Sunday, March 28, 2010

How to catch dinner with dental floss:

Been playing around with the "figure four deadfall" since Boy Scouts. However, they tend to be frustrating to set, and have a tendency to not trip when they should.

Have recently been experimenting with the "Paiute deadfall", and like it much better. It's easier to make, easier to set, and more likely to work. The trigger is more reliable, more sensitive, and faster.

There are some good videos online (some a lot better than others) and Google is your friend.

I made this one from some small serviceberry sticks and dental floss. It's on top of a rock frequented by the chipmunks that are raiding our garden. A smear of peanut butter on the long trigger stick is the bait. The lever stick is about six inches long, and the post stick about five. Seems just about the right size for chipmunks and red squirrels, and likely to work for anything from mice to gray squirrels.

Maybe a few of these belong in your pack on treks where you intend to supplement your diet by foraging, or when there is a significant risk of being stranded or lost. They're much lighter than Conibear 110's, and even lighter than snares. The posts and trigger sticks are so easy to fashion that you really only need to carry the lever/string/toggle assemblies. They don't get beat up the way snares do, so you can use them over and over.

I whittled a few on a rainy day, in front of the woodstove with good light, proper tools and warm hands. It was fun, and I'll have either them or the knowledge to duplicate them from now on.

Trapping laws tend to be strict, so be informed and careful. But don't wait until you're starving to figure out how to do all this stuff. You can practice without harming any animals if you use a weighted cardboard box instead of a rock. I went through a military survival school years ago and didn't catch anything for the first five days. If I'd known then what I know now, I would have been a lot more comfortable.

When you set traps, the more the better. Half a dozen minimum. Mark the location of each one somehow, AND draw a map. Otherwise you'll never find them all again.

Friday, March 26, 2010

A politician's promise:

I phoned my NH state representative, Kate Miller, about some pending legislation (HB1693.)

She assured me that she'd support it.

The next day, she voted against it.

Where do we find such leaders?

My latest hero:

In the late 1800's, an English-Cree halfbreed named Alexander Linkletter ran sixty miles in eleven and one half hours.


Why wasn't this front-page news?

All the news outlets are reporting this, but always somewhere below Tiger Wood's return to golf and Jesse James' affair with a tattoo model:

This year, the Social Security trust fund will pay out more than it receives. The Congressional Budget Office did not expect it to pass that threshold for six more years. (The phrase "trust fund" is a misleading accounting device; it's really just a giant I.O.U., as the money has already been spent and it's a "pay-as-you-go" system.) Whatever you call it, they now expect that it will be depleted by 2037.

The Medicare "trust fund" is in even worse shape. It's trustees are reporting that it will be insolvent by 2017.

Both TARP and Obamacare were underwater the day they were signed into law.

Our leaders are smart people. They know that this entitlement spending is unsustainable. They know that bureaucracies don't change without a crisis. Are they deliberately creating a crisis? What's the change they want?

What's in your car?

Gave my car a spring cleaning and reorganized the emergency equipment for the most likely exigent circumstances of the summer season.

This stuff will stay even while the weather is warm:

tow strap
jumper cables
fire extinquisher
quart of oil
paper towels
duct tape
fuel filter
tools to change fuel filter (for my car: pliers, screw driver, 10mm nut driver)
rain poncho
compresses, tape, gloves and scissors for first aid
wool hat, mittens, socks and sweater
sleeping bag
cell phone charger

This stuff will come out until fall:

traction mats
ice scraper
Nu-Wick brand candles
Nutella (tastier than peanut butter)
hard tack

Thursday, March 11, 2010

A Inflation Primer

Condensed from the writings of John Silveira:

"Inflation isn't so much that prices go up—because that would imply that groceries and stuff like that have somehow become more valuable. Inflation is when money becomes less valuable so it takes more money to buy a sack of potatoes, a gallon of gas, or hire a babysitter. It's a distinction most people don't seem to get.

In fact, in cases where commodities become more valuable, it's usually a case of supply and demand. When there's increased demand for something, or the supply of something we typically use runs short, the price of it goes up. For example, if a bad winter wipes out much of the citrus crop, oranges become more expensive that year. When the crop returns to normal the next year, the price of oranges returns to where it usually is.

Inflation, on the other hand, is an increase in the money supply that exceeds the expansion of the goods and services available to buy.

Imagine a bunch of us are stranded on a desert island with a set of poker chips. We decide the poker chips are going to represent the total of goods and services on the island because we want to use them as money. Say some of us harvest coconuts and we decide each coconut should cost five chips. Next year there's a bumper harvest of coconuts. If there are too many coconuts, each one is going to be worth less than they were in the previous year because the people harvesting them are going to have a harder time dumping them all, so the price may fall to three chips apiece to encourage people to buy them. On the other hand, if there's a bad harvest, it's going to be harder to buy them, so if consumers want them they're going to be willing to pay more for them and the price will go up. Maybe they're going to be seven or eight chips each. But we expect the cost of a coconut to hover around the average price of five chips we pay for them in a normal year.

