Hi Canadian-guerilla. You hit the nail square on the head.

My saying that “we are moving from form to function in our society” is an ongoing process. And those who recognize this early on will benefit the most as well as make an easier transition.

Making preparations have the added benefit of mentally preparing the individual for what I expect will be a tumultuous and probably extremely dangerous time.

Since bartering and horse trading is a lifestyle, it should be a valid benefit for all scenarios, not just good or stable times. I consider it an absolute necessity for building wealth through the years.

Assets acquired that have a personal usage beyond what their sale would price would fetch; these assets are to be kept for the long term. Sentimental items should be weighed against their sale price and what added benefit may result. An antique clock grandma once had and had been passed down is an example of a very personal decision. I can make no judgments here; ALL such items have to be weighed individually and carefully. Because when they are sold, there is no going back and retrieving them at a later date.

At the other end of this consideration are factors such as size, utility, fragility, storage and what it will be seen as in some distant future.

The only things I won’t sell are family pictures (yeah, like someone would pay a dime for the whole batch !), family artifacts such as a wooden chain my father carved during the last depression, and a few items I am slobberingly sentimental about (holding back tears here).

So just about everything I have is for sale at some price. Of course, the prices may be far higher than buyers are willing to pay. I don’t care; their use to me establishes their sale amount in dollars. Ugh, fiat paper ! It has its value as long as someone is willing to trade it for something of value. You see this going on every day and all over the place. It is inescapable; who would trade gas or food for silver or gold bullion ? Moreover, what owner of precious metals would risk others knowing that he had precious metals around ? It can be done but trading with precious metals could get you killed if you don’t know who you are dealing with.

So you see, precious metals are to be held in lieu of fiat paper when working in the framework of wealth preservation. It is most incorrect to assume that the populace will quickly change to dealing in precious metals rather than fiat currency. It can and should happen but that don’t make it a slam dunk for us PM aficionados. There will be a period of time in which PMs are to be in hiding. They may never be allowed to be the “coins of the realm”. To do so would take away the incredible profits from those who control the fiat currency. And that ain’t going to happen painlessly or peacefully.

For many years I have deeply felt that the reason that gold and silver have only risen modestly in comparison to where they should be is that their TRUE VALUE cannot be allowed to become known. The 5,000 year of mankind’s reliance on gold and silver as money towers above our less than 100 year “experiment” with unbacked fiat currency. Unfortunately, we are the financial lab rats.

Here is an interesting article about gold and silver’s price increases in relation to other commodities.

Gold & Silver – The Fuse Is Lit!
By Peter Degraaf


http://www.gold-eagle.com/editorials...aaf050808.html

It states that silver would have to increase 8 times or $135 to equal the 1980 price peak. And that is using official CPI numbers ! And we all know how those CPI numbers are grossly understated. My guess is that silver should be at $250 or higher at its peak. But what peak ? Relative to what ? The fiat dollar ? How can a silver or gold ounce be valued against a rubber yardstick such as an unbacked fiat paper dollar ? The answer is that it can only as long as others will trade fiat paper for real, three dimensional wealth you can hold in your hand. Ponce‘s quote “If you don’t hold it, you don’t own it” should be firmly tattooed in our minds by now. Fiat currency is a confidence game and when the con is up, the confidence vaporizes.

There is something I want to mention here and that is that if someone has a large amount of PM and little food preps, it is time to consider balancing your life’s portfolio.

Another point to consider is that if you need cash that is critical to a profitable deal, it may be wise to weigh PM you have on hand against losing out on this deal. It is called lost opportunity cost. Let me explain.

Say there is a deal where a cash layout of $300 will return $2,000. But you hold silver or gold but no cash and the precious metal is expected to double in the same time period as the deal takes. Simply put, without buy and sell fees, you would have to rebuy the precious metal for $600 when the deal is completed. A net profit of $1,400 would be the lost opportunity cost if you were not to take advantage of the deal.

There are miscalculation possibilities in time required as well as the net profit so I would caution you to thoroughly think this through.

Another reason to sell precious metals for dollars is if there is something that may not be available later but is crucial to your survival. Food preps are high on the list, if not at the very top. In my case, I need a 3,500 gallon water storage tank. It would cost about $1,800 which is about 100 ounces of silver. A thought comes to mind to weigh the benefits of continuing to hold the silver against the security of having the water storage tank.

Gotta go, best wishes,

Agnut

We own nothing in this world but merely have use of it for a time, for we are mortal.

Try this...it'll still look like shit but will stop the rust.http://www.rustbullet.com/
:bull-buddy-icon:

I got a message from agnut that he is having major computer problems and has not been able to post (or read GIM). He didn't want everyone to think he forgot about yall. Hopefully he will be back online soon.

__________________



The president of a socialist nation (America)..
has to give a convincing speech saying essentially..
“We are not going to do.. what we are doing”

"No exports, No recovery"... Ponce

Been missing your posts as well, Randy.

__________________
Yep....it's true.... most folks are dumber than coal buckets.

I'm BAAAAACK ! (such as it is). My old Microsucks system bit the big one and I bought a Mac OSX system yesterday(used of course. Was $125 too much ?)

I still haven't figured how to compose posts and then download them; so I will be a bit slow getting restarted.

Gut a barbecue for $25 at a garage sale yesterday morning. Then got an acetylene torch outfit in the afternoon. And last, got the Mac computer just before dark. After paying for the computer I asked, "what else have you got for sale". He said that he had a barbecue for free if we would haul it away ! My son and I looked at each other in shock. It was like a deja vu from the blue.

Turns out, the BBQ had a full tank of propane and a rain cover. It was a large one and in good condition. The man was moving away and didn't have the space for it.


So now we have 2 BBQs in one day. Whoda thunk ?

Best wishes,
agnut

P.S. I can't believe how dependent I had become on the internet. Losing it for a week was a big wake up call for me.

this should be like one of those old Columbo moments
just as he's going out the door, he turns around for one last comment

__________________

Hi again. Still crippled by my computer ignorance. Mac is so totally different than microsoft; I can't even find the programs on which to write posts.

This market/economy seems to be getting shakier by the day. It wasn't that long ago that I was recommending caution regarding discretionary income disappearing (last July. About the same time the subprime mortgage was becoming known).

Currently there seem to be good prices at garage sales and newspaper items for sale. However, unless you really need the items offered, I would recommend that you wait a few months. This crisis is just unfolding and a perspective won't become apparent until we are in the thick/sick of it. This is in regard to your buying items that may look like bargains right now but won't look so hot in the future.

Planning for the future is a tough call with so many uncertainties swirling around. All in precious metals ? All in preps ? Dollar stockpile ? Rural property ? And the list of questions goes on and on...

Point is, positioning ourselves involves a highly personal and individual set of decisions. Right now I'm buying a 2,500 gallon water storage container. It is a cost that is almost impossible to weigh against its future value. I already have a well but if I lose electric I also lose water. Gravity feed or a 12V pump with a water storage tank would buy time for adjustment.

Sure I'd rather have the extra cash for liquidity but having water stored may be prove to be the best liquidity of all.

So many judgment calls to be made these days. I suppose it comes from knowing too much about how fragile/precarious our world is. Sometimes I feel like Noah, getting the ark loaded while watching for storm clouds.

How much time left ? The answer is : NOT ENOUGH ! Why ? Because even if we do all we think we can, later when it is too late to prepare any more, we will regret not having done more. But don't despair; the bottom line is that we should do our best and be content with that, no matter if someone else is better prepped. This ain't a competition but rather a personal journey. No regrets later.

Anybody check out bugout locations since we first talked about them ?

Best wishes,

agnut

Hello Agnut,
I CUT a lot of stuff and paste to print things I want to save and re read / savor ( like yours :D )
again later in what is called " text edit " which is
under the hard drive icon and then under the applications icon on my MAC.
It is similar to word pad on that other system.
Excellent find on the new computer !!
Regards,
Haystackneedle

Hello Davy,
80 thousand is only broken in good !!
The ex wife ( gone but not forgotten..heh heh..) and I had a '92
and it needed its first real work at near 200K.
Further,
I would call that wee bit of rust " patina " and no worries...
Heh, reminds me of the rides in my grandpa's 40 something Olds where
I could look through the floorboard at the gravel road going by when we were on the way up to the store where I could get me a Mt Dew.
Regards,
Haystackneedle

Here's some things to think about. There are several others that will come to mind; that I'm sure of.

21 Real-Life Signs We're in a Recession

http://www.timebomb2000.com/vb/showthread.php?t=288672

Feel free to post any ideas you may have. No matter how miniscule or crazy they may seem.

Best wishes,

agnut

Good one Canadian-guerilla. My younger son and I went garage sailing last Saturday. Got sterling salt and pepper shakers for $3; they were weighted but still a bargain I figure. Also got a new golf bag and a set of left handed clubs for $10; for my son, the southpaw. This is the first set of left handed clubs we have seen offered and the price wasn't going to get any cheaper.

I am ashamed to mention that I also bought an old plow, the kind you have behind a mule. It was so cheap, $20 bucks, that I had to have it; for decoration at least. One heavy bugger to get off the truck though.

Oh, and also got a mama and baby rubber ducky for the bathtub. Been wanting those for years; since I heard that Greenspasm also had a rubber duck. Maybe I'll now get some new insights into the machinations of macro finance. The ducks were for free in a box of odds and ends. I could have spent hours of valuable time and money in searching. Sort of a bargain for the kitsch collecting challenged. An idiot's delight.

