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8.31.2016 - Financial Intelligence Report Bookmark

Two Distinct “Preps”
The timing is good for moving along a bit concerning basic prepping for emergencies. With the tropics heading up, with 99L now a Tropical Storm, with Africa coughing up a train of impulses into the South Atlantic, this is a decent time to run a few Prep articles. I suspect that at any particular time over the next couple months, someone might be getting slammed in a bad weather event.

There are really two distinct differences when someone talks about prepping. The difference is this... are you prepping for a short term situation where you might need to “rough it” for a couple weeks, or are you looking at hunkering down in an EOTWAWKI it situation? (end of the world as we know it) They are vastly different preps folks. I am focusing on the short term. For me to truly introduce you into “big time” prepping, I’d literally need to write an E-book. But to get you through a few weeks of getting by...it’s fairly easy.
As you all know, I try my best to offer up real world solutions to things other than just simply the markets, because frankly the markets are not the only thing in life. Sure we make our money investing, but we all have lives outside the markets. So if there’s a topic I’m fluent about, I think it’s right that I share that with you all. Having lived through some big time ugly disasters, and having spent the time and money to learn from experts on Disaster prepping, I enjoy sharing the knowledge.
A couple weeks ago we talked about water, and how to get it, and filter it in an emergency situation. I’ve had a ton of people write in to thank us for that article, as they had no idea that there were filters available for just 80 -200 bucks that allow you to take swamp water, ditch water, retention pond water and turn it into drinkable water.   I was happy to share the info, and I hope you all went and got one.
When the power goes out in a “normal” emergency, whether it’s an ice storm, earthquake, Hurricane, etc, water is one of the first things to worry about. But it isn’t the only thing as we’ve discussed. If you live in a frigid zone and you heat with electric, then heat becomes almost - if not as -important as water. But there’s obviously more to being comfortable during an emergency situation than just water. Food comes to mind, and then of course a way to “cook” it.
The beauty of short term food storage is that you don’t need to be a survivalist to have a pretty good short term stockpile. Canned foods such as hearty soups store well for a long time and are fairly cheap. While certainly not gourmet by any fashion, 50 cans of Progresso Rich and hearty soup, or even Campbell’s chunky steak and veggie soups will get you through a few weeks of no supermarket. But you don’t want to eat just soup for a few weeks, and there’s other things that are also cheap to store up that last a long time. Dried pasta comes to mind. Rice. Canned tomato sauce. Canned veggies. Canned pork and chicken breast. Canned Tuna. Knoor’s packaged flavored noodles. Sugar, Salt, Oh and don’t forget your coffee and tea, dried milk or non dairy creamers etc.
In other words, there’s a difference between prepping for the end of the world, and being prepared enough to live fairly well for a few weeks. If your town was in lock down for 21 days as they try and snuff out a viral infection like Ebola, do you have enough for you and your family to stay “in home” for 21 days? Probably not. But it is so incredibly easy to do, that you should have that stuff on hand anyway. You never know when that next twister, hurricane, flood, virus, etc can hit your hometown.
So here’s an action plan for you all that’s really quite easy. Get yourself to a BJ’s, or Costco or any other bulk seller and buy yourself a nice assortment of canned goods. Pick up your soups, rice, pasta’s, tomato sauces, canned veggies, canned pork and chicken, etc. Then find a decent place in your home to store it all. If you have to, it will work in a shed or garage, but it’s better in a basement or a spare walk in closet if you have something like that.
Okay, so if you got the water filters I talked about, and a few hundred dollars worth of canned and dried food, you’re pretty much almost set for hunkering down. But, you have to have a way to cook that food, and boil water. Life gets mighty miserable if you can’t have your morning coffee or tea. So if you live in a house with electric cooktops, and the power goes out, you need plan B. Even if your house is supplied with natural gas, that gas only comes if the pumping stations are on line. During Hurricane Sandy they had to turn off the natgas because of so many fires. So having a backup is necessary.
For most people the first thing that comes to mind is the propane grill. That’s great, just as long as you buy an extra propane tank or two and keep them filled. You can go a long time cooking on a grill with just two filled 20 lb tanks. But you must have them BEFORE the emergency hits. The day the power goes out it’s too late, the propane tank swap joints will be bone dry in a matter of a couple hours. Do yourself the favor, get a brand new tank at say Lowes and get it filled. Total cost 50 bucks. Keep them both as full as you can, or the best thing is to have 3. Keep two full at all times while you use the 3rd for daily grilling.
But what if you didn’t have a grill, or any propane? Is there any way to cook without making like Davey Crockett and building an open pit fire? Yes there is, but again, you’ll need to “get” the thing or build one ahead of time. It’s called a rocket stove, and frankly every home should have one or two. You can make them yourself for about “free” if you’re even semi handy at all, or you can buy them pre made for about 30 bucks or so. You can use paint cans, soup cans, bricks, etc, and they work VERY VERY well.
