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Tuesday, May 27, 2008

Oil and Food Defining a New Major Global Paradigm

With permission from Stratfor, George Friedman's initial take on how the global dynamic is being transformed before our eyes by the rise in oil and food prices is a must-read ...

May 27, 2008

The Geopolitics of $130 Oil

By George Friedman

Oil prices have risen dramatically over the past year. When they passed $100 a barrel, they hit new heights, expressed in dollars adjusted for inflation. As they passed $120 a barrel, they clearly began to have global impact. Recently, we have seen startling rises in the price of food, particularly grains. Apart from higher prices, there have been disruptions in the availability of food as governments limit food exports and as hoarding increases in anticipation of even higher prices.

Oil and food differ from other commodities in that they are indispensable for the functioning of society. Food obviously is the more immediately essential. Food shortages can trigger social and political instability with startling swiftness. It does not take long to starve to death. Oil has a less-immediate — but perhaps broader — impact. Everything, including growing and marketing food, depends on energy; and oil is the world’s primary source of energy, particularly in transportation. Oil and grains — where the shortages hit hardest — are not merely strategic commodities. They are geopolitical commodities. All nations require them, and a shift in the price or availability of either triggers shifts in relationships within and among nations.

It is not altogether clear to us why oil and grains have behaved as they have. The question for us is what impact this generalized rise in commodity prices — particularly energy and food — will have on the international system. We understand that it is possible that the price of both will plunge. There is certainly a speculative element in both. Nevertheless, based on the realities of supply conditions, we do not expect the price of either to fall to levels that existed in 2003. We will proceed in this analysis on the assumption that these prices will fluctuate, but that they will remain dramatically higher than prices were from the 1980s to the mid-2000s.

If that assumption is true and we continue to see elevated commodity prices, perhaps rising substantially higher than they are now, then it seems to us that we have entered a new geopolitical era. Since the end of World War II, we have lived in three geopolitical regimes, broadly understood:

  • The Cold War between the United States and the Soviet Union, in which the focus was on the military balance between those two countries, particularly on the nuclear balance. During this period, all countries, in some way or another, defined their behavior in terms of the U.S.-Soviet competition.
  • The period from the fall of the Berlin Wall until 9/11, when the primary focus of the world was on economic development. This was the period in which former communist countries redefined themselves, East and Southeast Asian economies surged and collapsed, and China grew dramatically. It was a period in which politico-military power was secondary and economic power primary.
  • The period from 9/11 until today that has been defined in terms of the increasing complexity of the U.S.-jihadist war — a reality that supplanted the second phase and redefined the international system dramatically.

With the U.S.-jihadist war in either a stalemate or a long-term evolution, its impact on the international system is diminishing. First, it has lost its dynamism. The conflict is no longer drawing other countries into it. Second, it is becoming an endemic reality rather than an urgent crisis. The international system has accommodated itself to the conflict, and its claims on that system are lessening.

The surge in commodity prices — particularly oil — has superseded the U.S.-jihadist war, much as the war superseded the period in which economic issues dominated the global system. This does not mean that the U.S.-jihadist war will not continue to rage, any more than 9/11 abolished economic issues. Rather, it means that a new dynamic has inserted itself into the international system and is in the process of transforming it.

It is a cliche that money and power are linked. It is nevertheless true. Economic power creates political and military power, just as political and military power can create economic power. The rise in the price of oil is triggering shifts in economic power that are in turn creating changes in the international order. This was not apparent until now because of three reasons. First, oil prices had not risen to the level where they had geopolitical impact. The system was ignoring higher prices. Second, they had not been joined in crisis condition by grain prices. Third, the permanence of higher prices had not been clear. When $70-a-barrel oil seemed impermanent, and likely to fall below $50, oil was viewed very differently than it was at $130, where a decline to $100 would be dramatic and a fall to $70 beyond the calculation of most. As oil passed $120 a barrel, the international system, in our view, started to reshape itself in what will be a long-term process.

Obviously, the winners in this game are those who export oil, and the losers are those who import it. The victory is not only economic but political as well. The ability to control where exports go and where they don’t go transforms into political power. The ability to export in a seller’s market not only increases wealth but also increases the ability to coerce, if that is desired.

The game is somewhat more complex than this. The real winners are countries that can export and generate cash in excess of what they need domestically. So countries such as Venezuela, Indonesia and Nigeria might benefit from higher prices, but they absorb all the wealth that is transferred to them. Countries such as Saudi Arabia do not need to use so much of their wealth for domestic needs. They control huge and increasing pools of cash that they can use for everything from achieving domestic political stability to influencing regional governments and the global economic system. Indeed, the entire Arabian Peninsula is in this position.

The big losers are countries that not only have to import oil but also are heavily industrialized relative to their economy. Countries in which service makes up a larger sector than manufacturing obviously use less oil for critical economic functions than do countries that are heavily manufacturing-oriented. Certainly, consumers in countries such as the United States are hurt by rising prices. And these countries’ economies might slow. But higher oil prices simply do not have the same impact that they do on countries that both are primarily manufacturing-oriented and have a consumer base driving cars.

East Asia has been most affected by the combination of sustained high oil prices and disruptions in the food supply. Japan, which imports all of its oil and remains heavily industrialized (along with South Korea), is obviously affected. But the most immediately affected is China, where shortages of diesel fuel have been reported. China’s miracle — rapid industrialization — has now met its Achilles’ heel: high energy prices.

