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Tuesday, May 23, 2017

Cutting Debt While Prepping

Poor Man Survival

Self Reliance tools for independent minded people…

ISSN 2161-5543

A Digest of Urban Survival Resources


Comment ça marche? Or Why Things Might Not Work Much Longer: How You Can Cut Debt While Prepping

It's a French phrase meaning "How does that work?"

Well, it doesn't really… especially when we're talking about politics or economics. The whole world is a mess... and you know it.

José Ortega y Gasset was from the old school in Europe. Think white suits and fedora hats. Maybe a glass of wine and some fine conversation among the ruins.

In his 1929 work The Revolt of the Masses, Ortega "traces the genesis of the ‘mass-man’ and analyzes his constitution en route to describing the rise to power and action of the masses in society" [from Wikipedia... I'm cheating a little here, but it's still good information for you].

Again from Wiki: “Ortega is throughout quite critical of both the masses and the mass-men of which they are made up, contrasting ‘noble life and common life’ and excoriating the barbarism and primitivism he sees in the mass-man.”

“The Fascist and Syndicalist species,” wrote Ortega, “were characterized by the first appearance of a type of man who 'did not care to give reasons or even to be right, but who was simply resolved to impose his opinions. That was the novelty: the right not to be right, not to be reasonable: ‘the reason of unreason.’"

Or as I see it among Democrats it has become the season of unreason...

Until you win the lottery, here are some items I recommend saving up to purchase [you’ll have to read a bit further]. One day, they just might save you. After all, our nation, our world may be headed for calamity and most either refuse to see it or refuse to prepare for it.  Consider the following:

Regular retailers, who have to staff each store can't possibly compete with Amazon. And the retail industry in America is falling off a cliff…

Credit Suisse says it's possible more than 8,600 brick-and-mortar stores will close their doors in 2017. That’s four times as many as closed last year, and would far surpass the former peak of 6,163 store closings in 2008.

Does this sound normal to you?

Does this sound good for the economy or America?

And here’s the critical question…

What happens when investors realize Amazon isn't ever going to make any real money? What happens when borrowing gets more difficult (and more expensive)?

What will happen when investors realize that Amazon's core competitive advantage is that it will never make a profit?

Of course, Amazon isn't the only company dramatically expanding their business with funny money…

I could show you dozens of companies whose entire business models are predicated on virtually free access to unlimited capital…

  • Revenues at Netflix have soared from $4 billion to nearly $9 billion in three years. Cash flows, however, have gone from a positive number to NEGATIVE $1.5 BILLION. And they’ve borrowed $3 billion to finance this growth… so they’re deep in debt and losing millions per year.

This is what happens when a country’s money has been destroyed, and borrowing unlimited amounts is basically free.

  • Deere &Co. (the farm equipment maker to the world) has seen its share price quadruple since the last financial crisis. But here’s the problem: Deere has taken the central banks' free money and loaned it to customers.

The company now holds $38 billion in loans and leases. Does it sound like a good idea to you that management is betting the company (founded in 1837) on the ability of farmers to repay $38 billion in tractor loans?

Keep in mind, the entire company is only worth $35 billion in the stock market. Does that sound “normal” to you?

The only competitive advantage these companies have is a central bank that's lost its mind, by printing money and manipulating interest rates to artificially low levels for more than 90 straight months…


Easy money policies have created an overcapacity in everything from new cars to TV shows… student loans and college degrees… consumer debt and corporate debt… and more.

The real world can only consume so much oil and watch so many TV shows. Consumers can only take on so much debt.

And now… it’s all beginning to fall apart. Capital One, a company that lends billions via credit cards and sub-prime (risky) auto loans, just reported that a critical threshold has been breached… more than 5% of borrowers are not paying back their loans.

The destruction of our money is primarily what’s caused stocks in the U.S. to soar more than 250% since the last crisis.

When savings pays no interest, it turns us all into speculators, chasing returns in the stock market.

All of this low-cost money borrowed from tomorrow simply bids up the price of so many existing assets today. It produces no new “learning” or value (which is what sound money should facilitate) and it leaves us with no way to pay back these debts.

This is why U.S. commercial real estate is up more than 100% since the last crisis. It’s why the average price of a house in San Francisco is now more than 50% higher than it was during peak years of the real estate bubble!

It gets worse: U.S. companies have borrowed more money than at any time in history. According to Moody’s, an all-time record $2 trillion worth of corporate bonds are coming due in the next five years.

Does this sound like things are back to “normal” to you?

Free and easy money has made every spending decision easy for politicians too.

This is why Social Security, Medicare and other entitlement programs are bankrupting our nation… and are completely unsustainable.

As Barron’s concluded earlier this month: “Those who depend on the current system of elder-care entitlements face a potentially hellish future.”


U.S. household debt reached $12.7 trillion in the first quarter of 2017, topping the pre-recession level in 2008.

Let’s offer a few cautionary notes when comparing the debt totals. A few important things have happened since we hit the previous record level in 2008:

  • The population has risen.
  • The economy has expanded.
  • The number of households in the U.S. has increased.

The numbers aren’t adjusted for inflation. Greg McBride, CFA, Bankrate’s chief financial analyst, says it’s not an even comparison. “On an apples-to-apples basis, household debt has not exceeded the pre-recession high,” he says.  [However, wages in most industries still haven’t kept pace and prices for health care and tuition, for instance, have continued to rise].

