Decisions in the New Economy (The Great Recession) – What would I do?

What would I do?

People in America seem to be worried about a possible permanent shift in the economy that occurred in 2008 with a series of cascading events. A perfect storm of easy credit, the housing boom, commodity speculation (mainly oil), and shady banking practices led to some disastrous events -

Events of 2008

1. Crash of investment bank Bear Stearns (13 March).
2. Fall of Fannie Mae and Freddie Mac (7 September).
3. Bank of America’s acquisition of Merrill Lynch for $50 billion (14 September).
4. Lehman Brothers filing for Chapter 11 bankruptcy (15 September).
5. American International Group’s liquidity crisis. AIG’s shares lost 95% of their value and the company reported a $13.2 billion loss (16 September).
6. The bailout of the U.S. financial system (The Emergency Economic Stabilization Act of 2008). President Bush signed the bill into law within hours of its congressional enactment on 3 October, creating a $700 billion Troubled Assets Relief Program (TARP) to purchase failing bank assets.
7. The stock market crash began on 6 October and lasted five trading sessions. During that week, the Dow Jones Industrial Average fell 18.1%.
8. Citibank received the first of their three bailouts (23 November) . Amount: $300 billion.

An Economic Roller Coaster

By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. No one was buying and many mortgage owners were underwater and either walking away from their homes and/or defaulting.

Oil prices set off a world-wide panic, hitting hit $145.29 a barrel (3 July). George W Bush lifted an almost 20 year-old executive order that banned oil and natural gas drilling in most US coastal waters. The symbolic move was presented as a way of relieving the pressure that high oil prices were placing on US citizens. However, by 21 December oil prices at $33.87 per barrel had became too low for companies to invest in explorations and drilling sites.

Gold prices over the period varied from a low of $712.50 in October 2008  to a high of $1218.25 on 3 December 2009, buoyed by international government purchases.

The unemployment rate in the USA steadily increased from 4.9% in January 2008 to a high of 10.2% in November 2009.

The Economy under Obama (2009)

• A $787 billion dollar economic stimulus package, The American Recovery and Reinvestment Plan was signed into law on 17 February by President Barrack Obama.
• Automaker Chrysler filed for bankrupcy (30 April).
• Automaker General Motors filed for bankruptcy (1 June).
• President Obama signed into law (24 June), The Car Allowance Rebate System. “Cash for Clunkers” was a $3 billion U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle when trading in a less fuel-efficient vehicle. The program lasted from July 1 to August 24 2009.
• President Obama signed the “Worker, Homeownership and Business Assistance Act of 2009” into law on 6 November, extending the first-time homebuyer tax credit of up to $8000 if they close on the purchase by midnight June 30, 2010.

Green Shoots

The first usage of this economic mantra was uttered by Ben Bernanke, chairman of the Federal Reserve Board, in mid-March 2009 when he told 60 Minutes that he detected “green shoots” of economic recovery.

It seems that after a long and dark winter of economic woes, the springtime would encourage a sense of return to the consumerism, low unemployment, free lending, and other such nuances of the American dream that we have been taking for granted since World War II post-war prosperity.

But the point is, as Obama seems to imply – that recovery (green shoots) is possible despite persistently high unemployment. In other words, a jobless recovery? Many experts believe this is not possible.

What would I do?

If I knew that hard times are coming for the whole country, which is still in collapse now with state governments starting to going broke / insolvent (such as California and New York), I would think twice about planning for my future.

The Old Rules Are No Longer Valid

The Old Rules = American Dream (climb until you reach the sky)

The Negative

People I know (and don’t know) are losing their jobs or having their

1. salaries cut
2. hours cut
3. unpaid holidays

People I know who are already out of work

• cannot find a job
• become under-employed (same as over-qualified)
• go back to school for a ‘practical career’

The Positive

People in general are downsizing

• re-using, repairing, recycling
• sharing expenses (housing)
• doing things themselves
• cutting back on non-essentials
• getting back to basics (gardening, sewing, cooking)

This is the new normal. There is no end in sight (and it is likely to get worse)

Danger Zone

I don’t take on new debt:

