Friday, July 24, 2015

Be ready by September

If you are keeping an eye on current events and watch alternative media sources at least somewhat regularly you are probably already aware that there is a lot of talk about what could potentially happen this fall.  More particularly in September.

I won't go into the details, you'll just have to do your own research about what could potentially happen.  But I will say that the correlation and coincidence of events is astounding!  Too many to say that it is purely coincidence.    

Here is a video worth watching that will give you a picture of what I am talking about.

When the time for a decision is at hand the time for preparation is past.  Better early than late.  That's all I'm saying.  I don't have any special knowledge of anything specific that may or may not happen this fall but what I DO know, and that I have been saying for a while, is that the time will soon come in which it will be too late to prepare.

The truth is that there are more than just a few possibilities for chaos at this time.  Systemic breakdown, economic slowdown, financial collapse, Jade Helm 15, world war, you name it.  Take your preparations seriously and make it your goal to be as prepared as you can be by September.  Most likely nothing will happen but the quantity and coincidence of events that are piling up make it too risky to ignore.

I find it more than interesting that some of these systemic problems that have been addressed in the alternative medial for years are actually starting to make their way into the mainstream media.  This can be interpreted as a good sign or a really bad sign.  For conditions to be so bad that even the mainstream media can not ignore them means that they must be pretty bad, but it is good that more people are learning about them.

Here is a short list of some of my recommendations that you should do to be ready, just in case;

1.  Have at least three months worth of food storage and 2 weeks of fresh water.  Fill your cupboards primarily with the stuff that you eat every day.  Don't forget the TP, extra batteries and other essential household supplies.

2.  Learn how to bake your own bread and have 3 months worth of ingredients.  You'll need an alternate way of baking bread too.  I have an ECO HERC oven by Titan Ready USA as well as a dutch oven either of which will bake bread very nicely.  I also have a stash of charcoal briquettes and tea light candles.

3.  Keep some cash on hand.  ATM's and banks do not have enough cash for everyone.  Most US dollars exist only as 'one's and zero's' in a computer.  If there's a problem with credit there will be a run on cash and you may not be able to get any.

4.  Trade some of your dollars for precious metals, silver in particular.  What good is cash in the bank when it earns you virtually no interest and is at risk of loss?  At the very least silver is an excellent way to preserve and store wealth.  Silver is highly undervalued at a time when all paper instruments are highly overvalued.  If you don't hold it you don't own it... and it just may go to the moon!

5.  Get everything in order.  If your car needs new tires or a new battery, don't hesitate any longer.   Take care of needed home repairs,  Get that surgery scheduled you have been in need of.  Do now what you may not be able to do later.    

6.  Have at least one firearm and an adequate supply of ammunition.  Learn how to be safe and proficient with it.

7.  Don't plan on taking any trips of any significant distance.  Plan on staying close to your home base.  Whenever I go anywhere my plan is based around the possibility that I may have to walk home.  So I carry with me what I would need.  I call it my bug-home bag.  If you do take a trip my advice is go prepared.  Plan on walking home.

8.  Consider your gas tank empty at 1/2 tank and have a 5 gallon can or two filled and stored in a safe place at home.

9.  Learn to do without... technology.  It could be a good time to print out those pictures that are precious to you that only exist digitally.  Print out important journals that you have saved only on your hard drive(s).  Build a physical library of important books and instruction manuals.

10.  Make sure you are out of the market or that you hold only what you really want and are willing to hang on to long term.  Anything that exists only as a paper asset or digitally is at risk.  Concentrate on building tangible physical assets rather than stock or bonds.

Most importantly, don't worry and don't stress.  Like I said before. Most likely nothing will happen of significant consequence BUT it is far better to be prepared than not.  Your preparations will give you peace of mind for you and your family.

There are many more things you can do to prepare.  This short list is just a few of the more critical ones.  Check out my previous blog posts to learn more of my advice.

Tuesday, July 21, 2015

Interest rates as a means of control.

So the federal reserve says that they will be raising interest rates soon huh?  For those of you who believe that I urge you to think again.  The fed does not want to raise rates and will never raise rates until their purposes have been accomplished.  Purposes, you say?  What possible purpose could there be of spreading 'free' money all over the world beyond stimulating the growth of the economy?  To answer that somewhat sarcastic questions I ask you another questions.  For what reason(s) is anything ever free?  What strings were attached the last time you got something for free?  What was the actual price you had to pay when you last got something for free?  Free carpet pad with overpriced installation?  Buy one overpriced pair of shoes and get another one free?  Get a free Subway sandwich but only after accruing points having made many other purchases first.

