Victory Gardens and Arrow Shirts

By the time World War II ended in 1945, I was seven years old, so I do remember quite a bit about those times. One of my strongest memories is of our family cultivating a “Victory Garden” along with every one of our neighbors and relatives. A bit of research on my part found that these gardens, instituted as a national movement during the war, accounted for fruit and vegetable production equal to the entire commercial market at the time. Victory Gardens were ostensibly a way to ensure our troops would receive the lion’s share of the commercial growers output, but in reality the main reason was that they provided a way for Americans to feel like they were participating in the war effort. In addition, most every other commodity was rationed; for example, meat, sugar ,milk, butter, and so on. Hard to believe for anyone born after 1945. 

Shortly after the war, I remember that every Sunday we would take a family drive in the country. At the time, I did not realize that pleasure driving had been banned during the war, and that gasoline had been strictly rationed. (As a side note, the coveted “X” ration card with unlimited gasoline purchase was found to have been illegally issued to 200 congressmen--I guess things haven’t changed much after all.) The United States really had all the gasoline it needed, so the true reason for the rationing was to save on distribution costs and minimize the use of rubber in the tires. The Japanese had choked off our rubber supplies, so the military needed all the rubber we could produce with our limited capacity.

So what does this all have to do with investments? First of all, to demonstrate that it was only three generations ago that the United States was coming out of a deep, deep depression and that there was a time, in my lifetime, when there was not an abundance of foodstuffs and consumer goods. We are so used to the lifestyle we have now that it is hard to believe that it was not that long ago that there were shortages of commodities, whether man made or natural. It is only through complacency and ignorance that we deny that it could happen again.

But it can--in a heartbeat. The “big one” could hit California any time. Al-Qaeda could succeed in nuking a major city. A stray asteroid could slam into the Los Angels basin. An economic crisis as bad as the Great Depression could occur. (It nearly did a couple years ago.) Mt Rainier could blow its top and wipe out the Pacific Northwest. The list goes on and on--catastrophes could happen at any moment. Are you prepared? Probably not, and that is where I feel you can make the best investment you will ever make for your family.

You have to invest in your survival. That means instead of dumping money into the stock market, or the gold market, or savings accounts, that you invest some of your hard earned cash in the things that keep you alive, eg., food, water, shelter, and energy. Enough to last you for six months. No, I am not Mormon, although I live in Utah, but I do believe as they that it is prudent to prepare for the worst by ensuring your family can survive even the most dire man made or natural disasters. You cannot eat certificates of deposits, paper money, or even gold. Not so long ago, the main enterprise of mankind was the production of food because that was the very basic essential of life on Earth. If you don’t eat, you die. My little nest egg is worthless unless I can convert it into the essential commodities of life, and in a real crisis, I would not count on paper money having any more value than the ink that was used to print it.

Six month’s worth of food, water, and energy is surprisingly affordable. Basic commodities such as wheat flour, corn meal, rice and beans are cheap and easily stored in bulk. Water, or a way to produce potable water is essential. Energy in the form of charcoal or solar panels is available. I have spent less than $1000 in setting aside enough of the above to feed myself and my family for at least six months, keep us warm in the winter, and ensure a clean drinking supply.  Basic survival stuff, but the best investment I have ever made. May I also suggest you do the same. Its what we do out here in Flyover Country. Hope for the best, but prepare for the worst.

In the past 60 days, soybeans 22%, sugar 51%. In the past 4 months, wheat is up 72%. This year, corn is up 48%. These numbers are the market telling us that the smart money is shifting from dollar investments to commodity investments as fears of devaluation of the dollar mount.  Better stock up--its a long way to Spring and getting your Victory Garden planted.

Lead story in the Wall Street Journal today--Cotton up 100% this year. Better stock up on your Arrow Shirts.

JP

http://twitter.com/minerjp

Its OK to be Paranoid

My old flying buddy Moose tells me its OK for me to be paranoid because the bastards really are out to get me. So it was with sullen suspicion I greeted the news that the Fed was going to pump another gazillion dollars into the U.S. economy by buying some of our own Treasury Bills. I immediately suspected that the Danes were letting their garbage pile up again, but since I am a complete pointy head when it comes to macro economics, I could not quite identify my unease. So I took to the kitchen table again, only to find that my $5.00 calculator did not handle numbers that large, so I had to create an analogy that made sense of it all. Here’s what I came up with.

Imagine there is a very large corporation that manufactures lots of “stuff.” This corporation sells their “stuff” to a super mega corporation and makes a ton of money doing so. Everything was going along just dandy until the management of the mega corporation made some bad decisions and they found they had a cash flow problem and were having trouble meeting their payroll. So they turned to the supplier corporation and asked them to loan the mega corporation some money so they could meet their payroll. Corporation number 1, not wanting to lose their best customer, loaned out the money and everyone was happy. Mega corporation then hired some new management but they made some decisions that only made things worse, so they turned to their supplier and asked for more loans. By this time, Corporation 1 was getting a little nervous, and thought the risk was going up, so figured it was about time that the Mega Corporation coughed up a little more in interest payments. Not so fast, said the Super Mega Corporation--you see, we can print our own currency and loan it to ourselves.

So China gets the message. If you want to keep selling “stuff” to us, we want you to buy our debt, but we are going to keep the interest rates low because we control the currency of trade. In fact, we can just print more of our currency any time we feel like it, since we are the biggest economy in the world.

