So much good stuff where to began......

Sorry Agnut, i meant to post a few things sooner but i have been busy. I have to agree with....well just about everything, but that would be boring. I was reading over your pros and cons of owning real estate, i like your view except that it has everything to do with single family dwellings. With land you have many options, living on it is just one. I think to have a mortgage now is suicide. Others might disagree and say what about inflation, "buy a house for as little down and wait for inflation and sell it for a profit." To risky for me, i tend to think that if inflation took off housing prices would fall further, core commodities would increase but people are loosing jobs left and right, supply and demand would say lower housing prices.

Dont get trapped into thinking that buying land for an investment means that you are buying a house\condo\dwelling for rental income. Like i said in a few other posts, rural farmable land can hold its value in the worst of times.

Take for example, a nice irrigated 10 acre parcel with a well on it for $50,000, you pay cash and you own title on it, no mortgage. Property tax is around $100 a year. Now you want income and have done your home work on apple orchards. You would no that 1 acre holds 202 apple trees, 12 feet by 18feet across. You have 10 acres, so that would mean that you need 2020 trees. One tree cost between 3-7 dollars, average 5 dollars a tree and you get, $10,100 for the trees. It takes 3-4 years for the trees to reach maturity. If you do it the un-organic way it cost about $2000 per acre for supplies per year. In the 07\08 season a box of apples sold for around $20 a box. One acre with 202 trees produces about 375 store quality boxes of apples, that's about 75% of the total yield per acre. Do the math and you get a before expenses income of $75,000. This scenario would pay for itself in the first 2 producing years. For a little more than an $80,000 investment you can have a producing 10 acre apple orchard. People like apples.

This beats the hell out of rental property, no tenants, no broken toilets to fix, no bad attitudes! Most important is that you dont have to worry about sky high property taxes.

In Washington state trees are not considered an upgrade to the property, only permanent structures. You would not get charged a dime over the assessed value of the vacant land. You could even put a small barn up for a little tax increase, just watch out for those houses. There are tax incentives for Agricultural land, but its been my experience that if something is given by the government than something is taken away.

Pm's are great but without land you will blow through them quickly if anything seriously bad happened. Land is like air, it provides the basic necessities in life. Seems most on GIM are holding their PMs to someday buy land with it. You cant eat PMs, but you can eat stuff that comes out of the dirt.

I have to agree that it would be a better time to rent than to buy a house now, wait and see what happens. If the MSM says the housing market is turning around than its going to get a lot worse. But this doesn't rule out all land options, you just have to be creative.

I have a family member that just bought a rental house in California, he paid $140,000 for it. The mortgage is just a touch over $1300. He said he can get $1300 for it. WTF! He thinks this is the bottom and hes is loosing money every month. In a few years he wont be able to give that house away. The smart money will flood the market when the rent to mortgage ratio hits 15%.

You said it best "pride comes before the fall." For most a house will be the biggest purchase, a moron could sell a house to a first time home buyer. This is because first time home buyers dont have any experience buying homes. Its only after you have purchased a few properties that you start to get the idea of the game. Thats what separates the amateurs from the pros. They know what they are looking for and they treat it like a buisness, because it is.
Forget the glamor, the prestige, set your ego aside. Barter and horse trade for it.

You said something about the average home turn over is about 5 years. Think of the closing cost that are generated by such a high turn over........

__________________
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

Hi MNeagle. I see that happening in my area too. How bad it gets over time is anyone’s guess; counties are desperate for revenues. My mom disputes the property tax increases and wins all the time. Read the thread below and you will see what retired folks are doing about too high property taxes.

Thanks to Bajan Man for his great thread. The author, Roger Wiegans, aka TraderRog, is someone I’ve been reading for a long time.

Predictions for 2010...Good News - Bad News

t=429240


He predicts a 30% further drop in real estate prices in 2010.

So a house bought now for $300,000 would drop to $210,000, maybe more. Talk about 90 grand going up in smoke. And in a year no less.

Still want to buy a house ?

Like trying to catch a falling knife. Falling machete is more like it. Funny but nobody talks about what happens afterwards. So I’ll say it. Fingers or whole hand cut off. Financially disabled for the rest of your life.

Is this something you want to do ?

Can I be any more negative about buying a house right now ? Lord knows, I’ve tried.

Best wishes,

Agnut

P.S. I’ll respond to answer2me’s meaty post as soon as I get the time. Owning acreage is a whole different animal than a house in the suburbs. This is something I’m familiar with, living on 10 acres right now.

I’m going to shelve the unreal estate talk for a bit to cover Christmas shopping and how to be a cheap ass.

My house value here in El Paso, Tex.., er Texico, has dropped $40K from when I purchased it in 2007 and my taxes went up last year as well.

I was able to get the pervious owners down $19K on their asking price which put the price in line with the actual value at the time.

The sad thing is that being .mil I am probably going to loose my shirt, pants, sock, and boxers next year if I have to PCS (Permanent Change of Station - move). I have already had two realitors out and both said pretty much the same thing, to sell in the economy here I should be prepared to accept a $30K to $50K loss.

Nothing like serving my country while getting bent over and 'serviced' by my gooberment.

HoHoHo…. Merry Christmas ! Or is that politically incorrect ? Happy Holidays ? What are we celebrating anyway ? Oh yeah, the birth of our Lord and savior.

Here’s some Christmas gift ideas from a total dirt bag (yours truly) that might keep you out of the poorhouse as well as dog house this time of year.

1. Junk you have laying around like old records, art, DVDs, videotapes, etc…. You know, the kind of stuff you bought when you weren’t paying attention or drunk. Or maybe got out of someone’s trash. And if they open it and wince, you can always tell them it’s a gag gift to cover your ass.

2.New items you never used or gifts you got and never got around to trying out. It’s called resifting and you better remember who you got it from in the first place. Nothing says I’m a moron like giving back a gift from the person who gave it to you last year. Well, unless they have developed Alzheimer’s lately. Then you’re good to go.

3. Can of beans with a bow on it (might be more appropriate next year).

4. Sterling silver jewelry. I have loads of it I got years ago for the melt cost. If I were to weigh them and calculate their cost, it would be less than a buck for many of them. When I have wrapped some up and given then in past years, the ladies always were thrilled. After years I am still getting thanks about some of them. Diamonds are forever (but your relationship ain’t, so don‘t go nuts and buy into one of these pieces of flawed glorified glass).

5. Have you seen the car ads where they put a gigantic bow on a new Lexus or Mercedes, implying that this would be a great Christmas gift ? Yeah, turns my stomach too. How about a 1/24 scale plastic model Mercedes with a bow on it ? Put it in the driveway Christmas morning. Then you could brag to all your friends that you got the old lady a new Mercedes for Christmas. Lots of laughs but probably won’t get you laid.

6. The ultimate gift. MONEY ! You can be as generous as you want here. Sounds crazy but I’ve done it in the past. All it takes is an agreement with the other party that they will “gift” you with the same amount. I gave $1,000 to a family member a few years ago and lo and behold, he gave me $1,000. We cried and were so excited with what we could do with so generous a gift.

Hey, why not give a check for a million dollars ? You could write “not negotiable” on the back in case they got any flights of fancy. The possibilities are endless; just ask Bernanke. He’s got a printing press; you might as well have one too.

And there must be many more possibilities like foot rubs, back rubs, front rubs (more for you than her but what the heck, you can try).

Best wishes,

Agnut

A good recent case on eminent domain.

NY Court Rejects Columbia University Eminent Domain Claim

Here in New York, a state appeals court has rejected a government attempt to invoke eminent domain to seize property in Manhattan for a proposed expansion project by Columbia University. In a three-to-two ruling, the court criticized what it called the government’s “idiocy” in declaring the neighborhood in question “blighted” to justify the takeover. http://www.democracynow.org/2009/12/4/headlines#10

__________________
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

Hi answer2me. It’s about 2:00 A.M. and I couldn’t sleep. About time I responded to your meaty post. But first, here’s an excellent article that lays our what really happens to unreal estate investments and retirement funds through time :


Surviving The Cure For Asset Deflation
Daniel R. Amerman, CFA, DanielAmerman.com

http://www.gold-eagle.com/editorials...man120309.html

I’ve always found it asstounding that most folks don’t factor in the changes in purchasing power through time periods. Like high blood pressure to the body, inflation is a silent killer to investments.