You and I both know that virtually nothing is truly free.  The first pair of shoes you bought were overpriced so that the store could afford to give you another pair for 'free'.  Subway had to make a nice profit on you from all of your purchases before they could give you a free sandwich.  There are many more examples of this that I won't take the time to go into.

Sure, the Fed continues to keep saying at each FOMC meeting that they are going to raise rates but those of us who are clued into the truth about the federal reserve understand that their talk is all for show.  Have you seen how the markets react after each FOMC meeting?  Just the hint that the Fed is going to raise rates in the near future sends the markets up.  They don't need to raise rates to make the dollar stronger.  At least not for now.  All they have to do is hint about it and the main stream media and wall street jump as if it has already been done.  This strategy will not work for much longer.

The real reason interest rates are at essentially zero, in my humble opinion, other than because the economy is not actually growing, is specifically for the primary purpose of getting all people, cities, governments, municipalities and countries into debt and thus into servitude, under their control.  Who are "they"?  They are them who's product is debt.  Those who tell us that debt is a way of life.  The only way of life.  They are the same ones who brainwash us everyday with temptations of 0.00% interest rates on your new VISA credit card and low down home loans.  While at the same time they are destroying the middle class which virtually guarantees that you'll stay indebted to them forever.   

It is a fact that the US economy can not grow unless debt is expanded.  Both consumer debt and government debt must continually grow while the government attempts to inflate away their debt.  The fractional reserve banking systems that has taken over our world necessitates that additional debt be continually created just to cover the interest that is due on all the money created out of thin air.  I know, it makes perfect sense right?!  Ug!!!    

The fed could have and should have raised rates as soon as the recession was officially over.  Not that the recession ever really ended.  Zero percent interest rates were never appropriate.  Even Janet Yellen herself has called the low interest rates "inappropriately low".  Years and years of cheap money has done irreparable damage to the entire worlds financial system.  Cheap money has caused production of commodities and other products to expand greatly which has lead to overproduction and excessive supply.  This is leading to deflation, the number one enemy of the fiat banking system.  These guys know EXACTLY what they are doing.  

If any of you doubt what I am saying then take a look at what is happening in Greece.  Did the IMF forgive ANY of the Greek debt with their latest "bail out" agreement?  Did they give up anything at all to benefit the Greek people?  The answer is loud and clear; NO!  Reducing Greek debt would be a good thing for Greece, the IMF and as all nations holding Greek debt.  Greece's economy would grow which may make it possible for them to actually pay off a lower level of debt which would then benefit all parties.  BUT this did not happen and will not happen because the IMF and the international bankers only want control.  The IMF will now be taking control of Greek infrastructure and assets which will make conditions even worse in Greece.  Without assets the Greek government will not be able to raise the revenue necessary to even pay the interest payments due.  So, Greece will be back in not just the same place but in much worse condition as soon as the bail out funds from the IMF run out.

Now, suppose that the IMF did provide some debt relief for Greece.  What would have been the result?  Other countries that are indebted to the IMF like Greece would also petition for debt relief.  Providing debt relief would thwart the purposes of the world banks, central banks and the elite.  Debt is their product and there are no returns or exchanges allowed.  The IMF just made this perfectly clear with the latest Greek bail out.   Not only would debt relief be like giving refunds on open box merchandise after 30 days but it would cause everyone else to race for the exits as well.  This would cause a collapse of not only the Euro and the EU but shortly thereafter the entire world financial system.  Now that we see that the 'powers that be' will not allow debt to be forgiven, except for where otherwise permitted by law, you should assume the same for yourselves.  

My advice to you... Run for the exits!  Get out of debt now by whatever means you can.  Do not fall into the trap of acquiring debt just because you are tempted with extremely low interest rates.  Live within your means at all times even when you watch the Jones's drive home in the newest luxury SUV towing the matching ski boat.  Get yourself out of the system and put your hard earned wealth into real assets, not paper 'assets' or vehicles that depreciate and break down.  Remember, this is being done to us on purpose.  The banks and the elite are intentionally burdening us with debt as a means control.  Being in debt is servitude.  You can not truly be free if you are subject to rulers.  The fed will not raise interest rates until the entire planet is under their control, including you and me.  (Ok, that may be an exaggeration but hopefully you get my point.)

