Tuesday, March 28, 2017

You're an idiot if you don't invest in Tulips...

Which I'm sure was said more than once during the Dutch Tulip Bulb bubble.  As one professor stated to me, if we could go back in time to become  investors, we would be CRAZY to get out of that tulip market!  It was sooo easy to make money!  That is, right up until the day the bubble burst! Such is the dilemma for those of us who think future security is achieved by contributing to 401K or IRA paper products.   The bubble hasn't burst, so of course we can't give up the compounding effect of paper asset prices that seem to only go up Up UP!  That is, till we try to cash out.  Then, we encounter the  Sell out curve. Well, so much for saving anything...

The same is true of maintaining a career in today's hyper complex economy.  Doing the same job year after year isn't good enough.  We need double digit gains every year!  Sell more, make more, market more and of course reduce those costs!   Those who talk of leaving the system to build a permaculture homestead or tour the world in a sailboat may be able to escape the system.  However, the rest of us have significant barriers to making such a switch. Besides, it's fun to stay in the bubble!  So, that's where we are now.  Stock market going like gangbusters and maybe we're grabbing a paycheck. Gloom and doom will be here soon, but the effect of large macro economic change is always a few years away.   That is, till that day comes when we get invited to an unscheduled meeting and then.... We find we have started an unscheduled permanent unpaid vacation.

The thing about macroeconomic change is that it sweeps up many good capable people  It's not that work goes away - it just changes.  What our industrial system will change into as we deplete the cheap fossil fuels  is anybody's guess.  However, it's probably safe to say that some people will thrive if they identify new opportunities early.  As I'm fond of saying, even when Vesuvius was about to cover the city below in hot ash, somebody was doing OK.  That is, anybody with a boat that could take passengers away from that mess!  Not that I advocate price gouging during a crisis.  The point is, no matter how dire the large economic picture is, there is almost always some way to do well.  But how do we do OK in the present environment?

First, we need to know where we are (and how we got here).  Next, we need to know where we want to go.  Finally, we need practical solutions on how to get to that better place. When it comes to all that, I ran across a very good talk that featured some post-peak heavy weight guests.  Taken together, the show is one of the best talks on some post-peak lifestyle solutions that I've seen in a while. Here's the tagline:

This summit brought together an amazing panel that consisted of John Michael Greer, James Howard Kunstler, Chris Martenson, Frank Morris, and Dmitry Orlov to talk about issues ranging from politics, the economy, the food we eat, immigration, labor, poverty, minorities, war, and much more. Please be sure to like and share and stay tuned for more dynamic events from The Center For Progressive Urban Politics!  Visit it HERE

Thursday, July 28, 2016

Nissan Leaf versus Subaru Forester

The cost per mile winner - Nissan Leaf.

Starting in 2015, I decided to do a 5 year experiment.  For this time, I had two cars.  The first car, the Nissan Leaf, was bought with the idea that having a relatively simple and new car would save money.  Being a 2013, it is still new enough that most parts have not worn out.  If they did break, they are under warranty.  At the bargain after tax price of $13,800 it was more than I had ever paid for a car.  However,  I anticipated the per-year cost should be lower than a gasoline car.  First, being electric, it lacks many of the things that are typically expensive repairs on regular cars.  For example, there is no muffler to rust, gas tank to leak and so on.  The engine and transmission are also very simple and have been cited as statistically being around 25 times as reliable as a gasoline car. Oh, and I would not need to buy any gasoline for the life of the car.  As for energy use, I found it used about as much electricity as a small window air conditioner.  That is, it has apparently added about $20 to my monthly electric bill.  It would eventually need a new battery pack, but if I junk it anytime after 6 years, I anticipate that I would be ahead of what I would have paid to drive a regular car over the same period of time..

The second car, my winter rat, was a used 2007 Subaru which I acquired at a slightly below market price of $5900.  I expected this car to have higher operating costs, but I thought it would still be overall cheaper due to the low acquisition cost.  At first, that was true.  During the winter of 2015-2016, I plowed through the snow with no problems other than adding a starting battery costing $130.  So far, so good.  Then, mid winter, the muffler needed to be replaced.  Also, I needed a new set of tires and oil needed to be changed.  Again, expected repairs.  Taken together, they were around $800.  As winter turned to Spring, the Subaru mostly sat in the driveway.  Due to driving the Leaf, the Subaru sat so much that I became concerned that I might need to put gasoline stabilizer in it's tank!  Also, staying in one place it was starting to cause four tiny tire indentations in my driveway!

Meanwhile, the Leaf continued to operate, requiring nothing more than a daily charge which was hardly noticeable on my utility bill. When I first got the leaf, I was concerned about the range.  So much so that I insisted the dealer deliver the car. However, I quickly realized my driving habits fit well within it's round-trip range.  Looking at my odometer, I found that I only drive around 20 miles a day to work (sometimes 30 on the weekend) and this is well within the Leaf's range even with heat or air conditioning operating.  I also noticed a nice surplus in my weekly budget due to not needing to buy gas.  It's only major repair was for a universal joint problem that created an occasional grinding noise but didn't disable the car. There was also a software upgrade for brakes, a defective seat heater and an air-conditioner pipe adjustment.  All replacements so far have been covered under the factory warranty. 