China is facing higher energy prices at a time when the U.S. economy is weak and the ability to raise prices is limited. As oil prices increase costs, the Chinese continue to export and, with some exceptions, are holding prices. The reason is simple. The Chinese are aware that slowing exports could cause some businesses to fail. That would lead to unemployment, which in turn will lead to instability. The Chinese have their hands full between natural disasters, Tibet, terrorism and the Olympics. They do not need a wave of business failures.

Therefore, they are continuing to cap the domestic price of gasoline. This has caused tension between the government and Chinese oil companies, which have refused to distribute at capped prices. Behind this power struggle is this reality: The Chinese government can afford to subsidize oil prices to maintain social stability, but given the need to export, they are effectively squeezing profits out of exports. Between subsidies and no-profit exports, China’s reserves could shrink with remarkable speed, leaving their financial system — already overloaded with nonperforming loans — vulnerable. If they take the cap off, they face potential domestic unrest.

The Chinese dilemma is present throughout Asia. But just as Asia is the big loser because of long-term high oil prices coupled with food disruptions, Russia is the big winner. Russia is an exporter of natural gas and oil. It also could be a massive exporter of grains if prices were attractive enough and if it had the infrastructure (crop failures in Russia are a thing of the past). Russia has been very careful, under Vladimir Putin, not to assume that energy prices will remain high and has taken advantage of high prices to accumulate substantial foreign currency reserves. That puts them in a doubly-strong position. Economically, they are becoming major players in global acquisitions. Politically, countries that have become dependent on Russian energy exports — and this includes a good part of Europe — are vulnerable, precisely because the Russians are in a surplus-cash position. They could tweak energy availability, hurting the Europeans badly, if they chose. T hey will not need to. The Europeans, aware of what could happen, will tread lightly in order to ensure that it doesn’t happen.

As we have already said, the biggest winners are the countries of the Arabian Peninsula. Although somewhat strained, these countries never really suffered during the period of low oil prices. They have now more than rebalanced their financial system and are making the most of it. This is a time when they absolutely do not want anything disrupting the flow of oil from their region. Closing the Strait of Hormuz, for example, would be disastrous to them. We therefore see the Saudis, in particular, taking steps to stabilize the region. This includes supporting Israeli-Syrian peace talks, using influence with Sunnis in Iraq to confront al Qaeda, making certain that Shiites in Saudi Arabia profit from the boom. (Other Gulf countries are doing the same with their Shiites. This is designed to remove one of Iran’s levers in the region: a rising of Shiites in the Arabian Peninsula.) In addition, the Saudis are using their economic power to re-establish the relationship they ha d with the United States before 9/11. With the financial institutions in the United States in disarray, the Arabian Peninsula can be very helpful.

China is in an increasingly insular and defensive position. The tension is palpable, particularly in Central Asia, which Russia has traditionally dominated and where China is becoming increasingly active in making energy investments. The Russians are becoming more assertive, using their economic position to improve their geopolitical position in the region. The Saudis are using their money to try to stabilize the region. With oil above $120 a barrel, the last thing they need is a war disrupting their ability to sell. They do not want to see the Iranians mining the Strait of Hormuz or the Americans trying to blockade Iran.

The Iranians themselves are facing problems. Despite being the world’s fifth-largest oil exporter, Iran also is the world’s second-largest gasoline importer, taking in roughly 40 percent of its annual demand. Because of the type of oil they have, and because they have neglected their oil industry over the last 30 years, their ability to participate in the bonanza is severely limited. It is obvious that there is now internal political tension between the president and the religious leadership over the status of the economy. Put differently, Iranians are asking how they got into this situation.

Suddenly, the regional dynamics have changed. The Saudi royal family is secure against any threats. They can buy peace on the Peninsula. The high price of oil makes even Iraqis think that it might be time to pump more oil rather than fight. Certainly the Iranians, Saudis and Kuwaitis are thinking of ways of getting into the action, and all have the means and geography to benefit from an Iraqi oil renaissance. The war in Iraq did not begin over oil — a point we have made many times — but it might well be brought under control because of oil.

For the United States, the situation is largely a push. The United States is an oil importer, but its relative vulnerability to high energy prices is nothing like it was in 1973, during the Arab oil embargo. De-industrialization has clearly had its upside. At the same time, the United States is a food exporter, along with Canada, Australia, Argentina and others. Higher grain prices help the United States. The shifts will not change the status of the United States, but they might create a new dynamic in the Gulf region that could change the framework of the Iraqi war.

This is far from an exhaustive examination of the global shifts caused by rising oil and grain prices. Our point is this: High oil prices can increase as well as decrease stability. In Iraq — but not in Afghanistan — the war has already been regionally overshadowed by high oil prices. Oil-exporting countries are in a moneymaking mode, and even the Iranians are trying to figure out how to get into the action; it’s hard to see how they can without the participation of the Western oil majors — and this requires burying the hatchet with the United States. Groups such as al Qaeda and Hezbollah are decidedly secondary to these considerations.

We are very early in this process, and these are just our opening thoughts. But in our view, a wire has been tripped, and the world is refocusing on high commodity prices. As always in geopolitics, issues from the last generation linger, but they are no longer the focus. Last week there was talk of Strategic Arms Reduction Treaty (START) talks between the United States and Russia — a fossil from the Cold War. These things never go away. But history moves on. It seems to us that history is moving.

