No Bailout!

We are living in really, really, really scary days.  Our financial institutions are falling right and left all because of greedy, bad investment strategies in an overinflated housing market.  When the bubble burst, the banks started bleeding red ink.  Now our government has stepped in and nationalized some of them.  Even worse, it wants to bailout these institutions with OUR TAX DOLLARS in a plan that will only lead to more of the same trouble we have now.  My friend Bob Waldrop put into words what so many people saying.  I only wish Washington would listen.  I’m afraid they won’t.  Here is what Bob has to say:

“Our problem is that Wall Street and Congress and the Fed and the White House are all on drugs. They are addicts desperately looking for their next high.

At this point in the addiction sequence, there are no good options.  Some of the possibilities are worse than the others, and — surprise! — it looks like the political bailout plan manages to incorporate those proposals that will ultimately yield the worst results.

The financial system is in trouble because of a host of reasons, but “most recently”, the straw that broke the camel’s back were the “toxic loans”.

For years the government encouraged bad loans by finagling the interest rates to artificially low levels.

Their purpose was to stimulate/create/encourage more credit for political reasons.  (The artificially low rates also penalized savers, so we’ve been subsidizing the grasshoppers at the expense of the ants.)

If we create new credit, it must go somewhere. And so it came to pass that practically anyone with a warm body could get a Very Large Mortgage, plus a second mortgage, and a line of credit secured by the property. As big huge piles of cash were shovelled out the door into the real estate market, prices soared and the nation entered into a mindless orgy of material consumption unequaled by the worst excesses of the past.

So what’s the favored solution from the politicians?  Even more of the same policies that got us into trouble in the first place!  It’s the Washington way — if something doesn’t work, well, let’s just do MORE of it, and then maybe it will work.

It was a great party. But it’s about over.

We shot the system full of financial methamphetamine.  For those of you who aren’t aware of the effects of meth. . . At first, by all reports (I have no personal experience with meth, but I have known many meth users), it is a really great high.  You are finally Truly Somebody!  But then you come off the high — so immediately, more meth is required.  As time goes on, each individual dose of meth lasts a shorter period of time, so the user keeps taking more quantity more often.

Sooner or later comes the crash.

The longer you delay the crash, the worse the crash will be.

So as we approach a “financial meth” crash, what do our politicians and pundits advise?  MORE financial meth!  They say — “Let’s get higher, and higher, and higher!” It’s an addictive pathology, running rampant at the highest levels of politics and business.

This high will probably work through the election, maybe even through the next couple of years.

But make no mistake about what will happen:  This will not be the last multi-hundred billion dollar bail-out of the imperial economy. There will be more and more financial meth until — as with the homeless crack smoker, crouched under a bridge toking on an empty pipe desperately trying to get one last rush — there is no place else for us to go.

We are in big financial trouble.

Letting the system get rid of its bad debts through bankruptcy, foreclosure, and write-offs would be painful — but the alternative, mostly likely an inflationary deflation, would be much worse, and last much longer.

“We the People” would be hurt, but it will be even worse later when it becomes impossible to issue any more bail-outs and the final reality of the decade(s?) long Second Great Depression is upon us. That would bring “even more” bankruptcies, foreclosures, and write-offs.  In some counties of Oklahoma, during the original Great Depression,  85% of the property was foreclosed on.  “Compare this with” the 3-4% foreclosure rates today, and you can see we have much further to fall.

We do no favors for meth addicts when we help them get another fix to avoid the terrors and pains of methamphetamine withdrawal.  The only way towards healing is to confront the withdrawal and go through it.  I feel very sorry for meth addicts, but there isn’t any other way forward than the withdrawal.

The same is true for We the People, the politicians, the bankers, and our collective financial methamphetamine addiction.  We made this financial bed that we now lay in.  We demanded it, wallowed in it, lusted for it, voted for it, and willingly participated in it. . . but comes now the piper with his bill and he will be paid.  The longer we delay, the more excrutiating the payment process.

The present macro-economic situation makes it even more important to build/create/grow local economies of production and exchange to replace the failing systems in which we presently live, more, and have our being.  This isn’t just something pious that Bob likes to say (well, it is a “pious statement” and I do “like to say it a lot”, but it’s importance is deeper than my personal affectation). This is “personal safety net”, as in, “if you don’t have one, you may be seriously sorry” as all this unfolds around us.