The official reason for the Fed to buy our own debt is to keep the interest rates low so the economy can recover faster. But here is what is rotten in Denmark. We hear about trillions of dollars piling up in banks and corporations, waiting in reserve while the managers figure out if the U.S. mega corporate managers are going to get things right. If interest rates are kept artificially low, the banks and corporations will eventually have to invest that cash in capital improvements, goods, and services. Thats a good thing. The bad news is that I am getting shafted.

You see, I have reached “senior citizen” status and live on a fixed income. For years and years I sacrificed and saved my dollars so I could have a nice little nest egg for retirement. I figured that nice little nest egg would create some income in the form of interest. Last time I looked, I was getting a return of around a half a percent on all that hard saved money. So what am I to do for investments? Well, that will be the subject of my next blog. This one has grown a bit large.


One last observation. If the U.S. prints more money, doesn't that decrease the value of each dollar in circulation? I'll leave that question to someone who really understands macro economics.

JP   

http://twitter.com/minerjp

Maggie's Notebook: Cuba Iran Korea Review U.S. Human Rights Violations: Obama's Voluntary Shellacking

Maggie's Notebook: Cuba Iran Korea Review U.S. Human Rights Violations: Obama's Voluntary Shellacking

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Action vs Propaganda

Go to wsj.com to see the two articles that prompted me to write a "letter to the editor" of the "Wall Street Journal."  Here is what I wrote:  (This letter was actually published by the WSJ)

November 5, 2010Wall Street Journal

Letters To The Editor

Dear Sir or Madam (With apologies to Senator Boxer)

I was struck by the contrast between Rep John Boehner’s article in Friday’s WSJ (What the Next Speaker Must Do)  and the article just below his (An Undeserved Win for the GOP). In the first, Boehner offers four specific actions for the next speaker to take that would restore some confidence in our Congress.  In the second, and shorter opinion piece, Ms Henvel manages to absolve the Democrats of any blame, call for redistribution of wealth, slander the Republicans as the party of empty slogans, raise taxes, get out of Afghanistan, empower the downtrodden minorities, and for Obama to redouble his efforts that led to the “shellacking” he took. She is truly a gifted writer, being able to pack all that progressive pap into one short piece. Boehner’s article offers solutions--Henvel’s offers the same old tired propaganda from the left.

James P. (JP) Morgan
Sandy, Utah
http;//flyoverfeedback.blogspot.com

The Bubble Nebula

Out there in the night sky, near the constellation Cassiopeia (The big Dubya in the sky) is a fascinating object called the Bubble Nebula. Located only 11300 light years away, it is the result of a massive star (the bright area of the bubble) blowing out gases and intense radiation to form and light the bubble. This star is 100,000 times brighter than our own sun and is 45 times more massive. The bubble is about 10 light years in diameter.

Taken the night of 3 November 2010 with backyard telescope in Sandy, Utah.

JP

A Star is Born

I wrote the following blog a couple days ago, before the election. In his victory speech, Rubio reinforced my belief that he will play a huge role in the Latino voting bloc by asserting that the American Dream is still alive and well and with in reach of everyone. It was a positive message, and will resonate with those striving to achieve success in this great country.


In Monday’s Wall Street Journal, Matthew Kaminski published an article titled “Who’s Afraid of Marco Rubio.” Excellent article about the up and coming new Senator from Florida. The thrust of Kaminski’s opinion was that Rubio has the Democrats frightened since they sense a rising star in the Republican party, thus the ham-handed attempt by Bubba to stop Rubio by encouraging the Democratic candidate to drop out, thus throwing votes to Turncoat Charlie Crist. Kaminski does a great job outlining why Rubio has emerged as such a charismatic politician, astounding the political class with his rapid rise from the barrio. However, Mr Kaminski sidesteps the most compelling argument as to why the Democrats fear Rubio.

Simply put, Rubio represents a Republican candidate who has vast appeal to the Latino population. As the fastest growing bloc of political voters, the Democrats felt they had locks on the Latino vote. Rubio’s compelling story, in addition to his upbeat attitude and communications skills, mark him as someone who will be closely watched by the Latino bloc.

That is why they are afraid of Marco Rubio.

It will be interesting to see how he performs in the Senate and on the national stage. I predict bigger and better things for this exciting politician.

Kaminski Article:  http://tinyurl.com/2a8p4vl    or, just click on the title.





JP

What Comes Next?

The wait is nearly over. Tomorrow, the people of this great Republic will file to the polls, cast their votes, and hopefully restore some balance to our body politic. The pontificators and the pollsters have had their say, now it is our turn to voice the only opinion that really counts.

It is pretty obvious by now that the Republicans will regain the House, effectively firing Nancy Pelosi. That alone is a huge step in returning some sanity to the legislative process. Control of the Senate is a long shot, but even if the Republicans fall short, there is a good chance Harry Reid may take a long overdue retirement.

The important thing to remember is that change alone will not guarantee desired outcomes--look what our current President, elected with a mandate to “change”, has wrought. Hopefully, we are sending a new crop of legislators to Congress to accomplish two main goals. 1. Undo some of the extreme changes enacted by Pelosi and Reid and signed by Obama. 2. Govern intelligently and with the consent and support of the great American people.

This will only happen if we, the people hold our representatives and senators accountable for their actions. To paraphrase another conservative blogger found in these pages, “Be forever vigilant and remain true to our core beliefs.”

JP