Get Ready ... Seriously -

Monday, May 26, 2008

Memorial Day 2008

To those who made the greatest sacrifice for our nation and our way of life ... we are in debt, may we never forget.

Saturday, May 24, 2008

Food Crisis Today is Just the Start

Paul Roberts, the author of the new book, "The End of Food," offers a timely eye-opening editorial below that must be digested if you are of the opinion that the food situation is going to be resolved anytime soon.

Today's food crisis isn't a blip

By Paul E. Roberts

For anyone wondering where food prices are really headed, the news that Beijing has begun buying up farmland in Africa and South America offers a troubling hint. When China began acquiring oil fields in the 1990s, it signaled both the end of China's self-sufficiency in oil and the start of a competition between China and other big oil importers that helped push crude prices to their current record levels. That the world's most populous nation now seeks to lock up pieces of foreign food production not only confirms that China has reached the end of food self-sufficiency as well, but suggests that Western hopes for a quick end to today's food-price crisis could be overly optimistic.

According to conventional wisdom, our food crunch is a temporary glitch. Because grain shortages are being caused by many factors — new demand by biofuel refineries, drought in Australia, among others — the pain can't last. Eventually, drought will abate. Biofuels programs will be reined in. Most important, farmers will plant more acres and boost global supplies, just as they always have during shortages. Food may never again be dirt cheap, but by next year, prices for key crops will swing back to a more moderate line. Right?

It's a comforting picture, to be sure. But as Beijing's real-estate spree suggests, food prices are being driven by deeper, more fundamental factors that won't be so easily resolved.

[snip] (Read full editorial here.)

Get Ready ... Seriously -

Sunday, May 18, 2008

Mountain House Canned Foods Now Unavailable!

Demand at Five Times the Level of Last Year
Huge Backorder List Bogs Mountain House Down
Sales are Offline till Mid-Fall at Least

Mountain House foods are the bellwether products for the emergency storage food industry, and it is becoming apparent that emergency food in general serves as a leading indicator for the broader food marketplace in America. As such, here's a milestone development that all with eyes to see need to take note of ...

AS OF MAY 15 ...

Mountain House (Oregon Freeze Dry, Inc.) notified dealers that demand has reached five times last year's levels and that they are forced to stop taking further orders for their canned varieties for several months, in order to catch up.

Current back-orders are now out into July, so for those who submitted orders in the first half of May--please be patient--you are not forgotten, just way down the list at this point. Orders submitted earlier are due to ship soon. Be assured--there is no worry about submitted orders not being filled. If you have an order outstanding--it WILL be processed as soon as possible.

Those of you still awaiting delivery of a Safecastle 3-case/18-variety kit, we are yet waiting for shipment of the last of the bulk order for the contents of those kits. We still expect that our kit buyers will take delivery by about the end of May.

So ... we have removed from our buyers club store our Mountain House can-case listings until further notice (probably the Sept./Oct. timeframe).

HOWEVER--WE DO HAVE ONE GOOD SIZED EXTRA ORDER OF MOUNTAIN HOUSE CANS in the queue that should arrive here in July. At that point, we will make a special offer to members for that food, so stay tuned, if that is of interest.

Other Emergency Foods Getting More Scarce as Well

In addition, we have been informed by other suppliers that they are on the verge of running out of a wide range of emergency foods. So we have made an additional bulk order of some basic foods such as canned butter, cheese, bread, rice, and more to serve the needs of our members for at the least the short term.

All indications are, the food crisis will become much worse before it improves. Act accordingly please, and prepare your household.

Mountain House Pouches Remain Available

Mountain House foods packed in mylar, stand-up pouches (in single-, double-, and 4-serving sizes) remain available. We have done the math and compared the pouches to the cans and we have been surprised to realize that with the latest MH-can-price hikes, the pouches actually deliver about the same food value as the cans, dollar for dollar, calorie for calorie.

The main difference is really the shelf life you are purchasing ... 7 years for the pouches vs. 25-to-30 years for the cans. (How many think the time before they need to dig into their emergency stores now will be out there beyond 7 years???)

Of course, on the plus side, you are able to stock up on a wider variety of foods for your money and have your meals prepackaged in meal-sized, warm-able containers!

So here you go ... we've got some deals in the pouches for you effectively immediately ...


Purchase pouch cases totaling at least $1275 (after member discount), and we'll apply an EXTRA 10% discount off your order after you checkout and before we charge your card. That's a 30% discount for buyers club members! And of course, everything ships free, as always.

Or, purchase at least $650 worth of pouch cases (after member discount), and we'll apply an EXTRA 5% discount on your order after you checkout and before we charge your card. That makes for a 25% discount for buyers club members!

Sorry--this offer does not apply to the 7-Day Just in Case kit or the 72-Hour kit.

Check out your MH pouch case options here.

Shop for other available emergency foods while you still can here.

Join the Safecastle Royal Buyers Club for a one-time $19 fee.

Get Ready ... Seriously -

Wednesday, May 14, 2008

Disasters are a Message from God?

Cavuto could certainly have been a bit more patient with the reverend, I think ...

Get Ready ... Seriously -

Saturday, May 10, 2008

Everything You Need to Know About the Economy in Less than Two Hours

I have to say ... this series of online video clips by Dr. Chris Martenson is the most valuable and timely internet info resource I've ever come across!