Sellers said they were actively selling early which was a change from other times I was out garage sailing. I saw several antiques for sale and am only guessing but I think people are starting to offer things they hadn't intended to sell a few months earlier. Maybe an indication they are starting to get tight as several internet articles have stated.

I see this as only the very beginning of the Great American Garage Sale. There will be better bargains as time passes and I advise to not jump the gun. What may seem like a bargain now may be a mistake later as a flood of merchandise comes out. Higher priced items may seem cheap but they may be hard to find buyers. So be careful here.

I have been hearing that high miles per gallon cars are becoming popular. This is a considerable part of one's income and should be thoroughly thought out. My diesel pickup truck gets about 40 MPG but will need a rebuild soon. . I am still waiting to hear if I can get the VW diesel pickup truck. I may be able to get it for about $500 and then put about another $500 into rebuilding the engine and transmission. It may be worth about $5-6000. I'd love to keep it but with the profit potential, it doesn't make sense.

Now might be a good time to hold a garage sale of your own. As the summer progresses I expect many, many garage sales to be competing for buyers' dollars. And as there are more sales than money available, the old supply/demand equation should kick in and yield a drop in prices.

And don't forget to donate unwanted items for income tax savings. I once read that Hillary donated some of Bill's old underwear and got a tax write off. Monkey see, monkey doo. Are presidential skid marks collectible ?

Looked out the front door yesterday afternoon and there was a zebra not 50 feet away. He was chomping on the clover. Also there were three small mules in the north field. This happened the other day too; I think the zebra is the ringleader. Let's see, a zebra and three mules AND a plow......Hmmm

Best wishes,

agnut

I just got back from an estate sale. I got a steam canner complete with 2 racks, 3 dozen quart canning jars, and the jar grip for only $5! What a steal.
Also picked up two do-it-yourself home repair books, 1 1940s cookbook, 1 book on identifying, foraging, and preparing natural medicines; all four books were only 50 cents each.

This is what you might call the ultimate bartering and horse trading deal. A bugout location. How do you negotiate for this ?

Killer 2021 posted a thread that got me thinking entitled :

Think food prices are high now? Just wait until peak water!

t=268819

Ponce has been warning of peak water for a long time. He also recommended investing in water companies. Seems he has been ahead of the understanding curve on many subjects. Genius is largely misunderstood. Also impatient, passionate and a pain in the butt sometimes. HaHa. Too bad he isn't here on GIM any more.

I noticed that the bar graphs show the largest portion of water (the red areas) used by the population is in three countries; Australia, Canada and the United States. Something we take for granted and shouldn't.

With meters on wells in some areas and restrictions on collecting rainwater, it seems that we are heading into worsening times. I just bought a 2,500 gallon water storage tank. If my well has problems or electricity goes down, my family will have some time to make adjustments. We are also planning to collect rainwater from the barn and house roofs to irrigate the garden and orchard.

I don't know what those who have prepped and are living in the cities will do. This is the reason I have been recommending others to find a secure bugout location. There may be only 1 in 1,000 who have prepared. And of these one in a thousand, how many have a bugout location ? One in a hundred ? one in a thousand ? If the latter (pretty extreme, I know), that means that there would only be about 300 out of a population of 300,000,000 who have prepped AND have a bugout place !

Now you can deny my opinions or slice and dice the numbers any way you want but there is no denying that to stay in the city will be "problematic", to put it mildly. Do you really think you will be able to remain in a city and negotiate for food, water, electricity and security in the midst of a collapse of the financial system ?

It seems we have come to the point of having to decide whether to sacrifice the current comforts and conveniences of living in the city for the safety and security of living in the boonies. And I realize that this is a very hard decision to make right now with the uncertainties of the future. We must read the signs of the times and guess where we will best be located in the future. And it is this uncertainty or guessing that prevents us from boldly going where almost no prepper has gone before (apologies to Capt. Kirk).

Security for my family and me is high on the list. Notice that TN...Andy, Ponce and several other members on GIM are already positioned on acreage. Chris Laird, the owner of the Prudent Squirrel website, has recently moved to rural acreage. Starting to get the picture ?

Believe me, I'm not all cocky and self satisfied here living on acreage. Rather I am concerned for others who have prepped and may be blindsided later. You don't have to spend a fortune and equip a rural property. You may be able to find someone you could stay with. But you must do it now in order to cement your relationship with this rural property owner.

Geez, I am looking at what I have written and feel a sense of being a doomsayer. Those who have bought precious metals and then prepped are now being told that they need to go further and have plans to bugout from their familiar location. What the Hell is next, you are probably asking under heated breaths ? I don't blame you one bit. The task to prep as completely as possible is a long process. I have been at it for years and still feel that I am not completely ready. Ponce has a saying, "To be ready is not". That about says it all for me.

No air; dead in a few minutes. No water; dead in a few days. No food; dead in a couple of weeks. No security; dead any time.

Moving to rural digs may take care of the security AND water problems at the same time. Air we all take for granted; but if this air becomes polluted by things I don't really want to go into, a rural location may also provide security. And the last, food; well, in the country you could grow food and there are things to eat in the woods. I wouldn't depend on animals for food because they will disappear fast (as in decimated) like they did in the last depression. Funny how so many think they can just go into the woods and shoot game for dinner. Now THERE is a big dot as to how ignorant the general public is about food resources.

As for security in the country, each area has its own particular set of factors. You must recognize them and weigh carefully.

Ponce has a plan behind a plan behind a plan. Do you ?

Best wishes,

agnut

P.S. The Zebra and three mules were back again. I guess our tall grasses and clover are irresistable. I walked up to the zebra and petted it on the nose before it got wind of my human "aroma" and galloped off a distance, occasionally looking at me in pity and derision. Made me feel like a skunk at a wine tasting festival.

Hi ShirleyUgeste. Great deal there. I got a steam canner setup but with not nearly the amount of accessories you got. $5, eh ? Why didn't they just give it to you ?

And self help books are always a bargain. I have hundreds of books that include gardening, humor, medical, interesting stories, famous quotes and many just for reading entertainment someday. Ponce tells me that in Cuba, some homes have libraries that rent out books. Maybe a future income source. But hard to tell with our society being what it is. I'm doubtful myself.

Here's an interesting article concerning a dollar crash. Jim Turk, as I have previously mentioned, has predicted a dollar crash soon; like in the next few months. The implications for us are both profound and confusing.

A Dollar Crash Will Have Disastrous Implications For Global Financial Markets
by Addison Wiggin
http://www.gold-eagle.com/gold_diges...gin052708.html

It has been written that only about 5% of our money supply is in paper dollars and coins. Additionally, about 75% of dollars are held outside the U.S. That would mean that a mere 1.25% of the money inside the U.S. is in physical form. The rest, 98.75%, is electronic money !

Tie this in with The Shell Game by Darryl Robert Schoon

http://www.gold-eagle.com/editorials...oon052608.html

And you get a pretty scary picture of what would result in a credit crash combined with the pathetic cash 1.25% circulating in the U.S. This is what happened in the last depression; a cash rarity situation. I remember my father telling me that when he was a boy during the depression. There was very little money circulating and therefore people were working for practically nothing. Fifty cents a day wages. And this was in a time in which only about 5% of the population had been invested in the stock market. Well, today almost everyone is hooked into the stock markets either by direct investing, 401Ks, IRAs, pension funds, municipal investments, and a plethora of other shady/shaky deals. The point is, a financial crash today would be far more damaging to the general population that in the last depression. Some writers have estimated 7 or 10 times as bad. Yikes !

As Mr Schoon stated "During the great Depression, money didn't disappear; credit did". And with 1.25% in cash and 98.75% in credit, can you see the potential danger just like in the last depression ? But maybe much worse ?

I have conflicting opinions of where to position oneself. Heavy into cash ? What will cash buy in such a crash ? Will it be king or crap ?

Heavy into precious metals ? Who will have money to buy it ? And what will its purchasing power be in such a future ? And will it be confiscated or restricted in some ways ?

Lots of uncertainties and therefore lots of different opinions. We don't have all of the pieces to the puzzle and therefore it may be best to have differing amounts of both so that we aren't crushed by being in only one money.

Of course, this dividing our wealth and riding the fence, so to speak, won't yield the maximum if we are correct in our investment. But at least we won't be demolished if we invest wrongly. Hey, I don't like it any more than you but this is one of the costs resulting from dealing in unbacked fiat currency. Today I saw a CNBC headline that said something like "Is The Fed At Fault ?" HaHa. That's a good one.

So in preparing for having some liquidity in order to be ready for future bartering and horse trading, I have both cash and some precious metals. We each will have to weigh the situation and balance our wealth according to what we are comfortable with.

I must add that having bricks of pennies and nickels could be a wise idea since they can't just be printed out of thin air like paper currency or electronic and their intrinsic or metal content value is above their face value. For years I have speculated that they may be necessary as a fractional currency to a new currency such as the Amero which has been bandied about on the internet. If this is the case, they may skyrocket in value. The question is, will the government go to the trouble to coin new fractional coins or use the current coins in circulation. So here is a case where having a load of coins around could be far superior to having an equal amount of paper dollars.

Ponce's famous quote, "If you don't hold it, you don't own it" takes on a twist here since even though you may hold $1,000 in paper dollars, it won't be the same as holding $1,000 in nickel and penny coins. When/ if there is a bifurcation (divorce) between paper and coins, you don't want to be holding the weaker and more vulnerable of the two.

