Zombie Housing Market

on August 18, 2012 at 4:46 pm
Posted In: Economy

Zombie Housing Market

On this broadcast of Capital Account, Lauren Lister interviews Barry Ritholtz, CEO of Fusion IQ on the housing market. Barry claims there are between 3 and 6 million homes in the foreclosure pipeline. Homes that are foreclosed but not yet on the  housing market are referred to as shadow inventory. These homes sell at below market prices to quickly clear them from the banks books. By having so many homes selling at depressed levels, it prohibits the housing market from recovering and it maintains a zombie like state; not completely dead but certainly not alive and kicking.

Barry sees home prices falling another 5% to 10% without another recession.  Here at Prepper Recon, we think another recession is all but baked in, so that would likely mean more job losses which leads to more foreclosures, which leads to an even more depressed housing market. On top of the 3 to 6 million homes in shadow inventory, there are approximately  another 3 million homes who have not paid a mortgage payment in 12 months. Banks are delaying the foreclosure process and letting the defaulted borrowers stay in their homes rather than let them sit vacant. Banks refer to this practice as strategic non-foreclosure. This could go on for some time, but eventually these homes will also become part of the inventory. Think of them as a second wave of zombies that haven’t yet reanimated but you know it is coming.

It is a vicious cycle, without more jobs, we can’t buy homes and clear the inventory so the housing market  can recover. Without a recovery in the housing market, we can’t create more jobs as it is the driver for a significant portion of consumer spending. Think of all the things we buy for a home, TVs, dishwashers, couches and curtains. None of these things get bought or need to be made if people don’t buy homes. As consumer spending is 70% of GDP, it is hard to grow out of the last recession without the sales of these home goods.

What does this mean for Preppers?

What it means to me is that I can keep saving for a Bug Out Base or rural retreat. If you haven’t read the Prepper Recon 7 Step Preparedness Plan, please do so. It  will describe in detail what a bug out retreat is and what you should look for. I am more likely to get a good deal on a rural property in a year or two than now.

Does this mean you shouldn’t buy a home now? If you are in the position to buy a home now, meaning you have the credit and the down payment, you can probably buy and pay much less in mortgage payments than rent. As people are afraid to buy or unable to buy because of higher lending standards, rents have gone up while home prices fell. That money saved can be put away towards buying a rural retreat.

Be smart and do your research. You can set a search on Realtor.com for cities or zip codes where you would like to buy a home or a rural retreat. It will e-mail you every time a new listing comes up within your search parameters. Even if you know you won’t be ready to buy for another two years, start the search now to familiarize yourself with those markets. Remember, every housing market is local and will vary from area to area.

Happy prepping!

2 Comments

Make Your Own Sterno

on August 16, 2012 at 2:50 pm
Posted In: Prepping on a Budget

Make Your Own Sterno

Since I live in Florida, Hurricane season is as good a time as any to do an annual gear check. I always change out my stored water at the very beginning of hurricane season. This ensures my water storage is never older than 1 year. I recycle old juice bottles and fill them with tap water that I can run through a Britta filter if I need to drink it. At some point after that, I deconstruct my Bug Out Bag and reassess the contents. I change out any canned goods in my bag that are nearing expiration and replace them.

When we start to see storms, I check my “Bug In” gear. After our last big storm Wilma, I invested in a camping stove and several disposable propane bottles. That was 6 years ago. 2 of the bottles were light so I hooked them up to see if they still had gas.

They still worked, but leaked out the remaining gas when I unhooked them. The rest had a little rust on the bottom so I sprayed them with a coat of galvanize paint.

Rather than replace them for around $10, I remembered a trick my old Scout leader, Mr Yager taught me. You can make your own Sterno with left over candle wax, some coiled up cardboard and an empty tuna can.

        

I used an empty soup can to melt the wax in the double boiler to keep me out of trouble with Mrs. Prepper Recon. I then used my multi tool to evenly pour the hot wax into the tuna can and over the card board; this will effectively waterproof it.

