What to do to prepare for a Presidential declaration of a Bank Holiday
Posted on June 26, 2009
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Several things have been going on that have really been bothering me. The first item is the fact that many US Embassies have been issued a year’s worth of operating expenses in US currency and told to convert it to the currency of the country in which they are located (except for the US Embassy in the UK). They have been told to do this right away. The second item that concerns me ties in with the first and comes from various underground news sources that the President is considering implementing a Bank Holiday. (http://prudentinvestor.blogspot.com/2009/06/newsletter-us-embassies-are-advised-to.html)
For me, this is pretty scary stuff. For those who do not know the history on the previous US Bank Holiday, here is a quick synopsis:
On March 5, 1933 President Franklin Roosevelt declared a US Bank Holiday and closed all the US banks for 4 days. (www.history.com) During this time, President Roosevelt successfully stopped the runs on US banks which was his primary intent. He also was able to push through Congress the Emergency Banking Act in that same four days. Passed by Congress on March 9, 1933 the act handed the president a far-reaching grip over bank dealings and “foreign transactions.” On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 to be turned in for other money. He also took the US off the gold standard allowing the US currency to inflate, which it could not do if backed by the price of gold. After the Bank Holiday was over, one third of US banks did not reopen.
Now if President Obama is going to pull the Bank Holiday plan out of the Roosevelt playbook, I think things will happen much differently this time around. Banking today is different than in 1933. First, there are Credit Unions. Though they would likely stay open during a Bank Holiday, their access to cash will be limited as they need to go to a bank somewhere to acquire it so expect them to quickly run low on cash. Historically, it wasn’t until 1934 that President Roosevelt signed the Federal Credit Union Act into law. (https://www.rbfcu.org/NB/html/Reference/AboutUs/HistoryofCu.htm)
Also, there was no computer access to online banks, ATM’s, or credit cards in 1933. If a Bank Holiday were proclaimed today, how would these issues be handled? Likely, they would have to be shut down as well during the Bank Holiday period. This of course, presents a serious dilemma for most of us. How do you buy food and gas without hard cash if credit cards, debit cards and ATM’s are non-functional? How do you pay bills if no one will accept a bank check not knowing if it is good? Is everyone starting to get my drift here? This is pretty scary stuff. The last Bank Holiday lasted four days. How long would this next one last? Only one person knows, President Obama.
The fact is the $900 Billion payout to bail out our US banks last winter is not working. The economy is still sagging, unemployment is still rising dramatically, banks are not lending money, home mortgages are down and car sales have plummeted. Even Warren Buffet now thinks the US may need a second stimulus package. (www.bloomberg.com) How do we afford that? We are still printing all the money to cover the last stimulus and bailout.
So in a nutshell, here it is. To date I have recommended to all the family and friends that read this website, to stock up on food and buy silver. I still recommend these strongly. I will now add a third requirement. Take your money out of the bank right now, today, and have plenty of cash on hand. I suggest at least $1,500 to $2,000. If a Bank Holiday is declared, you will need cash, as I expect that is all that will allow you to buy food and gasoline. I also need to mention that Walmart right now has small fire-safes on sale for $39.95. I would suggest you pick one of these up to lock up your silver and cash since stuffing it all in a mattress is a real bad idea. As usual, all comments on this issue are welcomed and as things develop economically, I will add more to this blog.
One last note, if you have anything in a bank safe deposit box, take that out now as well and put in that new fire-safe you are buying. Not only will you not have access to your safe deposit box during a Bank Holiday, but with the new rules signed into law by President Bush last fall with the Homeland Security Act 2, items in a bank safe deposit box can be confiscated by the bank at will.
Clayton
I always wondered what Tripe was.
Posted on June 21, 2009
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Joan likes to buy cookbooks at garage sales. This is actually amusing to me as she rarely cooks anything leaving that “messy” chore to me. In one of the old books she bought we found the following yellowed, recipe for Tripe. Clearly Joe, whoever he was, did not get along well with his ex-sister-in-laws.