If it is any indication of what is to be and the wiser choice, remember the woman in 1922-23 hyperinflationary Germany who had a bathtub of German Mark coins. I read that she did alright during this monetary blowoff. If she had had paper German Marks instead, she would have had only toilet paper and fire starter.

Maybe our lowly coinage will be a saving grace for the few who understand what they are holding. Something to think about.

Best wishes,

agnut

Well, it looks like some more of the msm is catching on. Here is a piece I found in The Trumpet:

http://www.thetrumpet.com/index.php?...ef=patrick.net

"People are cleaning out their houses of gold, silver, whatever, to get money just to fill their cars with gas."

and

"The bills are coming due, and America is headed toward the biggest garage sale ever—and economic meltdown."

As you they say "There's a storm comin"

bf

Hey there AGNUT long time reader first time poster here.

Just started hitting the flea markets and garage sales over the past weekend and found a decent amount of good deals but I was surprised to see less garage sales than I did last year. But as you say the storm is brewing and I agree that once people run out of jewelry and other easy cash in items then things will come out of the closets and garages for sale.

Picked up 5 old hard back books that I felt were great deals. I am sure I could have paid less than $2 a piece but I was so excited with what I found I did not care. An alice in wonderland from the 50's was nice for my duaghter but my favorite was the 'Last of the Mohicans' in almost perfect condition from 1936. I love the story. As for how to books an algebra book from 1905 with notes was nice and an economics book from the same year. Not exactly how to but still necessary for the education of my children or one day grand children.
Saw a few hand cranked drills for a steal and alot of sterling silver plated dinnerware.

As for the use of prescious metals during a severe depression or cataclysmic event I have put alot of thought into this and it is hard to discern. Will people be willing to purchase them, will they be high in value. Will poeple even accept them as payment? I recently watched the movie hannibal rising and, as graphic as the movie is, it gives a great perspective on this subject. In the movie and the book the lithuanian flag changers scavange dead bodies and steal from homes and castles. Looting art, jewelry and other prescious tangibles. But when the war ends their wealth sky rockets. Not before.
I have seen this in many WWII movies as in schindlers list when Oscar Schindler offers the nazi officer diamonds and refers to them eventually needing PORTABLE WEALTH in the coming collapse of the reich.

I can see these things as a way to survive and possibly purchase land or other goods but the darker days might be a way to aquire more prescious items at lower cost as they will be in less demand. But the dark days need to eventually end to have wealth appreciate. If you are rich in survival goods then one should be fine and may possibly come out on top at the end if they are prepared now. I am in no way suggesting looting or thievery.

I will hit the garage sales this weekend to find some more deals to post about.

Hi Bottomfeeder. I tried your website twice and twice it kicked me off the internet. Looks interesting but I can't see it long enough to read much. Could you put the content on a post ?


Yeah, it is beginning. And in this beginning time period, be especially careful to avoid catching a falling knife. It may be wise to envision a future where things have been turned on their head and to think of negotiating in that mindset. For instance, a boat that is valued at $6,000 and is for sale at $3,000 may appear to be a bargain. However, with fuel prices on the rise, what will that same boat be worth if/when gas were to rise to $10/gallon ? Additionally, a boat needs registration, maintenance and fuel (lots and lots of fuel to push it through the water).

Some bargains ain't bargains when all of the pluses and minuses are laid out on a sheet. In fact, I have a 21' boat I will be selling soon. It sleeps 2-4 and runs great. Problem is, it has a hungry V8 engine and if the outdrive or seal ever goes out, it is expensive to fix. I got it at a bargain price a couple of years back and I'll break even or make a little. Sometimes a deal can be part of having fun with the item for a while and then selling it with little dollar profit. I suppose I could rationalize and say that all the fun had with it was the profit.

When I bought the boat I wanted to have something my sons and I could enjoy for a while AND not lose money when I later wanted to sell it. I think it will work out with summer boating season just ahead.

I also have an 18' Dorsett with a Merc outdrive and a 4 cylinder engine. It should cost a lot less to operate. Besides, I only paid $300 for the boat and trailer. It was a backup fort when I sell the 21' boat and it seems that its time has come. I understand that the trailer is worth over $600 and it will be hard to envision losing much in the future.

I'm writing this to indicate how I think regarding possessions and their benefits and liabilities, As I have written before, a common characteristic of wealthy individuals is that they think of the worst case scenario, the most they could lose, as part of their decision making process.

Last Saturday my son and I were garage sailing. I found 20 pairs of Levi and Calvin Klein ladies jeans. Made a package deal for $15, or $0.75 a pair. Hard to lose on such quality merchandise. At the same garage sale was an antique solid oak ice box. It was in excellent condition and I couldn't believe the asking price; $75 ! I haggled a bit and got it for $60. It is in my den and I may not ever sell it because as a piece of furniture, it is more useful that the cash I might get for it.

By the way, this particular garage sale took place on a property that looked as if was being maintained by a full time Japanese gardener. So perfectly manicured that I felt embareassed at my own place. But on second thought (my saving grace and rationalization to conceal my laziness), my place is set up to appear that I am basically a total dirtbag and don't own anything worth stealing. You might say it is one of my preps for perps.

Point is, look at the people and property on which you are buying from. This is usually an indication of how they take care of their possessions.

Yesterday my son and I picked up a VW Caddy diesel pickup truck. They are hard to find and I have been rather impatiently waiting for this one to become available. So why am I excited about this particular model rather than a VW Rabbit or Jetta diesel ? Well, from what I can see by what other VW pickup diesels sell for, they are thousands of dollars more. The last auction of one on Ebay had a 1981 model with a 135K mile used engine, a 4 speed used transmission, a cracked windshield, no canopy, torn driver's seat. It sold for $7,800 with about 45 bidders and 5,500 who looked at the auction.

When I get done with my VW Caddy, it will have a rebuilt engine, a tricked out rebuilt 5 speed transmission, a new windshield, brakes done, a new dashboard top, a theft preventative system, a paint job and a detailed canopy (which, by the way, came with the VW in the first place. The tires are almost new and the interior is excellent. It will be better than it was when new.

Gee, do you think it will sell for more than $7,800 on Ebay ? My only concern is that the economy could crash in the meantime and nobody would have the bucks; everybody in survival mode. My backup plan (always have a backup plan and one behind that one too) is to restore the VW Caddy and THEN decide if I want to sell it or keep it. I will let the market decide for me because this truck will get over 60MPG and I won't be in a hurry to sell it at any price.

So what is happening here ? I found a niche within an already profitable area that is much, much more profitable. And restoring a VW Caddy truck is the same work and investment as my restoring a Jetta or Rabbit diesel.

This type of thinking should be part of our consideration in bartering and horse trading. Always look for a higher and better use of your time and investment. It could be something as simple as what you focus upon and search out further, better possibilities within that focus.

There are several other niche market cars that can be bought and sold profitably. Of course, with rising fuel prices, the highest MPG cars are being pulled out of back yards and fixed. They are in highest demand and I expect that they will get hard to find as fuel continues its price rise.

And lastly, I asked the man with the VW Caddy "WHat else have you got for sale ?" Betcha thought I'd forget, huh ? No way Jose. He had a diesel engine without the cylinder head for $50 and out back he had a VW Rabbit diesel complete car in decrepit condition for $100. I took the engine and said I would be back for the VW Rabbit diesel. The injection pump alone is worth about $300 and the engine can be stroked with a 1600 crankshaft which I have. The transmission is worth $60 and other parts are worth hundreds. Obviously, I am looking at it as a parts car; too much work to bring it up to snuff.

As you probably know by now, I rebuild transmissions. But in these uncertain times it is best to have several options to make a living. As Heinlein said, we are not ants but multifaceted complex creatures and should be able to competently perform many varied tasks. I feel that this will be necessary more than ever in the future we now face.

Best wishes,

agnut

Hi sindgefallen and welcome to this little corner of GIM. It's 4:00 A.M. and I have been up for a while. Just got back from the garage/workshop where I often sit and have a drag on a cigar. Sometimes I sits and thinks and sometimes I just sits. Actually, some of my best thinking comes in the middle of the night when all is dark and even most of nature slumbers. I highly recommend taking time out to think. Have a notebook handy; your brain may surprise you. And there WILL be a test !

Not much going on right now except the neighbor's peacocks beginning to stir. The zebra and burros haven't come around the last few days. I miss them. CNBC is on the boob tube with their view/slant/poopaganda of how the world works. Gold_Eagle.com will have posted their list of daily articles at 4:A.M. Pacific time. I always scan those for interesting viewpoints.

You know, with all this running to and fro in the quest for more "stuff", we all should take the time to step back and look at the big picture. Our mortality and what we can do with our time remaining. I'm 61 years old and feel that I have already lived two or three lives. Lots of memories and experiences to draw upon.

I think all of us can sense that big changes are just around the corner. And preps, for what we can only guess at their future value, are on our minds. It is far more complicated than "guns, gold and grub". We may well be about to enter a very long period of difficult times (hope I didn't candy coat it too much). Entertainment will become more important as time passes. I know it seems trivial to mention it at a time in which most are thinking in terms of survival preps. But what is survival without hope and some pleasant diversions to take our minds away from daily responsibilities ?