When I took the Subaru on it's first long trip, the real cost of maintaining an ICE car became apparent. During that drive, oil consumption suddenly became around a quart every 100 miles!  Once I got home, my mechanic traced the cause to a leaky oil pressure sensor gasket (one of three that this model car has). The gasket was cheap.  Replacing it was not - at close to $300 dollars.  Then, a few weeks later, the dreaded check-engine light appeared again and it started burning oil rather than leaking it!  Buying a car scanner $89 revealed a misfire in one of the cylinders.  A compression test, then removal of the heads, revealed the exhaust gasses had eroded some paths through the metal around the exhaust valves.  Fixing that required extensive and lengthy repairs, to the tune of two months of being off the road and a monetary cost of $3200!  

So far, the before-tax Forrester costs are...
Acquisition cost of Subaru(with tax) - $6500
Starting battery $130
Muffler & tire replacement ~ $800
Oil temperature gasket leak ~ $300
Bulk oil jug purchases to replace oil lost to leak ~$40
Scanner $89
Compression diagnosis $130
Engine head repair, including timing belt and serpentine belt replacement $3200
Total cost so far are approximately $11,189
if I had not had the leaf, I would have had  rental car costs in too.

Although the Forrester repair costs were abnormally high, the reviews for the 2007 model year show that I am hardly unique in having them.  Nor was I done with them.  Next,, my Forrester has developed a new power steering shudder and the struts developed a creaky sound.  As for insurance and registration savings,  the rates are comparable on either car.  Due to my bundling of insurance, it looks like I would gain around $500/yr savings if I gave up either one of the cars.  

As for miles driven, the Leaf clocked just over 10,000 miles that past year versus the Forrester at just under 2,000.  However, before concluding the Leaf was clearly the superior car on a cost-per-mile basis, consider that many of the Forrester's miles have been earned during very bad conditions.  The Forrester's winter performance has never been in doubt.   On several early mornings, when the temperatures were below zero and nary a snowplow was in sight, the Forester plowed through the cold snowy roads perfectly.

Unlike the Forrester, the Leaf's winter reliability depends heavily on snowplow clearing and a nightly opportunity to thaw in a warm garage.So, in my geographic area, it looks like the Nissan Leaf can fill a meaningful transportation niche only part of the year. Unfortunately, my transportation choices are defined by peak performance demands.  That is, I still need a car that can go through deep morning snow (only 4 or 5 days a year) and survive roads covered with corrosive roadway salt.  Unfortunately, in my area, that still requires a petrol car with AWD.

* Update: This April, the Subaru had another large oil leak from a defective freeze plug.  That made my car briefly totally run out of oil. Fortunately, I had the common sense to stop the car before the engine seized and have it towed to the shop.  After a  $300 repair, the car is again mobile.  However, I found the rings are now shot and it's not cost effective for me to repair.  The car still worked but it needed to be topped up with oil every time I bought gasoline! I decided to sell it for $2300, ending the  experiment early.  

Saturday, February 20, 2016

Economics of 3-D printing in a post-peak oil world

This is a plastic part to a table that allows a network cable to go through a conference table.  At the moment, we only need one.  Take a guess on how much it is.  I'll give you some hints.   From the image you can see it's a relatively small size. It's made of relatively inexpensive plastic - HIPS to be precise but being made of ABS or other forms of plastic or even rubber wouldn't impact it's mostly aesthetic function. I'll give you the most important clue.  The real cost of this item isn't in material cost of the plastic (If you were to buy this material in quantity, the per-pound raw material cost is still under $0.10).  Rather, the bulk of the cost depends on proximity of the item to the place of need.  My proximity to the conference table is insignificant - only a room away.  However, my proximity to a supply of these things is where the real cost becomes apparent.

If I was hypothetically standing next to a barrel of these things at a factory, I could grab one and probably pay pretty close to the material cost of this item.  Assuming that factory did retail, and was expecting me to buy many more of these, I would say it's price would be around $0.15 ea.

If was at a local big box store such an item would probably be on a pegboard hook, wrapped in a plastic package with a description and a bar code.  The retail price with all package, processing, delivery and sales tax would drive the price up to just above a dollar.

All of the above prices don't take into consideration the searching time and true delivery cost of the item. The most direct way to see the delivery cost of an item is to order an item online and then have it delivered to your door.   Given postal rates, an individual can be expected to pay a minimum of around $8 for shipping  all but the smallest of items to their nearest postal box.  So, in the example above, that can increases the cut rate price of $0.15 to be around $8.15.

Even that expensive ordering option is not how we typically buy such items.  Instead, many of us get in our expensive car to drive to the nearest hardware store which is usually at least 15 minutes away.   Then spend half an hour looking through all the wall baggies, then find a retail clerk who is faster at searching baggies. Maybe they have one, maybe not. Assuming the item exists and is in-stock, we then expend more time driving back.  As can be seen in this example, the whole process can take a large amount of time even if no excessive traffic is encountered on the roadway.  If we were to pay ourselves even the new minimum wage of $15 an hour and split the miles driven over the life of the car, well, you know where I'm going with that. 