And buying unreal estate now is taking unnecessary risk of further price drops in the next couple of years. One article I read predicted a further 30% drop in unreal estate by the end of 2010. I feel it is far, far better to rent and save the difference in precious metals so that as unreal estate prices fall and precious metals rise, you will have made money and patience work to your advantage.

There is a good time to buy a property and a bad time to buy a property. With what we know, particularly having read the above article, which is it ?

There is one exception these days and that is doing what is called an exchange. Essentially trading your residential property for an acreage property with no or some cash differential. My mom turned me on to this; she is a retired real estate broker.

Answer2me, you wrote about buying acreage with a well and growing a crop on it. A good idea but I’m going to write about an acreage upon which you also live. While your idea of an agricultural moneymaking venture holds potential, I believe that combining it all on one acreage has some advantages.

Okay, it’s time to talk about acreage property and how it is a whole different animal than residential property. My sons and I live on 10 acres. About 3 acres is cleared and the rest is wooded. We have enough to plant a huge garden and an orchard. And maybe put in a pond for fish or summer watering the garden. There is a seasonal stream that could be diverted into a deep pond.

A list of positives and negatives follows :

Positives :

1. Lots of land for growing food. And an orchard.

2. Room for chickens, goats, sheep, rabbits, cows, etc.

3. Privacy. Think peace of mind.

4. Security. Again, think peace of mind. Our no trespassing signs are up. I have a gate for the only way in or out (just haven’t installed it yet). Can’t do that in a residential property, can you ?

5. Wood for heating house and workshop. If fuel prices return to the last year’s peaks of $145 a barrel oil, the savings of wood heating will become more significant.

6. Storage space. Now this is a great plus to the barterer and horse trader. It would be impossible to do what we do in a residential property. I’ve hauled in tons of items that made and saved me lots of money.

7. The potential to operate a business that could not be done in a residential area. Most acreage is outside city limits and laws are usually much more lax in the county. Also, no fire marshals and other govt snoopers coming around and hassling you.

Don’t think this point of having a business at home is insignificant. Actually, it is probably the biggest plus on this list. I was paying $1500 a month in rent before I moved my business to home. This one act saved more money monthly than what I was paying at home. Additionally, I can write off part of the property against business income taxes.

8. We do welding, transmission rebuilding and repairing of our own cars at home. Hard if not impossible to do that in most residential areas.

9. In my opinion, owning acreage bodes well for the future regarding potential for appreciation. At least, in relation to a residential property. Envision living in both types of properties in five years from now. Which will become more desirable ?

10. More bang for the buck with acreage property than residential property. I moved from a residential house valued at about $350K to 10 acres for $290K, a decrease of some $60K. It came with a three bedroom two bath house, a well, septic system, a large two car garage with workshop, and a 2000 sq. foot barn.

11. Better place to raise children. And as they grow up, you could make room for them somewhere on the property. A trailer or motor home with electric, plumbing and cable connections. This would save a ton of money for them and if you have the right kind of young adults, they could help around the place. You know, like what our forefathers’ did. Going back to the old ways with family sticking together is rewarding beyond what words can say.

12. Quiet. No neighbors making noises next door. No snooping around, wanting to know every move you make.

13. Pollution, both noise and clean air.

14. Spectacular night sky with stargazing a real possibility. As you are aware, city lights obliterate night sky purity. Here I can go outside and look at a clear Milky way and watch meteor showers like a fireworks display. Oh, and we occasionally shoot off fireworks for amusement. As I wrote once, I’m waiting to find a screaming deal on a large telescope. The time is not right but I’m hoping that someone will have to unload their monster telescope cheap when the economy forces the selling of larger items.

15. A generator. That’s something that’s hard to have in a residential place. I’ve been looking at a 12K Detroit diesel genny for $2700. It uses les than a gallon per hour and I’m planning to use half diesel and half old filtered oil. Charge a battery bank, power the well and do the laundry at the same time. Maybe an hour or two per day. If oil prices skyrocket like last year, it might even save me on electricity. Right now I’m focused on having a genny if we lose power for an extended period of time. I have 3 gas gennies now but they aren’t designed for continual use. The Detroit diesel is made to run 40,000 hours between top end rebuilds.

16. A well. Pure water without chlorine or fluoride. Less cost than paying for city water in the long haul. Also, we have a 2,500 storage tank for emergencies. Water is extremely important; we just don’t realize how important until we don’t have it.

17. Room to experiment and innovate. That’s if you have the inclination.

18. Trash. We burn most of our trash and haul the rest to the dump station. In the residential house we paid over $100 monthly for trash pickup, water and septic. Of course on acreage, there is maintenance money to be set aside when things wear out.

19. You can run around naked if you want. I mentioned this because Ponce has a piece of private property with a Jacuzzi and he sounds like a nudist at heart.

20. You can shoot a gun on acreage in many cases.

21. Nobody comes by on Halloween. Think of the money you will save in candy.

22. A bugout place for family and friends. If what I think will happen in the next year actually comes true, this alone will be priceless for loved ones. Plus, there is safety in numbers. And the potential for sharing expenses in hard times.

And now the negatives :

1. With all the above possibilities, you will be busier than you have ever been before. So don’t expect to just lay around and watch TV and drink beer. There will be a multitude of things to do that you didn’t have when living in a residential property. Maybe this is a positive; it depends on your attitude.

2. You will be farther away from town and have to drive in for supplies. Again, this may be perceived as a positive if you are a country boy at heart like me and avoid crowds as much as possible.

3. Police response will be slower. But I never did plan to depend on them anyway. Remember, when seconds count, the police will be there in minutes. Maybe instead of carrying a gun in their holster, they should have a big piece of chalk instead. You know, for the outline.

If you can think of any other negatives, please post them. I’m all out. HeeHee

Best wishes,

Agnut (happily living in the boonies)

P.S. This post points up the potential to sell a residential property and buy a country property. You may be able to even do an exchange which is advantageous taxwise. As time passes and others begin to want to do the same, the window may close for being able to do this without having to pay a large differential. There are loads of residential properties relative to the number of desirable acreage properties. Something to think about. You know, supply and demand.

serious farming required sacrificing of personal freedom

I remember by grandpa never ever had a vacation,

he in a way was a slave of his cows, sheep and pigs.

no matter how healthy or sick he was he had to get up with the sun and feed his livestock

year after year, a decade after decade

Any comments on where you get inventory in the winter? Around here auctions, garage sales and flea markets generally only happen during warmer weather.

Agnut, as alway great information!

Hi Grim. Sorry to hear of your predicament. I was a Navy brat and remember my folks having to rent their house in Tennessee when we moved to a new post in Alaska. Back in the 50s house prices were low relative to incomes and they didn’t change dramatically like we have seen in the last years.

Nowadays a house purchase can become an overwhelming drag on one’s future. Renting seems to be the only other option. As I wrote, renting is about 1/3 as expensive as owning with a mortgage.

You might consider doing an exchange, trading your current house for another where you are being posted. It may not be feasible but nevertheless worth investigating.

==========================
I have owned small businesses for 40 years and well understand that the ground floor, the small businessman, is foundational to healthy employment. How can rents and mortgages be paid, credit balances be paid, consumer buying be healthy without a healthy small business environment to provide employment ?

I haven’t had a sale in about a month; so how could I even think about hiring an additional worker ? In fact, I’m thinking about what else to do in order to supplement income. Increased advertising hasn’t helped since it seems almost nobody is spending at this time. So I’m broadening product lines which would be increased competition for sales against other businesses which had previously not had me trying to take a bite out of their own decreased volume of sales.

About 2 years ago I saw this coming and built a reconditioned transmission rather than a fully rebuilt one. It was a trial unit and the sale price was hundreds of dollars less than my rebuilt transmission. It sold quickly and thereafter I never heard form the buyer. You see, in mechanics, silence is as close to getting a tip or applause for our good work.

This successful trial sale 2 years ago was preparation for what I’m experiencing today. My reconditioned transmissions are priced below what a junk yard charges. And they do not have the variety I have nor are their units disassembled and repaired with hard parts and all new seals and gaskets. The only way they can compete is to drop their prices substantially. And that would practically put them out of business.

