Checking Off My “To Do” List

1) Following Jim Sinclair’s advice [Sinclair’s Third (and Final?) Warning] I have sold off my silver ETF (SLV). ETFs are now too suspect to be trusted.

2) I have repatriated ALL remaining cash that had awaited deployment in my brokerage account with OptionsXpress.

Even though OptionsXpress remains in the top tier of online brokerages, per Jim’s recommendation I’m further limiting my exposure to financial entities.

3) I have checked the health of my local bank. [How to Rate Your Bank’s Safety] It’s now rated “C” (down from C+ last fall). The rating agency says,

wcbsm“The C rating means that, in our opinion, this institution offers fair financial security, is currently stable, and will likely remain relatively healthy as long as the economic environment avoids the extremes of inflation or deflation.

In a prolonged period of adverse economic or financial conditions, however, we feel this institution may encounter difficulties maintaining its financial stability.”

Update June 7, 2009: Please keep an eye on your bank! One of my banks was rated C+ last Oct. 2008. When I checked again in Feb 2009 it had dropped to C. Now it’s dropped to C-, just one step away from the deadly “D” range. I’ve set up a contingency plan establishing new accounts at another bank.

4) I have previously [Week of Nov 24] laid in a 3-month supply of freeze dried food for my family (1 year supply divided by 4 people) and a gravity-powered water filtration device. Also picked up N95 anti-virus surgical masks.

5) I have stockpiled about 4 months of prescription meds. I’ve been working on this since last fall. (It takes planning when dealing with doctors/insurance.)

6) I continue to monitor economic events. When (not if) TSHTF I am ready to yank our remaining $ from the bank and go on a WalMart shopping spree for essential items and non-perishable or extended-expiration-date food. (Think oatmeal, canned milk, cereal, canned meat (SPAM), actually canned *whatever*, sugar (it self-stores for years). Flour? Some but not a lot, it’ll spoil quickly no matter how it’s stored. But a 5-gallon pail of wheat from our health food store? Yep!) I could go on but you get the idea!

7) Our three cars are paid off and healthy. No credit card debt. Large store of propane, just in case. The only thing that’s financed is our house–I plan on paying that off once hyperinflation hits and precious metals skyrocket. Beating the banksters at their own game with inflated dollars: cool.

8) A store of physical silver and gold (of course) in a secure location where I can get at it in less than 15 minutes. Please! NOT IN A BANK “SAFETY DEPOSIT BOX” [Safety Deposit Boxes Confiscated]. Better to bury it if you have to rather than trust a bank after 9/11 and The Patriot Act.

9) Guns and ammo? Not yet, I still can’t see myself shooting someone. ‘Course, Yogananda used to tell a story about a saint and a snake…[Is It Spiritual To Defend Yourself?]. Maybe it’s worth having a gun just to fire over the heads of potential attackers…

10) Yes, we have a second home in the rural Iowa countryside. You too can buy an old farmstead cheap. Ours is a modest story-and-a-half on two acres, beautiful view, pasture all around us, nearest neighbor 7/8 mile away. 10 minutes to the nearest town with a grocery store. 110 minutes away from home #1 by Interstate.

Cost? $8,000. Nope, I didn’t forget a zero. Taxes are cheap, too. Quiet. Velvet black night skies. No more than handful of cars passing by on any given day, fewer if it’s been raining (dirt roads).

iowafarmhouse_sm

Will you consider protecting yourself? And your family? This week?

Please?

Scott

Warnings & Advice from a Saint, Part 4

This is part 4 of 5. If you wish to read or refresh before continuing see:
Warnings & Advice from a Saint, Part 1
Warnings & Advice from a Saint, Part 2
Warnings & Advice from a Saint, Part 3

Following are some personal comments. Feel free to skip the text in blue to get straight to the “good stuff” from J. Donald Walters.

“Material Success” by JDW: A Wake-Up Call
Meltdown2011.com is my attempt to warn everyone I care about of the coming worldwide financial Armageddon, and what to do to protect yourself.

