Dollar begins free fall

http://www.nypost.com/p/news/business/dollar_loses_reserve_status_to_yen_hFyfwvpBW1YYLykSJwTTEL;jsessionid=65E301CF47ED50D15170F8D6530791C5

"After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other.

"He's in a crisis worse than the meltdown ever was," said Peter Schiff, president of Euro Pacific Capital. "I fear that he could be the Fed chairman who brought down the whole thing."

Well, who couldn't see this one coming? 

I see there are two trends emerging, A) Denial, the DC spendthrifts simply act as if this is not a fact of life for their budgeting purposes, they will not stop spending, they will not stop issuing debt and they will continue to print money with no inherent value. 

B) The statistics for inflation will be skewed and unreliable, quite simply they will lie about the effect that inflation will have on everyday life in America.

What this means in real world terms, if one stockpiles is imported goods are going to go upwards in price, everything from plastic storage bowls to Levi's will cost more and soon, perhaps as soon as this Spring, maybe sooner.

It also means that internally produced commodities such as Sugar and Grains will rise in price as the producers can now make more money selling internationally than domestically. 

I'd recommend inventory what items you purchase the most that are produced internationally and make a decision on what you would invest in and use the most and make a decision to purchase, or do without or substitute...because they are only going to rise in price as the dollar slides in purchasing power.

Greenshoots?

It is now official Senior Citizens will not see a Cost of Living increase for the next 2 years as the Treasury has determined that inflation will not be an issue.

An idea of course that is spurious at best, Utility Companies are raising rates, Grocery Store prices have also increased, but those are not "core inflation" measurements, which means Granny is outtaluck with a shrinking in purchasing power .Gov payout making do is again a reality.

I do believe that Seniors will be able to handle such a situation better than today's youth because at least they have heard the stories of the Great Depression, though they were rarely told that the .Gov and FDR actually prolonged the Depression.

Either way, the Alpha Strategy is nothing new for the Seniors I've met, for example a 81 yr old Florida lady who stockpiled grains and breakfast cereals as well as having a Orange and Grapefruit Orchard. 

Christmas time meant homemade Orange Marmalade, which is quite good actually.

To me, the recommendations for Alpha Strategy warehousing are non commodity items, anything that is imported will naturally rise in price as the dollar (and our purchasing power) continues to erode, imported items such as Quality cookware such as knives and cooking gear will rise in price by next spring, as will auto parts which on new cars will see increases in prices if one has dealer servicing, and parts will rise in price even on that classic Toyota 4 Runner.

Ammunition is a neutral buy at the moment simply because production will exceed demand and prices will naturally fall with the caveat being .Gov action to increase the prices via onerous regulations in places such as California.

The Federal Reserve begins Monetization

Monetization...or "Stabilization" is when the Federal Government issues debt, that a different branch of the Federal Govt purchases, in this case, the Federal Reserve which prints the "dollar" is purchasing from the Dept of Treasury, which issues Debt instruments.

So?

Basically the Fed is printing money and handing it over to the Federal Govt, that causes inflationary pressures, which in turn causes prices to rise across the board, everything from Ramen to Gasoline will rise in price.

The best hedges against the coming price inflation, besides marketable skills, are items that must be purchased either now, or 3 years from now, Motor Oil, Oil Filters, Toilet Paper, Food Items, key clothing items as well such as socks or briefs.

And keep in mind, the Porkulus monies, some 600 billion "dollars" remains largely unspent, add that to the 200 Billion in failed Treasury Debt that did not sell at auction, that produced 200 billion more that will be pumped into the US Economy, as well as the decline in the value of the Dollar v the ChiCom's Yuan, making even imported goods more expensive, and the Citizen is facing an inflationary spiral.

And the more the Obama Administration spends, the worse the cycle will grow, and they plan on spending Trillions more on non revenue producing projects, make work projects if one will.

Michael Janke's Take Control and change your life

Here on ye olde blog I think a new feature will be the "bargain book bin" featuring a review of a older book normally available for 1 dollar or less, but has content that merits mentioning.

This installment will highlight a work from the year 2000, Michael Janke's " Take Control Master The Art of Self Discipline and Change your life forever"

Found at the local Goodwill for the sum of $1.00, Janke was a one time motivational speaker who authored several other books along with a series of videotapes (it is from the Dot.com era).

