Part of our mission at Prepper Recon.com is to conduct reconnaissance on the web and other information outlets to bring you the best intelligence around. Today’s post is an interview with one of the most respected preppers in America. In this recent commercial free interview on Coast 2 Coast, James Rawles talks about the economy and many other issues.
James Rawles is a former army intelligence officer as well as an author. He has written How to Survive The End of The World as We Know It, which is exactly what it sounds like. He has also written 3 fiction books on the coming collapse; Patriots, Survivors and his latest, Founders, which will be released on September 25th. James Rawles is also the creator of Survival Blog.com.
James Rawles has had a lot of influence on me and his views are very close to those of Prepper Recon.com. In this interview he speaks about the threats we are facing from our towering debt and steadily falling dollar. He also discusses the likelihood of food riots associated with a financial collapse or disruption of the SNAP program. SNAP is the electronically managed federal food stamp program and is vulnerable to EMP or disturbances within the internet.
James Rawles recommends reducing debt, building long term food storage and focusing on backup water supply systems in case of service outages. In the questions and answers portion of the show, James talks about the types of things people might look for in a barter economy. He recommends precious metals, such as gold ans silver coins. He also recommends ammunition as a batter item and things like kerosene and 2 cycle oil.
We have links to 2 of James Wesley Rawles books from Amazon on the right side bar of this page, including Founders, which can be pre-ordered if you like. If you are new to prepping of new to Prepper Recon.com, please read our 7 Step Preparedness Plan to get ready for the tough times ahead.
EMP is an electromagnetic pulse. It is a strong burst of energy that emanates when a nuclear weapon is detonated. When such a weapon is detonated at a high altitude, the EMP is spread out over the line of sight. If a strong enough warhead were detonated over Kansas at an altitude of 450km, the effects would span the entire continental US. All critical infrastructure such as electrical grids would be disabled. All cars with computers would be disabled. All credit card machines, computers, cell phones and radios would be disabled. There would be little to no radiological effects from the blast, but the effects of the EMP would be devastating to society.
Most grocery stores will be closed as they have no means to collect cash without the use of their registers. Some small convenient stores may be accepting cash, but unless you had cash before the event you would not be able to access your funds from the bank. By the second day, it would become obvious that something is seriously wrong and people would be looting stores.
Some preppers have anticipated such an event and built Faraday cages to protect their electronics. A Faraday cage is simply a metal box that absorbs the electronic pulse from the EMP. As long as the electronic devices are not touching the sides of the cage, they shouldn’t be harmed by the EMP. Electronics could be insulated within the cage with Styrofoam or thick cardboard. Putting a shortwave radio in a gun safe or metal ammo box insulated my non metallic material should protect it from the blast. A shortwave radio would allow you to hear reports from other parts of the globe and possibly even Ham operators who had their equipment shielded from the EMP. The video tells us what a real threat this is. It is only prudent to be marginally prepared for such an event.
Revolution on NBC begins September 17th at 9 pm. The story is about an EMP that has taken down the grids and the survivors struggle to rebuild society. It is very entertaining and will provide opportunities to discuss the threat of EMP with your family and friends. We have a link to the First Episode of Revolution right here on Prepper Recon.com just in case you can’t wait to watch it.
On Thursday, Ben Bernanke announced that the Fed would buy mortgage backed securities at a rate of $40 billion a month. He also stated that the monetary policy would continue indefinitely until the labor markets improved. In past rounds of stimulus, the Fed has stated how much and for how long they intended to continue quantitative easing maneuvers. By putting the economy on a constant QE drip of $40 billion rather than the large one time purchases, they hope to smooth out the market’s highs and lows associated with previous QE. The targeted effect will be more of a daily methadone clinic rather than a weekend heroin binge.
“We will print to infinity and beyond!”
This new open ended round of asset purchasing eliminates the need for QE 4 as QE3 can go on until doomsday, which may hasten its coming. Gold and Silver shot up as they have been doing since Mario Drahgi’s announcement of unlimited QE on the European front. We now have the 2 largest central banks on the planet committed to printing money until they run out of ink. Fortunately for them, as the money is just created into existence by a key stroke on the computer, they are not actually limited by the amount of ink or paper.
The $40 billion monthly purchases of MBSs together with the additional asset purchases made with the interest payments collected by the Fed will total half a trillion dollars per year. This is new money injected into our economy. This creates inflation as more dollars are available to buy the same amount of goods and services. It is also a disincentive to saving. It encourages people to spend their money now rather than let it sit around and loose its value. If I have $10, I may be able to buy 2 pizzas today or if I wait until next year, I may only be able to buy 1 pizza with the $10.