The report notes that 11 percent of student loans haven’t had a payment in three months or more. That understates the real problem. The actual number could be twice as high because the loans are covered by grace periods, or deferments, allowing repayment at a later date.

Student debt is a major concern

At more than $1.3 trillion, student loan debt concerns me the most. The burden is rising as state governments provide less funding to their colleges and universities. Students and their families are paying the difference, often taking on thousands of dollars in debt. Many graduates carrying that debt are delaying other purchases, like homes.

This seems unsustainable, for the nation and for future students. The new figures indicate that student loan debt is rising at an annual rate of $83 billion. When it comes to funding education, the government is letting us down.

If you’re saddled with student loan debt, check out these tips for paying it off .

Now…Things you should be doing to prepare [you’ve been preparing all along, right?]

1) Food Storage: You’re probably thinking, I can build up food storage. That's not expensive. But I'm talking about building an entire year’s worth of food storage, which can be expensive, so I recommend building it up slowly.

Food storage is critical because not only will it save you in a survival situation, but it can also be a relief in times of financial crisis — like a job loss, medical emergency or other unforeseen circumstances that tighten your purse strings.

By accumulating an entire year’s worth of food, you can be confident in your ability to feed your family. Just remember to be mindful of expiration dates and rotate your food storage regularly so it doesn’t spoil.

2) Generator: When it comes to generators, there are a range of different options. For thousands of dollars, you can install a huge generator that will power your entire home. Another (cheaper) option is to buy a portable generator to power just the necessities.

Both choices have their advantages. A generator attached to your home, for example, has more juice to power more items. However, a portable generator can be taken with you in an emergency.

Either way, it’s worth spending the money to buy a quality generator in the event you are without power for an extended time. Personally, I prefer a portable propane generator, but that’s only one alternative. Do some research and find the option that best meets the needs of you and your family.

3) Guns & Ammo: Since I'm a big gun guy, I have more than a few guns in my home that I can use to protect my family. And since you never know how long a crisis situation will last, I have also stockpiled plenty of ammo — I strongly encourage you to do the same.

I recommend having at least 1,000 rounds for each caliber of firearm you own. If you own several guns of the same caliber — 9 mm, for example — you may want to increase your supply to 2,000 rounds. Remember, you may need to use your firearms to hunt as well as defend your family, and a gun without ammo is useless.

The Bottom Line

Of course, the items mentioned above can be purchased on a budget. But the more money you spend on stocking up, the bigger the benefit in the long term.

And while you’re at it, think like Randy Wagner and look for ways you can reduce damage to your home from natural disasters. For example, if you live in a hurricane-prone area, keep sheets of plywood on hand to cover your windows, and make sure your roof is in good shape. Or if you live in an area where earthquakes occur, look for ways to reinforce the structural integrity of your home.

I have always suggested stocking up on silver [more than gold] in the form of “junk” or circulated U.S. silver coins in various denominations along with items that you can use for barter including alcohol, extra ammo, food, medicines, tools, fuel, etc.

If you’re carrying debt, follow these tips to pay it off once and for all. If you have a balance on your credit cards, consider a balance transfer card to consolidate all of your credit debt onto one low-rate card. Consider joining Money Masters, a Facebook group, for personalized advice from Bankrate experts.

For those of you who have the luxury of time, but not the luxury of money to store up emergency food, consider making your own MRE's.

Cari's article here on how she makes her own homemade MRE's .

An important postscript:  Always keep in mind that all socialism involves slavery…


More Resources:

Yours for better living,

Bruce, the Poor Man



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Larry said...

Wow-I knew it was bad, but these stats paint a picture far worse than I thought. Thanks for a detailed, resource-filled and highly useful article.

DAR said...

Obama didn't do crap for the middle class-more folks on welfare and:

"The hard fact is that the past decade’s $10 trillion in deficit spending has produced the worst economic growth as measured by Gross Domestic Product in our nation’s history. You read that right, in the past decade our nation’s economy grew slower than even during the Great Depression. This stagnant, new normal, low-growth economy is leaving millions of working age people behind who have given up even trying to participate, and has led to a malaise where many doubt that the American dream is attainable."

Niagra said...

Most people are idiots and won't pay attention to this or anything else when it comes to being prepared...they're lucky to have enough beer on hand to watch a ball game. Every time there is a natural disaster the news shows 100s of Hogwarts lined up at the stores cleaning off the shelves of water and more BECAUSE they're too stupid to have anything stored up at home-that's the way Americans are.

Mary Ann said...

Amazon and others are turning to machines to replace workers. The problem will only get worse from here on out.

Bob said...

U.S. households that are setting records. The Wall Street Journal just ran an article with some new debt figures.

"The total debt held by American households reached a record high in early 2017, exceeding its 2008 peak after years of retrenchment in the face of financial crisis, recession, and modest economic growth. In the first quarter, total debt was up 14.1% from that low point as steady job gains, falling unemployment, and continued economic growth boosted households' income and willingness to borrow. The New York Fed report said total household debt rose by $149 billion in the first three months of 2017 compared with the prior quarter, or 1.2%, to a total of $12.725 trillion."