1. because I may not be able to pay it back
2. I may be a candidate for debtor’s prison
3. The banks aren’t lending anyways
4. The credit card companies are ruthless and heartless
5. The US dollar may crash
6. There may be hyper-inflation (this could work to advantage, though)

I clear off my old debt

• As fast as I can
• Reason (2) above
• Reason (4) above
• Reason (5) above

I don’t buy a house now

• Because the values keep dropping (another 20%?)
• Home ownership is no longer the investment it used to be
• I can’t get credit (welcome to the club)
• I don’t take on new debt

I make myself as self-sufficient as possible

1. I live near to where I work
2. I grow my own food, or get it locally
3. I am active in my community (organizing co-ops for bartering, trading)
4. I help people to help themselves (teach skills, form support groups, share resources)

I prepare for the worse

• Don’t keep all your money in the bank. Have substantial cash on hand for emergency (such as a bank holiday)
• Stock up on a couple months food (canned, dried, beans, rice)
• I am able to survive without electricity (off the grid, if the grid goes down)
• I am able to survive without a car (gas shortage, price increase, rationing)

I re-learn basic skills

• First aid
• Reading (ancient pastime)
• Sewing
• Cooking
• Canning / Preserving
• Repairing household items
• Meeting my neighbors
• Volunteering

There’s nothing wrong with any of these. Back when times were simple and uncomplicated and the family was king, a man knew his neighbor, and let a little imagination fill the time – these value were standard fare.

I unlearn bad habits

• Buying luxuries
• Driving everywhere on a whim
• Watching mindless television
• Believing everything the Media says

I would begin these preparations in earnest, trying to provide some measure of future security for my immediate family and friends. Once the general population stops buying the ‘green shoots’ mentality and looks at the reality of the situation and its global context (no man is an island, because we are supported by other governments in trade and in buying our debt), the measures mentioned above will become much more commonplace.

Barring a new war, possibly coexisting with an energy shortage, or massive inflation caused by loss of the dollar’s value as the de facto world currency, these are the minimum steps to be taken.

Edwin Ollikkala

Singapore

Decline USA – Breaking News for SUNDAY 26 October 2008

.

Why U.S. banks still aren’t lending

Many are hoarding cash, don’t expect credit climate to improve until 2010

Simply put, banks are hoarding cash, and the influx of government money won’t necessarily change their plans. That’s the case with Citigroup, which has shrunk the size of its balance sheet by 13 percent over the past year and plans to cut even further. “We’re not going to treat [the money from the government] like a windfall and back off of the measures that we have under way to get the company fit,” Citigroup Chief Financial Officer Gary Crittenden told analysts recently.

Depressed credit market until 2010

The industry may be hunkering down for a while. In a recent survey by data firm Reuters LPC, 40 percent of lenders and loan investors said they didn’t expect the credit climate to improve significantly until 2010, after the worst of the recession has passed. “Lending won’t start until everyone agrees the bottom has been reached,” Richard M. Kovacevich, chairman of San Francisco-based Wells Fargo told BusinessWeek in an interview with Maria Bartiromo.

more…

.

Mounting Layoffs: Why They’re Different This Time

Thousands are losing their jobs at Merck. Thousands more are being cut at Xerox, Yahoo, Chrysler and General Motors.  Those companies were in the news just this week, and they weren’t alone. Corporate America is now following the lead of Wall Street, where tens of thousands have lost jobs, many of which will never return.

The question, though, is this: As the layoffs add up, how bad will unemployment be in this recession? And what does that mean in terms of when and how the economy will recover?

Typically, people have picked up and moved to another part of the country when times have gotten tough. Not this time, Zandi said. “There’s really no place to go. The only big economy that’s doing well is Texas. Of course, the fact that so many homeowners are underwater cuts down mobility,” he said. He said the phenomena could prolong the recession.

more…

.

Dorn: Markets Are Off Their Lithium

The bipolar/manic-depressive markets are off their lithium and about to crash into major depression. This looks like the revulsion stage that we have been writing about over the past few weeks.

