Copyright 2012 by John T. Reed
Multiple.
That is an important word when things do not function normally. As happened in the Northeast this past week because of Hurricane Sandy.
You want multiple ways of doing basic things for two reasons:
• cost
• availability
I have lately been telling readers how to prepare for a monetary crisis—hyperinflation. You might think a too-much-wind-and-water crisis is different. Not so much. One reader in Philadelphia thanked me for urging him to stock up on food for hyperinflation. Turned out it was important when Sandy hit his area, too.
Indeed, I recently attended a local emergency preparedness fair to get ideas for my hyperinflation book. They had no thought of hyperinflation there, but they should.
While there, one guy tried to recruit me for a volunteer position. He was in the emergency communications truck, which look like a fire engine in terms of paint job and such. Hyperinflation, like a hurricane, can cause you to lose communications methods—either because you can no longer afford your normal commo method or because your communications supplier is being knocked out by hyperinflation-related problems like labor strikes or their inability to pay their bills.
I told the guy in the truck that I had been a commo officer in the Army in Vietnam and that I was curious what type of radios they had. In Vietnam, we had FM, microwave, early satellite, and HF (ham). The local emergency commo truck guy answered my “What type do you have?” with,
All of them.
And he was not kidding. He showed me aircraft radio, which he said was what I should have taken to the Grand Canyon. It is monitored by aircraft passing overhead. You don’t use it to call your mom; only to yell “Mayday!” Most other methods would not work in the Grand Canyon because of the vertical rock walls. They also had marine (watercraft) radio, satellite, FM, AM, citizens band, HF, microwave, cell, and probably others.
Is that too much? Well, having all those ways to communicate would cost a bunch of money, maybe hundreds of dollars for each one. But a lot of New Yorkers might tell you it was worth it during the aftermath of Hurricane Sandy.
My main point here is that only having one—Plan A—is a very bad idea. A lot of New York City dwellers had no communications after Sandy because they only have cell phones and those rely on local utility electricity. Regular land lines have their own separate electrical power because they need very little of it—just enough to ring the distant phone and to carry sound.
You need to have a Plan B and maybe a Plan C. Whether you want to go to D and F and so forth I’ll leave up to you. It is sort of a matter of how much money you have. You don’t have to be a zillionaire to own ten different types of radio, but you might want to buy more food and soap and such before you buy your fourth type of radio. What types you need depends on your location, terrain, distance to help, communications infrastructure in the area.
People in New York City don’t have many Plan B’s for necessities like electricity, water, sewer, food, transportation, heat, medicine, hot water, cooking, communications. In contrast, at my exurban home, we have gas, electric, firewood, fireplaces, an outdoor barbecue, charcoal briquettes, a stream behind our back fence, wild turkeys and deer roaming the area where we live, much stored food and hygiene items, guns, ammunition, lots of battery-powered LED lights. Others in my area have propane, septic systems, wells, egg-laying chickens, swimming pools full of fresh water.
Not only are city dwellers not likely to have these back-ups, they cannot get most of them. Too many regulations and bans. Too little space.
Islands are not so great when transportation systems break down. I grew up in Wildwood, NJ, a barrier island just north of Cape May. New York City is composed of three islands: Staten, Manhattan, and Long, plus the Bronx, which is not an island. It is hard to get onto or off of an island when there are problems with the necessary airports, bridges or tunnels. Hyperinflation does not adversely affect bridges or tunnels in the short-term, but affects maintenance over longer terms. Air travel is adversely affected in hyperinflation because of its high cost and reliance on foreign fuel.
We take necessities for granted. One lesson of Sandy that relates to hyperinflation as well is you need to think through exactly what are necessities and whence they will come from if an emergency cuts off Plan A. Here is the list:
water
electricity
food
ability to cook (fuel, stove/oven, flue)
hot water
light
heat
air-conditioning
transportation to work, school, health care, food, water, fuel
vehicle fuel
medicine
hygiene needs
Internet service
consumables
needed to run your business
safety from crime
shelter
access to high ground or a secure building above the flood crest
adequate flood insurance if you live or own a building on a flood plain
communication
In light of the Hurricane Sandy media stories, you can see where virtually everything on this list is causing people problems in the Sandy impact area. The cost and/or availability of these things is also affected by hyperinflation. In her diary of the early 1920s hyperinflation, Anna Eisenmenger reported life-and-death trouble with most of these.
