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Water and The Market Bookmark


The Water Problem

Water is the most amazing fluid on earth, and yet we take it for such granted that no one gives it a moments thought.  It isn’t just the “cool” facts about water that make it intriguing; such as the fact it is one of  the only substances that exists in three states, being liquid, solid and gas without needing extreme temperatures to create each state.  Water for instance  is the only natural substance found in all three physical states at the temperatures that naturally occur on Earth.

But water is much more than “some wet stuff” we use to drink, cook and bathe. Studies have shows that water actually has a form of memory.  Water can dissolve more substances in it than any other material known to man. Water is somewhat unique as it is one of the very few materials that increases in volume as it freezes. By expanding in volume by up to 9%, the density of water in its solid state is lower than it is in its liquid state. This gives ice the ability to float.


The Water Problem

Water is the most amazing fluid on earth, and yet we take it for such granted that no one gives it a moments thought.  It isn’t just the “cool” facts about water that make it intriguing; such as the fact it is one of  the only substances that exists in three states, being liquid, solid and gas without needing extreme temperatures to create each state.  Water for instance  is the only natural substance found in all three physical states at the temperatures that naturally occur on Earth.

But water is much more than “some wet stuff” we use to drink, cook and bathe. Studies have shows that water actually has a form of memory.  Water can dissolve more substances in it than any other material known to man. Water is somewhat unique as it is one of the very few materials that increases in volume as it freezes. By expanding in volume by up to 9%, the density of water in its solid state is lower than it is in its liquid state. This gives ice the ability to float.

I could go on and on about the mystery that is indeed plain simple water, but for today I want to focus on the importance of it when we’re faced with a situation where there doesn’t seem to be any. Imagine for a moment if you will, a power outage that stops the town pumps from operating or your well from operating. Or maybe a disaster situation such as a flood, or Hurricane, or tornado.  While we take for granted the availability of water; when something ugly happens, water soon becomes a very serious focal point in your immediate life. 

Not to get terribly graphic, but even such things as personal hygiene become an issue when there’s no water around. Not only can’t you brush your teeth or bathe, the act of “going to the bathroom” becomes a major problem. If the toilets can’t flush, it won’t be more than a matter of a single day for a family to find out that they’ve got a serious sanitation problem.  So, not only do we need water to survive, as the medical folks tell us that we can only last about 5 -7 days without water…we need it for much more than simply drinking. 

So here’s the question. If something ugly happened…say some terrorist group did knock out the power to your area for several weeks, and you were faced with the fact that the faucets weren’t going to work for quite a while, what would you do?  Standard disaster preparing suggests that you have a gallon of water per person per day stored up, and you should have at least 3 days worth. Well that’s fine if the disaster only lasts 3 days and all you’re doing is drinking it. Again I’ll ask… how do you flush the toilets???  

(Note… a lot of folks don’t know this, but you can flush your toilet simply by dumping a gallon and a half of water right into the bowl from a bucket. The toilet doesn’t care where the water comes from to flush, it works by water pressure in the bowl. )

If your home is secure, meaning you can live there, then any old water will do as far as flushing the toilets. Get a 5 gallon bucket and fill it from the pool, a stream, a retention pond, a creek, a lake, Rain water you’ve collected etc. It doesn’t matter, you’re simply dumping it to flush the toilet. While certainly not convenient, just about everyone lives within a short walk of “some” body of water.  Be creative in your thinking. When Sandy hit in NJ, and knocked my house down, my son and I had to move into an RV we had in a local campground. We had to take turns carting water from a small lake nearby, to keep the toilets functioning. It sucked… but it works. 

But what about drinking water? What about that morning cup of coffee or mixing up a can of soup?  ( Yes I know this will require “cooking” and we’ll explore that in another issue. We’ll talk about easy ways to boil water and cook in the future)  If you don’t have a store of water built up, are you destined to dry up and blow away? Not at all. But here’s why it is called “prepping” folks. You have to prepare ahead of time and have what you need on hand for when the disaster, outage, etc, hits. Once the power is down, once the water isn’t flowing, it is too late. You’re stuck. 

