Part 3: What Am I Doing About Inflation?

I will begin by telling you there will be a part 4. It seems as I go along I just keep remembering more about the methods that have become second nature to me. Much of it will, likely, be old news to you, but hopefully some of it will be new, or inspiring.

In part 2 I illuminated the strategies I used to reduce my "energy footprint". Reducing the amount of energy you use while still maintaining your lifestyle will save on the amount of energy that you will have to purchase. Sure, it may contribute to a "greener" planet, but that is just incidental. Having more dollars to spend on other things is the real goal of conservation.

My current project is to get up and running by the end of this year a 2.5KW wind turbine. This should furnish about 90 to 100% of my electrical needs. I have the good luck to live in an area where this is a feasible option. Just 5 miles down wind from me is one of the largest wind-farms in the country. I hope they dont mind that I will be bleeding off a few watts before it gets to them...#8-)

I plan in the future to add 5kw of solar generation. This will all be "Grid Tied" so that I use the grid as my storage medium. The solar generation is waiting for a reduction in the cost per watt of solar panels. Right now they are way too expensive to pay for themselves.

I do all this work myself. The cost of having a turnkey installation of either wind or solar generation makes the system uneconomical in that it will likely never pay for itself. If you are out to reduce your carbon footprint and dont care what it will cost, be my guest. But I want payback. Carbon, Shmarbon, I eat meat and live on the top of the foodchain as I have said before. By doing it yourself you can have a 2.5KW wind turbine up and producing for less than $7000, mine will cost less than $5000 so a two year payback is likely. Solar however, even with do it yourself will likely cost $3 a watt minimum so I will wait as I need 5kw of solar if I am to completely slake my appetite for energy.

My next post will be an exposure of the myth that you need 70% of your before retirement income to comfortably retire.

So stay tuned if you are about to retire.

Jim Isbell
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Citizen Legislature

I am going to delay my 3rd post on personal Conservative finances for a day to interject this post. I want to get this said before the election is cold in our memories.

A lot has been said about the fact that the original framers of the constitution meant for the congress to be filled with citizens that came to serve for a few years and then went home to be replaced by another citizen. The idea was that no one would be there long enough to get into real trouble, or learn how to steal.

In a recent discussion with our "new" congressman from my district I felt a little uneasy when I asked him how long term limits should be and he said 16 years. I asked why so long, and he said, "You need to be there for a while to learn how to work the system (steal...in my book)." I responded that that was the whole problem, "we don't want them to be there long enough to learn how to steal." Then he said, "But you need seniority to get anything done," To which I responded, "Seniority would mean nothing if we had term limits because no one would have it."

He has also said, "I will have to learn how to compromise and help others so they will help me." To which I say Bull Shit. We should never compromise and vote for what we know is wrong to buy a vote on something we know is right. The wrong vote pollutes the good intentions. Each time it is done it is easier to do. That is what we are fighting in government today.

The real problem is that we have gotten away from the concept of a "Citizen Legislature". But whose fault is it? It is OUR fault. Most of us are not willing to serve. We are not willing to run for office. We have defaulted to the "professional legislature". We can only turn it around if we are willing to accept some of the responsibility for running for office.

I am making my commitment here and now. If my congressman doesn't stick the the conservative values he ran on, he better be looking in the rear view mirror, because I will be there. If he stumbles, I will be there to run against him in 2014. I don't want to run for office so I hope he sticks to his promises. He gave me an 8 point "Contract" which he personally signed and told me to hold him to it. I will.

You should commit to run for office if someone you elected does NOT live up to his campaign promises.

I will.

Jim Isbell
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Part 2: What Am I Doing About Inflation?

Yesterday I posted about my financial strategy for keeping up with inflation. After I posted it I realized that there were other things that I have done over my lifetime that also worked but were not direct investments. There are investments in time and things that you can change in your lifestyle that will also work to mitigate inflation. Reduce your energy consumption!

Now, don't misunderstand me, I am no "Greenie". Personally, I feel that the human race is King and we should live like we are on the top of the food chain. After all, our ancestors didn't claw their way to the top of the food chain so that we could eat grass. We don't owe any other species any more than to treat them with respect, but not to degrade our lifestyle for their benefit. After all, a simple food chain that would work is Plankton, Whales and Humans. We eat whales, defecate in the sea to feed the plankton and the plankton produce oxygen to breathe and feed the whales. Simple, effective, but probably we would get tired of the blubber diet. But the green lifestyle has some advantages over and above not destroying the environment.

If you don't waste energy, you don't have to pay for as much of it. With inflation and scarcity driving up the cost. Not having to pay for what you waste is "income" that you can allocate to better use.

From 2007 to date I have been working on reducing the energy that I have to buy while STILL MAINTAINING the same lifestyle. I dont intend to give up anything but still reduce my expenses.

