The world discards ideas and people that present multiple standard deviations away from “normal”. And yet, Reality has always been phenomenal and noumenal. To ensure you’re able to thrive in the artificial chaos of this generation you’ll need to be an outlier, in many ways. Here’s “The Outlier’s Handbook” to optimize your trajectory.
The Outlier’s Handbook
(Thriving in Artificial Chaos)
Table of Contents
Part 1 — What Outliers?
“Let Your Reasonableness Be Known to Everyone”
Ockham’s Razor: Benefits & Limits
The Bookends of Normalcy Bias & Cognitive Dissonance
“This Book Goes Too Far!”
What Outliers?
Outliers Defined
You Know You’re An Outlier If . . .
Outlier Benefits
Outlier Costs
Personal Secession and Other Outlier Mindsets
Part 2 — It’s Your World, Boss!
This Is Where You Live
American Roulette
The Constitution is Safe!
A Bank with Social Services Around It
Democracy: The God that Failed
The Corporation
The Deep State
Fascism, American Style
Lifecycle of Nations
“Poverty of Nations” Report Card
Imperial Collapse Playbook
Danger, Will Robinson!
Technocracy: The Trojan Horse of Global Transformation
Regional Bloc Head Mercantilism
Gee, Maybe Nation-States Weren’t So Bad, After All
Solutions Amidst Global Fascism
Change Happens Like This, Now
Part 3 — The Usual Suspects
Call Them As You See Them
Origin & Story of Rulers and Authorities
Angelic Gen 6 View: Consistency & Insights
So, Who are “They”?
The “New” Face of Evil (Follow the Blood)
Long Term Trends Require Spiritual Unity
The Minions
A Working Structure of Oppression
They Walk Among Us
Serial Killers
How Can You Spot One?
Political Ponerology
7 signs you might be dating one
Protection From Them
Speech Patterns
I, Psychopath
The Hidden Cost of Killing Psychopaths
Beware the Backlash
Elements of Their World View
Their Goals
”Ye Shall Be As Gods”
Their Methods
The Moral Code of Evil
Inversion
Undisclosed Adhesion Contracts
Counterfeit Money
Controlled Markets
Technocracy
Stacked & Interlocking Pyramidical Structures
Consolidation
Democracy
Eugenics
Perpetual Fear
Long-Term Planning
With Methods Like This, Who Needs the Occult?
Part 4 — Acquiring Immunity
Move #1: Acquire Personal Immunity
Personal Matters
Purpose is Everything
Managing Outlierhood
Growth
Ethical Time Travel
Health Matters
First Do No Harm
Clean Food, Water, Air & Place
Nutrient Dense Diet
Gut Flora, Probiotics and the Second Brain
Optimal Exercise
Stress & Breathing
Life Extension & Blood Sugar Management
Sensible Health Insurance
Putting It All Together
Spiritual Matters
Intelligent or Random Design
Oneism (Monism) vs. Dualism
CINO’s & MINO’s
Christianity Leads To Science, Islam leads to Murder
Gandhi or Jesus?
Get Blessed
Get Uncursed
Supernatural Immunity: The Mind & Way Of Christ
The Whole Council of God
Spiritual Warfare
Practical Examples of Spiritually Based Solutions
Locational Matters
The Best Place to Live
Where Not to Live
Should you relocate?
The World is Yours
The Illusion of Ownership
Mobility
G.O.O.D Project – Lessons Learned
Family Matters
Instrument of Recursive Perfection
Spouse Choice
Children
Extended Family
Friends Worth the Title are Family
Community
Legal Matters
Natural Law
The Constitution is Safe!
Jurisdiction Matters
Where is the Agreement?
It’s Hard to Be a Free Man
Unraveling Your Liberty
Financial Matters
Money is for Immunity & Purpose
Business as Extension of Purpose
Tax Penalties for Fear and Poor Planning
Mortgage Slavery, Repealed
Austrian Economics is Real Economics
Investments in Immunity & Purpose Have the Highest ROI
Asset Protection
Political Matters
Terms of “State” & “Government”
The Diversion Of Left – Right Thinking
The Votes that Matter
Optimal Government = Perfect Self-Government
The Chief Asset Of The State: Fear & Belief In It’s Necessity
All Matters of Liberty Are Related
Caveat Viator: Libertarianism and Anarchy are Aspects of a Complete Worldview
Govern Thyself Perfectly and Hold Death Dear
Perspective Matters
The Most Valuable Commodity on the Planet
Philosophers On Donuts
Terms of “Freedom” & “Liberty”
Equality & Authority
Freedom & Structure
Peace Does Not Flow From Passivity
Proof and Truth
You Can’t Beat Everything with Nothing
“Let’s Just Split the Difference and Find a Middle Ground”
Stoicism
The Opportunity in Uncertainty
If Swamp Rats Can’t be Exterminated Why Can You?
What About America?
Doing Matters
Tony Robbin’s Best Trick
Think Spiritually, Act Locally
Getting Things Done
Low Hanging Fruit
Tragic Flaws of Conventional Prepping
Expert Tips
How To Lose Without Fighting (An Outlier’s Not To-Do List)
Part 5 — Ants & The Human Mosaic
Change The World in Four Moves
Humans as an Ant Army
Move #1: Immunity
Move #2: Specialize
Move #3: Move
Move #4: Cooperate
Humanize the Best Attributes of Animals & Insects
Part 6 — Problems: Solutions
Move #2: Specialize & Pick One
Personal Concerns
Training Disguised as Education
Shortening Attention Spans
Media Agitprop
Health Concerns
Eugenics
Vaccines Vs. Immunity
Socialized Medicine
Food Fascism & GMOs
Fluoridated water
Nuclear Waste & Meltdown Disasters
Geo-Engineering
Disease(s) Cured
Spiritual Concerns
Psychopathy
Moral Relativism
Odious Debt (Slavery)
Wars of Conquest
False-Flag Attacks
End Times Decoder Rings
501c3 Churches
Locational Concerns
Agenda 21
Scientific Control Grid
Power Grid Fragility
Family Concerns
The State as Great Father
Broken Families
Legal Concerns
Patent Squelching
Webs of Undisclosed Adhesion Contracts
Drug Wars
Licensing
Militarization of Police
Surveillance State
Monopoly
Bonus: Beating Traffic Tickets
Financial Concerns
Fractional Reserve Banking (The Theft of Human Labor)
All the land development talk in my Galt’s Gulch Chile series seems pretentious. Then again, merely telling the average person you’re flying to Chile has a good chance of causing eyes to glaze over as if one is doing something exotic. Flying to Chile is not exotic; it’s merely something that’s possible the instant one decides it is.