The world is in crisis and so many people are suffering. Our hearts go out to those who are losing their jobs, seeing their retirement accounts dwindle away day by day, and are suffering physical and mental illness from the stresses of having to decide between buying food or much-needed prescription medication. It’s a tragedy being played out around the world today and there is likely no end to it in the foreseeable future. We have come to this point in “The Big Rollover.”

Tragically, it is still in its infancy as the next shoes are about to drop.

more…

.

Hard times have some flirting with survivalism

With foreclosure rates running rampant, financial institutions teetering and falling, prices for many goods and services climbing, and jobs being slashed, many Americans are making preparations for worse times ahead. For some, that means cutting spending and saving more. For others, it means taking a step into survivalism, once regarded solely as the province of religious End-of-Timers, sci-fi fans and extremists.

“There are a lot more people — a lot more eager people — who are trying to get themselves squared away logistically,” said Rawles, who lectures and writes books on preparing for and surviving “TEOTWAWKI” — The End Of The World As We Know It.

more…

.

Obamacans: Prominent Republicans Line Up Behind Obama

Since Colin Powell crossed party lines to endorse Barack Obama last Sunday, a steady stream of prominent Republicans have endorsed the Illinois senator over rival John McCain.

Former Massachusetts Gov. William Weld is endorsing Obama today at a press conference in Salem, N.H. Weld was a public supporter of Mitt Romney in the Republican primaries. In a statement, Weld called Obama a “once-in-a-lifetime candidate who will transform our politics and restore America’s standing in the world.”

On Thursday, former Minnesota Gov. Arne Carlson endorsed Obama at the state capitol. “I think we have in Barack Obama the clear possibility of a truly great president,” he said. “I would contend that it’s the most important election of my lifetime.”

Scott McClellan, a former spokesman for President George W. Bush, also endorsed Obama Thursday. USA Today reported that McClellan told CNN in a taping to be aired this weekend that Obama has “the best chance of changing the way Washington works.”

more…

.

McCain Faces Internal ‘Palin Insurgency’

Four Republicans close to Palin said she has decided increasingly to disregard the advice of the former Bush aides tasked to handle her, creating occasionally tense situations as she travels the country with them. Those Palin supporters, inside the campaign and out, said Palin blames her handlers for a botched rollout and a tarnished public image — even as others in McCain’s camp blame the pick of the relatively inexperienced Alaska governor, and her public performance, for McCain’s decline.

“She’s lost confidence in most of the people on the plane,” said a senior Republican who speaks to Palin, referring to her campaign jet. He said Palin had begun to “go rogue” in some of her public pronouncements and decisions.

more…

.

Crises on Many Fronts

The focus in the presidential campaign has been almost entirely on the struggles faced by the middle class — on families worried about their jobs, their mortgages, their retirement accounts and how to pay for college for their kids. Each nauseating plunge in the Dow heightens their anxiety. Each company that goes under and each government report showing joblessness on the rise intensifies their fear.

No one knows how to quell the uncertainty. And no one is even talking about the poor.

“First of all, at least in the short term, we can expect more families will become homeless as foreclosures continue to mount and jobs become harder to hold and more difficult to find. As jobs disappear and employers begin trimming expenses, we can foresee people losing health insurance, swelling the ranks of the medically uninsured.”

more…

.

As Yard Sales Boom in Hard Times, Sentiment Is First Thing to Go

Austerity and frugality are kicking in big time in the heartland of America.

An eternity ago, people in this city in northern San Joaquin County braved four-hour round-trip commutes to the San Francisco Bay Area for a toehold on the dream. Today, Manteca’s lawns and driveways are storefronts of the new garage-sale economy — the telltale yellow signs plastered in the rear windows of parked cars Friday through Sunday directing traffic to yet another sale, yet another family.

The garage-sale economy is flourishing here and in many other regions of the country, so much so that some cities have begun cracking down. With more residents trying to increase their income, the city of Weymouth, Mass., limited yard sales to just three a year per address. Detective Sgt. Richard Fuller said it was now common to see 15 cars parked in front of a house.

more…

.

Pay rises and Christmas parties cancelled as companies cut costs

Almost four in five British businesses are cutting back on everything from hiring new staff to paying for the office Christmas party, as they batten down the hatches for a deep recession.