I want to convince you to take action NOW to make your life more secure in the future. Time is not on your side; events are already in motion with unstoppable momentum.

Those of you who do not prepare will be crushed under the wheels of this economic juggernaut. [find more hyperbole here]

Back in the summer of 2005 I was not prepared.

Sure, I had some savings, sure I had a 401K. I paid no attention to the markets in which my retirement was invested. I relied on a sincere Financial Planner I knew to “take care” of my financial future.

J Donald Walters“Material Success” shook me awake. Knowing the man who wrote it, knowing the depth of his concern for his fellow man and knowing he had no ulterior motive save helping others, I listened. The first time I read it I sat in stunned silnce and reflected upon it. Then I immediately reread it.

That day I decided to take responsibility for my, and my family’s, well-being to the best of my ability. I began following gold and silver prices. I began researching stock market trends. I learned about “bubbles” and how they were likely to recur. And I learned about possible future “cataclysms” he discussed.

In other words, as best I could I vetted his claims and concerns. And it looked like JDW was right.

Please consider what he wrote three and one half years ago. Now, it seems eerily prophetic. Please consider taking the steps he suggests to protect yourself and your loved ones. Only if you are prepared will you be able to extend a helping hand to others when the time comes.

 

Scott 

Excerpt #4 from J. Donald Walters’ 2005 “Material Success”

The Most Important Investments
Material Success through Yoga PrinciplesI myself have never been interested in money for money’s sake. As the founder of several communities, however, which have been dependent on my practical and not only my spiritual guidance, I’ve considered it important to keep abreast of the broader economic picture. I’ve reflected deeply, therefore, on my guru’s predictions regarding the world economy. He, too, was concerned for others’ welfare. In trying to keep abreast of these matters, I’ve made a study of things that would otherwise have been of little interest to me.

Investment #1: Silver & Gold
From what I have studied, it seems clear to me that the safest investments, monetarily, are silver and gold. These investments are the ones most highly recommended by people whose counsel I incline to believe.

Of other investments I am more doubtful, even though these, too, are highly recommended. I consider the sustained value of such collectibles as paintings, for example, to be less reliable. Large items, moreover, are more susceptible to damage or theft. Gems, though small and easy to transport, undergo wide fluctuations in their market value.

Investment #2: Land
What my Guru particularly urged people to invest in was land. He wasn’t thinking of its monetary yield; in other words, he wasn’t counseling people how to be greedy with safety! Rather, he urged them to think in terms of having life’s basics, so as to be free to concentrate on higher things, and of course especially on the search for God.

I want to emphasize that the Master wasn’t recommending investment in income-producing property such as apartment houses. Certainly he wasn’t trying to make landlords of people. His recommendation was to purchase only enough land as one needs in order to supply one’s self and a few others with the basic needs. With land, they could grow their own food, have a sufficient water supply, and if they buy with discrimination, not burden themselves with heavy mortgage payments.

During economic hard times, the definition of material success is not money, but security.

Whatever assets you have, invest as much money as you can in things that you can control. You cannot control the stock market.

Put whatever money you can spare into buying land with arable soil.
1) Plan to grow your own food.
2) Buy property in a low-tax area, and
3) preferably where there is a minimal danger of social unrest.

material-success-sidebarThere is a supposedly true story about a man who, in the aftermath of World War I, realized that there was likely to be a World War II. In an effort to avoid it, he traveled throughout the world in search of some place that would, he hoped, be trouble free. Finally he bought land and settled on the island of Guam. That was in the mid-1930s. As many still remember, in only a few years Guam was the epicenter of the Pacific war theater in World War II!

Place your faith in God above all. He expects you to use common sense also, but don’t concern yourself too fearfully with finding a place of perfect safety.

Your very fear might attract danger like a magnet.

Human life will never be perfectly secure. Do what seems reasonable to you, then leave the results in God’s hands. Remember, sooner or later you will have to leave this world anyway; it is not your true home. Do what seems reasonable, therefore, but be free of attachment to the results of your actions.