It is pretty easy to construct a stove out of any materials you may have around. The homemade Sterno should burn around 45 minutes to an hour. It is not as clean as Sterno brand Sterno, but I am manufacturing this for a hurricane or TEOTWAWKI. Always use a pan or foil, and never place meat directly over the flames as it will be covered in soot.

Resourcefulness is a key tool in survival. Let us know how you prep on a budget.

Happy prepping!

7 Comments

Jim Rogers Interview

on August 12, 2012 at 6:18 am
Posted In: Economy

Jim Rogers

Jim Rogers is a multimillionaire investor who stated the Quantum Fund with George Soros. He has split from Soros and now manages his own investments.

In this interview, Jim Rogers speaks about the growing lack of trust in the banking system. He describes how that lack of trust will continue to eat away at the financial sector. He predicts prosperity for the agricultural industry. As emerging markets begin to demand higher standards of living, they will also begin to eat more meat which in turn drives demand for feed corn. Jim Rogers recommends investing in sectors that are involved in  agricultural production such as farm machinery and fertilizer. He expects agricultural areas to become the new money centers of America.

Jim Rogers recommendations can be a sign of hope for preppers. As preppers look at less populated areas, they can consider crops and live stock as means of income as well as self sufficiency. The other side of the coin is unforeseen disasters that can destroy an entire years work. This is the case with the drought in the heart of the agricultural production states that we are presently dealing with. Corn has nearly doubled since the onslaught of the drought. This has caused feed prices to double as well. Farmers who raise live stock have been forced to sell everything but their seed stock as they can no longer afford to feed the animals and make a profit. Short term meat prices will likely fall due to the glut of inventory but future prices will sky rocket. Even a bumper crop next year would not be able to bring meat prices down as it will take at least two years to have herds replenished to normal levels that can meet demand. Stock up while meat is cheap. These prices are sure to be short lived.

2 Comments

Jobs – Unemployment Creeps Up to 8.3%

on August 3, 2012 at 4:23 pm
Posted In: Economy

Jobs Data Weak- Unemployment Creeps Up to 8.3%

Today’s jobs report from the BLS or the LBS as I like to call it (Lots of Bull Stuff) showed we added .1% to unemployment from June. 8.3% is a steady move up from 8.1% in April. When you look around, you may think it seems much worse than 8.3%. You are right, 8.3% is the  U3 number which does not include people who have quit looking for jobs or those who are working part time because they can’t find full time jobs. That  jobs number is called U6 and is now at 15% which is up from 14.5% or a full half of a percent since April. Using the U3 jobs numbers instead of the U6 jobs numbers is lying at worse and sugar coating at best. The purpose is to make you feel better so you will keep consuming. If the BLS reports the real numbers, you will think there is an economic crisis coming and quit spending. As our economy is 70% consumer spending, everything falls apart when people get scared and quit spending. In fact the only thing holding our financial house of cards together is consumer confidence. When that goes, everything goes.

So what is the answer? Should they report the real numbers and cause a panic? If they did, the crash would come sooner. The sooner it comes, the sooner we can start to rebuild. The longer we wait, the larger the debt grows, the less our money is worth and the more severe the crash will be. For the people who can see it coming, the delay buys us precious time to build up our defenses in the way of cash  in case of a depression, precious metals  in case of hyperinflation, and food stockpiles in case of whatever. Do what you can, when you can to be prepared.

Here is the link to the BLS jobs numbers.

Magazine Ban Going to Senate Vote Today

on July 30, 2012 at 3:49 pm
Posted In: Constitution

Magazine Ban up for Senate Vote Today

Senate Bill 3414, also known as the Cyber Security Act is up for a Senate vote as early as today! SA 2575 is the back door amendment being used to sneak the magazine ban in.If passed, all magazines with a capacity of more than 10 rounds would be banned. The 2nd Amendment states “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” The purpose was to protect us from tyrannical governments. The ability to defend our selves against thugs was just assumed. Gun control is infective in reducing violent crime. Research the statistics from cities like Chicago and DC where gun laws have thrown out the 2nd Amendment rights. You will quickly discover, criminals pay no mind to the law. It is only the law abiding citizen who obeys, and in their obedience left defenseless against the murderers who slaughter them.

