Friday, October 10, 2008

Now I Get It

The commercial paper issue, or the lack thereof, is something that didn't connect for me until today. Then today I saw reports of ships sitting in our ports, loaded with food, that isn't being delivered, because the middlemen can't borrow money to buy it.

So it all makes sense now. The inevitable has come.

We have an economic system in the US that is very fragile. It's based on just in time inventories. Businesses depend on just in time credit to buy materials just as they need them to resell, just as the order comes in.

This system is driven by tax law that penalizes businesses for stocking up on goods. There are many efficiency driven arguments that tell us that this is an optimum strategy.

But, this system relies on cheap, over the road transportation to fill orders from anywhere, quickly. It requires cheap and easy credit. It requires abundant and cheap fuel.

If we lose any of these sustaining resources, then the system backs up and shortages occur.

In the South East, we're seeing this in fuel shortages that ripple into other markets as truckers don't have fuel to move goods.

Now we're seeing across our continent as the easy credit system dries up.

As our market unravels, these mini-crisis will increase in frequency across our economy, creating major problems where they intersect. Food and fuel are about to start rising in price while supply shortages occur. Businesses that lived on credit, will have to start buying using real money, and passing on the added costs to retool their finances and taxes on warehoused commodities, on to the consumer.

Though in the long run, shipping by rail, buying in larger bulk quantities and storing goods at a past price to resell at a higher future price might be cheaper, it will be hard to change our system to work this way.

By now you've probably seen many stories and videos on the net, telling you to stock up on food. We're nearing a crisis point now. If you don't have food to last you a month or more, go out and buy it now. Get a couple of extra five gallon cans of gasoline and fill them up. Keep them stored properly though. Don't put them in a hall closet. If you live in an apartment, then maybe you shouldn't buy them...

What kind of food should you buy?

First, buy foods you'll eat. There is no point in buying foods you won't eat.

Don't buy foods that require refrigeration. Not because I expect power failures, but because sometimes accidents happen. If your freezer decides to quit, you may end up wasting food and money. Use your freezer and refrigerator for short term storage and luxuries.

What you should buy is:
1. Canned foods.
2. Dried grains like rice and beans.
3. Sugar
4. Flour
4. Misc baking goods.

Please feel free to add to this list. My wife is the cook. She's not here to tell me how I'm screwing this up.

Then go to your local garden center and buy pots and potting soil to create your own herb garden. Most herbs can be grown on a patio. Perennial herbs like oregano, rosemary and thyme are best bought as potted plants. Parsley and basil grows easily from seed and this is the cheapest way to grow it.

Why am I recommending herbs? Quit simply it's because it can turn plain rice and beans into a much more interesting dish. Also, herbs are overpriced in the supermarket. You're not really paying for the herb so much as you're paying for the packaging. Save your current shakers and jars, and grow your own for pennies per pound.

Every years now I have basil self seeding all over my garden. Several pounds of fresh basil ends up back in the compost bin. I give a lot away. But only when I do the legwork to thrust it on neighbors. Most of my neighbors don't really cook, at least I don't think they do.

If you have a flowerbed, put four or five oregano plants in it. you'll never buy oregano again. That's another one that get's pruned and tossed into the compost by the bag full. It's a weed at my place.

I've also been growing my own horseradish. I'm glad I did. It's easy to grow. Spreads easily. And both the root and the leaves are tasty. We've been cooking the leaves like turnip greens.

*********************************************************

The US is going through a restructuring period, much like what we've seen over the last two decades in South America. The US is seeing it's currency and markets debased and soon, the last of it's assets will be stripped.

We are entering a new depression. We are stair stepping down the Post-Peak Oil decline. It will b a long journey, now and then our intrepid leaders will stop causing harm and we'll see small temporary recoveries. But on the long haul, we will do as other civilization did before us. We will do the wrong thing, at the wrong time every time we encounter a new crisis.

It will take a protracted depression and multiple election cycles to get good honest and intelligent people into office, if we're even allowed to vote. so don't look for a recovery now. Don't wait for the government to tell you what to do. The government will defend itself. But it will too starved of resources to help you.

Our leaders won't give up on the wars for a time. So they'll have to cut domestic services. To keep our wars going, our government has no choice but to re-engineer itself as nothing but a war machine. As it devalues the currency, and generates $trillions of dollars out of thin air, it will be hard pressed to keep up with the rising cost of waging war. It will freeze spending on the domestic front. As prices continue their dramatic rise, federal employees will be seeing payroll freezes, and budget cuts. Many agencies won't have the resources to function. Yet they'll remain for a time.

Our local school system, the DISD just misplaced millions of dollars, and now they have to fire thousand teachers. They announced a new Spanish language program, but they don't have Spanish language books. New schools are opening with empty libraries.

