Episode-1007- Listener Calls 10-26-12 — 35 Comments

  1. Jack is right about HOA. We live in WA out in the rural area. We bought a piece of property in CA and it is in a neighborhood of HOA. Our WA property doesn’t have HOA, so we didn’t know anything about that and got into it blindly.

    HOA is another restriction besides your county, and state government. It is comprised of a lot of retired people who has nothing better to do. Who came up with rules and laws that is completely ridiculous. You cannot fart there and not get a ticket. I am serious. They tell you how many cars you can park in front of your driveway. What color your fence can be…etc. The only thing that is good with HOA is, there is a club house for you to go and exercise. You paid approximately $400 annually for that privilege.

    We have a community here in WA without HOA. Our neighbors help each other and watch out for each other. We need to do more, but basically without HOA and their restrictions; people get together and help each other anyway.

    Trust Jack, there’s lots of places without HOA. We asked the question later. Dumb us. We did not know. Unless you wish to pay more to government (or have more restrictions), you want to listen to Jack.

    • @karen

      I agree and will go further and tell Jack in his own language, Jack you are full of shit when you say you are not smart. You say you can’t learn calculus because you don’t care, I say that doesn’t mean you are not smart.

      My guess is if someone said, learn to pass a calculus test and I will pay you 10 million dollars, about a month from now you would be able to discuss calc with a math major. It isn’t you can’t because you don’t care, it is you won’t because you don’t care and man that is smart in and of itself.

      Yesterday was a great example. You had that young guy on, an Economics Major from some big school. Don’t get me wrong I do not mean to insult that guy he was really smart and a great guest. Yet you sounded like a tenured professor talking to a gifted student instead of a host interviewing a guest.

      So here is this kid getting ready to go to grad school, with a subject he did a thesis on and old hick red neck Jack is just schooling him (very politely) left and right. You were not even really schooling him you were making his points far more clearly then he could.

      See that is mastery, I heard you say one time, “experts make the complex simple” in your business podcast, that is what you do and you are in my view an expert teacher. I love that you’re humble about it though, I don’t think I could stand you if you were not honestly. A guy that thinks he knows it all is a pain in the ass, a guy that thinks it and can damn well prove it is unbearable.

      Karen is right we are all fortunate to have you as a teacher and a guide. I know my life is better for it. That fact that you know you didn’t get there alone is what makes you not just a great teacher but a great guy.

      Even when you go off from time to time on something I don’t agree with I just shrug and wonder how many of us could handle a few dozen emails a day telling us we are doing everything wrong while busting our ass so hard to help others. I figure you are owed the ability to “snap a gasket” as you put it from time to time. Anyone who doesn’t like it should spend a week answering your emails. BTW today was one of those times where when you snapped a bit, I totally agreed, made my day thanks.

      Thanks Man,


  2. Jack,

    I have one twist on the listener question relating to defaulting on debt when the collapse occurs. For those who have enough capital to pay their debts but choose not to pay them off at this time, there may be a strategic advantage. If you convert part of your portfolio to physical silver, and your primary debt instruments are fixed interest mortgages, if hyperinflation occurs, you could choose to pay off that note by cashing out physical silver. The concept is that the principal amount on your fixed rate mortgage is measured in dollars, with no inflation adjustment. As silver goes up in value, as measured in dollars, it becomes easier and easier to pay off the principal on outstanding fixed rate mortgages.

    • Your twist is nonsense I don’t mean to be a dick but IF is the biggest bullshit word in the English language. Take the Mastercard and buy lotto tickets then! You don’t know when shit is going to happen or how exactly it will and neither do I. You could see silver drop to 12 bucks tomorrow, if it does I will buy it heavy but if you are holding it and it stays there for 2 years while the economy stagflates you are totally completely screwed.

      Silver and gold are long term insurance because we know what the eventual future is, even if they pull off a miracle you still know inflation is the plan. What you propose takes a rock solid insurance product and converts into a short term option with a serious consequence if you bet the time line wrong.

      There is no way to make a case for it, it is perhaps the stupidest idea in the history of prepping.

