Cash under the mattress or chickens in the yard?

We've been watching the situation in Greece with great concern. It seems the instability in the Greek banking system has reached crisis proportions, and the EU itself is threatened.

And it is the ordinary Greeks who are suffering. Anyone drawing a pension is limited to taking out 120 euros per week, and others are limited to 60 euros per day (in some places it's 50 euros, since apparently Greece is running out of 20-euro bills).

Yesterday I saw an interesting article entitled Greek villagers' secret weapon: Grow your own food. "Ilias Mathes has protection against bank closures, capital controls and the slashing of his pension: 10 goats, some hens and a vegetable patch," starts the article.

It goes on to say that while rural villages are by no means immune to the financial crisis, at least they're not in imminent danger of starving.

Meanwhile in urban areas, grocery store shelves are being stripped bare as people desperately stock up. At the moment grocery stores are resupplying from their own storage areas, but the cash crunch means incoming supplies are slowing down. I doubt anyone is going to let Greece starve, but it's not a fun situation for the ordinary Greek citizen.

Now consider this article I tucked aside from a couple weeks ago in which one of Britain's most senior fund managers urges people to "hold physical cash" (euphemistically referred to as putting money under the mattress) to prepare for a "systemic event." I'm sure Greece was on his radar when he said this.

Quoting the article: "'Systemic risk is in the system and as an investor you have to be aware of that,' he told Telegraph Money. The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some 'physical cash,' an unusual suggestion from a mainstream fund manager."

As as the Greeks are discovering, cash metaphorically under the mattress is great, but you can't eat it. The rural Greeks who have chickens, goats, and gardens -- even if they have no cash whatever --

are in a better position than those who are facing bare grocery store shelves and riots in the streets. If nothing else, it gives them goods to barter.

This is why I urge people to consider what we call tangible investments. Some interpret this term to mean gold and silver. That's fine and dandy if you can afford it, but we've taken a different route. We're "investing" in our farm and its infrastructure and livestock.

As the Greeks are discovering, it's not a bad investment tactic in the long run.

Barnyard economics

Don listens to a lot of talk radio while he works. He came in from the shop a couple of weeks ago, chuckling over two economists who were being interviewed.

Apparently the economists were arguing over what drives the economy, and they were getting very hot under the collar.

"This is what drives the economy," the first economist practically shouted. "It's production!"

"No, you fool!" retorted the second economist. "This is what drives the economy -- it's consumption!"

But Don, good farmer that he is, was able to reduce the arguments of the economists down to what he called Barnyard Economics.

"Take two bales of hay," he said...

One good...

...and one bad.

The cows will eat the good stuff and not the bad stuff.

Farmers (the producers of hay) must stop trying to make the cows eat the bad stuff because the cows (the consumers of hay) won't thrive.

In other words: Consumption is driving our production.

And there you have it, folks. Barnyard economics.

When cash is no longer king

Anyone who's ever listened to the Dave Ramsey show knows his mantra: Cash is king.

What he means by this is, credit can kill you. Too many people get into horrifically deep debt due to the ease of credit cards (and other debt-enhancing methods).

But using just cash, literally cash, is becoming rarer and rarer, it seems.

Lately our family has been transitioning to as much of an all-cash lifestyle as possible. In many respects it makes things much easier. We don't overspend, we don't bounce checks, we don't risk identity theft, and seeing those bills empty out of our wallets makes us realize how fast and easy spending is, and we can adjust or slow down accordingly.

Besides, as I wrote earlier, we don't like the idea of having a little cyber-trail following us all around town, monitoring what we buy. Data mining is everywhere. Cash eliminates that possibility.

As such, our local bankers are now familiar with our pattern of going in and withdrawing sums of money, which we then portion out for whatever spending we plan to do. (It helps that we bank at a small credit union in a small town where we're friends with the bankers.)

Granted, most of our cash withdrawals are fairly modest, since our income is modest. But once in awhile we have fairly large purchases -- winter hay or a piece of used farm equipment, for example -- and the people we buy from are grateful to receive cash since they know the payment won't bounce. Besides, farmers usually aren't set up to take credit cards, so cash works perfectly.

Once in a great while we'll need larger sums, so we've been known to call our bank and ask if they have sufficient cash on hand. Sometimes it takes them a day or two to acquire it, at which point we go in and make our withdrawal.

