CSRobbins,

I know it can be difficult to go out and find deals but you can't give up. I'm currently out of a job but I'm able to pay my expenses by horse trading and finding good deals.

Rejection is one thing that will definately make you stronger. Keep asking - it gets easier.

Hustling is the name of the game. Make horse trading your job. You may have to take a small ad in the local want ads saying you buy certain items. I did that initially with coins and I got a call from another collecter who just bought up an estate and had a ton of stuff he didn't want. He was looking to get rid of these $25 bags of state quarters from the mint, still sealed in the mint packaging. Many states and both mint marks (I think 50 different bags total). He was going to take them in to the bank and cash them but he saw my ad and sold them to me for face value. It was a no lose proposition and I made some money on it. This guy kept my number and when he gets stuff he doesn't want he sells it to me cheap.

It definitely starts out slow but once you hit your stride you won't want to stop.

Good luck,

Silver Stater

Well glad to say I finally scored some deals. Just purchased 4 ase 1 2005, 3 2006 in great chape for 12.50 thats 2.20 UNDER spot... Yes!

Also I am speaking with an older lady in control of her late husbands estate, 59 merucries, I offered 50, looks like this is another deal. Also she has some halves for me to look at, ill try 2.50-3.00 for them seeing as they valued at 5.33, i want to be somewhat fair and not completely rob her, but if she was way more than I can afford I might just offer her another 50 for them and see if she takes...

Peace

Don't blantantly take adantage of someone or the deal may be your last. It's one thing for them to say they want $50 for something than for you to offer it, knowing it's worth way more. Word spreads and if you're fair people will recommend you to others they know. If they cheated they'll tell twice as many people not to deal with you.

An Insider's "Getting Started Thoughts" On Scrap Metal as a Business

---

Thanks for asking about Scrap Metal.

You do Not need a Truck to get started in this business. Heck, you don't even need a Pick Up - it helps if you do have a Pickup, but you do Not Need one to get started.

In fact, one fellow in the UK started his Scrap Metal Business with his Sedan. If the load was too big to transport in his Sedan he'd either hook up a trailer to his sedan, Hire a Pickup or small Truck to drive to transport it, or even hire a larger transport with driver if it warranted it. With the point being, do Not let your lack of Pickup be a hindrance to getting started in this business.

He started by taking his scrap to existing scrap metal yards - as all people would be advised to start. And eventually opened his own yard.

And with regards to this, you need to know the various prices at the various yards. And you need to know this for a couple of reasons...

Reason # 1: For convenience and Smoother Operation. If you have a Load on the West side of the city you live in, you don't want to drive to the East side to drop it off at the scrap yard unless it financially warrants it. You'll be losing too much Time in traffic. Better to drop off at the Nearby Yard so you can do more jobs in that area.

Reason # 2: You might be able to get more money for some metals at some yards than others. For example, one yard might be paying $1.90 per kg for Aluminum (alley, as we call it) while another yard might be paying $2.20 kg. If you have a couple of hundred kilograms one yard would be paying you $380 and the other yard $440 - a difference of $60. Better to take it to the yard that pays the best, as long as you don't then spend the extra money in Costs to do so. (Silly to drive across town to get the extra $60 while spending $20 on fuel and losing out on another $300 job in the area because you took too long to check them out and give them a price.)

You can find out their respective prices over the phone. Call them and ask them for their prices on...

Brass
Stainless Steel
Steel
Copper - pipe, stripped wire, insulated wire
Aluminum

With the exception of Steel, you should get prices per KG or Pound. Steel is by the Tonne and is quite cheap - maybe $80 per 1,000 kg.

Generally, the prices go...

Copper Wire Stripped (sometimes three times as much as insulated wire) and Copper Pipe
Brass
Copper Wire Insulated
Aluminum - there are usually two prices for Alley depending on if it was Cast Alley or not.
Stainless Steel

I actually like Brass over Copper Wire because of its Weight to Volume ratio. It weights a lot while taking up a small space. (Visit a hardware store and pick up a Brass Faucet Set to understand this.)

You'll also need to carry a magnet around with you. With the exception of Steel, the others are Non Magnetic. Important to know before you think you've got a load of Brass when it's really Brass Coated Steel or Brass Colored Steel.

Also a good idea to carry around some Hay Bale Bags or Garden Waste Bags or even the smaller Fertilizer Bags to put Loose Wire into. A small fertilizer bag might hold 20kg of wire while the larger bags could hold around 100kg. At $2 per kg for such wire, the small bag would be worth about $40 while the larger bag around $200. Often, you can get such bags for Free from the scrap yard by telling them you have a Lot of wire and need a bag to put it into to get it to them.

Other handy items would include a Four Wheel Trolley - the kind you see sold in Office Supply Stores and some Auto Accessory Stores. Flat, and low to the ground, they are ideal for putting those Bags onto and then Wheeling to your vehicle.

Many bags of wire can be filled during an Office Strip Out. In fact, talking to a couple of Sparkies on a 12 floor strip out I was involved in, they took out 1,500kg of wire per floor. At $2 per kg, that was $3,000 worth of wire per floor. Times the 12 floors and their boss pocketed $36,000 in scrap wire while also Charging for taking it away.

Another fellow would visit Mechanics and take away the discarded Catalytic Converter (CAT). Last I heard, he opened them, took out the Titanium and put it into four 44 gallon drums (all on one pallet) and sold the four drums to a company in Germany for $120,000!!!

Another guy drives around in a small Flat Bed truck picking up bags of wire. I've seen him with 8 bags on his truck - at anywhere from $200 - $300 a bag (depending on the price at the time) he had at least $1,600 worth of scrap on his truck.

Some sparkies have told me about Wiring Up a new office fitout on the Friday only to find it stripped of wire on the Monday thanks to Wire Thieves who then sell it to the scrap yards.

Even hotwater systems have a value - copper ones. Ask your scrap yards how much they pay for a system. If they paid $50 say, then you could run an ad...

Hot Water Systems Wanted. Any age or condition. Cash Paid. 555-5555

Pay $15 to $25 per system and you'll make $25 to $35 per system. Ten systems a day will make you $250 to $350 per day. If you find you can get $70 per system, then paying $15 to $25 per system nets you $45 to $55 - ten per day then makes you $450 to $550.

You might be able to Do A Deal with some Sparkies to Cash In their wire for them. They call you to let you know they have few Bags ready. You visit, pay them in cash, then take the bags to the Scrap Yard to get paid yourself. In such cases, always make at Least what you paid them. That is, if you paid them $100 for the bag you want that bag to be at least worth $200 to you. While this is a 50/50 cut you'd not have those bags without them doing the stripping and bagging work for you. And you make some easy money just taking it to the yard.

This is one of those businesses where you have to get the word out Directly. To mechanics to collect Copper Radiators, Plumbers who might replace water systems for the Brass and Copper they take out, sparkies for the wire, and so on. Many such Contacts already know of the Value of the Scrap they have, and would use you as a Convenience to doing it themselves. But it's worth sending them a flyer or even Business card letting them know you exist.

Heck, you might even find a niche taking away old washing machines and the like. They have Metal which has a worth...

Old Washing Machines & Dryers Taken Away. Only $10 Disposal Fee. Call 555-5555

Get paid to take it away and paid for the metal it has. It's usually Steel Outer and Inner so might not be worth the High Prices of Copper or Alley, but the yard still might pay you for them - call them and ask. Even if they won't pay for them they will Take Them Off Your Hands, so you could still make money charging others to take them away.

You'll find some metals come into your hands in greater volume than others. In this regard it's a good idea to have some Storage Containers at home. A Container for each metal is ideal...

So as you come across the odd Brass Faucet it goes in the Brass Container. Same for Stainless Steel Door Handles and Door Furniture going in the Stainless Steel Container. That enables you to have small Stock Piles of certain Items to be Cashed In when they reach 20kg worth.

Other than the above, just get into and learn the rest as you go. You'll discover there is more metal available than you at first realized.

Michael Ross
www.hotsheetcity.com

__________________
.........................................

The only socio-economic system compatible with freedom is capitalism, as defined as the complete separation of the economy and the state.

How 6 people accidentally found a fortune

http://www.cnn.com/2009/LIVING/08/12...ure/index.html




Thought of this thread immediately!

Hi CSRobbins and silver stater. I appreciate your posts. Negotiating sale price is an art in itself. The best way I’ve found is to ask what the seller wants and then go from there. And if the seller either doesn’t have a price tag on the item or wants you to offer what you are willing to pay, I recommend that you be insistent that the seller give you a price. That establishes a starting point from which to bargain. Yesterday my son and I were at an automotive swap meet and a seller had a stick welder with all the accessories for which he wanted $50. The price was so low that I didn’t haggle with him. There are times where we should pay the price and be happy with it. To have haggled in this instance and get it for $40 would have been a negative in my mind. The same goes for buying silver and sterling silver. Recently the price has been in a tight range. And being able to pick up any large quantity at a deep discount is near impossible. The last two deals I have seen were where the seller changed their minds and decided to not sell their sterling silver. The public seems to be wising up; probably from necessity rather than preemptively planning as we here on GIM think.