The cost of coconuts depends on supply and demand, surpluses and shortages.

A raft drifts in with another set of poker chips. So, we effectively double the money supply on the island. What happens to the value of everything?

The cost of each coconut is going to be doubled because there's now twice as much money—or poker chips—on the island.

Anyone who's been saving his poker chips for a rainy day is going to suddenly find his stash of chips have half the purchasing power they used to have. That's inflation: an increase in the money supply and a decrease in the value of each dollar.

If instead of more chips showing up, half the chips on the island suddenly fall into the ocean and are lost, each remaining chip would now have twice the purchasing power they previously had and coconuts would cost half as much, because we said the number of chips represent the value of all the goods and services on the island, including the coconuts. That's deflation; a decrease in the money supply makes each chip more valuable.

This may surprise you, but we've only had long-term inflation since the Federal Reserve was established in 1913 and they got control of our money supply. They have steadily increased the money supply faster than than the increase in the amount of goods and services that that money will buy. The result is that money has become worth less and less until, today, a dollar has about the same purchasing power as four cents had in 1913.

Governments like inflation. Governments like to tax us and inflation is a tax. Most people simply do not understand that.

Let's go back to the analogy of the island. As I said, if a second set of poker chips arrives, as they're introduced into the island's economy, the prices of everything on the island will begin to rise to reflect the number of chips. But before they do, the person who found the chips gets to spend them while the prices are still low. In effect, they're stealing the value out of everyone else's chips.

In the same way, when the government increases the money supply, without a corresponding increase in the amount of goods and services, they devalue everyone else's dollars—they're worth less and buy less as prices begin to go up. But government gets full value with this newly created money because they spend it first.

So, with inflation, they're stealing value out of every bill I have in my pocket.

Stealing is exactly what they're doing. Keep in mind that if introducing more money were harmless, the government wouldn't care about counterfeiters.

Inflation amounts to legalized counterfeiting. The same people who would scream at a tax hike or a new tax imposed on us, blithely ignore inflation because they don't understand that it's caused by the government and it's another tax. It's the ultimate withholding tax because it comes out of everyone's pocket even if you're in the underground economy. But the worst thing is that it discourages saving and investment.

We should try to invest our money somehow. But consider the effect inflation has on some types of savings, say a savings account, a certificate of deposit, or a U.S. Savings Bond. The interest paid on any of these is low. In fact, they're often lower than the rate of inflation. On that basis, the more you save the further you fall behind in purchasing power. But what makes it worse is that the interest paid is also taxed, that is, part of the imaginary gains you've made are taken away from you by the IRS. So, saving that way becomes a loser's game. The more you save, the further you fall behind.

Over the long run, even putting money into precious metals is a loser's game—that is, if you do it honestly. If you invest in gold or silver, it's a nonproductive investment; it doesn't even earn you interest. What gold and silver really do is respond to the value of the dollar and other currencies. The price of those metals will go up with the inflation rate so, over the long run, if you hold onto them you should theoretically break even in purchasing power. The problem is that when you sell your gold or silver the IRS sees your gain as a ‘real' gain and takes a chunk of it by taxing you. Thus, even precious metals are a losing position—unless you don't report the sale. As a hedge against inflation they're terrific, but they're not making you money in the way stocks, bonds, or savings accounts would in a stable and noninflationary economy.

Other countries have already experienced periods of hyperinflation. The German mark (after World War I) started losing value so fast that people were getting paid two and three times a day and they'd leave work each time so they could spend it before it lost even more value. If you didn't spend it right away, it was going to be worth a lot less in just a few hours. It got so bad that people not only spent their money as fast as they could, they often didn't bother taking their change.

Money was so worthless you couldn't buy heating fuel with it, so to keep warm many people took to burning the paper bills instead.

In Hungary, just after World War II, the Hungarian pengö lost its value even faster. Throughout July of 1946, prices tripled every day. What cost 1,000 pengö one morning cost 3,000 the next and 9,000 the morning after that.

Today, Zimbabwe is undergoing hyperinflation. Their hyperinflation started when the country's president, Robert Mugabe, took land away from the former white landowners to give to blacks who, unfortunately, were unfamiliar with agricultural practices. Crops failed and Zimbabwe began having problems feeding itself. As a result, food prices jumped and Mugabe started to run the presses to keep up with the price increases. Coupled with that was his decision to quadruple the pay of the police and the military (to keep their allegiances) without putting it in the budget, and the presses had to run even faster and longer to make up for these and other budget shortfalls.

There was a time when the Zimbabwean dollar was worth more than the American dollar. Today, it's possible to find 100 trillion dollar Zimbabwean notes, but no one wants them. You can't even bribe a Zimbabwean official with Zibabwean money.