The three most important things in real estate are location, location, and location. So it is with Plan B. If you can walk to the things on the above list, you are in real good shape. Specifically, that would mean your home and work, shopping, school, and medical care are in a mild climate; on the U.S. mainland; have lots of sun light; fresh water; arable land; trees that you can cut down for firewood; local laws that allow livestock, propane, a back-up generator; vehicles that use different kinds of fuel, and above flood-crest altitude, and nearby workplaces, shopping, schools, and health care.
I have been reading admonitions in the media against owning a home or business in a flood plain for decades. Federal flood insurance creates a moral hazard by encouraging and enabling people to violate that admonition. The existence of federal flood insurance is a national disgrace. If you need it and can get it, you’d better do so. But even better you should not be eligible for it because the U.S. government is going bankrupt and the federal flood insurance agency is already closer to bankruptcy than the rest of the federal government.
Do not buy real estate on a flood plain. If you own some there, sell it.
Flood insurance, I heard, only goes up to $250,000. Not enough to fully cover high-priced ocean-front property. Also, when hyperinflation hits, you have to jack your coverage limits up a whole lot on a daily or weekly basis to keep up. I doubt the government would raise the maximum fast enough for you to maintain the same purchasing power amount of coverage.
Once again. Don’t own property in a flood plain.
No matter how good your location according to the criteria I just listed, hyperinflation and some physical emergencies will still cause you problems. So you need to take additional precautions. Some, like putting savings in foreign bank accounts in foreign countries have no application to the Sandy storm. Here, I will just talk about the stuff that applies to both hyperinflation and hurricanes.
You should have extra food stored. Your freezer is one place to store it—excellent for about six months of storing good-tasting normal food—unless the power goes out. In that case, you should have a back-up generator, e.g., Generac CorePower ® Series 7/6 kW Air-cooled Automatic Standby Generator Sears Item# 07191149000 | Model# 5837 $1897.99. That runs on liquid petroleum, a.k.a. propane, or natural gas. I have not heard anything in the media about natural gas being out. Propane never goes out, although in a flood it may float away.
Once again, do not own real estate in a flood plain. Indeed, people are trying to heat their kitchens with their gas ovens. Officials say not to do that. I don’t know why. If you can cook a turkey for hours, why not leave the door open and heat the kitchen. You should have a carbon monoxide (CO) detector. Maybe CO is the problem.
At least two hospitals in NYC—Bellevue and NYU—had back-up generators that failed. Fire the person responsible. Bill O’Reilly, rich guy with a back-up home generator, also had his generator fail. He said it was because he did not test it. Fire him. I expect the manual says how often to test it. So put it in your calendar and do it.
One issue that strikes me a somewhat humorous is one of the things people are trying to get gasoline or diesel for is to run generators which are needed to run gasoline and diesel pumps at service stations. Hess Corp., to their credit, has generators at many of their stations in case the power goes out so they can still pump and sell gas and diesel. I do not know whether they avoided the circular firing squad by having those generators be powered by natural gas or propane so they could avoid the situation where they need gas to run the generator and need the generator to pump the gas.
Think, folks. Gas and diesel require electricity to be pumped. So having a backup generator that requires gas or diesel to provide electricity is not sufficient diversification of your energy sources. Furthermore, gasoline is extremely dangerous to store and diesel is hard to store long term. Natural gas rarely gets cut off and propane can be stored effortlessly. Gasoline, diesel, and heating oil are mostly deivered by trucks which require roads and bridges and ports that tend to go out. Natural gas comes from pipes which are more resilient. Propane comes from trucks, but you can buy it in advance when the roads are fine.
