Tag Archive for Collapse

California’s Water Shortage Will Lead to a Spike in Food Prices and Economic Peril

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As California’s drought stretches into years, the situation according to California’s Governor Jerry Brown is becoming dire.  “Today I’m declaring a drought in the state of California,” said Brown. “We’re facing perhaps the worst drought California has ever seen since records began being kept about 100 years ago.”  As a result, incremental actions to restrict water use have been placed into effect.  Most recently, Governor Brown announced last Friday that they won’t send any water from the state’s vast reservoir system to local agencies beginning this spring, an unprecedented move that affects drinking water supplies for 25 million people and irrigation for 1 million acres of farmland.  The restrictions in water use will be particularly detrimental for anyone involved in agriculture where irrigation is vital for California’s crops raised primarily in arid regions.  The result of this drought and necessary restrictions to California industry and agriculture will mean a spike in food prices and even greater job losses in California.

People fall over themselves lauding the wonderful weather Southern California offers its residents.  However, what Southern California doesn’t offer is adequate fresh water to support the state’s massive population.  Fresh water is the most basic resource for life; yet, over 38.3 million people call it home even though natural sources of freshwater are far inadequate.  Historically, the snow pack in the Sierra-Nevada Mountains has filled reservoirs to supplement California’s water demand, but with record low snowfall, no relief is in sight or expected.  More alarming is the fact that climatologists are warning that this drought could continue anywhere from a couple decades to two hundred years based on California’s historical climatic cycles.  If indeed this drought persists unabated, it could mean that California will be entering a historic dust bowl situation that could effectively collapse the state.

Further compounding the problem is that California leads the country as the largest producer of agricultural products (crops and livestock), accounting for more than 11 percent of the national total, based on the 2007 Census of Agriculture.  To support this, approximately 80% of California’s freshwater is used for irrigation.  Given the shortages, California cannot provide freshwater for its inhabitants and agriculture and industry.  As such, the tap will be turned off first for California’s farmers.  In fact the mere threat of water rationing has already forced many farmers to leave fields fallow and write off this year’s crops as a total loss.  The situation is even worse for fruit and nut orchards where the water restrictions could kill productive trees that take years to grow to fruit bearing size.  Livestock too will not survive without water so cattle, swine, and poultry populations will be slaughtered and not replaced.  As farmers shutter their operations until conditions improve, the businesses that sprung up around California’s agricultural industry are also going out of business.  This will cost California billions of dollars in lost revenues and further exasperate the already high unemployment in California.

The result of the drop in California’s agricultural production will restrict food supplies even as demand globally is growing causing food prices to skyrocket this year.  This will result in major shortages of products that California produces for the United States such as artichokes, lettuce, spinach, peaches, and strawberries.  Many other products such as tomatoes, bell peppers, and carrots, which California produces 1/3, 1/2, and 2/3’s of respectively, will see major price spikes.  Meat prices will also spike after cattle, swine, and poultry populations are slaughtered since herd numbers are already at historic lows.  If not already bad enough news, inflation will continue to erode the purchasing power of the dollar compounded by the dollar’s weakening status globally as a currency.  Add this to a nation with an economy already in collapse and its citizens watching any remaining disposable income vanish as their quality of life descends down a toilet bowl lined by socialist and Marxist economic policies and we have a very real recipe for social unrest.

In case the impact of California’s drought hasn’t caught your attention yet and you still don’t see why it matters, let me be clear.  The drought in California will cause your grocery bill to double again this year.  If you are an average, struggling, middle class American, you will be forced to cut even more from your already bone thin budget and for the first time actually have to go without when it comes to many food items so that you can pay your most basic bills.  This will further reduce the disposable (what if any is left) income Americans have to spend, which will put even more retailers out of business this year.  This will lead to a cycle of more layoffs and higher unemployment as the US economy enters into a collapse of historic proportions.

Taking a page from the government, this impending disaster offers opportunity for those savvy enough to foresee it and take action.  For starters, it would be wise to enter into direct agreements with cattle and pig farmers for set amounts of beef/pork now before prices spike.  Buying a steer or hog now at current prices that will be slaughtered later in the year will save you hundreds of dollars if not more later in the year when prices spike.  To illustrate the already rising prices, the prices of beef have already spiked 16.8% this year and bacon is up 22.8%.  Further, if you haven’t started a sustainable garden you need to begin now.  Invest in a large quantity and variety of heirloom seeds suitable for your growing conditions.  Gardens are not something that happen magically after tossing a few seeds into the yard.  As we have said many times, gardens take time (years), work, and experimentation to perfect.  Anyone waiting to the last minute to plant a garden “when things get really bad” will fail miserably.  Invest now in a garden that will produce beyond the needs of your family and it will reward you handsomely with tasty, healthy food at a price you can afford.  If you don’t have the land, make a deal with someone who does so that you can gain access to fresh produce.  Further, any additional produce not needed can be sold or bartered at a premium price later this summer when the shortages and price hikes really begin to be felt.

In summary, California is entering a period of drought that may last beyond our lifetimes or end next year.  Either way, the water shortage will cause grocery bills to spike to record high levels.  This will further destabilize the already sick US economy.  To protect oneself, the smart prepper will invest in food products and sustainable food production capabilities such as good land, farms, livestock, and gardens to insulate his family from the upcoming price hikes and shortages and turn misfortune into a money making opportunity.

 

By Guiles Hendrik

February 17, 2014

All rights reserved. 