The point is, it's our business what we spend our money on. It's ours. We've earned it. We can spend it however we please.

But it seems the government disapproves of cash spending, if this article is anything to go by.

The article states: "Earlier this week, a senior official from the Justice Department spoke to a group of bankers about the need for them to rat out their customers to the police. What a lot of people don’t realize is that banks are already unpaid government spies. Federal regulations in the Land of the Free REQUIRE banks to file ‘suspicious activity reports’ or SARs on their customers. And it’s not optional. Banks have minimum quotas of SARs they need to fill out and submit to the federal government. If they don’t file enough SARs, they can be fined. They can lose their banking charter. And yes, bank executives and directors can even be imprisoned for noncompliance.

"But now the Justice Department is saying that SARs aren’t enough. Now, whenever banks suspect something ‘suspicious’ is going on, they want them to pick up the phone and call the cops: '[W]e encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem, who may be able to seize the funds, initiate an investigation, or take other proactive steps.' So what exactly constitutes ‘suspicious activity’? Basically anything.

And this "suspicious activity" includes cash withdrawals of $5000 or more. Oh goody. I wonder if the federal government is aware that used farm equipment often costs more than $5000?

The logic behind these policies, of course, is to catch criminals and terrorists. But by casting such a wide net, they're also "catching" ordinary folks doing ordinary things (which, I suspect, is the point).

It's now becoming the norm to prove our innocence rather than our guilt. There are endless stories of people acquiring cash through legitimate lawful means, only to be "caught" with it and have it "confiscated" as suspicious.

I never thought about it before, but I've learned it's no accident that America no longer has any bill denominations higher than $100. My parents used to have a 1972 set of World Book encyclopedias, and I clearly remember leafing through the Money section and seeing photos of $500 bills, $1000 bills, etc. I just checked our 1990 version of the encyclopedias, and sure enough, $100 is the highest bill shown.

Why is this? Well according to this article: "Despite this enormous depreciation, the Federal Reserve has steadfastly refused to issue notes of larger denomination. This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government. The purpose of its ongoing breach of long-established laws regarding financial privacy is to make it easier to monitor the economic affairs and abrogate the financial privacy of its citizens, ostensibly to secure their safety from Colombian drug lords, Al Qaeda operatives, and tax cheats and other nefarious white-collar criminals."

I should point out, this is not just an American trend; it's worldwide. The urge to track, apparently, is an international phenomenon. "The governments are desperately using terrorism as the excuse to hide their war on cash," notes Armstrong Economics. "They are trying to eliminate money all together to force 120% tax collection. There is no reform contemplated, just raise taxes all the time. There is no end game here that has anything to do with preserving our freedom and way of life."

I guess in our own small way, we'll continue to be "domestic terrorists" and continue our habit of using cash whenever possible... until it's no longer possible.

My -- ahem -- two cents' worth.

The advantages of being a country bumpkin

When we think about the Great Depression from the 1930s, we think of the images of pathetic apple vendors on New York City streets, or people lining up for soup kitchens, or families fleeing dust storms billowing over prairie landscapes, or other grim scenes. We hear stories of hardship handed down by our grandparents. We remember the sad cases of people losing everything they owned when the stock market crashed.

What we don’t hear very often are people who (mostly) escaped the hardship and deprivation of the 30s altogether... because they were independent farmers in parts of the country not hit by drought.

Reader Sidetracksusie left this comment on my Why Be Normal? post which was so fascinating I didn’t want it buried. She wrote:

An old rancher in Wyoming shared with me that he was not aware there was ever a depression: he had no stock in Wall Street, only stock with four legs; no money in a bank, only what was in his pocket. He rode out to care for cattle every day, cut hay with a team of horses, ran his simple irrigation ditches, fixed his fence with tools and wire he all ready owned. He pushed cattle to mountain pastures in the spring and brought them back in the fall. He didn't have tv, radio or a newspaper. He just had his work and his land. Prices of beef went up and down. He never have many clothes, and no fancy ones, but kept a good heavy coat, gloves, hats, scarves.

He found it strange that "normal" people thought they could make something from nothing and would jump off buildings (something he read years later) when they found out it didn't work. He was happy he lived in what he learned was "fly-over" country.