The Fed also disincentives saving by keeping interest rate low. People see no reason to save when they can not earn interest on their savings. The hope is that you will go out and spend the country back to prosperity. Consumer spending makes up 70% of GDP. Without it, the economy crumbles.
It is a flawed system. One that requires an ever increasing amount of debt. One that requires an ever increasing amount of money to service the debt that has outstripped the previous money supply. I know I sound like a broken record at times, but this is the fundamental reason that you need to prepare. As we print more money, we devalue the dollar. This creates more instability in the bond market as lenders see they are repaid with dollars worth less than the ones they lent out. When no one will buy US bonds, except the Fed, they will be forced to buy all new debt and print money to pay off maturing bonds. This will cause hyperinflation on a super nova level and our monetary system will collapse. When we have no more medium of exchange, we will learn how thin the veneer of society is.
If you are new to the site or just have not gotten around to it yet, please read The Prepper Recon 7 Step Preparedness Plan. Do what you can now to prepare for the coming storm.
In our 9/11 post, I mentioned a quote by Thomas Jefferson. He said “Peace, commerce and honest friendship with all nations- entangling alliances with none.” We spoke about the adverse effects of our foreign entanglements. The news headlines have been filled with more examples of why we should have “entangling alliances with none”. On Tuesday night and Wednesday morning we saw news reports from around the world of protests against America.
Followers of Islam were enraged over a film called “Innocence of Muslims” that ridiculed their prophet Mohamed. On September 11th, they directed their anger at the entire US and our embassies rather than the one person who made the film. If you some how feel responsible for offending them even though you have never seen the film, don’t worry, Obama was quick to issue a formal apology. If you don’t know what you did wrong and don’t understand why we are apologizing to these murderers, join the crowd.
My God constantly has his name used as a curse word on prime time television, yet I hear no apologies from our great leader. South Park on Comedy Central portrays Jesus as a wimpy, some what effeminate, powerless human who does a day time talk show like Dr Phil, and there are no explanations from the White House. I guess the squeaky wheel gets the greesin’.
Libyan protesters attacked the US Embassy in Benghazi on Tuesday and killed the US ambassador to Libya, Chris Stevens, as well as three of his staff. I know the following picture is disturbing, but it is important for the American people to see the return on their investment.
US Ambassador Chris Stevens was murdered at the US Embassy in Libya. AFP/Getty Images
Here is our first dividend payment on the $1,000,000,000.00 plus investment we made in funding Libya’s freedom. Read the itemized expenses for $600 million spent in the first week of the Libyan no-fly zone in this ABC News article. Similar protest occurred in Egypt where our embassy was also attacked.
Like kind investments often provide similar returns. It is only human to want to help those we see suffering in Syria at the hands of a tyrant. I suspect that we are supplying them with weapons as I seldom see footage on the news of the rebels without AK 47s and RPGs. They seem well armed for people having trouble feeding themselves. My concern is we will kill a monster that we are able to reason with and replace it with one that we are not.
The weapons used to assault the US Embassy in Libya could have been provided by US operatives. We know we provided the weapons and training to the Afghan Mujahideen in their conflict with Russia during the 1980’s. Our intentions were great as we wanted to cease the spread of communism. However, we have just passed the 11th adversary of an unintended consequence from that involvement. We are still dealing with the unintended consequence from that involvement as we fight against the offspring of the very militants we helped to arm and train. The threat of soviet brand communism has long since past but our soldiers are killed or wounded everyday in Afghanistan.
Keep your eyes open. As I said in our last post, we have missed the chance to elect a leader who is willing to use our military might in a constitutional manner. This election cycle is just going to be about defeating Obama Care so we can salvage some remnant of an economy. If you haven’t read it, pick up a copy of The Revolution, by Ron Paul. Dr Paul is retiring this year but his ideas will not. I don’t agree 100% with everything he says, but he has laid out a much better path for our country than the status quo. After you read it, pass it on. This is how ideas are spread.
11 years ago our country was thrown into a state of disbelief as we tried to process the images that we witnessed on our television screens. Many of our fellow citizens lost their lives that day. Many more lost loved ones who would never return home. Each and everyone of us lost our false sense of security. Our country came to a screeching halt. The stock market stopped trading. Airports were shut down for days. It was truly the end of the world as we knew it.