Sindgefallen, you mentioned books with an obvious fondness. I have to agree with you; I have hundreds of books and many I wouldn't sell. Last weekend I found an old western, "Chip Of The Flying-U" by B.M. Bower. It has a copyright of 1906 and is in excellent condition. Paid 50 cents. It has a depiction of a cowboy roping a steer on the cover. The back page lists other books by the author, fifty cents each ! Hey, hold on there partner, I paid fifty cents myself ! Shouldn't I have gotten a discount since it was used ? Oh yeah, that inflation thingie. 102 years is a long time and we have been on funny money for about 95 of those 102 years since the book was published.

Last Saturday's garage sales didn't yield any big things. Got 4 DVD movies for $1 each. Also got 4 plastic cabinets full of electrical fittings and assortments of nuts, bolts and screws for $10. Ponce told me to collect as much as I could find as long as it was cheap. He said that these small items will be valuable. Like having a hardware store for pennies on the dollar. Sometimes people give me heavy boxes of mixed new nails and nuts and bolts.

A 5 gallon plastic gas can for 75 cents. New it would be about $9. A tree branch trimmer for a dime. New it would be over $10.

I got a heavy aluminum pot for 50 cents. The scrap metal is worth about twice that but I need it for holding parts in my shop. And that is a miniscule example of a higher and better use until I may sell it for a profit.

With this principle in mind, a large item such as a backhoe may cost me about $10,000 and the work it could perform would cost maybe $600 were I to rent a similar backhoe. It's clear that buying rather than renting would be a bad idea. Also, a backhoe's maintenance can be very expensive. The only alternative could be if I were to find a backhoe in need of repair and fix it, use it and then either keep it or sell it at a profit. Recently I looked at a large backhoe needing an engine rebuild. It was offered for $1,000 and another $1,000 to get it over to my place. I would need about another $1,000 in parts and a week's work to get it running. It would probably sell for the typical $10,000 but for some reason I passed on the deal. It might still be there. I have enough irons in the fire right now and can't spare the time. An old cowboy saying (that I made up) is that "he has so many irons in the fire that he put the fire out." I have been there and it is like being burned out, not feeling motivated to do anything.

I don't know if some of you are feeling the same way but I have been factoring in the time from purchasing a fixit project and the time interim until it can be sold. Maybe it is the feeling that any day things can catch me holding the old maid, so to speak. Probably a bit paranoid on my part and I shouldn't let it weigh so heavily on my considerations. See how all this reading bad news can seep into the equation ?

This is part of the reason that I see differently than what are perceived as bargains to the common man on the street. I have one foot in the present and one in the future. A gas guzzling SUV seemed practical a few years ago but fuel prices have decimated resale prices today. A barrel of oil is up to $135 this morning. My Datsun diesel pickup gets 40 MPG and I intend to modify my VW diesels to get 60 MPG or better. A fun game for me that could also pay off bigtime. Imagine a car that gets better mileage than many motorcycles.

Switching gears and direction here (I do that a lot, so have your seat belts on and your seats in an upright position), I was calling around looking for some transmission cores. I called one man selling rebuilt engines on Craigslist.com. He is an old timer like me and has been into VW repair for 30 years. We must have talked for over a half hour and he gave me several leads where I may find what I am looking for. I asked him what he was looking for and it was engine blocks and cylinder heads. I asked him what he was willing to pay and he gave me prices. I found someone selling what he wanted for less than half what he would pay. I called back and gave him the phone number. Tit for tat.

See what happened here ? Networking involves sharing knowledge and greatly broadens our horizons. The profit here was in the connections I got and his profit was the connection for parts he wanted. Also I have established a relationship with a really nice person; I found out what he is like during our conversation. You can learn a wealth about someone if you will listen closely. By the way, I have 14 of the engine blocks he is looking for but need them for the future. I paid $20 each and they are worth 5 times that to a rebuilder. Nice to know if I ever change my mind.

Last Saturday I was offered a Storm Vulcan crankshaft grinding machine for $3,000. A big machine; weighs tons. The machinist said that I could grind crankshafts all day long for $100 each. Takes about an hour to grind a crank. Problem is that this machine needs an experienced machinist. I mean a really, really good machinist. One screwup and the crank is junk. Besides, I don't know what demand there will be for such machine work in a crash scenario. So I passed on it.

When I moved here to the Pacific northwest a few years ago I sold all my furniture except a leather recliner and a sentimental small secretary (the four legged type). I outfitted the new house with used furniture. Much of it was dirt cheap but not dirty. I took tons of tools and things I couldn't easily replace. I made outfitting the house into a game and couldn't be happier. If you are considering moving, dump the big things that you can easily replace and travel as light as possible. Renting a big truck and paying for gas can be quite expensive when you could replace those heavy items with the cash you get in selling them at your old location. If you are insistent on keeping all of your "stuff", maybe renting a 60' sea container and loading it yourself and having it moved could be the least costly. My sister is considering moving and says that she needs three big rental trucks for all the "stuff". She estimates it would cost about $6K. It would cost maybe half that with a 60" sea container. But you need a place to dump the container and should have that set up beforehand.

By the way, that ice box I mentioned in my last post that I got for $60. I didn't know its true value but bought it on a gut feeling. I checked on Ebay and there were two for sale. The first was comparable to mine and the price was $650 ! The second was OK on the outside but looked like a monkey had been living inside; they were asking $600. Now my problem is how to sell it most effectively.

Haystackneedle told me about opening an Ebay store and I am looking into it now. If I do start a store I will let you know how it all works out. I have hundreds of items that could be sold and its a lot cheaper to have a store than to list items separately. There are other advantages too.

What I am trying to do here in these examples is to share some of my perspectives and experiences to motivate others to actively look into areas they otherwise may have never considered. The world is so enormous and varied that it will never be covered by any one person. There are more opportunities here than could be taken in a lifetime. I have always said that if you can't make it in America you can't make it anywhere. Imagine those living in rural China or India and compare all the opportunities we have before us. The streets here are literally paved with gold and silver; the world is waiting for us to discover all the wonderful possibilities. And you never know. The greatest wealth of all is that you may grow and become a fuller, happier person.

Best wishes,

agnut

P.S. Sindgefallen, I haven't responded to your writing about real estate and precious metals. I would like to when I get the chance as they are so important to our futures.

There are as many solutions to a problem as there are lines radiating from a point.
Thoreau

i think a lot of people miss out on the opportunity of a DIY fix-it project
the hands-on experience of fixing something yourself
could well outweigh the few extra dollars you get selling it later
i think, after TSHTF,
one of the curses of modern society will be the loss of DIY curiousity
as opposed to the easier practice of buying a new cheapo item

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Originally Posted by agnut
I don't know if some of you are feeling the same way but I have been factoring in the time from purchasing a fixit project and the time interim until it can be sold.

I factor that in alot. Playing the game with a limited amount of working capitol makes me a bit cautious when trying to take on a fix and resell project. At this point for me the time isn't as much of a deal breaker as tying up cash for long periods of time in the rebuild/fix and till sale parts of the total deal. I am working toward increasing my working capitol as some really nice deals are to be had if you can "invest into them" so to speak and still work other smaller deals at the same time

Thanks again Agnut. One of the best threads on GIM and your efforts to keep this thread going are most appreciated.

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I wasted my time till time wasted me. - Jon Oliva

Sindgefallen, your last post's reference to precious metals and real estate and their relative value in an economic collapse is important to have in perspective right now. Why ? Well, I feel that right now we are standing before the precipice and still have time to adjust our assets for best potential. Problem is, nobody knows for sure how the future will play out. The best we can do is to diversify and hope for the best.

While cash may fall in purchasing power in the future, we still need it to transact on a daily basis. In a collapse, cash may become king for a while. First, very few hold any significant cash in hand. I have read that the average family only holds about $50 in cash. And second, the general public will continue dealing in cash since that is all they know. A cash crunch may be a time in which one could scoop up bargains. But what is a bargain when there may be no one with cash to buy these bargains ? In other words, we must deal in the time in which we are living. Items that are bought must be sold as soon as possible since the financial landscape may change without warning. Besides, quick turnaround makes cash available for more deals. Time is money; money can be lost by holding onto an item too long.

Precious metal dealers, like at your local coin store, always know what the price is at the moment of purchase as well as the price at their sale. They get on the phone or internet to have the most current prices. It is the spread they are interested in. That is where their profit is made, not by holding onto their precious metals in anticipation of long term gains. I know that some PM dealers have their personal stash but they are smart enough to know the difference. Their spread or margin for what they offer for sale in their stores is relatively small while your bartering and horse trading can be relatively huge ! But it is the greatest when you buy and sell in the shortest time possible.

Imagine buying an item for $100 and selling it for $200 the next day. This is a way of pyramiding a pittance into a fortune. I have written about this a long time ago. Imagine taking $100 and doubling it each day. At the end of a half a month you would have $1,638,000. That's in 15 days !

But this is not really possible; just a theoretical exercise since finding a deal in which you could double your money each day becomes impossible as the increasing size of the deals necessary also becomes impossible to find. At least you can see how fast this could get you up and running. Think of it like an inverted pyramid; the first deals are small and easier to find. But as you build each day like adding a new layer on the pyramid, you have greater depth as well as width in the size of each layer necessary to continue. So let's not go off into flights of fantasy. And let's not drive ourselves crazy in the pursuit of quick riches.

