see all of this unfolding, we have to ask ourselves – Now what?
Prepper
Feb
11
Game Over? conclusion
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I’m back and feeling a little better… I had the opportunity to really vent my spleen with a friend last night. We didn’t come up with any global solutions to this DOOM but it helped to actually vocalize my concerns. He didn’t disagree and had nothing in the way of a rebuttal. It appears that we may all be feeling the same way. This situation looks bad but we have no choice but continue to plod on each day the best we can… It’s this, best we can, idea that I want to wrap this all up with, what exactly should we all be doing right now…
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What are the things that we all could do to better our chances of a comfortable transition to whatever might come next? Several things come to my mind and they aren’t new concepts to what we’ve already been discussing here. It appears that we’re hitting the same nails so much that we can’t help but make some progress… That is, as long as we are actually taking action, if you aren’t swinging your hammer than you may not be experiencing the results you could have!
First, what is your debt load? Is there payments in your monthly budget that could be paid off early? Maybe moving money from a savings account to pay these debts off early would be wise? No saving account, than have a garage sale… Find some extra money that is currently being held captive in that back bedroom closet. Clean house, simplify and raise some funds that can be put to better use. I speak from experience here, I am currently doing this myself. It’s not easy to see old treasures go down the road but if I want to keep moving in the right self sufficiency direction, sacrifices must be made.
The debts that I would focus on are the one’s that are for anything you want to have with you on the other side of whatever is coming down the pike. For instance, if you have a truck that is intrical to your plans for the future – get it paid off! Anything that could legally be taken from you should be your highest priority. You only own the things you don’t owe on… Homes are included in this equation…
I have to offer a quick side note… PAY ALL YOUR BILLS – DO NOT BE A DEAD BEAT! I do not hold the opinion that it is ever alright to not pay your obligations. You signed on the dotted line, now you follow through and pay the bill. A time may come where there is truly no choice but that is an entirely different subject…
Second, we all need to make some educated guesses at what will be valuable in the coming economy… This next economy will even probably still be in dollars. It’s the value of those dollars that I call into question? Holding dollars and banking on them not being terribly devalued would be fool hardy.
What are the tangible assets that we could buy and hold to weather the storm that will certainly bring changes to our business as usual status. Possibly items that you will need to have anyway? This approach would give us the ability to avoid any downside risk. If you were going to buy that particular item anyway, where’s the harm in buying it in advance?
These items could fall anywhere on the spectrum from food items to truck tires. There are things that every family has to purchase and if we can identify those and agree that they will only be going up in cost, why wouldn’t we make a strategic purchase ahead of schedule?
Obviously, we can’t purchase all of the things we’ll ever need but there are things that will put us in a better position to be self sufficient. Does anyone have children? It seems that there are always shoes or coats that have to be replaced. Maybe my daughter was different than other peoples kids but I doubt it. Each of us will have a list that will vary from the next guys but it’s worth thinking about…
So you say you’re already squared away in the hard goods department. What else might be worth considering? How about old faithful… Precious metals? I know we are all hearing endless advertisements for these on the radio right now… Do not buy these because you heard that so and so personality is doing it. Think it through for yourself!
I do have some silver in the form of pre-65 silver quarters, dimes and half dollars. These are a hedge as far as I’m concerned! I don’t view them as an investment per say. Yes, I do hope they go up in value but that traditionally only happens in correlation with a drop in the value of the dollar. If we do experience an inflationary event and we will, these coins could provide for my family if it came down to that.
Whether we see inflation or an entirely new currency, precious metals as a commodity or hard currency would be convertible to what ever the powers that be had come up with to call money. Many people own these same coins as a barter good and I see the value in this as well. We are all seeking options to keep ourselves ahead of whatever curve is thrown at us.
Another thing that I believe would be a good idea to have would be any tools of your trade. Lots of tradesmen own their own tools and have this covered but others don’t. If you’re fortunate enough to have picked a career that will be valuable in a new economy, unlike myself – paper pushing desk jockey, than be sure to have the requisite tools to perform your skill!
