Here are a couple of handy ways to store and haul it.
In many countries, traditional water collection involves carrying a 5-gallon (20-liter) bucket on the head. This practice puts a great burden on the body and can damage the spine, neck and knees over time. A full Hippo Water Roller only feels like 22 pounds (10 kg) when rolled over level ground, making it possible for almost anyone to transport 24 gallons (90 liters) of water in much less time and with greater ease.http://www.hipporoller.org/index.php
Here is a way to save water for use later like after a storm or flood.
The waterBOB® is a water containment system that holds up to 100 gallons of fresh drinking water in any standard bathtub in the event of an emergency. Constructed of heavy duty food grade plastic, the waterBOB® keeps water fresh and clean for drinking, cooking, washing and flushing. Water stored in an open bathtub, with dirt, soap film and exposure to debris will spoil and become useless.During a hurricane or tropical storm, water main breaks and storm surges can interrupt or even contaminate your water supply. It is during these conditions the waterBOB® may be used for temporary water storage. Constructed of heavy duty plastic that is FDA compliant for food storage, the waterBOB® keeps water fresh and clean for up to 4 weeks. The waterBOB® is very easy to use. Simply lay the liner in any standard bathtub, attach the fill sock to the faucet and fill the bladder to capacity, which takes approximately 20 minutes. A siphon pump is included to easily dispense the water into jugs or pitchers. Never wait in line again to buy expensive bottled water! Be prepared with the waterBOB®.http://www.waterbob.com/Welcome.do;jsessionid=88318085DA6B2EBB8516B6D7D6B84CA6
Here is a couple of good pages of info rain water harvesting
http://www.motherearthnews.com/Green-Home-Building/2003-08-01/Harvest-the-Rain.aspx
http://www.motherearthnews.com/Nature-and-Environment/2003-08-01/Its-Raining-I-m-Storing.aspx
'Lifesaver' Bottle Purifies Water in Seconds
Friday, May 09, 2008
On the outside, it looks like an ordinary sports bottle. On the inside, there's a miracle: an extremely advanced filtration system that makes murky water filled with deadly viruses and bacteria completely clean in just seconds.
The Lifesaver removes 99.999 percent of water-borne pathogens and reduces heavy metals like lead, meaning even the filthiest water can be cleaned — immediately.
It will be a boon to soldiers in the field, so it's winning accolades from the military.
It also stands to revolutionize humanitarian aid. It could be the first weapon in the fight against disease after a natural disaster, like the one in Myanmar this week.
I attended the Lifesaver’s launch at DSEi London, the world’s largest arms fair. Its inventor provided a pool of dirty pond water as a test subject, and I drank some after it was filtered. Not only did it look pure once it passed through the Lifesaver, it tasted pure, too.
The process takes only 20 seconds and is simple enough: scoop some water, pump it through the filter and you’re ready to go. The instructions are displayed in pictures on the side of the bottle, so it can be used by anyone, removing the language barrier.
Outdoor enthusiasts may find it useful, but the Lifesaver is perfect for the military. The bottle is designed to “scoop and go,” so soldiers won’t have to carry the added weight of clean bottled water. They can pick some up out of any source and keep moving.
As an added bonus, the bottle can shoot a pressurized jet of water from any angle, which will be useful for washing wounds free of contaminants and debris.
Other filters use ceramic pores and can’t catch most bacteria and viruses, but the Lifesaver uses microscopic pores a mere 15 nanometers across — about one-hundredth the width of a spider’s silk — narrow enough to stop the tiniest threats. That means virtually nothing — not even bacteria and viruses — can get through.
And since the bottle uses a carbon filter, it makes water safe and sterile without any chemicals, removing that iodine or chlorine taste.
The bottle weighs about 1.5 pounds and can filter one and a half pints of clean drinking water each go. Its replaceable filter can handle more than 1,500 gallons of dirty water before it has to be replaced. And since it won’t process any water once the filter has expired, it will be impossible to drink contaminated water by mistake.
Michael Pritchard, a British entrepreneur, designed the Lifesaver in the wake of freshwater shortages that followed the 2004 tsunami and Hurricane Katrina.