I’m not sure what sterling silver’s buy price is at the coin stores but I have heard that it is about 80% of spot. They then take it to the refiner where they get 90% of spot price. One dealer I know gets 94% of spot price but that is because he takes in large quantities. So most dealers making 10% for their buying and taking it to the refiner seems to be a too small percent return. Maybe I’ve been spoiled over the decades but if there wasn’t at least a 100% return, it wasn’t worth the effort. This is always one of the prime factors in buying anything.

As I have written, a deal should be taken on an individual, unique basis. Each one is different in some ways. To buy an item that you really need for yourself for $10 when it is $100 new is for all intents and purposes a “ten bagger”. But to buy this same item and intend to sell it for a profit is much less. Nobody in their right mind will pay you the $100 new price. You may only sell it for $20, a two bagger. Additionally, you must calculate how long until you will be assured that you can sell it. Could be a long time and each item bought has a time limit within where, if kept too long, the profit fades into zero or even a loss. An example would be collectables. There is usually a bubble peak and then a falling demand and therefore a falling price. So timing is important as well as where you are on the timeline of the item’s peak and trough.

I’ve been watching housing for many years and although we are hearing all the talk about housing having hit bottom and this is now a good time to buy a house, I don’t believe a word of it. I know some here on GIM have written about buying a house but I would caution you to look at rentals instead. This unreal estate bubble isn’t deflated by a long shot. In the future a home may well be only a place to live rather than a speculative investment opportunity, with commensurate low prices. I have recently read that renting is about 1/3 as expensive as owning a home. Do prices have to fall by 2/3 until an equilibrium prevails ? Just because a house that was $512K in 2005 fell to $243K, it doesn’t mean that it is a bargain. This is like driving forward in time by looking in the rear mirror. Catching a falling knife is another way of looking at it. Wait until the knife has hit the ground before picking it up. Works in the kitchen; why isn’t it used with the biggest purchase in the average person’s lifetime ? Pure propaganda (pride of ownership) and peer (and spouse) pressure.

I posted a thread about what is the real unemployment rate. Jobs, or the lack thereof. If there are about 60% of jobs either directly or indirectly connected to government, which by the way is net hiring about 41/2 percent a year, this leaves 40% who are not govt connected.And out of this 40%, maybe as much as 50% are unemployed. This would imply that only 20% are pulling the other 80% of the load. No wonder the govt has to borrow so much. And this cannot continue for long until the foreign creditors grow tired of us and pull the plug. Do you think that the dollar will buy more or much less ?

Gotta go; I still owe a reply and thanks for des00s' great post. Lots to think about there.

Best wishes,

Agnut

P.S. Been picking up free boxes of fruit and vegetables form the local supermarket. For our animals and ourselves. You can’t believe how nice most of it is. Ripe mangoes, cantaloupes, apples, etc. I just asked an employee and he told me that various people pick up the boxes for their farms and ranches. We probably saved a ton so far and this looks to be an unending source of free food.

Thanks for posting that great article Des00s. Through all the writing about bartering and horse trading, I’d forgotten to cover this topic. My bad.

Through the decades I’ve always collected scrap metals and turned them in. Comes to more than beer money. Well, unless you are a total falling down drunk. In which case you probably don’t have a driver’s license to pick up the goodies laying all over the place.

The scrap metals prices can change in a short period of time. And each scrap yard has their own prices offered. So it pays to shop around and find the highest prices offered. Of course, distance traveled is a big factor. I wait for the price to be high and then drop off a load only if I am going to that area anyway. Why spend the time, wear and tear and gas for a specific trip. Like multitasking, and it will become more important in the future that we all get the most value for the miles we have to travel.

So where do we find this free scrap metal anyway ? Appliances with aluminum housings. Old copper wiring. The other day I got about 20 pounds of heavy 220 wiring for a buck. I can either use it for an extension cable or strip out the copper. I may use it for a line to a 220V air compressor I’m installing. That is, after I get it back from a guy I loaned it to a couple of years ago. What’s this ? Did I loan out a valuable piece of equipment for two years for free ? Dumb and dumber ? Not really, the guy took over my old repair shop and moved my business to my property for free. He also helps me with welding, parts and mechanical work. Lots of business connections too. Bartering and horse trading encompasses all sorts of trades and deals. Tit for tat. Some things you can’t put a value on such as helping others, new friendship, connections, etc.

Old propane barbecues are usually made of aluminum. Auto repair shops have scrap aluminum and brass. Aluminum cylinder heads, pistons, water pumps, etc. If you ask them for their scrap metal, they will often say that they have someone who picks it up. You might next ask how much he pays them for the scrap metal. The guy will probably look surprised since he has been giving it away. You may then offer him a price for the scrap. Could be cash, could be beer. Even trash dumps have valuable metals thrown away. Glass shops work with aluminum frames. Something to think about.

I get square 4 gallon plastic buckets with lids for 50 cents each. Delivered to my door, no less. Lots of uses (prep buckets anyone ?) and they would cost about $6 if I had to buy new and pay shipping. I have a standing order with a driver who picks them up from a bakery about an hour away. He gets them for free and I think it’s well worth paying for the convenience of having them dropped at my house. I would like to have a thousand of them since I could sell them for a profit in the future or use them through the years. Petroleum product, right ? And where is oil price going in the future ? Right !


Old broken furniture made of solid hardwoods like oak, cherry, walnut, maple. Maybe now you will understand why I bought a wood plane a while back. Have you priced hardwoods lately ? Maybe a crazy idea but I’m always looking for what will become scarce in the future. I may never get the time to actually put this idea into action but at least I have the equipment. The wood plane cost me $100. Not much investment and I could always sell the plane for a profit.

This wood plane relates to Ponce. Even though Ponce is well stocked with about every prep imaginable, he recently bought a precision metal working lathe. He got it in case it is needed for future income (yeah, right Ponce. We know that you just had to have another toy to play with and invent.). For years, I’ve been doing my best to imitate his way of looking at things. A plan behind a plan behind a plan is deeply engrained in his way of living.

Gotta go before this damn computer erases this post. Maybe it’s about time to gently tap it with my hatchet while whispering, “We’re going to be good to each other, aren’t we ?”

Best wishes,

Agnut

In case you’re wondering why you are having a hard time understanding our world seeming to be turned upside down, here is an article for thought :

Inflation’s Moral Hazard
An age of loose money not only destroys savings; it corrodes character.

By Theodore Dalrymple

http://www.city-journal.org/2009/19_...inflation.html

Lately I’ve been busy with the latest Silver Musing. Number XXXXVI, 46; can you believe it ? Anyway, this particular thread is vitally important in that China’s recent actions regarding gold and silver for their people has the potential to overturn the Comex silver short manipulation. Something I and many others have been waiting for the last several years.

Okay, enough of that. What deals and money saving ideas have occurred lately ?

I use a delivery service for my rebuilt transmissions and the driver also delivers pies from a local bakery into the big city. I asked him if he would see if they have any buckets. He said they had a large stack of them and they were free if I wanted them. So I asked the driver if he would pick up a load the next time his truck was empty. The next Friday he dropped off 60 buckets with lids. They are square buckets (stack and store better than round buckets) about 4 gallons each and are clean inside, having been used for baking ingredients. I surprised the driver and paid him $30 on the spot and told him that any more he could deliver I would pay the same. He seems happy with this arrangement.

Since that first time, he has delivered two more loads of buckets. And more will be coming in the future.

By the way, these buckets would cost about $6 each of ordered through the internet. So getting them delivered to my door for 50 cents each is a bargain.

Not only that, I am storing away the extra buckets I can’t use right now for the future. They have so many uses besides storing food preps that I can’t imagine having too many. Maybe a thousand wouldn’t be enough if they become unavailable in the future or too high priced. Remember, they are plastic and therefore a petroleum product. Also, some manufacturing plant had to have fabricated them. Will they be in business in the years to come ? Think of Cuba and their unavailability of most everything.

One thing is that they must be stored out of the sunlight. They do stack well and being square, they store much better than the round buckets.

If I had bought these buckets new, 200 would have cost me at least $1,200. But I paid $100, so the $1,100 savings was after tax money. I would have had to make about $1,500 before taxes. Also, sales tax if bought within my state would have been an additional $100.

Okay, so far so good. A bargain and some trading material for the future. But what if I wanted to get my initial $100 investment back for further deal making ? Maybe sell them for $1 or $2 at my next garage sale. Swap Meet ? Craig’s List ad ? Local Thrifty ad ?

Say if I sold 100 at even a buck each. I would have my investment back and still have 100 buckets for my own use. Maybe a good idea as long as the future bodes well for my continuing to get more buckets. Maybe a bad idea if this were to end and all I had was what I had accumulated to that date.