For example, a man I know is a union plumber. Great pay and with seniority he’s able to avoid many of the dirtier jobs. However, he works primarily in the commercial side of the business and has a truck with everything he needs provided… Great, of course your employer should provide the required materials but what happens if you needed to do plumbing work in the “grey market” or as a barter-able skill set? Will you have the required materials to complete the job? What about the specialized tools to do a difficult project?
We would never be able to have everything that we might possibly need for any given situation. However, there are specific items that each trade requires that if stored ahead of time would allow 90% of the typical work scenarios to be done. In addition to the idea of being able to do the work, you would be storing a hard asset in the materials. Some items are sure to change as the technology does but rarely would an item become completely obsolete. Your back stock of tools and hardware could become very valuable if and or when the local Home Depot is being run by the Chinese government. Other trades people would surely rather deal with you than them or the Mutant Zombie Bikers they hire to work the customer service counter! Just sayin, its worth thinking about…
Did you say to yourself, “What skills do I have to offer?” I thought I heard someone in the back of the class say something… You’re not alone! Our current economy is chock full of office workers like myself that will most likely not be replaced the next time around… I have lots of “Jack of all trades” type of skills but nothing that would qualify as mastered… I’m not being humble either, I’m taking a good hard look at what value I might be if the time comes to prove my worth… I have a selection of things that I will be pursuing as a means to make myself more well rounded and also could be used to fill voids in a future society. I’ll keep you all appraised as I progress in my new skills.
Are there personal interests or hobbies that you have now? What about that “Bucket List” of to-do’s? Find something that would be of use to your neighbors and set about learning all you can. Buy the tools and a good home study course on how to achieve some level of competence. Go take a course through the local trade school… There really is no wrong answer to this, whatever you decide is going to benefit you, even if we miss the big flush I truly believe is in the works!
I have read or heard more times than I can count from people like us, you know “Gun Nuts”. “After the collapse I’m going to find a farmer to hire on with as security”, sounds good, do you actually have the skills to be of service to said farmer? Personally, I have the tools but they’re of far greater value than I am… I don’t get out and knock the dust off like I should. Our shooting skills are just like anything else, they have to be used to stay in practice. If we aren’t doing our part the tool will only carry us so far. Don’t get me wrong, I think there will be plenty of “Security” positions available. 30 rounds of ammo in the general direction of the gate or only 1 from cover? Your choice but I say whatever skill or skills you choose, work on perfecting them now!
Hopefully, these ideas will get you thinking. There’s lots to do, at least for most of us and time appears to be short. We will all certainly get less done than we would have liked but if we just start we’ll get more done than if we don’t start at all… Think all of this over and see what you come up with.
Maybe you think I’m being dramatic and everything will work itself out. The government will get this economic hemorrhage under control and we’ll see the return of the weekly shopping trips to the mall. A new car in every driveway and ever larger homes for ever smaller families. Only time will tell but either way don’t waste the time you have waiting to see if you get to be the one to point and laugh at ol’ Prepper this time, I might just be right?
Prepper
Feb
10
Game Over? part 3
Posted by: | Commentshttpv://www.youtube.com/watch?v=RPSJDqx4Dq4
How’s this for mainstream evidence of what I’m talking about? What do you think? The words of a US Congressman speaking directly about what we’ve been discussing? While Ron Paul is a fringe political figure, this doesn’t make him wrong! I can’t say that every single plank in his platform is going to be something that I agree with but he is the closest thing to a “Good” politician that I’ve come across. Ponderous… I wonder if he would consider himself a DOOOMER??
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So, I wish I could say that a good nights sleep had cured my pessimistic attitude. It hasn’t though, I’m still keyed up over this subject. In the comments section “JeSter” reminded me of something I had missed… Our petro resources, these too would be valuable on the world market. Their value will only be increasing as the predicted shortages begin to come to fruition in the coming years. I wonder if this might be the reason that the oil fields of Alaska haven’t been brought into production? Maybe they don’t even belong to us anymore? This would make more sense than the thin, “save the polar bears” excuse that we keep being fed like the children the government sees us as…
Alright, since no one has sent me a rebutal, I’ll assume we all agree the train is soon to be leaving the tracks. Is there anything that we can do to stop it? Are we going to see a breakdown of society due to the coming economic changes that inflation will bring? Will our money be of any value at all?