Friday, June 26, 2015

Everyday Bug-Out Vehicle

I have a problem with the typical bug out vehicle that you may see hard-core preppers advocating all around the internet.  A big, old, ugly, lumbering beast of a vehicle.  Of course there are many different versions of what could be called a bug-out vehicle as well as many reasons why you might want to build one.  My version of a bug out vehicle is one you might not have considered.  Do you need a bug-out vehicle built from an old surplus military rig or '70's EMP resistant vehicle?  Maybe not.

Here are some of the qualities that I require, or rather, need, in my own bug-out vehicle.

Reliability/Dependability.  Sure, a 1970's bronco could be considered reliable in it's own right but compared to a Toyota from the same era it doesn't hold a candle.  Imports including Toyota and Nissan have long proven to be the most dependable SUV's and trucks on the road,  Newer American made vehicles like the F150/250/350 have also proven to be tough and reliable.

Move quickly and quietly over rough terrain.  In an SHTF scenario you'll need to depend upon speed, agility and stealth.  A full size, solid axle V8 vehicle with a flowmaster type exhaust and big knobby mud tires is not what I would consider agile nor stealthy.  Worn mud tires and a loud exhaust meant to show off your big block V8 engine grunt will tell potential marauders that you are coming from miles away.  Keep your vehicle exhaust stock to keep it as quiet as it can be.

Be appropriate for everyday driving.  In an emergency you may not get the chance to switch vehicles from your daily driver to your bug out vehicle.  For me they are one and the same.  I've got to be able to carry all 7 of us safely to and from school as well as on the weekend trip.  Three point seat belts and head rests for everyone.  AC and a good stereo too.  :-)  

Capable.  It should be obvious that any bug-out vehicle must be four wheel drive.  The traction difference between front wheel or rear wheel drive only and a 4 x 4 rig is like the difference between night and day, or even more dramatic.  If you were to get stuck because you don't have a 4 x 4 then your bugging out attempt is over and your chance of survival drops dramatically.  Getting slowed down by rough terrain would also make you vulnerable to those who would take your preps away from you.  A capable rig does not mean that you have to be able to drive it through a mud bog or a boulder field.  Most stock trucks and SUV's are capable enough to get you through more obstacles than you can imagine if you have the knowledge and experience of how to drive them.

Towing.  The most reasonable way to prepare to bug out is to have your daily driver and then equip a trailer to tow with all your supplies.  Yes, your bug out location should already be stocked up with supplies but there will always be more that you should take with you.  A camping trailer or a simple enclosed trailer will do nicely.  There are off-road trailers available that are more capable with more ground clearance that are a great option depending upon where you plan on going.  Parking a camo painted blazer on the side of your home may alert your neighbors in your suburban neighborhood that you are a bit of a kook, whereas your daily driver with a few mods and a white utility trailer wouldn't stand out at all.        

To ensure that a vehicle remains dependable it must remain as close to stock as possible.  To improve speed, and agility you'll have to make some modifications without compromising reliability.  

To make your rig more capable without compromising reliability I suggest the following modifications.

Lift.  Increase the height of your rig by 1" to 2" to accommodate heavy duty springs, slightly larger tires and better quality, larger diameter shocks.  This will increase the load carrying capacity and make your vehicle handle better with heavier loads.  Most rigs can handle up to 3" of lift without compromising the angles of the drivelines and axles/CVs.  Do some research for your particular vehicle to determine what is best.  You can go higher but you might compromise the driveability of your rig and compromise dependability.  There are lots of great quality kits available if you do wish to fit bigger tires, depending upon which rig you have chosen.

Shocks.  Switch out your stock shocks to a higher quality more off-road capable shock like the Bilstein.  Longer shocks will be required when installing a lift kit.  Bilsten makes more than a few versions from the mild to the wild.  There are also many other manufacturers that make replacement performance shocks.  Larger diameter and longer shocks will give your rig more suspension travel, more control under heavier weight and allow you to move at higher speeds over rough terrain under control.