My mother's parents fared those same years in much the same way…they were poor and raised every bite they ate, buying only salt and such. No savings in a bank that they "lost". Nothing much changed for them, other than they shared what they had with more people. Country bumpkins that were probably looked down upon, previously, and that in years to come, were most likely looked down upon again, living life simply by the labors of their hands, content to sit on the front porch and visit, to play cards with the extended family and neighbors, to have potlucks after church.

They had little but I guess they had enough and they seemed secure and content for as long as I was honored to have them as my grandparents on this earth.

This is an intriguing notion -- to be independent enough that an economic depression more or less passes you by. It shows the strength and benefits of tangible assets (cows, garden, chickens, etc.). Being a "country bumpkin" has some advantages, I guess.

I know it's not possible to be entirely immune from another economic depression -- but it's not a bad goal.

Learning the basics of economics

The girls are working.

They have jobs as housekeepers for some friends who own a motel. Four or five days a week, they drive into town (Older Daughter now has her driver's license! She passed her driver's test with flying colors!), work, and then come home. Both are pleased to be earning money and are intelligently divvying their income between savings and spending. Older Daughter is the primary housekeeper, and when there are too many rooms for her to handle on her own, she "hires" Younger Daughter to assist. Younger Daughter also works as a groundskeeper for some neighbors when they're away traveling.

On the days they use the car, we charge Older Daughter $4 for gas (about how much it costs for each round trip into town). We are also requiring her to pay $50/month for her car insurance, which is tacked onto ours (insurance costs are low in Idaho). Such is Real Life.

Nonetheless the girls are earning money, and are having a lot of fun deciding what to do with it. Older Daughter is saving up for a car. Younger Daughter is socking away a lot of her earnings, also with the notion of a car in the distant future.

We opened up checking accounts for both kids so they can start learning the intricacies of handling their income -- the mechanics of deposits, withdrawals, debit card use, online banking, balancing a checkbook, etc.

With the (cough) "power" of a debit card to make online purchases, both kids spent a bit of money at first, primarily ordering books they've wanted. They're learning to set aside a certain amount of "play" money and not go beyond that amount without considering whether the purchase is really worth it.

I found it interesting that after a couple of fun days in town when the girls went to the grocery store and bought their lunches, they quickly realized how easy it is to fritter away their paycheck on unnecessary and temporary pleasures (such as deli food). Now every morning they diligently pack a lunch to bring with them.

I'm proud that our girls are developing a reputation for being hard workers. I'm also pleased that they're discovering, through their own efforts, the basics of Real Life economics.

Another tangible investment

For some time now, I've been urging people to consider tangible investments rather than intangible investments. Fiat currency and all the investment portfolios in the world are subject to endless economic tweaking that could leave their real worth far less than you think.

To that end, Don and I have always tried to think in terms of what would make our homestead more efficient and productive. Anything that fills these qualifications are, we feel, a worthwhile investment.

This past week we had to have a vet come to dehorn a four-month-old calf, give her brucellosis and tuberculosis tests, and get all her shots up to date in order to sell her. As expected, it was a physical nightmare because let me tell you, a four-month-old calf has a LOT of kick in her. I was almost nauseous with dread as the vet visit approached, knowing what kind of rodeo I could expect. Then there was the follow-up vet visit to check the tuberculosis test, which necessitated catching her once again. In short, it was a lot of hard work. Hard, and potentially dangerous. A stray hoof could kick us in the gut or the head and do a fair bit of damage. And this was a calf, not a full-grown cow.

Don and I are getting too old for this. That was our conclusion.

Yet we are determined to remain in this homesteading lifestyle, so we had to come up with a way to continue that won't threaten us with physical injury. The solution? A squeeze chute.

A squeeze chute is something we've needed for a long, long, long time... but the price has always put us off. Good squeeze chutes can run anywhere from $3000 to $7000, depending on how many bells and whistles they have. But after this past week's multiple rodeos, Don got on Craig's List and started searching out any possibilities.

And oh my, he hit the jackpot.

$950 is an awful lot of money for us, but we justified it two ways. One, if we're going to buy a big-ticket item, this is literally the only time of year we can do so, when we have a shot of income from the busy season for our woodcraft business. And two, the cost of a squeeze chute is ultimately cheaper than the cost of hospital bills from a concussion or bruised internal organs while trying to wrestle with a recalcitrant animal; or of additional vet costs for an injured animal.