Okay what’s a rocket stove? The idea of a rocket stove is a way to cook or boil water, using very little “fuel” but produce enormous heat. The fuel used is sticks and twigs. Now the beauty of these things is that no matter where you live, you can forage up enough sticks and twigs to fire these up several times a day. That’s quite unlike a big wood grill or smoker, which needs logs. Logs are hard work, twigs however are on the ground everywhere.
I truly wish I had made a video to show you all how these things work, or even how to make one. But there’s enough good video’s on youtube to get you started. I have made several of these things, and I have to tell you, they’re really quite amazing. With a coffee can full of twigs, I can boil a gallon of water, or cook anything I could cook indoors.
This is a video showing you how to make one. It’s not the best by far, but it hits the high points and shows you how easy it is to make one.

Note, when I make mine, I set the inside can on the bottom of the gallon can, not up off the bottom has he does. I do that so there’s a place for the fire ashes to build up without choking off the air inlet. So, place the inside can on the floor of the gallon can and have your air inlet can come in about an inch to inch and a half above it. Also, cutting the holes is a pain, no doubt. However, you can use a hole saw IF you take the time to fill the gallon can and the one soup can and fill it with water and then freeze it first. It makes life much easier.
Another note> this guy used Vermiculite for an insulator. It doesn’t work that well. I’ve found that what ever you put in there, pearlite, playground sand, Vermiculite, etc is going to work for a while and then the outside can will indeed get hot. Ceramic fiber mats are the best, but at 50 bucks a pop, it certainly changes the price point of your stove which is normally around “free”.
If you look around on you tube you’ll find quite a few more, and you can get as fancy or as basic as you want. Then again, there are folks that build these and sell them online for about 30 bucks, it’s not a horrible idea to just buy one if you don’t want to make one.
Again folks, I don’t tell you guys about products, or projects or what have you unless I completely believe in them. If I won’t use it, I certainly cannot tell you to use it. So anything you see in my pages comes with the guarantee that I trust in what I’m telling you to be “good stuff”. These little rocket stoves are indeed “good stuff”.
As a side note, you can make larger rocket stoves out of barrels, etc to use as a heat source in outbuildings, etc, and they are really quite incredible. I have not made one personally, but my friend Ken did for his garage in NJ, and the amount of heat it puts out in comparison to the amount of wood he puts in, makes it about 3X more efficient than his wood stove in the house. Pretty neat stuff.
Now if you’ve not prepared at all, and the power is down, you don’t have a grill, no propane and you didn’t bother to buy or make a rocket stove can you still cook something? Yes, but it takes a bit more work. Naturally you can make an open pit fire, but it uses way too much wood, and it’s pretty visible to everyone. It works but it’s not ideal. You’re not going to want the hassle of trying to find and cut wood to feed it. The better way is a hole fire. It’s called a Dakota stove. Here’s what you do... you go outside, maybe to your backyard. You dig two holes, side by side maybe 4 inches apart. Make them maybe 8 - 10 inches in diameter and maybe 16 inches deep.
Down at the bottom dig a tunnel connecting the two. Make that hole about 4 inches around. Put your kindling, and twigs in one hole and start a fire. What you’re doing is using one hole for an air inlet, and the other to contain the fire. Once the fire is going well, it will stay contained in the hole, with flames coming out the top. Put some rocks or bricks or what have you around it, and then you can place your pot on top of the fire.
The fire will burn really hot, but it will need more fuel. That’s the only problem is that you have to feed the fire hole from the top. So you’ll have to move your pots and pans to refuel. But it is very efficient, using very little fuel and it produces a very hot fire. When you’re done, you just fill it in with the dirt you removed to make the holes.
So think about what we’ve done over the past few weeks. In just a few articles we’ve shown you how relatively easy it is for you to survive fairly comfortably during a short term emergency situation. For 200 bucks you can get a water filter that will produce gallons of drinkable water each day for your family, and you can get that water from lakes, ponds, drainage ditches, retentions ponds, streams, etc. For about 400 bucks you can stock up enough canned and dried food to feed your family pretty well for 3 weeks. For “free” you can build a little rocket stove or two, that will cook anything you want to make, using common twigs for fuel.
Is that all there is to it? Not really, there’s always the little things you should have on hand. Matches and lighters, a medicine kit, toilet paper, candles, batteries, flashlights, etc etc. It’s amazing the amount of things we take for granted in running our daily lives. But my main point was that in a short term emergency disruption, as long as your main shelter (house, apartment, etc) is still intact, you can get by pretty well with not a whole lot of effort.