I’m often up at 2 to 4 A.M. thinking about all sorts of ideas. I sit in the shop among piles of transmissions and gear sets. I take notes and later investigate. It’s not perfect but I believe it is ahead of what my competitors are doing. A few weeks ago I decided to sell used low mileage transmissions. I found a source and can make a profit and at the same time take their exchange transmission in for my rebuild program.

This plan of a low price leader was used over 40 years ago when I owned a flower shop. I lived in the back and was going to college at the same time. I was also selling cars on the side. And now that I write about it, it sounds a bit crazy.

The plan was that I painted a big sign saying “Roses $1.99 a dozen. These were actually baby roses that I bought from the grower for $2.00 for a bundle of 25. My intention wasn’t to make 100% gross profit but rather to lure in customers with the low price. You see, I also had roses from anywhere from $4.99 a dozen all the way to $14.99 a dozen for long stem beauties. I always thought that the more expensive the roses someone bought, the more trouble these guys were in with their spouses. Some truth to this anyway.

The point is, in these times we all should be finding some quiet place to spend some quiet time to think of possibilities and to take notes of where our minds take us. Because if we do not do this, we are but reactionaries to what comes our way. This begets what Ponce calls having “a plan behind a plan behind a plan”. Planning ahead is integral to being a futurist. It is also one of its main benefits as long as we ACT on the things we perceive coming down the pike.

There is a whole world out there just waiting for us to discover the potentials. Some may be small profit wise and some may fulfill our dreams.

Through the years people have asked me “what if I try and fail ?” I responded with “If you try, you cannot fail. You will either attain your goals or you will learn valuable lessons.” Now this may sound trite but in the whole scheme of things, what we learn strengthens us for the future. The trick is to not attempt more than you can afford to lose.

Here’s a real life example for you. In the late 70s I had an auto repair shop with 12 employees and a used car lot on the side. I was encouraged to open a second used car lot 25 miles away. It was available and in a good location. So I moved in and stocked it with cars.

I closed the lot a few months later due to poor sales volume, not to mention that I had more of my cars stolen and stripped in the night than cars sold in the day.

What valuable lessons did I learn that would prepare me for success in the future ?

1. Know your area and competitors.

2. Know your potential customers.

3. Have a realistic business plan. More like a battle plan; you are waging economic war.

4. Don’t spread yourself too thin.

5. Expansion can be as debilitating as under capitalization.

With this understanding, I cut my losses and returned to my repair shop and small used car lot and focused on improving what I already had. Within a few months I had increased sales and become a meaner leaner businessman.

Life is like schooling; when you think you know it all, that’s as far as you will get.

The older I get, the more I know I don’t know.

Best wishes,

Agnut

Failure to plan is a plan for failure.

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

Here is my tale of bartering and horsetrading,

I know a guy who is a butcher, makes sausage, and sells meat, his company is a little place a speed block building. I have been buying all of our meat there for about a 2 years now. I would load up on meat and ask him , "How much do I owe Ya" He would reply, " Could you just bring me some cigars?" ( I had the cash in hand) No just bring me some cigars. I always offer cash first, nope he just wants cigars.

I like that cigars for steaks

__________________
Truth is the souls food for mans survival.


The depression starts, when you loose your ability to maintain your lifestyle. Not a minute before that.




To be is to do.
-Socrates
To do is to be.
-Sartre
Do be do be do.
-Sinatra

Hi Grad. How true, farming is hard work. Also the hours can be long and 7 days a week. And hard to get off the treadmill once you have obligated yourself.

I guess it depends on how much time one needs or wants to devote to farming and taking care of animals. We are on 10 acres, mostly wooded, and have only a dozen chickens and a garden; this doesn’t take up much of our time. We don’t have to have the chickens and garden at this time but are learning for the future when they may become critical to our needs.

I use the acreage to do my mechanical repair work and continue to accumulate tons of things that may be necessary in the future. I can do most of the mechanical work when I want or as it is ordered. I take weekdays off and do other things. But I may work on the weekend to play catch up. There is flexibility in being self employed.

Higher skills pay better than farming. Not to denigrate farming; I have a high respect for the farmer and believe that in the coming years they will become more highly regarded as we collectively learn that food isn’t grown and processed in the back room of the supermarket. And the public ain’t gonna wake up until either food prices rise dramatically and/or the shelves become empty.

If you still think it’s a good time to buy a house, here are a few articles to read thoroughly and make you look before you leap. From the frying pan into the fire, that is.

US Housing Crash Continues
It's Still A Terrible Time To Buy
Why?

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

US Housing Crash Continues
Who disagrees that house prices will continue to fall?
Everyone making money off you!

http://patrick.net/housing/crash2.html

US Housing Crash Continues
What are their arguments?

http://patrick.net/housing/crash3.html

I highly recommend that you download and copy these three articles and put the in a file marked Unreal Estate. And whenever you are tempted to buy a house, take it out and reread it.

If we were to experience a hyperinflationary episode as what occurred in 1922-23 Germany, debts would be wiped out and mortgages would be paid off in bundles of Monopoly money. But do you really think that’s what is going to happen ? When the largest bill is one hundred dollars ? And we as a nation are on the hook to the rest of the world for trillions ? Maybe the Chinese creditors will take our houses in trade for their foreign trade surplus. A twist on the German WWII word for more room for their people, lebensraum.

I still believe that hyperstagflation is in our future. Wages going nowhere and unemployment rising while prices keep going up. Don’t you think we are in the middle of it now ? It isn’t going to be like the German hyperinflation where it took a wheelbarrow of German Marks to buy a loaf of bread. Hyperstagflation is a seemingly innocuous creeping process through time; its devastation only becomes apparent when compared to a more normal, sane past.

Face it; we lost WWIII. It was a stealth war that almost nobody recognized. It was a war waged in economic theory. Keynesian theory versus the Austrian School led by Von Mises. And look what has been winning for many decades. Disinformation on a grand scale causing dumbing down of the populace lured to go to the dark side. Bread and circuses ala cheap credit and easy money while the barbarians were breaking down the gates. And over issuance of unbacked fiat currency was the neutron bomb. You see, a neutron bomb destroys life while leaving the structures intact. In the case of economic war, the destruction takes place in the hopes and dreams of the populace. And the reparations after war’s end are in the form of what I call “debt man walking”. Like a ball and chain. It’s there but you can’t see it. Well, unless you talk to the casualties or look deeply into their eyes.

The only defense against this destruction was for the populace to wake up and overthrow Keynesian theory. But that ship has sailed.

You don’t own a house; a house owns you. Your oh so precious time here on this earth; your sweat labor. It is all a matter of degree.

If you are putting 10 to 20 percent down and carrying a mortgage, the predicted decrease of 30% in house prices in the next year would decimate your finances; possibly for a lifetime.

However, if you can afford to buy a house cash out, you will still have lost the opportunity of having used that cash for other, possibly better, opportunities in the future. No, no, I have no interest in buying a house at this time in history. When it is to my advantage I will think about it then. It is like the attitude of investors after a terrible stock market crash. They also have no interest in investing after being burned badly. Might take a generation or two before folks forget the lessons of history and once again venture where angels fear to tread.

Again I point out that this may be a good time to trade a suburban house for a place with acreage in the country. You must realize that some folks have done this and are still doing this so this opportunity may end without warning. After all, how many suburban houses are there in comparison to rural acreage places ? 50 to 1 ? I don’t know but this awareness alone should be significant enough for you to ACT if you are in position to do so.

Always be mindful that buying a piece of unreal estate is probably the largest transaction in your life. Well, except for the decision to have kids. And for those of you have kids, need I say more ?

Patience is a virtue. So you hard chargers out there, take heed. The “pride of ownership” ain’t what it used to be. Is it ? And “pride comes before the fall”. Hasn’t it ?

Best wishes,

Agnut

Some good wisdom right here.

Keep your mind moving and always hunting for the next idea. Put those thoughts on paper. Keep yourself driven and you will stay ahead of the wave.

Good stuff......

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

for my GIM quotes file

__________________

Hi Past Tense. Good question. Seasonality plays an important part in bartering and horse trading. Right now we are in the midst of the winter season. Garage sales have gone into hibernation. There are still a few happening though and you should check them out. Also, estate sales continue but at a slower volume. There are auction houses still operating throughout the year. Winter isn’t a time to look for winter clothing; late spring and summer is best. I have gotten three London Fog jackets in the spring/summer for a couple of bucks each. They are about $200 new. Boats in the winter tend to be more flexible pricewise. And after Christmas, January and February may be a good time to look for a bargain car. Few have money at this time and the bad weather keeps the buyer competition down.