Delivering bottled water to disaster areas is difficult, especially in places like Myanmar, where the government is currently interfering with efforts to distribute supplies and aid. If disaster victims had access to the Lifesaver, they could have ongoing access to clean water without the need for airlifts.
Delivering those planeloads of water is expensive, too. A U.S. Army study revealed that the cost of delivering bottled water to Afghanistan was $4.69 per gallon. Pentagon figures on Hurricane Mitch showed the cost of air freight was even higher: $7.60 per gallon.
Just one Boeing C-17 transport plane full of Lifesaver bottles would provide 500,000 people with access to safe drinking water for up to 16 months — saving millions and saving lives.
http://www.foxnews.com/story/0,2933,354735,00.html
Here is a few articles about water filtering, go to the links for pictures (sorry)
Gravity Fed Water Treatment System – Mod 1*
I. Discussion
Water is essential to sustain human life. In many types of disasters, access to clean drinking water
may become a problem. Often times ground water sources and tap water sources will become polluted, which can lead to sickness, disease, and the potential for epidemics. During a crisis, the ability to treat water can sometimes mean the difference between life and death. Individuals can only survive for approximately 3 days without clean drinking water.
Although water filtration systems are sold that can biologically filter water at the individual and
family level, filtration systems providing the pure drinking water requirements for a small community are very limited.
Ceramic water filters are expensive and few members of our society will have the foresight to
purchase one. I felt there has to be a better means to filter drinking water in an emergency. I visited my local plumbing supply store and designed & constructed a high volume Gravity Feed Water Treatment System. This system is designed to filter 100,000 gallons of biologically contaminated ground water from rivers, streams, ponds, lakes, rainwater runoff, or biologically contaminated tap water converting it into drinking water at a rate of approximately 130 gallons per hour during a crisis, enough water for a small town.
II. Design Goal
This system is designed to take biologically polluted surface water from streams, lakes, ponds, rivers and rainwater runoff and filter out biological threats in order to produce clean drinking water.
• Heavy Duty Capacity: Converts 100,000 gallons of biologically contaminated surface water to
drinking water.
• High Rate: Filters approximately 130 gallons of water per hour.
• Operates without electricity.
• Relatively Low Cost (0.6 cents per gallon)
• Filters contaminants (0.5 microns or larger) from ground water rendering water microbiologically safe.
o Removes greater than 99.99% of E. Coli bacteria
o Removes greater than 99.99% of Vibrio Cholerae (Cholera) bacteria
o Removes greater than 99.999% of Shigella bacteria
o Removes greater than 99.999% of Salmonella Typhi (Typhoid) bacteria
o Removes greater than 99.999% of Klebsiella Terrigena bacteria
o Removes greater than 99.999% of Cryptosporidium cyst
o Removes greater than 99.999% of Giardia cyst
* This is a conceptual design. I have constructed and tested the original Gravity Feed Water Treatment System.
http://personals.galaxyinternet.net/tunga/I38.htm But not this modification. This revision substitutes a Doulton Rio 2000 High-
Flow Ceramic Whole House Water Filter in place of the American Plumber W.5CPHD 0.5 micron water filter.
http://www.pure-earth.com/PDF/Rio%202000.pdf The design may require additional engineering to ensure effective operations.