Argentina, Brazil, and Bolivia experienced hyperinflation in the late part of the 20th century. All of it was the result of government overspending; when the bills came due, unable to pay them with taxes, the respective governments ran the printing presses and got caught in that same vicious circle.

Whenever governments have accumulated extreme debts that they are unable or unwilling to raise the money to pay off, either with the sale of bonds or the raising of taxes, they often resort to simply printing more money by running the presses, whether it's the paper presses or the virtual electronic presses of the computer age that create electronic credits.

Governments have streams of commitments, and more often than not they're political promises politicians make to voters to keep themselves in power.

Neither inflation nor hyperinflation can exist without the government having a hand in it. Government is the cause of both inflation and hyperinflation.

At some point, the politicians may try to blame it on the ‘greedy bankers,' speculators, and black marketeers, but none of them can run the presses.

Consider our unfunded debts. These include the costs of Social Security, Medicare, national healthcare if it passes, the trade deficit, and the bailouts—for which trillions were manufactured out of thin air in a way a Zimbabwean strongman could only dream. We owe trillions in loans to foreign governments, most notably China. The responsibility for paying all of this off is being thrown on the backs of the young and those yet unborn.

There's no way we can keep this up. In fact, when the younger generations of voters come of age and they realize what we and the other older generations of voters have voted ourselves, and that we've saddled them with the onerous task of trying to pay off these unpayable debts, they may just welcome hyperinflation and screw us the way we've been screwing them, for example, by making our savings and Social Security payments worthless.

But not only do we have all this debt, a lot of our currency is overseas. Foreigners have been willing to hold American dollars for decades because it's been universally recognized and it's been considered stable. But, if all those dollars were to come back here and were spent in a short time, it too might lead to hyperinflation. It would be like the raft with a duplicate set of poker chips suddenly showing up on the island.

There will be winners and losers. The prime winners may be future generations, including those not yet born, whom we've been trying to saddle with all these debts. The last few generations have been the most selfish in American history. We've voted ourselves all kinds of benefits that are going to have to be paid by the young. But there's going to come a time when the young realize it. We can't hide it forever. And when they see what's happened, they're going to do something about it at the polls. As a result, it's likely to be the older people who are going to be hurt.

In almost every country where inflation has gotten out of control, many who had spent their lives providing for themselves with investments and savings found the purchasing power of their retirement nest eggs wiped out by the hyperinflation, the value of their savings stolen by a government. And those who watched their retirement disappear overnight had to return to the workforce in their old age.

The young are resilient and have their whole lives ahead of them. They may be better off if hyperinflation manages to wipe out the debts we've been trying to saddle them with.

Might hyperinflation help a lot of homeowners because it would allow them to pay their mortgages off with inflated dollars? Keep in mind that the recent bailouts went through despite polls showing the public was against them. It's because Wall Street and the bankers have Washington's ear. So, for better or worse, Congress is likely to step in and make laws saying mortgages and other loans, such as car loans and credit card balances, would be inflation-adjusted. That would be tantamount to another bailout.

Is there a way to keep prices down despite inflation, like wage and price controls?

They don't work. At best they do nothing, at worst they destroy businesses and jobs. By instituting wage and price controls, policy makers force sellers, under penalty of law, to sell their goods and services for money that is worth less and less every day. They force workers to work for less and less of a living wage. The result is that sellers may wind up selling goods at a loss and may go out of business while workers struggle because they can't pay their bills. So we have scarcity of goods, lost jobs, and a burgeoning black market. Even if the prices stay down temporarily while the controls are in place and the government threatens penalties, once the controls are lifted, the prices shoot up to where they should be. This is what happened when Nixon tried to impose price controls in the early ‘70s.

Price controls also force businesses to either withhold their products from the market or they force them to sell on the black market in order to survive. Goods including food and clothing often disappear from the shelves, and people walk away from their jobs to work under the table. Politicians are against black markets because they expose political policies for what they are—shams—and they can't tax them.

What could we have done differently to have prevented this? We could have voted differently.

How were we to know what was coming? You should have turned off the sitcoms. The problem with the American electorate is that it doesn't want to inform itself of what's going on in the world, but it still wants the right to vote.

Is there anything we can do now? Go back to the Gold Standard—it kept our money stable for over a century—and start paying our debts and stop expecting the as-yet-unborn to pay them for us. That's unlikely to happen.

So what do we do to protect ourselves? If we're lucky, we'll watch our currency inflate slowly and we can get rid of our dollars and turn them into hard assets. But I'm already hedging my bets. I buy hard assets, everything from junk silver coins and ammo for the guns I own to food and wine. I have lots of food, lots of wine. It's also good if you can get your hands on some stable foreign currencies like the Euro."

John Silveira