It is Time to Buy Silver.
Posted on June 15, 2009
Filed Under General Insanity | 3 Comments
It is time to buy silver. I promised more updates on the economy as time progressed and it is now time for one. In the last economic analysis I published I recommended you buy food. This is still very true, but now is the time to also buy silver. Try to get as much as you can before mid-July and then if you are still able, keep buying into September.
Here is why. Adjusted for inflation, gross Federal tax receipts have only risen 40% in the last 39 years. However, over the same time period, total government spending increased 2,600%. If the US government today collected 100% of the entire nation’s wages as taxes, it would still not be enough to cover the current federal budget. We would still have a deficit.
In other words, it is now impossible for the US government to ever pay off the national debt or even service it for that matter. Soon, foreign countries will no longer trade in US dollars as a result. That is when the proverbial crap will hit the proverbial fan. The US government knows this and believes there is only one option to fix the problem and that is to inflate their way out. Inflation is coming big time and the only protection you will have is to own precious metals.
I recommend silver as it is more available than gold and comes in smaller denominations. Also, it is less likely to be confiscated by the US government when the time comes. If you don’t think the government will not come after you to take your gold, think again. President Roosevelt did just that in the last great depression and since President Obama has pulled out and is running the game to the “Roosevelt Playbook” I think it could happen again.
Do not buy paper saying you own silver from a bank. Many banks are actually selling “silver certificates” that are not backed by silver. They don’t have the silver they are selling. Buy silver and keep it physically near you. It looks like there are some major disruptions coming very soon to the Comex and LME that control commodities prices and you want to buy your silver before this occurs. Silver prices right now are running around $18 a troy ounce. Just two years ago it was at $9 per troy ounce. I personally am buying 2009 American Eagle one ounce coins. They are readily available and are quite attractive with a Walking Liberty on the front face.
During the Great Depression of the 1930’s, bellhops and elevator operators were routinely tipped by “high rollers” at the hotels in small gold coins. Several of these bellhops and elevator operators saved these tips in jars over the years of the Depression. By the end of the Depression, these same bellhops and elevator operators took those coins and bought the hotels they worked for during all those years. This type of opportunity will happen again. A few hundred dollars of silver or gold today, could pay off your entire house mortgage three or four years from now if we get the hyper-inflation that the US government is setting us up for with these incredible deficits.
Make sure you stock food too. You are going to need it.
Clayton
Lance Strikes Again
Posted on May 16, 2009
Filed Under General | 4 Comments
I have a room in my basement, about 10′x10′ what has my well pump and a few shelves in it. I have it set up with pet beds, food, water, a rug, etc so the dogs have somewhere safe and warm to be on cold days while I’m at work. I have a cinder block I use to secure the door shut from the outside.
I came home from work the other day to be greeted by Lance. Just Lance. Now I’m thinking, okay, he’s strong maybe he managed to push the door open. But any gap he could get out of, Emme could easily fit through. What’s going on here? I look around the house for Emme to see if she’s sleeping or something and didn’t greet me. No Emme. So I proceed to the basement.
About halfway down the stairs, I notice some boards I had stood up against a wall were on the floor. Odd. I get a few more steps down and see why.
There’s now a hole, about 4′ off the ground and 8″x12″ big, straight through the drywall. I go around to the door and inside there’s Emme, just as angelic as can be, awaiting my arrival. Below the hole there is a 30 gallon tote that Lance apparently stood as he dug a hole as high as he could reach. (http://www.flickr.com/photos/38442320@N02/3536424448/) Emme couldn’t jump high enough to get out. Upon moving the tote I find the mess of shredded paper backing and drywall powder that was my wall when I left for work that morning. (http://www.flickr.com/photos/38442320@N02/3535609301/)
I can’t punish the dog, He’ll think he’s in trouble because he greeted me at the door. I have a home appraisal in about 3 days and no way to cover this hole. What kind of a dog digs through a wall, really? Thanks Lance. You have once again proved yourself to be the stupidest dog ever.
