Archive for December 14th, 2012

Preppers Under Attack, Part 1

“There are those who think the Doomsday Preppers is an extreme model of self-preparedness; I just see them as an extreme model of selfishness.”

-Valerie Lucus-McEwen, emergency manager/blogger, Emergency Management website, November 29, 2012

I don’t know about you, but it seems to me that “preppers” are coming under increasing attack these days. Maybe this animosity stems from numerous reports of preppers making it through Hurricane Sandy in decent shape while many of their neighbors suffered. Or maybe it’s because modern survivalists and the fruits of their labor are visual reminders to others that they’re lagging behind in providing for their/their family’s safety in a dangerous world (Sandy was yet one more reminder that government can’t always be there for you). There’s probably envy too, where if I don’t have an emergency food supply, then you can’t have one either. Hoarder.

Since the end of November, I’ve been watching a series of posts by Valerie Lucus-McEwen, an experienced emergency manager and blogger on the Emergency Management website. In her Disaster Academia blog on November 29, Lucus-McEwen penned a post entitled, “Doomsday Preppers are Socially Selfish.” You can probably guess by that title that she’s not a big fan of those preppers featured on National Geographic Channel’s hit show. From that piece:

You might wonder why someone like me, who has been in the business of encouraging disaster preparedness for a very long time, is so critical of people who are doing just that. It’s because they are being socially selfish – preparing themselves and the hell with everyone else. Instead of spending time and energy making changes that would benefit the larger community, in their very narrow focus of loyalty they are more concerned about themselves.

Now, to set things straight, Lucus-McEwen’s beef in this post seems to be with the “Doomsday Preppers,” not preppers in general. She said the Doomsday Preppers were “being socially selfish – preparing themselves and the hell with everyone else.” And she does seem to have a point- in a number of cases. Lucus-McEwen falls victim to generalizing here (who hasn’t at one time or another?). Or not watching enough episodes. Because right off the bat I can think of two preppers from season 1- Preston White and Bruce Beach- who were willing to share their seeds with and provide shelter to members of their community in the event of disaster.

As for the “socially-selfish” preppers, one thing to keep in mind here that a lot of people forget (or never realized in the first place) is that Doomsday Preppers is part of National Geographic Channel’s “American Outliers” programming. So it should be of no surprise that the preppers featured in this TV series might be a little bit “different” from other preppers who I’ve heard say time and time again that they’d share their food, water, and other preps with others “until it hurts.” So much so that they’ve gone out and acquired above and beyond what they need should it come to that.

Finally, are any preppers really “socially-selfish?” After all, the preparations they’ve made to take care of themselves/loved ones/neighbors free up government resources to assist others in the community after a disaster. Looking at it this way, the argument could be made that prepping is actually a socially-responsible activity, rather than a socially-selfish one.

Anyway, Lucus-McEwen’s blog post subsequently generated a lot of “attention” from preppers. So much so she’s followed-up “Doomsday Preppers are Socially Selfish” with:

“DOOMSDAY Preppers vs. DISASTER Preppers- What We Have Here Is A Failure To Communicate”,

“Doomsday Preppers: Mea Culpa”, and

“OK, I Get It. Preppers Aren’t Selfish. I Was Wrong. I Apologize …”

Yikes.

Part 2 will be published after the weekend.

(Editor’s note: Part 2 has been published here.)

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Nouriel Roubini: ‘Highly-Likely Chance We’re Going To Go Over The Cliff’

Last time I mentioned Dr. Nouriel Roubini, a former Treasury official in the Clinton administration who correctly-called the 2008 global financial crisis, he was warning about a slowing U.S. economy. Well, the professor of economics at New York University and chairman of Roubini Global Economics appeared on Bloomberg Television’s Surveillance earlier today and discussed the looming “fiscal cliff,” the combination of tax hikes and spending cuts the U.S. faces on January 1 under current federal law. “Dr. Doom,” as the media sometimes refers to him as, warned viewers:

I think there’s a highly-likely chance we’re going to go over the cliff. If we do so, the market reaction is going to force the two sides to reach an agreement. But even if we reach an agreement, like I said- you’re going to have 1 to 2 percent drag on growth in an economy that’s barely growing.


“Roubini Says Fed Inflation Targeting Out the Window”
Bloomberg TV Video

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Peter Schiff Predicts ‘A Tidal Wave Of Inflation’ For U.S.

