This Week’s Natural Manmade And Economic Threats

by David Morris on July 1, 2011

Welcome to this week’s Urban Survival Newsletter, brought to you by the www.SurviveInPlace.com Urban Survival Course and the www.LamplighterReport.com, my monthly print preparedness newsletter.

I want to start off by wishing everyone a Happy Independence Day and welcome all of our new Sovereign Man readers this week.

Whether you are new to the Urban Survival Newsletter or have been reading my reports for the last few years, you probably know by now that I don’t focus on individual potential threats to our way of life.  Instead, I share tactics and strategies with you that I am using to prepare my own family that will work in the event of a broad range of disasters, as well as if I never have to depend on my preparations for the protection of my family.

That being said, there are a few situations/risks that have been on my radar recently that I want to make you aware of.  They highlight the inter-connected nature of our world, as well as some specific action steps that I’ve taken that you can do as well.

Volcanoes

Three weeks ago, Chile’s Puyehue Volcano erupted.  This week, flights in New Zealand (12,000 miles away) were canceled.  In comparison, it’s roughly 2,400 miles from Mount St. Helens to NYC and DC.  The distance that ash would have to travel if carried by the jet stream would be 3,000-3,500 miles since it doesn’t go in a straight line, but it’s still about half the distance that it is between Chile and New Zealand.

To see an example of just how erratic the jet stream can be, watch this satellite video from NASA.  http://www.nasa.gov/mov/560224main_110604-16_volcano_chile.mov One of the things that it shows is the ash changing direction from blowing straight East in the morning of June 6th to blowing at a 45 degree angle to the Northeast by afternoon.  This isn’t just local…the smoke and ash are hitting areas of Argentina that are SEVERAL hundred miles further north than they did a few hours earlier…and then switching back to straight East a few hours later.

Mount St. Helens IS an active volcano and the dome has been visibly growing for a number of years.  Both St. Helens and Rainier have been having spurts of increased seismic activity in the last couple of months.  It’s one of those threats that could disrupt daily life in the next 50 seconds, 50 years, or 500 years.  It’s also a threat that has the potential to effect the lives of everyone on the continent…and possibly other continents as well.

Taking a step back, Japan is a series of volcanic islands and as man of 10% of the world’s active volcanoes are in Japan.  Just like the jet stream blew ash from Chile to New Zealand and there are reports of irradiated debris from the Japanese nuclear reactors landing in the United States, a major volcanic eruption in Japan could disrupt life in North America as much as Mount Saint Helens going off.

Wildfires

This has been a dramatic year for wildfires so far.  While some parts of the country are experiencing record flood levels, other parts of the country are in the middle of multi-year droughts that are making for violent and fast moving fires.  Add to this the wildland/urban interface issues that pop up when densely developed suburbs are built in the middle of wildfire prone areas, and you end up with INCREDIBLY expensive disasters…both in terms of financial and human cost.  These wildland/urban fires are blown out of proportion to a certain extent because of the fact that news media can get to them and get footage without having to leave the pavement or the comfort of their cars, but they are a big deal, none the less.

As more and more people who don’t have an awareness of appropriate wildfire prevention practices move into these wildland/urban interface areas, we’re likely to see an increasing number of “accidental” fires.  I put “accidental” in quotes believe that the term negligent would be more appropriate than accidental in most cases.

Besides naturally caused fires, accidents, negligence, and arson, wildfires are an easy asymmetrical attack that insurgent forces can use against the US.  Japan launched 9,300 balloon bombs against the US during World War II because they knew that they didn’t stand a chance against a country where nearly every farmer had guns, ammo, and hunting experience.

In addition, at least one Al Qaeda detainee has talked about a plot to set fires in national forests.  Granted…the one I’m referring to was from 2003 and the “plot” that he shared was ridiculously cumbersome, had too many moving parts, and didn’t pass the “sniff” test of a legitimate plot in my opinion.  It used incendiary devices with timers and counted on the instigators sneaking out of the country before they went off.  A few dozen diesel fuel soaked hay bales near kindle-dry deadfall in a few states would do the same thing and has been a common topic of conversation among red card holders (fire professionals certified for wildfires) online and in person for years.

In addition to the HUGE commitment of talented human resources required to fight wildfires and the loss of structures, displaced homeowners, insurance claims, and ash can have regional and national effects.

