Lessons from Argentina's economic collapse byEsteban Morales
(Editor's note: the article that follows is a very sobering account of the effect that the collapse of the Argentine economy (1999 - 2002) had on its citizens, as seen through the eyes of one of them. The economic collapse wiped out the middle class and raised the level of poverty to 57.5%. Central to the collapse was the implementation of neo-liberal policies which enabled the swindle of billions of dollars by foreign banks and corporations. Many of Argentina's assets and resources were shamefully plundered. Its financial system was even used for money laundering by Citibank, Credit Suisse, and JP Morgan (sound familar?). The net result was massive wealth transfers and the impoverishment of society which culminated in many deaths due to oppression and malnutrition. I am not sure the same thing is about to happen here, but I am sure that there is a distinct possibility that it might. Just food for thought - JSB)
Wednesday, 13 December 2006
For western countries such as the UK, the first major problems of Peak Oil, assuming there are no oil shocks, will not be the shortage of oil but the economic crises that will occur. Argentina is a recent example of a country that suffered a serious economic crisis, and although Argentina and the UK are not identical, anyone interested in how economic crises can affect individual lives will be very interested in the following vivid description of life for an Argentinian following the economic collapse.
My brother visited Argentina a few weeks ago. He's been living in Spain for a few years now.
Within the first week, he go sick, some kind of strong flu, even though climate isn't that cold and he took care of himself.
Without a doubt he got sick because there are lots of new viruses in my country that can't be found in 1st world countries.
The misery and famine lead us to a situation where, even though you have food, shelter and health care, most others don't, and therefore they get sick and spread the diseases all over the region.
What got me started on this post is the fact that I actually saw this coming, and posted on the subject here at Frugal's, months before the new viruses spread over the country and the news started talking about this new, health emergency, which proves that talking, thinking and sharing ideas with like minded people (you guys), does help to see things coming and prepare for them with enough time.
So I started thinking about several issues, what I learned (either the hard way or thanks to this forum) after all these years of living in a collapsed country that is trying to get out an economical disaster and everything that comes along with it.
Though my English is limited, I hope I'm able to transmit the main ideas and concepts, giving you a better image of what you may have to deal with some day, if the economy collapses in your country.
URBAN OR COUNTRY?
Someone once asked me how did those that live in the country fare. If they were better off than city dwellers.
As always there are no simple answers. Wish I could say country good, city bad, but I can't. Because if I have to be completely honest, and I intend to be so, there are some issues that have to be analyzed, specially security.
Of course that those that live in the country and have some land and animals were better prepared food-wise. No need to have several acres full of crops. A few fruit trees, some animals, such as chickens, cows and rabbits, and a small orchard was enough to be light years ahead of those in the cities.
Chickens, eggs and rabbits would provide the proteins, a cow or two for milk and cheese, some vegetables and fruit plants covered the vegetable diet, and some eggs or a rabbit could be traded for flower to make bread and pasta or sugar and salt.
Of course that there are exceptions.
For example, some provinces up north have desert climate, and it almost never rains. It is almost impossible to live of the land, and animals require food and water you have to buy. Those guys had it bad, no wonder the northern provinces suffer the most in my country.
Those that live in cities, well they have to manage as they can. Since food prices went up about 200%-300%. People would cut expenses wherever they could so they could buy food. Some ate whatever they could, they hunted birds or ate street dogs and cats; others starved.
When it comes to food, cities suck in a crisis. It is usually the lack of food or the impossibility to acquire it that starts the rioting and looting when TSHTF. When it comes to security things get even more complicated.
Forget about shooting those that mean you harm from 300 yards away with your MBR. Leave that notion to armchair commandos and 12 year old kids that pretend to be grown ups on the internet.
Some facts:
1) Those that want to harm you/steal from you don't come with a pirate flag waving over their heads.
2) Neither do they start shooting at you 200 yards away.
3) They wont come riding loud bikes or dressed with their orange, convict just escaped from prison jump suits, so that you can identify them the better. Nor do they all wear chains around their necks and leather jackets. If I had a dollar for each time a person that got robbed told me, "They looked like NORMAL people, dressed better than we are", honestly, I would have enough money for a nice gun. There are exceptions, but don't expect them to dress like in the movies.
4) A man with a wife and two or three kids can't set up a watch. I don't care if you are SEAL, SWAT or John Freaking Rambo, no 6th sense is going to tell you that there is a guy pointing a gun at your back when you are trying to fix the water pump that just broke, or carrying a big heavy bag of dried beans you bought that morning.
The best alarm system anyone can have in a farm are dogs. But dogs can get killed and poisoned. A friend of mine had all four dogs poisoned on his farm one night, they all died.
After all these years I learned that even though the person that lives out in the country is safer when it comes to small time robberies, that same person is more exposed to extremely violent home robberies. Criminals know that they are isolated and their feeling of invulnerability is boosted. When they assault a country home or farm, they will usually stay there for hours or days torturing the owners. I heard it all: women and children getting raped, people tied to the beds and tortured with electricity, beatings, burned with acetylene torches.
Big cities aren't much safer for the survivalist that decides to stay in the city. He will have to face express kidnappings, robberies, and pretty much risking getting shot for what's in his pockets or even his clothes.
So, where to go? The concrete jungle is dangerous and so is living away from it all, on your own.
The solution is to stay away from the cities but in groups, either by living in a small town-community or sub division, or if you have friends or family that think as you do, form your own small community.
Some may think that having neighbors within "shouting" distance means loosing your privacy and freedom, but it's a price that you have to pay if you want to have someone to help you if you ever need it. To those that believe that they will never need help from anyone because they will always have their rifle at hand, checking the horizon with their scope every five minutes and a first aid kit on their back packs at all times.... Grow up
SERVICES
Whatever sort of scenario you are dealing with, services are more than likely to either suffer in quality or disappear all together. Think ahead of time, analyze possible SHTF scenarios and which service should be affected by it in your area.