I am certainly not against storing up gallons of water in your garage ( again, remember seasonal temps…frozen water is a real problem if you’re house is just as cold as it is outside)  or basement or what have you. The problem is of course that it is bulky stuff. It’s heavy and takes up a lot of space. You can easily store up enough to get you through a few days. But after that??  Now what?  So what you need to do is have the tools on hand that allows you to “make” drinkable water from unlikely sources. 

One of the remarkable things about our advancements in technology is that things that were impossible just 100 years ago, are very possible now. In the field of water purification, that is very evident.  So let me ask you something. Did you know that there’s a water filter so advanced, that you can take stagnant creek water, and in ten seconds, produce clean clear drinkable water?  Well there is. In fact, there’s several ways to do this and we’re not talking about some thousand dollar giant set up here folks. I’m talking under 200 bucks. Later I’ll show you how to cut that to under 50. 

Some people have heard of the “life straw”, but many haven’t. While not the ultimate solution, this thing is cheap, works incredibly well and will keep you alive in ugly situations. It is a filter used by one person, to get a drink out of creeks, lakes, ravines, you name it. For 20 bucks a pop, it is something that everyone should have a few of.  But they also make bigger units for filtering enough water for families to use. 


The unit they call the “Lifestraw family 1,”  will produce enough clean water for a family of 5 for 2 years. Yet it costs just 80 bucks.  So “technically” you could go to a rain puddle, scoop  up a couple quarts of dirty water, pour it through this thing, and end up with a quart and a half of clean drinking water. I quotation marked “technically “ simply because I’d take it one step further and boil the water that comes out, to make 100% sure it is sterilized and completely healthy. 

These units are used all around the world in humanitarian situations where they’re trying to help folks in Africa and other far off places with no clean drinking water, and it works. Is it perfect? No. It takes quite a while for 2 quarts of water to filter and although 99.99999 % effective, I’d want the last step of boiling or at least adding a drop of chlorine just to kill that last chance something got through. 

There’s another choice in the “portable” water filtering arena that bears mention for sure. This is called the Lifesaver Bottle. And it costs considerably more. It is 169 bucks for the personal version. But, I quote from the front page…

The LIFESAVER®  bottle is the world’s first portable water bottle to remove all bacteria, viruses, cysts, parasites, fungi and all other microbiological waterborne pathogens without the aid of any chemicals (like iodine or chlorine) or the need for any power or UV light. Filtering down to 15 nanometres, that is 0.015microns. With the smallest virus known being Polio at 25 nanometers, you are safe in the knowledge that LIFESAVER®  filters all bacteria, viruses, cysts and all waterborne pathogens from your water.

On the site, they show the inventor drinking out of a polluted tank that they’ve tossed garbage in, rabbit poop in, you name it. He puts the bottle in, pumps the handle and drinks the clean water. It is quite amazing and yes they have a larger version for more than personal use.  It costs 209 dollars, and holds 18 quarts at a time. It too comes with the guarantee of removing virtually everything that can hurt you from a supply as ugly as swamp water. Amazing technology. Find it here….


Now for the more “handy man” of you out there, you can actually build something fairly similar to the Lifestraw family 1, for about 40 bucks. All you need is two food grade 5 gallon buckets, and a couple of these filters…


What you do is take one 5 gallon bucket and drill two holes in the bottom. Take these filters, and “stand them up” so the black plastic flange goes through the holes you just made and use the nut that comes with them to hold them in place. Take that bucket and place it on top of the other bucket. Pour your dirty water in the top bucket, and it will be forced by water pressure  through the filters and drip into the bottom bucket.  While certainly not as good as the lifestraw or lifesaver, if you started with relatively clean water, all you’d need to do is boil the cleaned water for 3 minutes and you’d have perfectly drinkable water. 

For those of you with a few extra dollars to spend, you can make that same sort of bucket to bucket filter system with Berkey’s integrated filters. They cost about 107 dollars for two, but they are indeed state of the art. They not only get rid of parasites and bacteria, they remove like 70 different chemicals to “undetectable amounts”. You can find them here…


Likewise if you can find “almost clean” water, say from a swimming pool, you can use a table top filter with charcoal filters like the “big Berkey”. It will filter out the chlorine and other chemicals you don’t want to be drinking. They’re expensive units, but pretty attractive and work very well. Many people buy them just to run their household water through to get rid of fluoride and chlorine, etc. 