    • What you’re describing wasn’t the question though. The caller wasn’t asking about fixed rate mortgages, he was talking about intentionally running up the MasterCard and having no intention to ever pay it. What you are describing is sort of Chris Duane’s strategy: don’t run up your credit cards, but buy a house cheap now at 3.5%, and once (if – hahaha) hyperinflation occurs, walk into the bank and pay off your $200k mortgage with a gold eagle. Entirely different scenario than running up the credit cards, because you need someplace to live anyway, and 3.5% is dirt cheap.

  3. Wartime Farm is a fantastic show! Highly recommend it. Shorty the little pig is so dang cute. Course he looks tasty too. It is also a very eyeopening show.

    As far as using railroad ties around the garden. I used them a few yrs back. Never had a problem with stuff growing. They were used on one side of the garden as a retaining wall. Also put gravel and plastic on the soil side. Loved it. Provided a nice place to sit too.

    However as the pest control guy said carpenter ants will love it there. You have built a luxury condo for them. Wish I had listened. We ended up with sever ant damage on our house. Upon taking the ties out we also found termites. Termites are rare here. Apparently both ant and termites loved the ties.

    These ties were use and reclaimed from neighbors so they were over 20 yrs old easy. They sat on our property for 3-4 yrs before we used them. Now I will never stack ANY type of wood closer than 30 feet from the house. Never will I use bark or wood mulch close to the house and all wood decks are on their way out. Not saying anyone else would have a problem this was just our experience and a possible heads up.

  4. Jack,

    I have to disagree with you regarding intelligence. You said your IQ came from photographic or audiographic memory, and that might be the case. I believe the IQ score might be a little bit misleading also.

    The problem with IQ is not the memory, it’s the recall. Many people retain the information but when asked about the info, cannot recall. Where do you stash your ??? Cannot remember. How do you create so and so? Been too long, can’t remember. Social scientists have been able to take people under hypnosis and make them remember things that happened in their past; I think they said back to age 4.

    Imagine your memory as Google Data Center. If you don’t know where you stash your information, you won’t be able to find it in your memory bank.

    Several years ago, there’s several scientists (I believe in Canada) who can wipe away people’s memory and made them have amnesia about who they are. Not sure if that is a permanent amnesia, or if it is just a temporary thing.

    Jack, I think you have extraordinary memory recall and also a great gift.

    Thanks for being a teacher.

  5. I would like to chime in on the call about VWs and TDI.

    You really need to base your choice to buy a TDI vs gas on how many miles per year you drive. If you only drive 9k miles per year, don’t buy a TDI. Look at a TSI gas turbo. They get ~35mpg and you get a break on fuel price AND maintenance.

    Here are some things that people don’t consider when they buy a TDI.(sadly MANY people that buy the newer TDIs should not)
    1) Your fuel cost is higher per gallon
    2) Your maintenance costs are higher. Every 20k you need to replace the fuel filter. You will have a timing belt to replace at ~120k. You have to add urea on the newer TDI.

    People that are on the TDI bandwagon generally don’t consider anything but MPG and the color of their car. This is one reason I have drained more gas from diesel tanks in the past 2 years than I did the 8 years before that.

    Now all that being said, I LOVE LOVE LOVE the TDI. I think the ALH(1999-2003) diesel engine is one of the best out there. The Pump Duse(2004-2007ish the one Jack has) is a really great engine too. The Common Rail(CR the newest TDI engine) has such great power and MPG. There were some issues with the high pressure fuel pump. I think the newest 2011+ are fine. Fuel quality in that engine is crucial!

    Not sure if that helps or hurts more LOL! If you have any VW specific questions I would be more than happy to help.

    Oh, if fuel becomes in short supply, I think that diesel is a great option.

  6. Wartime farm is indeed a great show. They also did shows in other time periods in the same vein, starting with Tales from the Green Valley and continuing through to Victorian Farm and Edwardian Farm. I’d also suggest another semi-related BBC Two show by the name of “The Victorian Kitchen Garden” which was put out in the 80s and so is free of the reality tv taint and I found to be more informational. Couldn’t recommend any of them highly enough though.

    • Funny how it happens, but I have been watching the “Victorian Kitchen Garden” and “Wartime Farm” the past several weeks on youtube. They are so interesting. Another I have just started watching is “Victorian Garden” in which they show what and how they grew veggies and fruit in victorian times. Each month of the year is a separate show.
      Those Brits- if they were not around, we would have to invent them.

