Personal Incomes, Consumer Spending Up In December

Personal incomes rose more than expected in December and consumer spending increased for the third straight month, helping the economy slowly recover from the worst recession in decades.

Still, the increases were modest, reflecting the reluctance of many households to spend amid tight credit and high unemployment. Widespread joblessness is also limiting wage and salary growth, as firms find it easier to retain workers without raising compensation.

"Consumers continue to save far more than in recent years and allocate their spending very carefully," Julia Coronado, an economist at BNP Paribas, wrote in a note to clients.

The Commerce Department said Monday that incomes rose by 0.4 percent, the sixth increase in a row. That's slightly better than analysts' expectations of 0.3 percent growth.

Income growth was spurred by a large, one-time social security payment, the department said. Wages and salaries rose by only 0.1 percent, or $9.1 billion, after increasing 0.4 percent, or $27 billion, in November.

Consumer spending, meanwhile, increased by 0.2 percent, less than analysts' forecasts of 0.3 percent. The department also revised November's figure to show a 0.7 percent increase in spending, higher than the initial estimate of 0.5 percent.

Consumer spending is closely watched because it accounts for about 70 percent of total economic activity. Spending has grown in the past six months but consumers remain cautious as they seek to rebuild savings battered by a steep decline in household wealth.

Americans saved 4.8 percent of their incomes in December, the department said, up from 4.5 percent the previous month. That's up sharply from the spring of 2008, when the savings rate fell below 1 percent.

Rising spending helped the economy grow at a rapid pace in last year's fourth quarter, the department said last week. Consumer spending increased by 2 percent in the October to December period, after a 2.8 percent increase in the third quarter.

That helped boost the nation's gross domestic product, the broadest measure of the economy's output, by 5.7 percent in the fourth quarter, the department said. It was the fastest growth in six years. The economy grew at a 2.2 percent rate in the third quarter after a record four straight quarters of decline.

Much of the growth was powered by increased production as companies stabilized their inventory stockpiles. Inventories were cut sharply in the recession as sales slowed. As firms rebuild their inventories, the economy should benefit. But once inventories are in line with sales, that support for the economy will disappear.

Many economists are concerned growth will likely sputter to a 3 percent pace or below in the current quarter once government stimulus and inventory restocking fades. Many economists expect the economy to grow at about a 2 percent pace this year.

That likely won't be fast enough to reduce the unemployment rate, which currently stands at 10 percent. Unemployment will likely rise for several more months, most economists say, and remain near 10 percent through the end of the year.

A price gauge tied to consumer spending edged up 0.1 percent in December, below the 0.3 percent pace in November. Excluding volatile food and energy costs, it ticked up 0.1 percent.

Over the past year, this price gauge excluding food and energy is up only 1.5 percent, a sign that inflation remains in check. That makes it easier for the Federal Reserve to keep a key interest rate at a record low of nearly zero percent, in an effort to stimulate the economy.

The Commerce Dept; BNP Paribas

Cash for Kitchen Clunkers?

Cash For Appliances Rebates Headed Your Way

If your refrigerator is about to die or that washing machine has seen better days, don't despair. A rebate toward a replacement could be just around the corner.

All 50 states, plus Washington, D.C., and five U.S. territories, are in various stages of unfurling their own energy-efficient appliance rebate programs thanks to some help from the federal government.

Funding comes from nearly $300 million of the American Recovery and Reinvestment Act (ARRA), often referred to as the federal stimulus package. The program aims to replace inefficient appliances with those rated Energy Star or better, stimulating sales for retailers and helping consumers save on their utility bills in the process.

Residents who live in Connecticut, Delaware, Indiana, Kansas, Maine, Oregon and Wisconsin already can get rebates. For instance, the Connecticut Cash for Appliances program offers mail-in rebates ranging from $50 to $500 on certain refrigerators, freezers, room air conditioners, clothes washers and central air conditioners.

While most states are deciding to open the program to all residents, Kansas decided to use its funding to extend an earlier program for low-income residents and the Oregon Cash for Appliances program also targeted lower-income families with instant rebates on heating systems.

Along with the seven states that have already started their programs, Hawaii, Illinois and Vermont have also begun initial stages for the own programs.

Four more states - Georgia, Michigan, New York and Rhode Island - will start up their programs this month, with Idaho, which plans to start its program either in February or March, possibly raising that number to five.

New York has even given the program its own branding, calling the New York Cash for Appliances program the "Great Appliance Swap Out" and targeting a start during the week of Presidents Day. Unlike other states, New York is also offering residents the chance to bundle their purchases to save even more, earning rebates up to $500, or $550 with documented recycling of old appliances, total by buying a refrigerator, dishwasher and clothes washer.