Think about the most likely scenario but also think outside the box. What's more likely? A tornado? But a terrorist attack isn't as crazy as you though it would be a few years ago, isn't it?
Also analyze the consequences of those services going down. If there is no power then you need to do something about all that meat you have in the fridge, you can dry it or can it. Think about the supplies you would need for these tasks before you actually need them.
You have a complete guide on how to prepare the meat on you computer... how will you get it out of there if there is no power? Print everything that you consider important.
WATER
No one can last too long without water. The urban survivalist may find that the water is of poor quality, in which case he can make good use of a water filter, or that there is no water available at all. When this happens, a large city were millions live will run out of bottled water within minutes.
In my case, tap water isn't very good. I can see black little particles and some other stuff that looks like dead algae. Taste isn't that bad. Not good but I know that there are parts of the country where it is much worse. To be honest, a high percentage of the country has no potable water at all.
If you can build a well, do so, set it as your top of the list priority as a survivalist. Water comes before firearms, medicines and even food.
Save as much water as you can. Use plastic bottles, refill soda bottles and place them in a cool place, preferably inside a black garbage bag to protect it from sun light. The water will pick some plastic taste after a few months, but water that tastes a little like plastic is far way better than no water at all.
What ever the kind of SHTF scenario you are dealing with, water will suffer. In my case the economical crash created problems with the water company, that reduces the maintenance and quality in order to reduce costs and keep their income in spite of the high prices they have to pay for supplies and equipment, most of which comes from abroad, and after the 2001 crash, costs 3 times more.
As always, the little guy gets to pay for it.
Same would go for floods or chemical or biological attacks. Water requires delicate care and it will suffer when TSHTF in one way or another. In this case, when you still have tap water, a quality filter is in order, as well as a pump if you can have one. A manual pump would be ideal as well if possible.
Estimate that you need a approximately a gallon per person per day. Try to have at least two-four weeks worth of water. More would be preferable.
POWER
I spent WAY to much time without power for my own taste. Power has always been a problem in my country, even before the 2001 crisis.
The real problem starts when you spend more than just a few hours without light. Just after the SHTF in 2001 half the country went without power for 3 days.
Buenos Aires was one big dark grave. People got caught on elevators, food rot, hospitals that only had a few hours worth of fuel for their generators ran out of power.
Without power, days get to be a lot shorter. Once the sun sets there is not much you can do.
I read under candle light and flashlight light and your head starts to hurt after a while. You can work around the house a little bit but only as long as you don't need power tools.
Crime also increases once the lights go out, so whenever you have to go somewhere in a black out, carry the flashlight on one hand and a handgun on the other.
Summarizing, being in a city without light turn to be depressing after a while. I spent my share of nights, alone, listening to the radio, eating canned food and cleaning my guns under the light of my LED head lamp. Then I got married, had a son, and found out that when you have loved ones around you black outs are not as bad. The point is that family helps morale on these situations.
A note on flashlights. Have two or three head LED lights. They are not expensive and are worth their weight in gold. A powerful flashlight is necessary, something like a big Maglite or better yet a SureFire, specially when you have to check your property for intruders. But for more mundane stuff like preparing food, going to the toilet or doing stuff around the house, the LED headlamp is priceless. Try washing the dishes on the dark while holding a 60 lumen flashlight on one hand and you'll know what I mean. LEDs also have the advantage of lasting for almost an entire week of continuous use and the light bulb lasts forever.
Rechargeable batteries are a must (ed. Get a solar powered battery charger) or else you'll end up broke if lights go out often. Have a healthy amount of spare quality batteries and try to standardize as much as you can.
I have 12 Samsung NM 2500Mh AA and 8 AAA 800mh for the headlamps. I use D cell plastic adaptors in order to use AA batteries on my 3 D cell Maglite. This turned out to work quite well, better than I expected.
I also keep about 2 or 3 packs of regular, Duracell batteries just in case. These are supposed to expire around 2012, so I can forget about them until I need them.
Rechargeable NM batteries have the disadvantage of loosing power after a period of time, so keep regular batteries as well and check the rechargeable ones every once in a while.
After all these years of problems with power, what two items I would love to have?
1) The obvious. A generator. I carried my fridge food to my parents house way to many times on the past. Too bad I can't afford one right now.
2) A battery charger that has both solar panel and a small crank. They are not available here. I saw that they are relatively inexpensive in USA. Do yourself a favor and get one or two of these. Even if they don't charge as well as regular ones, I'm sure it will put out enough power to charge batteries for LED lamps at least.
GAS
Gas has decreased in quality as well, there is little gas. Try to have an electric oven in case you have to do without it.
If both electricity and gas go down, one of those camping stoves can work as well, if you keep a good supply of gas cans.
The ones that work with liquid fuel seem to be better on the long run, since they can use different types of fuel.
You can only store a limited amount of compressed gas and once you ran out of it, you are on your own if stores are closed of they sold them out.
Anyway, a city that goes without gas and light for more than two weeks is a death trap, get out of there before it's too late.
A DIFFERENT MENALITY
I was watching the People & Art channel with my wife the other night. It was a show where they film a couple for a given period of time and some people vote on who is the one with the worst habits, the one they find more annoying.
We were in our bed, and this is when I usually fall asleep but since the guy was a firearms police instructor I was interested and managed to stay awake.
At one point the guy's wife said that she found annoying that her husband spent 500 dollars a month on beauty products for himself. 500 USD on facial cream, special shampoo and conditioner, as well as having his nails polished! If you are that guy and happen to be reading this, or if you know him, I'm sorry, but what an idiot!!
"500 USD, that's a small generator or a gun and a few boxes of ammo" I told my wife.
"That's two months worth of food" she said.
We were each thinking of a practical use for that money, the money this guy was practically throwing away.
Once the SHTF, money is no longer measured in money, but you start seeing it as the necessary goods it can buy. Stuff like food, medicine, gas, or the private medical service bill.