It's called The Crash Course:

Spend a little over an hour watching the series, from beginning to end, and you'll likely feel a great deal more in tune with why things are happening the way they are and where we are headed.

As the good doctor says, "The next 20 years are going to be very different from the last 20 years."

Understand the risks and probabilities, and you can't help but be smarter about your efforts to prepare.

Get Ready ... Seriously -

Thursday, May 08, 2008

Update--Emergency Food Supplies in the US

The news from where we sit is not encouraging ...

1. FEMA and some relief agencies are scarfing up any available MREs, grains, rice, and beans in the USA to send to Myanmar recovery efforts. Supplies of most of that were already in very short supply, so this is a significant punctuation mark to the current situation!

2. Mountain House freeze-dried canned varieties are increasingly on backorder, even for dealer orders, just from the increased US demand of the last few months. Right now--almost 20% of their varieties are out of stock. These foods are also typically tapped for relief efforts, and may indeed be impacted as well, though I haven't yet gotten the word on whether that is the case this time.

3. Other brands--canned butter, cheese, freeze dried fruit, canned bread, eggs, and dried milk and milk substitutes are disappearing fast now again--much going to disaster relief.

4. For the last week, it has been an impossible challenge for me to find large quantities of foods of almost any kind from our big-time suppliers. I've got a couple of my biggest orders ever waiting to be placed if only I can find a wholesaler with the food available. We're being flexible and trying to be patient, but we're talking dozens of pallets of food here, and that kind of supply is not available in the near-term anymore (and going forward, no one is optimistic they can deliver till maybe fall at the earliest--and quite possibly not then).

5. Another development--one of our larger package customers (one pallet) had their order disappear from the delivery truck the night before it was to arrive to him this week. Of course, he's getting replacement food, but I just hope this is not a harbinger of things to come.

Get Ready ... Seriously -

Monday, May 05, 2008

Another Core Issue Behind Today's Food Crises

"Must read" (click on article title below to read the entire column):

Published on 4 May 2008 by Resource Insights.
The just-in-time economy crumbles
by Kurt Cobb

Almost two years ago I wrote a piece called "Is just-in-time nearly out of time?" laying out how completely the just-in-time inventory management idea had infected businesses, governments and even nonprofit organizations. I catalogued concerns that the practice of holding razor-thin inventories of many critical items such as food, fuel and medical supplies could potentially imperil our ability to provide them in circumstances where 1) supplies grow unexpectedly tight, 2) logistical lines are impaired or cut, or 3) a large humanitarian catastrophe requires surge capacity for food aid and medical treatment.

Fast forward to 2008. Food riots are spreading across the world as soybean prices have more than doubled, corn and wheat prices have tripled, and rice prices have risen to more than five times their low of $4 in 2003. As a result of two decades of low agricultural prices, many governments became complacent and paid scant attention to food issues. They drew down grain stockpiles, neglected agricultural research and rural assistance, and generally took the attitude that market forces should increasingly dictate food production and prices. Food was becoming just another input into the world industrial system.

All that has changed as swiftly as grain prices have risen. India, which has always maintained a government stockpile of wheat, purchased several million tons in the international markets last year after six years with no imports. Malaysia announced a plan to "develop stockpiles of essential foodstuffs like rice and cooking oil." Guatemala announced plans to address food prices that include increasing food stockpiles within the country. Several countries announced bans or restrictions on rice and wheat exports.


Get Ready ... Seriously -

Friday, May 02, 2008

Scarcity Economics Taking Root in Global Markets

This is an important read if your crystal ball is at all foggy and you need to discern the future of the economy and your personal well-being.

Be sure to also view the MSN video on the column pages: "What Farmers are Saying."

Why we're stuck with insane prices

Forget supply and demand. We're now seeing scarcity economics at work -- what happens when buyers fear they won't get what they need at any price.

By Jim Jubak

If you think prices have become insane, you're right. But insanity rules markets for everything from oil to rice right now. In fact, insanity is the new "normal."

For example, why should oil sell for $119 a barrel, a whopping $55 a barrel, or 86%, higher than it did last April?

[snip] Read the entire column.

Get Ready ... Seriously -

Investigative Perspective on the Hunt for Rice

This video is by the famed columnist James Lileks.

Sunday, April 27, 2008

Pandemic Flu Still Looms Large

Thank you to Dr. Carty for this advisory on surviving pandemic flu, which remains as big of a threat as ever. (Click the title below for the original posting.)

Pandemic Flu for Survivalists

By Brian Carty, MD, MSPH
April 25, 2008

Thanks to a strict naval quarantine, the island of American Samoa was virtually untouched by the devastating 1918 influenza pandemic which killed at least 50 million people worldwide. Would this strategy enable you to survive a flu pandemic? Probably not. You would have to live on an island and be able to enforce a quarantine, or you would have to completely avoid contact with the rest of society for the duration of the influenza pandemic, as long as a year or so.

Imagine that you, your family and friends have sequestered yourselves to escape a plague. Then suddenly you discover contagion in your midst. A chilling fictional account of a group of people in a similar predicament is found in Edgar Allen Poe's short story "The Masque of the Red Death." In this tale, a prince and his friends seclude themselves in a castle during an epidemic of an illness known as the "Red Death." An elaborate masked ball is held. But a stranger is discovered who is not only costumed as a corpse, but as a victim of the Red Death. The stranger is unmasked; the Red Death has arrived:

And now was acknowledged the presence of the Red Death. He had come like a thief in the night. And one by one dropped the revellers in the blood- bedewed halls of their revel, and each died in the despairing posture of his fall. ... And Darkness and Decay and the Red Death held illimitable dominion over all.