But things will really start getting into full swing when March arrives. A total of 11 states will roll out their programs in that month, followed by more than 20 in April. At least seven of those states have targeted the 40th anniversary of Earth Day (April 22) to start their programs.

The Kentucky Cash for Appliances program is one of those with an Earth Day start. It's also one of the most far-reaching programs, offering rebates on 17 different types of appliances, water heaters and heating/cooling systems.

By the end of April, Nebraska and Wyoming, which are both unsettled on either an April or May start, may be the only states without a Cash for Appliances program already under way.

Source: ARRA

Polling

U.S. News & World Report has been running a poll (as most online people do to keep readers interested, bloggers do it, too). We thought we'd post post the latest numbers as of early Tuesday morning. We weren't surprised.

Obama's polling numbers in many categories have been dropping like a lead zeppelin. Granted, polls can be unscientific, and somewhat contradictory of other polls. Some pollers have a tendency to cook the numbers. We believe these numbers can be trusted these since they are in line with other polls that have asked the same question. As you can see, 68.14% (the overwhelming majority thus far) state Obama hasn't met expectations, but then again their expectations were very low anyway. Well, sure. Despite all his charisma and talks of change and hope and cow-towing to the Liberals and so-called Progressives, bowing to unions and other out-dated special interests groups, he's still an inexperienced leader. And he gives all indications to being just another politician. But you already knew this, right?

Getting Older? You Should Need Less Sleep

Healthy people need less sleep as they age and are less sleepy during the day than healthy young adults, according to a new study in the journal Sleep.

Researchers from the University of Surrey found that, when spending 8 hours in bed at night, older people slept 20 minutes less than middle-aged people, who slept 23 minutes less than young adults.

Older people woke up more often, and the time spent in deep sleep decreased as people got older, according to a news release on the work.

Because older people were not more sleepy during the day, the researchers said it appears that less sleep is healthy as people age.

The study involved 110 healthy adults without sleep complaints. Twenty to 30 years old was considered young, 40 to 55 was considered middle-aged and those over 66 represented older adults.

According to the authors, the study has implications for the treatment of insomnia in older adults, who may be unaware of their reduced sleep need...

On that note, we'll say good night.

University of Surrey

Interpol: Passport Fraud Major Global Threat

The biggest travel threat facing the world now is passport fraud, according to the chief of Interpol -- the millions of stolen documents that could be used by terrorists or criminals to travel worldwide.

Airport body scanners, embraced by many in the aftermath of the attempted Christmas Day airplane bombing, are a misguided solution to travel threats, Interpol Secretary-General Ronald K. Noble told The Associated Press in an interview Thursday night.

"The greatest threat in the world is that last year there were 500 million, half a billion, international air arrivals worldwide where travel documents were not compared against Interpol databases," he said on the sidelines of the World Economic Forum, where 2,500 business and political leaders are gathered in this Alpine resort.

"Right now in our database we have over 11 million stolen or lost passports," he said. "These passports are being used, fraudulently altered and are being given to terrorists, war criminals, drug traffickers, human traffickers."

The solution, he said, is better intelligence, and better intelligence sharing, among countries.

"You don't know the motivation behind the person carrying the passport," he said. If you're a terrorist, he said, "Are you going to carry explosives that are going to be detected? No."

Many U.S. airports use the body-scanning machines and airports in other countries are adopting them after Nigerian Umar Farouk Abdulmutallab allegedly tried to detonate explosives hidden in his underwear Dec. 25 on the Detroit-bound flight.

But Noble questioned "the amount of money and resources that go into these (body-scanning) machines."

He cited a case two weeks ago in a Caribbean country where five people were arrested carrying European passports, but were caught after they were found to be carrying stolen passports -- one stolen back in 2001. The five had "definite links to crime, organized crime, human trafficking but no definite links to terrorism," he said, though he wouldn't name the country.

He said U.S. authorities are recognizing the threat of passport fraud -- in 2006, U.S. authorities scanned the Interpol database about 2,000 times, while last year they did so 78 million times. They came up with 4,000 people traveling on stolen or lost passports.

Intelligence experts have cast doubt on the usefulness of the so-called no-fly lists of suspects shared among airports worldwide, saying that criminals can change their names or make simple name spelling changes that render them untrackable.

"(The lists) are useful but I don't believe they are the be-all and end-all," Noble said, adding he was concerned about governments' efforts to expand them.