So obviously here’s my point folks. Yes you should have some bottled water on hand for an emergency. But if the emergency outlasts your supply, you have to have some way to make water for hygiene and drinking/cooking. Those methods exist and they’re what I’d consider dirt cheap. 

As far as finding water, again most of you live at least “nearby” a stream, lake, pond, creek, retention pond, storm run off pond, etc. From there you can get creative. Do you know how much water falls on your roof during even a small rain shower? It’s hundreds of gallons. Take one of your downspouts and run it into a food grade barrel or even buckets. Use one of the filters I mentioned to clean it up and then finally boil it for a few minutes for absolute safety. 

I mention boiling because I’m paranoid. Yes these filters are amazing, but I don’t want that one lone “tough guy” bacteria getting past it and infecting me. Science says boiling won’t reduce chemical pollution, but it kills viruses and bacteria. So if I can find what I might consider chemically free water, such as rain run off, then all I have to do is filter and boil and I’m good to go. 

As you can see, the technology exists to take virtually any fresh water source and turn it into life saving, life sustaining drinkable water. It isn’t as convenient as turning on your tap of course, but when the taps don’t work, it’s a true life saver. For the prices we’re talking, how could you not want a few of these things on hand?  

So here’s an action plan for you all. Get one lifestraw for each member of your family. They’re 20 bucks a piece. Keep them in your glove compartment or your kids backpack or what ever. They’re for emergency use only of course, and not the most elegant way of getting water. But if you were stranded somewhere, it could keep you alive. 

Buy either the lifestraw family 1, or the Lifesaver “jerry jug” for your family. The Lifestraw family 1 is 80 bucks, the Jerry jug, about 200. They’ll both work, the Jerry Jug is better.  Then get yourself some food grade 5 gallon pails with lids. I get mine from the local “firehouse subs” joint. They’re the ones they get their pickles and other stuff in. They charge 2 bucks for them. 

Look around your immediate block for sources of water. Because you usually view a little creek or pond as “icky” you probably didn’t pay attention to how many of them there really are. Find the closest one to you and then figure out the best way to transport water from it to your house. You might use a pull along wagon, your car if it has gas, a wheel barrow, etc. Get yourselves a few larger food grade barrels, and figure out how to divert rain water into it. You can grab it coming off a shed, your house roof, etc. If you only need it to flush toilets, toss a bunch of bleach in it, and it will stay for a long long time. 

As you can see, there is now NO reason to not be able to produce drinking water for washing, bathing, drinking and cooking. A few simple steps now could mean a big difference in your quality of life in a bad situation.  So do some research on the things I’ve presented and get “prepared”. 

Maybe next week we’ll talk about cooking and boiling water when the electric and gas is out. I think you’ll find that interesting too. 

The Market….

On Sunday we spelled out a litany of reasons the market “could” be setting up for a significant pull back.  We discussed the triple witch, the Hindenburg Omen’s, the insanity of the Ali-baba IPO, and a host of other ills.  But we tempered it by saying that it “could” happen. We didn’t say it would. 

Why is that? If everything you can think of suggests a poor economy, falling wages, lousy jobs opportunity, global chaos….why wouldn’t you finally be able to say “this is it! The big pullback is here!??”  Simple folks…the market has been distorted beyond any reasonable imagination. When the market is in danger of a serious swoon, “they” come in and jam it higher. It’s been the M. O. for years now. 

All we can do is present to you the times when the market looks dangerous, so you can be aware.  We know that one day, there will be no “save” and the market will finally freefall to lower levels. But when? We simply don’t know, but we are also certain that we get closer to it as each month goes by. 

So, Monday and again on Tuesday the volume dried up and the market fell. In this day and age, any time the market falls for more than 50 points, CNBC drags out all the Old Wall Street shills to tell everyone why it is the best buying opportunity in history and you have to buy with both hands. The way they approach it, you’d swear something like a nuclear bomb went off somewhere, when in reality all that happened was that the DOW fell a few points.  The drama is a bit much for me. 

But that said, the market SHOULD have fallen. It should have kept falling and falling and falling. On Wednesday morning we learned that mortgage applications fell by 4% again. Over in Germany their business readings are falling again, as they shoot themselves in the foot by following the US sanctions on Russia.  We learned that the Dutch company TNT Express, which is one of the worlds largest logistics companies, like UPS, or Fedex had come out and warned that they won’t meet their year end targets. Why? Weak growth in the US and Europe. 