The Aurora shooter gave no concern for the law. You are not allowed to brandish firearms in a public place, nor discharge them in city limits, nor threaten people, nor kill them. Yet all 4 of these firearms laws that already exist failed to stop the tragedy. A magazine ban would have made no difference as he would have disregarded it as well.In fact, the law penalizes private citizens by requiring them to obtain and maintain a concealed carry permit. The citizen must pay a fee and take a class, submit paperwork and pay State and Federal fees totaling $105 in Colorado plus $105 for renewals. The criminal pays nothing in fees! Are the fees the reason none of the victims in the Aurora shooting were armed? Were mounds of paperwork, classes and what amounts to a penalty tax for abiding by the Constitution the cause for so many unnecessary deaths and injuries?The Aurora tragedy could have been greatly mitigated by 2 or 3 armed citizens. They could have returned fire and taken out the gunman, had our rights not been so trampled already.

It is not “somebody” that needs to do something about the magazine ban. It is you who needs to e-mail your Senators and Representative and ask them to vote NO on Senate Bill 3414, The Cyber security Act and the back door magazine ban. You can find your Senators info here, and your Congressional Representatives info here.

Banned in the USA – The Bible is no longer welcome in many US cities.

on July 28, 2012 at 6:16 pm
Posted In: Constitution

The Bible is no longer welcome in Chicago.

Prepper Recon is typically not a source that covers the culture war. There is no need to reinvent the wheel nor Fox News where the culture war is discussed ad nauseum. From time to time, however, a particular battle in the culture war arises that we believe affects our countries  survival.  We will resume our 7 part preparedness plan with part 2, The Bug Out Bag, in our next post.

President Obama’s former Chief of Staff and now Mayor of Chicago,  Rahm Emmanuel has issued a statement that Chick Fil A is no longer welcome in Chicago. This decision came on the heals of a comment made by Chick Fil A CEO, Dan Cathy. He simply stated that he supported “the biblical definition of marriage”. No derogatory statements were made. Rahm Emmanuel said those are not Chicago’s values and stated Chicago was withdrawing its welcome to Chick Fil A. His fight is not with Dan Cathy, but rather the Bible. Homosexuality is not something Dan Cathy decided was wrong. It is spoken of in Leviticus 18:22 and I Corinthians 6:9 as a sin. It is no worse than the other sins spoken of in those passages such as drunkenness or greed, but it is a sin. In pulling the welcome mat for Chick Fil A , he is pulling the welcome mat from the Bible and anyone who believes it. Are churches next to be told by Rahm that they have worn out their welcome ? Will they be followed by the eviction all Christians? Can you imagine the out cry that would be made if any Mayor, any where, were to say Gay business owners are not welcome in their city?

What does this have to do with prepping? Everything! The Bible carefully spells out what a nation can expect when it chooses to follow God in the way of blessings. The Bible is even more descriptive of what a nation can expect in the way of curses when they turn away from God and the way he has asked us to live. Our nation has been slowly migrating away from the Bible for years. We seem to be picking up the pace lately and we should expect to reap what we sow. At Prepper Recon, we believe the Bible is the infallible Word of GOD. In Deuteronomy 28  of the Bible, Gods declares blessings for obedience and his curses for disobedience. Here is a short excerpt:

Blessings: Deuteronomy28:1-14

If you fully obey the Lord your God and carefully follow all his commands I give you today, the Lord your God will set you high above all the nations on earth.2 All these blessings will come on you and accompany you if you obey the Lord your God:

3 You will be blessed in the city and blessed in the country.

4 The fruit of your womb will be blessed, and the crops of your land and the young of your livestock—the calves of your herds and the lambs of your flocks.