I do not have one yet but I probably will get a back-up generator. In hyperinflation the problem would be cost and/or availability of electricity. The same could be true of natural gas—the stuff that your local utility provides through pipes in the street. Propane, on the other hand, can be bought in quantity in advance when teh price is normal and stored in your backyard, where allowed. It is probably mainly a suburban or rural thing. In big cities, I wonder if even the co-op or homeowners association would be able to get such a generator—because if we let one get one we have to let everyone and that would be too much noise and exhaust fumes if everyone got one.
Again, in urban areas, you are only allowed to get what you need from Plan A sources because Plan B takes up space, makes noise, emits fumes, etc. One of Anna Eisenmenger’s problems was she lived in downtown Vienna. Her sick family members who stayed temporarily at her uncle’s farm in Linz during the hyperinflation were transformed to good health. During emergencies—both monetary like hyperinflation and natural disasters like Hurricane Sandy—big cities and islands are the worst; farms on high ground, the best. Suburbs and exurbs and are closer to the good end than the bad.
Today’s weather reports—11/2/12—say it will be freezing in the New York area tonight. In that case, you don’t need a freezer. Protection from precipitation, theft by animals or people are enough. A part of the garage with louvers to let cold air in might get the job done on most winter days.
You can store food for up to 30 years at room temperature. It is generally less tasty than frozen and refrigerated food, but freezing requires electricity and the expiration date on frozen food is measured in months, not years. I have seen many reports over the years about people being saved by their stored food in natural disasters like Sandy, personal disasters like losing a job or bankruptcy, and certainly in financial disasters like depressions and hyperinflations.
Storing food in freezers or just at room temperature is tougher in expensive big cities because generators are discouraged or impossible and plain old storage space is very expensive.
The current issue of my newsletter Real Estate Investor’s Monthly happens to have an article about the advantages of having a vehicle that is powered by propane or compressed natural gas (CNG), either directly by carrying that gas in the vehicle or indirectly by having an electric car that you can charge via a generator that burns natural gas or propane.
I am told you can fill your vehicle CNG tank at your local UPS depot and other locations. Google CNG stations for a map showing locations in your area. You can also make your own home a CNG refilling station for your private use by getting a special compressor attached to your gas line.
The only factory-made CNG car I know of is the Honda Civic GX. I saw one at my local Honda dealer. Looks like a perfectly normal car. You can also get most cars and trucks converted from gasoline use to CNG by certified converters. Google for a list near you.
And, of course, there are street-legal golf and other utility carts that are battery or propane powered.
If that sounds a bit much to you, I’ll bet you are not currently living on Long Island or in other areas near the coast in the Northeast. It probably sounds like an absolutely brilliant idea to people who are currently waiting in hours-long lines for gas.
The advantage of propane, as I said above is it works even when natural gas fails, although natural gas rarely goes out. In hyperinflation, though, you might not be able to afford it or price controls may make it unavailable once the hyperinflation takes hold.
The bottom line here is it would be very valuable to have a vehicle powered by other than gasoline or diesel in the event of any type of emergency including a monetary emergency like hyperinflation. The current situation in the Sandy area is a classic illustration of that. The 1973 and 1979 gas lines are a better example if you are old enough to remember those.
Here is an email from a reader:
I am in Connecticut and having a diesel-powered car has been a real asset for me. The only stations that are out of it are the highway rest stops that truckers use. Relatively few non-commercial vehicles use diesel, and most stations have diesel-only pumps with no lines. Not only that, but diesel offers tremendous gas mileage. My 2010 Volkswagen Golf TDI goes 600+ miles to a tank, including 50MPG or more on the highway.
Your "something other than diesel" advice makes sense for hyperinflation, but it's been great so far in the Hurricane Sandy aftermath.
Also, a survivalist forum says you can store diesel safely for up to 10 years by adding widely available preservatives. It stores much longer than gasoline apparently.
Good article. Very intrigued by conversion to propane/natural gas.