Janke's work is small, 231 pages, and is mainly focused on increasing self discipline and productivity via a series of self assesing questions as well as worksheets that one designs that are a kind of Get Things Done system with absolutely no flab to be found. 

And that is the heart of the book and one of the most positive features of the work, Janke' is an ex SEAL and intersperses vignettes from his time in the military that, in my view, are written for the .com era new gen computer techie types, the stories don't add much to the overall message of the book, Efficiency via Time Discipline.

If the reader can put aside the SEAL references, and focus on the self assessment and goal setting portions, Janke's book can be very effective at turning dead time into productive time as well as focusing effort into finishing projects from the most mundane tasks to the longer term goals that must be completed. 

The simple system of a ledger and a box next to each task as well as Substitute Thinking is effective, and if followed, works surprisingly well. Results being the ultimate "proof test" Author Janke's should be given credit for writing a implementable system that actually works.

Janke' s Future Orientation is out of the norm for such a motivational work and makes for a interesting purpose in following his prescribed plan of Self Discipline. Actions now, ones that take concrete and positve steps in a parent's life do trickle down to the children, such a view is worth considering paying the $1.00 this book currently commands.

Summer time

We have had an incredible amount of rain this spring, literally, we have gone from drought to flood in 4 months.

Which is great for the plants, not so good for the people.

Inflation is slowly appearing out in the Real World

Alas, it's been a month since I posted simply because there is so much turmoil at the moment that patterns had yet to form, until now:

Gasoline has risen from 1.97 to 2.13

Motor Oil has suddenly spike upwards, premium brands are now 3.20 a quart, even the store brand at Advance Auto has jumped to 2.69 from 1.59 even during the height of the oil crunch last year.

Spaghetti Sauce has jumped from 1.00 or so to 1.25, even plain old boxed pasta has increased from .88 cents to 1.37 a box of rotini.

Ammunition is still scarce, with astronomical prices being asked for a single box of ammunition, 47.50 for a single box of aummunition.

The M1 supply has risen 10% already,  with more to come, meaning inflation will really kick in this year, meaning what you purchase now will be a better investment then most of the traditional intangiables investments that served so well from 1982-1999.

We've had an unusually wet spring so far, the home garden is doing well, and hopefully, home gardening will continue to grow in popularity as it will provide an offset to the inevitable increase in the price of gasoline and other food stuffs, in this case those in warmer weather climates will have an advantage over those in the northern parts of the US, or for that matter, the globe. If you have the climate and the space, there is little reason not to grow a garden this year, and grow that which will be expensive at the local grocery store, Red Peppers for example, are a good crop, Corn on the other hand, is not as 3/1.00 vs 1.89 per pepper makes quite clear.

The Propeht of Doom Syndrome v Enlightened Self Interest

No doubt about it, these are troubled times Spiritually, Ethically and Financially, from Bank Collapses to Nationalization to Inflation to increasing structural costs, and of course anyone who is even partially serious about a Religious Faith is the subject of scorn.

Times like these a Jeremiah or a Nietzsche arises to pronounce this era is the most trying ever and destruction is certain to come. It's human nature to seek out what we feel is the "truth" for the times, in good times, Anthony Robbins or Chris Warren, in bad times Gerald Celente or Peter Schiff.

The Prophet of Doom is set upon a pedastal and either praised or mocked depending on what one's views are, the Sunny Optimist is either called out of touch or bringer of hope, depending one what one wishes to hear. 

As a Preparedness Aware Individual, it is wise to maintain a balance between both, to be Optimistic about one's preparations but a Prophet of Doom subscriber is not a mutually exclusive philosophy, in fact, it is simple Enlightened Self Interest to grasp the fact that times are never as bad as they seem, nor as prosperous as they seem.

A year's worth of supplies should cost about a month's pay depending on family size and Cadillac tastes, and using the Alpha Strategy, one is insured either way, it is a safe bet that inflation will be a fact of life, so prebuying items that will cost more later makes sense in the case of job loss, or hyper inflation or simple piece of mind. So one has effectively hedged against both a crash or even a return to normalcy.

I enjoy Gerald Celente's work, I also like Rick Warren's outlook, I don't plan on moving to the hinterlands (yet) nor do I plan on putting on a happy face...