To me, spending 500 dollars on beauty products, and to make it worse, on a guy? That's simply not acceptable.
The way I see it, someone with that mentality can't survive a week without a credit card, no use in even considering a SHTF scenario. And this guy is a firearms instructor?... probably the kind of guy that will say that a handgun is only used to fight his way to his rifle... and his facial night cream...
Once you experience the lack of stuff you took for granted, like food , medicines, your set of priorities change all of a sudden. For example, I had two wisdom tooth removed last year. On both occasions I was prescribed with antibiotics and strong Ibuprofen for the pain. I took the antibiotics( though I did buy two boxes with the same recipe just to keep one box just in case) but I didn't use the Ibuprofen, I added it to my pile of medicines.
Why? because medicines are not always available and I'm not sure if they will be available in the future. Sure, it hurt like hell, but pain alone isn't going to kill you, so I sucked it up. Good for building up character if you ask me . Make sacrifices so as to ensure a better future, that's the mentality you should have if you want to be prepared. There's stuff that is "nice to have" that has to be sacrificed to get the indispensable stuff.
There's stuff that is not "basic need stuff" but it's also important in one way or another.
My wife goes to the hairdresser once every month or two. It's not life or death, but it does make her feel better and it boosts her morale. I buy a game for the Xbox or a movie to watch with my wife every once in awhile, just to relax. 7 or 10 dollars a month are not going to burn a hole in my pocket.
Addictions such as alcohol, drugs or even cigarettes should be avoided by the survivalist. They are bad for your health, cost a lot of money that could be much better spent, and create an addiction to something that may not be available in the future.
Who will have to tolerate your grouchy mood when your brand of smokes is no longer imported after TSHTF?
GRAY/BLACK MARKET
Once the SHTF the black/gray market will take no time to appear all around you.
In my country, gray markets were even accepted in the end. At first it was all about trading skills or craft products for food. Districts and towns would form their own barter markets, and created their own tickets, similar to money, that was used to trade.
This didn't last long. Those tickets were easy to make on your home computer, there was no control and eventually people went back to paper money.
These markets were usually placed on warehouses or empty land, and were managed by some wise guy and a few thugs or hired security.
Anyone can go rent a kiosk inside these markets for about 50-100 pesos (about 20-30 dollars) a day and sell his goods and services.
Piece within these markets is usually respected... lets just say that these managers don't call the police if someone tries anything funny, like stealing, fighting or taking advantage of women. That's not good for their business and anyone that tries to mess with their business finds out how much pain the human body can actually experiment or gets a free ticket to meet the Lord.
Sometimes even uniformed cops manage security on these markets, for a small fee of course. As always, you still have to be careful. They may still try to pick your pockets or even attack you once you leave the market. Once you leave the market, you are on your own, as always.
This market evolves, and now a lot of different products are available. Today I visited my local market, a warehouse that is fairly well set up and cleanly managed. They had problems for selling stolen merchandise and fake Brand name clothes a few days ago.
What can be found at a local markets? Mostly food and clothing. Some have more variety than others but cheese, canned food, spices, honey, eggs, fruits, vegetables, beer, wine and cured meat are generally available, same as bakery products and pasta. These are less expensive than those found at supermarkets. Fresh fish is sometimes available but not always, people don't trust much products that need refrigeration, and they get those at supermarkets instead.
Clothes are also popular and you can find copies of brand name clothes, imitations, or even original stolen new clothes, the same goes for shoes and snickers. Children clothes, underwear, socks, sheets and towels are all very popular. Some sell toys, but they are always China made, mostly poor quality though there are some few exceptions.
Others sell tools, also made in China can be found as well, but they are of poor quality.
Some offer their services and repair stuff or offer work as handyman.
You would be amazed of the junk that these guys manage to fix: TVs, CD players, Power tools, etc. They even manage to solder the small integrated circuits boards sometimes. Give one of these guys a screw driver and a bar of chocolate and he will fix a nuclear submarine.
After food and clothes, the 3rd most popular item has to be CDs and DVDs, movies, music, play station 2 and Xbox games, programs, it all ends up there just one or two days after the official release in USA. Seems that they have a guy hidden under Bill Gate's desk or something.
Anyway, almost everything can be found there, and if you want, you can ask around, talk to the right guy and buy illegal stuff like drugs or black market guns and ammo. The quality of the drugs is questionable, of course, and a lot of addicts die from the mixtures these guys sell. Guns are mostly FM High Powers, Surplus 1911s and Colt .45s, Sistemas, and old Colt Detective revolvers in 38 special that found their way from police and military armories into the black market. Condition isn't very good but if you have money you'll be amazed of what you can end up with. Everything that is used by the military and police, including SMGs a, Browning 50 BMG Machine guns, and even frag grenades, is available in the black market, if the customer has the amount of money and a little patience, of course. The big guns may take a while, but the handguns and grenades are readily available.
GOLD:
Someone hit me in the head please because I messed up about the gold issue.
Everyone wants to buy gold! "I buy gold. Pay cash" signs are everywhere, even on TV! I can't believe I'm that silly!
I just didn't relate it to what I read here because they deal with junk gold, like jewelry, either stolen or sold because they needed the money, not the gold coins that you guys talk about. No one pays for the true value of the stuff, so big WARNING! Sign on people that are buying gold coins.
Since it is impossible to determine the true mineral percentage of gold, small shops and dealers will pay for it as regular jewelry gold.
What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewelry. They should be less expensive than gold coins, and if the SHTF bad, you'll not be losing money, selling premium quality gold coins for the price of junk gold. If I could travel back in time, I'd buy a small bag worth of gold rings.
Small time thieves will snatch gold chains right out of your neck and sell them at these small dealers found everywhere. This is VERY common at train stations, subways and other crowded areas.
So, my advice, if you are preparing for a small economical crisis, gold coins make sense. You will keep the value of the stuff and be able to sell it for its actual cost to gold dealers or maybe other survivalists that know the true value of the item.