Noble, who has expanded Interpol's efforts to fight terrorism, cybercrime, corruption and maritime piracy in his nearly 10 years at the helm of international police agency Interpol, also had words of warning for people hoping to donate money to Haiti after its devastating earthquake.

"Be very careful," he said, citing several cases of fraudsters preying on donors and stealing their money via fake charity Web sites.

"Whenever there's a tragedy it seems to bring out the best in people and unfortunately the worst," he said. He said several U.S. sites have been taken down since the earthquake after they were found to represent no known charity.

Interpol has a team helping identify victims in Haiti, a daunting task with an estimated 200,000 dead. Another daunting task will be rebuilding Haiti's law enforcement.

Policing in Haiti "was a challenge before this happened," he said.

World Economic Forum, The AP, U.S. State Department

Lower Gasoline Prices Vary Widely Across US

The two-week drop in oil prices is paying off for drivers in some parts of the country more than others.

Retail gasoline prices have now fallen for 19 straight days to a national average of $2.669 per gallon. State averages are 10 to 15 cents lower a gallon in many parts of the Midwest and South, and locally prices may as low as $2.25 per gallon, said Tom Kloza of the Oil Price Information Service.

Different tax rates from state to state are part of the reason for a wide range of prices. Wholesale prices also can vary considerably throughout the country, with prices at $1.86 per gallon in Chicago and $2.01 per gallon in Los Angeles Monday afternoon, Kloza said.

Midwest fuel prices tend to be cheap in the winter because the weather usually leads to low demand, he said. Prices are also held down by gasoline blends that have cheaper components during the winter. Higher gas inventories than last year, low-cost ethanol and retailers operating either at thin or break-even margins also keep prices lower.

At the pump, a gallon of regular sold for $2.398 on Monday in the Kansas City, Mo., area and $2.433 in Tulsa, Okla. But the price was $2.706 in Boston and $2.633 in Phoenix, according to auto club AAA, Wright Express and OPIS.

Average retail prices in California, typically among the highest in the country, also have broken below $3 a gallon.

After falling 0.5 cents overnight, the national average was down 8.53 cents from the 15-month peak of $2.7543 a gallon reached on Jan. 14, according to AAA, Wright Express and OPIS.

Prices have dropped 4 cents a gallon in the past week, but are still a penny above levels of a month ago. Prices are 80.2 cents higher than a year ago.

Kloza said prices could fall another nickel or dime per gallon before hitting bottom for the winter.

The Energy Information Administration on Monday reported a similar drop in gasoline prices over the past week. It said prices fell 4.4 cents to a national average of $2.661 per gallon with the lowest price of $2.541 a gallon in the Gulf of Mexico region.

After trading lower since hitting a 15-month high last month, oil prices headed back toward $75 per barrel Monday.

Analysts blamed the jump on a variety of factors, including attacks on an oil pipeline in Nigeria, persistently cold weather in the Northeast and a stronger stock market.

From the Wall Street Journal; Oil Price Information Service; The Commerce Dept.

Formula Shows Why It's Hard To Cut Jobless Rate

The economy's 5.7 percent growth last quarter - the fastest pace since 2003 - was a step toward shrinking the nation's 10 percent unemployment rate.

There's just one problem: Growth would have to equal 5 percent for all of 2010 just to lower the average jobless rate for the year by 1 percentage point.

And economists don't think that's possible.

Most analysts say economic activity will slow to 2.5 percent or 3 percent growth for the current quarter as the benefits fade from government stimulus efforts and from companies drawing down less of their stockpiles.

That's why the Federal Reserve and outside economists think it will take until around the middle of the decade to lower the double-digit jobless rate to a more normal 5 or 6 percent.

Another way of looking at it: A net total of about 3 million jobs would have to be created this year to lower the average unemployment rate by 1 percentage point for 2010, economists estimate. Yet even optimists think the creation of 1 million net jobs is probably out of reach this year.

High unemployment poses a risk to the unfolding recovery because it leads consumers to spend less, keeping economic growth weak. A sharp pullback in spending might even push the economy back into recession. Joblessness also represents a danger for President Barack Obama's Democratic Party in this fall's congressional elections.

The National Association for Business Economics and the International Monetary Fund think gross domestic product will rise just under 3 percent for all of this year. GDP, the best gauge of economic activity, measures the value of all goods and services produced in the United States.

To get a sense of just how deep a dent the worst recession since the 1930s has made in the economy, consider this: The economy shrank 2.4 percent for all of 2009 -- the sharpest drop since 1946. It was also the first annual decline since 1991.