A dollar collapse could have a couple of outcomes, neither of them good for the majority of us. Worse case scenario, economically speaking, would be the dollar losing all of it’s value… This would require a new currency to take’ it’s place… Hard to prepare for that eventuality since we don’t know what the currency will be… Not good, I don’t have a lot of savings in cash but what I do have is all in US dollars… I think that the more likely course the dollar will take is a traditional inflationary unwinding of its value. Day one the dollar is worth “X” then throughout the day and certainly throughout the week it loses more and more of its buying power.
If we look to history and even what’s happening currently in places like Argentina or Zimbabwe, we’ll see that inflation is a killer. The government will be running the presses ever more often to continue adding the requisite zeros to our bills that will come with the inflation. Plan accordingly…
Yeah right, “Plan Accordingly” – I was just seeing if you’re paying attention! How are we suppose to plan accordingly? Many of us have food stored and certainly the guns and ammo to field an army of friends and relatives but this enemy is different. Food storage will eventually run out and the need for guns and ammo won’t be what we initially squirreled them away for. We’ll be in a world that no longer looks the way it does now. That is, unless you have already lost your job and have begun living in your car. The rest of us, well maybe no so much us but certainly our extended families and those of co-workers will have come to look like a bad dream in comparison to today…
Anyone care to comment on this situation? All I can say to you guys is the same thing I keep telling myself… Things have been bad before, even wars that nearly bankrupt the county… Why would this be the time we actually go under? I really try to stay positive and convince myself that we will weather this storm and see a bright blue sky in the morning but I’m having a hard time buying my own story… Is there going to be a blue sky?
Possibly, the inflated dollars will make the situation look better if we see home prices rise due to the dollars lowered value, right. An increase in home values would be a good sign, wouldn’t it? I’m afraid not, unless we have this combined with the ability of buyers to qualify for new mortgages, how could this possibly help? So, let’s say unemployment went down at the same time the inflated dollars created the rebounding home prices… Maybe that would work – maybe? How long could that situation make a difference? Once these magically re-employed workers bought these magically re-valued homes, they would still be hard pressed to purchase the rest of their needs with those same devalued dollars…
Anyone feel my frustration? Is this current situation sustainable? Where do we go from here? Our savior – Obama, has lost support faster than I would have ever believed possible… Other than the goof balls that are still wearing around their Obama election T-shirts, I can’t find anyone that will volunteer that they voted for him. One of my neighbors is a life long democrat and he is animate about the country needing to get “that guy” out of there…
I think that we are rapidly approaching “Game Over”… Maybe not in a way that will have a permanent change but I think the changes that will be required are going to be painful! It has taken us many years of financial mismanagement to get to the point we find ourselves at now. We won’t be able to get this thing turned around quickly, if at all. The only thing that could happen quickly is the situation getting worse, that could happen at almost anytime…
We are hanging on by a thread and the government has already printed how many trillions to keep us from sliding over the edge? The country is on life support and we have leaders that are way behind on their malpractice insurance payments. It doesn’t take much to guess what’s going on in their heads… “I don’t want to be around when the family finds out I killed the patient!” I think we should be watching the exits, I don’t think they will be able to squeeze much more profit from this country and when it’s gone, I bet they will be to. These politicians can’t be as stupid as they appear! They have to see the handwriting on the wall and so do we!
Look at this situation honestly and evaluate where you are currently and where you want to be down the road. Can you still get there? Will our children ever have a chance to achieve the lifestyle we have enjoyed? These are important questions… What are the answers?
I’m going to sleep on this issue again and see if I can come up with a plan for us DOOMERS to build the lifeboat we’ll all be needing. A life boat to get us from where we are now to a place of safety in our uncertain future… Stick with me and we’ll wrap this all up tomorrow…
Prepper
Feb
09
Game over? part 2
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Business Opportunity?
