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Survivalnomics 101

From John Galt at  
http://johngaltfla.com/blog3/

23
03/11

Survivalnomics 101

19:17 by John Galt. Filed under: Whatever

click to claim 6 free meals
By John Galt
March 23, 2011

Good afternoon class.
This course offers no refunds, there are no grades but failure is an option. As I discussed on the radio program the initial ideas behind surviving and economic or currency collapse are simplistic to most but require quite  a few to swallow their pride, eliminate the malady of being finicky, and understand that value reigns supreme from this day forward. To start with, I shall repeat the story from the radio program last night which highlighted the daunting future America may be indeed facing shortly.
While I was in a small central Florida town I stopped at a Walgreen’s to pick up some tea and I noticed a clearance sale for the seventy foot rolls of aluminum foil. Knowing full well that aluminum prices were skyrocketing and that the clearance for this size was the same reason they cleared the 75 foot rolls a year ago, because they were about to make them smaller (probably 65 ft. now) I purchased four rolls at $0.62 each just to store away for future use. As I was engaging the young lady who was the cashier the discussion came up about the great price of this item on clearance to which I said to her, “yup, this is a great deal because inflation is getting ready to hit us hard.” The comment she made back stopped the buzz in the line behind me of mostly elderly ladies.
“What’s inflation?” the approximately nineteen or twenty year old woman asked.
At this point in time I was debating a treatise from Von Mises or just telling her to read everything ever written by the Mogambo Guru when another flash hit me that perhaps I should recount my collegiate education of Keynesian garbage. I elected to simplify this as much as I could so the rest of the customers would not have to listen to a twenty minute dissertation and they could purchase their goods and carry on with their lives. “You know the price of gas how it has moved up so rapidly the last few months,” I began, “well imagine prices for food, medicine, everything moving at the same pace month after month but your pay remains the same . It’s what we lived through with Jimmy Carter.” The elderly woman behind me snickered at that and the young cashier had a light bulb go off and that was that.
The question now becomes, how many tens of millions of people are under that same mindset? And what would will you do to prepare your household for the changing economic landscape?
The first item the reader must accept is that everything you have learned about shopping, consuming as it were, must be erased out of your mind. The questions must be asked if you anticipate a sustained economic downturn where your income will remain stagnant but inflation ravages the land.
Do you buy the name brands still as habit dictates?
Do you buy in bulk?
Do you buy quantity now in anticipation of price increases or package size reduction?
Do you acquire barter goods or just stock up for personal usage?
Do you make large capital purchases (Cars, homes, vacations) before the onset of relentless inflation then hyperinflation?
Each of those questions deserve their own personalized answer based on the individual’s earnings, ability, and plan. If you think the government will always save the system and it is unnecessary to prepare for the onset of any type of inflation you can cease reading any further and pursue whatever it is one does outside of reality.
Meanwhile for the rest of us, prepare for the worst by preparing your family first. The first question was key because it is a chance in shopping habits. There are store brands which are just as good as the manufacturers name brands, sometimes in larger packaging, and usually substantially cheaper. Some easy examples are canned vegetables, dairy products, and frozen foods. Shockingly a lot of the generic or store brand vegetables in the canned and frozen food section are actually of American origin, which is important to my shopping habits after visiting Mexico and witnessing their agricultural sector first hand. Another key thing to consider is the step down in shopping locations. Too many people are fixated on the “WalMart has the best deals” mentality and refuse to visit the Aldi’s or other grocers like Save-A-Lot, Dollar General (where available), and other budget grocers. Typically it is because people look down their noses as they are located in “that part of town” but I tend to use my street smarts and find those locations that are not going to provide an opportunity for me to test my conflict resolution skills. Save a buck, buy the lower grade products, lower grade fresh produce, and pick and choose the bargains without exhausting your wallet!
Next the question is buying in bulk, as at the warehouse clubs. This is another test for the smart shopper. Often they tease you with several truly outstanding bargains be it on meats, produce, etc. at the warehouse clubs but often when compared to purchases as the lower grade grocery stores or bargains at mainstream stores, the deals are misleading. Once again it is a matter of picking and choosing where and what you purchase. The bigger determination is buying only those items in bulk which are used frequently enough for a constant rotation to insure spoilage or rot does not occur. Lastly if you do not have room for it, do not store it. My wife gets somewhat angry with me when I elect to store items at times because if there is a crevice, there is usually canned foodstuffs tucked away somewhere in the house; or ammunition; or paper goods; or etc….
The next question is does one buy everything in sight because of anticipated price surges. If you can afford to buy it, store it, and use it the answer is a resounding yes. Price increases of anywhere from 7 to 35% have been seen in my grocery stores, even higher when you take new package sizes into account.
If you are going to follow this series to the end, then yes, obtaining barter goods is a prudent and wise move. Toilet paper will make you a king, ammunition a well fed individual, and a boatload of tobacco and alcohol for barter a potential regional dictator before all is said and done. Ignore the Mad Max scenarios, people will want lung cancer and hangovers before they worry about food and gasoline. The rest of might consider those latter items crucial but having leverage in the barter community are key to obtaining good and services desired by your family.
The last item is purely a personal decision. Should I buy a home? Totally up to your ability to afford one but if you are in a profession which requires constant relocation, I would suggest reading this article:
Why I’m Never Going to Own a Home Again
As far as vehicles are concerned, I have a strong rule of thumb to use: Ease of repair, fuel economy, and durability. New cars generally will fail in two out of three of those items because the situation in Japan with the shattering of the Just-in-Time inventory system should tell you what would happen during a systemic economic failure. Stick with simple, smart, and stealthy and the vehicle could well be a smart long term purchase that saves you heartache as society goes nuts.
Lastly other large capital purchases are up to you and your family. Many need vacations to survive this and I understand this fact completely. Do not take my advice on this, pray on it. Think to yourself “can I afford this” or “will it destroy our emergency savings?”  Those types of purchases are up to each family’s ability to project future savings and need and you are going to have to reflect on this personally, I can only steer you in that direction.
This is going to be a weekly series on the radio program and I look to expand the concept from 101 to a final class at the 403 level. In future editions I hope to cover basic manufacturing, inventory maintenance, precious metals, barter, alternative markets, dealing with the government in a new system, and more. Stay tuned…..

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