If there’s a storm headed your way it’s time to cut the crap-talk about some castle you own and get to a motel room anywhere the storm isn’t. Why be grandiose about the simple and elegant act of leaving to let the storm pass? In fact, why say anything at all except to make a few calls to shutoff utilities and keep any promises you’ve made to others before leaving town? With mouth firmly closed, just hop a flight and get a room.
Engaged Withdrawal is Not Passive
The point of all this ex-pat business is to contribute to the solution through engaged withdrawal. Having gone through much of the advanced work of ex-patting my family I can vouch for the truth that engaged withdrawal is not a passive undertaking (Hat tip to Wendy McElroy for this link).
Two Paragraph Expat Guide to Chile
Forget about all this talk of land development and ownership. Motels, Hotels, Apartments, houses and cabana’s dot the entire country, have already been developed, and are yours for the renting. Your best second home is a rental anywhere you want to be. Keep it that simple and you won’t even be limited to Chile.
Nine out of ten Chilean ex-pats end up in NE Santiago (Las Condes) so just rent there for a few months and make scouting trips on the weekends. When the 90 days is up on your visa fly to Argentina for the weekend and reset it. That’ll get you out of the US for six months with your “measly” first passport. You have one, right?
It’s Your World, Boss
The world is yours the instant you recognize it is. The nagging urge to “own” things, perhaps stronger in the American psyche, is best kept at bay when conducting one’s life across multiple nation-states.
I recall streaming the movie “Inglourious Basterds” [sic, indeed] from netflix to the ipad and realizing the adjoining cabana could be rented for my kids, along with the one we were in, for less than our US mortgage. With that thought, the fear of being trapped in proximity to the endless artificial problems of the state’s creation started to melt away. My second thought was that all this was achieved for the price of a plane ticket, rental car and a hotel room.
This is a re-post of a summary of Catherine Austin-Fitt’s financial detox plan as given to Max Keiser five years, ago. The 15 pieces of wisdom extracted from the video are timeless. If you had started working on them in 2009 it would have had a dramatic impact on your life. Five years from now the same will be true about starting to work on them, today.
Catherine Austin Fitts is a breath of fresh air.
With a keen understanding of the links between politics, corruption, and money she is unmasking economic con-games, one by one, for the benefit of us all. Give her 15-minutes and she’ll explain the most complex schemes and enable you to see right through all sides of the rhetoric we’ve been hearing all our lives.
Not only that, but, she offers powerful solutions and action plans that can be implemented within minutes of watching one of her videos.
Listen to her describe her “Bailout Plan” in the video, below, which I found on The Edge with Max Keiser.
1. – Save Time
Cut out TV and corporate media. They’re a brainwashing waste of time. You’ve got better things to do and think about. Get radical about cutting this out and save 5-10 hrs a week of “bad training”.
Get corrupt people and enterprises out of your life. They get access to your data and money. Consider carefully the banks, brokerage houses or institutions you do business with.
Control personal data. There is no privacy. Think through who you do business with and who has access to your data.
Compliance – be impeccable with compliance. In a situation with highly complex rules and no privacy it’s easy to get caught up in a dragnet.
Simplify. The less things you’re responsible for the better.
2. – Get Smart
Implementing 1. gives you time for 2. and 3.
See things as they truly are.
The greatest wealth creating entity of all time is the family. Think strategically about your family and friends.
If you’re not in a conspiracy you need to start one. Conspiracy means to breathe together. Start a conspiracy with your family to benefit each other and keep corrupt institutions out of all your lives.
Network with other people who know what’s going on. Nobody is as smart as all of us.
If you have time, understand history. What’s happening today is logical if you understand the history of things like narcotics trafficking, mortgage fraud, etc.
3. – Reposition Your Assets
The goal of the games of economic warfare are control and equity.
Build your equity. Invest in your health and your knowledge. Think strategically about managing these key assets.
We’re leaving a large bubble and now people want hard assets. Shift out of phony financial instruments into securities and hard assets with solid economics.
Stick with long term trends. Follow the tapeworm. Don’t be confused by economic nonsense into investing into anything that is not long term and high quality like food, water, gold, Precious metals.
Demonetize. We put money into financial assets, get yield, then buy things. This is a losing proposition.
Catherine Austin Fitts is always worth your time. Check out her blog which she calls, The Solari Report.
An item with money qualities might be a good barter item. To be an Optimal Barter Item it must also directly fulfill multiple human needs in the circumstances of the barter.
For each scenario under consideration ask yourself what items would directly fulfill multiple human needs and be widely accepted in trade in excess of the trader’s need. If the item is also transportable, divisible, storable, measurable and hard to counterfeit then it’s a winner: An alternative form of money in the circumstances of the barter.
Since anything can be used in barter it’s worth making an equation as a tool to separate the wheat from the chaff:
(M * N * LP)1-n = Optimal Barter
Where M are the money qualities, N is how directly the item fulfills a need and LP is the Life Priority of the need fulfilled. Note the 1-n subscript. That’s because an item can fulfill needs across multiple categories of life. In fact, the best barter items do.
Money & Substitutes – (M)
One way to compare barter items with each other is to compare each with money and rate them according to how they measure up. The top items on the resulting list are possible money substitutes. Their fulfillment of human needs, however, is another matter entirely. See ‘Ammo vs. Money’ where I compare ammunition with all the attributes of money.
When barter is king money is dethroned: It takes a backseat to the direct fulfillment of human needs. The concept of money and its substitutes is still useful, however, because many items that fulfill human needs are also decent money substitutes.
Water, food, syringes, antibiotics, IV Lines, portable water filters, firearms, ammunition, batteries and radios are worth more than the money used to buy them even in good times. In a crisis some of these are needed so badly they might overcome the biggest stumbling block of barter: The lack of a double coincidence of wants.
Direct Need Fulfillment – (N)
Water quenches thirst, Food satisfies hunger, Tarps block rain and wind.