In my case, gold coins would have been an excellent investment, saving me from loosing money when the local economy crashed. Even though things are bad, I can go to a bank down town and get paid for what a gold coin is truly worth, same goes for pure silver. But where I live, in my local are small time dealers will only pay you the value of junk gold, no matter what kind of gold you have. So, I'd have to say that if TSHTF bad, gold jewelry is a better trade item than gold coins.
GUNS, AMMO AND OTHER GEAR
After TSHTF in 2001, only the most narrow minded, brain washed, butterfly IQ level idiots believed that the police would protect them from the crime wave that followed the collapse of our economy.
A lot of people that could have been considered antigun before, ran to the gun shops, seeking advise on how to defend themselves and their families. They would buy a 38 revolver, a box of ammo, and leave it in the closet, probably believing that it would magically protect them from intruders.
Oh, maybe you don't think that firearms are really necessary or your beliefs do not allow you to buy a tool designed to kill people. So you probably ask yourself, is a gun really necessary when TSHTF? Will it truly make a difference?
Having gone through a shtf scenario myself, total economical collapse in the year 2001, and still dealing with the consequences, 5 years later, I feel I can answer that question.
YES, you need a gun, pepper spray, a machete, a battle axe, club with a rusty nail sticking out of it, or whatever weapon you can get hold of.
A LOT has been written on survival weapons. Everyone that is into armed survival has his or her own idea of the ideal gun battery. Some more oriented to a hunting point of view, others only as self defense means and others consider a little of both, and look for general purpose weapons.
Talking about guns, there is one special subject I want to rectify, and it's the point on what's the primary weapon for the survivalist, specially a urban survivalist that has to function in a society, yes, even after the SHTF.
People, if you are interested in real world SHTF situation, and you want to prepared for the real deal, then understand that this isn't black or white.
You wake up one day and listen on the radio that the economy collapsed and that the stock market closed indefinitely.
CRIME AND INSECURITY
Even though crime has always been an issue in South America, my country was quite the exception. It was dangerous, yes but nothing like after the 2001 economical crisis. One used to be able to let kids play on the sidewalk, or walk back home from a party, a few blocks, and be somewhat safe. This all changed now. There are no kids playing on the sidewalks anymore. I should emphasize this a little more. There are absolutely NO kids playing on the sidewalks at all, at any time of the day. Maybe a kid rides his bike a few meters on the sidewalk, but always under the supervision of an adult. A kid riding a bike on his own will get that bike stolen in no time, probably get hurt in the process, therefore no responsible parent leaves a kid alone on the street. Teenagers present a greater problem. You can't keep a 15 or 16 year old inside a house all day long, and even though they are big enough to go out on their own, when the sun goes down things get much worse.
This is when parents organize themselves; either taking them to someone's house or to a club and picking them up at a certain time. Taxis and remises are used sometimes , but there have been lots of cases of girls getting raped, so no parent worth a buck leaves his son or daughter in hands of a stranger. After years of living like this, almost everyone learned to be careful; sometimes they had to learn the hard way. Practically no one leaves a door or window opened or unlocked. Nor do they hang out in front of the house talking to friends. A bad guy might just see you there, like a sitting duck, pull a gun on you and take you inside your house.
There are no "bandit's law" anymore. One used to hear people talk about "You shouldn't resist a robbery, give them what they want and they'll go away". That holds true no more. These guys are under the influence of drugs, epoxy glue, or just hate your guts so much, because you have a better life than they ever dreamed of, because they were abused since the day they were born, that they will hurt and humiliate you as much as they can. Letting a criminal inside you house almost guaranties you that he will rape/beat/ torture and abuse whoever they find inside.
I personally drew a line a few years ago and decided, after one long, serious conversation with my wife; that no one would be allowed inside the house, no matter what. We figured that there are worse things than death. Having decided that, I make sure I always have a weapon on me. They'll have to pay dearly for my life, plus interests.
By far, the most dangerous moment of the day, is when I (or my wife) leave/enter my house. A solid, secure house cannot be broken in easily, so criminals wait until you are standing on front of the door with the keys on your hand to jump on you. This is why we are extra alert when approaching our house, look all around us and if we see anything strange, keep walking around the block or keep on driving. No door is ever opened when there is a strange person around. Whenever someone knocks on our door (and we don't know him/her), they are answered from a second story window. Criminals sometimes disguise as electric company guys or something like that, saying that they have to fix something. NO! If there is something to be fixed they can fix it on the sidewalk. Anything inside your house is your responsibility and the company is not going to fix it for you. Either way, it's always better to play it safe, Better to be rude than dead.
On the car/driving issue, that calls for an entire post dedicated to SHTF driving. For now I'll just say that windows and doors have to be closed at all times, a weapon must be within arms reach, and that stop signs and traffic lights have a hole new meaning once TSHTF. If your country ever falls as mine did, you'll remember me whenever you see a traffic light. You never stop at a red lights or stop sign unless there is traffic, especially at night.
At first, police would write you a ticket for not stopping at a red light if they saw you (another way of saying that they will ask for a bribe if they see you pass a red light), but after a few months they realized that nothing could be done, people would rather risk a ticket than risking their lives, so they decided to turn traffic lights to permanent yellow at night, after 8 or 9 PM. This is, of course, very dangerous. Night car accidents are both frequent and brutal since sometimes both cars hit each other at full speed.
MissinLink asked some good questions that might interest others as well, and since we are on the security issue, here they are:
"Do the invaders of homes in the country just drive up in cars or trucks? Do they hide and sneak up? How do these home invaders attack a home in the country? A similar question could be asked for homes in the city."