Is this starting to sound like all preps and especially precious metals ?

Remember the quote from one of the sages from TimeBomb2000 ? Realize that what you hold right now may be all that you will ever hold. Ties right in with Ponce’s saying, “If you don’t hold it, you don’t own it”.

This may seem small and insignificant but this transaction is representative of the bartering and horse trading mind.

Many years ago I was watching the Johnny Carson show and James Galway was a guest. He is one of the top flute players in the world. I have several LP records of his music. Anyway, the conversation came around to Johnny asking when he got into this music work. And I’ll never forget what James Galway replied; “Well, Johnny, In my country when you are doing what you love more than anything else, it’s not considered work”. Johnny just stared at the camera and you could have heard a pin drop in the audience.

More conversation followed as well as James Galway performing his specialty; playing two flutes at the same time ! A real mind blower.

But that gem of wisdom was lost on the audience. Too many people hate their job and can’t wait for the weekend off.

Work isn’t work if you love doing what you do. Hopefully, this bartering and horse trading thread will help some of you find something that makes you want to get out there and check out some mouthwatering deals (just don‘t go so far as to be foaming at the mouth). If you can’t wait for the newspaper to arrive. If you can’t wait to get to the garage and estate sales. If you are always seeking ways to use your money more powerfully. If you are wanting to become more independent. If you are sick and tired of inflation silently stealing your income. If taxes are too burdensome. If you want to have some discretionary money for precious metals.

All of these can be accomplished through effective bartering and horse trading. The degree depends on you and your motivation to better your life, especially for the uncertain future.

Please read the silver musing XXXXVI thread; it contains references to several website articles that hammer home the precarious financial situation we are all in. But don’t get mad; get even.

There are dissipaters, maintainers and builders in this world.

The dissipaters; what can you say ? They are the consumers who buy on credit and later can’t afford the payments. The kind of people who win a 5 million lottery and are broke and in debt soon thereafter. The kind of people who get an inheritance and piss it away in foolish self indulgences.

The maintainers are somehow able to hold on to what they have been given and have earned.

The builders are the realists who ACT. They start with little to nothing and make it grow. They are always on the lookout for opportunity.

The process of becoming a successful barterer and horse trader is a one way street. Once you lose your ignorance, you can’t get it back.

Again I recommend “The Millionaire Next Door” and “The Millionaire Mind”. They can be found at abebooks.com and they are $3.64 with free shipping. Told you I was a cheap bastard, didn’t I ?

Gotta go

Best wishes,

Agnut

Randymatt, thanks for the private message with the following article. Wow !

It covers preps, neighbors, transportation, bartering and even zombies. A must read.

Circle of friends
The importance of other people
in our preparedness plans

By Claire Wolfe

http://www.backwoodshome.com/articles2/wolfe111.html

Best wishes,

Agnut

P.S. With the 263,000 unemployment figure out this morning, things don’t appear to be getting better. The economic "gurus had predicted between 100,000 and 250,000; but we got even worse than the most pessimistic. I have a feeling that time is shorter than we expect. Any day now….

So much to do but not to be discouraged; what we accomplish now won’t have to be done later in a difficult environment. And as the article says, there WILL be things that we all forgot to do.

Now may be our last chance to sell some items that will provide some extra cash/preps. I hope we are all fully aware that some of the things we possess now may well lose practically all value after a crash.

Agnut, Finished your thread a few days ago......love it! Dont let those books slip through your hands, there is money to be made on them. I picked up 315 books the other day at a garage sale for $.50 each. I started to go through them and found more than 2 dozen were listed on www.alibris.com for over $20, 2 of them were listed over $100. Books are hit and miss, they are only worth what someone is willing to pay. Selling them is easy, for an annual $20 subscription to alibris.com you can list as many books as you want and not pay a dime until they sell! There are various levels, it works kinda like ebay. It gets cold in the winter, lets face it, as un-sexy as selling books goes, people have to read.

I have noticed on GIM prep forums and on other forums that not much attention is given to nutrient value in food stocks. Processed foods like vegetables and fruits loose between 50-80% of there nutrient value after canning. I am sure you already know that this has much to do with processing, boiling, and handling techniques. Ascorbic acid ( vitamin c) is one of the more sensitive elements to heating and blanching. Vitamin C deficiency causes scurvy, bruising, gum and dental problems; it basically will turn you ugly! This might be a good thing for someone who is trying to lay low and out of sight, but if you value your teeth and health vitamin c is a good thing. Lets take a look at the ingredents in Campbell’s cream of mushroom soup: WATER, MUSHROOMS, WHEAT FLOUR, VEGETABLE OIL (CORN, COTTONSEED, CANOLA AND/OR PARTIALLY HYDROGENATED SOYBEAN), CREAM, SALT, CORNSTARCH, MODIFIED FOOD STARCH, DRIED WHEY, SOY PROTEIN CONCENTRATE, MONOSODIUM GLUTAMATE, DRIED DAIRY BLEND (WHEY, CALCIUM CASEINATE), SPICE EXTRACT, YEAST EXTRACT, DEHYDRATED GARLIC.

This ingredient list is off the back of a can of regular cream of mushroom, not the low sodium kind. The 6th main ingredient is salt. The label says that a serving sizes is about a half a cup, thats 4 oz. 12oz in a can makes 3 servings per can. I am an average size american and can easily eat the whole can. So, in one serving there is 850 mg of sodium, multiply that by 3 and you get 2550mg of sodium in one can, no vitamins can be found. You can make the same analysis with most other canned soups, even Nally's chilli. There is almost zero nutrient value in most named brand canned products. It is not worth the 89 cents per can that it costs, thats why they only charge 89 cents per can, you get what you pay for. My point is, if you stock up on the wrong type of food stuffs, you could cause more damage than good. I think if the SHTF, people who have food stocks will tend to rely entirely on them, most do not consider the consequences of a eating poor quality food. Think of what high blood pressure can do to you in a short period of time without the proper medical treatment. Rice, especially brown rice is usually better and cheaper than pasta, wholemeal pasta being the exception. Brown rice has fiber, calcium, and iron for women; it is also a source of good fat and carbs. I bought 24 pound of organic brown rice for $18, the costco kind, in the same store i also found 25 pounds of white rice for $7.99! My plan is to mix it in with the white since it is more expensive. So what do you buy if eating raw dirt is better than most canned food? You could stock up on seeds to sprout. Sprouting seeds is a pure source of food that could be easily stored, grown quickly, and eaten raw for maximum nutrient value. Alfalfa sprouts are common and loaded with amino acids and vitamin c. You can sprout almost any type of seed, all it takes is a dark place and water, there are sprouting kits to get you started. You want to be careful in storing them, moisture is your biggest enemy. If you have noticed the new kinds of breads being sold in local grocery stores, some of them are made from sprouted grains. This is a simple process and another use for the sprouts. After the the seeds show a small sprout growing from the seed, let them dry, then grind them up in your grain mill and you get the same flour these breads are made from, the nutrient level in sprouted grain flour is much higher than a normal seed. There are many more ideas out there for seed sprouts, just have to be creative.The idea behind storing food shouldn't be "what can i get for the cheapest price with the longest self life", it should be, "what can i buy to sustain myself with the maximum nutrient value, for the cheapest price".........

__________________
If you hold your value in a public way, it will be taxed or taken for the good of all. Such are the ways of extream times!

-Another

This applies to pretty much everything.
Exactomundo. Welcome to GIM!

__________________
Illusions occur when our brains attempt to perceive the future, and those perceptions don't match reality

Hi answer2me and welcome to GIM. For a new poster, that’s a pretty meaty piece of work. Thanks and I hope you will continue to contribute as we all need to share all we can in order to become as aware of all the subtleties of money, preps, etc.

First, let me recommend some articles for your perusal:

The End of Money and the Future of Civilization
by Richard C. Cook

http://www.globalresearch.ca/index.p...t=va&aid=15651

Gold/Silver: The First Global Bull Market
The Acamar Journal

http://www.gold-eagle.com/editorials...mar101509.html

Ignorance Is Bliss
By Peter Schiff

http://www.321gold.com/editorials/sc...iff101609.html

What Happens If the Dollar Crashes
Trade wars could break out. Overexposed banks might collapse. And that's just for starters

http://www.businessweek.com/magazine...2000801269.htm

While these articles may not seem to be about bartering and horse trading, they actually are, but at the other end of the deal making; the dollar/yen/euro/peso intermediary in a trade of goods for a recognized storehouse of value. Problem is, the world is running on potentially unlimited overissuance of said fiat currencies. UGH !

Gerald Celente, one of my favorite financial gurus, focuses on trends and not so much on predictions. These trends, gathered from past and recent performance, have the ability to foresee more accurately the future likelihood of their continuance. His method is to show readers the trends and let us come to our own conclusions. A trend will ordinarily continue until it doesn’t ! There must be a valid reason for it to suddenly change course. I have always said that when we face a bad situation, we need to ask ourselves what it will take to reverse the ongoing process or trend as Celente calls it.