If you hold that attitude, you will certainly find it in keeping with yoga principles to be sensible also. Don’t imagine that God will be more pleased with you if you face life passively with the thought, “Whatever comes is my karma. I can’t control anything in my life.”

The purpose of karmic law is to teach us, through punishment and reward, to act always for the best. Don’t expect to be protected by faith alone – unless, indeed, your faith is so strong, and focused so one-pointedly, that all your energy flows toward God.

Buy land within your means. If you can’t buy it outright, get property that you can pay off in a reasonably short time. Try to settle in the general vicinity of a small town, where others can help you in times of need.

Don’t get land too near a large city, where violence might easily erupt during general social upheaval. If that land should contain a house, all the better, but if it doesn’t and you can afford to build, or if you have the skill to build a home for yourself, it may be to your advantage to build exactly according to your own tastes and needs.

Investment #3: Basic Necessities
Food, clothing, shelter: these are life’s basic necessities. If possible, store basic food supplies: foods that will retain their freshness a long time. Make sure that whatever food you buy for future use is tightly sealed, in an air-proof container, safe from mice, insects, and other pests, and safe also from excessive heat and humidity.

In this modern age, many people are accustomed to such amenities as electricity. In times of emergency, however, electricity can be dispensed with relatively easily. At Ananda Village it was years before most of us could install electricity in our homes. We were perfectly comfortable with bottled gas for cooking, and, for lighting, kerosene, candles, or oil lamps.

One thing that will help your home very much during extremes of cold and heat will be insulation in the walls – particularly in the ceilings. That insulation needn’t be expensive. Even newspapers, wadded up and crammed into the walls, can be very effective. Books are available on this subject. Study them, and see what kind of construction will be the most cost-effective, efficient, and practical in your area.

If you can’t live immediately on your property, try to get away to it for weekends, and also for longer periods occasionally. Even if there has to be someone on the property to take care of it, you may be able to supervise from a distance the creation of a small vegetable garden.

Coming up:

In the final excerpt from “Material Success” J. Donald Walters writes on:
1) Your energy is an essential investment.
2) Including others in your investments.
3) Can you survive tough times alone?

Warnings & Advice from a Saint, Part 5

Warnings & Advice from a Saint, Part 3

If you wish to read or refresh before reading this, part 3, see: 
Warnings & Advice from a Saint, Part 1 
Warnings & Advice from a Saint, Part 2 

Following are some personal comments. Feel free to skip the text in blue to get straight to the “good stuff” from J. Donald Walters.

The Eyes Have It
swamiscott_1995_2After the calmly startling experience of JDW’s “searchlight of love” gaze washing over the concert audience, I knew I had to meet him face-to-face. The outdoor concert’s intermission was coming up: a time of mingling before the second set.

I’m quite the introvert and, added to my usual unease at human interaction was a feeling of unworthiness at meeting Mr. Walters. Yes, I actually thought of the Wayne’s World “We’re not worthy” line. I smiled to myself. This wasn’t something he projected–it was my own warped self-talk. So I sez to myself, “I flew all the way out here to see the man. Take a few steps and just do it! Don’t be a wimp!”

Mr. Walters was standing on the steps leading to the deck where refreshments were being served. People were bustling around him while he calmly smiled out at the distant hills. I approached him. I felt awkward. I, who a few short years ago was an avowed agnostic and had no need for “the crutch of religion,” felt compelled to kneel before this man. This urge surprised me; I dismissed it and kept standing.

“Hello, sir. I’ve been wanting to meet you.”

He took my hand. “I’m happy to meet you,” a slight lilt in his voice.