5 Your basket and your kneading trough will be blessed.

6 You will be blessed when you come in and blessed when you go out.

7 The Lord will grant that the enemies who rise up against you will be defeated before you. They will come at you from one direction but flee from you in seven.(J)

8 The Lord will send a blessing on your barns and on everything you put your hand to. The Lord your God will bless you in the land he is giving you.

9 The Lord will establish you as his holy people,as he promised you on oath, if you keep the commands of the Lord your God and walk in obedience to him. 10 Then all the peoples on earth will see that you are called by the name of the Lord, and they will fear you. 11 The Lord will grant you abundant prosperity—in the fruit of your womb, the young of your livestock and the crops of your ground—in the land he swore to your ancestors to give you.

12 The Lord will open the heavens, the storehouse of his bounty, to send rain on your land in season and to bless all the work of your hands. You will lend to many nations but will borrow from none. 13 The Lord will make you the head, not the tail. If you pay attention to the commands of the Lord your God that I give you this day and carefully follow them, you will always be at the top, never at the bottom. 14 Do not turn aside from any of the commands I give you today, to the right or to the left,following other gods and serving them.

Curses: Deuteronomy 28: 15- 24

if you do not obey the Lord your God and do not carefully follow all his commands and decrees I am giving you today,all these curses will come on you and overtake you:

16 You will be cursed in the city and cursed in the country.

17 Your basket and your kneading trough will be cursed.

18 The fruit of your womb will be cursed, and the crops of your land, and the calves of your herds and the lambs of your flocks.

19 You will be cursed when you come in and cursed when you go out.

20 The Lord will send on you curses, confusion and rebuke in everything you put your hand to, until you are destroyed and come to sudden ruin because of the evil you have done in forsaking him. 21 The Lord will plague you with diseases until he has destroyed you from the land you are entering to possess. 22 The Lord will strike you with wasting disease, with fever and inflammation, with scorching heat and drought, with blight and mildew, which will plague you until you perish. 23 The sky over your head will be bronze, the ground beneath you iron. 24 The Lord will turn the rain of your country into dust and powder; it will come down from the skies until you are destroyed.

The curses actually go on for another 44 verses but I think you get the picture. Some will say ” I believe in a loving God and he wouldn’t curse a nation like that.” I believe in a loving God too.  I also believe in a God that that lets us choose. If we are cursed, it is because we chose to be so.

Allow me to point out a couple things that may sound familiar. Vs 17 “Your basket and your kneading trough will be cursed” I think this verse refers to economic prosperity. You really have to do some digging to find any good news on the economy.

Vs.22″The Lord will strike you with…with scorching heat and drought” Has anybody watched the Weather Channel lately?

Vs.18″ The fruit of your womb will be cursed, and the crops of your land, and the calves of your herds and the lambs of your flocks.”  Commodities analysts expect beef prices to fall this year as farmers sell cattle they are unable to feed due to the drought. Next year, however they expect prices of beef to sky rocket. Corn prices are up 41% since the beginning of the drought.

Chicago is one of several cities who have withdrawn their welcome for the Bible. Philadelphia City Councilman James Kenney told Chick Fil A to “take a hike and take your intolerance with you,” . Bostons Mayor Thomas Menino, also said the chain would not be welcome.

If you believe the Bible, it is irrational to think things are going to get better. Our nation has become unblessable. The time to prepare for our destruction is now. Destruction is a strong word but it is not mine, I borrowed that from Vs. 20, and 24. Don’t take my word for it. read the entire text of Deuteronomy 28. You will find that some derivative of the word “destruction” ( destruction, destroy or destroyed) shows up 8 times.

The Ultimate Prep

All of this talk of wrath may have you wondering what to do about it. The Bible is very clear, “You must be born again” John 3:7. What does that mean? Watch this video and check out the link below it.