Answer2me, you sound like you are well steeped in food preps and nutrition. You may want to share your thoughts at the survival prep forum also.

I have a lot of rice but also many other preps. The reason for the cream of mushroom soup is to add some “gravy” to the rice and meats. We have a test garden going and have learned a lot this season. Our dozen chickens are producing about 4-5 eggs a day so far. Maybe the photo we just put up of Co. Sanders will lend some encouragement. We would like to put some fruit trees in next spring; didn’t make it this year. See how we will suffer for not doing all that we can ? I know, I’m nowhere near perfect and let some things slide. My sons and I have been here on these 10 acres a little over 2 years. There are still so many things I would like to have ready that I’m still overwhelmed. By the way, having electricity for the long term is high on my list. Although I have 3 gas generators, I don’t fool myself. They are just to run the well to refill the water storage tank and to recycle the freezers in a power outage. My best solution is a solar system and a water cooled low RPM diesel generator. But they don’t come cheap.

I’ve grown wheat grass for years; the shots of its squeezed juice are potent and I understand, provide most vitamins and minerals we need.

The reason the dollar and other fiat currency has seeped into the bartering and horse trading thread is because they all are unreliable in the long term and therefore should be viewed, at best, as temporary uses as intermediaries in trade. I believe that we are in a great paradigm shift and that the world will be turned upside down in the next few years. Dishonest money begets dishonesty. What else could you expect ?

This is becoming even more crucial that we should have a greater portion of our wealth in gold and silver. Used to be that 10% of one’s wealth should be in PMs , but now 30% or greater is appropriate to my way of thinking. If China and India are encouraging their citizens to hold physical gold and silver, what do you think will happen as the dollar slides off into oblivion ? And we Americans are being discouraged to own physical PMs ? Can’t you see the great shift of real wealth in progress ?

So with all our bartering and horse trading, keep your eye on the prize; long term security for yourself and your loved ones (and maybe a few you don’t love so much). Precious metals are a must for our future. I bought about $500 in silver the other day. Some .999 one ounce rounds, some 90% and some Peace dollars. Since then their price has gone up but I am not fooled; actually, the value of the dollar has gone down. So, my strategy is working; I’m at least maintaining purchasing power through time.

Can you envision a future in which almost no one has any money ? Hell, I can see that it has already happened to some folks. But what I mean is, the general population being broke and most every possession for sale for a pittance. You know, like the last depression. This is but one scenario and I invite you to propose others. Hey, something has to happen in the future ! So what’s it gonna be ?

Off topic but have any of you taken in any items to nonprofit businesses that you can’t use or sell ? Remember that you have only 74 more days before New Years. If Hillary could declare Bill’s old underwear, skid marks and all, for a donation tax writeoff, why shouldn’t we ? Monkey see, monkey do.

Best wishes,

Agnut

Unreal Estate

In past months I’ve been seeing posts about buying real estate. Is it a good time or a bad time ? The answer varies by location, usage and price. A long time back I predicted “that in the future at some times and in some places, real estate would be worth less than ZERO”. Well, it has already happened.

Detroit Attempts to Auction 9,000 Properties for as Little as $500; 80% Had No Bids

http://snardfarker.ning.com/profiles...pts-to-auction

Even though the opening bid was for $500, there were no bidders for 80% of the offerings. What if the bid were for zero dollars ? Would it have been much different.? And what if they were to PAY you $500 to take the property off their hands, would you even want to get involved ? I wouldn’t, even if I lived in Detroit.

With the banks not lending, real estate buying would drop to the cash price offered. And who has the cash on hand to buy a house outright ?

The figure for banks’ holding foreclosed properties was 600,000 a while back I wonder what it is now. Additionally, the banks aren’t taking possession of properties that would have been foreclosed on in normal times. In the last three months something like over 900,000 places were overdue enough that they should have been taken back. But they weren’t. One reason is that they would have had to be put on the books of the banks. Another is that the banks would have had to pay property taxes on these properties. As these properties stand, the accumulating taxes continue to pile up against the borrower rather than the banks. Still another is that if the banks were to take possession of the properties, what would they do with them ? A flood of hundreds of thousands of bankers’ properties coming on to the depressed market would drive prices into the ground. And consequently, the homeowners who had been making their mortgage payments would walk away from their homes by the droves. Can’t happen, you say ? Well, imagine being in a house that you had paid $300,000 for three years ago and the best price you could get for it is $150,000 now. While rentals are being offered at a fraction of the mortgage price you are paying. And your “secure” job has become iffy. And you have credit card debts and car payments too. And so on. Push becoming shove seems to be the order of the day.

So what is the bottom price gonna be ? If you bought a house right now, how much farther will it fall ? That’s the big question. Will patience be rewarded this time ?

My feeling is that taking out a loan for a house is leveraging the future. A future that is extremely uncertain.

After all a house is meant to be a place to call home, not an ATM machine like it has been abused in the past.

Worth mentioning is that distressed properties will continue to have high property taxes. The local government is in the hole with their fallen tax collections and needs to pay for their govt workers. Do you think they are going to let you buy a $500 house and pay $5 (1% taxes) per year in property taxes ? Or even $50 per year, which is 10% ? How about $500 per year, which is 100% of the price you paid for the house ?

Where is the fairness with property taxes assessed against selling price, you ask ? There isn’t any !!!

Another sign that “they” will skin you alive if you get too close. If you don’t know to be super wary by now, you better wake up big time !

And lastly, you can’t really “own” a property since if you neglect to pay property taxes, they will throw you out on the street and sell the place for taxes due. Get it in your head that at best you are a glorified renter. And “buy” or rent accordingly.

I think that real estate is the largest bubble in regards to the man on the street. This is what we should be concerned about; what affects us directly AND something we have the power to change.

Because we are heading into a depression of unknown magnitude and longevity, I don’t even know if I would ever want to obtain any real estate for the purpose of rentals. My mother is a retired real estate broker and even she says that she doesn’t want any more rental properties in the future. In fact, she sold a couple a while ago. I’ve personally seen the trashed out rentals, maintenance costs, vacant rentals (no money coming in but money going out) and back payment chasing to know the headaches involved.

Bottom line is that we are going through a process of adjusting to what the market will bear. And prices are still way too high in my opinion. Buying now would be like trying to catch a falling knife. And a heavy knife at that, since real estate is highly leveraged.

With all the uncertainty these days, why buy a house for $250,000 and harness yourself for 15 or 30 years, paying double that with the interest accrued ? AND taking the chance that you won’t be able to keep paying through all those years.

I have read that it costs about 3 times the cost to own a house than to rent a house. If so, just imagine the money that could be saved by renting. One drawback of renting is that the landlord could default on his mortgage payments and you would have to move on short notice. I guess you would have to think like a gypsy; always ready to move on. Better to not have too many possessions to haul around too.

I get the feeling that the middle class is being herded to join the lower class and in time, to be like Mexico with a huge lower class, little middle class and a small upper class who pull all the strings. In such a scenario, there is little opportunity to ever get ahead.

Are You Middle Class? Maybe Not For Long

http://www.lewrockwell.com/calderwoo...rwood36.1.html


For many years I have tried to live as sensible a life as possible. I drive old cars, I don’t eat out, I have a garden and chickens, I have no debts, I have savings, I bargain hunt, I pay low rent, and I cut costs whenever possible. Actually, this is much how my grandparents lived. I still have what would be considered luxuries. Hundreds of books, hundreds of DVDs, CDs, vinyl records, a computer, and some stuff that gathers dust, sentimental stuff. And reluctantly to admit, I have a big screen TV. What’s this, agnut ? A big screen ? A traitor to the bartering and horse trading lifestyle ? I do have to say that I’m a video junkie and love movies and the nature channels. Since childhood I have always dreamed of being able to enjoy a theatre like experience of movies in the privacy of my own home. And having had a big screen for the last 4 years I now know that I could give it up if necessary. If it self destructs I will either find a used one (they are cheap on Craigslist) or move on to other interests. There are more fascinating things to do and discover than the years I have left on this earth.

What is the true value of entertainment with a bit of education thrown in to the deal ? Hard to put a dollar value on it. Maybe more important to consider what my sons and I could do which would be better for our growth. Its called lost opportunity cost.

When I think about it in comparison to the fact that 2 billion people live on $2 a day, I feel lazy and self indulgent. You see, we Americans have been wealthy and have not realized it. In the last decades we went too far and borrowed our futures for current extravagances. And now the piper wants to be paid. And because we have had all this illusionary wealth, we have a very, very long way to fall. Actually, I’m trying my best to live like a lower class citizen so that when the crash comes, I won’t have too many adjustments to make. A race to the bottom. We cannot kid ourselves and think that we can break out the popcorn and watch the rest of the world suffer. We all will see and feel it to some extent.