If we need the part at work, cost can still be high.  We need to count hourly time for searching for a part from an approved vendor.  Then print and submit the appropriate purchase order to the appropriate person. Even if the purchase order process is only asking a boss for approval, their time at their hourly rate is being used too.  Then, a small slice of time from accounting to process the order, then send a check.  Meanwhile, on the other side, someone needs to maintain a whole business infrastructure so their employee can pick the part, pack the part, then ship it to you.   The only bright side to this is that delivery costs may be shared if more than one of the same item is being ordered from that same vendor.

Contrast that to on-site manufacturing.  Just measure the diameter of the hole.  Start a CAD program (commercial or open source).  Then measure the part, draw the piece and export to a printer.  Assuming the printer is in working order and has a supply of plastic, there is no additional transport cost, reporting cost and relatively small wait time!  Plus, if another is needed at a later time, the cost is even lower!  The per-part price from a 3-D printer is still pretty high.  However, printers are getting more reliable and less expensive all the time.  Due to this, it is now possible to get saving from small batches of multiple items.  Just like multi-item orders make per-part costs lower, printers are now reliable enough to print multiples of parts unsupervised. The economics rarely make sense for hundreds of parts.  However, when only two or three relatively simple parts are needed, printing rather than ordering can be the least expensive option.

Thursday, January 14, 2016

Surviving outside the financial system

Unfortunately, when it comes to living in the U.S. there is sometimes no alternative to cash....or is there? Depending on who you pay tax to, it may be possible to either pay taxes with items or at worst sell items for cash. So, it may be possible to survive with very little cash (assuming one doesn't get trapped into the medical or  prison industrial systems). The principle is based on this article which showed how one individual turned one red paperclip into a house. Now, the article is not to show that you simply need a drawer full of paperclips to solve your financial needs. Rather, it's to show how it is possible to show how to barter profitably.

Bartering isn't about living without working. Rather, it is a way of directly participating in the economy. With the exception of transport costs and perhaps a bit of marketing cost, bartering can be remarkably efficient when compared to the regular economy. The unconventional economy or black and gray markets tend to be able to avoid some if not all of the following business costs:
  • Income tax
  • Credit card transaction fees
  • Bank fees (just for having a "business account" at the bank)
  • Business license or permits
  • Cost increases for various services due to having "business rates" rather than consumer rates for utilities such as electric/phone/internet.
  • higher rents in "commercial zones" rather than "residential" zones.
  • frivolous lawsuits
  • fancy packaging
  • global transport costs (if not manufactured locally)
  • Shoplifting
  • Cost of accounting in terms of time/money spent maintaining compliance for the tax authorities.  Eg. Within the state sales tax.  (When all costs are counted, this cost of compliance can exceed the actual taxes owed for a start up business.)
Only the first category of cost is illegal to try to avoid.  It is perfectly sensible to try to avoid the other ones.  Each cost may be small, but there are so many of them!  No wonder the regular economy is dying! There's only so much that can be taken out of  transactions before products don't have enough profit to be worth selling! However, as yesterday's retail industry dies, other solutions that avoid at least some of these rapidly rising financial costs are taking their place. Craigslist, Ebay, pawn shops, roadside produce stands and even people selling items out of the trunk of their car may be able to remain out of the reach of at least some of these financial leaches.

Is it possible to make a living this way? Perhaps. Some T.V. shows such as "pawn kings" show it may be possible to avoid some costs. However, like any business, the money making activity is not always obvious. It may just be that the participants make more money selling the TV show than on everyday selling activities. So, it may not yet be economical for many to exist in this way. However, each year, more people try.

Wednesday, December 9, 2015

Timing personal collapse

There are many ways of interpreting when personal collapse happens - and what personal collapse looks like. 

For one particularly good example of what personal collapse looks like, see Paul Krugman's article
By security, I mean that you have enough resources and backup that the ordinary emergencies of life won't plunge you into the abyss. This means having decent health insurance, reasonably stable employment and enough financial assets that having to replace your car or your boiler isn't a crisis.
By opportunity I mainly mean being able to get your children a good education and access to job prospects, not feeling that doors are shut because you just can't afford to do the right thing.

As for when it happens, I find that it depends on the definition of collapse.  I did a previous posting on this topic a while back.  http://lifeafterpeakoil.blogspot.com/2012/06/apocalypse-when.html

When developing a response plan to economic collapse, one useful thought experiment would be to imagine if a person was to lose their primary means of making a living due to some economic upheaval. What is a good plan for that?  For me, this became more than just an academic topic.  A few years ago, through a comedy of circumstances, I found myself suddenly unemployed.   Expenditures such as mortgage, taxes and utilities were about as expected - and unemployment insurance (plus what I had saved previously) would cover those expenses for at least a year or possibly more.  I had also been preparing for some sort of financial disruption due to peak oil for several years earlier.  So, I had more than enough of some items like food and gardening supplies.  I even had a bicycle, good shoes and warm clothes.  Most important, I lived in a city which made most every need or want within walking distance.  At the time, the weather was mild, going into summer.  So, my home heating costs were low and my pedestrian transportation option made my gasoline expenditure almost vanish!  However, I found I would quickly run short of other resources.  One commodity that I found depleted much more rapidly than I predicted was cash!  It turns out that I had underestimated my monetary expenditures - specifically for insurance.  The big three were for auto, home and medical.