He looked into my eyes and posed a seemingly simple question, “And your name is…”

I looked back into his eyes; it felt like falling. Flying, actually, into a vast void. Having studied astrophysics a few yeas back at U of Iowa, I imagined it like soaring into the vast reaches of interstellar space. Clouds of interstellar dust glided by, the absolute blackness of space decorated with a carelessly-tossed spray of stars. Wondrous! Somewhere from these depths I heard an echo, gradually resolving into a voice. I became aware the man before me had asked a question, and I was risking rudeness at not answering.

scotts name tagBut, what was the answer? I couldn’t recall my name! Where were those prized 141 I.Q. points I used to have? Ah, yes, I’m wearing a name tag! “Scott,” I declared in response, as only my first name was on the tag.

“Nice to meet you, Scott. And where are you from?”

Damn! I’m on this wondrous journey through the final frontier and I’m being pestered with questions! Again, I’m rescued by my name tag as it has my hometown written under my name.

And I know we talked a bit more but I can’t recall about what. I know I made it back to my seat, unsteadily, next to a friend I had made a few days earlier. He smiled at me knowingly, with quiet approval. Guess he’d been there before.

 

Scott 

 

Excerpt 3 from J. Donald Walters’ 2005 “Material Success”

How Soon Will These Dire Predictions Be Fulfilled?
Material Success through Yoga PrinciplesThe truth, surely, is obvious: their fulfillment has begun already! Never has the world’s economy been so unstable, despite everything that politicians and newspaper editorials declare in an attempt to reassure everyone. The American economy still looks fairly strong, but it is much weaker than the propagandists insist.

Please be very careful from now on about how you invest your money, as well as your time and energy. Don’t live in a dream world of wishful thinking.

Numerous investment newsletters, which are free from the influence of political considerations, foresee imminent disaster. Even they, however, try to keep their readership by promising the possibility of emerging from hard times more wealthy than ever.

I challenge that promise.

The world, instead, is speeding rapidly toward bitter disillusionment. Even those newsletters, which are more truthful than the newspapers, still fan the flames of greed. Humanity must learn its lesson. Only then will it rediscover the only thing that, forever, has really worked: Doing what is right.

Financial Drowning of Millions
Meanwhile, why join the lemmings crowding forward to leap into the ocean of self-destruction? The surface of the water shimmers, the radiance seeming to suggest wealth, but that superficial appearance is destined to end, with the eternal impersonality of karma, in the financial drowning of millions. Follow what my Guru’s guru, Swami Sri Yukteswar, counseled, “Learn to be comfortable within your purse.”

Your Attitude During Lean Times
People will need to adjust their expectations to a lower yield. They will find it not so difficult to accomplish. Think of it as a challenge, not as a disastrous deprivation. By glancing even briefly at the innumerable signs all around us, you may realize even now that the most practical investment you can make is simply that: to adjust your expectations.

material-success-sidebarPractical Steps To Take Now
From today onward,
1) Make it a principle to avoid debt. If for any reason you need to borrow, make a serious attempt to pay off that debt as soon as possible. It simply won’t be worth the cost, in terms of your peace of mind, to have debt of any kind hanging over your head like the sword of Damocles.

2) Try – every week, if possible – to put a little money aside.

3) Don’t place too much faith in banks. During depressions of the past, many banks had to close their doors, leaving their depositors without recourse.

4) Above all, don’t place too much faith in paper currency. The way in which governments the world over are printing money these days in attempts to meet their national commitments, all the currencies of the world may well lose all their value in time.

5) If possible, keep a certain amount of money in solid assets.

6) Don’t rely too heavily on your government’s promises. Democratic governments everywhere try to be responsive to the will of the people, but that will is guided almost entirely by self-interest. It is a recipe for disaster. The question people generally ask, when voting, is, “What’s in it for me.” It is this consciousness which elects their representatives to government posts. The persons most likely to be elected over and over again are those who make outrageous promises, each one of them targeted toward satisfying people’s greed.

The “Hidden Tax”
Will those promises ever be fulfilled? All of them? Impossible! Already people’s mind-set is to get much more than any sane government can possibly supply. The governments keep on trying, but they know there is a limit to how much they get by taxes. The solution they hit upon, inevitably, is to print truckloads of paper currency. This is monetary inflation. It is also called “hidden taxation.” The way governments everywhere manage to have more money than they dare to demand in taxes is by way of the printing press.