Sometimes they just drive up to where you are working, if you are far away from the home, but most of the time they sneak up on you. Criminals are not stupid, and they will spend days checking the place and specially YOUR ROUTINE. For example, if they see that you lock the gate at night, as most do, they will wait for you behind a tree until you are close. This is done a lot. Dogs are the best alarm you can find, and criminals know that. They will poison them with pills when you go to sleep and attack the place in the middle of the night. I know of many that had their dogs killed. If they think that security is tight, they will just hide near the main gate, and wait for you to leave or return. When you stop at the gate and must get out of the truck to open/close the main gate, they attack. I'd say that the most frequent kind of attack is attacking by surprise when you enter/leave your home.
"Most common times of attack? Day night evening morning? I understand occur when coming or going from ones home, etc."
7 am, 9 am, 1pm 7pm, all are common times for attacks. There is no "safe" hour of the day. Night is particularly dangerous. Maybe attacks during the day are faster, they want to get some money or jewelry and leave fast, while at night they might stay inside more time, maybe till the next day. But there are no fixed patterns. If I could give one advice concerning SHTF security, it would be: Eyes and ears wide open when you enter/leave your home. If possible, keep a gun on your hand when doing either one. If something looks, even "feels strange, then go around the block and check again, carefully. If you see them still there, either call the police (if still available) or get help. If you approach the house with a large number of people they will leave. One time, I saw a couple of strange looking guys at my door. I went round the block and saw them still there. I started flashing the car lights and the horn and they left. I had a gun with me, though, so be careful when trying this. Also, remember that a car is one heavy, powerful piece of machinery. I know a guy that had one of those big chrome-tube bumpers installed on his truck, especially for hitting those that were stupid enough to try and make him stop by standing in front of the car.
If I had a truck, I would do so myself. Though I would keep my mouth shut about it, as always. Just say that you think it looks cool or something. Every now and then someone tries to force me to stop my car by standing in front of it (I suppose there are still fools out there that get robbed this way), in the middle of the street. I just aim at them and accelerate at full speed. They always jump out of the way before I hit them. By the way, at first, doing this made me feel nervous, but can you believe that now it's just common driving, as normal as changing gears? I guess it's a little sad.
http://www.silverbearcafe.com/private/10.08/tshtf2.html
Next week we will cover the second and final part of this article
S.Africa: Shocker: We ran out of Gold coins - KrugerRands! - A shortage of Gold coins?Date Posted: Tuesday 04-Nov-2008
I wanted to place an order for some Gold and had a chat to a broker at the Gold coin exchange. He told me that there are no KrugerRands as of yesterday. He said for the 3rd time in 2 years, there were no gold coins available for a given day.He told me that they got an order for 5,000 gold coins from Switzerland and there is a rumoured shortage of gold coins in Germany.He told me something about America putting a stop to all gold coin sales for quite a while - we reported this on AC a while back. Then he said that in America they had forward-sold something like 200,000 tons of gold and that was why they had put a halt to trade. (I don't quite understand it myself).But yeah... interesting... people are buying gold despite market manipulation.I see some of the charts predict the Dow Jones will rise to about 2,500 points. That is of course after a worldwide bailout. But do these loony Govts think you can keep markets going up forever? What's the bet that that market will rise somewhat and will then come crashing down again since we are in a bear market.Anyway... I was quite astounded to see that we were short of KrugerRands, even if it is only for a day or two!! Not ONE available to buy in Johannesburg - once the golden city.The current price of a KrugerRand is: R8,000 for a 1 oz coin. And R1050 for a 1/10th Oz coin.
http://www.africancrisis.co.za/Article.php?ID=37537
A RUN ON PRECIOUS METALS
As Crisis Grows, Investors Look to Gold
By Anne Seith in Frankfurt
Worried about their nest eggs in the global financial crisis, a growing number of investors are swapping cash for gold. Dealers of coins and gold bars are having trouble keeping up with demand.
Robert Hartman sounds a bit breathless as he answers his phone. "This is already a state of emergency," the CEO of the Munich-based gold dealer Pro Aurum tells SPIEGEL ONLINE. For two weeks, he has been unable to fulfil all the gold orders his company has been receiving. Customers are storming its online shop. And the banks the company usually services just keep on ordering. At the company's fulfilment center, orders are packaged seven days a week. "I'm just happy our employees have been willing to do this," he says.
Since the collapse of US investment bank Lehman Brothers led to the sudden widening of the global financial crisis, nervous savings depositors and investors have been storming the gold market. Tuesday, Hartmann says, was a day unlike any other he has ever experienced, with massive amounts of gold being sold across the globe. Roger Breitkopf, a precious metals dealer at German banking multinational Deutsche Bank adds: "Compared to August, (gold) sales have increased tenfold."
Indeed, anything that shines is selling right now -- gold coins like the Krugerrand, the American Eagle, the Maple Leaf and even the Vienna Philharmonic as well as gold bars in all sizes and weights. The phenomenon has fueled an increase in gold prices that has seen the cost of a fine ounce rise from $730 on Sept. 11 to $880 on Wednesday. "In light of the run on the market, it's going to be even higher soon," says Eugen Weinberg, an analyst at Germany's Commerzbank. Gold funds are also in high demand as well as shares in gold mining operations, whose stocks were falling dramatically before the crisis.
'People Can Always Sell a Bit of Gold'
The desire for the security of gold is now "reaching the broad masses," Weinberg believes. And it's no longer just small depositors who are fleeing to gold, says dealer Hartmann. Major investors are also shifting their assets. "You can tell because the value of total orders is climbing faster than the volume," he says. It's a clear signal that people with savings are preparing for a crisis. Breitkopf sums up the phenomenon in a few words: "Many are thinking: Who knows what's going to come next?" If worse comes to worst, "people know they can always buy something with a bit of gold."
Belief in gold investments in uncertain times isn't misplaced, either. Few other precious metals have proven as resilient to general economic crises as gold. According to Weinberg, 70 percent of all gold is used to make jewellery, so its price is less dependent on industrial developments than other precious medals. "Since July, the price of platinum has halved," Weinberg says, offering a comparison.