The greater availability of diesel in the Sandy area is irrelevant to hyperinflation. In hyperinflation, the issues would be whether the gasoline/diesel comes from overseas and whether you can afford the inflated price and whether the producers will sell it for government-controlled prices. I would not expect there to be any advantage of diesel over other vehicle fuels during hyperinflation.
Propane apparently stores forever without any preservatives. It also is apparently much cheaper at present on a cost-per-mile basis. Generally, propane and natural gas come from the U.S., not overseas, and we have a lot more of it than Obama has been letting us produce.
For advance purchase (before hyperinflation strikes) purposes, propane and diesel are the winners.
You must store other food and consumable necessities like those for hygiene, medical needs, business supplies, inventory to sell. If that’s expensive in urban areas either move or cough up the money.
With regard to hyperinflation I recommend putting savings abroad in foreign currencies as I have done. In the Hurricane Sandy situation, merely moving ten or twenty miles away probably would have solved most problems, but even that is very hard without a way to power a vehicle. Indeed, for some time after Sandy, residents of NYC or Long Island had great difficulty flying to say, Montreal.
So Plan C or D or whatever should be to leave the country. That requires foreign currency in a hyperinflation emergency although not in a natural disaster like Sandy. But it requires a well-thought-out escape plan taking into account possible non-availability of normal vehicles, roads, bridges, and airports. I am guessing that getting out of the intolerable areas in NYC or Long Island right after Sandy might involve hiring a boat on an ad hoc basis to take you to Connecticut or Rhode Island or some such. Upon arriving in a relatively normal area, you would rent a car and find a hotel or other lodging.
I expect this article will cause some readers to tell me stories about how people in the NYC area have been coping with lack of Plan A supplies and services.
Email from a reader:
The bulk of the hurricane damage done by Katrina was to Mississippi's gulf coast, not New Orleans as the media would report. New Orleans had some wind damage and a flood, coastal Mississippi communities were obliterated by the 30' storm surge. I have a commercial sign business and one of my customers, Penske truck leasing, sent me down to Hattiesburg, 60 miles or so north of the eyefall, a few days after the storm to hook up a large generator to their shop and later I was contracted to work on all the AutoZones in Mississippi, New Orleans, and other Louisiana towns. I bought a travel trailer and moved down there and saw and experienced how they had to live.
The most remarkable thing I saw was the reslience of the American people. The news media loved to portray the hand wringing types, but by and large, the citizens assessed the situation and made the best of it. Those did not make the TV news.
My timeline went like this, Friday the weather forecasters said Katrina would be a cat one hurricane that would swing north and hit around Panama City Beach, Florida. I remeber one saying it would be a rainmaker for Florida. I don't watch much TV so Sunday I was very suprised to learn Katrina was a cat 5 monster with my city in the crosshairs. I filled up my vehicles and spare gas cans, got batteries, canned goods, etc. As you said in your hyperinflation book, it was buying in advance. At my business I own three generators that are used frequently on jobs so their reliability was unquestioned, and I filled them up too, plus extra fuel cans I had around.
I live 100 miles from the coast, but in the direct path of Katrina. When it came over the sustained winds and rain blew down many trees and ruined a lot of roofing. A few buildings on unsheltered hills were blown away. I think our max sustained winds were around 100 or so. After the storm there was no power in much of the city and hardly any rural areas. The cell phone towers have battery backup and worked till the batteries died.
The conundrum is we didn't know how long we would be without power and had to plan based on power not coming back on for a very long time. I heard on the news some people in New York are running their generators 24/7. That is dumb, a huge waste of fuel. Here, at first, people just kept their freezers running. At some point you wonder if the frozen goods are worth the fuel that is getting more precious by the second. Many used all their fuel to power a freezer that ultimately thawed, causing them to lose their food and fuel!
Power for gas pumps. One acquaintance of mine owned a convenience store in a not so nice area of town. He went down there with a hand pump where it's inserted in the fill caps and turned with a crank. One of the locals demanded he give him gas and gun brandishing saved the day. Just mentioning that to say power is not needed to get gas out of an underground tank.