Depressions are just that; depressing. I expect many to just give up and live at the whims of the handlers. However, it doesn’t mean we have to. There will be opportunities; it is just that they will be different than those in good times. I may be hauling goods from one town to the next. I may start to rebuild motors and transmissions I have never done before. I may start to offer reconditioned transmissions rather than rebuilt ones. In fact, I have already done this with a test run and it works well. Part of being a futurist. While right now someone may be able to pay $900 for a rebuilt unit whereas in a depression, the market may only bear $300 for a reconditioned unit. For years I have stored away loads of good used parts for this possibility. Sure, it takes as much work to recondition as to rebuild but if that is all there is, I have to go with the flow. Adaptability to change is key.

I hope that some of the examples I give will provide you some insight into what you must do in order to not only survive hard times but also to prosper. School doesn’t teach you to think for yourself; you have to take a personal journey. With a positive attitude, adaptability and reasonable goals you have the makings for a successful life.

Sad that with all the costs of having employees, there is little incentive to hire, even with a business that is busy. High income taxes and other costs become overwhelming for small businesses to hire new workers. In my last business I had 12 workers at the peak but nowadays I would not hire help even if I was so busy I had to turn work away. In my view, the negatives of having workers are beyond the benefits. I wonder how many other small businessmen are thinking the same thing. A “jobless recovery” ? Are you friggin’ kidding me ? What ivory tower bozo thought that oxyMORON up ?

Best wishes,

Agnut

Brand new homes in Growing Central Ca. town starting at 180K
http://www.bonadelle.com/?gclid=CMq4...FR4Uagod5XjvQQ

__________________
Bye GIMmers

Its been a Fun learning experience !

Speaking of buying real estate....

From http://patrick.net/housing/crash.html

US Housing Crash Continues
It's Still A Terrible Time To Buy
Falling House Prices Are The Solution, Not The Problem

By Patrick Killelea, last updated Thu Oct 15, 2009
House prices will keep falling in most places because those prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's yearly income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the house's yearly rent. Yet on the coasts, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines. Renting is a cash business that reflects what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will keep falling for a long time. Anyone who bought a "bargain" this time last year is already sitting on a very painful loss.

It's still much cheaper to rent than to own the same size and quality house, in the same school district. On the coasts, yearly rents are less than 3% of purchase price and mortgage rates are 6%, so it costs twice as much to borrow the money than it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is three times the cost of renting. Buying a house is still a very bad deal for the buyer on the coasts, but it does make sense to buy in the Midwest and some other places where prices have fallen into line with salaries and rents. Check whether you should rent or buy in your own area with this NY Times calculator.

The bottom will be here when buying a house to rent out clearly makes money. Then you'll know it's safe to buy for yourself because then rent can cover the mortgage and all expenses if necessary, eliminating most of the risk. For a rough indication of the wisdom of buying, divide annual rent by the purchase price for the house:
3% = do not buy
6% = borderline
9% = ok to buy

So for example, it's borderline to pay $200,000 for a house that would cost you $1,000 per month to rent. That's $12,000 per year in rent. If you buy it with a 6% mortgage, that's $12,000 per year in interest instead, so it works out about the same. Owners can pay interest with pre-tax money, but that benefit gets wiped out by maintenance costs and property tax, equalizing things. It is foolish to pay $400,000 for that same house, because renting it would cost you only half as much per year, and renters are completely safe from falling house prices.

It's a terrible time to buy when interest rates are low, like now. Realtors just lie without shame about this fundamental fact. Prices fall as interest rates rise, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake.

It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.
Your property taxes will be lower with a low purchase price.
A low price gives you the ability to pay it all off instead of being a debt-slave forever.
Paying a high price now may trap you "under water", meaning you'll have a mortgage larger than the value of the house. Then you will not be able to refinance, and won't be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage.

The US economy will not recover until interest rates are allowed to rise. To favor debtors and banks, the Federal Reserve forces artificially low interest rates on America, destroying the free market for money itself. The Fed prints up bales of money and lends it to banks at 0%, so the banks feel no need to pay you any interest for your money. While this does temporarily let debtors and banks evade the consequences of their own bad decisions, it also eliminates all investment in businesses, crippling the economy and leading to mass unemployment.

Investing in business is always risky, and it's especially risky in uncertain times like now. People with money will not invest until they feel interest rates are high enough to compensate them for the risk. Investors and banks refuse to risk their money at the Fed's artificially low rates, because at those rates, they will lose money. Would you loan money to a business at 4%, when the odds of losing your money are 8%?


Buyers borrowed too much money and cannot pay it back. Now there are mass foreclosures, and the Federal Reserve is buying up bad mortgages to let banks evade the consequences of their own foolish lending. Congress also authorized vast amounts of bailout cash from taxpayers, to be loaned to banks that can't even remember how to write a safe mortgage. These purchases and loans reward banks for making very bad gambles on lending.

The Federal Reserve's manipulation of interest rates punishes savers (did you check CD rates lately?) and keeps debtors in the maximum amount of debt possible without default. The Federal Reserve's motto seems to be "make everyone slave away for the banks, forever".

We also have legal contracts being modified to stop even well-justified foreclosures. No one was forced to borrow money. It was a choice -- a very bad choice, but completely voluntary. Grownups should be responsible for their own actions. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price, not to mention what this does to faith in contract law. No one in government or the media will even mention that everyone in foreclosure trouble got themselves into that spot by voluntarily borrowing money to spend on luxuries.

Should taxes and artificially low interest rates and newly printed cash be used to pay the debts of irresponsible borrowers, no matter how much they over-borrowed and overpaid for a house? Should savers be forced to pay the debts of other people who cannot afford "their homes" no matter how far it is beyond their actual financial means? If so, go buy the most expensive house you can right now! Borrow as much as you possibly can to buy a bigger house, and don't pay it back, knowing that the Fed and Congress will force the real repayment obligation onto savers, onto people who are living within their means, so that you can stay in "your home" rather than in a house you can actually afford. No one ever died because they had to rent.

Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that two trillion dollars in foolish mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for another five years or more. This is not just a subprime problem. All mortgages will be harder to get.

A return to traditional lending standards means a return to traditional prices, which are far below current prices.

Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.

It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6% because of the realtor lobby's corruption of US legislators. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.

Shortage of first-time buyers. From The Herald: "We were all corrupted by the housing boom, to some extent. People talked endlessly about how their houses were earning more than they did, never asking where all this free money was coming from. Well the truth is that it was being stolen from the next generation. Houses price increases don't produce wealth, they merely transfer it from the young to the old - from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize."

High house prices have been very unfair to new families, especially those with children. It is foolish for them to buy at current high prices, yet government leaders never talk about how lower house prices are good for pretty much everyone except bankers, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you'll save more on your next house than you'll lose in selling your current house. Every "affordability" program drives prices higher by pushing buyers deeper into debt. To really help Americans, Fannie Mae and Freddie Mac and the FHA should be completely eliminated, along with the mortgage-interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable and stable housing market because of that.

Government "affordability" programs just encourage debt, making prices higher, not lower. True affordability is not more debt -- true affordability is lower prices. The government's false affordability programs have created more debt than can ever be repaid. Credit rating agencies then lied about the value of this debt, ending trust in the whole system.

The government keeps house prices unaffordably high through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government ever talks about the obvious solution: less debt and lower house prices. That solution would harm bank profits! The real result of every "affordability" program is to keep you in debt for the rest of your life so that you remain an obedient worker. Lower house prices would liberate millions of people from decades of labor each. There is never anything in the press about the millions of people that were hurt and continue to be hurt by high house prices.

The government pretends to be interested in affordable housing, but now that housing is becoming affordable via falling prices, they want to stop it? Their actions speak louder than their words. The government will step in or stay out only if it helps corporate profits for congressional campaign donors.

Why is the failed market in health care exempt from anti-trust laws? Because the insurance cartel makes the most profit that way, and the cartel uses that money to pay lobbyists who get congressmen to vote against change.

Why is the failed market in housing propped up with taxpayer-subsidized loans? Because banks make the most profit that way, and banks use that profit to pay lobbyists who get congressmen to vote against change.

It is not government itself that is the problem, but corporate control of government, using congress to forcibly extract profits from you.

Deflation. There is fear of inflation, but it's not likely in the next few years. The actual amount of money created by the Fed lately is a trillion dollars, which sounds huge, but is small compared to the $10 trillion drop in housing "values" and another $10 trillion drop in stock market capitalization. The US government will not print extreme amounts of cash like Zimbabwe did, because significant inflation would mean that foreigners would no longer lend money to the US government unless interest rates were much higher to compensate them for inflation losses. Higher interest rates would push more people with adjustable mortgages into default, leading to more bank losses. So the Fed won't do it. The most likely scenario is like Japan: low inflation and low interest rates, with falling house prices for years to come.

Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.

Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.

Failure to re-regulate finance. The Graham, Leach, Bliley Act did away with the depression-era safety constraints placed on banks. This paved the way for record profits in the finance industry and an effective takeover of the US government by large banks, which has not yet been reversed.