 

Knowing God,

Be Blessed and feel free to e-mail me at prepperrecon@gmail.com if you have any other questions about Knowing God.

 

Senator Tom Coburn speaks on the national debt crisis.

on July 26, 2012 at 2:23 pm
Posted In: Economy

Senator Tom Coburn speaks on Focus on the Family Daly about our national debt and unfunded liabilities. He discusses the catastrophic effect of our national debt to our national security. Senator Coburn is a Republic Senator of Oklahoma. He discusses fiscal responsibility and his new book, The Debt Bomb.

Access Video Here

The interview host points out our similarities with Greece. In some ways that it is very accurate in that we have no borrowed more than we can ever pay back. In other ways we are totally different. The biggest difference is there is no one big enough to bail us out. Unlike Greece, we can print money to essentially lend to ourselves. This allows us to kick the can down the road, but the can is getting to big to kick. Greece is a sneak preview of the types of social unrest we can expect when we, by lack of options, have to institute austerity measures. I would expect those measures to include government layoffs, raised retirement ages, major cuts to SNAP a.k.a food stamps, up to 20% cuts in social security pay outs. The difference between the Greek riots and what we can expect, is we have a large portion of our population totally dependent on the government to take care of them. Not only are they dependent, but they have decided that they deserve to be taken care of. When they no longer can be, heads are going to roll.

Please take the time to register to vote today. It is so important that we elect leaders who understand the the problems we face with out national debt. Maybe you favorite guy didn’t get nominated. Mine didn’t. But if we sit on the side lines, Obama care is certain to finish off our struggling economy. If we do nothing, in 2014 all employers with more than 65 people will have to contribute to their employees health plans. Employers with 70 or 80 employees will layoff the amount to get them under the cut off. Others will layoff as many as they can to absorb the cost of the new Law. Repeat this for every small business in a America and you understand. An unimaginably catastrophic employment crisis is coming our way.

In the News Today

The US Drought and its Effect on Consumers

Anaheim Riots Continue for 4th Night

 

Comments Off on Senator Tom Coburn speaks on the national debt crisis.

Economic Storm Clouds are Forming on the Horizon.

on July 25, 2012 at 4:06 pm
Posted In: Economy

Economic storm clouds are brewing in the distance. Europe seems to be unable to get on the same page. The only thing shared by the Europeans is the currency. Besides that, they are several different countries with different ideas about how to deal with the crisis. The Germans want to see some financial discipline before they sign off on any more bail outs while the rest of the Euro Zone wants to continue to live like spoiled children. When the financial equivalents to going to bed early and not eating ice cream for breakfast are proposed, there are riots in the streets. By the way, America stayed up til 4 a. m.  last night and had Rocky Road for breakfast; our day is coming.

Our immediate problem, the so called financial cliff, is a combination of several things. The possibility of the Bush tax cuts expiring on Jan 1 mean that most peoples tax rates will increase by 5%. All else being equal, that is a 5 % cut to consumer spending which makes up 70% of GDP.  Simple math tells you that will create a 3.5% drop in GDP. That’s a recession. Item number 2 on our list is the automatic sequester of 1.2 Trillion in Federal spending cuts.  This is going to take away a lot of jobs in the public sector as well as private sector jobs in companies that contract to the government.  Number 3 is the debt ceiling. Yes we already spent the 2 Trillion credit increase we got about this time last year. That means we have to do it all over again. It cost us our AAA rating last time. If we take another rating cut, bond prices will go up, they will any way, our interest rates go up and we need a larger portion of  our revenue to pay the interest. Lets say 30yr Treasuries go to 6% and because of our low credit rating we are no longer to roll over short term debt. If you look to the top left hand side of the blog you will see the debt clock. We are near 16 Trillion. 6% interest on that is 960 Billion dollars. Lets write that out with the zeros for effect. $960,000,000,000.00 in interest alone! That is about half of our total federal revenue. Things will get bad at that point.