In the case of medical, it was in the period where Obamacare was being implemented.  The insurance bills were a useless but massive monthly bleed-out of money that gave me nothing but a checkup visit.  The sliding scale of medical plans only looked at past income, not present income.  So, the sliding scale fees worked against me.  To the graphs, I was still a fat wealthy moneybag ready to be harvested.  Each month brought a healthcare bill of several hundred dollars that ate up a significant chunk of my unemployment checks.  In addition, I had an over-priced prescription that I felt I should maintain - that is until I saw the price of it increase from $35 a month to $1000 a month(because my insurance plan no longer covered it), then $2000 a month (the price I would pay if I had no insurance at all). Needless to say, I was in no position to pay the last two prices.  Fortunately, my doctor found a substitute medication.  It didn't work as well, but it at least allowed me to go back to work.  Now that I'm back to work, it is my employer is paying the ruinous sums of money to the insurance cartel. It's not that my healthcare problem is solved, but it does give some time for me to think about how to respond to the healthcare extortion system when the day comes that I can no longer work.

The whole exercise taught me some lessons. First, I learned that change of this kind can sometimes bring some unexpected benefits. Due to walking, biking and lack of daily stress, I lost some weight and gained some stamina.  So, my overall health improved.  Second, I learned that preparing for one kind of emergency (oil crash) that didn't happen gave me many of the same resources that were needed during another crisis that did happen (Job loss).  Not only did I have enough resources to get through the storm, but I also had access to low cost transport to a new job.  This was due to my decision (driven by preparing for peak-oil) that made me decide to buy a house near a bus line.

Friday, June 26, 2015

How to financially survive a visit to an ER in the United States

I have a saying that has been proven to be true. "Catch someone at the wrong moment and they will appear to be an idiot."  Fortunately, this condition is rarely incurable.  It can be treated with training. That is, for specific situations, the proper response to given stimuli can be made to be almost automatic.  It's done for many situations from learning how to fight to learning how to perform first aid. Although its impossible to train for every situation there are several situations every American citizen should be prepared for.

When it comes to dealing with hospitals and ER (emergency room) treatment, disputing anything seems futile.  They seem to be massive organizations that have enough lawyers to crush most anyone.  Plus, a victim is close to the perfect customer.  The "customer"  usually doesn't know what is needed, has no idea what the costs are and may be in no condition to think rationally. 

But first, if you are in a condition to make a rational choice, some nasty expenses can be avoided before they happen. For example, if you find yourself facing a decision to take an ambulance ride to the ER (emergency room) or to an urgent care center keep these points in mind.
  • Consider that ambulance transport is between $400 to $1200 a ride and is not usually covered by insurance.
  • If you didn't call it, you don't need to take it! However, a "responsible person" such as a friend needs to accompany you away from the scene (they will wait until this person shows up). 
  • If you do ride you can choose your hospital. Although, if you are not in the best state of mind, that might be quite difficult due to shock or being unconscious.  Then again, if you ARE able to make a rational choice, what are you doing in an ambulance?  Regardless, prepare to be fleeced.  There's not much you can do about it except try to leave the hospital early and have as few billable incidents as possible.
  • For not so serious conditions an "urgent care" clinic might be a less expensive choice.  Just don't expect off-hour service or quick treatment.  Then again, I've noticed that ER rooms at hospitals are not that fast either.  What seems to be the main advantage of "Urgent care" places is that they are much more receptive to your concerns about being able to afford treatment. This is due to them frequently wanting up-front payment.
Ok, so you couldn't avoid a trip to the ER and you are now home.  For normal debt it pays to retire debt as quick as possible to avoid interest and fees. However, hospital debt is rather strange.  The hospital will try to get an agreement with you as quick as possible (even though doing so may breech their contract with their insurance carriers). So, they will rarely contact you directly.  Instead, they may use another organization call you to "ask questions" to see if you "qualify for help". 