Mark Zandi, chief economist at Economy.com, and Bill Cheney, chief economist at John Hancock, agree that the economy would have to grow roughly 5 percent for all of 2010 just to ratchet down the average unemployment rate for the year by 1 percentage point -- to a still-high 9 percent.

Their math is based on Okun's law, named for economist Arthur Okun. In 1962, Okun produced a formula for the connection he saw between unemployment and economic activity.

Exactly how much GDP growth is needed to lower the unemployment rate for a given period varies. That's because the formula involves several factors besides GDP growth. It also considers, for example, businesses' productivity growth.

When the economy was recovering from the 2001 recession, it took two years to reduce the unemployment rate by nearly a full percentage point: It fell from 6 percent in 2003 to 5.1 percent in 2005. GDP growth averaged just over 3 percent.

Economists say the formula hasn't always held up perfectly in recent decades. Rather, it's relied upon as a rough rule of thumb for determining how much growth will be needed to lower unemployment.

But a near-textbook case occurred in 1976, when the economy expanded at a 5.4 percent pace. As Okun would have predicted, that growth drove down the unemployment rate by nearly a full percentage point: from 8.5 percent in 1975 to 7.7 percent

From information supplied by Economy.com, The Dept of Labor, Harvard University and National Association for Business Economics and the International Monetary Fund

360 In-Depth: Surviving The Storm

Steps Before, During & After The Storm

Introduction

Over the past many postings, we have considered the evidence of possible things to come. "The Quickening" series of reports is but one. We've also noted events via our In-Depth series as well (the FEMA camps, etc.) Other future events are just merely suspicions – as it is nearly impossible to tell how things will unfold – even with such things as Bible prophesy (Revelations) or even Nostradamus (December 1503 – July 1566).

While we will avoid getting too political in this forward (or for that matter in the report), politics is one of several elements that plays a central role in the storm – both for Americans and those worldwide. We have seen how governments can tighten its grip, and become oppressive in the course of human history. More and more world governments seem to be in the stages of doing that now (and not including the likes of Hitler, Stalin or Idi Amin). Governments are, typically and by sheer nature, paranoid. If they last too long in power without some sort of reckoning of balance (See Thomas Jefferson on The Sovereignty of the People from University of Virginia Library) and/or become large and bloated, or even over extend themselves, then they exist for their own sake and make strides to survive to that end, rather than serving the will of the people – government for the sake of government, rather than the governed. They become one large, lumbering behemoth.

Unlike some who proclaim total calamity and doomsday prophesies, we do not advocate revolution and violence, and certainly not anarchy, or the overthrow of any government. Instead, we advocate preparedness in the event government is in no longer in a position to serve, protect and defend. Hurricane Katrina is but one example, and not due to any lawmaker, cabinet official or even the president. It was a systematic breakdown by a lumbering government too large to see its own feet.

The concept of our form of government is not broken (the Republic known as the United States of America). The Constitution is a living, breathing document of her people; prone to change, always being interpreted, revised, modified to suit the ebb and flow of the prevailing political tide. The documents of our country are a rarity in the course of human history. But things have clearly gotten out of hand. The government and many others like it around the world are going broke – and quickly. Wild spending and corruption abound, selfish greed is the transaction of the day; the will of the people does not seem to be the preoccupying order of business, at least not the will of those who make up the backbone of a nation with their taxes, and the true spirit and values of this country inspired by our founding fathers. Many love their country, but distrust their government.

We, spawned by several entities within government, have been lulled into a sense that the government will take care of everything and everybody. While it is correct that governments being governments have massive resources, but, if you really believe government can and will save us all in hard times, then you will be in for a cold jolt of reality when times get even harder.

Choices and Dilemmas

To say dark times loom on the horizon would be an understatement. One can only see the difference between now and 30 years ago; one can only look at how events have transpired to make our world a very different and even more frightening place than ever before. We, as a nation, and much broader, we as a people in every city, town in every nation are clearly at a crossroads. Humanity is at a fork in the road – forget the Mayan calendar and 2012, forget the ambiguous sayings of Nostradamus or Sir Isaac Newton. There are as many interpretations for these subjects as there are days of the year. However, with topics like the economy, employment, the environment, wars and conflicts, diseases, food and water shortages, etc., it’s pretty obvious to us as to where this may be all headed. Perilous times, to be sure. Now it becomes a question of when and how.

Discernment of what and how may be coming down the road does not always include the when. Basic journalism teaches reporters to ask the four W’s: who, what, where, why and of course, how. The whens are never asked by those who learn by rote (a learning technique which avoids understanding of a subject and instead focuses on memorization).