In that time period I have been able to reduce my electric consumption from 13,600 Kilowatt hours a year to only 10,850 Kilowatt hours a year. That is a reduction of 20%. With the current price of electricity here, thats an income to me of $357.50 a year. I did that by converting almost exclusively to CFLs and Florescent tube illumination, and replacing an aging 10 SEER AC unit with a "newer" not new, AC unit of 12 SEER. By using a good, but used unit that I got for free and paying someone $350 to install it the cost will be amortized very quickly. The cost of the changes were easily paid for with the savings of the FIRST TWO YEARS. After that its gravy...and because of inflation the savings is even more dollars.

I have reduced my natural gas consumption from 26,500cf to 24,000cf, a savings of $46 a year. This was accomplished with the AC replacement.

The big change was reducing my gasoline consumption from 1180 gallons a year to only 300 gallons a year AND I drive more miles and enjoy it more in my 2000 Honda Insight Hybrid that gets 65MPG (around town)to 118MPG (best highway) and I bought it used. At todays price for gasoline that is a savings of $2400 a year. The payment on the car loan is only $2400 a year so I got the car for free!!! The car has a better AC than my Jaguar sedan, and more room in the seats than the Jag and gets 4 times the mileage!

I just realized that I am not near done with my attack plan on inflation so I guess there will be a Part 3 tomorrow.

Jim Isbell
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What Am I Doing About Inflation?

Lets start by saying, that I am NO expert on this subject. Yesterday I mentioned my belief that inflation was just around the corner. I also said I would tell you what I am doing about it. What I say here is what I am doing and is not a recommendation for what YOU should do. But I hope that my comments will prod you into doing some research on your own to see what is best for you. A also hope if you see any flaws in my reasoning that you will tell me before I make a big mistake.

Inflation generally means that money gets worth less and "things" cost more money. In other words if you have a "thing" that is worth $100 today and the currency is inflated by 10% then your "thing" will now sell for $110. So "things" make relatively useful hedges against inflation. But of course there are other forces that affect the market for "things" so it isn't always a direct relationship. For instance if you have an ice maker that is worth $100 in August and there is a 10% inflation between August and December, you may still only get $100 for the ice maker in December because the season is wrong for the market even though money is worth less. So be aware of that when you do your research. I don't buy age-able "things" as a hedge against inflation because age will devalue them, maybe faster than inflation is increasing their price!

I intend to spread my portfolio because of the many variables that may make one or another of my hedges either less valuable or less liquid. I feel I need some of my assets liquid and some very safe.

First, I will have very little cash in the bank when the inflation shows up. Cash will just be a looser in a rapid inflation. I will begin buying "stuff" as fast as I can to divest myself of cash.

Second, my home is a great inflation hedge, in my opinion, because I need it ANYWAY. My home is something I will need as long as I am alive. Its not so liquid in bad times, but I need it to protect me from the elements.

Third, I will be buying Gold and Silver as part of my hedge against inflation because if it really gets out of hand I can always spend the gold. Gold is a very liquid asset and easily converted into dollars if need be.

The fourth part of my portfolio is land. Not houses, but land. Houses will age. Houses have high taxes and high upkeep costs. And, the market for houses is very volatile. Land is somewhat more stable and the taxes are lower. Maintenance is minimal. But land is not so liquid in an emergency situation.

I like old cars. They are a fun hobby so I might as well consider them a hedge against inflation. Back in the 80s I sold off a sizable collection of old cars and was able to pay off the mortgage on my home so that I became debt free. I will continue to collect them because its a great hobby and if inflation gets out of hand the prices will rise with inflation.

And finally I am looking into an idea I had recently, investing in companies that sell "Reverse Mortgages". This seems to me to be a good way to invest in real estate without all the maintenance and tax problems. These companies are essentially betting on the future of real estate values. The owners take care of the maintenance and taxes as part of the mortgage agreement. If real estate goes up in value then the companies asset pool goes up with it. Considering the current state of real estate values, it would seem to me that the only way is UP. Of course, if Obama Care causes a down tick in the average life expectancy then this will increase the value of the assets as well.

Any comments will be appreciated. If my ideas don't hold water, let me know so I can bail out!!!

Jim Isbell
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Inflation To Be Fuled By Printing 1/2 Trillion Dollars

The Fed is now going to print one half a Trillion dollars in order to buy our own bonds!! This is an incredible run of idiocy for our government. But what would you expect from a government led by one.

Printing money to buy our own debt is like you going out and xeroxing a dollar bill until you had enough copies to pay off your mortgage!! It is not going to work.

