Beans, Bullets, and Butter

Did you ever really consider the value of a dollar bill? After all, the modern dollar is just a piece of paper. Its intrinsic value can't be much more than a cent, maybe even a fraction of a cent. In days gone by it was backed by silver bullion held in reserve by our government, they were even called silver certificates; but we stopped doing that a long time ago. Oddly enough a silver dollar is now worth something like $7.20. A Silver Dollar is 3/4 of a Troy ounce and an ounce is currently worth $9.61, down from $13.90 about the middle of last month. Another measure popular today is gasoline. Locally it's still valued at $2.17 per gallon, down from a high of $3.99 per gallon just about a month ago. I remember when I came home from Vietnam in 1971 buying gasoline for $0.25 per gallon. I could fill my Fire Bird 400 for less than $5. Today a tank of gas for my truck cost me $43.40.

I've got a friend in the construction business. Lately he's doing more home repair and remodeling than new construction. He was telling me that for some time now he has been trying to figure out a barter system for his services. He's built a spreadsheet that includes all of the things that he needs to keep his family afloat; so much food, so much fuel, etc... He's built his spread sheet in such a way that he can accept either money or tradable commodities. He got this idea from his Grandfathers journal. His Grandfather had lived through the depression of the late 20's and 30's. Apparently his Grandfather did as much work on the barter system as he did on the money system. He used cash to pay his bills when he couldn't trade other goods, but provided most of his families needs and amassed real property by bartering his services. Apparently he came out of the depression better off than he entered it.

I've got another friend that has taken the food storage concept to the extreme. He figures that he has enough bare essential food on-hand to keep approximately 50 people alive for a year. I asked him what that was about? Didn't he have troubles rotating stockage? What about spoilage? His response was that pigs and chickens really don't care about the quality of what they eat. And that he was planning on sharing his food with those really in need. Only they had to work for it daily. He also has many seeds stored up. His idea is that 2 or 3 man-hours of soil preparation and garden tending is worth a meal. He plans on putting several acres into produce and small live stock and to in turn barter his yield for other things he might need. Here in Arizona we have an extremely long growing season and he can likely get two crops a season as long as water holds out.

About now your wondering where's this old man is going this time. Its my believe that we've got about 6 to 9 months before things really melt down economically. I believe that we will face the real crisis about the time we come to end of this fiscal year (1 oct to 30 Sep). That's the governments funding cycle, a fiscal year. We, the American people, have allowed ourselves and our nation to transform our entire economy to a credit based system vise a value based system. In my opinion the start point was a few decades ago when we moved Social Security funds into the general budget and made it available for more than Social Security. Now we have a whole generation of Boomers (old farts like myself) who have paid into a system all our lives that has nothing showing on the balance side of the budget. The solution that politicians in power keep promoting are "entitlement" based welfare programs. We keep paying out more than we have, and we keep proposing socialized solutions that spend even more. My advise to you, my family, is to get serious about food storage over the next few months if you haven't been already. Figure out a way to put aside or ensure an emergency house payment or two. If you can, set a little cash aside also. Notice I said cash, not money in the bank.

There is an old adage out there that tells us to study history to understand the future. Think of the 30's with bank failures, or 9/11 when banks closed for a day. How about California with their fires of the past week. Had things been just a little worse they would have had a power black-out for a few days. Our entire banking system is based on the availability of electrical power, same issue with your credit card. No power basically means that the check-out counter every where is shut down and banks are inoperable. Where are you going to get your cash for a few days/weeks at a time if we have regional power failures?

The bottom lines is that you can survive any economic turmoil that comes your way if you're actively preparing for it today, mentally and physically. And if it really gets tough, I expect each of you to be prepared to bring your siblings, cousins, etc... under your wing, or at least help them to get here if nothing else. Like my Daddy always said, "There's nothing holding us back but Fear and lack of Common Sense." Lets take proactive actions today so that we can hold our collective own in the future.