The more direct the fulfillment the higher quality the item. I’m a big fan of substitutes but they’re not as easily recognized in the midst of a crisis as the real thing. Since barter items are best stocked after covering the essentials for your family it’s best to focus on items that fulfill needs, directly. There’s one exception to this line of thinking.
The best barter items span multiple categories of use: They directly fulfill some needs and indirectly fulfill others. Water is an easy example: It directly quenches thirst and cleans skin and has an almost infinite number of other uses. Water’s indirect uses multiply it’s desirability as is the case with other Optimal barter candidates.
Life Priorities – (LP)
It’s a constant burden to mankind that choices must be made with imperfect knowledge. With perfect knowledge ordering priorities is a cinch. However, wait too long for specifics to prepare and risk not being prepared, at all.
My Life Priorities are the same in good times and in bad. In a crisis I’ll rely on intuition to reorder priorities according to the scenario. For instance, although Water is #1 the urgency in finding a source is greater in a desert than in a rainforest. Medicine is #5 though in the absence of sickness or injury securing communications might pay bigger dividends. These are not compromises; just working flexibility and a trust of intuition after being prepared, in general.
For the purposes of preparing in advance for a non-specific crisis I’ve chosen to order life’s priorities in the following categories:
Water
Shelter & Clothing
Food
Security
Health & Medicine
Communications
Power
Hygiene & Sanitation
General Tools
Transportation
Going through your own reasoning process and placing these categories in order is surprisingly useful. Knowing your priorities is key in making disciplined and balanced choices when allocating limited resources.
Narrowing Down the Barter List
Think through your Life Priorities and order them into categories (As many as you find useful).
Consider the bolded items in the Comprehensive Barter Item List as barter items worthy of consideration (And please send me your suggestions).
Group the resulting items from step 2 that strike you as filling the most pressing human Needs into your life priority categories.
Sort items within each category by your sense of its importance.
Use your Life Priority categories and assign a primary category and then the secondary categories that the item serves.
Take each item compare it with the attributes of money and assign a value where 10 = Money and 0 = nothing in common with money.
Keep sorting using the criteria in steps 4 thru 7 until you narrow the list down to 20 to 50 items or however many you’d like to use as input to the Barter Equation.
The resulting items are the best items to use as input to the equation.
Consider Three Scenarios
Consider narrowing down your preparation scenarios to three:
The most likely threat to your physical location.
The threat that comes to mind when consulting your informed intuition.
The everyday potential threats and outages that normal life presents.
For example, my three are Fire, Dollar devaluation/Inflation and Electrical Power Outages.
Applying the Equation
Grabbing some promising barter items from the Comprehensive Barter Item List for my three scenarios here’s my impression of the values that should be assigned to them for each variable in the Barter Equation. The equation has not yet been applied. They have merely been sorted by their primary Life Priority category and then by their respective Money qualities. This is as far as people usually go when when considering barter items.
The higher the N the more direct its fulfillment of LP1 (As Ordered by my Life Priorities, above).
The higher the M the more qualities of Money the Item has.
LP1 is the items primary fulfillment category (In my opinion) and LP2 thru N are its secondary fulfillment categories.
Sorted by Primary Life Priority, then by Money Qualities
Barter Equation not Applied.
Item
N
M
LP1
LP2 thru N
Water Packets
10
7
1
3,5,7,9
Portable Filters
5
5
1
3,5,7,9
Duct Tape
7
7
2
4,5,7,8,9
Tarps
8
6
2
4,7,8,9
Aluminum Foil
4
8
3
5,7,9
Coconut Oil
10
7
3
5,7,9
Eggs & Milk
10
6
3
5
Baking Soda
3
5
3
5,7,9
Ammunition
8
8
4
3,6,9
Syringes
5
6
5
7,9
Alcohol Wipes
6
6
5
7,9
Antibiotic Lotion
8
6
5
7
Fuel
8
6
7
4,5,6,9,10
Generator
8
2
7
4,5,6,9,10
Soap Bars
7
6
8
5
Applying the Optimal Barter Equation (First Dimension Only)
Here is where the items rank after using a spreadsheet to apply the equation to each items M, N and the LP of their primary category only. In other words, this is where the item would rank if its fulfillment of needs in other life priority categories was left out of consideration.
(M * N * LP) = Optimal Barter
Rank
Item
N
M
LP1
LP2 thru N
1
Water Packets
10
7
1
3,5,7,9
2
Coconut Oil
10
7
3
5,7,9
3
Eggs & Milk
10
6
3
5
4
Ammunition
8
8
4
3,6,9
5
Duct Tape
7
7
2
4,5,7,8,9
6
Tarps
8
6
2
4,7,8,9
7
Antibiotic Lotion
8
6
5
7
8
Aluminum Foil
4
8
3
5,7,9
9
Portable Filters
5
5
1
3,5,7,9
10
Alcohol Wipes
6
6
5
7,9
11
Fuel
8
6
7
4,5,6,9,10
12
Syringes
5
6
5
7,9
13
Soap Bars
7
6
8
5
14
Baking Soda
3
5
3
5,7,9
15
Generator
8
2
7
4,5,6,9,10
Applying the Optimal Barter Equation to All Dimensions of Each Barter Item
Applying the equation now to both the primary and secondary life priority categories the item serves. Notice the increased liquidity of items that serve a broad number of categories.
(M * N * LP)1-n = Optimal Barter
Rank
Item
N
M
LP1
LP2 thru N
1
Water Packets
10
7
1
3,5,7,9
2
Duct Tape
7
7
2
4,5,7,8,9
3
Ammunition
8
8
4
3,6,9
4
Coconut Oil
10
7
3
5,7,9
5
Tarps
8
6
2
4,7,8,9
6
Fuel
8
6
7
4,5,6,9,10
7
Eggs & Milk
10
6
3
5
8
Portable Filters
5
5
1
3,5,7,9
9
Aluminum Foil
4
8
3
5,7,9
10
Antibiotic Lotion
8
6
5
7
11
Alcohol Wipes
6
6
5
7,9
12
Generator
8
2
7
4,5,6,9,10
13
Soap Bars
7
6
8
5
14
Syringes
5
6
5
7,9
15
Baking Soda
3
5
3
5,7,9
The above fifteen choices were chosen only to show how to apply the equation. It would be interesting to apply the equation to all barter items and see the results. If there’s enough interest that would be a fun exercise for another article.