Gold is also tax-free in Germany. "For so-called white metals like silver and platinum, you have to pay a 19 percent value-added tax, but not for gold," explains Deutsche Bank expert Breitkopf. And that's another reason people flock to gold rather than other metals.
Pro Aurum as well as banks are having great difficulty meeting the current spike in demand. "We can't mail out more than 300 or 400 packages a day," says Hartmann. Besides, many coins and bars are already sold out. The problem isn't that there isn't enough gold available. "The gold that's recently been mined will be enough for decades," Weinberg says, reassuringly. The problem is that coins and gold bars can't be produced quickly enough.
For example, the most beloved of all gold coins, the Krugerrand, is more difficult than ever to obtain. Despite the fact that Rand Refinery -- where the coins weighing exactly one fine ounce (31.1 grams) are minted -- produces at its full capacity, seven days a week, it is still unable to meet demand. And the situation doesn't look much better with other gold coins. "Orders are no longer being taken for the American Eagle and the American Buffalo," Hartmann says. And orders from gold bar producers are sometimes backlogged for weeks, Deutsche Bank trader Breitkopf says.
Few expect demand to diminish or prices to fall -- even if the financial and stock markets recover unexpectedly quickly. Most analysts believe the contrary -- that the price per ounce will continue to rise, perhaps once again breaking the $1,000 mark. "The fourth quarter is traditionally a good one," says Weinberg. "In Western countries it's Christmas time, in India it's wedding season and there are also many Muslim holidays."
And even if gold prices fall by a few percentage points, it will still be a good investment, trader Hartmann advises. "The loss then would be like an insurance premium," he says. "In return, your money will be safe in the event of a crisis."
http://www.spiegel.de/international/business/0,1518,druck-581923,00.html
U.S. Stocks Post Biggest Post-Election Drop on Economic Concern
By Elizabeth Stanton
Nov. 5 (Bloomberg) -- The stock market posted its biggest plunge following a presidential election as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.
Citigroup Inc. tumbled 14 percent and Bank of America Corp. lost 11 percent as the Standard & Poor's 500 Index and Dow Jones Industrial Average sank more than 5 percent. Nucor Corp., the largest U.S.-based steel producer, slid 10 percent after bigger rival ArcelorMittal doubled production cuts amid slowing demand. Boeing Co., the world's second-largest commercial planemaker, lost 6.9 percent after UBS AG forecast a 3 percent drop in global air traffic next year.
``We had an election yesterday; that doesn't mean the problems go away,'' said Kevin Rendino, a Plainsboro, New Jersey- based money manager at BlackRock Inc. who oversees $10 billion. ``We still have an economic slowdown.''
The S&P 500 tumbled 52.98 points, or 5.3 percent, to 952.77, erasing yesterday's 4.1 percent rally. The Dow retreated 486.01, or 5.1 percent, to 9,139.27. The Russell 2000 Index of small U.S. companies fell 5.7 percent to 514.64. The MSCI World Index of 23 developed markets decreased 2.5 percent to 982.98.
The slide halted an 18 percent rebound from the S&P 500's five-year low on Oct. 27. The benchmark for U.S. equities has lost more than 35 percent this year, the steepest annual plunge since 1937, and Obama will have to contend with an economy pummeled by the fastest contraction in manufacturing in 26 years and the lowest consumer confidence.
Biggest Rally Erased
The market's decline came a day after the biggest presidential Election Day gain since the New York Stock Exchange first opened for trading on a voting day in 1984.
The report by ADP Employer Services showed companies cut 157,000 jobs in October, the most since November 2002 when the U.S. was emerging from a recession. The Institute for Supply Management said service industries in the U.S., which make up 90 percent of the economy, contracted by the most on record.
About 1.3 billion shares changed hands on the NYSE, 11 percent less than the three-month daily average.
Citigroup lost $2.05 to $12.63 and Bank of America plunged $2.78 to $21.75. The S&P 500 Financials Index sank 8.8 percent after extending declines late in the day following Oppenheimer & Co. analyst Meredith Whitney's prediction on CNBC that the mortgage market will contract and more than $2 trillion in available credit-card lines will be pulled from the system.
Whitney also said potential loan modifications under an Obama administration will hurt banks and diminish their appetite for risk.
$6 Trillion Lost
The S&P 500 has lost about 39 percent since it peaked at 1,565.15 on Oct. 9, 2007, as the U.S. economy contracted 0.3 percent last quarter and credit-related losses and writedowns by global financial firms approached $700 billion. More than $6 trillion was erased from U.S. equities this year by the worst financial crisis since the Great Depression.
Nucor sank $4.16 to $35.50. Luxembourg-based ArcelorMittal reported third-quarter profit that fell short of analyst estimates, said its global output will drop by more than 30 percent, and forecast fourth-quarter earnings will fall as much as 48 percent. The company's New York-registered shares slumped 22 percent to $24.88, their biggest retreat in seven years.
Boeing fell $3.67 to $49.55. Its share price, which rose 28 percent from Oct. 10 through yesterday, ``is at least six to nine months from bottoming and beginning to mover higher again,'' David E. Strauss, a New York-based analyst at UBS, wrote in a report. Aircraft deliveries may tumble 29 percent from 2009 to 2012, the analyst said.
`Continued Softening'
Textron Inc. lost $1.71, or 9.2 percent, to $16.93. The world's biggest business-jet maker through its Cessna unit reduced the number of Citation jets it plans to deliver next year, citing ``continued softening in the global economic environment.''
Stocks extended their retreat even as Nancy Pelosi, Speaker of the House of Representatives, said Democrats may seek two economic stimulus measures if President George W. Bush limits the size of a plan to be considered during the post-election ``lame- duck'' session. Obama's party captured at least 19 seats in the House and at least five in the Senate, expanding its congressional majority.
General Growth Properties Inc. tumbled almost 50 percent to $2.25 for the biggest drop in the S&P 500. The U.S. mall owner that has lost more than 90 percent of its market value on concern it won't be able to refinance debt coming due this year reported a wider third-quarter loss and suspended its quarterly dividend.