The most helpful thing a hospital can do is wrap the hospital debt up for you for claims your insurance company covers versus stuff they don't cover.  Here's how it works.  The first bill from the hospital can get the claim amount up to, but not exceed the amount the insurance company says is a co-pay.  The rest of the bills then should "go through" your insurance company which of course they could deny and send right back to you.  So, here's where you have a little bit of control that might tip things in your favor (especially if you have bad insurance):
  • The hospital will bill you.  However, there MIGHT (or might not) be some negotiating points.  For example, maybe individual items can be consolidated into one big bill.  The hospital may benefit since it's an opportunity to "sweep everything under the rug" for stuff such as overpriced aspirin.  If the hospital doesn't wrap up everything for you, you'll get little bills for lab work, non-resident doctors, and goodness knows what else.
  • Avoid paying anything as long as possible until YOU have the information required to get the maximum amount covered from your insurance company.  Put the bills in a shoe-box.  To people billing you, make it clear you don't mind waiting for the hospital and their contractors and lab people to get their crap together. After all you only visited ONE hospital ONE time.  So, contact your insurance company and ask them about EVERY bill no matter how small. Even if you do pay it, by informing the insurance company of your payment, it eats away at your yearly deductible.
  • If anyone (but the hospital) says they will send you to a collection agency for non payment, inform them that the bill is being reviewed by your insurance company.  (make sure the insurance company really is reviewing it - ideally, giving you a correspondence number)  If they persist bothering you or threaten you with fees, remind them that charging interest or fees by itself may not be illegal but it likely violates your insurance company's agreement with the hospital.  If they persist, offer to report them  to your states insurance fraud hotline
  • Keep in mind, what is casually said over the phone usually applies to you, but unfortunately not to them. So, don't talk to anyone if you can help it. CallerID, voicemail and physical mail are your best friends.

Hopefully, you'll never need to use these tips.  However, if you do, I hope they help.

Tuesday, July 29, 2014

Healthy lifestyles - according to my insurance company

Well, it's finally happened.  Just like the movie Sleeper, everything that was bad for you is apparently healthy and everything that was healthy is now bad.  At least, according to my insurance company.

Ok, so how does that work?  A long time ago, cigarettes were shown to cause cancer and fried food caused heart attacks.  Fortunately, most of the smoke I inhaled in college was from second hand smoke and I developed an aversion to fried food in college.  Then, I entered the working world.  I soon get sleep problems due to, well, showing up to work.  In order to stay alert, I start to drink coffee and caffeine loaded soda.  Also, with a horrible commute, there is no time for proper meals. So, my diet became horrendous. This makes my weight go up.  As my weight goes up, it causes night time breathing problems among other things.  Less sleep, more soda, coffee and salty snacks to keep me awake. Eventually, I have trouble breathing at night due to Apnea that I start falling asleep during the day.  You get the picture. 

So, I go to the doctor.  He prescribes a sleep machine and some medication.  I'm finally able to stay awake during the day and get sleep at night!  I feel better and stay in the working world. After 5 years of this routine, I move from one employer to another as the new career norm now demands.  During this time, I try to do my part. I lose some weight which allows me to only use the sleep machine as needed rather than as a full time dependency and taper down my medication. After several employers and several insurance company changes later, I find myself back with the original insurer who approved my original medication. My physical health didn't decline - but thanks to changing employers, my financial health did change.  What used to be a $15 prescription became $30,$75,$15,$0,$350 then $3000 - what? After going back to Blue Cross, they decide they now won't cover what they covered before.

I naturally ask why.  It turns out the medication and my sleep machine are now rather expensive items due to pharma inflation. So, the insurance company wants to look for an excuse to now deny me my continued use of both.  So, they had me report my sleep logs.   They finally say, "nope, sorry, you don't have enough usage hours on your sleep machine. So, we're not going to pay for a repair or replacement."  They were also very careful to say they weren't denying treatment.  Just payment.  No matter, the effect is the same.  Without replacements, I start gaining weight again which makes the condition worse.  Looking back, I could probably have fought it based on denying me based on a pre-existing condition.  However, now I've unfortunately demonstrated I'm not dead without these items.

Anyway, after years of not smoking, I'm considering doing it again to lose the weight (or at least arrest the gain).  It's a risk assessment.  An occasional cigarette saved my life during a critical period (say, driving in winter in the middle of nowhere when I HAD TO stay awake to find shelter).  In the same way, smoking in leu of excessive weight gain may have the same effect on me.  That is, weight loss (or at least slower weight gain) to get rid of the Apnea might be a greater benefit than the health lost to smoking. So, I'm well on my way to living the Woody Allen future as seen in the Sleeper movie. He noticed that not one person he knew eating a high fiber diet lived past 200. So, bring on the menthol butts and Mountain Dew! Thanks private insurance!

In all seriousness, what this shows to me is that in spite of Obamacare insurance reform, the a-la-carte way insurance companies can deny some medications and treatments to some people is a loophole the insurance/provider/pharma industries can fly a medivac helicopter through. Pharma can still sell it's overpriced medications to end users (some who will still pay those high prices, at least for a limited time). Hospitals can then offer treatment not approved by insurance at substantial markup (patients will either pay those extra charges or go bankrupt and generate writeoffs for the hospital). Doctors still get kickbacks from pharma companies by prescribing expensive non-covered medications that patients will still buy - at least for a limited time till they run out of money.  It's all very corrupt.  The very rich own medical stock, which is doing quite well.  The very poor (or those working in the growing underground economy) now benefit since they get basic medical treatment but have no income that qualifies for debt retirement garnishment.  Who pays for it?  A shrinking middle class (gradually turning into the working poor) that pay through inflated pre-tax insurance premiums and artificially inflated medical supply prices.

One wonders how long this can go on. Probably longer than I can.  Welcome to the future...