Perhaps the analogy of a regular pyramid is best since it stands the test of time. Broad and deep. Have you ever seen a pyramid fall over ? Recall any hijacked planes crashing into a pyramid ? 'Nuff said.

Coin dealers can only dream about this high return from bartering and horse trading. But their business is steady and they make money when they buy as well as when they sell (or should if they are smart). Small percentage return but relatively constant in relation to most barterers and horse traders. I am writing this to make you aware of the time value of money.

The smaller deals are around but the large deals are less visible. There may be a company that has gone under and is selling out their inventory and equipment. It may be an estate sale where everything can be bought as a package. It may be a boat or a car that a seller has to get rid of fast. It may be a piece of heavy equipment needing minor repair, Or it may be a motor coach that is being sold at far below market price. Lots of possibilities. Always remember that it takes the same work to do a $100 deal as a $10,000 deal. Don't scoff here; I have seen and done it and it generally holds true. I recommend that you think deeply about this since by not adopting an open mind to new possibilities and ways of thinking, you can be holding yourself back. As the saying goes, you are your own worst enemy.

Boy, did I get off track there. Let's see, precious metals and real estate. Well, I see precious metals as a vital portion of one's preparations. Forget fantastic potential quick profits. It should at least maintain purchasing power through time. And accumulating more PMs should come as you make extra money. It should be in proportion to your whole portfolio. In fact, if you are always anxiously watching the daily PM prices rise and fall, you are probably too heavily weighted in precious metals. Additionally, you are thinking in the framework of a speculator or an investor. As a survivalist, I am at peace with my PM allocation. I have working capital and a budding business. Sure, I could instead have more PMs but I would be unnerved like someone with PMS. Sorry ladies, couldn't resist.

So enough of precious metals. They have their place on our lives but we should not go overboard. Remember King Midas ? Not a happy camper, huh ?

Now real estate, there is a can of worms. A primary residence with no mortgage is something to be proud of. But even this can be adjusted as deemed necessary. A big house with a market price of $375K in a residential area may seem superior to a farmhouse on 10 acres with a market price of $290K. But times are a changin' and that farmhouse on 10 acres could provide security and crops in a collapse. Where are we heading ? Isn't it becoming obvious ?

I have a prediction : At some times and in some places, real estate will be worth less than zero.

After a collapse and a property that can't be either occupied or rented, it still has the financial burden of taxes and maintenance. A big negative and that is what happened to many properties in the last depression. Last Saturday my son and I were garage sailing and we saw more houses for rent than we ever have before. I mean, it was ridiculous how many there are. I have read that houses aren't moving and owners are renting in a desperate act to lessen their monthly mortgages. Of course, many of them still are upside down since a house may rent for half or less than their mortgage payments. It has been said that real estate prices will continue to fall until the rent is in historic proportion. As I recall, the rents used to be 1% of the property value. So a $375K house renting for $1,300 is seriously out of whack. There is an insurmountable barrier here for many "homeowners" (I use that term loosely and somewhat cynically). They have no way out except ultimately tossing the keys to the lender and saying, "good luck Charlie". They have too little equity and the longer they delay in getting out, the more they will lose. They bought foolishly and the lender loaned foolishly and they both are getting what they asked for.

I think that this is the worst time to be buying real estate. Well, only thing worse is if you had bought at the peak. Amazing that real estate is being touted as a bargain. And guess who is doing the touting ? Would you trust them any more than Slippery Sam at the local used car lot ? As I have shown in the last paragraph, real estate has a long way to fall until equilibrium arrives. And I even have my doubts then as I view real estate as a black hole, sucking in surrounding properties. Oh yeah, even the fully paid for properties are getting clobbered. Why ?

A $700K home in a nice neighborhood is valued by what is called a "comp", a comparable price of nearby similar properties. And banks that have foreclosed and are selling (dumping, really) are waaaay below earlier prices. So these dump prices are used to determine the potential price for a property owned by someone who has either responsibly paid off his home through the years or has paid cash. In either event, he is screwed royally. And through no fault of his own.

I have a friend who I have been advising to sell for years. Two years ago he could have sold for $700K, last year for $600K and he says that he would be lucky to get $500K now. Losing $200K in 2 years is devastating, especially since real inflation is estimated as about 14% per year. I would calculate the real loss in purchasing power but I have just eaten and don't want to get sick.

With the banks borrowing hundreds of billions and scared to loan on real estate, the future looks frightful to me. I believe that they are heavily speculating, hoping to clear up their damaged books. Does this help explain the huge oil and food commodity price rises ? Are we the american people paying for the banks' mistakes ?

We can't spend too much time in understanding more details. Suffice it to know that things are screwed up and getting worse. As Ponce says, "The government will tell us what they want us to know AND what they can no longer conceal". To me, this also says that there is much more to be revealed. We must go about our lives and do our best to position/protect ourselves as much as possible. I hate to say it but things could get uglier than we can imagine.

Therefore, each day is a gift and we should use it to our maximum. Worrying about the future solves nothing but ACTING is the only way out.

There will be great opportunities at the bottom. Just don't be impatient, for to act too early is like catching a falling knife. You will get cut and bleed. And financial bleeding takes a long time to heal, if ever.

I tend to thingk in terms of Noah's Ark. Self contained and prepared for a long storm. What is coming isn't going to end quickly but rather will scar the psyche of the populace for generations. It was so for those who lived through the last depression and I expect a repeat.

Take heart; there were many millionaires made in the last depression. Who were they and how did they do it ? From what I have read and from family experiences, the people were out of debt and had some assets in possession. Like cash outside of the bank. At the bottom, real estate was sometimes given to those who were willing to take on the responsibility. I have a relative who took on several properties at the bottom. Got them from the banks for free and rented them out and when the market returned, he sold out and retired rich for the rest of his life. Nothing is guaranteed but this may work again in our future.

Acreage that can produce crops may be a great bargain at the bottom but it is complicated by future's uncertainties. Just something to watch for. I have been reading about switchgrass as a plant for making ethanol. A recent articles states that the return is about 5.4 times the oil needed to grow and process it. Corn for ethanol, little better than a break even, has been a govt boondoggle and may end soon especially with the starvation going on around the world. If I remember right, Ponce said that about 5,000 are starving daily. Too sad for words. This switchgrass appears to hold promise since it is not edible and highly profitable. So having acreage could become desirable if this alternative becomes popular. I don't have the funds to buy a large piece of acreage but if I did, I would be watching it closely. Just a thought.

My son and I went garage sailing last Saturday and didn't find much at first but we persisted. The last place had several 50 gallon plastic drums full of antifreeze. I took two drums and bought a pump on one of the drums. Total cost ? $10. I could have the rest but enough is enough. If antifreeze is $8 a gallon in the parts store, my two drums would cost about $800 or maybe $600 wholesale. Funny but I'm still not sure if I should have taken so much. It may take 10 years to use it all and storage is a consideration.

DVD movies are sometimes $1 and I got 4 last time. I'm waiting for someone to sell his collection but I expect that may happen later this summer. There was a lot of worthless junk last Saturday but the guy with the antifreeze had load of other free stuff that would cost me hundreds of dollars if bought at a hardware store. I got his number and address and will take a truckload when time permits. Just because I don't need his items right now doesn't mean that I won't either need them later or be able to sell them someday. It is a tremendous advantage having acreage as a place store bargains. This is something most folks don't consider and should.

I spoke with an old timer who is retired and used to make money buying at auctions and he was happy to tell me where and how to deal with them. I have his phone number too. Another possible opportunity; time will tell.

If you see any old dead BBQs, check them out. Many are made of aluminum. My son took the aluminum in from one and got $.50 a pound. Lawn chairs, aluminum siding and transmission cases and heads are also fair game.

I still haven't looked into old catalytic converters but I have heard that dealers are paying as much as $200 for some types. I have wondered if someone had a bunch of old wrecks out back, he may be willing to sell them. All that would be needed is a floor jack and stands and a power cutsaw. Probably have one out in 10 minutes. Just another thought.

I just talked with a man who scraps out old cars and metals. He sells scrap cars for $250 per ton. L.A. is paying $350 per ton. About $.90 to $1.00 per pound for aluminum. Most important to shop around for the best prices offered per pound or ton. They vary greatly.

Gotta go; lots of deals in the works.

Best wishes and JMHO,

agnut

Here's an article relating to what I have written in my last post :

A Real Estate Depression Without A Depression
by Michael Pollaro

http://www.financialsense.com/fsu/ed...2008/0616.html

I agree with the author that we are in deep doodoo and worse is still to come. So why buy a house in the current situation ? A guaranteed loser. Well, unless you could find a house for practically nothing.

I especially liked where he said "Be wary of the bottom caller. Falling knives can be fatal." All it takes is one mistake to ruin your life for a long, long time. And unreal estate's falling scenario is big enough and illiquid enough to bleed you dry and make you a slave to the debt system.

Sad to say, this real estate debacle will drag the economy down. Whether we own real estate ourselves or not, all will feel the pain to some extent.

Best wishes,

agnut

P.S. Should we call it surreal estate ?

much like PMs you don't lose on real estate unless you sell when its down.

If you hold for the long term your not gonna lose( acording to past history)

Real estate will/has always increased in value sooner or later. (In Ca. anyway)

I sold many PMs in 2000 and bought my 1st house and have done quite well since then.

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Bye GIMmers

Its been a Fun learning experience !

Hi again Canadian Guerilla. Insightful observation. How'd you get so darn smart ?