Make Preparations Now

Now that's a gruesome ending, but the history of plagues and epidemics teaches that isolation and quarantine alone often fail. Still, there are a number of steps you can take to prepare for the influenza pandemic which is certain to occur. When it will occur and what strain of influenza virus will be responsible are unknown, but influenza pandemics often cause an enormous number of serious illnesses and deaths.

Preparations include insuring basic food, water and shelter. Information from health departments, the Centers for Disease Control, and other entities will be vital. Face masks and frequent hand washing may be beneficial. Avoiding crowds in theatres, workplaces, schools, and the like may help prevent or delay infection, but these measures, as noted, are likely to be only partially effective.


In addition to these general infection-control measures, vaccines for H5N1 (avian influenza) are in development. Still, there is no guarantee that such vaccines will provide protection or will be available in adequate quantities. You should get whatever yearly flu vaccine is available. This will give you significant protection against the yearly epidemic flu virus or viruses and possibly some partial protection against pandemic flu.

Anti-Influenza Drugs

To hopefully prevent infection, anti-influenza drugs can be taken daily during a pandemic, as long as a year if necessary. If infection occurs, the drugs would be used for treatment. Various governments are acquiring flu drugs, but the quantities are sufficient to treat only part of the population for a short period of time. So once a pandemic starts, these drugs will be in short supply. Stockpile them now before you need them.

There are several antiviral drugs active against influenza. Both H5N1 (bird flu) and the flu strains which cause yearly epidemics are now resistant to amantadine and rimantadine. However, because the pandemic flu strain which eventually emerges may be sensitive to these drugs, you should stockpile amantadine or rimantadine. Both are relatively inexpensive. People over age 65 or who have impaired kidney function should not take amantadine.

There are two other drugs active against influenza – Tamiflu (oseltamivir), an oral drug, and Relenza (zanamivir), an inhaled drug. I suggest obtaining a one year supply of Tamiflu for each person to be protected. The cost for Tamiflu, 75mg twice per day for a year, is about $2700, not cheap, but there is no substitute for this drug. If you can't afford a one year supply, spring for a three or six month supply.

You Will Need Prescriptions

Your physician will likely cooperate by giving you prescriptions for these medications. If not, find one who will. Law enforcement officials have intercepted counterfeit Tamiflu, so buy from a reputable pharmacy.

It's also probably a good idea to stockpile some antibiotics to treat bacterial pneumonia which often follows influenza. My recommendations are azithromycin, levaquin, and linezolid.

People May Be Desperate for Anti-flu Drugs

If you decide to stockpile these drugs, don't tell anyone. Furthermore, the need to protect your stash against robbery and theft is obvious.

Make Reasonable Preparations, Then Relax

Many aspects of pandemic flu planning are beyond the capacity of individuals. Even so, if you follow the above recommendations, you will have done everything reasonably possible to prepare for pandemic flu.

© Copyright 2008 All Rights Reserved.

Get Ready ... Seriously -

Saturday, April 26, 2008

Being Cool Always Trumps Freakin' Out

For those who have been quietly, systematically putting aside emergency food and supplies for a while, you're justified in momentarily embracing that twinge of vindication as more and more about food shortages, buyer panic, and even riots around the world become the stuff of headlines.

But clearly, no one enjoys seeing what is transpiring around the world. Malnutrition and starvation in various populations are again becoming reality. Worse--pain and suffering among millions of innocents is only beginning.

Public policy blunders, natural disasters, crop diseases, short harvests, skyrocketing energy costs, and public panic are now colliding in a harsh cacophony that will continue to resonate for years to come.

It's all beyond what the average individual can impact in a positive way. The only thing to do is to try to look out for you and yours. However, at this point, that becomes exceedingly more difficult and costly.

"Hoarding" has now become a no-no. Where once, very recently, a common-sense approach to putting some spare resources up for a rainy day was smart and admirable (though never trendy or widespread), circumstances have shifted radically.

The responsible approach to the situation before us as a civilization is to now economize and conserve limited resources--particularly in the realms of energy and food. Allowing for limited supplies to accommodate those who are most needy has to become a priority. To do otherwise is not only immoral, it is foolish, as there is nothing like famine to cause slashing societal upheavals.

How and when does that happen? I don't have those answers.

It's Very Late

In wealthier societies, such as in the U.S., folks who have done nothing to this point to mitigate their household risks vs. energy crises and runaway food inflation and/or shortages now have their backs against the wall.

It's a tough way to wake up and to have to just start the journey. If this is you, you likely will want to break into a sprint, though that may not be very realistic now. Regardless, if you're in that position--do what you can before you can do nothing at all.

For those somewhere else on the preparedness path--just keep on keepin' on. Try to keep your momentum going--nothing more, nothing less.

Whoever you are, whatever you still need to do to get to a satisfactory point of equilibrium for your situation--this rule always applies: Stay Cool.

Panic will increasingly become a chosen option. But it never is the smart choice.

Whatever the crisis that presents itself ...
  • Stop.
  • Take deep breaths.
  • Weigh the options.
  • Pray.
  • Choose wisely.