America’s Literal Collapse

Our readers are more than versed on the figurative collapse of the United States, but today it is important to look at the literal collapse of America.  A key indicator of whether a nation is waxing or waning is the condition of its infrastructure.  Specifically, is the infrastructure modern, maintained, robust, and operating efficiently or is it dated, failing, vulnerable, poorly maintained, and inefficient?  When one assesses the condition of the US infrastructure, one finds a massively inefficient system that is becoming increasingly costly, breaking down, and in desperate need of repair and/or complete overhaul.  Today we will specifically look at the condition of the US transportation sector, which is quite literally, collapsing.

 

On September 24th a major bridge in Wisconsin near Green Bay had a 400-foot section suddenly sag forcing police to close off the span that carries Interstate 43 over the Fox River some 120 feet below.  The bridge carries over 40,000 vehicles a day and will be indefinitely closed.  Perhaps even more disturbing is that the bridge was recently renovated and last inspected in August of 2012, when it was declared sound.  If a recently inspected and renovated bridge that was deemed sound has failed, what does that say for the older bridges that haven’t been renovated and are already deemed at risk?  The answers are dire and supported by the latest civil engineering research.

 

A US Senate report just released coincided with this latest bridge failure.  The American Society of Civil Engineers (ASCE’s) 2013 Report Card for America’s Infrastructure graded the nation’s infrastructure a “D+” based on 16 categories and found that the nation needs to invest approximately $3.6 trillion by 2020 to maintain the national infrastructure in good condition. The following are the grades and the investment needs by 2020 for the surface transportation area:

o Bridges received a grade of C+;

o Transit received a D;

o Roads received a grade of D, and combined with bridges, and transit, have an

estimated investment need of $1.7 trillion; and

o Rail received a grade of C+ and has an estimated investment need of $100 billion.

 

Based on this, the US has to somehow find almost $4 trillion (estimates always go up, never down) in new revenue in what effectively amounts to five fiscal years (funding due in 2020 would need to be programmed no later than Fiscal Year 18 to pay out in Fiscal Year19).  Further, to receive C and D ratings, the majority of our transportation infrastructure has to be at risk of failing.  The bottom line is the money is not going to be appropriated because we don’t have it.  Even if we did, the bureaucracy with its pork, inefficiency, and regulations won’t be able to put the money into effect.  This means the repairs will not get done before 2020.

 

We can expect more and more major infrastructure failures across the nation as corrupt leadership and an overly burdensome bureaucracy continues to siphon off more and more money from the taxpayer.  Instead of going directly to maintenance projects where it was earmarked to be spent, the money ends up going to welfare programs, campaign donors, and interest payments on the exponentially increasing state and national debts.  None of these recipients add value to the society and will only contribute to the further deterioration of the infrastructure.

 

The huge problem with the infrastructure collapse is that it is not linear and it has ripple effects.  By not linear I mean that failures do not occur along a nice even line that gradually increases or decreases as bureaucrats would like.  Our collapse will resemble a more exponential trend similar to power grid failures where a small failure in the network cascades into a major grid failure.  Specifically, as one piece of infrastructure fails, it places greater pressure on other parts of the network.  This overstresses these nodes and causes them to wear out quicker and catastrophically fail long before their expected service life has occurred.  This trend will occur faster than money can be raised and maintenance conducted.  This accelerates the collapse of other nodes.  Further, as key nodes in the infrastructure network begin to fail, it has a direct negative impact on local, regional, and national economic conditions.  To offset the conditions, governments historically have opted to raise even more overly burdensome taxes on the few remaining productive citizens with jobs, which in turn actually reinforces the collapse cycle.  In fact, as major hubs begin to fail, businesses begin to lose greater percentages of their revenue, which forces prices higher and causes shortages of goods and services.  This reduces government revenues raised in the form of taxes and further reduces the amount of money available to be dedicated toward infrastructure maintenance.  Raising taxes higher only further magnifies this problem and creates even worse economic conditions.  This creates a viscous downward spiral that accelerates a nation toward total collapse.

 

Today we are caught in the downward spiral.  It is not when or if it occurs.  No ladies and gentlemen, we are in the midst of the collapse right now.  There has been no economic recovery and only lies and fudged economic numbers.  Even Wall Street, which has been booming, will face another even greater collapse when the Federal Reserve is finally forced to stop counterfeiting money, handing it for free to their banker allies, and then billing the taxpayer.  Make no mistake, it won’t be your grandchildren that inherit this unimaginable debt as politicians tell you; it will be you.  As such, you have two options.  The first is to ignore reality and succumb to a new Dark Age and slavery.  The masses have repeatedly done this throughout history when faced with a painful choice between immediate gratification or a tough, slow recovery that requires personal sacrifice.  The second option is to awaken your mind and open your eyes to what is going on around you and take action.  You few that choose the later will be in the minority.  You will be persecuted, harassed, and potentially even jailed for taking a stand to right the wrongs, but you will be the few that always change history.  Remember, it is never the masses that change history.  You know the collapse is coming and can’t be stopped, but you can be prepared for it.  Do all that you can in the time you have to prepare yourself, your family, and your community to rebuild.  Don’t waste your precious little time trying to fix what amounts to the Titanic sinking for the ship is lost.  No, be a Last Minute Survivor.  Go and get in a life boat and start paddling while the others remain convinced the Titanic is unsinkable.  You may still make it, but they will continue to dance until they drown.  Good luck.

 

By Guiles Hendrik

All rights reserved.

 

http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=a810613a-c18c-46fd-b38b-e8d4028c23fb

http://www.nbcnews.com/video/nightly-news/24817517

http://online.wsj.com/article/PR-CO-20130926-906190.html

http://www.cnn.com/2013/09/26/us/wisconsin-bridge-sagging/index.html