Just like in the last depression, repairmen of equipment, appliances, shoes, there will be a burgeoning need for such activities. I hope. I rebuild transmissions but I can see that my demand for good used transmissions will be greater in the future. I will be doing "patch jobs" to get customers back on the road.

So what am I doing to prepare for this great change ? Well, I am collecting all of the used gears, bearings, syncro rings and even good used seals. I have bucket loads of parts for this eventuality. Also I have a large quantity of new gaskets since they are generally only good for one time.

Before the depression hit, shoe sales were in a normal mode but after the crash, shoe repair was in greater demand. At least that's the way I see it. Gotta not only change with the times but also gotta be prepared in advance so that the transition isn't such a shock.

Here's an interesting example. I learned that the only supplier outside of the factory wasn't going to reorder specialized bolts and this supplier had only 1,500 bolts left. He didn't have the nuts that normally go with these bolts but I still bought his whole inventory. Little did I know that I would play hell in finding the specialized 9X1 metric nuts. Now I have enough bolts to rebuild 200 transmissions. And these were the last bolts available in the U.S. Wonder what my competition will do when they run out. By the way, the auto dealership sells the 8 bolts and nuts in a set for $240. I paid about $13 for a set with shipping.

Point is, some critical inventories of parts to complete a job are disappearing and won't be replaced in the future. Those specialized bolts would cost $60,000 to restock since the boly manufacturer will not accept a production run of less than 100K bolts at $0.60 per bolt. That is why I'm buying all critical parts right now to insure that my business survives.

The Royal Bank of Scotland just issued a global crash alert :

http://www.timebomb2000.com/vb/showthread.php?t=291685

This warning runs along the lines of James Turk's warning of a crash this summer. I posted Turk's article a while back and told you to take it seriously. There isn't much time left to get your "ark" ship shape.

Note that cash is predicted to be valuable in the near future. Haven't I been saying this for a long time ? It doesn't take a rocket scientist to see the absolute necessity to be diversified and prepared. Bracing for "a full fledged crash" as the article says isn't to be ignored or marginalized. This could be the last warning you get before it is too late.

The nature of a crisis is that it catches almost everyone unaware and unprepared. Please, please don't be among the "almost everyone". The purpose of the GIM website is to inform readers of possibilities as well as dangers. Over the years, precious metals have become a part of the foundation at GIM, whereas in the beginning it was primarily about precious metals. Now GIM has evolved to encompass most everything of significance to our lives. And some trivial, off the wall subjects, I might add. But the major focus at GIM is to be well informed and consequently to be well prepared. I hope you who read this will take the time to self examine your prep situation.

Highly important are your mental preps. Like how you are going to handle a chaotic/crisis when it unfolds. I also think we don't have much time; it could be tomorrow or in a few months. But the writing is on the wall.

Guns, gold and grub (and I don't mean grub worms; unless you are not prepared. For foraging in the woods is a supplement to your preps and NOT a mainstay. Well, unless you are Jerry and know how to live off the land.


It is about 4:30 A.M. and the neighbor's peacocks are announcing the coming dawn. Like some rooster on steroids. Glad they are so distant. Can't imagine owning one. Oops, now the peacocks have awakened the burros and they have joined in the chorus. A real barnyard symphony. Nobody ever says that an animal is off key. Guess that's reserved for us humans.

My son's homemade dandelion wine is bubbling in the background with the regularity of a wall clock. A wet tick-tick-tick. Dandelion leaves go great in a salad too. My son also has learned to eat stinging nettle after thoroughly steaming it. Grows all over the place here. Tastes like a slightly minty spinach. Kids, don't try this at home. By the way, I highly recommend growing spinach. We have two rows of them planted and we take off the larger leaves for salads. More than we can possibly eat. You don't need much land for this either.

A funny thing happened this morning. At least I think it was funny. Don't go by me; I have a warped sense of humor as you probably know by now. On CNBS (that's CNBC to the uninformed) they had a real estate expert and he said that a couple of years ago a house would sell for $700K and now it may fetch only $500K. Hit me like a frying pan upside the head, for this is EXACTLY what I have been telling an old friend for the last few years. His house was worth this $700K a couple of years ago and now he said he would be lucky to get $500K. But I'm not getting cocky; even a stopped clock is right twice a day (unless it is a stopped naval clock; correct once a day). Point is, sometimes we can study hard and see the future exactly as it will play out.

I communicate with Ponce regularly and it is almost scary how he sees the future and it unfolds as he predicts. I have never met anyone with this ability and don't expect to ever meet another. Of the one in a thousand who have seriously prepped, I guesstimate that Ponce is one in a thousand of the one in a thousand who have prepped so thoughtfully and thoroughly. In my book,that makes him a one in a million ! So with 300 million in the U.S., he is but one of 300. You may vehemently disagree but few know Ponce as I know him. I have to give credit where credit is due and tell you that many of my thoughts and conclusions come as a result of talking with Ponce. This is not to flatter Ponce; we are way beyond that. This is to inform you that both Ponce and I are on a day by day watch alert. We both feel that it could come tumbling down any time now.

Therefore, treat each day of prepping as maybe the last. Not frantically but with assured determination. We have seen the worldwide crop devastations recently. I read that if we have a poor crop this year, there will be mass starvation next year. Well, we are having mass starvation RIGHT NOW ! It is happening in the third world but we in the U.S. are only seeing food price increases and minor food shortages. Trouble is, we are becoming a banana republic without the banana trees ! So where do you think we will be after a dollar and/or market collapse ?

Why all this doom and gloom talk ? Please don't think of it this way but rather as part of our understanding of the gravity of the situation. We all must be futurists; that is where we will be living. In the future. And if we do not prep now while we can, no amount of money or begging in the future will procure what is easily had right now.

If this doesn't motivate you to action, you may as well be dead men walking. I can't put it any more bluntly. Life will be unbearable for the ill prepared masses. Everything you do right now could have inestimable value in the future.

As I and others have advised, get out of the city if you can. At least find a bugout place you can go to. I'm all booked up with family and I'll probably be spending much of the future, sleeping on a couch instead of a bed. Other people come first and me second. We truly are our brothers' keepers. Well, I have to admit that the couch is right in front of the big screen TV, so I'm not THAT altruistic. Hehheh

Bartering and horse trading our actions and considerations of others' needs for what ? Something greater than most imagine; our dignity and love of our fellow man. I would rather die in helping others than live selfishly in comfort while all around me is misery. I just hope I am strong enough to be up to this. I'm not a great guy; I've made mistakes in my life and am nowhere near perfect. I just feel that we are here for a greater purpose than ourselves. A secret of giving is that you get back many times what you give. It has always worked for me on the whole and I'm happy with it.

So what could we do right now that would be a help to others after a crash ? Well, many won't like this but here goes. If I had the extra money I would stock large quantities of basic food stuffs and put them in a storage locker. When the time was appropriate I would contact a local citizens group and offer it for free to those in desperate need. Of course, all kinds of things could go wrong here but this is the best my feeble mind can come up with. However, if it were sensible distributed, it may dull the blow for many who are unprepared. I am primarily concerned for their children; our future. Wasn't it David in the old testament who advised the pharaoh to store several years grain for the famine years ? Sad to say, our "pharaohs" today are our elected officials who once had three years of grain stored away (at taxpayers' expense, mind you). And they sold it down to where we only have enough grain for a half a loaf of bread for each of us.

Look at where we are now. Facing grain shortages here in the world's breadbasket with our reserves sold to our enemies. Gee, I wonder if anybody will connect that some day. Accountability ? Don't make me laugh.

For years I have been pondering what could be done for my local town and the only thing would be to talk to the mayor or food bank and make them aware of the coming crisis and what to do to prepare. Because I don't have the money to make a real impact. Being a minor politician, the mayor would see the advantage of being perceived as a prescient hero. Getting reelected would be a shoe in. Not to mention saving the local populace from starvation and misery. I don't know where the funds would come from but we keep having bond issues proposed for stadiums and other services that will pale in the face of food shortages. Are you thinking paleface right now ? That wasn't accidental.

Anyway, I have been considering getting a storage space and filling it with basic foods for the future. If things don't go Mad Max, and there isn't the crisis but only more food price increases without shortages, I could use the food for my family and friends. I don't know; still kicking around what to do. Hey ! I got an idea. Being the cheap bastard that I am, I could put the food in a 4X8 storage shed and save the rent. These storage places' rent fees add up, sometimes to far beyond the value of the contents. I once saw a storage space that had about a thousand dollars of contents and the owner had paid about $10K for storage over the years. Looks like a quiet racket to me.

Anyway, enough rambling for now. Gotta get to work.

Best wishes,

agnut

Hi Victor and thanks for the encouragement. Your working with limited capital is good for making you cautious in the future. And this cautiousness requires you to carefully and thoroughly consider all the pluses and minuses before committing yourself. I know, I've been there many, many times.

My example in my last post of the special bolts purchase was concluded as the result of considering all of the possibilities. The last bolts available with little possibility of their being manufactured in the future was one major factor. On the surface, the bolts are still available from the car manufacturer but I know for a fact that my customers will never stand for a price increase of $225 for my rebuilt transmissions. I would make absolutely no more net profit; the customer would bear the cost increases and the factory would get all of the money. Result ? My sales would drop precipitously (as in falling off the precipice).

So not buying these bolts would effectively put me out of business in short order. On this one factor alone, I was compelled to buy these last bolts at any price within reason. The seller could have demanded twice (or thrice) the price and I still would have bought them.