Impact, 2007 James A. Marusek
III. Parts List & Supplies
Quantity Item (or equivalent) Unit Price Total Price
1 55-Gallon Open Head Plastic Water Drum (Food Grade) $ 60.97 $ 60.97
1 Water Filter Housing – American Plumber W10-PR $ 39.95 $ 39.95
2 1” x 6” Brass Nipples $ 7.26 $ 14.52
1 1” x 2” Brass Nipple $ 2.35 $ 2.35
1 1” Ball Valve – Apollo #70-105-01 $ 13.76 $ 13.76
2 1” PVC NIBCO PVC-1 D1 D-2466 (1” Female Pipe to 1”
Male) One connector should have a high ridge at end of
threads to allow brass washer to rest against. (Refer Fig. 1)
$ 0.49 $ 0.98
1 1” PVC Male to Male Coupler $ 0.45 $ 0.45
2 1” ID Rubber Washers $ 1.00 $ 2.00
2 1” ID Thin Brass Washers $ 1.00 $ 2.00
1 Electrical Type 1” Nut $ 0.20 $ 0.20
1 1” PVC I NSF Female Adapter Insert $ 1.26 $ 1.26
1 1” PVC I NSF Male Adapter Insert $ 0.38 $ 0.38
60 Feet + 1” ID PVC SPA-Flex Pipe $ 1.97/ft $ 118.20
2 ¾” to 1 ½” Metal Clamps $ 0.59 $ 1.18
40 Yards 100% Bleached Cotton Cheese Cloth (36” wide) $ 0.80/yd $ 32.00
10 5 Micron Filter Cartridges – American Plumber Model
W5CPHD
$ 10.63 $ 106.30
1 Doulton Rio 2000 High-Flow Ceramic Whole House Water
Filter
$ 249.00 $ 249.00
1 Filter Wrench – American Plumber Model WWHD $ 4.83 $ 4.83
2 5-Gallon Heavy Duty Plastic Buckets $ 6.00 $ 12.00
Grand Total $ 601.36
IV. Construction
* Purchase the materials identified in the parts list. Most of parts are available in a plumbing supply store. Cheese Cloth can be obtained from a fabric store, such as Jo Ann Fabrics. I obtained the Doulton Rio 2000 and the 55-gallon drum by mail order.
* Drill a one-inch hole at the base of one 55-gallon plastic drum, approximately 5" from the bottom. Compare drill bit with PVC Connectors prior to drilling to ensure proper hole size.
* Using Multi-Purpose (PVC, CPVC, ABS) Cement join the 1" PVC D-2466 connector to the 1" PVC Male-to-Male Coupler, to the second 1" PVC D-2466 connector. To cement the connections, apply cement to both sides of each connection, push the joint together and give them a small twist. Allow the cement to cure for 4 hours prior to use. This will create a male to male threaded PVC Assembly.
* Insert the PVC Assembly into the 55-gallon drum. The side with the flat mounting surface should be placed into the barrel. Refer to Figure 1. If required, use a round file on the drum to increase the size of the hole slightly to allow the assembly to slide into the hole snugly. Clean out plastic filings from the inside of the drum.
* Slide the brass washers onto the PVC Assembly. If required, use a small round file on the washers to increase the size of the inside hole to allow it to slide onto the PVC Assembly.
Impact, 2007 James A. Marusek
Figure 1. 55-Gallon Drum Connections
Figure 2. Filter Housing Connections
Impact, 2007 James A. Marusek
* Coat both sides of one thin brass washer and one rubber washer with a silicon sealant. Place the thin brass washer onto the PVC Assembly. Next place the rubber washer. Insert the PVC Assembly into the 55-gallon drum. On the inside of the drum, insert an untreated rubber washer and a thin brass washer and then an electrical type 1" nut. Tighten the assembly.
* Push a 1" Female Adapter Insert into the PVC SPA-Flex Pipe. This pipe is semi-rigid. Use a rubber mallet to drive the insert into the pipe. Use a metal clamp to secure.
* On the other side of the sixty-foot pipe repeat the above step and drive a Male
Adapter Insert into the pipe.
* Next, fabricate the Water Filter Assembly. This will join the two Water Filter Housings
with two 1" x 6" Brass Nipples. The assembly is connected as follows: Outlet
side of gray American Plumber Filter Housing #1 to Nipple #1 to Inlet side of blue
Doulton Filter Housing #2.
Outlet side of blue Filter Housing #2 to Nipple #2.
* Assemble the 6 ceramic filter candles into the interior housing of the Doulton Rio
2000 filter assembly. The first step is to find the directions. They are well hidden wrapped
around a plastic pipe in the middle of the package.
Follow these directions to prepare the inner housing for assembly.