The resulting Top 10 items of your application of the equation are most worthy of your barter resources. They will directly fulfill the needs of your family while providing a backup form of money or trade liquidity during barter economies. Your proposed trades with these items are more likely to be accepted by fellow traders than those who haven’t gone through the exercise.
Whiskey, Cigarettes & Chocolate
These three items have proven themselves to be good barter items in real barter ‘economies’. The equation handles them well if you add them to your Life Priority list and give them a high “M”, which they deserve.
For instance, perhaps you would swap my priority of “Transportation” with “Vices” to account for Whiskey and Cigarettes. You would also rate these items high in “M” because they do fair well as money substitutes.
Chocolate fits naturally in the Food and Health categories and has a high “M” if the climate is not too warm.
The value of everything varies continuously in time. That doesn’t mean there’s no value in evaluating their relative standing in the only moment we have: Now.
Optimal Barter Items are like Superfoods
To be honest I had a different equation written when beginning this article. After going through the entire process it became obvious that some items are to barter what superfoods are to health: They provide a kind of comprehensive nourishment; they fulfill multiple high-priority needs!
I did not rig the equation to favor items that met multiple needs. I only discovered that no item that fulfilled only one need could compete with the liquidity or desirability of a barter item that fulfilled needs across the spectrum of life’s highest priorities.
The Trade Trumps the Traded
As with the use of money trade is more valuable than what’s traded. Who makes that judgment? You do by making the trade. After all, if you’d rather keep the items you’re exchanging then why don’t you? Even protesting ‘no choice’ admits you value what you get more than what you give. And, your fellow trader feels the same, no?
The Trade Trumps the Traded, every time, as evidenced by the fact that the Trade was made.
Human Needs Trump Liquidity
The purpose of your Optimal Barter Equation is to zero-in on the barter items most worthy of your limited resources. They’re the most liquid components of your preparedness plan. Since the top candidates are also essential it’s a judgment call to decide when you have enough. While your overall preparedness will be well served with these items be careful not to prioritize barter items over the broad range of essentials needed by every family.
I put Ammunition after Water, Duct Tape and Coconut oil and before Fuel, Tarps, Paracord and Whiskey. But, that’s just me. On a recent trip to Peru I noticed a fresh role of toilet paper on the dash of every taxi.
A man’s got to have his priorities!
Life Priorities – (LP)
For the purposes of preparing for a non-specific crisis I’ve chosen to order life’s priorities in the following categories:
Water
Shelter
Food
Security
Health & Medicine
Communications
Power
Hygiene & Sanitation
General Tools
Transportation
Spices & Vices
Going through your own reasoning process and placing these categories in order is surprisingly useful. Knowing your priorities is key in making disciplined and balanced choices when allocating limited resources.
Any situation requiring something akin to a remote control drill is eligible for the deployment of firearms and ammunition. Contrary to mainstream media brainwashing firearms have a broad range of application: They serve needs in three out of ten of my top 10 Life Priority categories: Security, Food and General Tools.
Differences of opinion on the value of barter items will be rooted in Life Priorities. Your vision of where Food, Security and General Tools fit into the big picture –And your strategy in providing them– will change the ‘price’ and liquidity you assign to firearms and ammunition.
Informed Subjectivity
In a barter economy you are one half of the pricing system and your fellow trader is the other half. Making subjective judgments about the value of a barter item is not a weak method; It’s the only method. Barter economies have no broad pricing system other than the subjective judgments of the traders. Instead of complaining about subjectivity develop an informed subjectivity to become a better trader.
In barter price is expressed in terms of the desired item. To save myself from drowning in a sea of subjectivity I came up with Your Optimal Barter Equation. Please see that article for a description of the equation. Simply stated:
(M * N * LP)1-n = YO Barter
Where M are the money qualities, N is how directly the item fulfills a need and LP is the Life Priority of the need fulfilled. Note the 1-n subscript. That’s because an item can fulfill needs across multiple categories of life. In fact, the best barter items do.
Money – (M)
Ammunition is compared with the attributes of Money in the first part of this series. Ammo fairs well in the comparison. On a scale of 1-to-10 where 10 is money I give Ammunition a rating of eight. It is viable, if not strong, in seven out of the 10 attributes of money; it is not fungible, is divisible only within the same cartridge and is best traded in manufactured lots. It is also destroyed or unpredictable if wet.
Direct Need Fulfillment – (N)
Bartering ammo instead of a gun is like bartering fuel instead of a car. The ‘fuel’ for these machines have more of the attributes of money yet directly fill needs for the same Life Priorities.
Because ammunition requires a gun I’ve given ammo an eight instead of a 10 when scoring its direct fulfillment (N). Before settling on eight, however, substitutes should be considered.
Ammunition Substitutes?
Security. Walking through the aftermath of Haiti or Katrina with pepper spray or rubber bullets is a weak security play. Even if you emerge unscathed what’s your strategy to provide security for your family? The stabilizing peace that follows in the wake of responsible gun ownership is dramatic, even in good times. How much more so in a crisis? Avoidance, lights, fair trade, keeping your word are minimum behaviors of rational people. However, security is not holistic until violence that may be thrust against you by less spiritual or less rational creatures can be stopped.
Food. Yes, ifcomplete proteins are stocked in advance. Have plenty of beans & rice, whey, TVP, Hempseed, milk, eggs, soybeans, etc. You can leave hunting to hunters only with advance preparation (And hunters would be grateful if you would be so prepared).
General Tools. Need a remote control drill? Then you need firearms and ammunition. No substitutes as of 2010.
Substituting peace for violence is a noble quest undertaken within one’s own heart. Would you stake your life on all those around you achieving this state of Grace? Stockpiling a nutritious variety of complete proteins will quell your families need to hunt. Do you have this food set aside and ready to go?
At best, substitutes for firearms and ammunition are indirect and require advanced preparation. While encouraging all reasonable avoidance of violence and advanced preparation my direct fulfillment (N) score of ammunition remains an eight.
How Does Ammo Stack Up?