Besides, this chute is far less expensive than anything else we could find. Don drove out on Wednesday and inspected it from top to bottom and found it's in superb condition, with the exception of some rotted-out wooden floor boards (which are easy to replace). Don paid the man on the spot so no one else would snap up this bargain.

So yesterday morning despite the pelting rain, we borrowed a neighbor's trailer and drove to the farm where the squeeze chute was located. It was about an hour's drive away, further into the mountains. Lovely location.

The seller didn't have all his firewood in yet, but he had a good start.

The seller was originally from Austria (he sounded exactly like Arnold Schwartzenager) and was retiring from raising beefalo. Beefalo are a cross between bisen and beef cattle, and apparently the meat is superb. However the animals are powerful and testy, far more wild than cattle, so needless to say a sturdy squeeze chute was essential. I figured if this chute could handle beefalo, it certainly can handle Dexters!

(Can you see the rain pelting on the pond?)

The seller already had the chute chained up to a track hoe, ready to load.

He lifted the unit and placed it on the trailer...

...then carefully nudged it until it was balanced in the middle. Then Don strapped it down for the trip home.

Before leaving, the seller showed us some other equipment he had for sale -- a sidebar mower, a plow blade, some balers, etc. There was an impressive yellow-jacket nest inside one of the balers.

That's a solid nest down in the bottom of this roll of baling twine. Good thing the weather was chilly and the insects were sluggish, or I sure as heck wouldn't be photographing them this closely!

The seller told us something about the sheer strength of the beefalo, and the damage they could do to intrastructure. For example they easily bent this sturdy tube gate.

More flimsy barriers such as this pressed metal gate...

...are often reduced to metal matchsticks.

I decided that no matter HOW fabulous the meat might be, I had no interest in raising something as powerful and half-wild as a beefalo. I like my Dexters and Jerseys.

We drove home with our new treasure... pardon me, investment... and parked it until a neighbor can come over with his beefy tractor to unload it.

Isn't that a pretty sight?

We still have a lot to do before the squeeze chute is usable. We need to build a run to funnel the animals into it. The run will be in a Y-shape, one branch of which will lead to the chute and the other of which will lead to a loading ramp for a livestock trailer. But the squeeze chute is the key to making life on our homestead a lot less dangerous and stressful, both for us and for the livestock.

In short, we'd rather have $950 put into a squeeze chute, than $950 sitting in the bank where it's subject to inflation or even government seizure.

Yes, tangible investments. Good idea.

The death of ambition

I've written about it before, but here's a cartoon that beautifully encapsulates an age-old point: government incentives destroy ambition.

"You cannot solve a problem of too much debt with more debt."

Here's a fascinating interview between Glenn Beck and Jim Rogers. There's an introduction to Jim Rogers here, then the interview itself is here.

Cheery stuff!

The future of Europe?

For quite some time now, my husband has been monitoring the goings-on in Europe with regard to the Euro and the countries being baled out (or needing to be baled out). Recently he flagged this article.

Germany has been shouldering the brunt of these financial obligations and are understandably fed up. "The European Financial Stability Facility has a ceiling of 440 billion euros ($590 billion), 211 billion of which is down to Germany," said German Finance Minister Wolfgang Schaeuble. "And that is it. Finished."

Finished. As in, Germany won't be baling out anyone else. While I cannot argue this decision, it does beg the question -- what's the future for Europe?

My husband thinks it may be war.

Everything you wanted to know about Economics

 (But were sorry you asked.)

Just before Christmas, I did a "guest" piece here at Rural Revolution called "A Sermon." I got a lot of great feed-back on it. Most folks seemed to agree with my belief that we have already gone past the tipping point here in the U.S. (and by default, in the rest of the world too).

One of the comments on the piece was written by "Anonymous Patriot," one of our regular readers, frequent commentators, and part of the RR family. She asked me for some amplification on my thoughts on what's coming. I waited a while before addressing her questions, mainly so I could figure out just what I really thought about them.

Let's do the disclaimer thing first. One, I'm the last guy in the world to ask for advice or prognostication. Once, as a kid in the more "relevant" public educational system of the 70's, my whole class was given an ESP test. Lots of cards were held up by the teacher facing away from us and we had to guess what she was looking at; wavy lines, stars, circles, etc. This was a full blown test, three sets of cards, our answers marked on test cards. I don't place a lot of truck with such things, but I'll tell you one thing. I scored lowest on the test. Not just lowest, but statistically way below even just chance. Apparently I am blessed with a powerful anti-ESP.