* Insert the 5-micron Filter Cartridge into the gray Water Filter Housing #1 (Drum
Side). Insert the 0.5 Micron Ceramic Filter assembly into the blue Water Filter Housing
#2 (water outlet side). Follow filter cartridge instructions for installation details. The Water
Filter Housings o-ring should be lubricated. Clean petroleum
Figure 3. Doulton Ceramic Filter Assembly
Impact, 2007 James A. Marusek
jelly is a lubricant that can be used for this purpose. Exercise care in handling this assembly in order to prevent damage to the ceramic filters.
* Connect female side of Hose Assembly to a 1" x 2" brass nipple to a 1" Ball Valve. Verify proper orientation. The outlet side of the Ball Valve should be connected to the hose assembly. The control valve should move freely once the Ball Valve is connected to the drum. Now, connect the other side of the Ball Valve to the PVC Assembly on the 55-gallon drum. I recommend two persons perform this step in order to keep the hose assembly from getting twisted or damaged.
* Connect the male side of the Hose Assembly to the inlet side of the Filter Assembly. I recommend two individuals perform this step in order to prevent damage to the Filter Assembly.
* Use solid objects such as bricks or rocks to provide strain relief on the hose exiting the water barrel and also to prop the filter assembly to keep it rigid.
V. Operation
* Close the ball valve on the 55-gallon drum.
* Fill a 5-gallon bucket with ground water. Place cotton cheese cloth over a second 5-gallon bucket and slowly pour the water from the first bucket into the second. The cheese cloth will remove large contaminants (such as leaves and twigs) as you pour the water into the drum.
* The 55-gallon drum should be placed at the top of a hill and the filter assembly must be placed at the bottom. The hill should have a 20-degree incline or steeper, in order for the system to work effectively.
* Open the ball valve and check for leaks. Tighten connections. Allow water to flow for 5-6 minutes before using the system for the first time. After purging collect filtered drinking water in biologically clean containers.
* The Filter Assembly should use a 1" Inside Diameter (ID) hose that is a minimum of 60 feet long. The gravity fed system requires a minimum head pressure to operate effectively. The head pressure can be increased by lengthening the hose. But under no circumstance should the flow rate exceed the rated flow rate of the Doulton Rio 2000 ceramic filters of 900 gallons per hour (~15 gallons per minute). Using a shorter hose length or a smaller diameter hose will defeat this system.
* The Water Purification System will require periodic maintenance. Filters will need to be removed and cleaned or replaced. Most of the contamination will be concentrated in the first filter assembly containing the 5-micron filter. The Doulton Rio 2000 comes with its own cleaning brush for the ceramic filters.
Replacement ceramic candles can be purchased as required.
VI. Limitations
* This system is not designed to treat water contaminated with oil, chemicals, heavy metals, dissolved salts or strong acids/bases. Additional steps may be required to treat these problems.
* This system is not designed to treat muddy water. Muddy water will clog the 5 micron filter quickly and require constant filter cleaning/replacement. In this condition it might be better to prefilter the water in a finer filter than cheese cloth or let the mud water settle out in the 5-gallon buckets before pouring the cleaner water into the 55-gallon drum.
Disinfecting Water
Boiling water instructions are issued after a public water utility has lost pressure in its water moving systems, making it possible for contaminants to enter water lines. Pay attention to local authorities on the status of your water supply.
1- Use only bottled or disinfected water for drinking, cooking, to brush your teeth, for cleaning contact lenses, until the public water supplies have been declared safe. The danger with tainted public supplies is from bacterial contamination that can cause severe diarrhea. Untreated diarrhea can be life threatening.
2- Water that you have saved in bottles before the storm should be good for up to six months, if properly stored. Proper storage means leaving no air in the container and storing in the dark. When in doubt, disinfect it.
3- To prevent the spread of disease, wash your hands frequently with disinfected water and soap.
4- Use water stored in the bathtub, from the pool or from the tap to flush the toilet. Don't drink or cook with water from the pool.
5- Bathing or showering with tap water is fine, but don't let it get in your eyes ears or mouth. If you shave with tap water, dab any cuts with antiseptic.
How to Boil Disinfect water:
1- Boil at a rolling boil for at least10 minutes
2- Let cool, add a pinch of salt for taste.
3- Pour the water back and forth between clean containers to reduce the flat taste.