It is impossible to know when there will be global shortage of the basic necessities of society; pin-pointing the break down of society, of culture, or least of all nations and governments is tricky. There are so many variables to add into the mix: terrorism, weather and climate catastrophes, yes, even earthquakes. But through talking with many, while remaining positive about the future, the consensus feel, think and believe a breakdown is looming on the horizon. Again, at the risk of sounding too political, just when we think we’ve seen just about enough of everything – thousands of foreclosures, tens of thousands stranded in a major city with no resources after a natural disaster, or millions unemployed while others get rewarded for bad behavior, and still disease and starvation on a massive scale – something breaks our consciousness in half again. And some of these incredible events happened here in America. We’ve touched on the reasons why these happened in past blogs, so we won’t harp on it.

Haiti: A Good Bad Example

We’ve seen how a country like Haiti, one of the poorest nations on earth, gets caught in a tailspin of circumstances. One tailspin begets several more. With many wealthy, industrialized nations on the brink of financial ruin, they are not so different from Haiti. All it takes is one hard knock between the eyes to reduce them to a third world country. It’s not so unthinkable for one to realize the problems we have trying to take care of our own in a non-emergency situation, let alone attending to a major disaster. There’s a point in time when these times occur, that individuals, family and groups together have to stop thinking in terms of thriving, but surviving. Once again, the WHEN is the unknown.

Haiti is not alone in this lack of readiness and the problems about getting help to the survivors make an urgent case for a new humanitarian business model that emphasises preparation instead of depending entirely on emergency aid flown in after the disaster hits.

Scenarios From Headlines

We have considered many scenarios while putting this piece together. And there are many ways for a society to come apart – an overwhelming attack of terrorism, the calamity of a natural disaster, a bankrupt government, or a collapsed economy. Any one of these or a combination thereof can contribute to the lack of services and utilities, infrastructure too broken to fix; and, so they can all have the same striking, end result.

Last month, we posted an in-depth piece about the possibility of a monster earthquake hitting the east and Midwest: infrastructure destroyed, hundreds dead, thousands homeless – think Haiti on American soil…and we’ve haven’t yet touched on the wild rumblings deep inside Yellowstone Park…

Worse Case Scenario #1: A magnitude 8.4 earthquake has rocked a major American city, one in which you live. What do you do? Think of yourself or your family in that situation. Early reports tell of massive casualties from collapsed buildings, the roads are blocked by debris, bridges and overpasses destroyed, no water from the tap, no power, mass chaos. The state’s Emergency Management protocol would kick-in and start coordinating with the local governments. Most likely the National Guard would get sent in accordance to FEMA and Homeland Security protocol. But, keep in mind, the numbers that re-enforce the Guard aren’t limitless. So they call out the Reserve – also not limitless. If the damage is so widespread and covers, say 8 states, or 10 states – surely personnel would be stretched thin. And we’ve yet to consider the problems concerning logistics. The same as or worse than the problem of logistics we’ve seen in Haiti or saw with New Orleans. Consider also that government and charitable assistance is about tapped out.

Another word about extra troops coming from a December 1, 2008 Washington Post report.

The U.S. military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe, according to Pentagon officials.

The long-planned shift in the Defense Department's role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said.

There are critics of the change, in the military and among civil liberties groups and libertarians who express concern that the new homeland emphasis threatens to strain the military and possibly undermine the Posse Comitatus Act, a 130-year-old federal law restricting the military's role in domestic law enforcement.

The Pentagon's plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, 2008 said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.

If funding continues, two additional teams will join nearly 80 smaller National Guard and reserve units made up of about 6,000 troops in supporting local and state officials nationwide. All would be trained to respond to a domestic chemical, biological, radiological, nuclear, or high-yield explosive attack, or CBRNE event, as the military calls it.Whether you're a conspiracy theorist and believe the military industrial complex will take over its citizens or you believe the military in all its experience won't be enough to save you, this is one scenario that will have to play out for real. Confidence and being over confident should never deter anyone from being prepared for when thing might fall apart at the seams.

Nine out of ten households don’t

have any kind of emergency bag.

Disaster experts say every home

(and car) should have some kind

of emergency kit.

You should also realize that there will be aftershocks, perhaps even more quakes. Remember, even though the planet is old, it is still moving. An earthquake at one fault or subduction zone can spur another one somewhere else. Unfortunately, accuracy is elusive. After decades of study, earthquake prediction is not an exact science, but scientists still keep trying.

