Self Reliance - Finances/Economics

We have been working on a polished piece for this subject, going back historically, etc. to document how we got here(Sept./Oct. 2008). This material is available elsewhere to those who would seek it, so in order to get something up while 'it's still hitting the fan', we expunged most of that, and we'll just offer a conclusion and get on with recommendations. If you don't agree with any of this, please don't assume that we don't know about battery chargers, inverters, converters, solar, etc. Thanks.

Conclusion: We're Screwed

We have strayed so far from the intention of the Founding Fathers it isn't funny. They specifically avoided a debt based system as was established in England before the Revolutionary War. They had seen the endless taxation and debt it incurred. They wrote against establishment of a central bank, and intended gold and silver to be the currency. Congress was to be responsible for our currency, and thereby accountable for it. They said, if the people ever discovered they could vote themselves money from the treasury, the republic would be lost. There are numerous letters and documents indicating the philosophy they espoused, and warnings of what would happen when the route they avoided was embarked upon. Essentially, a future generation ends up being debt slaves to a government/banking system, on the continent their forefathers conquered. We and our children are that generation. We are paying interest on the creation of our own currency, which has no intrinsic value. What is happening may seem to be tied to recent deregulation and excesses, but the whole system is flawed, and has been patched and bailed out numerous times. Rather than fix the problem, which would involve admitting mistakes and suffering a cleansing of debt and excesses, it was postponed, which ultimately makes the correction worse. Never in history has a fiat currency succeeded indefinitely. It was arrogant to assume we're different or smarter. Keynsian economics doesn't work. Either the Founding Fathers were stupid white haired rebels who got lucky, or they were a collection of principled, educated people who knew history and their place in it, who couldn't tolerate an unjust and immoral set of circumstances, and when they earned the chance (it wasn't given), tried to codify a system unlike anything before it (or after). They said it was designed for 'a just and moral people, and would serve no other'. Maybe that tells us something. Whether we muddle through once more, or go into a deflationary depression, inflationary depression, stagflation, whatever, economic life as we knew it is over. We look more like a communist or fascist state than those we accuse of being so. If you expect politicians of either major political party to fix our problems: it doesn't matter if you go down the left side of the road or the right side of the road, if you are on the wrong road. You still end up some place you don't want to be.
P.S. In the election of 2008, it was a race to see who could promise the most goodies, from different perspectives. Once again, government is promising to fix problems they created, by following the same policies that put us here. 'We will take care of you, just give us control over this and this and this, and give up your.....'. Trying to tax the next guy, always costs everybody. We've grown into a nation of cry babies, and think that spanking is outdated. Well, the spanking is here.

Addendum: See bottom of page

Recommendations

The standard recommendations start with having about three months cash accessible to cover monthly living expenses, to deal with personal circumstances (job loss, for example), or system problems (financial access). Eliminating as much debt from your life as possible is a good idea, though it appears if you have enough debt, somebody else will be put on the hook to deal with it (just kidding). Build a reserve to cover what otherwise may be a credit purchase, like major appliances, and buy the best quality, least frill model you can find ('buy the best, pay cash, take delivery'). Polish up or develope multiple skills, intellectual and physical. If you have a skill that requires tools, acquire the tools debt free, so they are available. It's better to work a day job, and be developing a part time night job, than lose your only job, and these days NO job or income stream is secure. (Feb. 12, 2009 - California is within days of laying off about 20,000 state employees. So much for the guaranteed civil service jobs.) Take charge of your health. Our medical system basically manages sickness and symptoms, and is not a health care system. Socialized medicine won't fix that. Study diet and nutrition - it won't take long and you will have more education on the subject than the average physician. Incorporate some vigorous physical activity in your life, both cardio and strength training. Walk from the far end of the parking lot, up the stairs, walk your dog, split your own firewood, etc. Stress will take a toll on body and soul, and we're in for some.

If you do have investments, learn to manage them yourself, or at least direct how they are managed and distributed. This may be one of the skills you need to polish or develope. If you think a third party will pay as much attention to the disposition of your assets as you will, just watch the news. Brokers and account managers make money going in and going out, not on the value of what's left. Having precious metals that you physically hold is an excellent diversification of assets, and the value won't go to zero. Studying this market, and seeing the manipulation and irrational central bank selling that occurs, may shed light on the 'barbarous relic' title they attempt to apply to gold, and why they attempt to discredit it.