The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

Thanks for posting the article RE: US Housing Crash Continues

__________________
Life is what happens when you have other plans.

Yeah but that is in fresno California, a desert community, very undesirable place, i would compare that to riverside county. In riverside county you have people with a long history of barley being able to scrape a living together. In 3 years (2004-2007) the value of the average house doubled, like it did most places. Suddenly People who were not used to having money had equity they didn't know what to do with, so they went out and bought yellow hummers. Its funny, i would drive through certain parts and you would see a house that the current owner paid $150,000 for and out front sat a brand new hummer on 44 inch rims. Say the average price for a hummer is $40,000 (probably much higher) and lets say this guy paid $150,000 for his house, the hummer cost 26% of the total purchase price of his house, more than his down payment. Stupid! I was in Fresno not to long ago, same situation. I agree with you Agnut, the housing prices in certain undesirable area will be worth less than zero, location, location, location. If you cant find a job close to it or you cant farm it, it is not worth owning. Kinda like "if you dont hold it, you dont own it," but different. The best example would be single family homes on small lots, worthless if the SHTF. Look at the price for rural farm-able vacant land and see what you get. From what i can tell not much has changed, prices are still holding. There seems to be more and more available as people need to pay bills but the good stuff is still holding. I would love to see some real stats on this. In the Pacific northwest, in certain areas i see prices going up. This has to do with supply and demand, mainly Californians moving out, for the first time in a long time last quarter, more people left California than moved in.

Agnet, would love to hear your thoughts on this topic.......
Most people prefer to buy land with a house on it instead of building it themselves. When you buy a conventional house 65%-85% goes toward labor. Pay cash for your land up front and build on it as you get the money; simple, dont buy what you cant afford. What you cant do yourself you sub out. I have estimated myself that it would cost between $25 and $30 dollars a square foot, thats for me and my skill set, might be different for someone with a different skill set. So lets say you find between 1-25 acres with water rites for between $5,000-$100,000 and you pay cash and you own title on it. The median family income in 2007 was $50,740 http://quickfacts.census.gov/qfd/states/00000.html. Lets say you save half that for 2 years by listening to agnut and taking his advice on how to be a cheap ass dirt bag. You would have $50,000, move in with your in-laws, whatever it takes to save. Now you have the dream of building a 1500 sqft home and getting the hell out of your in-laws! As you save you build. At $30 dollars a sqft it would cost you $45,000. For a couple working weekends, it would take 2-3 years to finish the work, (i think it could be done quicker if money where available). For the price of the land and $45,000 you would be mortgage free in 2-3 years. A good deal. Here is a good article on this topic.......http://www.backwoodshome.com/article...sworth112.html

The argument can be made, if prices in some areas will be worth less than zero, why not wait, why build? Location, location, location.......

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If you hold your value in a public way, it will be taxed or taken for the good of all. Such are the ways of extream times!

-Another

For an example of someone not just doing it but doing it off-grid and cheap check this guy out.
http://www.simplesolarhomesteading.com/

__________________
I was certified as a Forum Master by my score in the GIM Aptitude Test (Score: 72)
With one caveat, the score result stated: Other members immediately recognize your avatar and actually seek out your posts to see what your opinion is on any current subject.
I find that highly doubtful!

Just came across this unreal estate article. Good stats in a short article.

U.S. Home Vacancies Rise to 18.8 Million on Defaults - IS YOURS NEXT ?

http://www.rumormillnews.com/cgi-bin...gi?read=159235

I’ll write more on this and answer some posts when time permits.

Best wishes,

Agnut

Sometimes when you buy the land the improvements don't add a lot of value. When we bought our place last winter, we paid approximately what the land was worth. We have 3 buildings on it, an old pig barn that is now my shop, a 3600 sf shed, and a small 2 bed 1 bath house. The house is in good condition, and is adequate in size for us now, if that changes I can add on as I have time and money. The shed leaks some and doesn't look to pretty, but a new one costs big money. The pig barn took some work to convert to my shop, but not much. I'm glad that we didn't buy raw land without utilities or buildings. Even doing the work ourselves we would have spent a lot of time and money.

One option for building and getting out of the in laws place while you do it, is to buy a mobile home and put it on your land. If you watch you can get an excellent deal on one, and sell it when you're done for as much as you paid. I can't say as that would be my first choice, but I'd sure prefer that to the in-law option. This also would allow you to spend more time on the house building project. For instance, you have an extra hour after work, if you live at the in-laws you would spend some of that time driving to the home site. If you live there you can work as you have time and also provide better security on site.

Thanks for sharing that- interesting read. HH Mark

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Life is a coin, you can spend it any way you wish, but you can only spend it once.


"The life of every man is a diary in which he means to write one story, and writes another."

- James Matthew Barrie

Hi answer2me. I hard copied your post with quote from traderken since it would take some thinking. It is 2 A.M here and the rain is pitterpattering on the tin roof of my workshop. I had fallen asleep at 8 P.M. so 6 hours is all I need. So here goes :

Regarding trader ken’s quote, I recently read an article/thread that stated that it would be wise to consider deeply before moving to the boonies. This is where an active imagination comes into play.

Say you live in a city and want to gain security from what you perceive is coming down the tracks.

First, such a move should be one of want rather than one of fear/escape. I’m a country boy at heart and spent several summers of my youth at my grandparents’ cattle ranch. It was in the middle of nowhere, south of Lake Okeechobee Florida. They had outside plumbing where the Sears catalog wasn’t just for reading. We had to go through the chicken yard to get to it. There were no children to play with; I never even talked to one now that I think about it. We arose at sunrise and went to bed early. We had a rotary telephone that, unlike today, was hardly ever used. There was a small black and white TV that got 2 stations. Grandma wrung the necks of chickens and plucked them for dinner and I brought in an occasional rabbit which she would skin and fry up with sides of okra stew, homemade biscuits and corn. I used a single shot 22 rifle so learned to make each shot count. They had a huge garden with banana trees towering overhead.

At sunrise I’d take my BB gun and ride Buttercup, the lead cow with the bell, into the south pasture. I’d pass the time shooting flies off the barb wire fence. After that, I would head home for chores waiting. After dinner my aunt Patricia would teach me how to sew on an old treadle operated Singer sewing machine. They made most of their own clothes. Grandma had a huge box under the bed filled with pieces of old cuttings of material. She hand sewed crazy quilts. I wish I had one now. Priceless.

One time grandpa took me to a cattle auction. Very earthy if you get my drift…There were 60 or 70 men there. I was the only youngster. The auctioneer rattled on so fast that I thought it was a foreign language. The year was about 1956. Not to digress but the next auction I attended wasn’t until 1978. It was a Kruze auto auction in Las Vegas. I had entered a restored 1960 Jaguar Mark IX and a 1950 Packard flathead straight 8. As a friend and I were detailing the cars before the auction, I could hear an unmistakable voice in the distance. It was Buddy Hackett with his entourage strolling through the rows of classic cars. Talk about another world; and just 22 years had passed between that cattle auction and this car auction.

So you must be wondering, “Agnut, have you lost it ? What is the point of this ’blast from the past” ?

Point is, that was then, this is now. Even country life had transformed dramatically. Farmers and ranchers use computers, internet, automated machinery. Profit margins are thin to none due to high property costs, fertilizers, feed stocks, fuel, regulation, licensing and last but not least TAXATION.

Unless you have a skill that can provide a reliable stream of income, you will deplete your preps and savings through time.

Life has been idyllic where I drifted downstream through the years. And there have been short intervals of white knuckle running the rapids, wondering how/if I would make it. Being in a war has been described similarly as long periods of boredom punctuated by intervals of sheer terror.

Life is like that. I believe we all are about to run the rapids and it will require all our wits, experience, faith, sheer grit and determination to navigate through to the calm waters beyond. I feel that what is coming will be no less great an upheaval than the American Revolution. But it will be quite different.

Answer2me, I have been through developing a property. It took over 10 years and I would not do it again. Best to buy a place that already has electric, septic, well, house, workshop and outbuildings. The costs these days, not to mention the stress of having to live on a construction site with family are enormous. Also, I can guarantee that every construction project will cost more than estimated.

As an example, that Jaguar Mark IX took me 18 months to restore. Though it was a labor of love, I probably made $1 an hour for my efforts. At the same time I owned an auto repair shop and charged $60 an hour. See the disconnect ? I learned my lesson the hard way and would now buy a restored classic car (if I wanted one, which I don’t) that some other poor soul has restored for $1 an hour.

The same applies a piece of undeveloped land and “restoring it”.

Now what is crucial here is timing and patience. If you had bought a place in 2006, the peak prices, you would have by now lost a small fortune. But just because a $400K place in 2006 has dropped to $250K now is not a wise reason to think you have a bargain. What if the market price falls to $100K in 2012 ? Or to $50K in 2014 ? There is an old saying “Marry in haste, repent at leisure”. Marrying to a house is similar; a long term commitment. And be ever mindful that if you own a property in bad times, there will be others wanting to take it away from you. We have 100 times per capita the lawyers that Japan has. Do you think they will be digging ditches or digging at your property ? And then there is the tax men, hungrier than ever with all the unemployment and deficit spending.