Liquid Household Chlorine Bleach: (unreliable in killing Giardia cysts)
Normal household bleach, a solution of 5.25% Sodium Hypochlorite, can be used to kill germs in water (except tuberculosis germs). It should be standard household bleach with no extra whiteners, brighteners, or scents of any kind like lemon. Now if the only active ingredient in your bleach is Sodium Hypochlorite, it is suitable for water sterilization.
Be sure to sterilize and clean your water container, its lid, spout, funnel after each use. Pre-filter your water, if necessary, with commercial sized coffee filters.
Here's how you do it
1. Add 1/2 tsp. to 5 gallons of water if it is clear (or 8 drops of chlorine bleach to each gallon of clear water) or 1 tsp. to 5 gallons of water if the water is cloudy.
2. Allow your water to sit at least 30 minutes.
3. If water does not have a slight chlorine odor, repeat the dosage and let stand for 15 minutes.
Powder Chlorine:
There is a storage problem with Liquid Household Chlorine Bleach, Chlorine gas will bleed through plastic bottles, and storing bleach in a warm place will speed up the gas leakage. When this happens you will have no idea how much to put in the water.
You can make your own bleach by purchasing swimming pool "shock treatment" with 65% Calcium Hypochlorite and no additional anti-fungal or clarifiers. Thoroughly mix 24.5 grams (10 Tablespoons) of powder to one gallon of water for a 5.25% bleach solution. Five pounds of dry pool bleach costs about $10-15, which will make about 92 gallons of bleach, that will sterilize 706,560 gallons of clear water, or 353,280 gallons of cloudy water. If you allocate 3 gallons per person per day for drinking, food preparation, and sanitation, $15 will take care of 100 people for one year!
Iodine Tablets (Tetraglycine hydroperiodide)
- Follow directions on the package. Normally, use 1 tablet 8 mg for each quart of water.
- Make sure the tablet dissolves completely; mix thoroughly.
- Let stand for 30 minutes.
Liquid Iodine Preparations: (safe for 3-6 months use but questionable for long-term usage. Must not be used by persons allergic to iodine, with active thyroid disease, or pregnant women.)
Add to each quart of Clear Water
Iodine Topical Solution 2% Iodine (contain 2.4% sodium iodide) Amount per Quart 10 drops.
Iodine Tincture 2% Iodine (contain 2.4% sodium iodide) Amount per Quart 10 drops.
Lugol's Solution 5% Iodine (contains 10% potassium iodide) Amount per Quart 4 drops.
Povidone-Iodine 10% Iodine (non-toxic polymer that binds iodine) Amount per Quart 4 drops.
Iodine Water (4 to 8 grams pure Iodine crystal in 1 fl. oz water) Amount per Quart 10 milliliters
1- Mix thoroughly.
2- Let stand for 30 minutes.
For cloudy water, Double the chemical dose or double the time.
Iodine crystals in plain water works well and it lasts an extremely long time. The amount of iodine dissolved in the water is highly temperature-dependent, and is problematic in a cold environment.
Halazone tablets: requires 6 tablets per liter for 1 hour contact, poor flavor, and the tablets rapidly lose effectiveness when exposed to warm, humid air.
Note: The addition of a small amount of vitamin C (50 mg) to the ready to drink water will render the iodine water nearly flavorless!
Referances:
http://www.stormsurvival.homestead.com/Disinfecting_Water.html
Thomas E. Dietz, MD Emergency & Wilderness Medicine
" target=_blank>http://www.high-altitude-medicine.com/water.html
In the Middle Ages sheaves of straw were thrown into village ponds and wells to ensure the purity of the water. A bale of straw in a farm pond keeps it clear and research has proved the effectiveness of barley straw in particular at keeping pond water clear.
The straw release some natural compounds and soluble carbohydrates from the surface of the straw act on the monocellular green water algae causing them to clump together (flocculate) and sink to the bottom of the pond. In this way green water is often cleared in just a few days. Making the best use of the oxygen in water, safe aerobic decomposition is assured and the natural compounds which keep ponds clear are released into the water. The process continues for about six months giving long term protection.
Lavender could be more effective as a natural algaecide than barley straw if it grows in your area.