This is going to be the norm everywhere.

***************************************************************

Turn off your television.

Invest in hard assets. Wheel barrels, rototillers, shovels, hoes and garden rakes.

Buy seeds.

Don't buy any more gadgets.

Start your victory garden.

It's time.

9 Comments:

At 10:09 AM, Blogger The North Coast said...

Your post is very insightful and very important, as no one else is talking about the possible IMMEDIATE ramifications of the credit collapse on the fabric of our day-to-day lives and ability to procure basic necessities.

The grocery stores here are getting their deliveries and the gas stations are having no problems, so no one is alarmed- they think of the credit collapse only in terms of what it is doing to house prices, and their ability to get a loan.



"if we're even still allowed to vote", you say.

We had better go to work this minute to reclaim our democracy. If there were ever a time to NOT acquiesce to authority, this is it; if ever there were a time for citizens to retake control of their lives and communities, this is it.

 
At 3:29 PM, Blogger an average patriot said...

Hey Wease!
I have a moment from packing! You and I won't have any problem but people better learn quickly how to be more self sufficient. eat on the cheap, and adapt and over come!

 
At 9:05 PM, Anonymous Anonymous said...

Did you see Matt Simmons video on theoildrum?
Similar sort of thing, shows how the gasoline inventories can be dwindled very swiftly due to people topping off their tanks if they perceive a possible shortage in the future.
(it's yarra, by the way)

 
At 6:23 AM, Blogger Weaseldog said...

"if we're even still allowed to vote", I say.

We'll be allowed to go to the polls. We'll be allowed to cast votes.

But the machines count the votes using secret proprietary techniques, that are trade secrets. There will be no paper trail and no accountability.

Our money is valuable that source code that manages it must be able for review to auditors and it must keep a record of every exchange made. The logs made must be readable by human beings.

We don't do this with out votes because are votes don't hold the same value to us.

 
At 7:16 PM, Anonymous edgar said...

hi wease! Nice post!

things to buy that keep forever:

pasta
rice
dried beans
brown & white sugar
flour

cheap and bulky.

things to grow that keep well and are bulky in texas and oklahoma:

butternut squash

good frozen:

okra
tomatoes

 
At 7:34 PM, Anonymous Uncle Yarra said...

Coriander goes wild at my place, too. Also attracts good bugs.

 
At 7:05 AM, Blogger Svenja said...

Also, for those of you without a garden: Herbs thrive even in front of the window (you have to experiment some with the positioning... basil just HATES cold drafts!).
And even a Balcony can provide some edibles. I am currently down to herbs (I am from north germany Germany... not much you can do on a balcony in winter here), but summer gave me salad and tomatoes without trouble :).
I also have some basics (rice, pasta...) in the cellar... but I have to admit, is IS a good feeling that I am technically surrounded by arable land and have several farms reachable even by bike. Not quickly, but reachable.

 
At 8:55 AM, Blogger Bukko_in_Australia said...

Hey Weas, have you ever read a blog by a guy calling himself FerFAL? (The link is to a post about food supplies for when TSHTF.) He's an Argentine urban survivalist type who writes about how to get by in a society that collapses because of fiscal fuck-ups.

Generally, I don't like survivalists because so many of them seem like misfits who are eager for civilisation to disappear so they can have fun shooting people. While this guy doesn't shy from violence (he's written about some hairy shit) he doesn't relish it either, and focuses more on staying safe than getting even.

Apologies if I'm telling you about something/someone you already know. But what happened to Argentina in 2001 seems a foretelling of what might happen to the U.S. in 2009. It's been years since their economic implosion, and they're still not out of it.

And one more thing -- WATER! For every 5-gallon can of petrol you store, you should have 10 times that much H2O. (I'm very focused on that on this dryland continent.) If there's any social disruption, there may be hiccups in the water supply. Drinking, cooking, washing, toilet flushing, putting on plants -- what would you do if the pipes weren't flowing for a week because of a storm/power failure/utility ran out of money to operate and no one else stepped in immediately to resolve things?

How many gallon jugs do Americans throw out/recycle? While it's still flowing, fill 'em with water and store them in the garage. Even old milk jugs can be used for gardens/toilet flushing, despite the funk that's going to be in them from traces of milk. Something to keep in mind.

 
At 9:34 AM, Blogger Weaseldog said...

Thanks Bukko!

I don't know if I've seen his blog before. It seems familiar.

I'll add him to my blog roll.

As to water... Our local feed store is selling 330gal tanks that were used to ship concentrated Hawaiian Punch. The HP label is still on them. they are currently going for $85.

I plan to get one soon, probably to put in the garage, then a few more later for rainwater capture.

 

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