Tires.  With a 1" to 2" lift you'll be able to fit a slightly taller and wider tire on your rig.  A taller and wider tire will give you a wider track and larger tire footprint.  This is especially important when driving on deep sand, mud or snow when flotation is important.  Mud tires are awesome off road!  For the ultimate traction purchase a set of mud tires.  However, mud tires are noisy.  Especially as they get more and more worn.  This will hurt your ability to be stealthy at speed on paved roads.  Mud tires are also not as agile as an all terrain as they are made to fold and conform to rocks for increased traction.  Choose an aggressive all terrain tire that will keep your road noise down but is still tough enough for serious off-roading.  The BFG AT KO2 is my tire of choice.  There are only a few other tires that are just as tough.  For me, this tire provides the best combination of street performance and off road traction and durability. And it's pretty awesome looking too.   You need only increase your tire size by one or possibly two sizes.  Fit as much tire on as possible without any rubbing under compression or while turning.  

Wheels.  Consider buying a new set of wheels with your new tires.  Most of the time larger tires will still fit appropriately on the stock wheels.  Most stock wheels are designed for the tire to stay completely within the wheel well of the vehicle, which means a narrower stance.  Adding width is a must when adding height to your vehicle.  Select a wheel that has additional offset, that will widen the stance/track of your vehicle.  You need only add a little bit of width so that the edge of the tire matches flush with the edge of the vehicle or slightly beyond.        

Locking differential.  Adding a locking rear differential to your rig keeps both wheels turning regardless of how much traction either wheel has.  With an open differential if one wheel were to loose traction by either being on a slippery or loose surface or is lifted up off the ground, all of the power from the drivetrain would be transferred to the wheel with the least traction.  Locking the differential ensures that power is transferred evenly to both wheels.  If your rig has a traction control system you already have the means to control wheel slip.  A locking differential is more effective but with some practice you'll learn how to drive with your traction control system almost as effectively as having a locking differential.  Many Toyota off road vehicles have electronic locking differentials in addition to traction control systems which is the best of both worlds.

The vehicle that I have chosen for my bug-out / bug-home / tactical / utility (whatever you wanna call it) vehicle is a 2005 Toyota 4Runner.  Here's why.

It seats 7 people which is what we need to accommodate our family.
It is small enough to be agile on narrow mountain roads.
It is as reliable and dependable as it gets.
It has a 265 hp/330 lb ft torque V8 engine that is rated to tow 7,000 lbs.
It has a 20 gallon gas tank which give us the range we need to get out of dodge.
It is full time four wheel drive and has traction control and locking center differential.
I have equipped it with a 2.5" lift using heavy duty replacement coil springs and coilover shocks.  These particular coilover shocks are essentially a tamer version of a full-on off road racing shock.  The larger diameter shock body allows me to hit large bumps without slowing down while retaining control.
I switched out the narrow stock 17" wheels for a wider offset wheel to give it a wider stance for stability.
It runs 265/75R16 BFG AT KO2 tires.  Just one size larger than stock.  That's pretty much as tough a tire as you can get.  It has a three ply sidewall to resist punctures and aggressive side lugs to help when in deep mud.  Don't forget the full size spare.
I installed a hidden receiver hitch on the front of the vehicle to carry a Warn winch.  I elected not to install a steel bumper as they are quite heavy and reduce the agility and load capacity of the vehicle.
Add heavy duty skid plates to protect the vital 'organs' on the underside of the vehicle.  

This vehicle will get me anywhere I need to go and it can do it with relative speed, stealth and agility.

Now I know that there will be those of you who say that it is not EMP protected.  This may be true but my current bug-in plans do not necessitate an EMP resistant vehicle.  I have read that an EMP will not harm most vehicles anyway.  Whether this is true or not is beside the point as our current plans are to bug-in.  I am also of the philosophy that if you don't get out early, really early, you probably won't be able to get out at all, unless you happen to own a tank and a refueling station along the way.  If you plan on bugging out, do it really early, even now.  Move to a rural area and start your life there where you can then bug-in.

My priority with building this vehicle was to have fun in the mountains which also makes it an excellent bug-out vehicle.

Since I do not live in a truly densely populated area like an 'inner city' area I don't have to think about how I'd get out of there.  Frankly if I did i'd probably feel panicked every day thinking about when the right time would be to get out.  Get out now if you are not comfortable with where you live.    

Those of you who feel the need to purchase a surplus military vehicle that will cross the continent, more power to you!  You may be the one we all need to hitch a ride with some day.  For most preppers I think my advice should do you well.