  7. On the wild boar topic of what you feed them. I don’t have any experience with wild boars and what they eat. But I do practice falconry and feeding birds of prey anything other than what they eat in the wild is catastrophic on their health. It has to be a varied diet of what they would naturally hunt. I’m guessing it would be the same with wild boars or any wild animal for that matter. There are some supplements you can feed them sparingly.

  8. Sorry to but in on an unrelated topic…can someone tell me what recent episode has Jack saying “Not every citizen a soldier, but every citizen a sentinel.” or something to that effect.

  9. Jackie mentioned hydrogen and it does have some applications
    . I see it may not be taken is as a catalyst with other fuels. apparently you can you trace amounts of this so that you can run things like how are things like kerosene another like fuels
    the idea is to be running other fuels at levels below the combustion limit ratios.

    with the injection of small amount of hydrogen that will trigger the bus in of the other materials
    love the normal combustion

    • sorry for the gibberish with my voice to text conversion. I’m using an Android so I apologize. what I wanted to say is that small amounts of hydrogens will help you run other fuels not normally usable.

      • Don’t sweat it! And you first point on H is quite valid, something we need to look deeper into for sure, thanks for redirecting my perspective yet again.

  10. To the serviceman who asked how to invest I would add buying some silver or gold. You could have your parents hold it. Jack has said that having a percentage of your savings in metals is a good idea. This could help counter act inflation.

  11. [flame suit on] I guess I’ll register a positive opinion on HOA’s. Back when we lived in a town house we had an HOA. It had the usual stupid stuff. Additionally all the service providers (landscape, mgt company, etc.) were cronies of the builder. The builder actually starts the HOA then hands it over to the owners when the site is half full. All the service providers sucked and did not do their jobs well. My wife ran for and won the President position. She and a like minded board striped out all the stupid shit. Then she fired all the service providers, interviewed, and hired new ones.

    We now live in the country but we still own the town house under the HOA. Every few years she runs for and wins the presidency again (even though we don’t live there) and un does any stupid shit that was added over the years.

    With the range of stupid shit that city people can do (for some reason much of it involving large amounts of dog shit…) I don’t think I would own a city property without an HOA. I would never own any type of common wall structure without the protection of an HOA.

    Having said all that I would never buy a place in the country that has and HOA. there is just no reason whit out very close proximity or common walls.

    And I have no patience for people who bitch about their HOA and have never run for a position on the board.

    • Interesting post. It borders onto something I was thinking about. I am currently in an HOA – it’s not horrible, I’ve seen worse, but I do agree with Jack’s assessment and I would not buy into an HOA again.

      That being said, here I am. I have kicked around the idea of running for the board with the specific intention of reducing and/or eliminating as much of the bullshit rules as possible. In the extreme, I could even imagine resolving to almost disband the HOA all together, or convert it into something like just a common area maintenance organization.

      Your story gives me hope that something like that is possible, even though it probably is a long shot. Thanks for sharing.

      • That is what I did. Our HOA was REALLY stupid a few years back. We got letter after letter because our grass was not green enough. All while we were under a county wide water band. So I choose NOT to get a $50 fine.

        After a number of letters, we got the “come to a hearing or be fined $100 a day” nasty-gram. After spending a few hours throttling these people, we decided we would NEVER buy in an HOA again. Not only that, I would be the biggest p.i.t.a that they could imagine.

        Fast forward a few years. All the people that were on the board had been fired. The new pres is a great guy, but I still have no trust in the idea. I joined up as the 5th member. I would not have a majority vote, but I would at least be able to talk some reason in to the board.

        Now they only enforce things like, don’t park in your yard, and pay your dues.

        I in no way thing an HOA is a good thing. I think it is one of the reasons that no one knows their neighbors. It has help destroy the average community.

        When I was a kid we didn’t have that crap. Everyone knew everyone, even if they didn’t like each other. Oddly, everyone also cut their grass and kept the house up.

        We are planning a move right now. The current pres is on the way out, and I am scared as to who will take over.

