Back in those heady days of plus-forty silver, I used to tell myself that only I wish I had been enlightened just a few months earlier. My actual “date of enlightenment” was about September 15, 2010. Oh! I would have bought lots more silver at $18-24 per ounce in the Fall of 2010. As it was, I had just discovered metals and was picking and choosing, looking for sub-spot pricing, wondering if it really would go higher. Well it did. Then it went back down and I was frustrated—frustrated at those who illegally drove it down, frustrated at myself for not taking the “naysayers” seriously—these were regulars on the blog who warned us that a drop was approaching. I was frustrated at myself for not loading up my trading account and buying AGQ out of the money puts to hedge my stack. Frustration led to disgust, disgust led to a suspension of my buying, the suspension led to a place of hopelessness about learning to invest wisely. I got burned!
Well many of you know the old saying “Burn me once, shame on you, burn me twice, shame on me!” So here we are with a chance to purchase $20 silver again while gold meanders around at $1300. And this time I am enlightened. But will I take the advice of the old saying, become cynical and refuse to keep adding to the stack at these once desired prices because I fear another big price drop to (gasp) $10 per ounce? Or will I learn from that mistake, buy more at these prices and learn how to hedge my stack most effectively if metals rise, as Turd predicts they will?
What WAS my mistake anyway? Buying more silver at $35-45, or neglecting to hedge?
I say it was neglecting to hedge for a downside attack. It was assuming that the “moonies” were right because it resonated with my greed. And I will not make that mistake again. This time around I will continue buying at these low prices, and if we do make a run above $26 per ounce, I’ll inquire among the pros on this blog (or Jim Commisky) about some sensible hedging techniques to lock in those gains.
If the paper markets fail, there is probably no need to hedge my metal. Who knows what happens then? But if markets stay intact in some form as this economy continues its inexorable slide into the pits of Keynesian hell, I should be able to purchase derivatives that will let me sleep at night ( /SI futures options, AGQ puts, ZSL calls). I’ll cross that bridge when we get over $26. Until then I am going to stack what I can as we pay down the mortgage, within an allotment formula that keeps the wife happy.
And so what is the proper response to $20 silver? Stack with both hands—well at least one…
In my other Keynesian-hell defense efforts, I have backslidden into sin. Namely, I am no longer properly prepped for economic collapse. It doesn’t matter that I am convinced the collapse will be slow. I need to keep my family prepped for a fast collapse as well, especially since it does not cost that much to have some basic necessities and alternative energy methods on hand. But I have failed. The Ferguson events are making me wonder what my city would look like if the large population of native Americans ever gets angry. They certainly have grounds to protest.
There is nothing like taking the family camping to determine if you are properly prepped for emergency living. Our family moved 13 months ago, and I thought we brought all those necessities with us. But the other day, as we loaded the truck with our camping gear, I was unable to find my 4 gallon supply of camp stove fuel, I was unable to find my good camp stove. The sleeping bags are missing and the tent is nowhere to be found. I can hardly believe that I “gave away” these necessities to friends as we realized that all our “stuff” would not fit in the moving van last year. If you had seen that moving van, you would have knelt down and prayed for those poor people. Someone should have told me to stand back when we opened it after the 1750 mile voyage. We did have some yard sales and I must have sold or gave away some things. But this new home is much smaller and it does not take long to check everywhere.
I did save one old Coleman camp stove. But when I tried it out, I could not get it to light—perhaps bad gas? Lots of rust in that thing—Ohio was humid and not kind to metal items. But either way, it will not cook. Glad I didn’t have three hungry family members waiting for hot beans looking over my shoulder. So we went to the store to purchase a new stove and some fuel. Ouch! $100 fiat for a new stove and $13 per gallon for camp fuel. No inflation though, says the BLS.
I had to choose between a gas stove and a propane stove. I was unsure of the pro’s and cons other than when you are out of propane, you are out. The gas stove might be able to use other fuels. I also expect propane may not be easy to find one day. This dilemma is sure making a wood rocket stove sound more secure.
So we set out to the campsite with our truck loaded with everything I thought we needed. Upon our arrival we started searching for other things missing from our “essential list.” Spoons and forks, dishes, cook ware. All those things were kept in my old camp-box which had gone missing. We had one saucepan for the beans, and fortunately my wife remembered to get a can opener.
But the bathroom is what finally sunk our ill-fated camping trip. My daughter’s friend, visiting from Ohio, came with us—indeed she was the reason we decided to go. I thought the bathroom was just fine—it really was clean as far as outhouse-style, campground bathrooms go. Not too many flies, the sewage at least 4 feet below the seat. But she went over to the bathroom three times in 30 minutes, then announced that she did not feel well and did not want to camp anymore. given that she was a visitor, we coddled her and returned home after dinner. (Upon arriving home, she went straight to the bathroom.)
And then I recalled that my sister worked for a river trip outfitter one year, cooking, cleaning and taking care of the rich tourists that would pay $2500 per head to spend eight days floating down the Colorado river. She refused to use the open -air portable toilets and would (wince) actually “hold it” for eight days until they got back to civilization. She worked on about 8 trips that summer! I suppose she mostly fasted from solid foods. But really, I gotta think more about how to provide clean and sanitary, bug free, bathroom facilities with my bug out preparations. Not to mention showers… perhaps this little tent is a worthile investment. And lemme tell you, the events in Ferguson Missouri are making me wonder what my neighborhood will look like if rioting begins.
As we drove back into the wilderness, I noticed that someone had an acre with two travel trailers parked there and permanently connected to a septic tank—probably homemade. It really was a nice little set up—inexpensive, civilized, remote, and portable. If I simply want a place to go to get my family out of town and away from “rioting in the hood” why do I need to buy five acres and build a house? An acre with a travel trailer can serve the purpose. Portable storage sheds can keep some dry supplies safe. Greenhouse tents would keep most critters out of our gardening efforts. Taxes would remain low with no permanent structures. Solar panels can be mounted on top of the travel trailer… You know, I am nearly convincing myself that such an arrangement would be workable on a low budget. Situated on the right land, it would provide living quarters while we build a permanent cabin, greenhouses, work barns and dig a pond for my stack.
Just checking the prepping supplies this morning—Gee, the wife sure prepped us with lots of deodorant. I wonder why we have so much? But anyway, rather than giving up, I’ll learn something from these mistakes and hedge our stack and our lives against whatever kind of collapse we may face.