We will save the employment time bomb of Obama care coming in 2014 for another time. sufficient to say for now, all small business will lay off workers to either get below the 65 worker cut off point so they don’t have to contribute to the heath care plan or they will lay off workers to absorb the cost of contributing. This eclipses everything else in the previous paragraph. I voted for Ron Paul in the primaries.I am not a Romney fan but given a choice between a bullet in the foot and one in the head, I’ll take the foot every time. the bullet in the foot may eventually kill you but you have a lot better chance of being able to do something about it.

 

Nouriel Roubini, Professor of economics and economist for the IMF, World Bank, and US Treasury gave a great interview on the perfect economic storm we may be Facing.   ( 16 minutes)

 

 

 

Starting Friday, we will start a 7 part series on how you can get prepared.

Comments Off on Economic Storm Clouds are Forming on the Horizon.

The Social fabric of society seems to be unraveling.

on July 24, 2012 at 4:48 am
Posted In: Uncategorized

The Social fabric of society seems to be unraveling. The riots in Anaheim California over a police involved shooting barley made the back page after the Batman shooting stole the spot light. The left seems quick to blame gun laws as being responsible for the theater massacre while accepting no responsibility for throwing the 10 commandments out of the school system. Perhaps no one ever told him”Thou shall not kill”. In fact, the school system told him he was just a well evolved monkey. Stands to reason that so is everyone else. So if we are all just animals, how is killing a human different than killing a cow? After being conditioned to think there is no absolute authority, perhaps James Holmes’ own brand of moral relativism told him what he did was no different than eating a hamburger. As for the gun argument, if the second amendment had not been castrated, perhaps 3 or 4 other people would have been armed and been able to return fire. That would have reduced the body count to a fraction of what it was. Additionally, the court system and  money for housing an additional inmate would be freed up, because Holmes would be dead.

Two cops are accused of shooting an unarmed gang member in Anaheim California. Protesters responded by throwing rocks and bottles at police and stormed the police station.I wasn’t there, so I can’t say if the shooting was justified but the Mob Rule mentality of the protesters justified everything they got. The video show people with their children, protesting.  Any one who would bring their kids to an environment where the police are being assaulted is an unfit parent and should have them taken away.

The veneer of society is not that thick and it is badly cracked. I will  hate to see how weak the social fabric is  when food stamps and transfer payment stop because the government can’t borrow any more money.

Comments Off on The Social fabric of society seems to be unraveling.

Why I am a Prepper, Engineer775 speaking at a Preparedness Conference.

on July 23, 2012 at 4:31 pm
Posted In: Prepping

Why I am a prepper.

Engineer775, whom you may recognize from “Doomsday Preppers” speaks at a conference on why he is a prepper. His family has a rural homestead with the family of Southernprepper1. They are totally self sufficient and have tremendous stock piles. They raise cattle and chickens. They grow their own produce in a garden using fertilizer from the live stock. they produce their own fuel with some solar but mostly wood. they use wells and and a pond for redundant water supplies that are completely disconnected from the grid. These guys are going to bejust fine weather the End of the World as We Know it happens or not. They have a great life. We are not all in a position to be able to do that, but just because you can’t do everything doesn’t mean that you can’t do anything.

This is a very inspiring speech. Engineer775 also has one of the best you tube channels on preparedness. Engineer775 share the homestead with Southernprepper1 who is ex- military. He handles all of the security related aspects of their retreat. His youtube channel is geared towards security and is also one of the best out there. He teaches a lot of  simple to understand military tactics for securing your area as well as some fun dramatizations on prepping.Here is the link to the Southernprepper1 youtube channel. Conferences are a great place to meet preppers in your area. If you know of a conference in your area, e-mail me at prepperrecon@gmail.com and I will post the information as well as tweet it!

Comments Off on Why I am a Prepper, Engineer775 speaking at a Preparedness Conference.