Sometimes it is the “little things” that will make such a big difference. For instance I know a young couple that thought it wise to stock up all manner of canned foods for an emergency. Bravo! That’s good thinking. But when I asked them what brand of manual can opener they bought because some of them are pure junk, they looked at me with big round eyes like a deer in the headlights. They forgot about that. No power means no countertop electric opener. Likewise a rocket stove can boil water better than your gas range. But no matches or lighters means you’re looking just like that deer.
Yes you can flush your toilets with two gallons of creek water. But do you have any toilet paper? If stores are closed, or have been cleaned out, you’ll find that no TP makes you grumpy. So, you bought some cans of coffee for your emergency pantry. Good job! Did you remember to buy an old fashioned “percolator” coffee pot that works on campfires, or propane grills or rocket stoves? Or at least a French press you just pour hot water into and it drips through the coffee?
See? It’s a lot of little things that add up to making life easier in a bad situation. But the bottom line is that now we have so much technology, that it is only your choices that limit how well you will get through a bad time. With the advances in solar power and inverters, you can for very little money take a shed or outbuilding and make it completely off grid and run anything electrical you might want. But that’s a different article, this one is all about short term emergency contingencies.
One of the only constants in life is change. Things can go along normally for years on end, seemingly forever and then “boom” something happens. No one likes to think about it, let along prepare for it. It’s sort of like insurance. I hate paying my premiums each year. But I know it is for a good cause. Likewise taking basic preparation steps for getting through short term emergencies is like that insurance plan. Hopefully you’ll never need it. But when you do, it is awful handy to have.
One day I’ll produce a lengthy article or booklet on longer term preparing which will go into much greater detail. I’ve had quite a few requests for it. But for these letters, I think that if we hit the basics, and can keep you in food, water and a way to cook it, you’re already light years ahead of the masses. I think we’re off to a pretty good start there. So as the weeks go by we’ll inject an article here or there about such topics. It lets us take a break from beating up on Obama, foreign policy, the markets and the other insanity.
The Market...
Sideways, but with a bigger range. That’s basically what the market has been doing since all the way back to the 14th of July. It was on that day that the S&P broke over 2160 and closed at 2163. Since that day we’ve been up to 2190 and as of last Friday all the way back down to 2160. We’ve been in a box.
For the longest time the box had a floor at 2175 and a top at 2190 and we wiggled up and down inside that box for 14 sessions. Then we got our first failure of the box and we reached down to that 2160 level. Then a bounce back up for a few days and now... we faded down to 2161 today before bouncing up to 2170.
After the “Brexit” vote dip, the “central planners” pushed the market to all time highs. That culminated on August 15th at 2190. Since that day we’ve simply dipped and bounced and dipped and bounced as we travel “sideways”. The question is... will this market break out of the box to the upside or the downside.
Here’s the issue friends. The market SHOULD roll over and puke. I can list a hundred reasons why we have no business with a market this high. But I can also list ONE GIANT reason why it still might break out to new highs....The Central banks are in control.
This isn’t conspiracy nut stuff, this isn’t something to guffaw at. This is the basic truth of the matter. Central banks are buying up stocks and have been for several years. They don’t care about price discovery they don’t care about anything but keeping asset prices stable. So while the market should break down, it’s not going to until 1) some event hits that’s so big they can’t stop it, or 2) they change the game and decide they’re not buying stocks any more. That’s it. Two choices.
So while I’d love to buy 10,000 put options on the DIA's and the SPY... because I know we belong so much lower the fact is... we belonged “so much lower” 4 months ago too. And look what happened... we made all time highs.
What we’re doing in the Insiders Club is this... we’re working the ranges. When the market gets near the 2190 level we take our profits, and when the market is under 2175 we try and find good entry levels for the next bounce. Yes it’s work, and no it’s not worry free. But then again...what is in the market?
Look at what happened in the gold pits this morning. Out of the clear blue, someone with very deep pockets dumped 5 BILLION dollars worth of paper gold on the exchange. 5 billion folks. Would any real bullion dealer do that? Of course not because it destroys the price. But someone did. Hell yeah someone did, the Central bankers did. They’re desperate to get people to NOT buy gold and to put their money in negative interest rate accounts. This is war, war on gold.
I can’t give advice I’m not licensed or a registered advisor. But the advice I give myself is “use the dip in gold to accumulate more”. If someone wants me out of it so bad they’ll do something as egregious as dumping 5 billion worth of fake paper it must mean it is something I need to own!
In a general sense, until the pattern breaks... buy at 2160 - 2170 and sell at 2185 - 2190. That’s really all one can do until this pattern emerges into something else.
Take care and I’ll see you all on Sunday.

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