Thursday, June 25, 2015

ECO HERC oven review

Like I said in one of my previous product reviews, I don't just review any old product that comes my way. It either has to be exceptional, it must really surprise me or on the other end of the spectrum be so bad as to prompt me to warn my fellow preppers and outdoors-men/women.

This one both really surprised me and is exceptional.  My first thought when I saw the oven at the SLC PrepperCon expo was that it was gimmicky because it only uses tea light candles.  I couldn't imagine that such a small source of heat would work so well as to bake whatever fits in the oven.  In short, it really works!

To cover the basics; the Eco HERC (Home Emergency Radiant Cooking) is made of stainless steel and assembles easily.  It nests and stacks together and is quite stable.  It uses ten tiny tea lights to provide the heat needed to get the oven hot enough to bake most anything.  Titan Ready USA also makes a larger version called the HERC that can bake larger items but I find this smaller version to be quite versatile.  In a situation where you will need to use this oven, conserving energy will also be important.  I have not tested the larger HERC oven but it uses twice the amount of candles and thus I can only suppose that it can achieve higher temps.

I used three different methods to measure temperatures inside and outside of the Eco HERC oven.  Infrared, a meat thermometer and a freestanding thermometer which was placed inside the oven.  The temps measured with the infrared thermometer were all over the scale.  I assume that this was because of the shiny reflective stainless steel which made the readings inconsistent.  The highest temperature that I was able to measure was taken at the underside of the oven directly above the flames at the baking stone which was upwards of 350F.  Inside the oven it achieved a constant temperature of approximately 275F and the meatloaf I baked easily reached 190F in less than an hour.  The accuracy of each of these methods could easily be questioned but they were good enough for me to get a picture of how well the oven works.  The outside temperature of the lid of the oven reached upwards of 200F so needless to say, do not touch!  The feet of the oven got warm but were in no way too hot to touch.  The temperature directly under the bank of candles was around 150F.  Not too hot for most countertops but too hot for some and definitely something to consider when determining where you'll be using your oven.

The Eco HERC can be used indoors because it uses simple candles.  However, I will not recommend using it indoors, at least not until you learn how to use it properly.  Candles put off smoke which can collect on your ceiling.  Putting 10 candles together can create quite a bit of smoke.

My biggest concern with the oven is the possibility of flare ups.  When the candles are under the oven the wax liquefies and the liquid wax can catch on fire creating quite a bit of smoke and fire.  The instruction provided with the oven say to trim the candle wicks to 1/4" so as to minimize to possibility of flare ups.  I followed this recommendation but still experienced flare ups.  The oven comes with a stainless steel plate to place over the candles when this happens, not if, when.

I used my new oven for the first time in my garage, which was a good thing.  I preheated the oven for about 30 minutes, placed the meatloaf in and after a while left it alone for about 10 minutes.  When I came back smoke was billowing out of the oven.  The wax had caught fire and was filling my garage with smoke.  After extinguishing the fire I noticed that some of the wicks appeared to be longer than 1/4". So I trimmed a few of the wicks and lit them again and placed the candles back under the oven.  This time I did not leave the oven alone.  About 15 minutes later some of the wax started to ignite again.  I once again extinguished the candles with the metal place, trimmed a few more wicks and lit them again.  It seemed that I had finally gotten the wicks cut to the right height.  Another 20 minutes or so passed and my meal was done.

Although this flare up problem was a bit annoying to deal with at first as soon as the meatloaf was up to temperature I realized that the oven had worked awesomely well.  The Eco HERC is not something that you can set and forget.  It requires some attention and a little learning.  To be able to cook a meal indoors with candles and a little bit of attention is actually quite impressive.  I know that we are all spoiled by our modern day appliances that help to make life so easy.  Now imagine living without them.  Then think about how valuable this little oven would be if you had no electricity or natural gas.  The minor inconvenience of dealing with candles flaring up, and trimming wicks in order to cook a meal, is hardly worth mentioning after your nicely baked meal satisfies your hungry families needs.

The one part that I was most skeptical about is now my favorite benefit of this oven.  That is the fuel itself.  I would not have imagined that tiny tea light candles would provide sufficient heat to bake with.  Tea candles are inexpensive, safe to store and will store for many years and still work as they are meant to.  There are not many fuels that you say that about.          