So, have you thought to prepare for such a scenario?

We can almost see the email streaming in. Some would say, arm yourselves to the hilt, others would say pray, while others would say head for the hills and get out of dodge. Okay, great; at least you are thinking about the proposed scenario…

Arming yourself is fine. You have to protect yourself, your family, your belongings. Heaven knows, we’ve seen the worst in humanity when panic strikes in form of violence and looting, but we have also seen humanity at its best - from rescuers who don’t give up easily, and technology invented to save lives, to strangers nursing the injured and feeding the hungry. But guns only solve the security issue. You can’t chew on ammo to ward off hunger. And praying is great. We are advocates of lots of prayer, even when not in dire straights, but God gave you a brain to work things out. Heading for the hills may or may not be an option. If the roads are impassable, and say you do have supplies, can you carry them? Can the others keep up? If you live in places like Atlanta, Los Angeles, Chicago or the like, it would take hours upon hours to walk out of the metro area.

In the aftermath of an earthquake and you are indeed home or can get home – which is the first place many will go to if it’s still there – obviously check for damage: gas, water, structure. While natural gas is odorless, gas companies add odor so you can sniff it out. But be on the safe side. Get it cut off. If not, stay away for your own safety until you know that you’re not endangering yourself by entering.

Now that you have your homestead checked out and it is safe to return, check on supplies. If you know anything about disasters by now, you should be mindful of the fact that water is key. Availability of potable water will make or break any survival plans. People die from disasters not just from the injuries and lack of medical attention – they do not survive because of drinking dirty water or having no water at all. So, get several canteens. Try a camping supply store like REI or Whole Earth Provision Company. The U.S. Army version can be purchased at any Army/Navy Surplus.

So here’s the scoop on what you should have on hand. Keep an emergency bag, several in fact, for greater ease in stowing and carrying - some say keep it safe somewhere else other than inside your house in the event that you cannot get inside your home: perhaps a shed, underground storage. You can get these bags at any hardware store. Some like the tool bags, but backpacks offer greater carrier-ability. The sizes vary based on what and how much you put in them. Nine out of ten don’t have any kind of emergency bag. Disaster experts say every home (and car) should have some kind of emergency kit.

It’s In The Bag

Bag #1: The Med Bag – medicinal items - alcohol, peroxide, bandages; all the things you need to have on hand to cover everything from a bee sting to a laceration. Include incidentals like medical tape, gauze, scissors, various sizes of band-aids, anti-bacterial ointment, even tweezers and Q-tips®.

Bag #2: The Bag of Tricks – flashlights – various sizes from pin lights to Maglite®, weather radio/AM/FM/shortwave (to stay informed), duck tape, map of city/state with compass (a spare GPS), flares, waterproof matches/lighter, handheld citizens band radio (to stay in touch or call for help). Channel 19 is usually reserved for emergencies. And just as important: BATTERIES! There are radios that have a crank or use solar, so keep those in mind, too; H2O tester and purification tablets.

Bag #3: Food stuffs – peanut butter (high in protein), crackers, snacks to keep you going but will not spoil. Other food edibles can be stored in boxes along with bottled water.

Extra clothing is an optional bag, but you might at least consider having a couple of bags on stand by: extra tennis shoes, t-shirt, shorts/pants, windbreaker, hat, socks, maybe a blanket, a couple of hand towels and soap.

Incidentally, these are also good bags to have on hand in case of tornados, hurricanes, even a terrorist attack. The key is be packed, be prepared, be ready to move at a moments notice.

Worse Possible Scenarios - Continued

Worse Case Scenario #2: (We will combine some of these scenarios since what you need to think about only marginally varies based on the scenario.)

1. Government collapses.
2. People dead or dying from bio agent or other mass killing, an NBC perhaps, (nuclear, biological, chemical)
3. Financial markets tank on a global scale. The hard-earned money you have in your wallet, your bank account, the assets you have once thought were wise investments – worthless.

Just because the government collapses doesn’t necessarily mean the Anti-Christ is going to show up at your door campaigning for “King of the World.” We imagine (and hope) state and local governments would step up to the plate and insure law and order are being enforced. If not, expect a Wild West mentality to prevail.

After the Taliban was run out of Afghanistan by the U.S., that set up a vacuum. Aristotle’s long-held supposition goes, “Nature abhors a vacuum.” A prime example: warlords took over regions of the country, and ruled over those regions as warlords do. Like anywhere else, someone can’t just appoint themselves warlord without any objections – unless you have clout – either you have resources like food, water or medicine, and/or you have some firepower to match your appointment.