Get Ready ... Seriously -

Friday, April 25, 2008

WSJ: Time for Americans to Stockpile Food

Wait till this guy learns about long-term storage food ... he'll be giddy!

Load Up the Pantry
April 21, 2008 6:47 p.m.

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

Get Ready ... Seriously -

Thursday, April 24, 2008

LAST CALL on Mountain House Food

Last call on Mountain House freeze dried food before the company's spring/summer production changeover to pouches and government contract work ...

We thought we had placed our final group-buy bulk order several days ago, but with continuing strong demand, we're going to place one FINAL "final order" in the next few days to take care of our friends. And this time we mean it!

Anyway--whether you want in on the 3-case buy or you want any other canned MH product, order right now, please. Any further delay may very well leave you waiting till fall to take delivery.
Get Ready ... Seriously -

Sunday, April 20, 2008

A New Zealand Prophet of Imminent Collapse

I'll tell you what .... right now, enough people are thinking in these terms that I can barely come up for air (Safecastle's buyers club and shelter business are running me ragged).

The end is nigh

HELEN HARVEY talks to a prophet. - Taranaki Daily News Saturday, 19 April 2008

It's probably true that people don't want to hear things like "our current food system is totally unsustainable and on the point of collapse". But it's also true that Kevin Moore doesn't present his message in a way that is easy to understand. He interrupts himself, he changes the subject half-way through a sentence and goes off on tangents.

Ask him to explain his theory in two or three sentences. He doesn't. He doesn't even answer the question. "It's not a theory! Take out that word - it's not a theory. I'm presenting facts."

And news reports from around the world are telling a story similar to his. A shortage of food in Haiti has caused riots and deaths. Time magazine devoted six pages in its April 21 issue to biofuels and the resulting strain on grain supplies. Many of the subjects he talks about are regularly recurring themes in such respected journals as Nature and New Scientist. In New Zealand, the price of food and petrol has been steadily increasing.

Kevin Moore is famous for saying the end of the world is nigh.

He reckons he has never said that. What he says is the end of life as we know it is nigh.

New Zealand's current way of living will disappear sometime in the next three to five years, he says.
Peak oil and the world food shortage are the main problems, but there are other factors contributing to a future crisis - it's phosphorous, it's the money system, the water supply, the entire economic system.

The oil supply has peaked and is on the way down.

"Our society is totally dependent on oil, so without oil, it cannot function. Your food supply will be gone. You won't have anything to eat."

Take bread for an example. The tractor that ploughs the wheat field needs oil to function. A tractor is used to sow the field, harvest the crop and a truck transports it to the mill.

If the wheat needs to be dried, it is done using oil or natural gas.

Electricity is used to grind it and to work the ovens that make it into bread or biscuits.

"The whole system's dependent on using energy at about 100 times the rate we should be using it."

The age of oil will last about 150 years, he says, and it started in 1859.

"The crucial point isn't when oil runs out, it's when the supply starts to run down. That started in 2005. We're on the slippery slope."

Some of the predictions he's seen are pretty grim.

"It could be a matter of weeks. If there is an oil shock, the ships just stop coming to New Zealand."

About 15% of the oil used in New Zealand comes from here, so there will be some supplies, he says.

The run-on effects include the fact that trucks will stop delivering food to the supermarkets and that the tourism industry will be completely down the drain.

"It could be next year. I can't tell you exactly."

The very best case scenario is probably 2015. By then, the oil supply will be down to half what it is now, he says.

"You may recall, last year, I said the end of the world as we know it is coming very soon ... it happened August, September last year. That's when it happened. That was the end of the world as we know it."

In August and September, oil went up in price and the start of the meltdown of the American economy began.
"The meltdown started last August."'

Kevin Moore was born in England in 1950. He studied chemistry at the University of Surrey, graduating with an honours degree in 1972. "One of the things they dealt with on that course was resources depletion."

In 1974, he emigrated to New Zealand and arrived in New Plymouth in 1976. He left in 1991 for an attractive job offer in Napier - that didn't turn out that well, he says. He was then enticed to Auckland.

"That was a big mistake. I ended up trapped there."

He came back to New Plymouth in 2006. In 2007, he unsuccessfully stood for mayor.

He has two adult children. His daughter agrees with his philosophy, but she lives in the north of England, so isn't in a position to do much about it.

"My son was in denial for a long, long time, but about 18 months ago, the penny dropped. He said, Yeah, you're right, Dad."

In the future envisaged by Kevin Moore, people are going to be divided into two groups, those who perish and those who survive. "Survivors are people who know what is happening and they are preparing for the real future."

The perishers are the people who don't know what is happening, or don't care, or who believe that everything will carry on exactly the same. When oil runs out, work is going to dry up and people will lose their jobs.
"Finally, you'll starve to death."

People need to prepare for the loss of employment and then the shortage of food, he says.

They should stop spending their money on overseas holidays, jet skis, new cars, the latest DVDs anything that is not going to be of use to them, he says.

"The point is, you need decent-size land. You need to do anything you can to increase your ability to feed yourself."

He suggests people who live in an apartment buy pots and start growing lettuce, but then he backtracks.

"I'm not offering false hope to people, because if you're in an apartment block, you're f-----. There's no way you could possibly grow enough to feed yourself on the balcony of an apartment block. You have to relocate yourself somewhere that does have land."

Everyone needs to use money effectively now. Don't leave it in the bank or a finance company or the sharemarket, he says.