  12. I have some experience with debt in a collapse and I would highly recommend against it. I used to live in the Eastern Europe in the early nineties after the fall of The Berlin Wall. I was a witness of two or maybe three monetary reforms, in one of which money were exchanged 1000:1. Governments were changing every 6 months on average. There were a lot of ex-military, ex-police and ex-secret service for hire. They will come and “collect”the debt through extortion, kidnapping of relative or worse. Officially they weren’t affiliated to the bank. You got the picture.
    I am positive Fernando “FerFAL” Aguirre mentioned something similar going on in Argentina too.

    This is not a wise idea!

    Excuse my English, it is not my first language.

  13. I’ve never been part of f HOA but I don’t understand them and I’m repulsed by the idea. I’ve know a few people over the years who have had them and they sound as bad as I imagine. What’s the point of owning something that someone else has so much control over? Do you really own it. I agree with Jack 100% on this one. I think if I had to put up with a bunch of busy bodies taking notes when I put the trash out 2 hours too early, then it wouldn’t be long before I’d end up on the evening news. I think it also discourages people from talking to each other and getting to know each other as neighbors. It sets up a different relationship from the get go.

  14. HOA “agents” looked over the fence into my backyard and others on a regular basis, they wrote warnings for weeds in the cracks of your driveway or yard, for bushes not being trimmed.

    They even attempted to place a lien on the house if you were late on HOA fees.

    I’m sorry but there is just no justification for HOA’s in any residence be it rural or country. Let free will happen, and let the people govern their own neighborhoods.

    HOA’s are violations of privacy and liberty.

  15. Have not listened yet but about “wartime farm”
    Jack I believe that during WW2 the British government had more control and influence on the British people then in any other time period, this most have been a good thing for that time , i think. Reading WW2 histories it is almost unbelievable that my country was able to survive
    Do you agree?
    How times have changed our governments seem to have squandered any “victory” they are now corrupt. immoral shallow and inept . Having listened to your show since the begriming, my now largely libertarian viewpoint does not fit easily with our WW2 history which otherwise was our greatest hour.
    Mark the Limey….

  16. A good way to think about laptop battery life is that is has a limited number of charges. I run my laptop without the battery during normal use but keep it with the charger so it’s always there when needed. The closer you get toward the end of the battery’s life, the less power they output with each charge.

  17. Another comment on the run up the credit cards with the intention to never pay them once TSHTF…

    I’ve seen the wife’s deadbeat ex-husband go through bankruptcy twice now, and saw his paperwork because my wife was a creditor. He had to declare everything and I mean everything down to 3 goldfish valued at 10 cents each on his paperwork under penalty of felony perjury.

    So if you think you’re going to go put $25k on the MasterCard and go B/K and have no consequences & get to keep all the stuff, first of all you’re stupid: that leaves a huge electronic paper trail. They’ll know the shit you bought.

    Second, even if you’re somewhat smarter and take it all as cash advances and then buy your shit with cash, how do you explain where the cash went? I’m in Nevada, and everyone here is well aware of the old “oh I took it down to the casino and put it all on the Yankees – sheesh, sucks to be me”. Well, they can track that too (casinos have video surveillance, remember?), or the judge may well say well too bad for you, that’s your fault, not MasterCard’s fault – you still owe it.

    Third, even if you do get away with it, Uncle Shame is going to view that $25k forgiven as regular income tax, so you’re going to owe at least 25% on it, and they don’t forgive taxes in bankruptcy.

    Could this ever work? Yeah, I suppose so, but you’re highly betting on WROL, and not only that, but without-goons-for-hire-coming-to-collecting, as mitko posted above. Besides, if you’re WROL who are you going to go bankrupt with? By definition, if there’s a government to grant you bankruptcy, there’s also a government with the power to tax you on the amount forgiven and/or throw you in a federal rape cage for perjury.