Since I had a store of gas for a couple weeks, I wasn't in bad shape, however I still hedged my bets. During the day as I would travel around town I would look to see where utility crews were working to restore power. After nightfall I'd revisit those areas and note if the street lights were back on and if they were I'd be at a gas station pump in the area at 6:00am and top off my vehicle and all my cans with no waiting, using the Russian model of scarcity, buy all you can when it's available.
Diesel. When the power would come back on to stations that sold gas and diesel, the gas lines were around the block, but then someone would show up with a diesel and not have to wait, to the chagrin of the gasoline powered crowd!
Generators.
People with means would travel up north during Katrina with a semi trailer and buy generators, then come here and set up in a parking lot, selling them for cash only at a considerable premium. They all sold out regardless of price.
Fuel
Gas spoils after 30 days, diesel grows bugs, propane and cng last forever. If you have clean dry diesel, which is what you can get from a truck stop where the turnover is high, and put it in a sealed container with no moisture, it will last forever without algae growth.
Propane has less btu's per gallon of gasoline and costs more. However, it burns very clean and fumes are not an issue, the exhaust emitting CO2 and water. That's why so many warehouse forklifts burn propane, it's safe in a confined area. In the 70's fuel crunch many here with pickup trucks bought a conversion unit that consisted of a propane tank in the bed of the truck and a special carburetor that had a vaporizer, allowing either gasoline or propane to be used. Back then propane was much cheaper than gasoline, probably due to price controls on gasoline. Vehicles running on propane got worse mileage and had lower horsepower, but that was better than walking. I had some bottles filled at an old time propane store that still had the peeling paint advertising IMPCO carburetors and inquired why no one had them today. Other than the cost of the fuel, the guy filling the bottle said we run all our trucks on propane, but there's this inspection sticker that costs a lot of money you have to have for us to fill your vehicle. The sticker cost several hundred dollars and of course the propane company would fill their own fleet without it.
CNG. I recently installed signs on our first CNG dispensing location that I know of in my area. It's at a truck stop. The downside of CNG is that natural gas is from what I understand, extremely hard to compress, therefore storing a quantity is difficult.
Wood gassification. You didn't mention this one. One of my professors at Mississippi State related that when he was a student in the 1950's a Dutchman came by with a Lincoln pulling an odd looking trailer. It was a wood gassification system where wood is cooked and the highly inflammable gas is used as fuel. The Dutchman told of how they used these systems on vehicles, boats, and ag equipment during the Nazi occupation. On some show about preppers I saw a guy in Pennsylvania running a truck using the same method, except with animal dung. You could smell him coming, but it worked. http://en.wikipedia.org/wiki/Wood_gas_generator
These methods work with vehicles with a carburetor, I don't know if they could be adapted to modern fuel injection, but I have a 1948 Willys CJ-2A jeep, so I can make do with that if need be.
A horse. Mississippi has more horses than any other state than Texas and it's a royal pain to deal with feeding and boarding them, but they should be considered as a transportation method if all else fails.
Stove for heat. The difference between baking a turkey and heating your home is that the once the oven reaches the desired temp, the gas is cycled on and off sparingly to regulate the temperature. If the door is left open, the gas stays on all the time. I see your point in that their used to be gas space heaters, but even then we were warned strongly to adjust the air to a blue flame, yellow would kill. Many families died from carbon monoxide and a space heater. I have gas in my home and have a CO meter and one that sniffs for unburned hydrocarbons.
Canning. Canning doesn't require refrigeration and can be used to preserve meat, it's an alternative to the freeze dried stuff and works well if you have a storage place under 70 deg. One hurricane Fredrick story that was related to me was that when the eye passed over, the reduced pressure popped the seal on the canned goods. I'd never considered that.
One other thing, I spoke with a lineman once and he said part of his disaster plan was to live on the mainline or very near it, so that he would be first to have power restored. I don't know how to determine the mainlines of the power grid, but I would guess close to a substation would be best.
Regards,
John T. Reed