Four out of 10 businesses said they had cut back on recruitment; 27 per cent had reduced pay or bonuses; and another 27 per cent said they were squeezing the entertainment budget, including the Christmas party fund. Only 22 per cent had taken no cost-cutting measures in response to the credit crunch, suggesting its effects are now spreading beyond the banking and housebuilding industries.

more…

.

Obama as we knew him… man and boy

Schoolfriends remember his love for comic books, basketball and teasing the girls. A former boss recalls him as a young man running a community project in Chicago. A fellow senator remembers being beaten by him at poker. Gifted student, quiet persuader, charismatic speaker, loyal friend…

We speak to the people who knew Barack Obama best, revealing an intimate, often touching, portrait of a man on the brink of greatness.

more…

.

Police fear riots if Barack Obama loses US election

Law enforcement officials say the intense public interest and historic nature of the vote could lead to violent outbreaks if people are unhappy with the results, encounter problems casting their ballots or suspect voting irregularities. Police departments say they cannot rule out disorder and are mobilising extra forces and putting SWAT teams on standby.

In Oakland, near San Francisco, police will have tactical squads, SWAT teams and officers trained in riot control on standby.

There have also been internet rumours about plans for protests or civil disobedience by supporters of Democratic candidate Barack Obama if he is beaten by Republican rival John McCain on November 4.

more…

.

October 2008 fear panic meltdown crash – It’s real

This is a series of current (7 Oct 2008) articles which spell out the global economic crisis in black and white, with some superlative moribund adjectives thrown in to make you sit up and take notice. Indeed, ask yourself when have you heard any of these phrases in your lifetime?

Financial Meltdown: We’re on “the Edge of the Abyss” (Global Research.ca)

Years from today, when the current financial crisis is over, historians are likely to agree that it would have been far better if the Bush administration had declared a state of emergency earlier in the process so that the necessary steps could have taken to avoid a complete financial meltdown. The media could have been used to bring the American people up to date on market-related developments and educated in the bizarre language of structured finance. Knowledge is power; and power can prevent panic.

Now we’re in a terrible fix. People are scared and removing their money from the banks and money markets which is intensifying the freeze in the credit markets and driving stocks into the ground like a tent stake. Meanwhile, our leaders are “caught in the headlights”, still believing they can “finesse” their way through the biggest economic cataclysm since the Great Depression. It’s madness. more

Another report is from Telegraph.co.uk (6 Oct 2008); Germany takes hot seat as Europe falls into the abyss

During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis.

Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement.  The US commercial paper market is closed. The interbank lending market has seized up. There are almost no bids. It is a ghost market.

Healthy companies cannot roll over debt. Some will have to sack staff today to stave off default. As the unflappable Warren Buffett puts it, ” . . .

I don’t think I’ve ever seen people as fearful,” he said. We are fast approaching the point of no return. The only way out of this descent is “shock and awe” on a global scale, and even that may not be enough . . .  more

Another article from the Telegraph (they are not sparing the rod):

Russia and Brazil crumble as Commodity Prices Crash (7 Oct 2008):

The entire complex of commodities and emerging market stocks, bonds, and currencies is now in free-fall as the economic crisis spreads like brushfire, threatening to draw every corner of the globe into the vortex of recession. more

This editorial is more positive, balancing out the doom and gloom with practical, long term advice;

Sinking Rapidly Into Depression (Martin D. Weiss, Ph.D.  10-06-08, Money and Markets.com)

This is the crisis that will change the course of history.

Even before ivory-tower theorists have gotten around to officially calling it a “recession,” the U.S. economy is already sinking rapidly into depression.

And even as the government has vowed to embark on a $700 billion spending spree to avert financial panic, over $1 trillion in wealth has been wiped out in just five days of stock and bond market declines.

Cheap credit, the lifeblood of the U.S. economy, has nearly vanished from the scene.

Borrowing from Peter to pay Paul — the norm for decades in the consumer and corporate world — is becoming next to impossible.

Greed has been replaced by fear; euphoria, by panic; trust, by suspicion.