Imagine that. But hey, as long as Wall Street can leverage the carry trade, front lease gold and arbitrage the difference between the paper and physical market, get reverse repo money from the Fed’s… no one cares about such things as slowing economies.  Oh and by the way, just what do the upper end “insiders” think about the economy?  Let’s look…

A lot of people hear the word stock buy back and figure that the company believes so much in itself that they think it’s a screaming buy. Well nothing could be further from the truth. You have to understand there’s a big difference between what the Insiders in a company do with their own money, versus tossing corporate money around.  

So far, if we look at the last 12 months, stock buybacks have grown by 30%, to an incredible 550 BILLION dollars. Now please folks, you have to understand this. Buy backs make earnings look better. Buy backs often push stock prices higher. Buy backs often reward Insiders with higher stock options prices. Buy backs are done with CORPORATE money. Money the company made.  But what are the insiders doing with their own money? They’re SELLING their stock. Yes you got that right folks. So far this year there’s been 7,000 insider buys… and 23,000 insider sells. 

So they’re fine with the idea of using company money to manufacture earnings and boost their bonuses. But they’re in no rush to buy their own stock in their personal accounts. What does that tell you?  Exactly. It says “they want to get while the getting’s good”.

But hey, absolute manipulation and fraud shouldn’t be limited to just the US and it certainly isn’t. The Japanese make no bones about the fact they go in and buy up stocks when the index’s sink, and word now has it that they’ve gone in to the tune of 124 billion yen worth of EFT’s in August. That means the Bank of Japan now holds about 480 trillion yen worth of the Japanese equity market.  Is that insane? Sure, but when your economy is ready to do a face plant into the pavement, Politicians will do lunatic things to try and prevent it. Japan’s a prime suspect loon. 

Wednesday dawned on us with green futures. But ten minutes after the open we had faded to slightly red on the DOW and the S&P.  Then for about an hour we simply “sat there” at the unchanged line as they tried to figure out if they were going to let the S&P slip under its 50 day moving average, or come in with guns blazing and save the day. 

Well by 11 am, it was clear they were in “save” mode. We started climbing out of abyss and by noon we had 92 DOW points and 9 S&P points showing. Then for hours we proceeded to “sit there”. An hour and a half later we still had the DOW up 93, the S&P up 8.  But then…the “fun” began. 

Because of a little blurb suggesting that China might inject liquidity into their banks, the market started flying higher. Then, a Fed head came out to say that the dollar being high is screwing with their goal of more inflation. The trading robots figured both headlines meant rivers of more free money flowing from Central banks, and “boom” up we went. We ended the day with the DOW up 154, the S&P up 15.

Being that we were down 2 days in a row, I told the Insiders ( our paying members) yesterday that we might see a bounce day today, as they don’t like letting the market fall 3 days in a row. In fact we sold half of a short position that we had a 5% gain in just to lock it in. Well frankly I did NOT expect a monster day like this. I figured they might push us for 60 or 70 points.  But it still leaves the basic question… was today a one day wonder and we give it right back?  It’s possible, since all the ills we talked about on Sunday in the newsletter are still right there. 

My guess is that they push us up another day and try and get us closer to the all-time highs again. But I also think that it might not be able to punch through those highs and we roll back down again. So I’d expect a bit of weak follow through, and then a sag into the weekend. 

NOTE>  I have been getting some tremendous feedback from folks that took the Phil’s gang webinar that’s archived on their site. I know it sounds like a sales pitch, but it is NOT. Do yourself a favor and go to philsgang.com and take the webinar. The things you’ll learn inside about the 10 am rule and Donnies technical chart training is really valuable stuff and the webinar is like 60 bucks for 3 hours of learning. Here’s what one of my readers said to me Monday…

I just completed the on-demand Philsgang webinar, & found it very enlightening.  I especially now understand I was doing it all wrong, with the institutional investment, QE propping, putting orders in on weekend for Monday-AM, etc.

Bingo. That’s exactly the kind of response I thought I’d get and there’s been tons of them. So do it folks, it is indeed worth it. 

Have a great day, and I’ll see you all on Sunday. 


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