Bartering And Horse Trading (Part Duh)

[agnut]

Hi mick silver. We were just discussing how long, cold and rainy the winter was. Spring is now here and we can get outside to work many needed projects.

Garage, estate and moving sales (GEM) should start in volume later in April. Lots of folks having to move with the summer months coming. Should be lots of GEMs to pick up this year what with the economy being what it is. Just be careful in getting the right items as well as the right price.

The other day my son and I went to the local thrift store. There was a bag sale going on. It was $5 for all the men’s clothing racks’ items that you could stuff in this huge plastic leaf bag. They had been donated such a great quantity of clothing that they were overwhelmed and needed to make some room. Most of the items had $2 to $4 price tags on them. It was almost embarrassing; this was as close to a giveaway as it gets.

When I got home and emptied the bag there was 7 pairs of pants, 22 shirts and 4 spring jackets; 33 items in total. At an average of $3 each, the total if the bag sale were not going on would be about $100 ! A 20 bagger ! Thrift stores can be a goldmine, especially in the winter. Should be lots of winter clothing for sale with the warm season ahead.

But what would be the retail price if all these items were new ? Well, there are a couple of ways to look at it. First, the current retail price is only a guidepost since these are used items; their resale price is relative to their condition and name brand and demand. Second, these clothing items were purchased with the future in mind. As I wrote in my previous post that Jim Willie had predicted an 80% devaluation in the dollar, clothing items were almost all imported. It seems logical to me that when the dollar falls on an international scale, the imports prices will rise while items we make here will not cost nearly as much.

This is just one example and there are many, many others. Could be most anything that is imported. Things that we don’t make here in the U.S. For instance, what about imported car parts ? Will a wheel bearing for a Volkswagen rise from $5 now to $25 after a 80% dollar devaluation ? I would expect so. Additionally, with this enormous price rise, I expect that availability would be greatly decreased. Where I could buy 10 or 20 bearings right now, I may be able to find only 1 or 2 bearings in the future. Or maybe none since the sellers’ shelves wouldn’t have much backup inventory in the future with their wholesale prices also rising 5 times.

We must be aware that something as seemingly insignificant as not having a $5 wheel bearing will prevent our having use of our car. Isn’t it ironic that the old story of “for want of a nail the shoe was lost; for want of the shoe, the horse was lost; for want of the horse the battle was lost and for loss of the battle the kingdom was lost.” Ironic because the nail is now the wheel bearing. We are in the same situation as folks were many hundreds of years ago. And wisely having these little, seemingly insignificant things will keep your kingdom intact.

This analogy is all too true in manufacturing. I know; I have been there wherein transmission parts coming from Germany were delayed for two to three months and all of my competitors were shut down. I had foreseen this potential and had stocked thousands of dollars of new imported parts to supply my customers as well as the new customers coming from my competition. I was swamped with business until the parts finally landed on our shores. And all of my employees were rebuilding transmissions while competitors were idle. Must have cost them a fortune.

In my case, not having a $5 bearing would have prevented my rebuilding a $1,300 transmission. Talk about the tail wagging the dog.

A 6 bag of men’s socks is about $6 now at WalMart; will they cost $30 in the future ? After all, they are imported too.

On a related topic, what of house prices after a dollar devaluation ? Will an existing house that is now $200,000 be $1,000,000 in the future ? I don’t think so because an existing house is already built, it is not something imported and there are alternatives to buying a house. You can double up or rent; try doing that with a pair of socks. Just kidding but you get the point.

Although the price of a house may rise in dollar terms, I believe that it will greatly lag behind this 80% dollar devaluation of which Jim Willie predicts. Remember that most houses are sold through a bank loan. Will banks be lending in such a volatile environment ? And if so, what will they charge in interest ? And with high unemployment, who will be buying ?

The overview is that we are looking for an equal purchasing power of our income through time as we live through this coming dollar devaluation. If you believe that this is the way things will unfold, we should be thinking of prepositioning our assets as well as our understanding of how to navigate through the coming years. I know, gold and silver have stood the test of time. I agree here but this is but one prep item. I believe that gold and silver may well not be the premier trading material at times, particularly when food is scarce.

A roll of toilet paper is a good example of a harmless trading item. There are others such as new socks. Sleeping bags, jackets and used clothing also come to mind. Note that all of these items are nonrenewable resources; once they are traded/sold they cannot be replaced without having to buy them from a reliable source such as a manufacturer who are mostly overseas nowadays.

Growing food is a renewable resource that my son and I are thinking about. We are in the process of getting rid of the cows we have since discovering that they are too much work and expense for the reward. Hamburger would have to go to $20 a pound in the market before we would reconsider. When the fields are clear of cows we may decide to grow crops but they would have to be profitable or we will wait and do something else. At least the options are there for us. As long as we continue to pick up about a ton of free fruits and veggies a week, we see no need to plant a crop.

Gotta go and do some welding and drilling on hydraulic controls on my Ford 550 backhoe. Something I have never done before but to have it done would cost about a thousand bucks. If I can do it myself, the parts cost is around $25. I wish I could say I’ll pocket the $975 but it doesn’t work that way. HaHa

Best wishes,

Agnut

Proper prior planning prevents piss poor performance.