Financial self-defense calls for all of us to think about a way to make a living in a local economy. Practice makes perfect, so start a small family/household micro-enterprise now, before it becomes necessary.

My advice to people with money in the stock market is to take the money and run to the safer financial havens of paying off your mortgage and other debts, energy conservation improvements for your living space and lifestyle, and developing a new job for yourself in a local economy.  Food storage is also a good idea.

If you are presently in a debt reduction program (making extra principle payments on household debt), think about this. The conventional wisdom is that you pay off your high-interest debt first, like your credit cards.  But in Oklahoma, the homestead exemption prevents the house where you live (your “homestead”) from being sold to pay any debt not actually secured by your property.

Given the speed that things happen these days, folks may not have enough time to pay off their mortgage AND pay off their other miscellaneous debt, so if you live in a state with a homestead exemption for debts, it may be better to pay off your house first. Then you have a secure place to live, come what may in the financial world.  If you lose your job, you are not at risk of homelessness.  Paying off credit cards now, and then losing your home to foreclosure later, doesn’t get you much.

The present financial system is neither stable nor sustainable, and there is no amount of lipstick that we can smear on that pig to make it anything other than what it is.  An unsustainable system, by definition, will not continue indefinitely.  It will collapse.

Financial methamphetamine withdrawal will not be pretty, easy, or fun.  We might as well accept that right now and act as best we can to protect ourselves.

In other words. . . Slash household spending, curb your consumption, save money, live well below your means, and get ready for a Category 5 financial hurricane.”   Bob Waldrop

Bob is SO right.  The only way to get through this thing is to live frugally and as sustainably as possible within our own individual households.  Stop borrowing/spending with credit cards.  Start a food storage program.  If possible, pay off your mortgage.  Save as much as possible.  Make your home as energy efficient as possible to reduce monthly expenses which will enable you to save more.  Stop eating out all the time; grow your own food –  you’ll have more cash and be healthier. 

If Washington goes forward with the proposed bailout plan, we may all be forced into a very frugal lifestyle against our will.  I’m going to call my senator and representative and tell them that in my opinion, they should say NO to the bailout.  What about you?

Keep it simple,

Sherry

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The Big What If

Have you ever been to one of those workshops where you came away with so much information you felt like your head was going to explode – in a good way?  Well, that was my day today.  I attended Plan C for OKC at the operations center of the Oklahoma Food Cooperative.  Bob Waldrop, our very own sustainability guru, has put years of research and practical application into designing a model for surviving and learning to live after a national emergency that wipes out electricity, water service, and the food supply.   He talked primarily about the three biggest needs, food, water and shelter and touched on energy, human waste/trash, medical care and security.  A lot of information!  He will be sending all the attendees his notes and “a lot of URLs” that I will share. But, in the meantime, I would like to share my notes and some recommended reading from other participants, etc.  So here goes….

WATER:  You can live without food for a few weeks, but people die without water after 3 or 4 days.  If the electric water supply grid were knocked off line, diesel pumps might be able to provide up to 50% of daily need in most major metropolitan areas – but only for a short time, until the fuel ran out.  So, how does the average family prepare for a water shortage that may last up to a year or longer?  Ideally, the best way to plan ahead would be to drill a water well in your backyard and equip it with a handpump.  You know, the kind you see in old westerns.  The farm wife goes out with her bucket and fills it with water from the well.  While this is not what most people will take the time or money to do, there are alternatives.  A water catchment system such as rain barrels is the 2nd best method, using various types of cisterns (child’s swimming pool, stock tanks, chest freezers or refrigerators with doors removed and turned on their side (no electricity, no refrigeration), trash cans, ice chests, Rubbermaid tubs, fish tanks.  Lots of things can be used to catch rainwater.  Of course, purification is an issue and there are lots of methods: boiling, settling, slow sand filters (one of the best), solarization (clear jar of water in the sun), iodine (not sure how this works).  Must keep covered to prevent mosquitos.   Conserve, conserve, conserve (use gray water from bathing, laundry, etc. for garden)

FOOD: Sources: home gardens (learn to garden and preserve food now!!!!!!!!), fruit and nut trees (many take years to produce – plant now!!), buy wheat berries in bulk and purchase a hand grinder; livestock, fishing (learn to grow catfish, talapia, etc. in barrels), hunting, edible weeds, stockpile canned good (start now!), edible mushrooms, raise chickens (check local restrictions).  Related: stockpile seeds for vegetables when they go on sale at the end of the season and put them in freezer.  Join Seed Saver Exchange and form local heirloom seed exchange groups.  Cook with solar ovens (buy or make now!)