In the days and weeks following 9/11, American returned to God and church attendance soared. We quickly adapted to our new normal. Folks gradually lost their perceived need for an Almighty Being to protect them. America soon returned to her routine and was free to go back to her objects of worship from before. Sunday once again meant going to the lake, watching the game and cooking out. Maybe God will use a little louder alarm clock next time and America won’t be so quick to roll over and hit “snooze”.
We are still suffering today. Every time we get on a plane, we are reminded of the tragedy as we now must go through ever more invasive security screenings. Every citizen is now treated as a potential enemy. In the name of safety, we have willingly given up our 4th amendment rights. Thomas Jefferson said ” I prefer dangerous freedom over peaceful slavery.” I wonder if he would still recognize the America for which he and so many others risked all to form.
In his first inaugural address, Thomas Jefferson said “Peace, commerce and honest friendship with all nations- entangling alliances with none.” How disappointed he would be with our foreign policies. These foreign entanglements have cost us much in blood and treasure in the 11 years since 9/11. I understand and agree with the need to vindicate those who lost their lives in 9/11. What I do not agree with is the nation building efforts that accompany our present concept of war. War used to be a process of dealing with a country who had brought some grievous crime upon our nation. Now it has become an opportunity to buy friendship from our sworn enemies. An opportunity to force democracy upon a people who have little interest in it and no appreciation for it. And why should they look up to us? Are we the shining moral example to the world that we think we are? One of our biggest exports to the rest of the world is pornography. Our national divorce rate is 46%, second only to Sweden at 55%. Our mainstream film industry glorifies adultery, drugs and violence. We use the name of our God as swear word on regular prime time television and we consume as much drugs as the Taliban can produce.Why should they want to be more like us?
America borrows money she can never repay from one enemy (like China). We use that money to take to other enemies (like Pakistan and Afghanistan) and build roads, bridges, schools and hospitals while ours are crumbling to the ground. I am not naive. I realize the need for stability in those regions to maintain cheap oil prices. But if that is the reason, shouldn’t we be a little more transparent as to what it is all about? The price tag for our “cheap” oil is estimated to reach $4 trillion dollars and will have claimed more than 250,000 lives. These numbers do not take into account for lost limbs, broken homes, drug addictions and PTSD cases for our soldiers.
I hate to enumerate problems without giving a solution. So what can we do? We can pray. We can ask God to guide us back to being an America that He can bless. We can pray for the safety and protection of our troops that are still serving. Pray for comfort for the wives, children and mothers of those troops who have sacrificed everything.
We have missed the opportunity to elect a leader that can lead us out of our destructive behavior this time around, but I still encourage people to pick up a copy of Ron Paul’s TheRevolution. Read it and pass it on. This election is about defusing the economic time bomb known as Obama Care. It is the only thing that matters in this election. As the law stands, in 2014 small business of 50 or more employees will be forced to provide health care for all workers, many will chose to lay off workers to get beneath the 50 employee threshold. Hiring will freeze and the unemployment rate will skyrocket. We will enter a depression that will dwarf the one we had in the 1930’s.
If we can make the right choice this November,we can possibly tread water for the next 4 years. Perhaps in 2016 someone like Rand Paul will pick up the torch of his father and run to restore America. Perhaps it will be someone who can restore our liberty and restore sound fiscal responsibility. Pray that God will provide a great leader and that the American people will wake up and elect such a person. Don’t loose hope.
Financial Collapse – Threat Assessment Part 1: US Debt
I believe financial collapse is the most probable of all the potential threats that could trigger TEOTWAWKI ( The End Of The World As We Know It). Many knowledgeable people speculate that this is a real possibility for our country. They include former Army Intelligence Officer James Rawles, Economist Jerry Robinson, CEO of Euro Pacific Capital Peter Schiff, Author of Rich Dad Poor Dad Robert Kiyosaki, and Governor of Indiana Mitch Daniels. This list could go on and on. Why are all of these people so concerned about our economy? There is not one thing that threatens the demise of our financial system, rather it is a myriad of issues that together create the environment for the perfect storm. In this series of posts I will present my case and give you a short list of what you can do to get prepared.
Financial Collapse- Threat 1
Most economists agree the number one threat that could initiate a financial collapse is the public debt. The US national debt has just past $16,000,000,000,000.00. Even though that is a lot of zeros, you can’t fully grasp the amount of money that is without a visualization.
Those are pallets of $100 bills (thanks to demonocracy.infofor the graphics). Our countries GDP was just over 15 trillion last year according to the IMF. That means our national debt is 108% of the value of all the goods and services produced in America. Argentina’s debt was approximately 50% of GDP in 2001 when they experienced a financial collapse. Their total debt was roughly 100 billion dollars, spending at the pace of $3.88 billion a day, we spend that much in less than a month.