Thrift stores are open throughout the year. Ponce goes to his on a regular basis because new merchandise is coming in all the time. If you don’t periodically check them out, you will miss the new arrivals. I watch mine for vinyl records and even have the manager who will call me when she gets a new load on the shelves. Last week I got 7 records that cataloged at $20 to $30 each and one that was $40. Most of these records were from the late 1950s and early 60s. I paid 25 cents each. This is just one of my hobbies and it isn’t everyone’s cup of tea but if you have a particular interest such as books or glassware or tools, etc., you get the picture. I must have over a thousand records and don’t have more that a couple of hundred bucks invested.

Being A Skinflint

Well, let’s start out with the littlest items that you can accumulate for free or close to free.

The flint. I just popped apart a dead Bic lighter. It had a flint that still had a lot of life in it. Flints are about a buck for 5 so that’s about 20 cents each. These flints can be used in a Zippo lighter for the long haul.

Even paperclips can be accumulated over time. Why buy them if you can pick them up here and there ?

You’d be surprised how many little things are in the bottom of garage and estate sale boxes. Electrical plugs, etc.

Always remember that what usable items you can pick up for free are worth two times what you would buy in a store. I know; this sounds exaggerated but if you had to buy these items in a store, you would have had to make two times what they cost since the govt taxes you about half of what you work for.

Entertainment ? I buy prerecorded videotapes since no one seems to want them any more with the prevalence of DVDs. As I wrote recently, I got 181 videotapes for $5 or under 3 cents each. I can watch them and put them out for sale at my garage sale next summer. Also I have been picking up DVDs for just under a dollar each. You could say that I’m being paid a profit for my entertainment. How about you ? Are you still renting movies at Blockbuster ? Or even worse, paying $7 to go to a movie theatre ? Ouch !



So get lean and mean (especially mean). There is a multitude of small things you can save on which may seem petty at the time but if you will think in terms of what you can save in a year, you would be surprised.

Still not convinced ? Take cigarette smoking. Yeah, a nasty habit but if you are buying commercial cigarettes and paying anywhere from $5 to $7 a pack, you are wasting a bundle. Pipe tobacco by the pound is about $38 with sales tax. The rolling tubes are $4 for 250. I figure that comes to about $2 a pack. So saving $3 a day times 365 days comes to $1,095 a year saved. Saving $5 a day times 365 days comes to $1,825 a year saved. And remember, that is after tax money saved !

Supermarket shopping ? I don’t have to go into the sales and coupons; that’s pretty obvious. But have you considered the times you went to the market for a couple of items ? Why did you have to do this ? You could have bought these items on one of your big shopping trips. The time, gas and wear and tear on your transportation are a waste. One solution is when someone you know is going to the market anyway; they can pick up the couple of items you need without hardly any effort.

Trips into town should be set up in advance with several stops planned in advance. Going in for a single purpose should be only for an absolute necessity. In the future we may be doubling up with friends and family; even more savings potential.

I believe that the year 2010 will be a very tough year.

With house mortgages underwater and predicted to over double by the end of 2010. That’s from 25% to over 50% in 12 months. Whereas the last 3 years saw a yearly increase of only 6.7%, 2010 is predicted to increase 100% ! Parabolic ? You betcha.

With alt A and option ARM renegotiations peaking in the fall of 2010 while at the same time commercial real estate is in its first peak.

With a predicted 30% fall in house prices.

With foreigners not buying our bonds and being disgusted with the bundled CDOs sold as AAA quality and really being junk status.

With non government workers being laid off and the so called lucky ones remaining carrying a heavier burden, the government will have to borrow more and tax more. This alone may be the straw that breaks the camel’s back.

I could go on and on…

I see 2010 as part of the trend toward 20111 which, if we are lucky, may be the bottom. A bottom which will take many years to recover. Throw in a war and chaos and the depth would be incalculable.

Now the above is part of the thinking style from the book “The Millionaire Next Door”. A common characteristic of their planning is to first consider what is the most they can lose. The above is a macro worst case scenario and must be taken seriously in our planning from this day forward.

Another point we all should be aware of is food. Don’t be surprised at food prices increasing even more. I have read that the corn and soybean crops are doing very poorly. Much has been flooded and frozen. The Agriculture Department is suspected of sugar coating the figures. Imagine that. We export 40% of the corn and 39% of the soybeans of the World market demand. And with world population increasing with their foreign trade surpluses, they will be tough competition against our own food needs.

If you have precious metals, good for you. But if you also have a large stock of long term food stocks, better for you.

We all have seen cans of food rise from 49 cents to 59 cents or 69 cents. That’s a 20 to 40 percent rise. Some food items have risen even more. Although we have watched gold and silver prices rise dramatically at the same time, don’t confuse the two. Gold and silver are for the long haul; food is for survival from now into the long haul. We have to be alive and fit in the long haul in order to partake of the advantages of our having held precious metals.

With this attitude, I probably have less precious metals than many of you. But I also probably have more food stocks than most of you. It is a matter of personal perception and priority.

Just for the heck of it, let’s compare the buying of more precious metals against buying more food preps.

More precious metals :

1. Buying before prices rise further

2. Buying before availability becomes a problem



More food preps :

1. You will have the food in your possession. I can’t emphasize the importance of this this enough.

2. Fill in the rest yourself….

3.

4..

Best wishes,

Agnut


P.S. Here’s an interesting article about real estate and banks. It’s not what you may think. HoHoHo, heave ho that is :

JINGLE MAIL, JINGLE MAIL

http://www.gold-eagle.com/editorials...son122209.html

Thanks nub; a delicious example of bartering. You will probably be able to continue this through the coming times, especially if good cigars become scarce. May I suggest that you stockpile cigars, especially the types your butcher loves most ? They’ll last longest with the right humidity and temperature conditions. But you already know that. I used to smoke Cuban Cohibas when I could get them. They lasted about 1 ½ hours and were about the best I have experienced. Hey, I’m no connoisseur. More like a kinda-sewer; everything goes in indiscriminately.

An appropriate article to bartering and horse trading :


10 Predictions For 2010
Jason Hamlin

http://www.gold-eagle.com/editorials...lin122809.html

Note prediction #4.

“…There is an over-supply of housing and the high rate of foreclosures is likely to continue or increase during 2010. I believe real estate will be an excellent buy at some point in the next 5-10 years, but it is nowhere near a bottom yet.”

Next note prediction #7

“…While some are claiming gold has peaked, I believe gold is nowhere near a top and will reach a new nominal high between $1,300-$1,500 during 2010. Silver will outperform gold reaching $24 or higher as the gold/silver ratio dips towards 55.”

And note prediction # 9

“…One thing that is certainly not in over-supply is agriculture. With a very poor harvest season, lack of water in key agricultural areas and exploding demand from a growing middle class in China and India, I believe prices for many food items will shoot dramatically higher in 2010 and subsequent years. Investing in quality fertilizer companies should prove very profitable over the next few years.”

Lastly, prediction #10

“…The transition will undoubtedly be difficult as jobs become scarce, prices rise and crime and civil unrest flourish. However, there are common sense steps that you can take to protect yourself and your family. Besides diversifying out of dollars, moving your money out of banks and owning precious metals directly, you should also consider becoming more self-sufficient, learning to garden, stockpiling food and supplies which might become scarce, continually educating yourself and encouraging others to stop supporting a failed ponzi-based system. As it collapses under the weight of its own hubris and corruption, there will be enormous opportunities to profit individually and collectively as a society. The better prepared we all are to weather the storm and facilitate the transition, the better our future promises to be.”

There is more in the article; I have hard copied it for the future when I will be able to look back to see how accurate his predictions were. Most of them I agree with and have been reshaping my financial life to not only survive but also prosper in the coming changes.

Even something like stockpiling of toilet paper for future bartering may turn out to be one of the best items to have. Besides, I think it is safer to have for bartering than bullets, guns or liquor. A while back I thought of buying a lot of 2 x 4s and sheets of plywood but the price has gone up dramatically. So I saw that opportunity but missed acting on it when the price was 40% lower.