But fortunately I don't need to use eldric mind powers or "The Force" to be able to read the writing on the wall. I spend a fair amount of my on-line reading at sites with bonafide economic experts. While I don't always get all the acronyms, I do okay on the graphs and pie charts. And I'm a full believer in simplicity. Finance and economics is really very easy to understand once you strip away the manure that all professionals add to justify larger salaries. I know all about this, I was once a geotechnical engineer and engineering geologist. We would never use a fifty cent word when a twenty dollar word would do.

So to start here are some simple economic truths:

1) You can not forever spend more than you are capable of generating.

2) Currency (paper money and conveyances such as stocks, bonds, notes, etc.) are only commonly shared fantasies. They only work so long as people believe they represent real value.

3) Ponzi schemes will always fail in the end. And it doesn't matter if they are being run by a con man or a government.

So now to AP's questions.

1) Do you have any specific ideas about what we can expect? For example, hyperinflation leading to riots or perhaps union strikes which lead to food and gasoline shortages.

2) Do you envision widespread violence or peaceful protests or neither? How do you think the majority of the people will react to a sustained shortage of gasoline, for example?

3) When do you think a definitive and eye-opening SHTF scenario will unfold? Has it already begun (and most people missed it)? Will it happen in 2011 or 2012 or later?

4) If the government were to collapse, what would you suggest to take its place? Would you return to the Constitution or scrap it and start anew?

Given that economics can put even those with tooth picks jammed under their eyelids to sleep, I'll answer only the hyperinflation question today. Trust me, it will be too much even at that.

But first I have to define a few terms in my own long-winded style.

Right now the big argument amongst the SHTF financial gurus is the deflation/inflation debate. Both sides have respected experts with lots of acronyms after their names, essentially calling the other side a bunch of blithering idiots. My acronym supply is considerably more modest than theirs, but I have one thing they currently don't have: a PhD in poverty. So I make my predictions not on the basis of REMIC's, LTV's, CPI's or GDP's. I use YWHM. (“You want how much??!!”)

Deflation

Deflation essentially means that no one is spending any money. Consequently prices are forced down because it's better to sell something cheap and pay the bills rather than have it sit on the shelf. The big worry with deflation is that once you (and the million other you's) sell your product for less than you hoped to make, then you too will be reluctant to part with your diminished cash, forcing more deflation.

Inflation

Inflation means the prices on things go up. The money you have doesn't go as far. It's harder to pay the bills, buy the food and purchase the gas you need to get to work. The real mechanism here isn't that things have gone up in value; it's that the value of your currency has gone down. How does that happen? Someone (legally this would have to be a government, otherwise it's a crime [irony alert]) decides that there just isn't enough money out there so they print and distribute a lot more money. But here's the important part: that money is not attached to a real or existing value. It's created just by turning the proverbial crank on the printing press. But why does a government do this? Oh I don't know....suppose it decides that it simply MUST spend more than it takes in.

Whew!! That was starting to get to the point where I could charge big bucks for it. So let's cut to kitchen counter economics. The eggheads who argue deflation-inflation don't seem to see a simple reality. In times of monetization , inflation is what you get for the things you have to have. Deflation occurs for those things you might want, but can do without.

Examples?

Housing right now is deflationary. "But Don," you say, "Everyone needs housing." True. Except for one thing. Everyone HAS housing. With the exception of the relatively few truly "homeless," everyone on this snowy night is indoors, even those who've lost their homes to foreclosure and have had to move back in with Mom and Dad. Go out shopping and look at all the items for sale. Automobiles are selling cheaper right now. You can get a great deal on a room in Vegas. The latest whiz-bang electronics are going down in price. Why? Well if you might lose your job tomorrow you'll probably decide to hold off buying the latest big screen/computer/cell phone. But the folks who make or provide these things have to eat too. So down goes the price even at the expense of profit.