Bond Insurers
MBIA Inc. and Ambac Financial Group Inc. slumped after the bond insurers posted wider losses than analysts estimated. MBI fell 22 percent to $8.16. Ambac, dropped from the S&P 500 in June, fell 41 percent to $2.01. Slumping credit markets forced the companies to increase reserves for claims.
Pioneer Natural Resources lost 15 percent to $24.79. The oil and natural-gas producer in North America and Africa reported third-quarter earnings that missed analyst estimates and said it will cut drilling activity.
Sara Lee Corp. slid 14 percent to $10.20. The maker of frozen cakes and Jimmy Dean sausages said full-year profit will be less than it previously estimated because of falling foreign currencies and waning demand in Europe. (You can read the rest at the link below)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aj_ayFUP0riQ&refer=worldwide
Venezuela offers Russians big gold projects
Source: Reuters
http://www.alertnet.org/thenews/newsdesk/N06416298.htm
Have is a couple of articles i could not pass up that give a brief look into our culture as Americans at the present time.
Michigan Legislature getting 1st female Muslim
DETROIT (AP) - Michigan is getting its first female Muslim legislator, thanks in large part to her Jewish boss, the incumbent.
Rashida Tlaib, a lawyer, community activist and daughter of Palestinian immigrants, easily won a House seat in Tuesday's general election after emerging from an eight-way Democratic primary with 44 percent of the vote in August.
Tlaib, 32, said she wouldn't have run but for the repeated urging of Democratic state Rep. Steve Tobocman, who is stepping down because of term limits. Once she decided to run, she threw herself into it, knocking on 8,000 doors and hitting each household twice.
Southeastern Michigan has about 300,000 people with roots in the Arab world, but few of them live in Tlaib's largely black and Hispanic district in southwest Detroit.
"We view her victory as a sign that Michigan Muslims are welcomed as a part of our state's multi-faith and multiethnic society," said Dawud Walid, Michigan director of the Council on American-Islamic Relations.
According to the American Muslim Alliance, only nine Muslims were serving in state legislatures nationwide before Tuesday's elections, and only one of them is a woman. There are two Muslim members of Congress _ Democrats Keith Ellison of Minnesota and Andre Carson of Indiana.
The Michigan Legislature's first known Muslim member, James Karoub, served three terms in the state House in the 1960s.
Tobocman said he first met Tlaib about five years ago when she was working for the Arab Community Center for Economic and Social Services, where she did advocacy work for immigrants.
"I was just really, really impressed," he said. When he later became majority floor leader and got another staff slot, he recruited Tlaib for the job. He said she brings a passion for social justice and the ability to work with people across the political aisle with very different outlooks.
"She's someone who just intuitively understood the process right off the bat," Tobocman said.
The election was only one of many firsts for Tlaib. The eldest of 14 children of a retired Ford Motor Co. worker and his wife, she was the first in her family to earn a high school diploma. She went on to finish college and law school while helping raise 13 siblings.
"My parents ... are amazing Americans," she said. "They never thought this would ever happen."
http://wtop.com/?nid=213&sid=1512608
Food pantries mobilize as ranks of hungry grow
"I've never seen this type of demand before. As a food bank, you just think if you can make it through the summer and the holiday season, you can breathe a little easier because the load gets a little lighter. But this year that has not been the experience. It's been full-throttle every day."— Denise Holland, head of Harvest Hope Food Bank in Columbia, S.C.
By Charisse Jones, USA TODAY
As the economy falters and food prices seemingly rise as fast as the unemployment rolls, the face of hunger is evolving.
When Jennifer McLean, vice president of operations of New York's City Harvest, sees those lining up for help, she notices the schoolteacher standing in line at the food pantry. The cab driver calling his church for help. And more children whose families do not have enough to eat.
"The third and fourth ripple of a Lehman Bros. closing is the dry cleaner, the car service employee … who may have never turned to a soup kitchen or food pantry (before) who may turn to it for the first time in their lives," McLean says.
Need is immediate
To address a potentially unprecedented need for emergency food starting this winter, Feeding America, the USA's largest hunger relief charity, is announcing today the launch of a national fleet of mobile pantries to carry fresh vegetables and other groceries to the hungry.
Feeding America will receive $4.5 million from Kraft Foods to purchase 25 refrigerated trucks over three years that will be dispatched to rural communities and urban pockets across the nation where grocery stores and food pantries are difficult to get to or find.
"We certainly understand in this difficult economic environment … this issue is more important than ever, and it's one of the reasons we've chosen to step up at this time to try and address it," says Irene Rosenfeld, Kraft's chairwoman. She says the pantries are just one piece of a planned $180 million effort by Kraft to combat hunger.
Food banks in New York City; Chicago; Newberry, S.C.; San Antonio; Madison, Wis.; Cincinnati; and California's Central Valley will receive the first pantries by early spring. The rest will be rolled out in the next two years.
If they make three trips a week, the new pantries each can pass out groceries equaling 1.1 million meals a year.
The need is immediate. In a national survey in October commissioned by Kraft, 45% of respondents said recent economic changes had jeopardized their ability to provide enough food for their families; 56% of those earning $25,000 or less a year said they are more likely to use a food pantry than they were six months earlier; and 42% of households making $50,000 to $75,000 knew people who were seeking aid for food.
Among Feeding America's 206 food banks, the need for services has risen at least 15% this year, says Vicki Escarra, the group's president. Some of those emergency food providers have witnessed even greater increases.
"I've never seen this type of demand before," says Denise Holland, head of Harvest Hope Food Bank in Columbia, S.C., which will receive one of the mobile pantries.
"As a food bank, you just think if you can make it through the summer and the holiday season, you can breathe a little easier because the load gets a little lighter," she says. "But this year that has not been the experience. It's been full-throttle every day."