Tuesday, July 15, 2014

Pay off a mortgage or "invest" in the stock market

So, maybe you are living a little above the average "paycheck to paycheck" slobs.  You have a little extra money saved up, doing nothing In a savings account.  What should you invest in?  Should you pay off your home mortgage early or use that money to pad your retirement nest egg?  After reviewing several articles pro and con, I was not sure which way to go either. 

After reading articles, mostly pro-stock market investing, I opened a letter that absolutely decided the issue for me.  It was the check that I got which allowed me to “cash out” of one of my former employers 401K plans to my new employer’s 401K plan.  I compared the check amount I had to the statements I got in the months before.  Then compared it to the final “F##k Y#u" statement - that is the statement that says how much my fund would have been worth had I not cashed out.  During this long market rally, my fund value started at the year at 12k.  Then climbed to a little over 13K during March.  Then it would have apparently ended at just under 15K - that is, if I hadn’t cashed out a week earlier.  Yet, somehow between the statement printings that said 13K and 15K, the value at cash-out dropped to 10K? Coincidence?  Did a one-day massive stock drop then an even greater rally happen that week that nobody bothered to report on?  Of course not. The 10K what the mutual fund company deemed my paper was worth at that time. Since they were essentially the only buyer, well, they can really can set most any price they want.  In my case,  a technicality that allowed them to keep 1/3 of the stated value was a little condition buried in the fine print called "Forfeiture".

So, beware. There may be little mines in the fine print that allow these companies to legally not pay you anywhere near what you think you might get.  Also, keep in mind that mutual funds are subject to the same supply-demand that other investments are subject to.  That is, that gains or losses are only real the day of the sale.  The rest of the time, it’s statement bullshit to keep people in the market (see the blue dots that represent apparent values as per the quarterly statements).  I've named this phenomena “the sell-out curve”.  It’s not a real curve.  Rather, it’s the feeling one gets which seems like how the market must have performed the day of sell out when you get quite a bit less in a bank check than the statements suggest you would get.  

Oh, and when it comes to retirement, there's another future whammy too.  Keep in mind 401K investments are pre-tax dollars.  So, when I finally decide to turn this next investment back into currency to spend, I still need to pay income tax on it too! 

So, what's a smarter investment? Getting rid of debt.  That includes home mortgage debt. I'll even go out on a limb and say "especially home debt". Do the compound interest calculation. A small interest rate over a long time is still a LOT of money. In fact, for many people, they pay twice the amount of dollars they pay for their home.  Yes, yes, inflation trends can create cheaper dollars. However, the trend for doubling one's wages is not encouraging.   Also, unlike an investment firm, most individuals cannot just decide to payback a bank less than the full stated amount owed.

Sunday, June 1, 2014

Got food? Modern day droughts.

Lots of attention has been directed to California's food producing problems - with good reason since the entire state is under a drought.  However, modern day water problems are not just in California.  Google "Kansas Dust Storm" and you'll see shocking footage of a modern day dust-bowl type storm that happened this spring 4-28-2014.  These weather events combined with the pending loss in reserve currency status (that would make food imports very expensive) may soon not only affect U.S. food prices but overall food availability.

Those that forget their history are doomed to repeat it.

A combination of drought and misuse of marginal farmland led to Dust Bowl-like conditions in New York in the 1920s. Most people would think this photo came from somewhere in Kansas during the Dustbowl period in  the 1930's.  They would be wrong.  A combination of drought and misuse of marginal farmland led to Dust Bowl-like conditions in New York beginning in the 1920s.

Before the middle of the 19th century, forests had been primarily viewed as inexhaustible and an obstacle to civilization; they were something to be cleared out of the way for agriculture, or to be cut and exploited for profit. By the 1880s, less than 25% of New York State was forested, and the remaining uncut forests in the Catskills and Adirondacks were being logged fast. In 1885, New York created the Forest Preserve Act to protect state owned lands in the Catskills and Adirondacks from further exploitation. This act was strengthened in 1894 by an amendment to the New York State Constitution:

"The lands of the state, now owned or hereafter acquired, constituting the forest preserve as now fixed by law, shall be forever kept as wild forest lands. They shall not be leased, sold or exchanged, or be taken by any corporation, public or private, nor shall the timber thereon be sold, removed or destroyed."

Given that cultivated farmland will be reduced either through sensible legislation (such as in New York) or through natural forces (such as in Kansas) what is one to do?  One answer could be to encourage households to start kitchen gardens. A small plot of land, properly managed, has the potential to grow quite a bit of food.  Amateur gardeners can start with commercial seeds, soil and fertilizer for minimal investment.  Once the basics are mastered, permaculture techniques can then be gradually adopted.

Since back yards aren't available for everyone, other sources of food might be produced from basement or closet based hydroponic type systems.  One body of technology that may offer some promising solutions is the illegal pot growing industry.  Many "kits" needed to grow marijuana plans indoors can be easily adopted to growing other crops such as tomatoes.  Ironically, the patent laws might soon make growing any plant from seed be something that is just as much a criminal offense as growing pot from seed now is.  Given the potential for profitable shakedowns for those who dare save seeds, the ability to grow plants covertly may eventually be of some benefit.