An advantage is not an advantage unless you take advantage of the advantage.

Pretty twisted, no ?

Best wishes,

Agnut

Remember that what you do today will influence your tomorrow, therefore your tomorrow is today.
Ponce

Hi Agnut,

In the General Discussion forum, Popps started a thread about buying mirrors.

It got me thinking:

I often see what look like perfectly good mirrors tossed out on the street.

Sometimes I think I should pick them up.

What are your thoughts about mirrors? Resale, collecting, value, etc?

If you get around to it, please post your thoughts and advice!

You might look at eBay completed auctions to see what mirrors are selling for there.

Came across something which surprised me regarding the 1922-23 hyperinflationary German episode :

Deflation or Inflation...JGF...You're Just Plain Wrong

http://www.timebomb2000.com/vb/showthread.php?t=351538

In post #3, it states :

“But the main force which gave inflation its momentum was the steady decrease in the true value of money in circulation. This has been observed in all past rapid inflations and it is vital to understand it if inflation is to be coped with. During the war, as we saw, the price inflation lagged behind the rate at which money was issued. But now, as people lost confidence, prices began jumping much faster than the government could generate new money. Thus the total circulating currency fell drastically when measured in terms of its true value. One economist stated that, "In proportion to the need, less money circulates in Germany now than before the war. This statement may cause surprise but it is correct. The circulation is now 15-20 times that of pre-war days, whilst prices have risen 40-50 times." In fact, the total currency when calculated in gold value fell from 7428 million marks in January 1920 to a mere 168 million by July 1923.”

Notice that the total currency of German Marks when valued against gold fell a precipitous 97.7 percent ! If I am reading this correctly, although there were nominally trillions of German Marks floating around by the ending days of hyperinflation, their total purchasing power had fallen to less than one fiftieth (1/50) of what it was before the hyperinflation. No wonder most everybody ended up broke. Well, except property owners who paid off their mortgages with toilet paper Marks. Savers lost everything and debtors won. The financial world turned on its head.

So what is in store for us here in the good ‘ol USA ? In fact, are we living this in slow motion ?

One thing I can’t understand is that stock and bond buyers don’t seem to factor in true inflation against the percent of interest they receive. If they are getting 4% increase in a year while true inflation is running 14%, they are losing 10% in purchasing power per year. And adding insult to injury, they are paying income taxes on their so called profit. If they were to extrapolate this to a 20 year time period, they would end up broke. Is the investing world that stupid ?

Sometimes a seemingly insignificant mention of a past historical event will jog our imagination and get us to act upon its implications. And this acting upon could have great benefit down the road. In the German hyperinflation of 1922-3, a woman had a bathtub with lots of German Mark coins. I know, a bit strange but it was reported that she did well through the hyperinflationary period. Why ? Because her coins held their intrinsic value within (base metals, not gold or silver) rather than the paper Mark notes which held their value from government promises. And the German kept adding zeroes to the paper Marks until no matter how many they added, the fiat currency in its totality lost 95% of its purchasing value. When public confidence is lost in the issuer of the fiat currency, the “con” game is over.

Here’s an example I have been discussing with Ponce. Now Ponce is an adamant believer in holding nickels and pennies rather than paper dollars. See the parallel to the past ? Only the penny and nickel currently are close to their metal content. But Ponce did say that in a currency collapse/changeover, the dimes, quarters and halves will also be superior to the paper dollar. I agree but still prefer the pennies and nickels. In fact, a 3 for 1 or a 10 for 1 or even a 100 to 1 old dollar exchange for the next fiat currency (Amero maybe ?) may well benefit those who hold large quantities of coins. Either the coins will greatly appreciate with the new currency if designated a fractional part of the new currency or their metal content will prevent citizens from turning them in if they are not to be a fractional part of the new currency. In the latter case, they would either hoard them in disgust or use them in bartering later.

Remember the 1965 coin changeover ? Sandwich dimes, quarters and halves. Well, Kennedy halves had 40% silver for a few years. At that time you could collect all the 90% silver you wanted for face price. And now, what are they ? Thirteen times face price.

Is history about to repeat itself with the current coinage ? Your guess is as good as mine but there seems to be no downside to collecting coins rather than paper dollars. I would much rather hold a $100 brick of nickels or 4 $25 bricks of pennies than to hold a paper $100 bill. How about you ?

Best wishes,

Agnut

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."
Ayn Rand

"Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves." Money and Wealth in the New Millennium, by Norm Franz, copyright © 2001, Whitestonepress, page 154.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty - Thomas Jefferson

“Reason obeys itself; and ignorance submits to whatever is dictated to it.” Thomas Paine

“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible.”
Bertrand Russell

Addendum to my last post :

The coins of today will be what the silver coins were in the past
Ponce

Ponce wanted this clearly understood :

Coins are made by the U.S. government Treasury and backed by the U.S. government.

However, fiat paper dollars are made by the Federal Reserve, a privately owned company. Nothing to do with the U.S. government and backed up by promises. And we all know the saying “promises are made to be broken”.

Let the buyer beware.

Best wishes,

Agnut

Hi Saoirse. Hard to say what demand there will be for mirrors in the future. There are antique ones valued for the frames. And I’ve had some hand held ones with micro mosaic work surrounding the mirror. It sounds highly specialized and I wouldn’t advise getting into it deeply unless you were catering to the well heeled collector. And even then, our future bodes ill for discretionary items‘ resale potential. Even the rich won’t be buying as before.

Funny how one idea begets another. I’ve been thinking about using old satellite dishes and covering them with a reflective material and running a fluid line to heat and store for solar pumping to heat a house. Crazy, huh ? Well, it may not be able to provide enough heat to do much good but worth investigating. Ponce uses a solar powered fan to cycle heated air for his solar heated box. It takes the chill off and doesn’t cost any electricity or fuel. He uses it as a supplement to his main house heater and as a primary heater in spring and fall when temperatures aren’t too low. What Ponce doesn’t have he doesn’t need and what he does have is almost everything you can imagine.

Here’s a recent interesting thread from MKS, one of our GIM members :

Identifying Sure Signs Of The Final Economic Plunge
by Giordano Bruno

t=441426

After having read this thread I have a few signs my own :

1. Garage sales appearing on weekdays and Sundays. Also, good merchandise selling slowly or not at all. Used clothing sales however are doing well.

2. Dollar stores. Later cars in parking lot and better dressed customers.

3. WalMart. Most customers buying in food section.

4. Supermarket. Customers more hesitant when picking up food, buying off brands with lower prices. More coupon clippers too. Less steak and salmon, more hamburger, pork and chicken buying.

5. Body language. The financially well situated are more thoughtful while the less able are depressed and almost seething with anger.

6. Business lending offers increasing at first and then tapering off or ceasing altogether. This is after personal credit card offers have long since ended.

7. Work. Layoffs, job cuts wage cuts and shorter hours. Is your boss looking worried ? Less temporary work too.

8. More crime including shoplifting.

9. Seedy characters in beat up vehicles cruising neighborhoods during the weekday.

10. Stores offering discretionary merchandise such as game stores, music stores, etc. Few customers or shutting down.

11. More cars on the road unwashed and in need of body work. New car sales down big time; dealerships closing. More used cars for sale all over the place. Lots of late models with loans against them for sale; can’t make the payments any more.

12. Restaurants practically empty at lunch time and mostly empty at suppertime.

13. People living in the woods. Or doubling up with friends or family.

14. Overissuance of currency. But nothing getting to the man on the street except higher prices.In other words, hyperstagflation writ large.

15. Fewer and fewer ads for employment. And the ones there are offer low wages and are often highly specialized.

Not to shock you but I have seen all of this happening in my community. Well, except for #6, the business lending offers. This is because the average Joe is all tapped out on credit. The small business that is still operating has potential, at least apparently to the lenders. I get many business loan offers every damn week; I’m getting more calls for this than from customers.

Whilst this may seem off topic, I wanted to state the fullness of where we are right now. We are in a Depression and had better face the facts. When I began the bartering and horse trading thread over two years ago, things were so different. Most of what I have written still applies but with the caveat that we all must think of where we will be in the next year and to deal most cautiously. I see things accelerating downward and have been making plans to take advantage of what I believe is coming. As I have written before, a ¾ ton Dodge diesel truck with a double axle trailer will be necessary to haul off inventories of defunct companies or to clear out houses foreclosed upon or to haul non running cars or to rent out for hauling or any other possibilities that may avail themselves.