Why am I going into such detail about these damn bolts which are probably making readers bored to tears by now ? Good question and this story deserves a good answer. Here goes.

Imagine a manufacturer who has to gather all sorts of parts and materials together in order to manufacture a completed product. This manufacturer has no problem gathering all of these parts and materials EXCEPT ONE ! And the lack of that one item would shut down his multi million/billion dollar factory. The cost of this one item is insignificant to the price of the finished product. Other manufacturers also need this item for their products and are therefore in competition with each other. Because of the dubious miracle of JIT (just in time) inventory control, none of the manufacturers have any inventory of this one item except what is on the assembly line and what is hopefully in transit. Starting to sound rather stupid isn't it ?

Well, the manufacturers have learned to hedge their prices of this one item by a market mechanism which allows them to lock in the price of this one crucial item. They pay a small fee to secure an option to take physical delivery if the need arises. This guarantees their continued supply of this one item.

But like promises, guarantees are made to be broken. At the option (oopstion) side, the seller of these options is supposed to hold the physical equivalent of what he is writing the option for. So far so good. But this option writer doesn't really hold this item; he is just writing the option like he does without proof that he actually has the item.

Starting to sound familiar ? This would be akin to writing naked short options in the silver commodity (hmmm... sounds like commode. interesting) market. Of course, the fur has been flying concerning whether these shorts are naked or the sellers actually have the physical silver to back up their end of the bargain. Sounds a bit Faustian to me although the jury's not in yet.

Interesting that these large manufacturers critically need silver but rely on promises of delivery from the commodity exchange. A paper promise at that. Lord help them if the public ever wakes up to what and why inflation is devouring their futures. For their security and retirement are tied to the dollar's purchasing power at some date in the far future. A fear driven investor stampede into silver could be disastrous to the status quo.

Similarly, we should be holding physical precious metals as a hedge against broken promises of the fiat dollar.

Can't anyone see the overview of what is going on in our society ?

A downward spiraling dollar. Increasing unemployment. Food prices going through the roof. Gas prices going nuts and promising to get nuttier. Wage stagnation. Housing prices falling. Foreclosures increasing. The FED between a rock and a hard place. Crop devastation and resultant shortages. Worldwide starvation. Massaged govt statistics to conceal the ugly truth. Runaway govt debt. Ridiculously high taxes. Growing government with shrinking private sectors. Lapdog media instead of watchdog media. Financial advice touting paper promises instead of physical possession of wealth. Increasing crime, both blue and white collar. Lack of accountability for crimes, especially in the white collar crimes. Lies, lies, and more lies. I could go on but that covers most of it.

So do any of you think that the future looks bright ? With James Turk's and the Bank of Scotland's predictions of a collapse within the next few months, it is pretty clear to me where we are standing (the precipice) and heading (the crapper).

Hey, I don't enjoy all this doom and gloom talk any more than the rest of you but the facts are undeniable. We wouldn't be in the mess we are in if people didn't have to become amateur Sherlock Holmes in order to ferret out the truth.

By the way, I saw an article that stated that we may get some breathing space if China ends subsidizing their gas to their citizens. Oil could drop to below $100 per barrel. But if they do not end this, the article said that oil would rise to $200 per barrel. Lost of wild cards and black swans out there.

This thread began 18 months ago with the objective of offering opportunities for wiser spending our money as well as moneymaking deals all around us. But it seems that lately I have been focusing on the greatest bartering of all; our very lifestyles and financial freedom. Getting out of debt, living below our means, taking advantage of opportunities, buying food bargains and socking them away; these are all geared to elevate us toward freedom. The picture has become clearer as each day we are hammered with just how bad things are getting. There must be a tipping point in the near future; we can't continue in the direction we are heading. How long is anybody's guess. Point is, the Titanic's music can stop any time as she slips beneath the waves and hopefully we had the foresight to have brought our own life rafts.

The Titanic unsinkable ? The U.S. economy unsinkable ? Last summer we struck a financial iceberg no less damaging than the one that tore open the side of the Titanic. Can you hear the soothing music being played as the chosen few get aboard the lifeboats ? I read today that insiders are selling their stocks at an unprecedented rate while CNBC is playing the soothing music.

See, history doesn't always repeat itself exactly but it often rhymes. Here's hoping that we all have our life rafts in hand (if you don't hold it, you don't own it. Ponce)

Best wishes and JMHO,

agnut

P.S. Isn't it ironic that the troubles began with Bear Stearns ? Nothing like a stern bear to teach the bulls a lesson they will never forget.

hey agnut,
as per your bolt purchase
some people have foresight as to what could be valuable in the future

something simple, something small,
could well be worth its weight in gold in the near future

as most sheeple may think valuable means big ( big screen tv )

The devil is in the details

so to anyone reading this, think about your daily activity
and the little simple items that make life easier
and after TSHTF, the everyday common items that could be hard to find later on



i think i'm going to reread this thread from the beginning
and post & copy useful " typed bytes " for my own future reference
including those from the naysayers like Elmer

__________________

Hi traderken. I'm interested in buying real estate someday. For rental income and hopefully appreciation. I'd also like to have some properties to pass on to my 4 children. So I'm not against owning real estate.

My issue is with the times in which we live. And will be living in the next several years. You said "Real estate will/has always increased in value sooner or later. (In Ca. anyway)."

There is value and there is price in dollars and sometimes items, including real estate, have a wide chasm between them. If someone had bought a nice house in San Diego two or three years ago, it may have cost, for example, $700K. Today they would be lucky to get $500k, a loss of $200K. An old buddy is in this exact situation. In fact, the loss would have been more than that since there are realtor fees at both buy and sell times, there are maintenance and remodeling costs, there are property taxes. And there may be additional losses from the difference between what rent this house would fetch and the mortgage and other costs.

Also, the time value of money is a major consideration. If it requires 10 or 20 years to double your money, what will the purchasing value of the "profits" if inflation eats it ?

Traderken, here is what may be a favorable scenario for buying real estate :

The market has crashed for both stocks and real estate. We have been in a depression for some time now. Nobody has any money except for necessities and for sale signs in front of houses have long since disappeared. The rioting and chaos ended some time ago and there is an air of resignation that things will stay in the dumper for the foreseeable future.

Properties are selling at for cash prices; credit has been largely expunged from the system. In the beginning of the real estate crash, the banks were selling their foreclosed properties at fire sale prices, driving down the potential sale prices of nearby properties. Next came the ongoing spiraling down as job losses with attendant inflation and consumer debt dealt lethal blows to the populace in general. Some time after that, many houses became vacant and an ongoing skirmish ensued between squatters and property owners.

And who were these property owners at this point ? Some were banks who couldn't sell and were stuck with these liabilities on their books. Well, the banks that did survive because there had been a consolidation of banking a while back. No longer was there a bank on every corner. Many were taken over and many sat vacant, grim testament to the carnage.

Some of the property owners who has the dubious good fortune of having fully paid for property; these poor souls didn't see what was coming. They held on as things hit the absolute bottom. They couldn't rent and couldn't sell. As property tax and maintenance costs took their tolls, many of them simply let the govt have the property. These properties ultimately went for sale on the courthouse steps for the property taxes against them. These tax foreclosures are reputedly the best deals and something I will be looking for.

Sounds a bit extreme until you recall that in the last depression, some banks were renting their foreclosed houses at a dollar a year (or a month; not sure) in order to have the place occupied so that it wasn't vandalized. See, history can repeat itself.

And this isn't even a Mad Max scenario. although close to it, I'll grant you that.

My folks owned a realty company for several years and also handled many rental properties. I've seen some of what goes on from the inside. Funny that my mom is a real estate broker and has for years disagreed with me when I said that real estate sometimes goes down. Only recently has she conceded that I have been right. Old attitudes and assumptions die hard. There is an important point to be made here. That is, we need to be aware of changing circumstances as well as flexible in our reactions. Otherwise we can be left on the scrap heap. Life has lots of losers and few winners.

What I perceive is a lifetime opportunity ahead. But it will only be so if we wait until the absolute bottom and still have the resources to pick up properties for a song and rent or fix them up and sell them. It won't be easy in the beginning but as long as real estate returns in value somewhat in the future, there is a chance for tremendous gains to be had. I hate to use all the qualifiers like "somewhat, chance, maybe" but the future we are facing is so full of uncertainties that I can only guess and hope for the best.

The monkey wrench in these assumptions is whether real estate will dramatically increase in value as a result of things returning to what we have become accustomed to being "normal". America and the world will go through gut wrenching changes if we have a deep depression. It won't be the same as the last depression so don't expect the history books to be any kind of roadmap. We have exported our manufacturing this time and as I have read, recovery requires a manufacturing base in order to recover.

It may be that we become a third world nation with the remnants all around us as a reminder of our past greatness (and excesses). France has always seemed proud of their Napoleonic era and that was a long, long time ago. Dreams of former greatness die hard.

If we do have a deep depression, expect many to give up and die inside. I know, it's a hard thing to contemplate but most of us have lived like kings couldn't even dream of. Opportunity, education, health miracles, food varieties, discretionary income, mobility, cheap energy, electricity, instant communication, a plethora of entertainment and many more other conveniences we take for granted. It has been a wild ride. I can still remember the aroma of the outhouse I used on my grandfather's cattle ranch. They lived close to the soil and today we don't. Getting back to the grass roots will be nigh impossible for the masses. This is why many writers on the internet urge others to become as self sufficient as possible. The few who listen and ACT will be the least affected in a depression. To be a survivor ya gotta first be a survivalist. This ain't something you learn as you go.