Now head off to the grocery store. But first fill your tank with fuel. Don't forget your doctor appointment to check that suspicious lump. Prices up? There's the inflation. You’ve got to eat. You’ve got to drive. You’ve got to take care of yourself. To be fair, Inflation hit those manufacturers of the big screen TV and the pet rocks too. But they are in a bind. They have to lower their price or you won't buy. You don't NEED what they’ve got.

Hyperinflation

Hyperinflation is a whole different category of fish. You'd think that hyperinflation is just inflation on steroids. And they do appear to operate on the same basic principles: too much money chasing too few things. But that isn't really the story on hyperinflation. Hyperinflation is actually a mental condition rather than a financial problem. Remember rule Number (2) above? Money is only a shared fantasy. So long as we all agree that a small piece of linen with the face of a dead president on it actually represents a value, then money works much better than hauling a side of beef around to trade for a new MP3 player. But if that fantasy is damaged or destroyed, then the natural inclination is to get rid of those miniscule engraved portraits as quickly as possible. This fantasy is hard to shake. After all, we've lived with it all of our lives. So how does this failure of shared belief occur? Well there can be a number of flash points. And none of them are a sure trigger for hyperinflation. Hyperinflation may happen as a result of wars, political or social upheavals, aggressive monetization (meaning too much money being created without any underlying value) or ...a sudden loss of confidence in government securities backed by nothing. (Any of these sound familiar?)

No matter what the flash point, what it means is a sudden and massive desire on the parts of financial institutions (and later the public) to get rid of money and buy essentials (i.e commodities: food, fuel, etc.)

An example?

Suppose that a few large banks suddenly get the silly notion that all of those U.S. treasury bonds they were forced to buy by the Fed in exchange for a bailout are actually not worth much. Maybe this occurs because nobody comes out to play at a treasury auction. So the banks begin to sell their stockpiled treasuries off...hard. The money they get will be shoveled into commodities because by that point there's nowhere else for it to go. The Federal Reserve is forced to buy those treasuries back to keep them from crashing. They will do that by creating even more money to pay for the treasuries. So let's see. We have massive buying of commodities (food, fuel, metals) creating rising prices because of demand. And lots of paper money going down in value rapidly in relationship to the hard assets. About this time, those of us who weren't already leery of cash (and that's most of us) are going to realize that we'd better get rid of our cash quickly for the same reasons. So...the minute you get your paycheck, it's off to the store or the gas station. The owners of those businesses need to move that cash fast as well because the commodities they sell are going up in cost as well. And so on. Hyperinflation quickly becomes self-perpetuating.

Whew! Sorry it took so long to get to this point. What was the question again?

Oh right. The answer is: Yes.

I anticipate hyperinflation. When? I don't know. Why? Because we are insanely continuing our currency devaluation policies. Hyperinflation is like a forest fire. And right now the economic woods are dry. The air is hot. The breeze is strong. All it wants is a spark. Will the unions riot? Sure they will. They are already doing so. All over the world. So will everyone else.

Fuel shortages - yes.

Food shortages – yes.

Next time I'll take on question number 2. One good thing though. Pretty sure it won't require any toothpicks.

- Don Lewis

The economics of Prepping

A subject that some people have wondered about is the economics of Prepping. I mean, doesn’t it seem like a dumb idea to be spending all sorts of money on stuff we may never use?

My husband and I have given this a great deal of thought, largely because we are fairly low-income and thus have very little discretionary income to divert toward Prepping. Why, then, do we do what we do?

Putting aside the obvious – we believe an economic tsunami is coming our way and feel it’s best to be as prepared as possible – we also believe that Prepping is financially sensible. This may seem counterintuitive, so let me explain. Actually, it’s not “me” who’s explaining a lot of this, but my husband. Much of what follows are his thoughts.

We don’t feel that proper and sensible disaster preparation is ever a financially negative thing to do. Yes of course there are outlays of cash – sometimes large ones – but in the end you have something tangible to show for it. Those “tangibles” may include medical supplies, food, water storage, guns and ammunition, clothing (socks and underwear, winter coats and boots, sewing supplies), metals (gold and silver), rural property, nonhybrid seeds, livestock, etc. Some of these things, properly maintained, will last pretty much forever (i.e. guns, rural property, metals). Some of these things, properly handled, will multiply (i.e. livestock and seeds). And some of these things must be rotated in order to maintain maximum usefulness (i.e. food and certain medicines).