In Germany, during its time of hyperinflation (in 1923), the father of a friend of mine went into a shop and left outside it a wheelbarrow full to overflowing with his earnings for the day. The money, being worthless, seemed safe enough; who, after all, would steal it? When he came out later, his money was blowing about in the street: Someone had stolen his wheelbarrow, first emptying it of its contents!

Is It really a “Barbarous Relic?”
In America, people have been conditioned by government propaganda to view gold as a “barbarous relic.” It isn’t that those who own gold are less likely to be spoiled by greed, but at least gold can’t be printed like paper money. Its relative scarcity makes it a protection against hyperinflation. Should the dollar no longer be “worth the paper it is printed on,” don’t expect other currencies in the world to fare any better.

Place your trust in God first; then invest some of your money in things of solid worth. Tomorrow, paper money may be “gone with the wind.” Gold and silver are safer investments, and are likely to increase in value astronomically relative to the value of paper currency.

Coming up…

In the next excerpt from “Material Success” J. Donald Walters writes on:
1) Gold and silver: the safest investments?
2) What about gems, paintings and collectibles?
3) The one investment Yogananda particularly urged people to make.

Warnings & Advice from a Saint, Part 4

Pay Off Mortgage with Inflated $?

To my former employees: remember back in 2005 when I told you of my strategy to “beat the gov’t at their own game” when serious inflation would hit? I said we would be looking at rampant inflation in the future and the best protection looked like owning physical gold and, especially, silver?

Remember I said I planned on paying off my house with the silver once inflation and demand ran its price to the moon?

Good, you’re with me. I know some of you adopted the plan. It’s what I still intend to do.

However, I just read an interesting contrary opinion from someone whom I respect: George Ure at www.Peoplenomics.com . Even though he thinks the idea is “obviously nonsense” I thought you might like to hear a divergent view.

“So should we take money out of our 401(k) and pay off our house?” asks one reader? 

 

I don’t know the specifics of this person’s economic situation, but the answer is simple.  Build a spreadsheet and put all the variables in:  Likely return on the 401(k) given a wide range of expectations (including going to zero) and then paying off the mortgage so you can have a free & clear place to live.  Almost, that is, because government is always your silent partner via the confiscatory tax system.

 

“But that’s so complicated”  came the answer after I explained about setting up the model to take into account paying off the house with ‘cheaper dollars’ once inflation kicks in (and I can think of 7.4 trillion reasons it might, along with a dollar repudiation that stubbornly appears in Cliff’s work.)

 

One way to get to the answer is to reduce everything to how many hours of work you’ll have to do to pay off the house.  After all, time spent in this life is the ultimate currency, right?   The goal here is to get as much self-reliance as possible and my 2¢ is that if you’re going to pay your house off, the sooner you stop paying the debt monster, the better off you’ll be.

 

If you bought a $60,000 house in 1980, inflation alone would bring the house value to $158,990 says the Minneapolis Fed inflation calculator.  And, depending on your interest rates, you would pay about $180,000 for it.

 

If the average income over this period started from $10, you should now be making $26.17 per hour just to stay even with inflation.  Call it an average of $18.085 per hour.

 

If you had paid the house off when you bought it, you would have worked 6,000 hours to buy the house (not counting taxes, of course).  Given that most folks work 2,000 hours per year, then you’d put about three years labor into buying the house.

 

On the other hand, with an average of $18.085 per hour and principal plus interest of $180,000 (varies by interest rate, which I assume to be fixed), then you would work for 9,952 hours to pay off the house, or just under 5-years. Longer, actually, because of indexing of taxes which would be forcing you into higher and higher brackets.

 

Not saying this will be the case in the future, but a reader wanted to know, so that’s how I look at damn near everything economic:  What gives me the most bang for the most buck?  “Oh don’t worry about the payments because you’ll just be paying the loan back with cheaper dollars..” is obviously nonsense, especially with the National Layoff Festival about to be sprung on us.