It's not what you make, it's what you keep that can make a big difference. We can't emphasize this point enough. If you buy toilet paper in a four pack, or get your deodorant or razors at the Stop-N-Rob on the way home, you are wasting money. A way to stretch your dollar, and also protect against possible shortages (inflationary environments and wage and price controls produce shortages) is to buy the items you use routinely in bulk and on sale. It's not a hard adjustment, just takes paying attention. You know most of the brands you prefer for the daily necessities. If you don't, don't buy something in bulk to try, before you figure it out. Make a list, mental if nowhere else. Just become aware of what is a good price for each item (you can probably use the local discount mart for a benchmark), and who stocks them or has them on sale occasionally. Sometimes it's the Price Club/Costco membership store, or a local drug store, or whatever. Items on your list that are available in packs (20 bars of soap, etc.), are usually the better buy, and when the packs go on sale, stock up. If the item is only available singly (most deodorant), watch for the promo sale and stock up. Also watch the cost per ounce of a particular item, as one size may be a better buy routinely. This takes a little time (reading ads you might otherwise overlook) and mental calculation, but it pays, and it doesn't take long to instantly recognize when something on your list is a good buy. If they are out, get a rain check. When you go to any store for anything, take a quick walk by the items on your list, as there are times when an in-store special is not in an ad, or you missed it, or you just don't get an ad for that store. It doesn't hurt to have a year or two supply of personal and household use items, and in fact, that is the point. If something happens (you lose your job, economic instability, etc.), you can pay attention to important things, not deodorant and toilet paper.

Toilet paper. It's really a drag to run out of toilet paper. Did you ever wonder what was done prior to the advent of toilet paper? You don't want to know, or have to figure it out. Don't buy cheap stuff, cheap meaning your finger pokes through all the time. Find a quality two ply you like, and watch for it. Usually 24, 36, or 48 roll packs are the best buy, particularly when on sale, but not always. Put some away, and rotate. Rotating applies to all these items. Baby wipes are handy to have for this application, as well as others.

This is not hoarding. This is planning and prudence, and makes economic sense. Before xxx-Mart's 'just-in-time' stocking philosophy became widespread, it was not an uncommon practice to have supplies on hand. Pantries, cellars, woodsheds, harvesting, canning, etc. were common practices. Methods of preserving foods were practiced, that didn't make them nutritionally useless or harmfull, as some current methods do. If supplies are readily available in the stores, this is good for the economy, and hurts no one. When supplies are scarce, putting away quantities will cause shortages for others. Those who try to frustrate planning like this (self reliance), tend to advocate central planning, and have their own plans for rationing, distribution, and control, and favor large population concentrations, where disruptions are the most damaging. It is easy to control dependent people, and a nanny state develops lots of them.

Common items to store:
Bath soap, deodorant, toothpaste, toothbrushes, razors, shampoo, make-up, rubbing alcohol, peroxide, bandages, pain relievers, vitamins, minerals, dish soap, laundry detergent, bleach, cleanser, ammonia, antiseptics, tissues, toilet paper, and others.

Post Election 2008, Innauguration 2009

Trillions of dollars to be spent to resuscitate a stalled/retreating economy? Where will the money come from? What will be the consequences? No explanation, other than “if we don't do this now, the outcome will be worse“. Nationalizing the financial system, and soon some corporations... Sounds like certain parts of Europe at certain times in history. Create a problem, then offer a solution that involves more government, more debt, and more of the same philosophy that put us here. Personal responsibility is no longer expected at any level. Like the current news of the lady (NOT) who had artificially produced octuplets. No job, no spouse, six children already, some of whom draw disability payment from “The State“ (that is, you, if you produce anything and pay taxes), a million dolars in medical bills already, etc. Those who have to pay, will have had no say in this case.

“Those who don't learn from history are destined to repeat it.“ “There is nothing new under the sun.“ The solutions offered have been used before, usually resulting in a totalitarian state. I think the scales have tipped, and there are more recipients in one form or another, than there are producers in this country, and the recipients have come to expect to do what they want, and be taken care of. Where this goes, one can't be sure of. But learning to be self-reliant and teaching those you are responsible for, the same characteristic, may insolate you from the consequences, or at least mitigate the damage.

The Treasury is now “purchasing debt“, that is, directly monitizing debt. The government is firing some of the last of its ammo, hoping for a hit. They may get a dead cat bounce in the markets, and some more “irrational exuberance“ from investors, but fixing the system with massive doses of the same poison isn't going to happen. Tax increases, wealth redistribution, etc. will only appease a voting block, for a while.