"Because if you do, it will be gone."

He brandishes a report showing graphs of a falling sharemarket.

The finance system isn't going to hold up, he says. How many finance companies have gone bust in New Zealand in the past year? At least a dozen. If Kevin Moore had been elected New Plymouth mayor at the last election, he says he would have stopped all spending on anything that is unsustainable, "particularly artworks and tourism and all that stuff".

"We are using up our last resources on artworks for the park, walkways, a centre to display artworks. Total insanity.

"I would have got community gardens, permaculture education centres set up now."

He would have demonstration plots and a centre to teach people the skills needed.

"This is stuff I proposed to the council and they took it off the agenda."

The window of opportunity to prepare for what he says is the inevitable is closing.

"It takes three or four years to grow fruit trees, so if the shit is going to hit the fan in 2010, which it is, maybe even 2009, and you haven't got your trees planted now, it's too late. That window of opportunity is gone."

Finance institutions are collapsing. Some people have already missed the opportunity to get their money out, he says.

"Anything you want to do will be harder next week than it is this week. It will be harder to do next month than it is the next month, much, much harder to do a year from now than it is now, because the price of oil and petrol is going up."

Kevin Moore is unemployed - has been for 18 months.

It's difficult to get a job: "The council won't employ me, because I'm telling the truth."

He has a degree in chemistry, but the chemical industry has vanished. And in the culture of youth, anyone over 40 isn't wanted, he says.

He is spending the last of his savings, cutting back, hardly buying any food. He has a scooter. He might use his car once a week and estimates he spends $5 a week on fuel.

Since buying his property 18 months ago, he has spent between six and 18 hours a day, seven days a week, working on his section and planting his future: macadamia, feijoa, loquat, orange, guava, lemon, grapefruit, tamarillo, pepinos, figs, apples, blueberry, cape gooseberry, strawberries, persimmon, corn, beans, chillis, carrots, peas ...

"I have no source of proteins other than eating snails and worms and I'm not into that at this stage."

People keep telling him to build a chicken house, but he says there's a flaw in that logic.

"The chicken system is dependent on imported grain. There is a shortage of grain. The prices are going up."

Many poor countries are struggling to get enough rice for their people, he says. "One of the reasons is biofuels. America is now using about a quarter of its grain crop to keep the cars running. The last thing we should be doing is keeping cars going or planes."

Kevin Moore plans to put barbed wire along the top of the fence that surrounds his property.

"I can do all this stuff and some marauding band comes along and kills me to get my food. Hence you have to think about the security thing."

It will come to that unless the community wakes up, he says, because people won't have anything to eat.
"All I'm telling you is facts, not my opinions."

By 2012, it will be pretty well over for everything. There's not much time.

New Zealand is in a far better position than many countries because of water, low population and its environment.

Life in the future will be similar to that in the 14th century, if we're lucky, he says - stone age if we are unlucky.

"I have changed the lives of at least 100 people. One person read my book, bought some land, planted fruit trees. My efforts have raised awareness, but most people are unreachable. It's easier to do nothing.

"I've been preparing for this mentally for the last five years. I've been preparing physically for the last 18 months."

Get Ready ... Seriously -

Wednesday, April 16, 2008

Essentially, They are Saying, "Prepare for a Nuclear Attack"

Once again, the basic message being communicated about widespread disaster remains cryptic, yet quite apparent--Prepare your household, as no cavalry will be there to answer your distress calls.

Read the whole Washington Times article by clicking on the article title below ...

Nuclear attack on D.C. a hypothetical disaster
by Gary Emerling
April 16, 2008


A nuclear device detonated near the White House would kill roughly 100,000 people and flatten downtown federal buildings, while the radioactive plume from the explosion would likely spread toward the Capitol and into Southeast D.C., contaminating thousands more.

The blast from the 10-kiloton bomb — similar to the bomb dropped over Hiroshima during World War II — would kill up to one in 10 tourists visiting the Washington Monument and send shards of glass flying the length of the National Mall, in a scenario that has become increasingly likely to occur in a major U.S. city in recent years, panel members told a Senate committee yesterday.

"It's inevitable," said Cham E. Dallas, director of the Institute for Health Management and Mass Destruction Defense at the University of Georgia, who has charted the potential explosion's effect in the District and testified before a hearing of the Senate Committee on Homeland Security and Governmental Affairs. "I think it's wistful to think that it won't happen by 20 years."


However, the experts emphasized that the explosion would not impact most of a major city and that in many cases, residents could remain safe by not evacuating immediately and clogging area roadways.

"It is also expected that, due to lack of information getting to the public, many people will try to flee by car or on foot, often in the wrong direction, again exposing themselves to high levels of radiation, as vehicles provide virtually no protection," Mr. Carter said.

Mr. Dallas said a major problem facing most cities is a lack of available hospital beds for victims of burns that would result from a nuclear blast. He said up to 95 percent of such victims would not receive potentially life-saving care.

"We're completely underprepared," he said. "Most of them will die."


Area officials have spent millions of dollars in recent years to develop evacuation plans and stockpile emergency supplies after a 2006 study by the U.S. Department of Homeland Security said local preparation for a disaster was "not sufficient."


"We are confident that the District is prepared to respond to a catastrophic incident affecting the District," Mr. Darnell said.

Still, Mr. Dallas said the majority of victims in a nuclear explosion will likely have to fend for themselves in the first hours after an attack.