I took the best money substitute candidates from the 400 Item Barter List and narrowed it down to 44 Items. After assigning M, N and LP values to each item a spreadsheet was used to calculate scores using Your Optimal Barter Equation:
(M * N * LP)1-n = YO Barter
The equation was applied to the items primary (LP1) and secondary (LP2 thru N) Life Priority categories. The top 21 items ranked as follows:
Rank
Item
N
M
LP1
LP2 thru N
1
Water Packets
10
7
1
3,5,7,9
2
Lighters
9
6
2
3,4,5,8,9
3
Duct Tape
7
7
2
4,5,7,8,9
4
Batteries
10
5
7
4,5,6,7,9
5
Coconut Oil
10
7
3
5,7,9
6
Ammunition
8
8
4
3,6,9
7
Fuel
8
6
7
4,5,6,9,10
8
Tarps
8
6
2
4,7,8,9
9
Paracord
10
6
9
2,4
10
Salt
10
7
3
5,11
11
Hemp
9
7
3
5,11
12
Silver (1 oz)
10
10
9
5
13
Eggs & Milk
10
6
3
5
14
Portable Filters
5
5
1
3,5,7,9
15
Wine
10
5
11
3,5
16
Whiskey
10
7
11
5,8
17
Handgun
8
5
4
9,3
18
Razors
8
7
8
5,9
19
Aluminum Foil
4
8
3
5,7,9
20
Aloe
10
6
5
8
21
Rifle
8
4
4
3,9
As you can see, accounting for a barter items use across multiple categories yields surprising results. I didn’t expect Lighters, for example, to rate so high. However, it’s difficult to protest a Lighter’s compactness, money-like qualities and it’s direct fulfillment of needs across six of my highest Life Priority categories. Water, Lighters and Duct Tape are clear winners (Using my values).
The next three items grouped closely; there was no clear winner among Batteries, Coconut Oil and Ammunition.
I expected Eggs & Milk to rate higher but the equation is a measure of a barter items liquidity in a barter economy. The ranked items are not a preparedness list, per se. It would be a tragic mistake to stockpile excess of the above items instead of focusing on your overall preparedness needs. However, having an excess of top scoring barter items would be among the easiest errors to correct in a crisis and might help fill in the gaps of your overall plan.
Point in Time Value
Change the scenario and change the price. A box of .357 costs less when golfing at Pebble Beach than in the aftermath of the LA Riots. The value of everything changes in time for too many reasons to list. That doesn’t mean there’s no use in taking a stab at relative value in the only moment we have: Now.
My ranking of these barter items was done in the same way as a trade: Subjectively. If I place a higher value on Coconut oil than Aloe does that make me an informed consumer of Coconut oil or an ignorant one of Aloe? You tell me, my fellow trader. The subjective evaluation of the price of a barter item is not a weakness of method: It IS the method.
Ammunition is a Barter Superfood
These top 21 barter items are the superfoods of a barter economy: They provide a kind of nourishment across Lifes’ Priorities. Even after a good meal a bag of Salt still appeals. Even with a full tank of gas a spare five gallons is not to be dismissed. And, you don’t have to be a shooter to know that a few boxes of .38 Special could be traded for just about anything.
While discussing the subject of this article with a friend he jokingly said, “Forget about other barter items. A gun is your ticket to get everything you need!”. When we were done laughing I realized he had perfectly captured the spirit of the unprepared, less rational or desperate. Unfortuneatly, even in good times there are at least76 Reasons to Have a Gun and the ammunition they use.
Like water in the desert, food during famine or shelter in a storm, the value of a gun and the ammunition it uses is exactly equivalent to the value of the life it defends at the moment it defends it. Unlike water, food and shelter, however, the gun may not have to be fired to achieve its full value.
May only one half of that decision be left to someone else.
Working this plan to pay off your house doesn’t free you from the daily grind, in the short term. You’ll still need to:
Keep making the payments on your mortgage.
Keep making payments on other fixed debts and expenses.
Scrape and save whatever you can.
Store your savings into silver until you reach your target number of ounces.
Keep your head above water during this disintegrating economy.
Monitor the price of silver and be willing and able to cash in when the time is right.
Cash in, pay the taxes, make large payments on your mortgage and lay low.
Doomed From the Start?
Are you paying on a mortgage from the overvalued bubble market?
The contrast between the difficulty of paying off a bubble mortgage and buying a new house in cash is going to get extreme. If it’s too much harder then consider a short sale, rent for a while and use your silver to purchase a new home when the time is right. You might as well benefit from lower housing prices.
Standing still will cost more dollars in the future than it does now. If you manage to come up with more dollars to stand still you’ll be taxed as if you’ve gained something.
This double theft of inflation and more taxes is ridiculous, of course. But, you’ll have to put more silver aside to pay the taxes on your non-gain. Otherwise, you’ll fall short of you’re goal to pay off the house.
How much more silver you’ll need for taxes is a function of the size of your mortgage and your current and future tax rates. It’s a moving target, but, you’ll have to take a stab at quantifying it to achieve your goal.
Federal
Buying or selling back silver eagles require no 1099 broker reporting. $1000 face value of junk silver (752 oz silver) is the threshold of reportabability. Less than 1000 oz of other forms is not reportable. A tax advisor would probably tell you that its good to know the reporting rules, but, they don’t affect the definition of when you’ve realized a capitol gain. You may, however, want to sell in increments less than 1000 oz. to minimize paperwork.
Sales Tax
Purchase in increments greater than $1500 to avoid paying sales tax on the purchase. Check your state rules for the threshold.
How Much Silver Do You Need?
Enough to pay off your mortgage, pay taxes on the non-gain and cover the spread on the buy and sell of the silver. If you can swing it why not add all your fixed debts to the mortgage amount and buy your way out of all debts?
The 1980 price of silver was $50/oz. The inflation adjusted price of $50 in 1980 is $129 in 2008. And yet, the current October 2009 spot price of silver is $16.32/oz.
Based on your belief use a silver price of anything between $35 and $129 for your calculations of the number of ounces to purchase with today’s savings. Then pick the month and year you think it will be worth that price. My number is $75.
I believe the dollar will fall and silver will rise in dollar terms so that one ounce of silver will be denominated in at least 75 dollars within three years. Tell me that its November 2012 and silver is $75 an once and I wouldn’t think you were saying anything extraordinary.
Example
Principal owed = $100K
Silver Now = $16.32
Silver Then = $75
Cap gains tax = 15%
Spread on the buy = 6%
Spread on the Sell = 2%
Ounces needed = 1537 costing $26,589 in todays dollars with buy spread
Sale price of 1537 oz. after paying sell spread = $112,969
Cap gains paid = $12,957 (costing 173 ounces at $75/oz)
Net (After taxes and spreads) = $100,012
So, for every dollar you save in silver you’ll be able to payoff 3.8 dollars of mortgage after paying the taxes on the silver gain if silver goes to $75.