    This is just a bad idea all around. I loved Jack’s suggestion of telling your buddy to get an extra line of credit & buy stuff for you. 🙂

    • I guess one clarification – that amount forgiven may or may not be taxable depending how you structure it. But think about this: has the trend over the last 20 years been for bankruptcy to be more or less generous? Less. Do you think Uncle Shame will be grabbing for more or less taxes from us over the next 20 years? More. So even if you could get away with it today, seems to me the trend is for EROL and for more boot on your throat, not less. And being in debt and unable to pay is just the excuse they’ll need to crack down on you. As Jack said, wage garnishment for life. Or maybe the return of debtor’s prison, or they’ll conscript you or your kids as government laborers until the debt is paid off. Who knows how bad it could get & what they might do. Why take this stupid gamble & give them an excuse?

  18. Jack, please allow me to offer my perspective upon your reaction to the BBC series Wartime Farm, about British farming during WWII.

    You very aptly said you feel American reality TV pales in comparison to the offerings of British TV production. And in the arenas of artistry and hard researching of data, I totally agree. But sadly there are two despicable business realities which drive the current priorities of how American reality TV gets produced. Specifically, reality TV is a way to save frigging gadzooks of money over and above the expenses for producing a traditional drama series such as CSI, or a traditional comedy series such as Two and a Half Men, or even a traditional cartoon series such as The Family Guy. And they save money in two ways.

    First, they save money because a) there are no scriptwriters (at least not Guild scriptwriters who get Guild minimums, just 21-year-old interns fresh out of film school who willingly work for pennies by walking around with hand-held cameras and help to spontaneously suggest fake lines of dialogue for the reality show subjects to spout from their mouths), and b) no actors (not Guild actors who once again would get Guild minimums, just laymen from the ranks of every day citizenry who would gladly appear on such shows for no pay at all). Reality TV is a way to “write” without writers, and to get actors who are not actors, and thus have to pay zero union wages to fill up the same amount of air-time.

    Second, in addition to such shows never having to pay union minimums, they also usually have (with rare exceptions) almost no makeup departments, no costume departments, no art directors, no property departments, etc. Reality TV is a fly-by-the-seat-of-your-pants undertaking where a couple of interns stand there with steady-cams and follow the ridiculous exploits of eager laymen who run around feeling important because they were able to land their 15 minutes of fame by being cast (usually for free) on this ridiculous TV show.

    So suppose two different production companies come to NBC and each pitch two different shows, one prodco pitches a CSI-look-alike, and the other prodco pitches an Amazing Race-look-alike. And on paper, during their respective closed-door pitch sessions, the first prodco offers a tentative budget whereby the production costs for completing one hour of the CSI-look-alike will cost the network about $1.2 million per episode, but the other prodco offers a tentative budget wherein production costs for completing one hour of the Amazing Race-look-alike will cost a mere $80,000 per episode, guess which show the network will prefer to green-light?

    In today’s 24-hour broadcast environment, trying to fill all 24 hours all 7 days a week is a difficult thing to do and still land paying sponsors for your time slots. In the face of ever-shrinking audiences who are being lured away from traditional broadcast TV (and even cable TV) by the more exciting offerings of the internet, the networks cannot justify increasing the prices of their paid 30-second commercial timeslots. Instead the bean-counters urge them to decrease the costs of actual production.

    Thus the unending cesspool of mindless drivel that America’s vast wasteland of reality TV has become.

    As for our friends across the Pond, their commercial TV companies also face the same business realities of having to satisfy sponsors and yet keep costs down. So their airwaves likewise suffer from some really bad reality TV offerings. But we Americans rarely get exposed to the super-crappy British stuff getting produced. We instead pretty much only see the Best of the Best of the Best from their broadcast output. We pretty much see almost only the stuff produced by the BBC. And please remember, the BBC is NOT a commercial operation, they are actually a government-subsidized outlet for fostering the best of the British people in the fields of art and education through the mediums of cinema and video. They are the British equivalent of America’s PBS. We Americans rarely get to see the stuff produced by the commercially run and profit-driven UK broadcast companies which are known as Channel 3, Channel 4, and Channel 5.

  19. @metaforge,
    That aint never gonna happen HA!

    I will say that many people use the hell out of the HOA. The emails that come through are absolutely ridiculous. Things like, “they got paint on my fence, their grass is not the right green, I didn’t sign off on their shed” and on and on and on and on and on. There are times where I would rather blow my brains out than read another bitchy email.

    I agree that the HOA police are out in force, but they chickenshit nosy neighbor is as much to blame.