Keep in mind that the oven will not work properly if it is subject to any kind of breeze which will keep heat from entering the oven.  You'll need some kind of a shield to protect it from wind if you are using it outdoors.

In order to be adequately prepared in an emergency you should have multiples and backups of everything that is important to you.  This should include providing for different methods of cooking and heating.  Other cooking and heating methods you should consider include: propane stoves, outdoor BBQs, charcoal briquettes and dutch ovens, wood and wood burning stove, kerosene heaters and stoves with a safer kerosene alternative fuel, butane camp stoves AND the Eco HERC oven with a good quantity of tea lights.

Check out the PrepperCon TV and The Prepared Guy YouTube channels for my video review of the Eco HERC oven as well as other products I highly recommend.  You can also follow me @thepreparedguy on Twitter and Prepared Guy on Facebook.


Wednesday, June 24, 2015


Another exceptional product!  Who would have thought that a pillow shaped light could be this useful.  You may recognize this from the TV show Shark Tank.  LuminAid came all the way from Chicago to be a part of the Expo in SLC in April.  During the two day expo I am told that they sold out, a few times.  It's a great product with a great cause.

My son and I recently used this amazing lightweight rechargeable waterproof floating light on an overnight camp out.  Field testing is important, to say the least.  This is when you discover for yourself how well, or poorly something works for you in real life and discover how it bests fits your specific needs and methods.

I always carry a bright high quality rechargeable LED flashlight with me.  I use it for both work and as a defensive tool where a bright focused light is essential.  If you carry a firearm you should also carry a tactical flashlight.  I won't get into this topic now but I mean to use this example to illustrate that specific purpose built tools fill specific needs.  You should be prepared by having the right tools for your specific tasks.  I obviously wouldn't carry a LuminAid light with me to serve the very important purpose of defending myself but it wasn't made for that purpose.  Another very important need that must be met when the sun goes down or power goes out by whatever means is having a reliable, efficient, rechargeable source of light.  That is where this light fits right in.  It is comforting to have a source of light especially in a stressful time and especially for children.

To perform most tasks competently at home your eyes don't require much light.  A bright light, such as a tactical flashlight, could be considered a convenience but also a 'waste' of light or rather a waste of energy when it is most precious.  Most traditional flashlights focus their beam in a single direction making it necessary to wear a headlamp or stick a flashlight in your mouth to direct light where you need it.  This can also ruin your night vision which makes you continually dependent on bright light.

Diffusing light through an inflatable plastic bag is ingenious!  It makes this light easy to pack and lightweight and very effective at the same time.  The diffused light is bright enough for most tasks at a table, in a small room or tent.  I noticed that the diffused light eliminated bright spots and helped to protect my night vision making more chores easier in lower light levels.  The even light made reading pleasant and did not strain our eyes.  Because of the even light distribution we didn't have to continually adjust and re-adjust a flashlight to see properly.

Also, in an SHTF scenario one of the most important tactics you can employ is to stay undetected.  A bright flashlight waving around inside your home or at your bug-out location could be difficult to conceal while low diffused light would make revealing your presence much less of a concern.

The light can be hung from or strapped to a pack to facilitate charging during the day if you are on the move.

I have added a LuminAid Packlite 16 to my bag as a compliment to a tactical flashlight and headlamp.  Always carry at least three light sources along with extra batteries or rechargeable batteries and a way to recharge them.                    

Friday, June 19, 2015

Are Real Estate bubble conditions possible?

I feel that I yet again have to give my response to another NAR (National Association of Realtors) video of whether or not a bubble in real estate currently exists.  If you do not wish to continue to read on my answer is Yes.  I believe that we are currently in another real estate bubble not only throughout much of the US of A but also here in Utah.

The NAR does not believe that we are in a bubble nor that there is any inflation.  Allow me to prove to you otherwise.

First, I hope that we all realize that the real estate market collapse of , I'll call it 2008+, was a result of a combination of problems including 'loose' lending regulation and loan and appraisal fraud which helped to fuel bubble conditions.

According the NAR's own data the price of existing homes from 1968 to 2009 had gone up consistently by approximately 3.7% annually.  The US govt. tells us that appreciation during this time was 4.5%.  According to the Case-Schiller index this price increase was 3.4% between 1987 and 2009 with an inflation rate of 2.9%.   When the rate of appreciation exceeds the rate of inflation people get quickly priced out of being able to afford a home.  Mr. Yun in this video tells us that home values have gone up by 8 - 9% over the previous year which he does admit is "too strong", especially since incomes are only rising by 2%.  There is obviously a problem here.