Posted by: Prepper | Comments (0)httpv://www.youtube.com/watch?v=qvrc7x3Amps
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So lets talk opportunities today… As you can see in this short video clip and I’m sure also heard on the news, brand new homes are being bulldozed by some banks. Does this sound strange? It does to me, new homes being destroyed and carried off to the landfill at great expense… Why is this happening? Are the materials shoddy or contaminated? Lets look at this a little deeper…
First I need to explain that I’m always looking for a new business opportunity so my view on this might be a bit skewed. Let’s just use this a thought exercise and see what we might come up with! If this is actually a viable idea and one of you goes on to make a million off of it, don’t forget where the idea came from!
Something about bull dozing perfectly good homes just doesn’t sit well with me. I guess that I’ve purchased enough building materials over the years that I know what they’re worth. I understand that banks are being put into difficult positions with homes that aren’t immediately saleable and I’m sure the carrying costs do mount up quickly… However, these are good homes! Maybe these McMansions aren’t of the quality that Grandpa would have built and they look better than they are, at least to the intended buyers but still a new home of modern construction has to be worth more than a trip to the landfill?
When you look at these houses on the news being pushed into big piles by heavy equipment, what do you see? I see a lot of brand new lumber and trim and windows, doors, fixtures, etc. Anyone know what their own home is made of…? That same stuff! Why couldn’t resourceful business man go in before the banks equipment got o the site and “SALVAGE” a lot of those materials? Is there some reason that this wouldn’t be acceptable? All of this stuff ending up crushed and buried in the landfill is an option but nothing else is? I doubt it, I imagine that the banks are just taking the course of least resistance and if they were properly approached they would be amicable to other solutions to the problem.
Lets look at another question… Who are those guys running the equipment? Do they work for the bank? Maybe they are bank teller by day and moon light as equipment operators on the weekend, knocking down houses for overtime pay? No, I don’t think that’s who they are either… I’m sure that they are employed by a contracting company that has won a bit with whichever bank to go in and remove the house. I agree that this is probably over simplifying it but still in a nut shell that’s about the size of it…
So these contractors get the bid to remove the house, does the bank really care how its accomplished? They might have some requirments but I doubt one of them is to destroy the material. This is probably done because its the easiest way to get the job done. One man on the machine and another to drive the truck to the landfill. Pay the dump by the ton to dispose of the debris and move on to the next house or block or city…
Why? Is there no market for second hand building materials? I happen to know there is! Many communities have an outlet store for just this type of material. Habitat for Humanity has these stores and I doubt they operate them at a loss! Sure there are probably some materials that would be difficult to salvage during the deconstruction process but many of them would come back out nearly the same as they went in… How many 2×4′s have you thrown out because the nail you hammered in had to be pulled and redone? That’s right – none! So we all know that lumber is pretty forgiving and the hole left from a pulled nail doesn’t make the board structurally unsound from that point forward…
How would you salvage these homes? How about just taking them apart in the reverse order that you assembled them? Why wouldn’t that work? To much labor? Maybe but I would say that the level of expertise that is needed to take the home apart is less than the level of competence that is used to build it the first time. It would require a well thought out strategy as how best to approach the tear down but everything we do requires this anyway…
Alright, I can hear it now… “This would be to dangerous”! All these low paid workers running around – in, out and on top of these homes swinging hammers and crow bars… Yes, it would be an interesting sight but would it be more cumbersome to insure this crew than the one that built the house originally? I don’t think so! Why would it, the workers would be doing the same type of work and under the same conditions. I will concede that the insurance would be costly, I say that because I know it is expensive to insure a traditional construction crew…
What about the profit potential? At the end of the day we would still have a big concrete lined hole and that would have to be dealt with? I’m sure that there would still be several large dumpsters that we would fill up… What else? Labor costs, delivery expenses to get our reclaimed product to a viable market… Hmm, is there any way to make a profit? It would be helpful to know what the banks are paying to get rid of the homes now – bull dozers and dump fees don’t come cheap. Is it possible that we could still charge the banks a fee and get to walk away with the materials as well? I just don’t see why they would care what happened to the materials, other than that they were legally disposed of? Any thoughts?
Like I already said I like just about everything that surrounds the topics of business and entrepreneurship. I think that this is worth spending a few days discussing and I wouldn’t be surprised that once were done with this, you see this opportunity in a new light! I’ll be back tomorrow and see what else we can come up with!
Prepper