How does that compare to saving dollars in a bank at 0 interest? Let’s say every dollar you have now is worth 60 cents then. That means instead of having 3.8 dollars you’ll have 0.6 dollars. That means you’ll have 6.3 times more dollars in your hand if your savings is in silver rather than dollars (3.8 / 0.6 = 6.33).
Step-by-Step
Decide what you think the price of silver will be in three years.
Look up how much you’ll owe on your house in three years.
Divide principal owed / silver spot in #1.
Add in the buy spread on the purchase
Add in the taxes on the gain.
Add in the sell spread.
Add 2, 4, 5 and 6 and recalculate #3 substituting the new number for the numerator (It’s recursive because of the taxes. I made a spreadsheet to calculate 1-7).
Find a source to purchase the silver.
Purchase the silver
Purchase a gun safe, not necessarily shipped to your own property.
Take physical delivery of your silver and store it somewhere safe — The gun safe being one of many options.
Keep making your mortgage payments and other expenses
Monitor the spot price of silver
Get as familiar and comfortable with selling your silver as you did in buying it in step 9.
Wait until the value of your silver hits your spot price.
Sell the silver in increments that enable you to minimize taxes on the gain.
As you sell the silver make huge payments on the principal of your mortgage.
That’s it! Don’t think about it too much or cash in the silver too early. Get back to your life.
If You Don’t Have the Money
The savings required to buy enough silver to pay off your mortgage is small in comparison to the size of a mortgage. However, it’s by no means a trivial amount of savings.
If you don’t have enough then either buy what you can or focus on other real assets. I keep a running list of my favorite real assets in Checklist for Hard Times. In that article I recommend not buying precious metals until you have the real things needed to fulfill the needs of your family. Providing shelter (Paying off the house) certainly qualifies as providing for the needs of your family, in my book.
With all this talk of money and sliver you might be surprised that my philosophy is that Everything is Worth More Than Money.
Belief is Good (And Downside Risk is Minimal)
The technique I’m proposing will work for balanced and financially conservative reasons. Yes, silver is undervalued, but, don’t bet the farm on it. Rather, payoff the farm with it. Use the rest of your savings to hedge risk and purchase tools and seeds for the harvest.
What I’m not saying:
Buy silver because you’ll make a lot of money.
Silver is your last chance at an investment of a lifetime.
Put every spare dime into more silver.
The silver market is manipulated and will spring back with a vengence.
I can’t make these statements because markets can be manipulated and investors can be wrong longer than you or I can remain solvent.
What I am saying:
The dollar will continue to fall and there is no government plan, action or will to save it.
The dollar will not be saved by deflation (Occuring simultaneously with overpowering inflation).
Silver is the most undervalued candidate among many other choices for hard assets in which to preserve savings.
Silver is not your only alternative for this plan. It’s just what I think is the best alternative.
Silver will preserve, though not necessarily increase your real purchasing power. It is the preservation, not the increase that this plan depends on.
Whether you execute the plan depends on your belief. Writers that specialize in precious metals are better sources to hone your beliefs than I can be in this article. I’ll list my favorites, below and suggest a reading sequence.
Belief is best when it comes from your own research. I recommend reading the following articles, in this order, to optimize your time.
In 1980 it took 814 ounces of silver to purchase a median-price home in the US.1 In today’s dollar 814 ounces would cost you $13,154.2
If this happens again you’ll be able to purchase a home, free and clear, for $13,154 of today’s dollar if stored in silver instead of the bank.
This article is not about buying new houses. It’s about a technique to get out of debt and own the house you live in. The debt I’m referring to, here, is fixed: Your rate and monthly payments are the same for the life of the loan.
You need only track the remaining principal on your mortgage and the spot price of silver to come up with input numbers for my proposed technique. Whether or not you execute the plan will depend on your belief.
Belief is best when it comes from your own research. I’ll provide some points of departure for that research but want to focus on execution, here.
Perhaps your belief will come easier knowing that what I’m proposing is just a . . .
Faster Version of the ‘Same Old Thing’
As a debtor, inflation helps pay off your mortgage if your wages keep up.
Every monthly payment is worth less to the bank. The inflation (Theft) is slow enough that wages get a chance to catch up. They rarely do keep pace, but, the number of dollars you receive usually does increase over time.
Three things are happening here on a normal basis as you pay off your mortgage:
Your getting paid more dollars from your employer or customers as you attempt to maintain purchasing power.
Each of your fixed payments are worth less to the bank.
The value of the balance due on the mortgage decreases by the principal portion of your payment and the inflation adjusted value of the remaining debt.
To speed up this existing process I propose that more of the the fruits of your labor be stored in silver to preserve (And possibly increase) its purchasing power. In effect, you’ll be speeding up step 1, above, by translating back your silver savings into dollars at some future date and paying down your mortgage. By that time, however, the dollar will have fallen and silver will have risen.
The silver you cash back into dollars will pay off a larger chunk of the currency your mortgage is denominated in: Dollars. Those increased number dollars may or may not have more purchasing power. But, you don’t need them to. All you need is for the silver to buy more fiat dollars to satisfy the mortgage. In other words, the mere act of preserving existing purchasing power will give the same effect as an increase in purchasing power when it comes to ‘purchasing’ debt.
In this one respect the falling dollar can be used as a One Trick Pony to help you escape from fixed debt.
Give to Caesar What is Caesar’s
As the dollar falls silver (And gold) rise in dollar terms to accurately reflect their unchanging value through the prism of a disintegrating metric (The dollar). Happily for you that disintegrating metric is what you owe the bank. Your mortgage says you owe dollars, not gold or silver. So store real value. When that real value is inevitably worth more tokens in the future turn them over to the bank to purchase your freedom.
Give to Caesar what is Caesar’s: The tokens he conjured out of thin air that now enslave you.
This Bubble’s For You
As people start to catch on and gravitate towards true value more will flee the dollar and buy up real assets. Silver is one of the prime candidates. The above ground silver available for purchase starts to disappear. This secondary event, in turn, causes more flight from the dollar which feeds an even more rapid rise in the price of silver. Then silver, itself, starts to rise even above its true value being one of the few worthy recipients of the flight from the dollar.