The reason I state that we are in a Depression is that whenever I have a problematic situation, I always ask myself what I need to do to get out of the situation and back to normalcy. We are so screwed up now that the only solution is to let things take their course. Like having the flu; in the first days you know that you are going to be sick for a while. The best you can do is to slow down and back off from normal activities. Take lots of liquids and sleep as much as possible. Like the flu, there is no quick shot or pill you can take that will cancel the coming sickness.

Politicians don’t seem to understand that when they destroy businesses by lending, legislation, taxation and regulation, they don’t suddenly magically reappear when things get better. Like burned stock and bond investors, most of the small businessmen who has gone under will not open a new business in the future. It may take a generation before folks become positive again. First, there is the capital required. It is not cheap to open a business; it takes about two or three years before the business is profitable and stable. And who in their right mind would want to start a new business these days ? I have a small business and have seen the sales volume fall off and have cut back wherever I can.

I see a lot of small home businesses popping up in the future. Maybe the shoe repairman will be working out of his den or garage. I see auto mechanics working mobile or from their home (shade tree mechanics). I see ladies making bread and pies and selling them from home. And lots of other possibilities from the home. Little to no overhead is the key. These are what I would call the “green shoots”; not at all like Obama is espousing. And I think he’s going to have a heckuva time harvesting these green shoots’ taxation.

This sounds like what happened when Russia collapsed; people fending for themselves. Some will make it but the ones who have been on the govt gravy train or in mind numbing jobs won’t know what to do. Maybe Darwin’s law will dominate. I hope so. You know, “ success goes to those most adaptable to change”.

Best wishes,

Agnut

“Let me tell you the secret that has led me to my goal. My strength lies solely in my tenacity.”
Louis Pasteur

"The Constitution only gives people the right to pursue happiness. You have to catch it yourself." --Benjamin Franklin

"If ever a time should come, when vain and aspiring men shall possess the highest seats in Government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams

"Still, prices plunged more than 12 percent last year -- the sharpest fall since the Great Depression. The price drop for 2009 -- to a median of $173,500 -- showed the housing market remains too weak to help fuel a sustained economic recovery".

http://finance.yahoo.com/news/Home-s...&asset=&ccode=

They say this like it is no "BIG" deal. "The sharpest fall since the great depression". They then turn this article around to show the positive side of real estate softening. Funny. If we don't stand corrected than housing prices will fall in some areas by another 30% in the next couple years. So, will this mean that this will be the worst decline in housing prices in the history of the united states? All the implications are leading to "YES"! Its unfortunate but there will be some killer deals in the not so distant future.

__________________
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

Hi Agnut & other posters to this thread.

First off I want to say thanks for the civil tone, & nuts & bolts practical advice you have shared.
I actually started at post #1 & have been working my way through. (up to page 17)

A couple of time travel observations:

It's been a long time since I've seen any pasta for 2 lbs for a buck. I can find it for 79 cents pretty easily & always at $1.00 a pound.
In January of 2007 you predicted price inflation, but so far we have gotten the creeping gradual type (often through "down sizing" like those half gallon of icecream boxes are first 1.75 then 1.5 quarts) ,
not end of the world as we know it hyperinflation stuff.
But still mighty irritating.

4 years ago I became a storage unit buyer & had some great success. Many times I was the only buyer that day. When the economy tanked, that changed. Now I am usually outbid by some folks that pay more than I think I could sell the stuff for. When I do win, I work harder for less... but it beats a blank.

I took some advice from this thread & after looking through the yard sale section of the paper, went to a "moving sale".
The people had dug themselves a hole. They "invested" in boyds bears & Bradford exchange collectables, then became dealers for the boyds line. But a year ago their craft show business had fallen off from selling $5K at a craft show to only $100. The Husband & wife lost their day jobs, & are now trying to sell all that ceramic crap that fills every room in the house. The bank is going to take their house that they are upside down in a mortgage on (after 12 years) & they are moving to a trailor court.

I know this because I took about 1/2 hour to chew the fat, & then asked would he entertain offers on that Shopsmith in the corner. (he had it priced at all the money, & I wasn't ready to beat him up on price yet) But I took his phone number & will keep an eye on opportunity.

When I got home, I thought... "Rats! ... I forgot to ask "do you have anything else for sale"

Anyway, thanks again for all the time you have invested in this project, & it absolutely deserves to be a sticky!

Hi Answer2me. Good thinking. There WILL be killer deals in the future. But I believe a healthy dose of patience will be wisest. I have read that real estate prices may drop 30% in the next 12 months. Sounds like the knife is still falling and I wouldn’t recommend trying to catch it on the way down. Wait until total disgust in real estate is prevalent. When the “American Dream" has become the "American Scream”.

Remember my prediction ? In the future, in some places and at some times, real estate will be worth LESS than zero. It happened in the last depression; will this depression be different ? Just look at Detroit where you can get a house for practically nothing. I see it spreading across the country in many but not all locations.

Here’s an article that caught my eye. Short but not sweet by any means. Note the reference to 90% silver coins and the return of the barter system. When the future comes, we need to be already there in our spirit, mind and preparations. Our bodies will follow. HaHa

PREDICTING DATE OF ECONOMIC COLLAPSE (TSHTF)

http://www.gold-eagle.com/editorials...ott020210.html

And speaking of bartering and horse trading, here’s a recent deal I have been looking to transact for about a year. I’ve been watching Craigslist for a Dodge diesel pickup truck. But not just any Dodge diesel; it must have a 5 speed transmission, bench seat to accommodate 3 occupants and not be an extracab model.


Last Sunday afternoon at about 4 PM I noticed a Dodge 1 ton diesel truck that had been put on Craigslist at 2:20 PM. I remember that the owner had been trying to sell it for $4000 in past weeks. The new ad offered it for $2600 ! I jumped on it like a hen on a June bug. My son and I were making the deal an hour after I called the seller and made him promise to hold it until I arrived with the cash.

The truck had new front discs and rear drums and brakes with a new master cylinder.
Also the 5 speed transmission had been rebuilt 30K miles ago. It is a 1990 model and has excellent original paint; it was garaged and babied through its life with oil and filter changes every 3000 miles. It also has a Brahma canopy. I could go on and on but I would be bragging. Whoops ! too late.

I didn’t expect that my truck would have a rebuilt transmission with new clutch and pressure plate (about $1,500) or a new brake job all around (about $1,000) or a Brahma canopy (about $1,000 new) or a Valley heavy duty tow hitch with electric brake setup (about $400) or that it would have original paint. Also being a 1 ton rather than a ¾ ton, it has heavier brakes , suspension and rear end. These were bonuses. All things that I would have had to pay for in the future.

The reason I opted for an earlier body style truck is that it will not look like the later style Dodge trucks. A lot less money too. I don’t want to appear as if I have a lot of money in the future and this truck should blend in with the other older trucks. Actually, the type I purchased ranged in price from $3500 to $6800 in good operating condition. And these never had all the bonuses my truck has. So not only was it a good deal but with $3900 in additional bonuses, it was a screaming deal !

The next morning a magnificent 2 year old Newfoundland wandered on our property and wouldn't leave. My son wanted to keep it if the owner didn't claim him. He called the nonprofit outfit for homeless animals where my younger son volunteers and there had been a man frantically asking about his dog. He had offered a $500 reward. The owner soon showed up and lived a few miles away. He offered the reward but my son asked him to make a donation to the nonprofit outfit instead. I am so proud of him; and he is broke right now. He said it just didn't seem right to take money for the fun he had had. I told him we could get a similar dog in the future if he wants. A huge, loving animal that I wouldn't mind having around.

My view is that we were blessed with the Dodge Sunday night and the good deed came our way afterwards. I know, sounds assbackwards but we take 'em where we can find 'em. Actually, reminds me of a favorite movie “Pay It Forward”.

There is a very important point here and two of my friends told me after I had informed them of my good fortune with the Dodge truck. I will put it in cap letters; it’s that important.

LET THE DEALS COME TO YOU.