SHELTER: if you can afford it, put thermal windows in your house now; add insulation to walls, passive solar heat, interior shutters, wood stoves, lighting (stockpile lanterns and oils to burn, candles), move multiple families in together and scavenge unused houses for material; use cellars/basements for food storage (not common in Oklahoma).  Keeping warm in the winter: blankets, using the south side of the house for living area in winter for passive solar heating, thermosyphen (?) heater, canopy beds with curtains.  NO charcoal inside, no inside generators or unventilated open flames.

ENERGY: wood, biomass, solar, wind, hydro, biodiesel, alcohol, human/animal powered, methane, cowchips, propane, recharge batteries with bicycle generator (get now!), geothermal, wood gas

HUMANURE AND TRASH: there is a way to draw methane off of human waste and use what is left as compost; other methods (old fashioned outhouses; composting toilets, Lugable Loo from Cabella’s, Watson Wick, Orchard Toilet, moldering toilet.  Collect urine separately and use 1/3 urine to 2/3 water for fertilizer.  Put backflow preventer on sewer line now!  There will be no trash!  Reuse and recycle everything.  Keep food cans, chips bags, everything will have a use at one time or another.  Use cans to grow seedlings for garden.

MEDICAL CARE: grow medicinal plants; nurses and midwives will be used more on a neighborhood/community basis when health care system collapses; elderly relatives in nursing homes will have to be brought back to the family home.  Natural birth control.  Neighborhood graveyards (no embalming available, build your own coffins)

SUGGESTED READING:Start creating a library of useful topics and printing stuff off the internet while we still have it.  Books: One Circle (may be out of print, check used book sources, libraries); World Made by Hand (fiction); Plan C; German E Commissioned Monographs (great source of medicinal plants, etc. not 100% sure of title); The Omnivore’s Dilemna; In Defense of Food; Simple Prosperity; Crisis Preparedness Handbook, Bread Builders, Wild Fermentation. Catalog: Lehman’s Non-Electric Catalog (lehmans.com – order stuff now!) Websites:Seed Savers Exchange, Mother Earth News (great source of information), Rain Barrels & More, Tank Depot, Oklahoma Wildcrafting (associated Yahoo Group: OKforagehead); internet information on building bicycle carts, handcarts, etc. 

I know all this sounds foreign to the average American, but it would take so little to knock our grid of power, water, food and energy offline.  Could you and your family survive?  Do you have the knowledge and skills to grow your own food, procure water and make your home liveable without electricity?  Its worth considering – what if?

A Monarch Kind of Day

I haven’t been inspired to write much lately.  But today I am.  It is the time of year in Oklahoma where we get a small window, a few blissful weeks, of absolutely flawless weather.  The long unbearably humid days of summer are behind us – a little early, it seems, this year.  The wind is calm – unlike spring, where you hang onto your skin for fear of it being ripped from your very bones.  There is not a cloud in the sky and its only 70-something degrees.  Ahhhhhh…..

I couldn’t stand looking out my double-pane office windows any longer.  I had to go out and get a little sun and get some blood flowing in my frigid veins.  Why are offices always kept so cold?  Not surprisingly, I was not the only computer-bound worker out for a stroll.  Everyone smiled and nodded, commented on the perfect weather.  The lawn guys were smiling and laughing, museum visitors strolling with their kids, squirrels chasing each other up and down trees. 

Then I saw it – the official first sign of fall in Oklahoma – a monarch butterfly.  The beauties migrate through here this time of year.  They are so majestic and awesome to behold.  The brilliant orange and black is unmistakable as they flutter by on their journey to – where is it? – Mexico?  Who knows.  The next thing to watch – or rather, listen – for, the next harbinger of the season, is the honking of geese as they migrate here and spend the winter on our lakes and ponds.  For some reason, every time I see the signature V-formation and here them talking to each, it feels like a smile and nod from God.   “I’m still here.  I’m still in control.”

So, my friend, look around.  No matter what part of the county you live in, fall is upon us.  Enjoy this season of transition and give a prayer of thanks to the One who created it all.

Keep it simple,

Sherry