Long ago I made a prediction that in some times and in some places, real estate would be worth less than zero. It has already happened in Detroit and I expect it will spread to other parts of the country as long as we continue on the same path.

The ability of precious metals to carry purchasing power through time is a personal judgment call. No one can say with certainty that X number of ounces of gold or silver will purchase a property. But history records that this is generally true. And I believe that it will repeat in time. After all, which would you rather hold; fiat dollars or gold/silver for the foreseeable future ?

If fiat dollars are secured by debt, what if that debt becomes uncollectable or valueless ? Fiat dollars are a promise to pay from some people you don’t even know. But physical gold and silver carry their promise within; their intrinsic value. This is why Ponce’s quote is so powerful. “If you don’t hold it, you don’t own it”. There is nobody between you and your store of value. Gold and silver have faithfully served mankind for millennia and I see our current predicament with fiat currency as an anomaly, one which has a lifespan that will expire - like all the other fiat currencies throughout history. And what were they worth at the end ? Zip, nada, zero.

If the past decades have seen so much change, we can only imagine what the continuance of change will bring in the future. This is a process toward an end; an inflection point, a break from sustainability which will become irrefutable.

In my thread “What Are The REAL Unemployment Figures ?” I estimated not only the unemployment rate but then sliced and diced the numbers to reflect the percent of workers who are not government workers. If you haven’t read it, be forewarned. It may blow your mind. This group pays the taxes from which the government derives the dollars to pay their costs which include the government workers. I even went further and stated that, in dollars, the non government workers make on average half the wages the government workers make. Conclusion ? This fact alone doubles the burden of the non government workers and therefore they are carrying an unsustainable burden. Here’s the thread :

t=393114



The big risk in life is having not taken that risk. That is, something you firmly believe in. So I wouldn’t say to not buy a property but rather to carefully consider your finances and abilities first. Maybe a place with electric, well and septic already in place. You could move a large motor home or trailer in while building the house. That way, you wouldn’t have to pay for the place you live in and the place you are fixing up. And you would be right there instead of having to travel back and forth. This is one of the reasons I have brought my transmission business home to my acreage. Saves about $1500 per month and is part of my plan to be as lean and mean as possible for the future I envision. I even have buckets of good syncro rings and bearings in anticipation of things getting so tight that people will no longer be able to afford a rebuilt unit but can afford a reconditioned, checked out unit. My prices would compete with the junkyard’s used transmission prices.. Maybe this scenario won’t happen but it doesn’t cost me anything to collect these parts. A plan behind the plan behind the plan is Ponce’s motto.

Remember Howard Beale in the Movie Network where he advised his TV audience to go to the window and shout “I’m mad as Hell and not going to take it any more” ? Anger, even righteous anger quickly fades. Rather, think “I’m smart as Hell and not going to take it any more”. Now that puts a fire in the belly that won’t go out. This is the essence of bartering and horse trading. Learning to control money rather than letting money control you.

In 1966, Alan Greenspan wrote :

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.”

He wrote while still a disciple of Ayn Rand, the author of Atlas Shrugged and The Fountainhead.

I believe this to be a true statement regarding our current situation. This is why we are conflicted among the many investment options.

Real estate ? Changing price valuations. Property tax increases. Security of ownership. Interest rate variations. These and others make up a toxic concoction that we must swallow in order to buy a property and be able to hold on to it through the future. I for one am highly skeptical of the cost/reward imbalance and would therefore seek other options.

I know of someone who got laid off last year and bought a huge motor home and moved on the property of a friend. He pays no rent but only the electricity he uses, about $75 per month. His monthly expenses are but a fraction of what they were when he was employed. Since jobs are becoming as scarce as rocking horse droppings, he has been on unemployment and manages to save money beyond expenses each month. This is one option that I like a lot.

I hope this example will help some of you who read these words. Thoreau said that there are as many solutions to a problem as there are lines radiating from a point. In other words, keep looking for alternatives. The inconvenience of a particular lifestyle may be outweighed by the financial benefits of unburdening yourself from trying to maintain a middle class lifestyle. And the sooner you ACT on this, the less you will lose.

Best wishes,

Agnut

Thanks BL96S5EU. Good website; I cruised it for a while. Downsizing seems to be the major theme here; the same thing I recommended at the end of my last post.

Here’s an eye opener for the foreclosure market and what is behind the curtain :

California Sending out Notice of Defaults
yet Overall Foreclosures Declining

http://www.financialsense.com/fsu/ed...2009/1109.html

After reading it, you should be all too aware that the unreal estate market ain’t gonna get “real” for a long time. I read that about 25% of homes are underwater now and about 50% will be by the end of next year. If true, we are in for a world of hurt. Especially if we are impatient and just can’t wait to take part in the “American Dream” of homeownership. What a flaming bag of crap !

Best wishes,

Agnut

Hi handyman. I agree with everything you said. My place was complete when I moved in; just needed some modifications to make it work for us better.

We should stay focused on this unreal estate market for a while (or at least we beat it to death until there isn’t any more understanding to get out of it).

Best wishes,

Agnut




P.S. Here’s a reminder to continue getting out there and seeking the hot deals.

Went to an estate sale Sunday. Got 171 videotape movies with 15 DVDs for a total 186 movies for the total cost of $5 !

Less than 3 cents each. Try renting movies; you’d probably get two rentals for that $5. AND you will have to turn them in the next day, so bye bye future resale of the movies.

About 70 of the 186 movies are ones we want to watch and the rest could be sold at a garage sale later. No lack of entertainment this winter’s eves.

Also got a Krupps meat slicer for a buck. Saw a used one on Ebay for $52 with shipping. Lots of other odds and ends for a couple of pennies on the dollar. Total for everything was $10.

By the way, this estate sale had been running for 5 days and I showed up on the last day (lazy bastard that I am). I can only imagine what was there at the beginning. The lady holding the estate sale just wanted all of the stuff out of there since it was rented out in a couple of weeks. I guess everything not bought was to be taken to the dump.

A couple of thoughts come to mind here. The lady holding the estate sale was for her dear departed friends. A sadness in itself. What she told me led me to believe that she is in financial straits and has no way out. A chill came over me of a situation wherein a person would receive a notice of eviction and wouldn’t know what to do with all their possessions. Putting them in a storage locker would only create another monthly expense while at the same time not being able to pay for it; a sort of financial oxymoron. Feels like instant homelessness, depression and hopelessness.

This is only a snapshot of what is happening all over America. It will become more obvious as time passes and the situation worsens. I want you to be aware and sensitive to these sellers’ plight. We who are prepared are not carpetbaggers nor vultures. We should be prepared to pay a fair market value for items. Just because the demand and therefore the price for such items has fallen through the floor is not our responsibility. We may receive some complaint that an item was worth $100 last year and can only fetch $5 this year. It ALL depends upon what the market will bear. Would this complaining seller expect you to pay $100 for an item you could only resell for $5 ? Maybe but don’t buy into this insanity if you come across it.

What I am saying is a repeat of what I have been cautioning you about for a while. Buy only something that you can use and is a screaming bargain OR something that you KNOW that you can easily sell for a profit. If things get much worse, there will be sales that border on giveaways and if you buy an item now for $10, it may be offered for a dollar sometime in the near future.

I don’t know when the breaking point will be reached wherein there will be a lot of people having to get rid of good items because they have no place to keep them. And at the same time there will not be buyers willing to own some of these items, even if they were for free. So the bottom may fall out of the used item market.

Unlike the last depression, we have tons of possessions these days. They all need a home or off to the dump they go. I believe it will be supply and demand turned on its head. Tons of supply with no demand for many items, especially the bulky items like pianos, dining room sets, bedroom sets, pool tables. And I don’t need to get into berating gas guzzlers, do I ?

Sometimes it takes the county a while to realize that you have added some value. They didn't notice my house for 5 years. Then the bill came. Ouch!

Good Idea! Lets beat it to death, i think it pertains to bartering and hourse trading, just on a larger scale. I will try to post some interesting thoughts about land taxation and the history of it in the coming days when i get a moment.

__________________
If you hold your value in a public way, it will be taxed or taken for the good of all. Such are the ways of extream times!

-Another

Poor, poor people...We must figure a way to test them before they are allowed to read this thread to prevent further 'fatigue'

__________________
I was certified as a Forum Master by my score in the GIM Aptitude Test (Score: 72)
With one caveat, the score result stated: Other members immediately recognize your avatar and actually seek out your posts to see what your opinion is on any current subject.
I find that highly doubtful!