I know, I had been looking for the right deal for a year but was not impatient. I have a list of items I would like to have but on my terms. Right condition and price. By the way, these are not items I have an immediate desperate need for but rather they are things in the back of my mind that seem like a good idea. I have to admit that I was becoming a bit concerned that I would not find the right truck before things became unstable (chaotic really). This is always in the back of my mind; there is no way to tell exactly when we will fall off the cliff. I just feel that with world events being what they are, we are so vulnerable now and every day of our ability to continue preparing is a gift.

Best wishes,

Agnut

P.S. I had to borrow $400 from a friend to make the deal since it was a Sunday night and cash was necessary. I could have given the seller bricks of nickels but I’m afraid that I could not replace them easily. And my silver ounces are out of the question at this time. A lesson learned to have adequate money in hand in an acceptable form and ready for whatever opportunities suddenly appear.

I love giving paper dollars for physical items and have to laugh inside. Because I know what they are really worth and will be worth in the future. And trading unbacked fiat paper dollars for physical gold and silver seems to be the height of ridiculousness to me. It is all I can do to keep from laughing out loud.

I envision some day in the future when I will look back and recall the days when precious metals could be acquired for a pittance. Remember when we could get 90% silver coins for face value ? I do and was too ignorant to see that the future would boost the price 13 times face value (and still increasing in my opinion).

As Yogi Berra said “The future ain’t what it used to be”.

PPS. If any of you are seriously interested in obtaining such a Dodge diesel truck, private message me and I will be only too happy to help you. My last Dodge diesel truck was a 1992, same model and it never gave me a bit of trouble. By the way, my truck gets 22-24 MPG (owner had a trip notebook with MPG records) and you can store diesel fuel a lot safer and easier than gasoline. Something to think about for the future.

Hi glockngold and welcome to GIM. Thanks for the compliment but I could have never been able to succeed with bartering and horse trading without the many GIM members who have contributed so generously and intelligently. A couple of quotes come to mind :

"I learned that it is the weak who are cruel, and that gentleness is to be expected only from the strong." -Leo Rosten

To know even one life has breathed easier because you have lived. This is to have succeeded.
--Ralph Waldo Emerson

The second quote is one that touches me deeply and it motivates me as well as removes me from my own internal problems. There is an enormous satisfaction in helping others; I consider it a harmless selfishness. HaHa

It is a wide world out there just waiting for us to discover all the surprises and personal growth. Life can be made so much easier and fuller. Most people spend money like there is no tomorrow. But since discretionary income has all but vanished for the masses, they are now having to look long and hard at their purchases. Unfortunately this is a foolish way to live when they could have done this years ago and wouldn’t have squandered what they could have saved away today. My folks taught me well and I have never forgotten their wisdom. I have only added to it through the years since education never ends as long as we are alive. It is sad that so many end their formal schooling and think that is all they will need. Only the truly wise know that the door to learning must remain forever wide open.

I agree that we have had creeping inflation rather than galloping hyperinflation. I didn’t mean to imply that we would have a hyperinflationary scenario first. That would only come when they are printing money like mad AND it is getting into the hands of the citizenry. The first is beginning to happen but the second is not. Therefore my expectation of what I call hyperstagflation appears to be in play. This hyperstagflation is when prices for things we need are rising while wages are not. And also while unemployment is terrible. Don’t we appear to be living this right now ? And facing more in the near future ? A repudiation of our dollar world reserve currency status would drive the purchasing power of the dollar into the dumper. This has already been happening; it is a process leading to our becoming what I call a “banana republic without the bananas”. Time will tell but I have positioned myself and my family for the years ahead. It is somewhat like the way my grandparents lived having been through the last Depression.

The insidious nature of hyperstagflation is that it is not generally recognized until it is too late. There is a tipping point wherein the citizenry have exhausted their resources and additionally can no longer obtain more debt in order to forestall bankruptcy. It has been happening on an individual basis to millions of folks in the last few years. I believe that this year will see an acceleration of this process that will drag down the economy to the point that it will be undeniable even to a moron (well, maybe not yet to a liberal however).

My friend Ponce told me that his preps would cost him 3 times more today than when he bought them within the last.12 years. That’s pretty steep inflation.

Glockngold, the storage containers can be hit and miss. I have bought several over the years and had a lot of fun (work too). Some of the best ones I won were over the Christmas holiday from Dec 15 to January 1. Seems few buyers show up at that time. I also noticed an interesting thing at these auctions ; often the first container auction is reluctantly bid upon and can be a great deal. And the last container or two often have few bidders if the other bidders have already bought containers earlier. They are content and probably out of money to bid too !

If you will get out there and rub shoulders with your fellow citizens you may even find a real lifetime friend. Priceless !

Best wishes,

Agnut

"I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious."
--Thomas Jefferson

Hey Agnut,

A while ago you talked about a book that had different values of catalytic converters in it. I was wondering if you knew the title or where I could find it? I've been looking, but so far have come up with nothing.

Hi davycoppitt. There are eBay 6 auctions listed right now for these books. And there are 25,903 listings for catalytic converter. Also try ABEbooks.com and type in catalytic converter.

There are several cat dealers buying from eBay auctions and you may be able to hook up with them through messaging. This may take a bit of detective work; First, check out for the names of continual cat buyers and then type in their name and if they are selling anything else, their auctions will appear and a way to contact them. Gotta be a bit creative and persevere but the benefit can be substantial.

Here’s a good thread from our own prolific Twisted Avatar :

How a New Jobless Era Will Transform America

t=448043

I noticed common themes running through the article; highly educated people who could not find a job commensurate with their education. Also most unemployed people applying for a multitude of jobs without getting any response. See what narrow thinking, inflexibility and expectations will get you when the economy hit’s the skids ?

As the article states, unemployment creates an environment in which alcoholism, drug addiction, divorce, depression, violence increase greatly. These tear at the social fabric and result in children growing up without having had the secure nest of a working father and mother in which to develop. Look around and think of people you know who have grown up in such an environment. I have known many. If you will listen to them, you can pick up on their resentment of having been cheated and shortchanged. They have had to overcome much in order to succeed in life; they have had to put the pieces back together of their shattered upbringing. Through no fault of their own.

I bring up this article to present you with some perspective of what life can be like without hope and imagination. This is a time to create a job for yourself rather than send out 200 resumes in hopes someone will hire you. If we are to succeed in life, we must have a full understanding of what we are working toward.. It isn’t to get rich in dollars (although this is certainly possible) but rather to have control of our finances far beyond others around us. I have read that when working for someone else, the company gets ¾ of the income generated while you, the employee get ¼. That is fine for some but I like the idea of getting 100% myself and additionally having total control of the decision making process. I work a lot less hours for the same income. Or I could work full time and net 4 times the income than if I were working in some company. Quite a few tax advantages with owning a business too.

I feel that it is long past time (but never too late) to consider starting a small business. Don’t let the above article dissuade you. A small business from home/garage has no additional rent costs. That’s a big, big factor. Thirty months ago I moved my transmission repair business from a $1,500 rental in town to my garage at home. Remember, that’s after tax money I would have had to pay and about twice as powerful as it appears. So 30 months times $1,500 is $45,000. But if I am being taxed at about 30%, that would have required me to have made an additional gross profit of $58,500 !!! Just to have paid the rent if I had stayed rather than moved home. This is BIG and should be foundational to your considerations of starting a small business.

Another important factor, also huge is to not have any employees. At least not until you have so much business that you cannot handle it yourself. And you could opt to hire sublet labor if necessary and possible. But I must caution you on this; the paperwork and expense of even a single employee is enormous and can cost you more that the rent of a business property. I feel it is better to work weekends if necessary and to extend times until orders will be filled. Most small businesses have busy times and slow times. Go with the flow and don’t be tempted to hire workers just because you are busy at a particular time. Like Ecclesiastes says, there is a time for everything. Here’s a sobering article about not hiring workers :

Dear Mr. President: Why We Are Not Hiring

http://www.americanthinker.com/print..._we_are_n.html

There are many advantages to owning a small business even though we are heading into a financial storm of unprecedented fury. There is a multitude of possibilities out there. I’ll list a few just so you don’t think I’m bullshitting you :

1. Start with bartering and horse trading; the passive part, buying. Wise buying of your needs will most definitely save you a great deal of money. I save thousands per year; how about you ? This is not to be thought of lightly since the income you presently have has been taxed heavily and after tax dollars are more precious than before tax dollars.