Bartering and horse trading goes all the way back to when man first had something that another man needed AND would trade for it rather than club him over the head for it. Caveman days. Nowadays most folks trade their dollars for goods in stores. So the age old art of haggling and negotiating has fallen by the wayside except for the few smart enough to see the benefits. And on a sardonic note, we may experience a time of pre-caveman times where people will be beating others over the head for things. It may look like Mad Max times have arrived but I believe that they will end quickly as order is restored. This is a time to hole up and watch and wait for learning what the rules are.

Like any sane person, I hope things don't get this extreme but at least I am aware of the possibilities and won't be surprised. Mental preparations go hand and hand with physical preps. Can't negotiate well while you're in a nervous breakdown. So hope for the best but be aware of the worst.

Best wishes,

agnut

P.S. Didn't get out to garage sales today but was busy buying boxes of things from a machinist I have known for years. Some great bargains and I'll tally up the value and inventory before I report and commence to braggin'.

Got a 14 HP riding mower for $5 and it runs good. May need a battery though. BooHoo.

P.P.S. Hey ! Battery just needed a charge. Mowed the lawn fast and easy. My only complaint is no beer holder. Now what kind of self respecting total dirtbag would be complete without a beer holder ?

AGNUT,
FWIW, here's my personal take on "beer holders" on riding mowers...

The constant shaking of the lawn mower causes the beer to go flat after about one lap around the yard. It sucks. The best beer holder on a lawn mower is the hand not holding the steering wheel. Relax your shoulder a little bit so the beer doesn't shake so much. I have a big yard, so a cold one only lasts me about 4 laps. But if I keep it in my hand, it's cold the whole time and never goes flat...and you always have one nice, cool hand!

You are very welcome for the lawn mowing beer advice. Mow on!

__________________
I was certified as a Forum VIP by my score in the GIM Aptitude Test (Score: 64)
When things go bad, you can't make paper bullets.

Hi Canadian Guerilla. If that bolt seller had 5,000 bolts I still would have bought only 1,500 bolts anyway. Why ? Because I don't foresee my building over a couple of hundred transmissions until I will be selling repaired used transmissions which won't need these bolts. Used transmissions because the public won't be able to afford a fully rebuilt one. I'll be competing with wrecking yard prices. Also, I will probably be into more deal making at some future time. I'm diversified and getting ready for several opportunities. I feel that it is more important to hold cash right now rather than to hold too many parts.


This morning starts June 26, 2008, with three more days left to close out the second quarter of 2008. The opening stock market had the Dow(n) at 11,666 which is below the line in the sand of 11,750. This is definitely a bad sign. I read that if the Dow falls below this 200 day moving average low point of 11,672, a freefall could ensue.

At this moment, 8:25 A.M. Pacific time, the Dow is at 11,576, off 235 points. S&P is below the 1,300 mark at 1,295, off 26 points. Gold is at 915, up $33 and silver is $17.26, up $0.77 !

Oh yeah, oil is at $138.55, up $4.00.

To kick a dead horse, as Mark Haines said on CNBC, Goldman Sachs downgraded Citigroup AND General Motors just after the open of the market. So Citi is off 5.5% and GM is off over 10% right now.

By the way, the Dow is still falling. Today is most definitely one to watch closely, especially for the close of the market. Will the plunge protection team be able to pull their cookies out of the fire ? Doesn't look good, so today could be the breakdown to the pit waaay below.

A couple of quotes from Orlandini's current article over at Gold-Eagle.com, "Another Tough Day !" :

"I firmly believe we are in the beginning phases of what will prove to be a devastating bear market that will eventually change the political, economic, financial, and maybe even the moral landscape of the United States of America."

"Ninety-nine percent of all commentary serves some hidden master that wants nothing more than to feed off of your capital. It’s very important to understand that the “system” is designed to enrich the few at the expense of the many, and you form part of the many. Never forget that you are playing a rigged game and that with some intelligence you can beat them!"

So what has this market bad news got to do with bartering and horse trading ? Everything, because we must continually study the volatile landscape in order to safely traverse the terrain ahead.

Remember when I recommended to keep cash in hand and to not be in a hurry to buy what may seem like bargains now which won't be such bargains in the future ? That's what I have been struggling to do for the last few months; accumulate cash in hand. I've even horse traded for some machinery I needed rather than use cash.

I believe that the second quote is an accurate condemnation of Wall Street's attitude toward investors. So why should we leap into this snake pit when we have such safer and saner alternatives ? Bartering and horse trading offers us control of the deals as well as incredible potential returns without the commission costs at both buy and sell times. I have NEVER invested in stocks and don't see any reason to in the future.

I also believe that the destruction of the middle class will partially come as a result of their blind reliance on stocks and bonds as their vehicle to a retirement. Trillions can be wiped out in a matter of a few days thanks to the miracle of computer trading. Another part is the debt they have allowed themselves to get into. Just couldn't wait to have things before they earned the money to buy them. Like impatient children. And lastly, real estate prices falling faster that the last depression is compounding their ability to remain afloat much longer.

What I am trying to say is that we may be wisest to wait longer for deals that we expect. There is a bottom to prices and we must be aware of the resale price which will change as drastically as the low price we had paid for that same item. I'm waiting to find a deal on a backhoe tractor. Too expensive right now but I'm hoping that they will be sitting around with nobody wanting them after a market crash. What may cost $10K now may be available for under $2K after a market crash.

Maybe the saying to "buy when nobody wants it and sell when everybody needs it" will be our byword someday. And "stocks" will be what we have stocked away in our barns and garages. Trading material.

In volatile times, items change from weak hands to strong hands. I'm sure you are all familiar with this concept. I will stick my neck out and say that things are REALLY DIFFERENT THIS TIME. As many of you, I feel that we are heading into a depression. A real bad mother too.

Take heart; there will be dangers but also great opportunities.

Now more than ever, "if you don't hold it, you don't own it" (thanks to Ponce) !

Best wishes,

agnut

P.S. Got about 500 pounds of galvanized pipe fittings for $50. All sizes; over a thousand pieces. I guess I'm getting to look like a hardware store here.

Also got 20 VW engine main bearing sets (cost over $35 each wholesale), new camshafts and oil pumps and a bunch of other motor stuff. Got a counterbalanced stroker crankshaft in the deal New it would be about $4-500; I don't know what it worth but I'll be out hawking my newly acquired wares. The cost for all of this "junk" ? How's fifty bucks ?


If you want to tell people the truth, make them laugh, otherwise they'll kill you.
- George Bernard Shaw

Here's an article that shows why it's important to remain liquid in our current situation. In the second paragraph he states, "But the prices of assets, like houses, stocks, jet-skis, GMC Yukons and pre-owned Hummel figurines are cratering as America turns into Yard Sale Nation." Sounds like The Great American Garage Sale.

Not Your Grandma's Depression

By James Kunstler

http://www.timebomb2000.com/vb/showthread.php?t=293035

Today is the last day of June which closes the second quarter and the first half of the year. June has had the worst fall in the Dow indicator since the LAST depression. We are only at the beginning of this bargain hunting season. So what should this mean to us ? Well, I can only speak for myself but I'm not in any hurry to buy anything unless I may need it AND it's a screaming bargain. Now isn't the best time to accumulate items for trading/resale later; be patient, the time will come. All I'm seeing is a lot of junk and a few good deals. I think it hasn't yet gotten to the point that large numbers of folks are selling their more valued items. It should come about as things get worse for the economy. Sure, there is a glut of big vehicles sitting around with no buyers. This will get worse as increasing fuel prices and attendant inflation further squeeze the populace.

Just like a stock investor, sit and wait for the bottom before buying in. In the meantime, watch for screaming bargains that could be resold in a short period of time. A quick turn, in other words. Get your cash back and use any profits for more screaming deals. I'm sitting on some diesel VW cars that would take weeks to rebuild and get to market. I bought them very cheap a while ago when nobody wanted them and could sell them for double what I paid but when rebuilt, they are now worth a bundle. They sit there waiting for when I have the spare time. My son is getting one of our boats ready for sale; it is a V8 and not practical for us any more. I got it cheap and may not make a profit but at least it will release some cash for the solar system I want.

I'd love to get a backhoe for the 10 acres we have but they are so darn expensive in relation to how much we would use it that it doesn't make much sense right now. Other things have a higher priority. Found a monster Case backhoe for $2,500 but it needs engine work and I'm already strapped for time. So it's not wise to bite off more than I can chew. It may be wiser to rent a backhoe for a couple of days for $600 and wait for the tractor prices to fall with the economy. This is one situation where I am conflicted; not sure if backhoes will fall in price as much as other big items. A backhoe isn't a toy like a boat or jet ski; it makes money and saves labor.A lot better to hold my cash and let time tell me what to do. See, every purchase deserves thoughtful consideration before commitment. Because once you commit, there's no going back.

Right now, holding cash even though it is fiat debt money may be the highest and best use for it. As I said before, only about 5 percent of our money supply is cash and about 80% of it is outside the country. That leaves only 1.25% of our money supply as paper dollars and coins ! So it isn't a far leap to see that we could have a helluva cash crunch coming down the road.

Gotta go.

Best wishes,

agnut