I'm not an economist nor have a degree in any other related field but I do have a degree in common sense.  The value of a home is only as much as a buyer is willing and able to pay or finance.  So, take these conditions into consideration before you decide if we are in a bubble again or not.

Back then, long term interest rates for a 30 year mortgage were at 6%+, now they are closer to 4%.  Since the financial crash home values have nearly 'recovered' (in my estimation) to the same insanely high levels.  I also understand that in some specific areas and markets of the country real estate prices have eclipsed the levels of those days.

The reason our interest rates are so low is because our 'economy' is so weak.  Low interest rates are meant to stimulate borrowing and spending to boost the economy.  If it was true that our economy is strengthening then why hasn't the Fed raised interest rates yet?

How much less of a home can you afford to buy when interest rates are 2% higher.  About 20% less.   That's considerable!  If a home were worth $250k in 2008 at 6% interest what should it be worth today at 4% interest?  Home value is inextricably tied to mortgage interest rates as most people in most any price range must get a loan to purchase a home.  If you can afford a $250k home at 6% you could also afford a $300k home at 4% interest.  For home prices to recover to almost the same point they were in 2008 the interest rate had to drop two points.  The home is more affordable for the buyer because the purchase price and interest rate have dropped which equals a lower payment. That is a good thing for now but it is not a good indicator as to where property values are.  Ask yourself this question; If interest rates were two percent higher right now would home prices be as high as they currently are?  The correct answer is No, they would be much lower.  As Mr. Yun says in the video, interest rates can not remain at these exceptionally low rates, that these are "special conditions".  I completely agree.  Although I believe that the Fed can not raise rates without hurting the economy, the market itself (economic mother nature as it may be called) will eventually cause them to rise regardless.

Mr. Yun indicated that incomes have risen by 2% since 2008 and that the job market is recovering.  Both of these statements are untrue.  The government produces whatever data serves their purpose and the NAR obviously believes and uses this data.  The web site tracks real numbers whereas the government excludes and includes whatever data they need to achieve their purpose.  According to shadow true unemployment rate is over 20% and inflation is between 8% and 10%.  It is a fact that there are more people unemployed right now than during the great depression and the labor force participation rate is at nearly a 40 year low.  The Baltic Dry Index is at an all time low and so is the China Containerized Freight Index.  There are many more interesting data points that prove that we are much worse off now than before the previous collapse.  Not to mention the increase in world wide debt by at least $57 Trillion.  While it appears that many jobs have been added to the economy the vast majority of these jobs are part time jobs with no benefits which took the place of quality full time jobs with benefits.  Does this sound like a job market that is recovering Mr. Yun?  Do we take the government at its word or should we do our own research?

Mr. Yun also states that credit requirements for getting a home loan have tightened up which, compared to before the crisis is true.  However, Fannie May and Freddy Mac continue to loosen their policies and have made both 0%  and 3% down loans available just like before.  Variable rate (ARM) loans are also back and credit score requirements have dropped significantly as well.

He also states that currently there are more all-cash home purchases than before.  While this I am sure is true we need to look at where this cash is coming from.  Could it possibly be coming from the American people who are worse off today than 7 years ago?  I don't think so.  It is my speculation that this cash is coming back home to roost.  Foreigners holding US dollars see the danger that the US economy is in and are spending their US dollars as fast as they can, while the dollar is strong, to acquire real property as well as other real assets.  This is yet another consequence, in addition to lost multinational corporation profits, we are seeing from the surge in the dollar compared to other currencies.  How many people do you know that have paid cash for their new home recently?  This surge in all-cash home purchases is that cash coming back into the US economy from foreign markets and it is causing inflation.

Mr. Yun states that there is virtually no inflation but he also says that home values rose by 8 to 9 percent over the last year.  Is this not a definition of inflation itself?  According to his data, with income rising only 2% and virtually no inflation this shows that home pricing is out of 'whack'.  Home builders have been raising their prices because their homes are selling too fast at lower prices. I'd say that's a sign of inflation too.