Naturally, avoiding the gangs and warlords will be a top priority for you if you’re on the go. If you can’t avoid them and do have to deal with them, remember, they will want what you have – sometimes by force and if they something you want, money will be no good. While these times might make you wish you learned Texas Holdem, you will have to barter – either in merchandise and supplies, or you have precious metal to trade. More on that with “The Color of Money…”

Nukes, Bios and Chems

If people are dead and dying from an NBC, chances are good you’re number might be up, too if you are in the same area. If you have managed to steer clear of the suffering and avoid becoming contaminated, then you still might have a chance of getting clear altogether. Take note of the weather. Anyone who lives in a certain area of the world for long, generally knows in what direction weather patterns move. In the U.S., weather moves from west to east, unless there is influence from the Gulf of Mexico, then weather takes on a north by northeast direction.

The point is, you can avoid fallout by staying informed of the contaminated area, but if you try to outrun it, especially by getting on the road, you and about 2 million + of your closest neighbors might be sitting in gridlock right along with you. We do not agree with several government assessments with regard to taping windows with duct tape and plastic based on the fact that it would take hours to shield windows and vents on any modest size home. However, this we leave to your discretion, since there are few alternatives if you decide to stay put.

If an epidemic (or worse, a pandemic) strikes – and there is reason to believe that because of our meddling with antibiotics, a pandemic is only a matter of time – the best you can do is protect yourself - proper hygiene, not withstanding. It may even be important to know where your food is coming from. Bacteria like salmonella is no stranger to our shores. Stay informed with the CDC website, the FAQs on the LYSOL® Germ Protection Center and GlobalSecurity.org.

We don’t want to get too over-involved in the particulars of the scenario as we mainly want to focus on what you can do in the event you (and your family) are left behind. We’ve given you the benefit of a doubt that you have already survived the initial onslaught.

The Color of Money Won’t Always Be Green

Touching again on part C: money is worthless and no government to back up the currency. Many have invested in gold as a hedge against rapid deflation of money and protection against winds of inflation, a recession, or worse, global depression. But think about this a moment. If communications are down, banks are closed or non-functional, infrastructure is in the tank, what good is investing in gold going to do for you, if you can’t collect on it? Do you think these brokerage or investment firms are going to forget about their own personal survival and think, “Before we try to head home to get food and water for our family, we need to FedEx some gold coins to Johnny in Omaha so he can barter with the warlords for bread.” Nope. It’s not happening. While that little certificate might be proof in normal circumstances that you own a chunk of the precious metal market, it’s worthless in the face of a catastrophe. You might as well have Confederate money.

In fact, the circumstances will be identical to the Southerners after the Civil War: they had currency and gold bonds, but they were as worthless as the paper it was printed on.

So what do you do? Well, had you thought ahead, you might have made your own insurance policy. Some have talked about hiding their own gold coins or other valuables somewhere, while others have tucked away sundries to barter with. Items like salt, sugar and the like are valuable commodities after a destructive economic shakedown. Some doomsday survival experts say stock up on non-parishibles like coffee and sugar - extra for you, extra to barter with. But who knows how really bad it might get. Some observers predict that a loaf of bread will be worth a half case of soup, or one Coca-Cola might be worth one troy ounce of gold. And apparently, according to numerous published reports, your bank or credit union's safety deposit boxes are not off limits to government confiscation. However, SNOPES.com, states this may be a growing urban legend. It's sounds like a cliche and slightly prehistoric, but maybe the mattress or digging a hole for a metal box in your back yard might the safe rule.

Observation, Research and Common Sense

This piece is based on research, reading, common sense and logic. It also involved trying to image how devastating a catastrophic breakdown of government, finance, law and services that could throw our culture and society off its delicate balance. If you think of the scenarios other locales in the world have gone through, the best you can do is educate yourself on their plight and imagine what you would do if in that situation.

The watch words are staying prepared with what you will need as well as knowing your surroundings - know what resources you can draw from within your immediate area. The citizens of New Orleans who choose to stay behind clearly weren’t prepared for Katrina. It is interesting to note that even though they lost power, had no food or water – they did have resources at their disposal to stay alive, but because they were not trained in survival skills or thought about researching how to survive a disaster before the storm hit, they were put in dire straights in thinking the government would save them - be it complacency, ignorance or maybe naivety. In fact, two facilities could have saved many of them: the library and the hospital.