Yesterday I went shopping and bought 4 32 oz bottles of Coffee Mate on sale for $2.50 each. The normal price is $4.19. I saved $6.76. Actually, there is a long list, almost $200 in groceries I bought. I used several coupons and looked for unadvertised sales. I had two grocery carts filled. I took advantage of the deep discount sales such as jelly, peanut butter and several other items. I only buy an amount equal to my needs and expiration dates. At the same time, some prepping for the long haul too.

The key indicator is that when I was leaving the supermarket, I realized that they probably didn’t make much profit on my purchases. My sister and nephew taught me well years ago and they are an absolute terror when shopping. My sister keeps a fat folder with coupons and she often gets items for practically free. There is a website called coupons.com where you can download and copy coupons. Better yet, type in coupons.com on Google and a huge list of websites will overwhelm you.

2. Catalytic converters. I know someone who gets them, mostly for free out of old cars sitting around in back yards and alleyways. He sells them on eBay and has made a connections with dealers who will buy any he finds. Also scrap aluminum and copper.

3. Buying cars and selling them for a profit. Used car parts are profitable too; a huge, huge market.

4. Buying inventories of defunct companies. A pickup truck and trailer (double axle car hauler type) comes in handy in both convenience and saved rental equipment costs.

5. Auto repair from home. Or a mobile repair service. Labor rates are usually from $60 to $90 per hour plus parts. I even met a man who has a shop and charges only $20 per hour plus parts. He is always booked with more work than he can handle. I can’t believe that he is charging so little, especially since he rents a shop space. He wants to move the work home and says that his customers will follow him anywhere he goes. Hey, I would too if I had to pay only $20 per hour for labor. Really nice guy too. Maybe he has prepositioned himself for Depression prices. Just kidding; anyone charging labor out should be somewhat in alignment with what the market will bear at the time. Maybe a bit below the market; anything much below that is doing charity work.

6. Mobile handyman service. Painting, plumbing, electrical, lawn maintenance, concrete cleaning, roofing, etc.

7. Baking and canning from home.

8. Foreclosure property repair. Hauling off contents, cleaning, repairing drywall, painting, landscaping, etc. Get in contact with realty companies and banks.

9. Buying tax foreclosures, fixing them up and reselling for a profit. There is money to be made here but be careful since we are in a falling knife scenario with unreal estate.

10 tractor service, garden tilling, tree planting, road maintenance, snow plowing, etc.

11. Appliance repair, air conditioning, heater repair.

12. Taxi service

13. Rent A Wreck

14. Pickup and delivery service, shopping for old folks.

15. Pawn shop ?

16. Go through the yellow pages directory and newspaper classifieds to see what services are offered. Imitation is the most sincere form of flattery (but your competition won’t be flattered)

17. Ponce has well over 150 bags of like new clothing for men and women and wants 100 more. He says when the dollar goes to Hell in a hand basket, imported clothing will become high priced as well as scarce. A $1.00 jacket bought now may be $10 or more later. Seasonality is important when buying and selling. Buy winter clothes in the spring and summer and sell in the fall and winter.

18. A machine shop or a welding shop.

19. Garage sale, estate sale and swap meet selling and buying for profit. Need I say more ?

20. Put an ad in the newspaper “buying estates”. See who calls. You can qualify them over the phone.

21. Bidding on abandoned/unpaid storage rental lockers.

22. Deal in DVD movies and vinyl records. I have bought hundreds of DVDs for a buck each and hundreds of vinyl records for as little as a nickel. I see on Craigslist that DVDs offered for $3 each. I have wondered if I put a huge list on there and could mail order them instead of having to meet the buyers. The vinyl records sometimes have a high catalog price and may be salable for a large percent profit. Right now I’m collecting records since they aren’t being made much anymore with all the CDs out there. Part hobby and part for potential someday.

23. If you have children at home, get them hustling so that they don’t become a burden to your finances. They aren’t royalty, are they ? So get their butts off the couch and learning the ropes of bartering and horse trading. Someday they will thank you for it.

That’s all I can think off the top of my pointy head. Any time you can barter rather than receive cash for your services/items, keep an open mind. What you trade for may be far more valuable than the cash you would have received. Could be a car, boat, jewelry, etc.

And for goodness sakes, keep a notebook with all the connections you make and phone numbers. Sometimes a seemingly insignificant connection can blossom into a bouquet of opportunities. It has happened to me many times and this is something you MUST do if you are to network into being busy with deal making.

This is mid February and in a couple of months the garage sales, estate sales and swap meets will be up for grabs. So get ready with some cash and notebook.

If you can get a copy of the 1959 comedy “The Mating Game” with Debbie Reynolds and Tony Randall, I recommend it highly. The country dad is a barterer and horse trader to the max. Five stars in my book.

Best wishes,

Agnut

"It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things." - Leonardo da Vinci

Thanks agnut for all your knowledge you share with us. I went into a thrift store the other day and saw the lady behind the counter going through jewelry and throwing handfulls of it into the trash. I asked if they threw allot away and she said if its broken or missing a piece they throw it away. They are now saving me all their broken and missing pieces of jewelry. I bet many thrift stores do this. It doesn't hurt to ask.

I've been wanting to relate a storage auction success story & now that I've passed the double your money point here it is:

As I've mentioned in a previous post, it's been harder to get cheap units because of more stiff competition on bids. I would keep going to the auctions, but didn't buy any due to the price being too high. (or at least so high I didn't think the work involved would be able to double my investment) Also, when setting my bid limit, I only bid on what I can see. (those closed cardboard boxes could be 30 years of old recipts)

When the unit door was rolled up, my heart started to beat a little faster. It had a neat, organized appearance. And it was all "guy stuff" Lots of hand tools, some lumber in stacks, a stainless grill, & in the very back what looked like a snowblower & MTD chipper shredder.

Long story short, I was high bidder at $600. It took a week to get everything home because here in southern PA we got a doozy of a snow storm. All the time as I was shoveling from the house to the barn, I was kicking myself for not bringing home that snowblower first! When I finally got the blower home (craftsman 8 horse electric start 24" cut) I gassed it up & it runs great. We got another 2 feet on top of the first 2 feet later that week & I was making paths all over the place. I never want to live without one of these tools again, especially where I live!

So at this point I kind of paid full price for a working snowblower. Now comes the work of marketing the rest of what I brought home.

I recognized the lumber as black walnut I quickly sold that on craigslist materials section $60.. Ditto with a small craftsman chainsaw $100.(I didn't like it enough to keep) A hunk of aluminum that was leaning in the back of the storage unit turned out to be a "as seen on TV" Little Giant ladder. craigslist $200. I posted photos on Craigslist of several lots of yard tools (shovels, post hole diggers, etc) at prices cheap enough to have folks drive here to save money & picked up another $100.

I was getting close to the break even with free snow blower point. But there was this pile of metal parts I didn't recognize & I was tempted to throw them in the scrap pile to get them out of the way. Some of the parts were pretty heavy & I was tired of moving them. A lot were still in plastic bags with fresh machine oil. One of the boxes had a shipping label from "Woodmaster" Never heard of them. But I thought I should at least try Google for some info.

It took me a couple days in spurts at the computer to identify the stuff, but it was time well spent. I now knew I had about $2000. in accessory parts for the Woodmaster 718 wood planer.

I listed the stuff in about 5 lots on Craigslist tool section with the correct name & part number along with the words "half price" in the title. I decided to use 5 separate listings instead of a single lot, so that I could post more photographs that way. (Craigslist limits you to just 4 photos per listing.)

The phone rang even before I had everything on line. "What's the least I would take for everything?" (I hate that question unless I'm asking it. ha!)

The next day a fella came down with $600. & left with all the Woodmaster stuff. Why didn't I wait for more money? Well, I didn't know for sure that more money was coming. And for this storage unit, $600. was my "magic number".

Lessons learned:

Keep looking for opportunity. I was getting discouraged with not getting any good auction units. But I kept showing up.

Every so often there is a gold nugget underneath that turd. You just have to be willing to look.

Research before tossing. If you can identify that metal part, you can take what looked like metal scrap, & sell it to the guy that's looking for it. If you don't know what it is, you're never going to find "that guy".

And finally, wait for the market... The rototiller & the chipper that were also in the unit I'll wait to sell till the spring & fall respectively.