Friday, July 12, 2013

Selective enforcement

For years in the U.S. there has always been the problem of selective enforcement when it comes to laws.  There are numerous times where one person is made into an "example" by being assigned a penalty while others get none. My favorite example is issuing speeding tickets. Speeders could easily have on-the-spot convictions at toll booths with time stamped tickets but they never are due to that pesky right to a fair trial requirement. In my opinion, it shouldn't prevent at least an appearance ticket from being issued if early payment of a toll shows speeding. However, I digress.

The fact is, the individual has more laws than can be applied to them than can be read in a human lifetime.  Does the fact a person can unknowingly break several  laws a day lead to frequent incarceration?  In most cases, no.  Instead, it leads to unelected governance and government bloat such as this team of agents who used taxpayer dollars to do a multi-agent arrest of a girl for buying water.  Why? The rulers become the ones who know the rules and can pick and choose which ones to point out when it's convenient to do so.  Such people include IRS auditors, coding inspectors, police officers and anyone else who has any government regulatory power at all.  Those who flash badges can even make up laws to entrap people such as officers in Ohio who set up a fake drug checkpoint.  Also, check out how our own FBI is "inventing terrorists"  It makes one wonder why we have laws at all. 

One relatively new use of selective enforcement is now being done to increase profits in the medical industry.  Did you know stockpiling your own medication is now illegal? Yes, stockpiling more than the prescribed dose of critical medication, you may need to live, is illegal. So, if you pill split due to anticipating a shortage due to financial hardship, too bad! Its more than you need since you obviously can get by with the lower dosage.  So, it could be the slammer for you!

Oh, but it gets better.  Suppose you check the price of your prescription with your pharmacist.  In some cases, the price charged is much higher than if you had no insurance at all!    However, going to another pharmacy and state you have a prescription and want to pay cash since you have no insurance.  Doing that is ...you guessed it...illegal.  Sorry, you were stupid enough to sign up for a medical plan through your employer that you cannot opt out of unless you are fired.  So, if you can't afford the higher price and you won't quit your job to get the lower price...no medicine for you!

When it comes to prescription drug laws, they now exist to extract maximum profit from patients.   Due to selective enforcement, these laws are making poorer people needlessly miserable.  Since rich people can still get drugs (and poor people know it) there is also collective non-respect for ALL laws gradually developing. Furthermore, a very lucrative price support system is now in place that is encouraging organized crime to enter the medical field. 

For example, one area that is experiencing explosive growth is in heroin distribution in leu of prescription pain killers.  The pattern is very simple to see. a person gets hurt.  Person is prescribed very powerful prescription pain killers.  Medication is then abruptly stopped either due to further prescriptions not being issued or more often insurance refusing to pay for drugs being sold at inflated prices.  Person is then addicted and/or is still in excruciating pain.  Result?  Person is willing to do almost anything to get release from the pain.  At first, they pay the inflated drug prices.  Once they are out of money (and it doesn't take long since self-pay prices may be in the thousands per dose), they then turn to illegal but affordable alternatives such as heroin. Pain is enough of a motivator to them that they not only overcome their fear of dealing with very scary people but also overcoming a very powerful natural aversion to needles to self-inject heroin into their bodies.   

The solution to any corrupted system isn't easy.  It's just this:  Replace our elected incumbents with people who are willing to repeal laws that may only exist to perpetuate the profits of a few at the expense of many.  The alternative will be to enter into a world where the official economy becomes crippled by provisional governance while an alternate system immune from regulation or taxation (and usually prone to violence) will start to thrive.

Tuesday, June 4, 2013

Could this be a new trend? Bottle gardening?

When it comes to vegetable gardens, I tend to be a bit of a purist. I make my own compost.  I grow my veggies from seed and I've so far been able to totally stay away from pesticides other than possibly beer for slugs.   However, mother nature is making gardening in this way tough to do.  The weather has been rather crazy lately.  Temperatures of nearly eighty degrees followed by cold nights with sudden downpours of rain or sleet.  Combine that with hungry bugs and animals and it's a rather scary place for a plant seedling to be!

A few weeks ago, I had a frost scare.  So, I decided I needed to cover my plants.  However, I didn't want to crush the little sprouts with a sheet.  So, I figured rather than using a few big sticks to lift an old sheet off the plants, I could use some cut bottles to support the fabric.  As I was putting the home made supports between the plants, I realized I could just use the bottles themselves to cover the plants and forget the sheet entirely!  Of course, I forgo the bottle deposit if I cut the bottles this way.  However, I get the following advantages:
  • plastic bottles are widely available and cheap.  
  • They seem to keep the plants frost-free (especially if the ground is warm and I put the cap on the top of the bottles)
  • The plants, being slightly warmer, can sometimes have a faster growth cycle.
  • Bottles also keep small pests away such as bugs and squirrels.  I haven't bunny tested these bottles but I'm optimistic they would work fine against those too.
  • So far, I don't seem to need any pesticides!
  • Although water condensation reduces sunlight (as in the image below) the bottle tends to keep water in too.
  • A seedling in a bottle is much easier to distinguish from a weed
  • They are very effective at thwarting squirrels (who happen to love digging up baby corn plants)
I'm guessing these bottles will last only a few seasons before breaking down.  However, for 5 cents a bottle, I'm not complaining much. It's a relatively cheap way to insure the plants get every advantage when it comes to growing.  The total "investment" of bottles above is a bit over $2.  It's not a particularly glamorous idea.  However, it does seem to be an effective way of protecting seedlings!