Yesterday, “crash prophet” Peter Schiff addressed the Fed’s announcement of QE4 from earlier in the day in the latest installment of The Schiff Report YouTube video blog. Schiff, who correctly-predicted the bursting of the U.S. housing bubble and 2008 global economic crisis, didn’t pull any punches when he warned viewers:

Well, the Fed now has come to a point where it can’t do that anymore, so it announced starting January 1- as expected- the Fed is going to begin to expand its balance sheet by an additional $45 billion per month, as it prints new money to buy up long-term government bonds. That’s in addition to the $40 billion worth of mortgages the Fed is already buying with money that it creates out of thin air. So if you take 40 and 45, that’s $85 billion a month, multiply that by 12, and the Fed has announced that it intends to expand its balance sheet by over a trillion dollars in 2013…

So, in other words, what Ben Bernanke said is, we’re just going to print money, and we’re going to buy a trillion dollars worth of paper every year, as far as the eye can see.

The President and Chief Global Strategist of Euro Pacific Capital talked about what inflating the money supply will mean for stocks and precious metals:

This is a very inflationary policy. Which, I guess, from a nominal perspective is bullish for stocks- not from a real perspective. But it is extremely bullish when it comes to precious metals.

Schiff recommended viewers do the following:

The bottom line to all of this is get out of the dollar. Don’t wait, run. Get out of it. Don’t worry if you’re a little bit too early (chuckle). Because believe me, you don’t want to be too late…

But you’ve got to get out of the dollar, and buy some gold. It is amazing that gold is still as cheap as it is…

But given all the money that has been printed- not only by the Fed, but central banks around the world- and all the money that is about to be printed, they are going to unleash a tidal wave of inflation. And the best way to float to the surface, and avoid being dragged under with the tide, is to have a life raft of precious metals. And then, look at other stock markets, where you might have some real growth.


“Ben Bernanke throws the dollar over the Currency Cliff.”
YouTube Video

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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Moody’s Revises Illinois’ Credit Rating Outlook To Negative

Moody’s Investors Service, a major Wall Street credit rating agency, announced yesterday that it has revised its rating outlook for the State of Illinois from stable to negative. Illinois is already Moody’s lowest-rated state. From the agency’s website Thursday:

Rating Action: Moody’s revises State of Illinois’ rating outlook to negative from stable; general obligation rating affirmed at A2

Global Credit Research – 13 Dec 2012

Action applies to approximately $33 billion of outstanding general obligation and related debt

New York, December 13, 2012 — Moody’s Investors Service has revised the State of Illinois’ credit outlook to negative from stable, while affirming the state’s general obligation debt rating at A2. The state has about $28 billion of G.O. bonds outstanding. We have also affirmed related ratings assigned to state borrowings, including about $2.6 billion of debt issued by the Metropolitan Pier & Exposition Authority, rated A3, and the state’s Build Illinois sales tax revenue bonds, rated A2, of which $2.7 billion are currently outstanding. The negative outlook is linked to ratings on the G.O. as well as the related credits.

SUMMARY RATING RATIONALE

The negative outlook reflects our view that the state’s pension funding pressures are likely to persist and perhaps worsen in the near term. Moreover, fiscal 2014 marks the last year before Illinois’ 2011 income tax increases are partly unwound, putting the state on track to deal with simultaneous growth in pension funding needs and loss of revenue. If the legislature in coming weeks or months enacts significant pension reforms, they are almost certain to be challenged, given the state’s constitutional protection of retiree benefits. Political pressures, coupled with the threat of litigation, may mean that any reforms enacted have only a marginal effect on liabilities. Despite a diverse economy with above-average wealth, lackluster demographic and economic characteristics indicate that, even with continued US economic improvement, the state’s existing tax structure will not provide enough revenue to address the rising cost of pension benefits and other state expenses. In addition, the state’s payment backlog remains high.

(Editor’s note: Italics added for emphasis)

Back on January 13, 2011, Illinois Governor Pat Quinn signed legislation authorizing a 67 percent increase in the personal income tax of Illinois residents and a 46 percent increase in corporate income taxes on Illinois businesses. In 2015, these taxes are scheduled to be rolled back from 5 percent to 3.75 percent and 7 percent to 5.25 percent respectively. However, as I noted that same day:

The last time income tax rates in the “Land of Lincoln” went up in 1989, politicians also claimed it was as a temporary increase to combat a financial “rough patch.” But the rates never came down and by 1993 were designated permanent. Until now, that is.

I won’t be surprised if lighting strikes Illinois residents and businesses twice.

You can read the entire rating action report on the Moody’s website here.

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Friday, December 14th, 2012 Bonds, Credit, Debt Crisis, Entitlements, Government, Taxes No Comments


Christopher E. Hill, Editor
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