Problem Solve this!
Posted on May 11, 2009
Filed Under General | 2 Comments
I was going to help Mark bleed the brakes and I said, “it reaks in here, what were you doing?” (chirp chirp) No response. I look over and there’s a dead stinking mouse stuck in the rocker panel under the driver’s door.
http://www.26liter.us/gallery/albums/userpics/10087/5-11-09_005.jpg
I figure this thing has been baking in the 95 degree Texas sun for at least 4 days.
My first thought is a little olive oil and a pair of pliers. I suspect most of the guts have sunk to the bottom half of the mouse on the inside of the frame panel. If we cut it out, the car will stink forever because there is no way to get it out without cutting the frame of the car.
Any other bright ideas?
~Kate
Dexter - available online
Posted on May 9, 2009
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For those of you who are Dexter fans but are unable to get Showtime like myself, here is a link to watch all three seasons online:
Clayton
Fun Little Game
Posted on April 16, 2009
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I found a fun little game that is free and does not require an email address so none of that pesky spam mail is involved. Click on the link below and challenge my guy to give me a point and then play for free as much as you want. The games are quick and will only take you a minute or two of your time.
Thanks,
Clayton
Inflation is coming, time to get ready.
Posted on March 19, 2009
Filed Under General Insanity | 6 Comments
I have received criticism from several friends and family for not discussing my analysis of the economy and what to do about it here in the family blog. I recently finished reading the book “The Richest Man in Babylon.” I am pleased to say I have spent my life living by most of the rules in this book and going forward I will live by all of them. This book, written in 1924, describes how everyone can make and grow wealth regardless of their income and current circumstances and regardless of the state of the economy. As an add-on to this, I will add a comment section later that summarizes the points in this book. Two key points of this book for this discussion though is: Live within your means; and protect your principle.
Our federal government has no understanding of these concepts. Except for two years under Richard Nixon and four years under Bill Clinton, our government has not been able live within their means for well over 50 years. Here is some basic economics for everyone; “in any country there is only so much money that is available for borrowing.” Money availability in a society is not infinite. Three groups consisting of individuals, companies and governments share the total amount of borrowing available in a society or country. The more one group borrows, the less that is available for the other two groups. This means that a total society will always live within its means even if individuals, companies or governments cannot. Remember this concept, as I will come back to it.
Unless you are over 50 years of age, you likely do not remember the Gerald Ford/Jimmy Carter presidential years. This is the period from 1974 to 1981. Inflation started under Gerald Ford and became much worse under Jimmy Carter. Does anyone remember the “WIN” buttons President Ford tried to get everyone to wear? It stood for “whip inflation now.” The idea was that the inflation rate was caused by some kind of national psychological issue and if we could all just get over it, inflation would go away. Does any of this talk sounds familiar today? The inflation problem in 1975 was not psychological then and current economic crisis is not psychological today.
The inflation rate under Carter hit nearly 15% on an annual basis. This means in real dollars, if you have $100 in the bank on January 1, a year later on December 31 it would only be worth $85. Many Americans in the last 6 months have watched their investments fall about 50%. This was only the first shoe to drop. This was caused because many Americans, American banks and certainly our American government have broken the rule I mentioned above about living within their means. Americans in general have also broken the rule: protect your principle. Well, the second shoe is about to drop because inflation is coming.
If you think the money deflation and the recession you have seen to date is bad then hang on because you haven’t seen anything yet. Nothing is as damaging as inflation on your money and if it hits 25%, most economists will conclude it is the dreaded “H” word, hyperinflation (a quasi-defined measure).
A year and a half ago I took all my IRA investments out of the mutual funds we had them in and put it 100% in Treasury Securities. We went from 10% returns in 2007 to 2% in 2008 as a result, but I protected the principle for our retirement investments. Last week I just took all the funds out of the Treasury Securities and put it into Indexable Treasury Securities. Indexable Tbills change their rates based on the inflation rate (Consumer Price Index) but has a general lower base interest it pays.