Often, your surface run off has a lot of nutrients it and that invites explosive algae growth. I have heard that natural bio filters can set up to soak up the nutrients, especially nitrates, by planting cattails (probably other plants too) but cattails are an excellent wild food plant too.
Some kind of pumped system to ensure sufficient quantities of oxygen in the water would be a great benefit too but will cost you.
This is not good.But the worst news is not in the stock market. It is in fact in some of the other indicators in the market which were indicating potential capital flight, along with still-extreme levels of stress.
I must caution everyone - if you are not prepared for six months to two years of unemployment, you need to be. If you are dependent on credit to survive (that is, if you couldn't make it without your credit cards) you need to fix that now.
Like today now.
Several times I have said "raise cash, get out of debt, be prepared."
I must reiterate this advice and emphasize it, as we may see a bond market dislocation and concurrent stock market crash at any time, without warning. It could be as early as today, in fact.
No, what happened the last three days isn't a crash, although it has now hit my full "bear market" target - 1070 - and in fact exceeded it.
Unfortunately what happened the last three days forces me to reset that target to the 2003 lows, and perhaps as low as four hundred on the S&P 500, 4000 on the DOW.
Needless to say if that happens it will be on the back of an economic catastrophe of a scale similar to the 1930s.
Bernanke's latest load of crap with an "SIV" for commercial paper is just another example of "more of the same" stupidity.
Bernanke and Paulson need to be indicted and jailed for criminal negligence (at best) and put in the stocks where the people can serve up some rotten tomatoes.
This evening we were "treated" to both political candidates shooting their mouths off on matters economic, but saying nothing of substance. Neither candidate was willing to admit the truth - that this "bailout" hadn't worked, that in fact the market had crashed by 15% since it was voted on, and that there is a zero chance of it having any positive impact on one American household.
But no, not even the "moderator" was willing to ask those tough questions, nor was anyone present.
These "debates" are a sham, a fraud and a gigantic waste of time.
Never mind that McCain embarrassed himself by claiming to be a "maverick" and "against pork", when he had just gotten done voting for over $150 billion of it in the Bailout Bill - pork that was not present in the original house version.
Was that claim of being "against pork" good for a "no" vote? Nope. He voted yes, as did Obama.
To those who dismissed the six petitions (you can go over to http://supportedthebailout.org and see the old ones) over the last year, how do you feel about it now?
To those who said that "subprime was contained", how contained is it now?
To those who said that deterioration in consumer credit wasn't going to be a big deal, would you like to revisit that belief?
To those who said that "the nation would not have a recession", do you have any regrets, apologies, or perhaps an outright retraction?
To those who told people to buy buy buy all the way down, how do you feel now that they've lost 30% of their money?
To those politicians from both parties who voted for the ESSA on the claim that it would "stabilize markets", can you show me where it has been, in fact, stabilized? If this is "stable" I'm somewhat curious as to your definition of "unstable".
There is chatter circulating, apparently, that "global equity markets will be closed after the emergency G7 meeting this weekend." That ought to induce confidence - just ask the Russians or Indonesians, both of whom have tried this and it has resulted in an instantaneous crash when they reopened (the Indonesian market was just closed AGAIN this evening, after literally imploding - down by more than 10% - within an hour of starting to trade.)
This is no longer a US problem, but the United States continues to refuse to lead. We continue to "trust" the idiot savants Bernanke and Paulson, both of whom have sung the same song since this crisis began more than a year ago, have been wrong 100% of the time, and yet have found an ear in Congress repeatedly willing to listen to and follow their insanity.
By allowing this action and indeed following the advice of these two each and every one of the 535 members of that body has taken unto themselves the responsibility for the calamity that now faces American investors and the public, as our economic system literally "folds back" and consumes itself. Americans will not be able to retire and have no economic security, and now are losing their jobs in increasing numbers. This will continue.
For more than a year I have tried to get the attention of Congress with petitions, phone calls and faxes. I have been ignored, as have others who have been consistently right in our expectations and beliefs, including "Mish" Shedlock, Nouriel Roubini, Charles Hugh Smith and others. Over 200 degreed economists urged that the "Bailout Bill" not be passed as submitted, including two Nobel Lauretes; all were ignored.
