To my family and friends;

 I have long been motivated by a personal desire to be self-reliant.  That is a big part of my reason for remaining at Covenant Creek despite many devastating and painful changes to my life these past few years.  I’m not a survivalist and I’m not interested in living a radical ‘off-grid’ lifestyle – I want to still have time and energy to enjoy my life, not just work all the time (although some may consider life on the land to be too much work).

 I am also deeply interested in history and the lessons therein.  It was Sir Edmund Burke who wisely said, “Those who don’t know history are destined to repeat it.”  This is the reason for this letter.  There are patterns in history, particularly in Western societies, that are now being repeated but at a much more significant pace and level.  Understanding what is on the horizon, I know that I would live with deep regret if my family and friends came to me in the future and asked, “If you knew this was going to happen, why didn’t you warn us?”

So, you have my permission to think of me as a kook, misguided, or paranoid; I don’t care.  I know that I am none of those things and sadly I’ve become accustomed to people believing things about me that are not true.  What I do care about is my family, each and every one of them, and the precious friends that bless my life.  There are very difficult times coming and there will be two responses:  One is to ignore it and be caught off guard and therefore become a victim of circumstances.  The other is to pay attention to the signs and prepare, and therefore be part of the solution.  I choose to be the latter and I hope you will too.

It begins with money and the wealth of nations, or more accurately, the debt of nations. Greece is on the verge of sovereign bankruptcy and several European nations are not far behind.  What is most disturbing is that theUS financial situation is far more grave.  When the first country fails, there will be a shudder, but not an immediate catastrophe.  However, once the first domino falls, the rest are not going to be far behind.  All of these governments have become dependent on debt to support their governments and populations; theUS most of all. 

 Historically, treasuries have printed money (called fiat currency) to pay back loans made in the form of bonds.  The consequence of that is a devaluing of currency.  We are seeing that already with the QE1 and 2 (“Quantitative Easing”) programs.  What has most typically happened historically is this practice of printing fiat currency not backed by some tangible asset (most often gold) leads to hyperinflation.  In pre-WWII Germany, the Weimar Republic experienced such astounding hyperinflation that people would pay for their coffee when they ordered it, because the price would have risen dramatically by the time they finished the cup.  Germans would leave work as soon as the stores opened with wheelbarrows full of money just to buy basic necessities.  As recently as 2009, Zimbabwe was dealing with hyperinflation at the rate of 231 million %.  And we think 5% inflation is steep!  The principal of hyperinflation is not only possible, it is probable and it is a very recent phenomenon.  Quoted from Goldonomic, an international wealth management organization: “Denial comes before panic sets in! Hyperinflation is a monetary phenomenon and Demand is not a factor pushing up prices.  Prices go up because the value of the Fiat paper money is falling as more and more is created…In Zimbabwe stores don’t even have goods on the shelves, people are hungry, there is no water, no electricity, no public transportation, gas is sold on the black market and large quantities of paper money confiscated…and yet the Stock market keeps soaring…”

Once the currency is devalued, commodity prices begin to rise.  Beef prices are rising simply because grain prices have gone up.  People are selling off, and even giving away, expensive horses because it’s too expensive to feed them.  Anything made with grain particularly is going to be affected – from cold cereal to ethanol fuel.  Once fuel costs are impacted – which could be from our nation’s inability to pay Saudis and other hostile suppliers (or their unwillingness to sell to us), coupled with our government’s refusal seek energy self-sufficiency by opening drilling and exploration of our own fuel resources – things are going to get ugly.  Food is transported long distances, therefore no fuel – no food.

A few years ago, I participated in a local foods task force in which we studied the food security of our community.  I live in a small coastal town with a tourism-based economy.  The full-time population is about 7,000; that population swells in summer months when almost a million visitors pass through the area.  Due to a number of circumstances, including location away from main transportation corridors, regional topography, availability and production of local farms, we learned that on the off-season, our community had about a week’s worth of food.  During tourist season that drops to two or three days!  If the store shelves aren’t replenished by trucked-in food, then the shelves are empty and people go hungry very quickly.  It’s not outrageous to predict the behavior of mobs of hungry people.

I could give examples ad infinitum.  The point is this: A wise person prepares for the storm before the rain starts.

This is what I recommend:

  • If you have money in the stock market (including mutual funds), get it out.  Get it out soon.  Any investment that is dependent on currency should be considered high-risk.
  • If you have large sums in banks or other financial institutions, particularly those covered under the federal deposit guarantees (FDIC, etc), consider this:  There is no massive pool of money somewhere that is going to pay out up to $250,000 per depositor (350 million US citizens) in the event of mass bank defaults.  Those deposits are guaranteed solely and exclusively by the “Full Faith and Credit of the United States Government.”  Just how much faith and credit do you think the US Government still has, or will have when the economy collapses?
  • Convert assets to tangibles, specifically those things that would have value as an alternate currency.  Tangibles may include metals such as gold and silver (coins for alternate currency, bullion for wealth ‘storage’).  Recently the price of silver dropped as large quantities were dumped into the market and is therefore much more affordable than gold.  In addition, historically silver typically performs more consistently than gold, which is much more volatile.   Other tangibles include anything that would be of value in a barter economy, such as ammunition, food, and consumable products (Imagine how valuable a roll of toilet paper might become!). 
  • Be prepared to feed and shelter yourself, your family, and others if necessary.  Have long-term food storage, extra water, and personal care items on hand.  Emergency Essentials (www.beprepared.com) and www.foodinsurance.com are two companies that I have done business with.
  • Be aware that you may need to defend yourself and those in your care, as well as any resources you may have.  Consider owning (and knowing how to use) firearms and have sufficient ammunition on hand.
  • Learn as much as you can about history, the US Constitution, and practical, useful, marketable skills. 
  • Don’t expect or rely upon the government to support you or to rescue you – or anyone else for that matter.  Those who could have prepared but chose not to are not likely to be looked kindly upon.  Determine to be self-sufficient and personally responsible, and at the same time, be as generous as possible with those in genuine need. 
  • Get to know your neighbors and/or connect with local like-minded individuals with whom you can share support and assistance should it become necessary.
  • If you live in a city, consider what food and safety issues might arise, and consider either relocating to a more rural area or what alternatives may be available should it become necessary to relocate in a crisis.

My objective is not to frighten anyone or elicit panic – neither is productive nor helpful.  Please remember that I share these thoughts with you out of deep love and concern for your well-being and your future.  The trick to being prepared is to consider all potentialities and take steps to mitigate those that are most likely to occur.  If you’ve been paying attention to the signs, this is most likely a review of things you’ve already thought about.  If not, this may be the first warning.  If nothing else, I hope this gives you food for thought and a topic for discussion among those you most care about.

The world is going to change and it will most likely change quite suddenly; that does not mean we need be fatalistic.  We have a strong foundation in our Constitution; we are a courageous and resilient people.  Americans always do best when our backs are against the wall.  I expect that to continue.

If you have any questions or would like to discuss these issues further, I am available any time.  

All my love,

JoDana

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