Things are going to get real bad in this nation financially in the next few years. People who have worked and saved for a lifetime are going to get wiped out. Many have already lost 50% over the last six months and the second half of their investments will get eaten up in the coming inflation. The world governments have dumped $11 Trillion unbacked money into the world money supply to try and prop up banks and large businesses that are “Too Big to Fail.” That money is now out there in the money supply and the only possible result will be inflation. The course is now set and the damage done.
So, what should you do? I have several suggestions:
1. If you have cash in the bank, buy gold. Do not sit on cash.
2. If you have lots of cash, buy land (it is the only thing we are not making more of).
3. Move your 401K or IRA investments into something that is inflation protected.
4. Buy and store six months of basic food staples for you and your family.
Throughout all of history, what happens during hyperinflation in every fiat money based economy like ours, is that the shelves of stores run out of goods to sell. Under hyperinflation is you have too much money chasing too few goods. Everyone will have cash, it is just there will just be less and less to buy and what is available will be very expensive. So, buy food now and store it, especially canned goods, rice, sugar and such.
Earlier this year I was making fun of the government statement “Too Big to Fail” as I thought this entire concept was ludicrous. I am not finding it so funny anymore. We will all be forced to live within our means on a national level (I said I would get back to this). We cannot just fabricate money to prop up failing banks and businesses, as it will only devalue the currency to the same levels it would have been anyway due to the resulting inflation. This coming inflation will mean that people will be going hungry in this country, many of whom have never gone hungry before. Don’t let it be you. As a last thought remember that putting money into the world money supply is an easy thing. We do not need printing presses to do this any longer as we have computers. Unfortunately, like in the Ford/Carter years, once the money becomes inflated, it takes 10 years to get the excess back out. Ten years is a long time to be hungry.
Clayton
Introducing Ashton Marshall Hiscock
Posted on January 27, 2009
Filed Under General | 1 Comment
Born Friday, January 23, 10 lbs - 7 oz, 22 inches long Ashton Marshall
Hiscock. Sally and Jon have another one. 
Jon, Zach, Ashton.
Mouse in the washing machine.
Posted on January 18, 2009
Filed Under General | 2 Comments
So I checked inside the washing machine yesterday to see what the status on laundry was. Instead I find a baby mouse at the bottom of the barrel. I tried to scoop it out with a cup, but it hid under the ridge of the agitator. So my next thought was, get one of the cats. Well, the cat had other ideas about going into the washing machine.
Next I get Mark, he grabs a pair of pliers and pulls it out by it’s tail. Since we now had a live baby mouse the size of a quarter in our hands, now what? If we just throw it outside, it will eventually find it’s way back into the house. The dogs were jumping up and dancing around us, the cats were nowhere to be found. We threw the mouse in a box that happened to be sitting next to the door so we could go find one of the cats to take care of the problem for us. Unfortunately, we didn’t think about the consequence of our actions. The cat promptly grabbed the mouse, then jumped out of the box and took off to the other end of the house with it!
As we’re chasing down the cat, screaming at it, the dog tackles the cat as it’s running away in the best game of chase the cat in a while, and the stunned mouse pops out of the cat’s mouth and woozily tries to hide under the edge of the kitchen cupboards.
Mark once again picks up the mouse by the tail with the pliers and throws it outside, dogs in tow. Radar gnaws and gums it up pretty good so the mouse is now soaking wet. Cheech bites at it a couple of times and the mouse finally dies. Now the dogs take a small bite, sniff it, bite, sniff, bite sniff. They didn’t quite know what to do with it. So finally Mark picks it up with the pliers again and throws it in the grass over the fence.
It was a pretty funny episode. Boy did we feel dumb. Poor mouse. It was just a cute little thing too.
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