"These people are going to be on their own," he said after the hearing. "There's no white horse to ride to the rescue."

Get Ready ... Seriously -

Tuesday, April 15, 2008

Headlines to Make the Imagination Wander

I know there are still a whole lot of people out there who are blissfully unaware of the spiraling state of our comfortable existence. But day by day, their numbers are shrinking.

Even those who are not in the habit of staying up on current events, through their weekly trips to the grocery store and their stops at the gas station, are finding cause for some well-warranted level of alarm.

Personal experience aside, today, a cursory review of the headlines adds to a rapidly heightened awareness ...

Today, April 15, 2008, I see these bold headlines at just a couple of mainstream news sites:

"Oil Sets New High Above $113 a Barrel"

"Wholesale Prices Soar in March"

"Foreclosures Jump 57% in Last 12 Months"

"House Prices Decline at Record Levels"

"Food Costs Rising Fastest in 17 Years"

"Wave of Bankruptcies in Retailing Causes Alarm"

We could go on, but what's the point? The reality is sinking in and being absorbed by even the most insulated of consumers. Things are changing--for people around the world, and yes--here too in America.

The time we have left to prepare wisely is short. As more folks jump in to play catch-up, the faster the supply-side situation becomes critical and unresponsive.

Scary? Yes. But reality increasingly sucks.

Get Ready ... Seriously -

Saturday, April 12, 2008

Businesses More Responsive than Government Providing Necessities After Disaster

Makes sense ...

Empowered to 'do the right thing,' employees gave away supplies and offered sleeping space after the 2005 hurricane. Local knowledge allowed big-box retailers to respond before FEMA could.

Hurricane season is just around the corner, so Americans should know where to turn to if disaster strikes. It's not the Federal Emergency Management Agency. A new study suggests Wal-Mart, Home Depot and Lowe's would be a lot more helpful.

The study, by Steven Horwitz, a professor of economics at St. Lawrence University in Canton, N.Y., stresses that successful disaster relief depends upon responders having detailed knowledge of a local area and the right incentives to act on that knowledge.

Examining federal and private responses to Hurricane Katrina, the study says why FEMA was destined to fail and why for-profit companies succeeded at disaster recovery.

It also looks at the Coast Guard -- the only federal agency lauded for its Katrina performance -- which rescued more than 24,000 people in the two weeks after the storm.

Local knowledge critical The study says Wal-Mart, Home Depot and Lowe's made use of their local knowledge about supply chains, infrastructure, decision makers and other resources to provide emergency supplies and reopen stores well before FEMA began its response. Local knowledge enabled the big-box stores to make plans ahead of the storm and then put them into effect immediately.

"Profit-seeking firms beat most of the government to the scene and provided more effectively the supplies needed for the immediate survival of a population cut off from life's most basic necessities," Horwitz wrote in the study, which was published by the Mercatus Center at George Mason University in Fairfax, Va. "Though numerous private-sector firms played important roles in the relief operations, Wal-Mart stood out."


Get Ready ... Seriously -

Sandia Study on Pandemic Indicates Just 28% Worker Absenteeism to Shut Down Freight System

Statisticians, scientists, and eggheads of all persuasions will be pleased to find more than enough data in this study to pore over. Most folks though, just want to get to the bottom line.

In a nutshell, in a pandemic, if the freight industry (ports and railways in particular were looked at in this study) experiences a level of absenteeism of 28% or more, we can figure on the whole freight-carrying system to grind to a halt. You might want to think carefully about what that would mean.

Get Ready ... Seriously -

Friday, April 11, 2008

FREE CELOX with Qualifying Mountain House Purchase--Till April 15 Only

It's a very busy time at Safecastle these days. The frail global economy and the developing food crisis are two very strong motivations for people to be laying in supplies.

As always, we're here to take care of our friends and members first and foremost.

We recently pointed out the Mountain House freeze dried food situation. As a reminder:
  1. Oregon Freeze Dry is again raising their prices this summer.

  2. As scheduled, they will be switching over their production lines to other product lines starting May 1. But as a result of current excessive demand for #10 cans, they expect their backorders on those products to immediately reach 3 months. (In the meantime, this month, orders are delivering promptly, within three weeks.)

  3. Our three-case variety package buy is in swing. We have our initial bulk order of food in stock and will be starting to ship next week to our customers.

Bottom line, Mountain House cans are about to get harder to lay hands on ... and when you do find some available, they will be pricier. We continue to offer all MH products at the maximum allowed discount, plus we ship free to the lower 48. Those things will not change.

However, we do try to help you along sometimes with a little something extra. So, for the next few days only ...

Through April 15 (or until supplies run out), we are sending one FREE pouch of CELOX to folks for every 6 cases of MH cans (36 cans) purchased during this special offer period!

Any six MH cases will do. ... Two of our 3-case kits get you a FREE pouch of the life-saving wound hemostatic agent, CELOX; one of our 8-case packages gets you two free pouches of CELOX; a 25-case order gets you 4 pouches; etc. (To see our buyers club pricing, mouse-over the main listing image).

Log-in to your member account, make your Mountain House purchase, and the CELOX will automatically be sent.

Still need to become a Safecastle Royal Buyers Club member? Make the membership purchase first. It's a $19 lifetime membership that gets you 20% or more off all our listings all the time, plus FREE shipping to the lower 48 on everything we sell!

Get Ready ... Seriously -