Everywhere, we see vicious cycles of mutual financial destruction… more

Airline Crashes Imminent; Time to re-organize transportation

It’s been confirmed; due to rising fuel prices, the airline industry is starting to go belly up. Acquisitions, mergers, downsizing, cutting routes, grounding planes and raising ticket prices are insufficient measures to deal with the enormity of the situation and prolonged, permanent high fuel costs.

Something has got to give, and it will come in two phases: bankruptcy, and dwindling numbers of worldwide air passengers. With or without government backing, bankruptcy will take its toll. Availability of routes and planes along with substantially higher ticket prices will force air travelers to re-think the way they travel, as well as the frequency of traveling.

Luckily, there are other transportation infrastructures available which are both more eco-friendly as well as carrying more passengers per unit of fuel. Basically, this refers to buses and trains.

Every city should now be actively upgrading and promoting the use of mass transit, converting trains and buses to alternative fuels, and planning for a future when public tranportation will be the only way to travel (bye bye the private automobile).

What people have taken for granted will become a luxury; cheap airfares and weekend getaways, single occupancy vehicles (not including motorbikes, scooters, Segways, and bicycles), and the phenomena of ‘travel on demand’.

Ted Ollikkala

Read more:

http://money.cnn.com/2008/07/15/news/economy/airlines/index.htm

http://www.newsweek.com/id/147684

http://www.iht.com/articles/2008/05/11/business/10transit.php

Austerity Measures for 2008

When the word ‘austerity‘ (wikipedia) is mentioned, people think back to the Great Depression and a temporary reduced standard of living brought on by economic consequences. They also think of Wartime Austerity; rationing, victory gardens, and saving rubber, nylon, etc.

In 2008 the New Austerity (Time Magazine) basically means having a tighter budget due to recent increases in the price of gasoline and food. Middle class families are feeling it. Lean times are ahead, tighten your belt, the new minimalism, less is more – that kind of stuff is in store, for the long term.

How long? Until the earth is healed. Until people stop squabbling over resources and learn to be more efficient and share. Until consumption balances supply, like back in the old days.

How old? Before the industrial revolution; that’s how long it’s been since humankind truly lived in harmony with his surroundings.

Not many people live like that these days, but there surely is a growing movement in this direction.

Here are some ideas culled from various sources regarding possible austerity measures to help anyone cut costs, not only to save money today; but to safeguard the future of society and the balance of nature while she starts to heal from centuries of abuse.

Eliminate frills from your weekly grocery shopping

1. Shop at a budget supermarket and/or buy generic
2. Combine errands (no more driving to the 7-11 for a pack of cigarettes)
3. Vacation close to home or vacation at home.
4. Leave one car in the garage
5. Shop at the Salvation Army or local Goodwill Store
6. Eat out less often
7. Stop being a ‘good consumer’ (you don’t really need any more junk, do you?)
8. Buy local produce
9. Learn how to cook
10. Start a backyard garden
11. Borrow how-to books and novels from the library
12. Watch video of your choice (active) on the Internet instead of on the televsision (passive)
13. Don’t buy a new television set (especially a flat screen plasma home entertainment system)
14. Act as if your nation is in wartime; make do with what you have – mend and repair
15. Dust off the bicycle in the garage and use it for short trips
16. Buy a scooter or Vespa for in-town travel
17. Pay off your debts
18. Get your money out of the stock market
19. Don’t buy what you can’t afford
20. Buy what you need, not what you want
21. Take up a hobby that pays
22. Simplify, simplify, simplify!
23. Stop competing with the Jones’ – cooperation will get you further
24. Learn to be more self-sufficient
25. Prepare an alternate way to heat your home

More ideas:

My Flight from the Grid

Survival Tips for the Economic Crunch

Ten First Steps

Sustainable Living – Part I

KNOW SOME MORE? PLEASE COMMENT

Housing has already crashed – how bad is it?

 

Real bad. Simply looking at collection of a single day’s Real Estate headlines leaves no room for doubt.