 

So, if you paid off your house with three years worth of labor in 1983, you would have 25-years of no house payment – just taxes.  yeah, no mortgage write off’  but counterbalancing that is the delicious ability to say ‘Take this job and shove it” any time you wanted, because you weren’t locked in to a house payment.

 

In the end, debt is a yoke of financial oppression which the ruling class seems to wield effectively to keep themselves living off the efforts of others.  Think of it this way:  The difference between the 6,000 hours to buy a house cash and 9,952 hours bought on credit didn’t ‘disappear’.  It went someplace.  And that place is into the ruling elite’s pocket.

 

Run your own numbers – they may be different.   

Scott Gallup sig

◊◊◊◊ Now: Gold @ $816.50, Silver @ $10.38, USDX @ 85.61 ◊◊◊◊
◊◊◊◊ Now: DJIA 8,726.61

Middle Class Will Get Wiped Out

Rich Dad, Poor Dad

Robert Kiyosaki (author of the famous “Rich Dad, Poor Dad” series of books), and his precious metals adviser Mike Maloney, have some interesting observations and predictions for gold and silver for 2008.

Some choice quotes from the video on YouTube:

Cash is trash. Gold and silver are God’s money, God made it.”

“Historically, throughout time, there’s a depression every 75 years. The last one was in 1930. So we’re right on it, right now. And the rich will get richer and the poor and middle class will get wiped out.”

“If the US dollar has to go back to gold-backed, you’re looking somewhere well north of $6,000/oz.”

“From 1971 to 1980 gold went up 24 times its starting price in 9 years.”

“From 1971 to 1980 silver went up 39 times its starting price in 9 years.”

“If you had just 10% of your net worth in gold and you LOST the other 90%, by 1980 you were 2.4 times richer than you were in 1971. With just 10%!”

“That puts us in the second phase of this gold/silver bull market. Phase 1 is sort of the stealth phase where it’s quiet accumulation. Then the second phase is usually the longest duration and the greatest growth. And the final third phase is the blow-off top where the market just goes vertical.”

“You remember the NASDAQ in the last three months of 1999? It just went vertical. The public and everybody rushed into it. And they all got slaughtered. The herd always comes rushing in at the end, and that’s the time you wanna sell.”

“You don’t wanna hold onto gold and silver forever. You wanna hold onto it until a median-price single family home costs less than 40 oz of gold or less than 500 oz of silver. Then you wanna trade your gold and silver for real estate–cash-flow real estate.”

Note from Scott: You can find the “median price single family home” data here. Look in the right-hand column titled “Housing Indicators.” It’s at $208,600 right now. That’s 224 oz of gold and 11,866 oz of silver.

“There is 8.3 times as much gold today as there is silver. Poland has 25% of the world’s silver.”

Silver is the biggest opportunity I have ever seen. Bigger than real estate, bigger than anything else.”

“I think somewhere on this big inflation we’re going to have one (short-lived hyper-) deflation that will wipe out people that are too highly leveraged who don’t have any gold or silver. “Savers” will be wiped out. “Spenders” will be wiped out.”

“(The US Fed and Euro Central Banks) have already shown their hand. You’re going to see this crash and then inflation like we’ve never seen. So it really works for us [Scott’s note: Robert currently owns many rental apartments] because we’ll be collecting the rent but then we’ll be paying off those deadbeat loans of ours with cheap (inflated) money. That is the strategy.”

“The good news? I believe you can set aside $8,000 now, buy silver, and in a few years you will be able to buy a median-price home with those 500 ounces.

Special note to my friends reading this (you know who you are): go to your safe and grab hold of five of your 100 oz silver bars. In a few years that’s a house. Grab another five. There’s a house for your oldest child. Quite a wedding present, no? Doesn’t it feel good?

You Have No Idea

 

 

 

◊◊◊◊ Now: Gold @ $932.40, Silver @ $17.58, USDX @ 72.74 ◊◊◊◊