The people of this nation have sat on their hands and watched American Idol, now turning into the NFL, while lapping up the slop from Paulson, Bernanke and Bush about how the "economy is fundamentally strong", instead of showing up in Washington DC to protest or flooding the fax and phone lines demanding that Congress act to reign in the fraudsters.
Let me know how "fundamentally strong" the economy is when you're walking the unemployment line and waiting for your turn at the soup kitchen for something to eat.
Entitlements? Forget 'em. They're gone. Social Security? Medicare? Done. Not today, but in the not-distant future. China, having gotten its money from the $700 billion "bailout", will ditch our Treasuries and refuse to buy more, as they will no more need to sterilize export dollars as our economy collapses. We in turn will be left to twist.
We deserve it, because we could have (but didn't) stand up to their demands that we cover a private dispute instead of handing over $700 billion we don't have. When (not if) the foreign flow of funds inward disappears due to the lack of need for these nations to recycle dollars, we will suddenly find that we have a nearly $800 billion a year hole in our federal budget - a hole that can only be filled by chopping Social Security, Medicare and the Military. Congratulations Congress (and America in general); you didn't really think you'd get away with that, did you?
George W. Bush will go down in history as the President who held the office while we drove our nation's financial system off the cliff, laughing all the while about flipping houses. And despite his protests to the contrary, the history books will record that it was his administration that removed the 12:1 leverage limits, sued New York to prevent them from clamping down on predatory lending, and willfully stuck its head in the sand while Bear Stearns prepared to blow up, never mind ignoring the problem after Bear detonated in February.
Henry Paulson will go down in history as the Treasury Secretary who sold out our nation to the Chinese and London Bankers, then fled the country with $500 million he "earned" creating and selling the very credit instruments that later blew up and sunk the nation.
The members of the House Financial Services Committee, the Senate Banking Committee and the Joint Economic Committee will each have special places reserved in the history books for refusing to deal with Ben Bernanke's raw power grab after Bear Stearns, an act that will ultimately be judged to be the single most important element of the crisis, as it forever put the market in a mood to expect "rule changes" at any time, precipitously damaging trust and liquidity.
The "no short" rule will ultimately be cited as the reason that the market crashed, being that there were no shorts to cover and thus hundreds of stocks, on that fateful day, went "no bid" and had their prices collapse to zero - all at once.
Oil will collapse in price to $20/bbl. Unfortunately nobody will have any money to buy gasoline, or a car, so it won't matter. As in The Depression millions of automobiles will be scrapped after being abandoned by their owners for lack of insurance and registration fee money. Cheap scooters will become the dominant form of transportation for those with jobs, as they will be all most people can afford.
As credit collapses distribution of food and other essentials will break down. Unable to access credit, trucking companies will be unable to get goods to market. The current distribution system for food requires travel of over 500 miles from production to consumption; this is untenable in a market where stable credit is unavailable. Food distribution will be severely impacted and in some areas may break down below critical levels.
Unemployment will reach 25% within two years. Median income will fall by 30% nationally. Foreclosures will reach 20 million homes. The government will step in with HOLC-style remediation but it won't matter - the unemployed won't be able to pay irrespective of the price.
House prices will fall to well under $100,000 nationally on a median basis but with lending all but non-existent you'll need 50% down. A few people will make out like bandits near the bottom, being able to buy up homes for $10,000 each in blocks of 10 at a time - for cash. 60% of America will be renters; nearly half of all homeowners will ultimately lose their homes to foreclosure.
Civil unrest will break out in major cities when incomes fall but the cost of food and essential services fail to come down materially, leaving millions of Americans hungry, broke and homeless. Unlike in the 1930s America will not quietly stand in soup lines - instead they will riot, loot and burn. The National Guard will be called up but will find it impossible to exert meaningful control without shutting down all commerce in the affected areas. The decision will be made to cordon off the cities and deny entry to anyone who does not live in that specific neighborhood, essentially shutting down commercial activity. GDP will fall by 30%.