Post-season note. The bottles gave the plants a good start but they are not a comprehensive cure.  The day before I was to harvest my crop of corn, some squirrels beat me to it!  I came home to see almost all the stalks tipped over and corn cobs scattered all throughout my back yard.  I have since changed the crops I grow and have armored my remaining plants using a 6x8 mini-greenhouse.  Now, my deer, rabbit, chipmunk and squirrel problems are problems of the past!  That only leaves the remaining problems of bugs, slugs and blight.            

Monday, May 27, 2013

This memorial day, here's to those in the silent service.

No, I'm not referring to those in the NAVY who served in submarine service or even the field agent spooks who worked for the FBI. Rather, I'm talking about the millions of non-government employees who go to work every day to generate the wealth to make a military possible. They are the factory workers, hotel cleaners, food service workers, retail people, nursing home workers, tomato pickers, forklift drivers and countless others who provide support services but have not directly served in one of the armed forces.

These civilians forgo a lifetime of benefits and status of government service to provide the true wealth that allows the rest of our government to function. They are the ones who do without civil or military pensions.  They get no extra points on civil service tests or special tax breaks.  They get no veteran discounts and would be quickly dragged out of a VA hospital if they were sick in spite of possibly having been employed at one.

So, here's to all the tax payers in private industry who actually work for a living. It's OK to appreciate the servicemen but don't forget everyone else who made their job possible.

Thursday, March 28, 2013

How to reset a civilization

In spite of the hype of hydrofracking, many people still seem aware that energy depletion is real.  However, few seem aware of what to do about energy depletion other than doing "more drilling".  However, one journalist, former BBC journalist James Burke, may have at least one of the keys that might help doing so.  He discusses how people can be caught in what he calls a "technology traps" He also does nothing less than show the essence of what it takes to reset a civilization.   The show was made in the 70's but what he said is still valid today.  It's worth a watch. It features real actors, real writing and of course lots of retro clothing. 

Sunday, March 10, 2013

The peacemaker of our time.

I was listening to the radio about how crime has mysteriously decreased in some cities.  Of course, some agencies are quick to take credit for this.  From Homeland Security and New York City police to the Prison Industrial Complex, all are quick to take credit for a reduction in crime.  However, I suspect something else is at work that has little to do with the boondoggle efforts of bloated police forces or even the number of guns in the hands of civilians.

Years ago, I was reading a Tom Clancy novel, Red Storm Rising.  It was a  novel about the Russians doing a bolt from the blue attack and being thwarted.   One statement that made the story more interesting was about how it was done.  A particular sergeant who somehow survived a surprise assault by the Russians was overrun and became trapped behind enemy lines.  He fortunately had, in the words of Tom Clancy, "one of the most powerful weapons in the U.S. military".  No, it wasn't a backpack nuke.  It was simply a radio.  He then proceeded to call in air strikes, artillery and other nasty countermeasures that ultimately stopped the assault.

In a similar way, most people (even children) now have that capability.  It exists in the form of a cellular telephone.  These little devices have an emergency number 911.  Thanks to that number, any incident can now be quickly reported.  When an incident is reported, resources start going to the site of the call. Even if the perpetrators left the scene, it's likely somebody may have recorded the event on a phone camera. Depending on what was reported or recorded, firemen, police, ambulances, helicopters, national guard units and even regular army could be called in until the threat is addressed. What is the difference today versus 20 years ago?  Is it bigger, better faster fire trucks? Is it due to some super breed of airport security guard? No, it's simply more information from any given incident.

With the emergence of phone cameras and GPS, the environment in the United States isn't very private. We already live in a virtual police state where movements are tracked.  It's a world where speeding tickets are issued by machines and mailed to the car owner.  It's a society where photos can be taken out of context for wrongful convictions (For example, speeding tickets for people who own the car versus drive the car).  It's also becoming a world where neighbors are encouraged by society to inform on other neighbors and where children inform on their parents.  In trade, we have a world where petty crime is less common but where minor incidents often are punished to the full extent of the law. It's also a world where Google can give the appearance of significantly boosting  IQ but lack of that data crutch can be crippling. It's the old choice of freedom from versus freedom to.

Some say this world of complexity will someday fail suddenly.  I disagree.  I expect that some version of mobile-data will be maintained in all but the worst energy depletion scenarios.  I base this on the fact that various 3rd world areas with sketchy economies still manage to provide surprising levels of cellular service over relatively barren areas.  Given that, is almost ubiquitous connectivity worth the trade of living in a surveillance state? That choice for now is still up to the individual.  Leaving the mobile phone at home or pulling out the battery (or just not charging it) is still an option. \