The library was very much in tact after Katrina and would have been the most obvious place to look for information on what to do in their situation. Secondly, the hospitals were pretty much abandoned because of the evacuation. Hospitals have their own communication and power supply (and food/water) – many have large emergency generators and need not worry about losing power from the grid.

Barring a hurricane, flooding and the like, consider planning ahead, and not just packing some backpacks. Think of planning from right in your own backyard.

During World War II, there were shortages and rationing. Many planted Victory Gardens – corn, tomatoes, beans, squash, and many individuals developed neighborhood co-ops in order to take advantage of the resources so that all can benefit. Little did they know, that such activities can be more than just a casual benefit in our future. Local production of food maybe all that communities have if there is no currency or no food on the shelves because of the breakdown of distribution or damaged infrastructure.

Analysis

Even with the complete breakdown of society and culture, we believe that people will begin again to form communities. Humans are social creatures. And while there will be cities and towns that will be guarded to keep out visitors and intruder alike, elsewhere, there will be locations of safe haven, instances of compassion, development of new communities and neighborhoods reminiscent of those from the eighteenth and nineteenth centuries.

There are several links provided for you throughout this report; we have also listed them at the end. We encourage you to read more about what you can do to prepare, be it online or your local library. Even if you choose not to follow these suggestions, if it motivates you to form a plan and make preparations, then this report has served a viable role.

LINKS: Browse, Download, Print

The American Red Cross - Preparing for Common Disasters: a set of fact sheets

University of Illinois - Disaster Resources

FEMA - Plan Ahead

Ready.Gov - Plan, Prepare, Stay Informed

360 News Briefs

Obama Unveils $3.83T Budget With Massive Deficits

President Obama sent the U.S. Congress a $3.83 trillion budget on Monday that would pour more money into the fight against high unemployment, boost taxes on the wealthy and freeze spending for a wide swath of government programs.

The deficit for this year would surge to a record-breaking $1.56 trillion, topping last year's then unprecedented $1.41 trillion gap. The deficit would remain above $1 trillion in 2011, although the president proposed to institute a three-year budget freeze on a variety of programs outside of the military and homeland security as well as increasing taxes on energy producers and families making more than $250,000.

Echoing the pledge in his State of the Union address to make job creation his top priority, Obama put forward a budget that included a $100 billion jobs measure that would provide tax breaks to encourage businesses to boost hiring as well as increased government spending on infrastructure and energy projects. He called for fast congressional action to speed relief to millions left unemployed in the worst recession since the 1930s.

After a protracted battle on health care dominated his first year in office and led to a string of Democratic election defeats, the administration hopes its new budget will convince Americans the president is focused on fixing the economy.

Storms Expected In West, North

Snowy weather was forecast to return to the Northern Plains on Monday, while the West Coast could get hit with another Pacific Storm.

A low pressure system that tracked over the Northern Rockies was expected to continue pushing east into the Plains. The system brought light snow to the Cascades and Northern Rockies over the weekend and could trigger up to three new inches of snow Monday over the Northern and Central Plains.

Flow around the system could bring warmer air in from the South and allow for more comfortable temperatures, with the Northern Plains expected to return to the 30s. The Southern Plains were expected to remain near 50. The brutal weekend storm that left several people dead in the Southeast has moved out to sea, giving residents a chance to dig out from a thick layer of snow.

North Korean Weapons Mystery Continues

Thailand said Monday that an aircraft loaded with North Korean weapons was flying to Iran when it was intercepted in December but the ultimate destination of the arms is still not known.

Thai authorities seized the Ilyushin Il-76 cargo plane and its five-man crew as it landed to refuel on a flight from Pyongyang Dec. 12. Found on board were 35 tons of weapons.

A Thai government report to the U.N. Security Council, leaked to reporters in New York over the weekend, said the aircraft, which had violated U.N. sanctions against North Korea, was bound for Tehran's Mahrabad Airport.

But Thai government spokesman Panitan Wattanayarkorn said Monday that "to say that the weapons are going to Iran, that might be inexact."

US Military To Resume Haiti Medical Flights

The U.S. military is scheduled to resume airlifts that brought hundreds of Haitian earthquake victims to hospitals in the United States before the flights were suspended last week.

The White House said military planes were on track to resume ferrying critically injured patients by early Monday, five days after the flights were halted. Since then, at least a handful of patients have arrived from Haiti on civilian aircraft, which aid groups say can be expensive.

White House spokesman Tommy Vietor said in a statement late Sunday that the White House received assurances that additional medical capacity exists in the U.S. and among its international partners for the patients.

From: The AP; FOX News; NOAA; Wall Street Journal Report.