How is this a problem? In the same way that credit score agencies look at your debt levels to evaluate your credit score, ratings agencies have a similar process for countries. When your ability to pay your debts become questionable, your interest rates go up on everything from car loans to credit card rates. Last year, we had a debate about the debt ceiling. During that time, our countries credit rating went from AAA to AA. I would say AA is quite generous, I would also say it will be short lived. We are now approaching the new debt ceiling of $16.394 Trillion and will be having the same conversation that cost us our rating last time around.
Why are Treasury rates so low? Rates on 30 year treasuries are currently around 3%, that is extremely low. Much of that can be accredited to fear in global financial markets. US Treasuries, rightly or wrongly , are still considered the safest place to preserve one’s capital. With the chaos in the Euro Zone, the US dollar has the appearance of the prettiest ugly girl at the dance. Buyers of US debt also know that we will always be able to repay our debts because of our ability to print money. If the Treasury runs dry , the Fed can step in and fire up the press. We have done this in recent years through Quantitative Easing or QE. When there are too few buyers of US debt, the Federal Reserve, which is not a federal agency nor do they possess any reserves, can purchase the debt through creating money to be used to buy debt from the US Treasury or other holders of US debt.
Why can’t we keep up this scheme? With each new round of QE, more US dollars magically come into existence to compete for goods and services that are not entering the economy quite so magically. Therefore, we have more dollars to exchange for the same amount of goods and services. Here is a simple illustration. Let us suppose we have an economy with nothing but 10 cheeseburgers and $10. Assuming all the cheeseburgers are for sale and no one is interested in saving money since there is nothing else in the economy to buy, each burger is worth $1. Now, the Fed steps in and prints 10 more dollars. We now have $20 and 10 burgers. Each burger is now worth $2. The burgers have no more ability to satisfy you than they did at $1, so they are not worth more. It is the dollar that is worth less. This is inflation. It works in favor of the government as the borrowed dollars that will buy 1 cheeseburger are paid back with dollars that will only buy half of a cheeseburger. They pay back with devalued dollars. This is also a tax on savers as the money you save today will be worth less tomorrow. It is also a tax on purchasers of US debt. As the inflation rises, so will interest rates as bond holders will not settle for an investment that loses money.
If the 30 year Treasury Bond pays 3% and inflation is 6% (see shadowstats, not the CPI), you are losing 3%. The bond market will not put up with this for long. At some point, rates will rise above 6%, let’s say 7%, the ever so magnanimous bond market will settle with a 1% profit after inflation. At our current debt ceiling level of $16.394 trillion we will be paying $1.15 trillion dollars per year in interest alone. Total federal revenue is $2.73 trillion. 42% of our total revenue will be consumed by interest.
At this point it becomes obvious that we will never be able to pay our debts. No one will buy our bonds, and the Fed is unable to print money at a pace that will sustain government spending. To do so would create hyperinflation such as was experienced by the Weimar Republic in the post WWI era. To devalue their war debts, The Weimar Republic printed money at record rates and devalued their currency to the point that people used the currency for firewood. There is a story of a woman taking a wheelbarrow full of money to buy a loaf of bread. When she arrived at the store, she left the money outside while she went in to get the bread. When she returned, the money was still there but someone had stolen the wheelbarrow!
Financial collapse becomes a certainty at this point. Our economy will seize up. Massive cuts will be enacted to all sectors of government spending. Entitlement programs will be slashed. The recipients, many of whom are in true need of the government assistance will go without while many others who have been trained to milk the system for generations will riot as they feel cheated because they can’t get what the government owes them. The blood in the streets will be up to your ankles.
This dramatization by Damon Vickers gives his view of how this could play out in a timeline presentation. It is about 9 minutes long.
What can I do now to get ready for this? Cut all unnecessary spending, stock up your pantry and diversify your savings into dollars, silver , and gold. Remember this is only one possible outcome. The complexities in financial markets can produce unpredictable outcomes. We may just as well experience a depression type environment where cash is king depending on the steps taken by the Federal Reserve. I have written a very comprehensive 7 Step Preparedness Plan that will help you prepare for whatever. Please read it and take action now to prepare for the coming storm.
This is a sneak peak at NBC’s new show Revolution. It is the latest TV show in the post-apocalyptic genre. The plot is a global EMP destroys all of the electrical grid and everything with a circuit board. The world falls into a state of chaos. The story picks up 15 years later and life as we know it has changed dramatically. Suburbia has been reclaimed as farm land and small self sufficient villages have developed. A power hungry warlord has recruited his own militia and rules by the sword.