 

SOURCE: http://www.realestatedecline.com/

 

Friday, May 2, 3008

 

Month-to-month, it gets consistently worse,” said David Blitzer, chairman of the index committee at S&P, noting that February also marked the sixth straight month that all 20 cities experienced declines. “The slope is one direction. There is no sign of a bottom.”

http://ap.google.com/article/ALeqM5hL1BztOWFNmmcLQ6aOP-BAz9FlMgD90BOMBO1

 

NEW YORK (Reuters) – Warren Buffett, the world’s richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.

http://news.yahoo.com/s/nm/20080428/bs_nm/buffett_recession_dc?ref=patrick.net

 

 

Home Prices Fall in 22 US Cities as Foreclosures Reach Record!
Bloomberg

Now’s not the time to be flip about housing
Seattle Times, United States

FORECLOSURES MULTIPLY AND VIOLENCE ERUPTS IN HOMEOWNER ASSOCIATIONS
Last week in Pompano Beach, Florida, Patrick Dellisanti, 57, walked into the clubhouse of his homeowner association brandishing a gun and demanded to speak with an employee of the association over the $4,000 fees charged to the condo of his 80 year old mother. He took two employees hostage.

Bank of America May Not Guarantee Countrywide’s Debt
Bloomberg 

With Much Blood-Letting to Come, the US Housing Finance System Needs Replacing
Money Morning

No recovery for new homes seen in 2008
Modesto Bee, CA

Average Homeowner Will Lose $85000 in Wealth This Year
HULIQ (press release), NC

 

Home prices sink at record clip; foreclosures keep mounting
The Associated Press

 

18.6 million houses empty because prices still too high (bloomberg.com)

 

 

A Manic Depression
HoweStreet.com, Canada
Housing bubble bursts, check. Huge financial institutions closing their doors, check. Well at least the worst is over, right? Wrong. …

 

  

Disappearing now: $6 trillion in housing wealth
Los Angeles Times, CA 
“At this rate of price decline, the excesses of the housing bubble will have largely disappeared by the end of the year. At the same time, the price decline …

 

Does anyone see good things coming out of this?

.

.

 

What to do when the rioting starts

It doesn’t take much to start a riot. Once the trigger point is reached, watch out.

In an age where access to common resources is likely to be limited and availability scarce or non-existant; we need some guidelines to live by. Man’s worst enemy is not himself; it’s his neighbor!

A riot, by the way – is defined as follows:

1. A wild or turbulent disturbance created by a large number of people.
2. Law. A violent disturbance of the public peace by three or more persons assembled for a common purpose.
3. An unrestrained outbreak, as of laughter or passions.

Americans are more familiar with mini-scale riots; bar brawls, road rage, jealous spouse; but we actually have very limited experience with the real thing.

Rioting requires a consensus that something is horribly wrong or deemed to be a personal injustice and demands immediate, violent action to resolve. It is part of the fight or flight syndrome; in which excess adrenaline is manifest by the human body.

PACIFIST ALTERNATIVES TO RIOTING

1. When people are rioting about food; you’re in the backyard garden harvesting

2. When angry people in their cars are queued up for blocks waiting to fill their tank or for the gas station to open; you’re riding past on a bicycle.

3. When heartbroken people are forced out of their homes; you take them into yours and build community sharing and pool resources.

4. If you have what people are serious wanting (food, money, transportation, basic neccessities, clothes) you offer to provide in exchange for their goods or services (bartering)

5. If ignorant people put up a fuss; train them in the proper manner.

6. Value the intellectual as much as the laborer; society needs both to survive.

7. Possession of money has nothing to do with character.

8. Don’t abandon the elderly; you need their life experience and wisdom

9. If people can’t get what they need; help them improvise an alternative.

10. If an idea works for you; maybe it will work for others. Share and educate.

HOARDING

1. It’s OK to hoard. This makes you a ‘one-stop service center’ for that particular commodity. As long as you treat the commodity as a central supply for your particular community you’re performing a valuable service. Some people will hoard metal scraps (for reshaping into other useful items); while some will collect and distribute non-perishable foodstuffs (canned, preserved goods).