The S&P 500 will fall to 150 and flatline, a 90% loss. CNBC and Bloomberg will cease broadcasting. Volume will fall to 10% of former levels.
Bleak outlook?
Yep.
Quite possible?
Yep.
Can it be stopped?
Yes, but not for much longer.
The markets are perilously close to a tipping point where they will collapse, after which all of the above will come to pass, and Congressional action (or inaction) will be irrelevant.
Congress will then have to face the people, as will President Bush and his Cabinet, and may God have mercy on our Republican form of government, because history shows that when government mismanages things to this degree and refuses to respond to the will of the people, a "messiah" generally appears with a "solution" - but there will be "compromises."
Like your freedom.
To fix the problem trust must be restored. To restore trust you must stop the lying, expose the liars, prosecute and jail them all, and stop changing the rules in the middle of the game.
This must happen now. Today. Immediately. Not tomorrow, not next week, not after a series of hearings.
Right now.
Market participants must be able to know that when they engage in a transaction it will be transparent, handled fairly, and their rights will be protected.
Our politicians must stop demanding the impossible - that home prices "levitate." House prices cannot be maintained at more than 3x incomes - it simply can't be done. We must encourage home prices to contract to sustainable, affordable levels quickly and efficiently.
Mortgages must return to 30 year fixed notes, 20% down, no more than 36% DTI. No government-linked paper in any GSE may issue outside these guidelines. We must reliquify the mortgage market, and this is the only way to do it - by writing only sustainable mortgages.
Strong consumer protection laws must be written that bar negative balance auto and home loans. The practice of "rolling over" an old car loan into a new one, producing an instant 20% or more deficiency against the vehicles value, must end.
Usury laws must be re-imposed, limiting credit card and other consumer loan interest to no more than a reasonable spread over funding costs. Yes, this will limit credit to less-worthy borrowers. So be it. Unbridled credit got us here, and we must prevent it from happening again.
The excess, unsustainable debt in the system must be defaulted. Whether held by corporations or individuals, it must be purged from the system. Those firms and individuals that are bankrupt must be so declared and their assets liquidated, so they can start over and the market can clear.
People will say that what I ask is unreasonable, unable to be achieved, or "needs study."
You're free to study all you want, but if these actions are not taken immediately, right now, today, the above forecast will come to fruition.
You are seeing the global credit markets unravel in front of your eyes, and it is happening precisely because the fraud, avarice and outright theft has gone unpunished and left in place to siphon off wealth from the average American for more than 20 years, and our President, in that environment, went on national television and threatened the world with a global Depression unless his Treasury Secretary got a $700 billion blank check.
The markets, correctly perceiving there was a problem, did exactly what they did when this same gambit was run during the Fannie and Freddie debacle - they called the bluff.
The check is now on the table and we have but two choices - either pay it or suffer the consequences.
Aussies joke - and hope - that China can save capitalism
The illustration shows a Chinese man in a Superman outfit telling exactly this to a bankrupt, cigar-smoking Wall Street tycoon covering his nakedness in a barrel.
"Oh, you're just loving this, aren't you," the fallen high-flyer replies in the cartoon in The Australian.
Amid turmoil in the world financial sector, the International Monetary Fund predicted Wednesday that China's economy would grow at more than 9.0 percent next year while much of the West faces recession.
That's good news for Australia, whose own economic boom has been driven for years by China's insatiable demand for mineral resources such as iron ore for steelmaking and coal to fire up its industries.
"China is now a major influence in the world economy and it's significant that the IMF doesn't downgrade its growth prospects," Finance Minister Lindsay Tanner told national radio Thursday.
"So we are well positioned to continue to sell an awful lot of exports to China and we believe that that's one of the important factors that's protecting Australia, to some extent, from the influences of the US financial crisis," he said.
Tanner's remarks followed those of Prime Minister Kevin Rudd, a Chinese-speaking former diplomat who has made building closer ties with Beijing a central plank of his foreign policy since taking office last year.
"China has a huge impact on the economies of the east Asia region, as well as the global economy," Rudd said Wednesday.
"My understanding is that China will continue to drive strong economic growth for its own national purposes, but that's also good for countries like Australia because China is such a major trading partner of ours."
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