Hi answer2me. Sounds like a good idea. Here are some of the pluses and minuses of home ownership :

“Owning’ real estate pluses :

1. Sense of permanence as opposed to renting.

2. Tax writeoff.

3. Freedom to do property improvements.

4. Pride of ownership.

5. Potential for appreciation.

6. Accumulation of equity through the years.

“Owning” real estate negatives :

1. Illiquidity of resale of property. That is, a semi-permanence until property can be offloaded to a greater fool. And in a downward market as we have these days, many houses have been languishing on the market for years. In order to sell these days, a property often must have a price below surrounding properties for sale. Getting ahead of the curve, so to speak.

Remember only a few years back when there were competing multiple bids over the asking price ? And people camping out overnight to buy a house ? Talk about a flip-flop in a short period of time.

2. If the homeowner becomes unemployed, as is the growing case, he faces the heavy burdens of mortgage, insurance, property taxes, maintenance. Oh, and the tax writeoff which was part of the equation that enabled him to buy in the first place, that is now not something that he can take advantage of.

3. Almost all property improvements are expensive and do not return value increase as much as they cost.

4. An old saying, “Pride comes before the fall”. Besides, it is a false pride built on the sands of debt. He borrows 90-95 percent of the purchase price. He doesn’t have much “skin in the game” and therefore can easily walk away when he becomes upside down with the sale price versus the mortgage due.

5. Ah, pride of ownership. See #4 above. The interest over the term of the mortgage greatly increases the total cost. One must consider the greater cost of ownership versus renting; I have read that it is about 3 times greater.

6. The average turnover of a property is about 5 years, a time period in which little principal reduction is accumulated. This is because a mortgage is back loaded with high interest percentage and low principal payoff in the first years.

7. Never delude yourself; you cannot actually own a property in the strict sense. Even if you have a property with no mortgage against it, you will lose it if you do not pay the property taxes against it. And with our government financial shortfalls, they are looking hard at increasing property taxes even with falling real estate prices.

8. Consider the lost opportunity cost of not having the extra money by renting and putting that money to work.

There are more pluses and minuses I’m sure. But the above ones are a start. They ALL must be weighed before making the plunge into property ownership.

As in all transactions, we must treat a property purchase in an unemotional businesslike manner. There is nothing like bringing along the wife and having her jump up and down with glee at the prospects of a new home. She is a nester by nature and operates from the emotional side. Not to detract from the ladies; I love ‘em (just can’t afford ‘em).

So if you think I take a jaundiced eye view at owning real estate, you are perceptive, my friend.

There are exceptions, of course. Even these must be taken in the context of the totality of our financial dealings. For example, a fully paid for property that has been inherited. Even this situation could be looked upon as holding possibilities. Much depends upon your personal finances and needs at that time. The property could be lived in or sold and the proceeds used in a new business venture or precious metals or whatever that may be more advantageous that keeping the property. So much depends upon one’s situation that I will not give advice here. That is for you to decide.

Yeah, I know I have written with a slant seemingly against property ownership. It is not all bad but this needs to be addressed with a negative bias in order to negate all the propaganda we have been fed through the media and those who stand to benefit from our illogical rushing in where angels fear to tread.

Hope this helps and causes some discussion.

Best wishes,

Agnut

As to #7, this year our home's appraisal fell $14,000. Yet the property taxes remained the same.

So in effect, our property taxes rose. Frustrating.

Hi Bl96S5eu. “Frugal fatigue” ? What the Hell is that ? More like childish temper tantrums at being told they can’t have a new toy.

Don’t get mad and act out irrationally; get even instead. Be a mature, fiscally responsible adult. This credit spending is mindless in that the money is spent, with the parasite of interest and penalties, long before it has been earned. For years I have resented those who spent on credit. This act drives up the price of everything and while I and many others do not use credit, we are forced to pay for the profligate spending competition of borrowers. UGH !

Well, it has finally come around full circle and is now biting the borrowers in the ass ! The result for many of these borrowers is that they are now worse off than being flat broke. They are in a hole so deep that they cannot climb out. Yes, they dug the hole but the bankers gave them the shovels and pointed out the spots to dig. And with the recent bankruptcy law changes, thanks to the banks getting Congress to close the exit, filing a chapter 7 bankruptcy has become much more difficult. I wrote about this a long time ago and called it “Debt Man Walking”.

Anyone notice that with the ongoing home foreclosure disaster, the lenders aren’t going after the borrowers who either don‘t pay their mortgage or simply toss the keys to the lender and move out ? It wasn’t like this a few years ago. What has happened in the last couple of years ?

And this brings up an interesting question. What is going to happen with the 600,000 plus (and growing) abandoned houses the banks hold ? They can’t be put on the market for they would cause a collapse in house prices. And those still struggling to make their mortgage payments in a scenario of falling home prices would probably see the futility of continuing making their payments. A collapse in real estate would follow.

I don’t know about you but this “too big to fail” crap makes the hair stand up on my neck every time I hear about it. The REAL “too big to fail” is the collective of the small businesses throughout America. Not the banks. Not the corporations.

What would the average house cost if it had to be paid for in cash on the barrelhead ?

There is a point here I wish to make; and it has been on my mind since the unreal estate bubble burst a few years ago.

Since most do not qualify for a home loan and banks are not willing to lend, what is to happen to these 600,000 plus foreclosed homes ?

And remember, this is a rapidly deteriorating trend. Envision a chart with maybe 5% of the houses underwater in 2006 to today’s reported 25% underwater. That’s a 20% increase in 3 years. About 6.6% per year. Pretty awful, wouldn’t you say ?

But the prediction for the end of next year is that over 50% of houses will be underwater !!! That’s an increase of over 100% in one year !!!

Can you now see the parabolic rise that will be taking place through 2010 ?

Adding insult to injury (with a heap of stupidity greasing the skids), commercial unreal estate is a horror show in the making. When businesses go belly up, people lose jobs. And when people lose jobs, they can’t pay their mortgages !!

This is only a bare bones observation but with enough fleshing out, a skilled writer could show all readers the flesh eating zombie on the horrorizon.

My old prediction has already come true. In the future, in some times and in some places, real estate will be worth less than zero. Don’t think so ? Look at Detroit. Look in some of the small towns that had a central business that recently closed down. Folks, it’s happening.

Ponce’s saying “If you don’t hold it, you don’t own it” is particularly appropriate regarding unreal estate. Buying a house with a mortgage against it is an illusion. Who holds the title ? Ergo the description in my previous post of being a “glorified renter”.

Either all these foreclosed houses will be rented out or sold to foreigners or their sale price will fall to what the market will bear. Complicating matters will be the dollar’s purchasing power.

There is another possibility, though radical. When Castro took over Cuba, rents and mortgages were cancelled and citizens could stay in the places they were in. The government owned all the houses. This may sound great but as I understand, their houses are now in third world condition. Dilapidated with no materials available at any price to repair them.

Only time will tell. But as we are on a parabolic trajectory, time is short. If I owned a property with a heavy mortgage and neutral or positive equity, I would sell it and rent for a while. We all must ask ourselves where we will be financially at the end of 2010 with the forecast of over 50% of houses underwater AND commercial property foreclosures peaking at the same time.

Is there a snowflake’s chance in Hell of the unreal estate market turning around ?

In Southern California, the health department had to get after the banks because some of their foreclosed houses had neglected swimming pools that became breeding grounds for mosquitoes. A small dot but one with ominous collateral implications.

If you had bought 10,000 ounces of silver in 2000 at $5 per ounce, you would have spent about $50,000. Wouldn’t have bought an average house, would it ?

If you had this 10,000 ounces of silver in 2009 at about $20 per ounce, you would have about $200,000. Probably buy an average house now.

If you had this 10,000 ounces of silver at the end of 2010 and say it had risen to about $50 per ounce, you would have about $500,000. Of course here I am speculating at the silver price rise but you can see the point. Unreal estate is falling while silver is rising and the price we pay is in patience. Who knows; maybe silver will rise to $100 an ounce while a nice house will fall to $20,000. A chart with falling house price and rising silver (or gold) prices diverging would show what has been happening. The trick is gauging the best time to sell some silver at the top (whatever that means) and buy a house at the bottom (again, whatever that means).

I don’t mean to be evasive about it, but like Gerald Celente, I only follow trends and make damn few predictions. Predictions are dangerous and wrong ones are like bags of stinking garbage one has to carry for the rest of one’s life.

When looking at a dire situation I always ask myself what it will take to get out of it. Or is it even possible ?

Sadly, the Fed, banks, industry, government and Wall Street are disasters. They have all painted themselves into a corner. I see none of them addressing the problems today but rather contributing to the acceleration of the trend downward. This is the reason that I feel that bartering and horse trading will become more prevalent in the future. Here is an article that gives some insight into our future :


Eating is important
By Hugo Salinas Price

http://www.321gold.com/editorials/pr...ice120209.html


Best wishes and JMHO,

Agnut

P.S. For an insoluble crisis to be overshadowed, a much greater crisis must arrive in order to eclipse it.