2. Transportation will be worth its weight in gold. Keep the lines open with proper security, maintenance. Collect a fleet of efficient vehicles for distribution of essential supplies. This includes trains, pickup trucks, and bicycles.

DEBTS

1. Labor bondage / indemnity / work camps will be used by creditors against default on their loans. It’s a heck of a lot more useful form of ‘punishment’ than putting people in prison! The people need not suffer in their bondage; they will gratiously accept this alternative of doing ’community service’.

UNEMPLOYMENT

1. No one need be unemployed. There will be a drastic labor shortage as most labor-saving, automatic, and manufacturing machines will be unable to operate or in disrepair during a prolonged energy crisis, fuel shortage.

2. Apprenticeship will re-establish itself as a better hands-on method than formal education as specialised skills are always in demand (blacksmithing, repair of hand-tools, farming, food processing and preservation, etc). Moreover, it’s localised and requires no central institution; operating autonomously and independently.

PLEASE ADD TO THIS LIST.

 .

An Endless Supply of Future Resources

WHEN THE INFRASTRUCTURE DOESN’T FUNCTION ANY MORE; SIMPLY DISMANTLE AND RE-USE IT

Came across an unusual point of view in my Peak Oil survival research; actually if you really think about it – it makes a lot of sense (from In the Wake)

“I like the idea of people dismantling centralized infrastructure to build useful tools for their own communities. A lot of post-apocalyptic genre movies show old factories and stores and gas stations abandoned and left standing to rust. But that’s not going to happen, because there is too much useful stuff in them!” – Aric McBay

If and when the crash occurs and energy is no longer available (permanently) to power society’s infrastructure; we must learn how to live ‘in the dark’; without power and lights, probably running water, etc. We must also learn how to live among the relics that once supplied convenience and comfort for our daily lives, most of which we took for granted and never gave a second thought.

The relics will get “in the way”; taking up valuable space. Some uses will be obvious (shelter, scavengeable replacement parts) but others will require some knowledge, skill, and ingenuity to make practical uses of these ‘mountains of metal’ or ‘ribbons of asphalt’.

Dedicated and specialized, several Post-Oil groups are in the process of compiling survival information for those future days. It is very overwhelming how much there is to learn, and no one person can learn it all. The applications hardly seem relevant; the scenarios don’t even exist! For example; how to melt aluminum and reshape it into other, useable items.

I will leave you with a final thought from Aric McBay :

Similarly, when a large, complex society breaks down I expect that some people will specialize in breaking down the infrastructure into smaller parts that small and sustainable groups can use. People won’t only dismantle infrastructure out of altruism or because getting rid of industrial installations and detoxifying those sites will benefit future generations (although that is the case and many people will do it for those reasons). People will do it also because it will make immediate personal and economic sense. (Even now, “everybody’s doing it”.)

.

.

Something gnawing away at you?

We will go down in history, if there is one; as the generation that squandered it all. America was blessed with abundance of clean air, rich soil, pristine lakes and rivers, and we were able to live off the land. No, wait – that wasn’t us! That was the first generation of Americans; the indigenous people – the native Americans, living in harmony with their ancestors and the cosmos.

ENTER THE COLONISTS

‘We’, are the incoming wave of settlers, so-called colonizers, arriving from Europe by the boatload from 1584-1776. We brought with us little technology. In fact, we were quite ignorant of how to live in the New World. Without help from our Indian brothers in 1621, there would have been no Thanksgiving. In fact, there would have been no Plymouth Colony – we surely would not have survived the winter.

Once we got a foothold in America, our sponsors back in Europe were experiencing a breakthrough of their own; the Industrial Revolution – which was to change the structure and purpose of society right up to the present time. Eventually, our sponsors – let’s call them the Ruling Elite, got greedy.

THE INDUSTRIALIZATION OF AMERICA

The indigenous populations of the USA, Central and South America were literally worked to death and their resources stolen (cotton, gold, furs, sugar, molasses, tobacco, lumber, etc.) and shipped to Europe as raw materials for mass manufacturing, and sent back to the colonies at higher prices. Tariffs and import taxes were tacked on by the powers that be and the early corporations such as the East India Company became rich and ever more powerful.

http://people.hofstra.edu/geotrans/eng/ch1en/conc1en/tradewinds.html

Exploitation by greedy corporations and non-democratic governments reached its culmination when slaves and opium became the top traded commodities of the world. Of course, slavery was abolished and opium made illegal. (However, it’s interesting to note that the top commodities these days are still drugs, with the addition of arms/weapons).