Now tell me, which of these things would be a “bad” investment, especially in light of the uncertainty that now surrounds traditional investments such as stocks, bonds, interest-bearing accounts, etc.? In the last few years, people who had money in the stock market have lost staggering sums of money. But people who invested in “tangibles” have seen their items either increase in value (sometimes drastically, like the more economically-successful souls who could afford gold) or at the very least stay immune to inflationary pressures.

You see what I mean? Even seasoned economists are suggesting that people dump their stocks and invest in tangibles.

Besides, look at it this way. Whatever you buy and store now is thereafter immune to all inflation. That 50 lb. bag of rice you bought for $15 will never have its price jacked to $20, or $25, or $30. Properly stored, rice will last for years and years and years. Rice you buy at today’s prices will not be subject to tomorrow’s inflation. Ever. Tell me why that isn’t a sensible investment.

Same thing with ammo. Same for silver or gold. Same for non-perishable medical supplies. Same for a water-storage tank.

Another thing to consider. When you buy food in order to store it, you often buy in bulk. I can get 50 lbs. of rice for $15 at the wholesale grocer’s in Spokane. But at my local grocery store, a 5 lb. bag of rice might cost me $2.50. Believe me, it’s a whole lot cheaper – dare I say, economically sensible – to buy in bulk.

And it goes without saying that, if the bleep ever hits the fan, these tangibles become priceless.

Another benefit to Prepping is knowledge. How many of your typical non-Preppers have any clue how to make cheese? Butcher a chicken? Can a batch of homemade pizza sauce? Make something using hand tools rather than power tools? Make soap? Wash and dry clothes without electricity?

But those with a Prepper mentality instinctively try to learn how to do things the old-fashioned way. It’s challenging, it’s fun, it’s creative, and it’s another priceless commodity should the bleep ever hit. And if the bleep never hits, we still have the knowledge.

Yet another economic advantage to Prepping is the “green” benefits. Due to our Prepper mentality, we do a lot of things the average “Greenie” is forever nagging people to do anyway. Preppers avoid or have eliminated disposables. They buy in bulk. They use non-electric alternatives whenever possible. Some are off-grid. I mean really, the list of “green” benefits just goes on and on.

But why do we consider our Prepper items as “investments”? Putting aside the inflationary immunity, many of the things we’ve purchased could be re-sold in a heartbeat at a profit. No, I’m not talking about our stored food (though I suppose it could be argued that even those are re-salable), but a lot of other things we’ve invested in have values that are going up. Sometimes rapidly. And nothing we’ve bought – not one single solitary thing – has gone down in value.

Most important, all the things we’ve purchased so far are either in active use or are available for immediate use. Those medical supplies sure can come in handy when we slice open a finger. And darn, I ran out of cornmeal in the pantry – time to crack a bucket and dip in. My reusable feminine hygiene items? Used constantly. My canning jars and reusable lids? Ditto. Our wood stove? It’s our sole source of heat in the winter. Our livestock? Re-salable, renewable, and an excellent source of, um, fertilizer. Rechargeable batteries, mousetraps, oil wicks, clothespins… the list goes on and on. All of these things have saved us money in the long run because they replace disposables, because they are reusable, because they are bought in bulk (thus beating inflation), or because they maintain or gain in value.

I hope this puts to rest the absurd notion that Preppers are fools who are buying a lot of useless stuff. On the contrary, I sleep better at night knowing that if the very worst (we pray) thing that happens is we get snowed in this winter (a frequent occurrence), we don’t need to fret in the slightest.

We are prepared.

Economics 101 (socialism in action)

Don't believe me when I say socialism doesn't work because it takes away incentive? Consider the following real-life example of economic theory put to work (this is one of those forwarded emails - I italicized certain lines):
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An economics professor at a local college made a statement that he had never failed a single student before but had once failed an entire class.

That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on socialism. All grades would be averaged and everyone would receive the same grade, so no one would fail and no one would receive an A."

After the first test, the grades were averaged and everyone got a B.

The students who studied hard were upset, and the students who studied little were happy.

As the second test rolled around the students who studied little had studied even less, and the ones who studied hard decided they wanted a free ride too, so they studied little.

The second test average was a D! No one was happy.

When the third test rolled around, the average was an F.

The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great; but when government takes all the reward away, no one will try or want to succeed.

Could not be any simpler than that.