I am not sure that Mr. Yun's statement that bringing additional supply into the market would help to ease the pressure of rising prices is correct.  The only way I see being able to add additional homes on the market is for new homes to be built.  The disparity of new home prices compared to existing home prices, at least in my immediate region is dramatic.  New home prices for properties that are comparable in size and finish level to existing homes sell for as much as 20% more, and you don't even get a fully mature landscaped and fenced yard.  Seeing that new homes are much less affordable than existing homes I don't think this would fix the problem.  Since we do have a need for more supply and the economy is supposedly doing so well then why don't we have more people selling their older homes and moving up improving their lifestyle into a newly constructed home?  Because in Mr. Yun's own words "the economy is sluggish".  The reason more new homes are not being built to satisfy the demand and ease pressure is because that demand for new homes just isn't there.  This is because there just aren't as many people that can afford them.  Believe me, if there was higher demand for new homes the builders would be building them as fast as they could.  Families want a home of their own but they feel the impact of lower wages, fewer work hours and inflation which keeps them in the existing home market and priced out of new construction.    

I have also heard that the banks are holding back foreclosed properties from the market in order to artificially inflate values which also increases the value of their portfolios.  I do not know this for myself so that is all that I will say on the subject.

In conclusion, all of these factors are indicating bubble territory to me.  Dramatic increase in home prices (inflation), interest rates lower than they should be with a weak job market and loosening credit requirements are part of the cause of this bubble.  But I will still give the same advice as I did a few months ago when I wrote my opinion about the 2015 Real Estate market.  Don't wait for prices to go down to buy a home.  If it is the right time for your family act now and don't look back.  Remember, a home is not an investment and debt is not a tool.  Realize that bubbles pop and cycles in all markets are 'normal'.  I haven't the slightest idea of how long this bubble will continue to inflate but I do know what happened to builders who had speculation homes on the market at the time the last bubble popped.  So, if you are speculating in today's real estate market be aware of the risks.  

Sunday, June 14, 2015

Solid Fuel, thoughts and observations.

Solid fuel is an important part of my bug-out /get-home bag.  In a pinch you can boil water without having to gather wood and I don't have to carry a larger, heavier gas (propane, butane, white, etc.) stove.  They make it much easier to get a fire started especially if you can't find any good tinder or dry wood.  Below are a few types of fuel that I have used for which I will give you my experience and opinion.  Keep in mind that there are other types of 'solid' fuels available and you can make your own version out of cotton balls and petroleum jelly.

I'll start off by saying that Esbit is my preferred fuel tablet.  Having used all of these different types of fuel I can easily say that Esbit is the superior product.  It burns the hottest, its the safest, and is the most versatile solid fuel.  It burns clean and is easy to light.  It can be used to boil water, as a heat source or fire starter.  They are each individually wrapped which is a plus.
Hexane tablets are my second choice.  They burn hot andclean but are not quite as easy to light as the Esbit fuel.  My biggest concern is the potential health risks.  They are made with formaldehyde and ammonia.  If they are accidentally swallowed by a child, or even held with wet or sweaty hands they will degrade into formaldehyde which is very dangerous.  My kids know no to eat them but it's still a concern.  The Esbit fuel is not safe to eat either but I don't believe that they are as enticing as these candy looking tablets.  Esbit tablets also have a 'fishy' smell to them which should make them seem less edible.  Don't worry, they don't stink while burning.

Trioxane fuel is the least expensive of these four options, however it does not burn nearly as long as any of them.  Trioxane burns hot and clean and lights with a spark whereas the others require a flame to light directly.  This makes it better as a fire starter than the others.  Because it does not last long it does not work as well to boil water but rather works best to warm an MRE which is what I believe it was designed for.  Once you open the foil package it will dry out/evaporate.  I also found that it left a residue on my hands that was difficult to remove.

This gel fuel is alcohol based so essentially it is 'Sterno' in a packet.  It lights fairly easily and burns clean but my problem with the gel is that it can be messy to work with.  It is heavier than the other fuels and I am concerned that there is a potential of it leaking in my pack.  Also, you'll need another bag or container to hold the leftover fuel.

Overall, Esbit is easily the superior fuel for me.  I use it along with the collapsible Esbit stove which makes it very easy to carry and the tablets store safely inside.  Please note that all of these products require good ventilation and are not for use indoors.

The purpose of this site is to provide you with information about what I have learned, my experience, and what my motivations are as a prepared guy. I have always felt driven to be ready for any situation by something powerful deep inside me. Being prepared has always served me well. I feel compelled to help others do the same.
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