Now back to the people putting their roots down in America. We built a democratic government, overcame a serious internal squabble (The Civil War) and everything was generally ‘cool’ (uneventful) up until the era of coal-fueled and steam-powered ships and locomotives gave way to gasoline powered automobiles circa 1903. http://www.ausbcomp.com/~bbott/cars/carhist.htm

THE FIRST GREAT CRASH AND RECOVERY

A dramatic new era of prosperity overran America, the ‘roaring twenties’. Like a kid in a toy shop – we went ga-ga over this the new mobility and kept rolling our money into new investments. Growing faster than could be supported, consumer and investment driven greed burst the bubble on Black Tusday in 1929 and we had to start all over again. A chance to make a fresh start!

As there’s nothing better than a war to stimulate the economy; luckily one came along (WWII) and soon the American economy was humming along once again. Sure, there were resource shortages to cope with, but patriotic spirit was high and people at home banded together like never before. Women supported the munitions industry and planted victory gardens. Although the war was far from home, our boys were over there spilling blood to protect the American Dream.

http://historicpelham.blogspot.com/2005_11_01_archive.html

I hope you’re starting to draw parallels at this point. 65 years ago, our present leaders were just growing up. They have witnessed the dramatic transformation of American civilization. They have also experienced the effects of war. They have been living the American Dream from day one. But the most impressive breakthrough was the post-war rebuilding of America.

THE BABY BOOM PLAYGROUND

Someday, looking back; this will be recognized as being the point of no return – when we crossed the threshold of common sense and committed ourselves to a lifestyle of unsustainability. Suburbia was born, new and exciting products were available for consumption, and the American Dream started all over again. The most highly prized consumer goods were televisions, refrigerators, and the ultimate personal transportation machine; the automobile.

http://www.californiaclassix.com/archive/61_Lincoln_c232.html

ENTER OIL DEPENDENCE

The temptation to develop, abuse and squander a God-send of a resource; the ultimate energy source: abundant, cheap, easy to find, easy to transport; was irresistible, of course. The benefits would never end, it seemed. Literally overnight, an entire lifestyle was built on oil-based and oil-powered products. And continues to grow.

Let’s skip a few decades, shall we… and get to the point. Let’s see what we got here: Americans have saturated themselves with suburban homes and personal automobiles to the point that they have been purchased on credit; people have over-extended themselves in order to obtain these items. But, come to think of it – homes are bigger than we need. Cars are too big too.

Bigger is better. Up-size, sir? Of course. Be a good consumer. Only $20 a month, sir. I’ll take it…

HICCUPS AND SIDE EFFECTS

Nothing is free, and if it sounds too good to be true, well… sorry to say that a society totally built on a limited resource is going to be limited in its growth. Limited by land, limited by the size of the population craving access to the goodies, limited by buying power (money). Pressured by its enemies who also want a fair share of a global resource.

The earth is sick, call a doctor! Erosion, ozone depletion, irregular weather patterns. Take a pill. The burning of fossil fuels has poisoned the earth where it came from. Taking millions of years to form under incompletely understood circumstances, all it took was a brief period of a couple of centuries to squander and use it up. But not just use it up; but ruin the host that created it! Neither man nor the earth will ever be the same.

http://www.raisethehammer.org/index.asp?id=175

My God, what have we done? – to quote my favorite Talking Heads song.

To learn more about the problem and to become part of the solution; google for “Peak Oil”. That would be enough to keep you busy for the rest of your life! Prepare yourself for the inevitable. Prepare yourself to cope mentally and physically with living with less. Prepare for shortages, price increases, rioting, more resource wars, and unbelieving people sitting in their SUV driving 2 hours a day between their oversized home, work, and Walmart.

It’s time to wake up, America

Inspired by Matt Savinar