Holland says that the 400 food pantries, soup kitchens and shelters her food bank supplies in 20 counties saw a 55% increase in demand in September compared with September 2007. Many of those in need had never had to ask for food before.
"There are people who are calling us … who've said, 'In the past I've been a donor. I can't donate now. I need the help, I need your services,' and that's been really heart wrenching," Holland says.
The mobile pantries will set up shop in church parking lots, at community centers or in other central spots, then allow families to choose foods that will help them prepare healthy meals.
Besides saving those already struggling from having to buy gas or find transportation to a quality supermarket, a key benefit of the mobile pantries is providing fresh produce in communities where nutrition often suffers because the nearest store stocks starches and cigarettes but not vegetables.
"In Chicago, like many urban communities, we have neighborhoods where you can literally go for miles without finding a grocery store," says Kate Maehr, executive director of the Greater Chicago Food Depository. Its 600 food pantries in September saw a 30% increase in visitors over last year.
Mobile pantries offer choice and dignity
With mobile pantries, where the food is fresh and free, people have choices they might not have otherwise when they are handed a pre-assembled grocery bag at a traditional pantry, she says.
"With that comes dignity," she adds.
Some food banks say that donations of canned goods and funds have dipped during this economic crisis. But they hope that with so many Americans struggling to make ends meet, the nation will make a greater effort to address the ubiquity of hunger.
"If there is a silver lining in the chaos going on in our financial market right now, it's that perhaps people will realize that this is a reality for way too many people," Maehr says. "There's an assumption that hunger is something that exists in a couple of bad neighborhoods. It's in every city and in every state in our country."
http://www.usatoday.com/news/nation/2008-11-06-fooddrive_N.htm
Longer-term jobless benefits hit 25-year highThursday November 6, 5:05 pm ET By Jeannine Aversa, AP Economics Writer
Jobless Americans continuing to draw unemployment benefits at 25-year high; retail sales slump
WASHINGTON (AP) -- The number of out-of-work Americans drawing unemployment benefits has surged to a 25-year high, while shoppers turned extra frugal, further proof of the damage from sinking economy, credit problems and financial stresses.
The Labor Department reported Thursday that the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October, well above analysts' estimates of 3.74 million. That was the highest level since late February 1983, when the country was struggling to recover from a long and painful recession. The year-ago tally was 2.59 million people.
New filings for jobless benefits for the week ending Nov. 1 dipped to 481,000, a still-elevated level that suggests companies are in a cost-cutting mode. The increase in continuing claims lags by a week, and represents the total for the week ending Oct. 25.
The work force was much smaller in February 1983, when the number of people continuing to claim benefits was 3.88 million. At that time, about 87.2 million Americans were in the work force, compared with almost 134 million today. That's one reason the unemployment rate was 10.4 percent in February 1983, compared with 6.1 percent last month.
Still, the increase in continuing claims indicates fewer people are leaving the rolls as newly laid off workers are added. That means unemployed workers may be having a harder time finding a job than in previous weeks.
Democrats in Congress are pushing to include an extension of unemployment benefits in a new stimulus package, which could be taken up this month. Benefits last 26 weeks.
Congress approved a special 13-week extension of benefits in June, and the department said about 773,000 people claimed benefits through that program for the week ending Oct. 18, the most recent data available. That's in addition to the 3.84 million that are receiving benefits through the traditional program.
Americans hit by layoffs, shrinking nest eggs and other stresses are pulling back even more, sending sales at many big retailers down in what may have been the weakest October in decades. That further darkened the outlook for the holiday sales season.
Target Corp. and Costco were among the many retailers reporting sales declines last month. Wal-Mart Stores Inc., the world's largest retailer, however, logged a sales gain.
On Wall Street, stocks slumped again as concerns about widespread economic weakness sent the major indexes down more than 4 percent Thursday. The Dow Jones industrial average tumbled more than 440 points.
Hoping to prevent a deep recession, the Federal Reserve last week ratcheted down interest rates to 1 percent and left the door open to further reductions.
The country's economic state has rapidly deteriorated in just a few months. The economy contracted at a 0.3 percent pace in the July-September quarter, likely signaling the start of a recession. It was the worst showing since the last recession, in 2001, and reflected a massive pull back by consumers.
With the economy sinking and consumers appetites flagging, employers have been slashing jobs. The government is expected to report a net loss of another 200,000 jobs when it releases the October employment report on Friday. The unemployment rate -- now at 6.1 percent -- is expected to climb to 6.3 percent in October.
As American consumers watch jobs disappear and their wealth shrink, they'll probably retrench even further.
That's why analysts predict the economy is still shrinking in the current October-December quarter and will continue to contract during the first quarter of next year. All that more than fulfills a classic definition of a recession: two straight quarters of contracting economic activity.
Yet another report out Thursday showed the efficiency of U.S. workers slowed sharply in the summer as overall production, or output, declined, reflecting the hit to consumers from housing, credit and financial troubles.
Productivity -- the amount an employee produces for every hour on the job -- grew at an annual pace of 1.1 percent in the July-September quarter, down from a 3.6 percent growth rate in the second quarter, the Labor Department reported.
With productivity growth slowing, labor costs picked up. Unit labor costs -- a measure of how much companies pay workers for every unit of output they produce-- increased at a 3.6 percent pace in the third quarter, compared with a 0.1 percent rate of decline in the prior period.
The 1.1 percent productivity growth logged in the summer beat economists' expectations for a 0.8 percent growth rate. The pickup in labor costs-- while welcome to workers -- was faster than the 2.8 percent pace economists were forecasting.
Economists often look at labor compensation for clues about inflation. These days, however, the Federal Reserve and analysts are more concerned about the economy's feeble state. While the pick up in labor costs might raise some economists' eyebrows, the Fed is predicting inflation pressures will lessen as the economy loses traction.
The 1.1 percent productivity gain was the smallest since the final quarter of last year, while the increase in labor costs was the biggest since that time.
http://biz.yahoo.com/ap/081106/economy.html
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