Grab some popcorn and enjoy the sneak peak of Revolution.
Wow! I was very impressed. It was quite a show. I noticed a lot of things that were fairly realistic. I saw some things that were not so much, but I think it will be a great conversation starter especially for non-preppers.
First was the EMP. I thought it was a good visual of what an EMP attack would look like. I would like to think that we would be able to rebuild in less than 15 years, but we do have to grant some poetic license here. Revolution is a TV show and I am glad NBC made it.
Second was the self sustaining villages. They were laid out like old frontier forts. I thought that was very well thought out and it would be very realistic for the scenario.
The third thing I noticed was the militia. They imposed their will on everyone else through force. They were the only one allowed to have firearms and operated a police state with the power derived from their superior weapons.
At the end of Revolution, we see a woman using a system similar to WINMOR . WINMOR is a system that uses your computer and Ham radio to send e-mail without the internet. It is very realistic that these types of communication systems would be used in this type of situation. That is assuming you had the forethought to place a functioning computer and Ham radio system in a Faraday cage prior to the EMP.
I hope you enjoyed the show. Revolution will be on NBC, Monday nights at 10pm.We will be posting a great informational post on EMP threats next week. Come back to see us soon at Prepper Recon.com
Mario Draghi has just announced that The European Central Bank or the ECB will be buying bonds. This is an unprecedented action by the ECB. Up to this point, members of the Euro Zone, primarily the Germans, have rejected the idea of bond buying programs. When a central bank like the ECB buys bonds, they do so with currency that is created out of thin air. This is what the US Central Bank, the Federal Reserve do regularly. By creating more money, the monetary base or M-O money supply increases. This creates inflation as you now have more currency competing for the same amount of goods and services.
This action will likely diminish the value of the Euro. As we have seen today, it will also make hard assets like gold and silver more attractive. At the time of this writing, gold was up $10 to $1705 and silver was up $.33 to $32.60. The devil is in the details as to what may actually comes out of today’s announcement, but it represents a fundamental shift in policy by the ECB. This will have dramatic effects to global markets in the long run.
Why did the Germans cave in?
Germany has been the best looking house in a bad neighborhood for a few years. They have been responsible with their spending and maintained a strong economy as a result. Other countries around them like Spain, Italy and Greece have squandered their wealth in wild living. They have given away hoards of cash in social welfare programs and young retirement age while failing to generate the required revenue to support such spending sprees. These countries are now teetering on the brink of collapse and the spill over will have devastating effects on Germany.
In an article by CNBCwritten Monday, the problem in the Spanish banking system is covered in some detail. Spaniards have lost confidence in their government to handle the sovereign debt problem. They fear a Greek type meltdown in their own economy. The Spanish see the possibility of a Euro Zone exit and return to the Peseta as an independent form of currency. It is expected that the Peseta would lose 25- 50% of its value against the Euro within the first year of the exit. This fear has driven Spanish depositors to withdraw savings en masse. The numbers for August have not been finalized or released, but they withdrew the equivalent of nearly $100 billion USD in July. Under the fractional reserve banking system, this destroys nearly $1 trillion in wealth. An explanation of the fractional reserve banking system is beyond the scope of this article, but I promise to write a full explanation of it and the hazards it creates in the next 2 weeks, so stay tuned.
A credit contraction of this magnitude is certainly wreaking havoc on the Spanish economy and threatening to spread a crisis of confidence through all of the struggling Euro Zone countries. I believe the Germans have come to terms with the fact that there is no other way out of this crisis. However, it is not a cure. It is, in fact, only a mechanism for kicking the can down the road and causing the final day of reckoning to be worse. With this year’s French election, the Germans lost their only ally in the fight for fiscal responsibility. With the election of new French president Hollande, France voted against austerity and joined the ranks of the rest of the drunken Euro spending festival.
I also suspect there was a back room meeting similar to the one we had in DC in 2008 where Hank Paulson and Ben Bernanke told members of congress if they didn’t pass this bail out, they should expect something resembling a zombie apocalypse in the next week. Nothing like the undead to scare you into doing the right thing. A continued run on the Spanish banks would create a scenario just short of this threat. I doubt German Chancellor Angela Merkel has any greater affinity towards zombies than the rest of us.
Here is quick video on the ECB decision. It is about 6 minutes.
We will have more on the threats of a financial collapse and a banking system meltdown in our coming posts. For now, keep your eyes wide open and happy prepping!