The Chinese are going to stop buying our bonds, so we will just buy them from ourselves?? If we do this then the Chinese will start selling the bonds they already have to get their money back before the dollar inflates itself into nothing!! If they don't want to buy them now, how do you think they will feel if we inflate the dollar?? Now the bonds will become worthless with the flood of bonds that the Chinese are dumping onto the market. So now we have to sell more bonds to get the same amount of, soon to be worthless, dollars that we were getting before. Its a vicious circle that will drive us to the point of having to pay a wheelbarrow full of dollars for a loaf of bread. The wheel barrel will be worth more than the dollars in it.

But, what can you do to protect yourself from this calamity?

Well, we have already started. We threw the bums out. Or as they say down here in Texas, "We handed them their ass on a platter." The elections show how we feel about the Obama administrations handling of financial matters. But that is just the start.

Now we hold most of the states legislatures and with the recent census, redistricting is coming to the country. The Republicans don't even have to resort to Gerrymandering, they can just do an honest job of redistricting and just the correction of the gerrymandered districts of the Democrats will swing the congress back to a fair distribution.

OK, so that fixes our government for the next 10 years...maybe beyond...if we keep an eye on them...a close eye. But what about your own personal security? What can we, individually, do to protect ourselves from the massive inflation that will engulf this country if we continue to print and inflate the dollar?

Inflation is the process of a currency becoming worth less. The word inflation seems to imply something getting bigger. But that is only the case if that "something" is the wheelbarrow you need to carry the money you need to buy a loaf of bread.

Tomorrow I will give you the plan I am using to protect myself from the coming inflation.

Jim Isbell
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Whats Next For The TEA Party?

I have addressed this subject several times in the past, but my answer to the question has usually been fairly nebulous. Several days ago I suggested that the TEA Party would become the conscience of the nation to keep the two political parties in check. I have since had some more specific ideas.

Last night I was at a victory party and during the course of the party I had many conversations with people that all wondered what we could do to keep the new political winners on the straight and narrow.

Somewhere, about half way through the party, maybe it was the wine, or maybe I really had an epiphany, but the idea came to me that if these jokers went south on us, we had to replace them. BUT...we cant start a third political party because that ALWAYS hurts the one you would have voted for if there wasn't a third candidate. So what can we do?

Its up to us. Each and every one of us, to become martyrs. As much as we despise politics, we must run for office. The young, the old, and everyone in between. Each of us should pick a candidate and watch him or her. If the person in that office does a good job, we are off the hook. But if they fail then we must take it upon ourselves to run for that office the next time it comes up. Challenge the liar and make him pay.

We can run as Republican or Democrat, the party doesn't matter, the message does. If we challenge him or her in the primary and don't succeed, then we can change parties and challenge again. Again, I say, it doesn't matter which party you run with, its the conservative message that you carry that makes the difference.

I am 74 years old, but I am preparing my campaign right now. I am looking into the requirements and the costs of a campaign. I hope that I never have to use the information. I hope the politician I am watching does what he said he would do and makes me proud.

BUT if he doesn't, I will be on him like a duck on a June Bug come 2013.

Jim Isbell
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We Just Didnt Get Credit For All We Did

Yesterdays blog touched on the above statement. The Democrats just don't get it. Today a Democratic pundit said they just didn't get credit for their accomplishments. They think that they needed MORE credit for their disastrous attempt to govern. They should be thankful that they didn't get credit for everything they did. If the full extent of their attempt to take over the US and turn it into a Socialist Republic of the USSR was known. There would not just be elections tomorrow, there would likely have been some hangings tomorrow.

The fact that they are still decrying the lack of credit for a failed policy, the fact that they think the electorate is a bunch of dummies, the fact that they think that they just didn't use small enough words to explain it to us, That they didn't take enough time to explain it to the "slow" voters who just aren't smart enough to understand it, this is why they will loose big tomorrow, and again and again. They have awakened a sleeping giant.

They will continue to loose over and over until they understand that their failure at the polls shows that their policies have failed. Their failure at the polls shows that the people DO UNDERSTAND and they DON'T approve.

But it is unlikely that the realization of that will come easy or quickly. The reason is that the entrenched politicians on BOTH sides are more interested in their own survival than the survival of the United States..like a bacteria not worried about its host. Further the infiltration of BOTH parties by the lunatic Fringe Liberals, the Socialist agenda proposed by the Progressives, led by George Soros, will continue as an infection to be purged from the body. Like all bacterial infections, they are able to morph and change shape so that they are not recognizable...until the next outbreak.

This is why we must all be very attentive to the nations health. As long as there is infection (Soros, Obama, Polosi, Reid) we must continue to expose it to the open air. Just as with a wound on the body, exposure to the open air will help to dispel the infection. We must be constantly on watch and when a fever shows, we must treat it immediately. We almost didn't catch this one and the Nation was very sick before we awoke to the disease.

We must vote tomorrow to put antiseptic on the wound, and we must stay vigilant, keeping the wound CLEAN, so that the infection does not return.

Jim Isbell
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