With the recent (current) Arizona fires, there has been a serious concern that the fire would reach high voltage electrical transmission lines that provide electricity across New Mexico and into Western Texas.  Similar problems with the electrical grid happen on a local level almost yearly with wildfires in California.  Electrical poles burn, power lines sag, resistance goes up, transformers blow up, and substations overheat.  In some cases, the impact remains local.  In other cases, the impact cascades across the grid effecting larger regions.

The point here is that people who live in downtown El Paso are vulnerable to wildfires that are hundreds of miles away.

And…on the economic front:

I could write on this every day for the next year and not run out of material, but here are a couple of the big things that have my attention right now:

  1. China and Japan are the number 2 and number 3 buyers of our debt, accounting for 40-50%.  To put that on a personal level, it would be like having balances on a dozen credit cards and having 40-50% of your debt on two of those credit cards.  Japan was a false economy before the earthquakes in March and is a “dead man walking” now.  I don’t see any way that they can keep buying our debt at the same rate they have been.China is slowly “converting” their treasuries into raw materials.  They’re buying companies that produce various ores and other raw materials that they need.  They’ve accelerated their pace to the point where they’re putting more money into buying ore, mining companies, land, and raw material production companies than they are buying US treasuries.  All of the money that they’re putting into these other assets are going up in value and the money going into treasuries is arguably going down in value and at some point they’ll be able to afford to sell off their treasuries without worrying about their remaining holdings going down in value or having us as a consumer of their goods.
  2. Radiation in Japan and drought in China are making it questionable whether or not these countries will need to massively increase their buying of food on the global markets…making already expensive food even more expensive.  China is investing $600 billion into water infrastructure in Northern China to help production there, but South and Central China has the lowest water levels in 50 years and a dry summer could seriously hamper China’s ability to feed themselves internally.Incidentally, China imported 95 million tonnes (104 million tons) of grain in 2010.  This amounts to 17% of their domestic production, but was supposedly all imported for emergency storage.  Personally, I think we could learn something from the Chinese here…they trade their dollars for land and precious metals and they allocate 17% of their food budget to emergency food storage.  Not a bad plan.
  3. We went for a Sunday drive through the county side last weekend to get our boys to sleep and so my wife and I could have some time to talk.  All of a sudden, we came up on a neighborhood with $800,000 and up houses on .5-1 acre lots.  In short, it had all of the inconveniences of living in the country, with all of the shortcomings of lots of people living on top of each other that you get in cities.It was amazing.  None of these people had water on their properties.  They didn’t allow livestock, and I’d doubt the HOA would like rabbits, chickens, or goats so there didn’t appear to be any way to get an agricultural exemption.  And, as I’ve discussed before, mortgage rates MUST eventually rise up above the rate of inflation.  The current CPI has food and fuel removed from it since the Bureau of Labor and Statistics couldn’t report a low CPI if they were included.  If you include food and fuel, as they have been historically, the CPI is closer to the 8-9% range.

    If mortgage rates would be properly priced above the CPI, the result would be a 40% drop in the housing market.  I wrote about this in more detail in February here: http://secretsofurbansurvival.com/?p=645

Here are some of the things that we are currently doing that you may also want to consider:

  1. Increasing our water storage and rain water catchment.  Water is heavy, bulky, and kind of a pain to store.  That being said, 6-12 months of food without water (or the ability to get water) to go with it doesn’t do you much good.
  2. Buying even MORE of the foods we currently eat.
  3. Buying foreign currency in small bills from big branches of our bank.  I’m not really that optimistic about any currencies right now, but I do think that there’s potential for our central bank to make dumber decisions than the Chinese, European, Swiss, and even Canadian central banks.  These are all currencies that you can go into your local bank and buy…just as if you were getting foreign currency before going on a vacation.  You probably want to call your bank to find out which branches can help you with this.  If they tell you they’ll charge you, call another bank.
  4. We’re spreading our preparations out even more so (physically, financially, and electronically) that no one event would be likely to completely wipe us out.

And, of course, if you haven’t signed up for the SurviveInPlace.com Urban Survival Course, I suggest you do so.  It’s a 12 week online course that more than 20,000 people have gone through over the last two years that’s designed to give you a practical survival plan based on real-world survival situations.  We’re not the first society facing the risk of breakdowns in the electrical grid, financial system, food supply, or civil order.  There are proven examples that we can follow that don’t require a ton of time or a ton of money.  All that’s needed is an awareness that we live in fragile times and a willingness to make continual forward steps towards being prepared for bad events.  To read more about it and get signed up now, please go to www.SurviveInPlace.com

Until next week, God bless and stay safe!
David Morris.