The amplification effect on price between silver scarcity and flight from the dollar continues until it takes the familiar shape of historical bubbles we’re now all familiar with. However, knowing this in advance and setting aside a modest amount of silver means that This Bubble’s For You.
I base this on . . .
A Radical Prediction that What’s Happening Will Continue
The Dollar Has Fallen 40% in the Last Eight Years. Contemplating another 40% decline in the dollar is no more outrageous than expecting things to continue as they have been.
If the dollar falls another 40% then a mortgage of $100K will be worth $60K in current value. Before shedding too many tears for the bank recall that the money they ‘gave’ you was conjured out of thin air because of The Awful Truth of How US Dollars are Created.
Apart from some temporary uptick the MSM will seize on as ‘proof of recovery’ do you know of anything being done that will save our fiat tokens?
Get On the Short List
You won’t fully benefit from the decreased value of the mortgage unless you can manage one of the following:
Your wages keep up with Inflation. If you increased your wages by 40% from 2001 to 2009 it was due to your own efforts not the silly CPI adjustments referred to as your raise.
You get paid the same wages in a currency that maintains its purchasing power. If you can manage this you either don’t live in the US or I’m reading your financial columns and watching your youtube videos. Thank you and enjoy the fresh air of the Swiss mountains or I hope your Mandarin lessons are going well, Mr. Rogers.
You use today’s dollar to purchase an asset or commodity that maintains its purchasing power.
Bingo! Now, that’s I’m talking about.
You come up with a money making idea that brings in tons of dough. Creating value for our fellow human beings is what it’s all about. Please don’t get lazy and keep the fruits of your labor in tokens.
With sharp inflation it’s a challenge to keep wages up even if you own the company. Business owners walk their own tightrope raising prices. Will the inevitable price increases be passed onto employees, immediately? Actually, they can’t.
Conducting business with a volatile currency is an expertise more likely possessed in a Banana Republic. If you’re trying to acquire such expertise there’s a fabulous little book that has a place on your nightstand: The Hyperinflation Survival Guide: Strategies for American Businesses
Stay Tuned for Part 2 of 2
I’ll get very specific in Part 2 of 2 with:
The Daily Grind
Tax on Standing Still
How Much Silver Do you Need?
Step-by-Step Implementation
If You Don’t Have the Money
Belief is Good (And Downside Risk is Minimal)
1Guide to Investing in Gold and Silver, Michael Maloney, Page 152. Maloney uses the Case-Shiller Home Price Index January 1980 home price of $42,747 divided by the silver price of $52.50/oz.
2It’s 10/30/2009 and silver is $16.32/oz. The dollar index is 76.38.
Last April, I sent an urgent e-mail to my friends and family urging them to consider taking protective measures against the collapsing US dollar. Now that I have YourOptimal.com up and running I’d like to put forth a more formalized plan and make it available to a wider audience.
(For an update of this bailout plan, see Depression Proof Your Money)
You don’t have to agree with my future predictions to be inspired to protect yourself from our current10% inflation rate. Do nothing and your $100 today will be worth $86 next year if its in the bank. I will be adding more articles, links and resources that will explore optimizing various aspects of life in light of the dismal state of our US and world economies. The purpose of the plan, below, is to provide an Optimal plan of action in case you are already convinced that action is required to protect yourself from the coming Hyperinflationary Depression. Here’s the plan:
Pay off all debts, within reason.
Move out of all investments dependent on US dollars.
Move all but 3-months of expenses out of banks into tangible & liquid assets.
Decrease your monthly overhead as much as possible.
Get rid of all physical objects you don’t need.
That’s it. Although the economic problems we are experiencing may appear to be very complex Your Optimal Bailout Plan for protection need not be.
Ninety percent of the protections you can achieve from the collapsing US Dollar will come from your complete and thorough implementation of the above 5-Steps. In fact, if you live in the US it may not be possible to save the remaining 10% of your assets since you need to keep some US Dollars in the ‘pipeline’ just to conduct your everyday affairs.
There are many non-financial aspects of the crisis that we are entering. I look forward to addressing those in future articles. For now, there is no point in complicating the plan until you have a handle on the above 5-Steps. Let’s go into detail about each of these steps.
Pay Off All Debts, Within Reason
Since we are entering the most inflationary period in all of US History we have to look at debt a little differently. During hyperinflation some debts become assets for the debtor. You may stand to gain more by making the payments than paying them off. That’s because your debts are denominated in a currency that is losing its value on a daily basis. The contract you have with the bank to pay off your house requires you to pay US Dollars. The actual value (Purchasing power) of future dollars is much less than the value of the dollars now in your wallet. If you can find a way to preserve the value of your dollars, today, then you can exchange that value for many more dollars, tomorrow, and make your future monthly payments much easier.
If the US Dollar is worth 50% of what it is today (7/15/2008) in 5 years then a mortgage of $100,000 today will be worth $50,000 in July of 2013. If you make your payments for the next 5 years you will have paid down your mortgage by whatever principle your payments could manage and the inflationary decline of the US Dollar will make an additional $50,000 payment for you!
The reason you rarely hear this advice is that its very tricky to manage. You will have to make sure you can manage all of the following variables:
Store your current dollars in something that maintains its current value.
Keep enough dollars on hand to make the debt payments.
Keep enough dollars on hand to pay for all of your other expenses.
Monitor the value of dollars and the value of your tangible asset.
Be willing and able to translate your tangible asset back to dollars.
Manage your bank account(s) so that you have just enough to meet expenses.
Have the mental and emotional fortitude to stay the course.
Using silver as an example, 1000 ounces of silver could have purchased a median value home in 1980. Some say it will again as as we enter this second round of the most hyper inflationary period in US History. You can purchase 1000 ounces of silver today for $14,000. As the dollar value falls you cash in the silver to make your house payments. If the economy goes like it did in 1980 that’s all the silver you need to purchase the note. But, make sure you buy the actual silver and keep it in your possession. The same technique can be applied with gold, of course.
Most financial people don’t want to get into these complexities. They want to keep things simple. They also know from experience that most people are overwhelmed with the details of everyday life and have limited time left over to tend to the financial aspects of their lives other than their job. You may also not be able to make your debt payments if you lose your job.
If you think you can manage all of the above variables then my advice would be to not payoff or accelerate the payoff of your fixed rate mortgage. If you have an ARM then this advice does not apply. In the case of an ARM you might want to consider a short sale while the climate is socially acceptable and you get the special tax break of not having to pay taxes on the amount that the bank let’s you off the hook.
If you have other long-term debts with an interest rate less than 7% (Student loans?) then you should probably not pay them off either. This is assuming you take the same approach as outlined above by purchasing other tangible assets that can be used to make future payments.
If you have long-term debts greater than 11% then you should pay them off despite the upcoming hyperinflation. Just getting free of the burden of these debts is enough incentive to pay them off. You’ll also be left with that much more resources to put towards the other 4-Steps of this plan.
Between 7 and 11% is the gray area and you’ll have to decide how well you can manage the complexities, above, in holding onto debt during periods of hyperinflation.
Move Out of All Investments Dependent on US Dollars
In 1944 we made an agreement with Saudi Arabia to provide military protection for them as long as they agreed to accept only US Dollars in exchange for oil. Since every country needs oil for energy, and many other things, every country had to start stockpiling large amounts of US Dollars to pay for their oil. This little known backdoor negotiation, along with the Bretton Woods Agreement in the same year, is how the US Dollar came to be the world’s predominant reserve currency.
Its important to understand the ramifications of the US Dollar being the world’s reserve currency in order to evaluate whether any given investment is dependant on the US Dollar. It gets even more complicated when other entire countries peg the value of their currency to the US Dollar. The effects of the good, bad and the ugly management of the US Dollar ends up getting exported to entire world in one way or another.
Because the US Dollar has a world effect unlike any other currency in the history of the world the US had the potential to effect the world in a very positive way. Unfortunately, the US defaulted on its international promise to exchange dollars for Gold in 1971.
This made every currency in the world into a fiat currency overnight. No longer tied to any objective value they have been freed to float at the whims of politicians, Central Banks, the World Bank and the IMF, ever since.
The history of fiat currencies, however, has proven that once a paper currency is not backed by any objective value the issuing government cannot resist the temptation to print more and more of them. Unfortunately, the US has been no exception to this historical rule. We did, however, manage to take the creation of US Dollars to a whole new level by skipping the difficulties of the printing press and going right to computer! And since other countries have to use Dollars to buy oil, and some even use US dollars as a backup or primary currency themselves, we’ve been able to get away with printing far and above the amount of paper dollars any country ever has before causing the currency to collapse.
As of 7/19/2008 the charts showing the value of the US Dollar against gold is remarkably similar to the charts of other countries just before they entered the final stages of hyperinflation. Here’s how it played out in Germany between 1919-1923:
What this means for moving out of any investment dependant on US Dollars is that almost nothing is safe. Conducting business during hyperinflation is very difficult and most US companies do not have the experience to manage the difficulties. To make matters worse, the individual equities of even the best run companies are psychologically tied to the broad market of all equities. When the broad market takes a hit so do all the rest, whether they deserve it or not. Therefore, even the stock of well run US companies is not a safe haven for your money.
Even moving US Dollars into another currency is dangerous because all the currencies of the world are fiat currencies. Although its the US and Zimbabwe in the news, lately, our mismanagement is already causing inflation around the globe as other countries continue to purchase our debt instead of investing the money into their own economies.
Bankruptcies and hyperinflation seem to be the plan for dealing with this crisis. Bankruptcies are the quickest way to deflate the amount of currency in circulation, either real or on the computer screen. And hyperinflation makes all of our debts much cheaper to pay off. What better way for the US to avoid defaulting on their unpayable debts then by paying them off with dollars made worthless through hyperinflation?
But, we don’t even get much of the benefit of the deflationary bankruptcies to balance out the inflation because the Fed conjures up however many billions of dollars necessary to ‘provide liquidity’ for failed large banks and mortgage lenders.
For all theses reasons I believe the only safe thing to do is to park your money in tangible commodities that preserve value. My personal favorite is silver, but, there is also oil, cotton, tobacco, sugar, wheat, copper, steel, gold, brass and anything else China and India need to keep their countries on the rise. If silver is your choice here’s how you can invest in silver.
The worst place to have money is in US Dollars, Checking or Savings accounts, CD’s, US Equities or indexes, T-bills or bonds.
Move All but 3-Months of Expenses Out of Banks Into Tangible & Liquid Assets
When you get a dollar in your hands that you don’t need for the next three months of expenses spend it on something of real value as fast as possible. Pay a bill, pay off a high interest debt, see if you can pay monthly bills in advance for the whole year, upgrade your slow computer and maybe even purchase food items with a long shelf life. When you’ve done all that and you still have money left over then its time to purchase more well known tangible assets.
I can only recommend Silver and Gold to fill this role because I have direct experience with them. The process is difficult enough without complicating it further by trading in and out of commodity stocks and keeping track of the tax ramifications. With silver or gold you can trade in and trade out as much as you need, almost anywhere, with no tax problems to worry about. The VAT makes it difficult to do this in the UK although I’ve read that you get it back upon selling.
If you have a 401K you can’t withdrawal without penalties then consider investing in a commodities ETF, Agricultural index, Natural resources and anything else that mankind requires and cannot do without like cotton, sugar, wheat, steel, iron, brass, silver, gold, corn, etc. If your 401K is limited in its options to invest then you have limited options to protect it.
Decrease Your Monthly Overhead As Much As Possible
Any extra money you have right now should go into purchasing tangible commodities that can preserve current value for when the US Dollar collapses. Therefore, any unnecessary monthly expenses should be cut back or stopped completely. Here’s a beginning list of things to get rid of:
Cable channel subscriptions you don’t watch
Internet subscriptions you don’t benefit from
Expensive Coffee
Excess minute plans for your cellular phone
Consider dropping phone land lines, altogether
Magazine subscriptions you don’t read
Eating out too often
Drinking out too often
Going to the movies when you can rent a DVD
Over insuring your house, car, health, life
Driving too far from home or work for errands or services
Overusing the A/C or Heater when fans, windows or firewood would do
Work at home a few days a week to cut down commuting time & money
Anything you own that you don’t need or use is a drain on your limited resources of time, effort, money, space, insurance, storage fees., etc. Your life will improve whenever you get rid of things you don’t need, now more than ever
Clean out the garage
Sell, donate or throw out the items in the garage you don’t need
Sell any cars you don’t use or need.
Hire a student or family member to put items on ebay and manage the sale