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{ 7 comments… read them below or add one }

Vote -1 Vote +1Robert
July 4, 2011 at 10:52 am

In addition to the artificially low mortgage rates the US housing market also has to contend with a 19% vacancy rate. When interest rates rise then there will be tremendous downward pressure on real estate prices. Real estate could drop as fast as stock shares did at the end of 2008! Unfortunately demographic factors mitigate against a rapid recovery. One interesting thing about real estate is that property taxes on real estate provide the bulk of the funding for local and state government activities in the US. If the tax base collapses then the tax revenues will also.

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Vote -1 Vote +1Chris Lockhart
July 4, 2011 at 12:24 pm

Great info as always. I really appreciate David’s view of the world and what is happening in it.

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Vote -1 Vote +1Norman Parker
July 4, 2011 at 1:55 pm

This may be a stupid question, but the answer will help me with my financial planning. I know that over time inflation causes the price of things to go up, meaning that it takes more money to buy the same item than before. So would it also be true that if I had shares of common, inflation should cause those shares to increase in price as well? Or asked in a different way – does inflation cause share prices to increase.

Norman Parker

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Vote -1 Vote +1Robert
July 5, 2011 at 6:58 am

Yes it does cause stock prices to rise. You are then taxed on the inflated price as income. Inflating the currency is very profitable for governments and that is why it is done. First there is the circulation of outright unbacked counterfeit new money and then there is taxation on the ‘Income’ derived by those holding real assets. Inflation also causes economic distortions that are very disruptive and run counter to increases in productivity as people and companies attempt to control the damaging effects of the loss of value of the currency.

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Vote -1 Vote +1Sarah
July 31, 2011 at 10:25 am

I would say yes because look at the high profit margins the oil industry is getting. It’s all because the price of fuel has gone sky high under this admin. so therefore the profits go up. Then everyone is mad at the oil man! When it is regulations that have caused the problems.

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Vote -1 Vote +1David Caines
July 5, 2011 at 3:21 pm

Actually, this is a comment to Arab Spring. You’ve hit one of my 3 major nails on the head, the other two being China and India. I hope you’ll forgive me for my “Stay Calm and Carry On” attitude about many things, but I find that in times of crisis cooler heads prevail. I also think that most downplay the real issues with what is shaping up to be the next world war, the one that we as a nation are unlikely to survive in any recognizable way.
I am one of a handful that fact checked things like Chinese and Indian and Arab military strength during the cold war years and have followed since. Thankfully we still have mad, but we are not the nation we were. We have few common threads, a sense of entitlement that boggles the mind and spirit and almost no shared culture. Except for the shared name of America, we barely exist as a people. Any one of these the elements if they chose to come against us militarily will hobble if not break us, any two will overwhelm us and the three combined would wipe even the thought of us from the face of the earth. And so yes, I am spending my time trying to grow common threads, teach, and pray. We are more fragile as a nation now than we have ever been. In this we agree. I think we also agree that all that can be done should be done to see that whatever can be saved of this nation and what it was meant to stand for should be saved. We even mostly agree on the how.
I’ve put up some stuff relating to questions asked on your blog/ forum. stick davidcaines100 into the search field on youtube, and you’ll find a handful of vids. I’d like to do one on your ten minute bug out drill, but I feel that is your intellectual property and won’t do so without asking.
Blessings,
David

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Vote -1 Vote +1Bill
July 6, 2011 at 11:47 am

@Norman Parker: Yes, inflation causes share prices to go up. But high levels of inflation makes the business climate so difficult for companies to succeed in that the actual values of the companies (their ability to make money) goes down. The most successful companies during a time of high inflation are those who focus on the impact of inflation rather than their core business. Obviously, an environment where it pays to largely ignoring your core business is not conducive to business growth, and thus not conducive to rising stock prices in general. Also, between the periods of high inflation may be periods of deflation (caused by defaults) which drives prices down.

The stock market will ultimately go to infinity, measured in today’s dollars, since the current dollar will, like all fiat currencies throughout history, ultimately go to zero. But this says surprisingly little about the stock market (or the dollar) over the next year. Buying the stock market for the long haul is equivalent to buying into the current and future government’s support for business, which sounds like an incredibly risky move.

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