Alaska DNR Land Sale

Undeveloped parcels are available all over Alaska. DNR just released the Spring 2011 Alaska State Land Offering. Here's your chance to snag some real estate, and some of it (like the parcels over by Glenallen) aren't taxed. I am of the opinion that real estate, particularly that which is not subject to property tax, is a good way to store your wealth. In any case, it's a far better vehicle than any bank account.

The view from Parcel #1208, and 8.5 acre lot with lake frontage.

The foundational priniciple of self-reliance

A lot of talk floats around the blogosphere about preparation for the looming economic and (God forbid) political collapse. Most of that talk focuses on trading your worthless paper dollars for something of value, particularly gold and/or silver. A lot of it is geared toward resistance to tyranny in various forms. A lot of people are talking about going "off-grid." My wife and I started working ten years ago on the path to self-reliance.

I should be clear in my definition of self-reliance: nobody can be completely self-reliant, unless they're willing to live an extremely bare-bones existence. As much as I hate to sound like the Abominable Pantsuit, it does "take a village" to live any kind of life higher in quality than that of a caveman's existence. Some specialization is a good thing: I'm good at making wine, and my neighbor is a gifted mechanic... that's just begging for future barter.

With that realization in mind, we still sought to minimize our reliance on other people as much as possible; furthermore, we are determined to limit our reliance on the System in favor of relying on trusted friends and neighbors. This requires the long-term development of a trusted network of like-minded people, folks you are reasonably certain will be there for you when it hits the fan. This is not something you can come up with overnight; trust must be earned. This, however, is another topic, perhaps for another time.

The subject of this post is self-reliance. I don't have a lot of deep thoughts on the subject, but I've spent ten years working on it, and I want to share what we believe is the foundational principle of self-reliance: you cannot be self-reliant if you are a slave. This has many practical corollaries, and here are a few:

Never Get Between a Frenchman and his Chocolate

If you owned any cocoa, hopefully you sold already, you evil war profiteer: Ivory Coast dictator captured; cocoa plunges.

Now maybe these fellows can get back to earning a living,
and I can afford a cup of hot chocolate again. Vive le France!

Alaska Mining Stocks

My kids recently expressed their frustration that we don't own any shares of mines in Alaska. My single gold mining stock hasn't performed nearly as well as my silver mining stocks, so I've been looking to diversify. Here's a list of some publicly-traded Alaska miners:

Teck (TCK - Red Dog)
Barrick Gold Corporation (ABX - Donlin Creek)
Novagold Resources (NG - Donlin Creek, Rock Creek)
Anglo American (AAUKY - Pebble)
Northern Dynasty Minerals (NAK - Pebble)
Hecla Mining Company (HL - Greens Creek)
Kinross (KGC - Fort Knox)
Sumitomo Metal Mining Co (STMNF - Pogo)
Fire River Gold (FVGCF - Nixon Fork)
Niblack Mineral Development (NIBMF - Niblack)
Heatherdale Resources (HTRRF - Niblack)
Coeur d’Alene Mines Corporation (CDE - Kensington)
Freegold Ventures (FGOVF - three projects in Alaska)
BHP Billiton (BHP - Western Arctic coal)
Rubicon Minerals (RBY - exploration in Alaska)
Kiska Metals (KSKTF - three projects in Alaska)
International Tower Hill Mines (THM - Livengood project)
Tri-Valley Corporation (TIV - two projects in Alaska)
Full Metal Minerals (FLMTF- seven or more projects in Alaska)

I'll try to post a brief profile of each of these as I decide which one(s) to invest in.

Disclosure: I do not directly own shares of any of the stocks mentioned, but plan to purchase one or more of them within the next two months. I do own Rubicon and International Tower Hill indirectly through the Market Vectors Junior Miners ETF (GDXJ), but have no plans to sell in the foreseeable future.

Update (4/11/11): Added Full Metal Minerals, who were doing all the work at Lucky Shot in Hatcher Pass, a few miles from my house.
Update (5/16/11): The ticker symbol for Full Metal Minerals was incorrect.

Silver not done yet

Today, the price of silver in worthless paper dollars is sitting at $40.91, about a 4% gain over yesterday's London PM fix. Silver is now up 44% since February 1. Here's today's chart, courtesy of Kitco:

Silver mining stocks are running up as well, particularly the junior stocks. Since February 1, Revett Minerals is up 40%, US Silver is up 53%, Canadian Zinc is now up 73%, and a new one I've recently added to my portfolio, Tinka Resources, is up 129%. If one had invested $5000 on February 1 in a balanced portfolio of silver and these four stocks, it would now be worth $8390, a 68% growth. Try getting a return like that in any instrument your bank offers. As I've said before, if you're not getting a 10% return, you're losing to inflation.

Gold/Silver Ratio, etc

Since March 7, 2011, the ratio between the prices of gold and silver has been below 41 every trading day but for three days. The ratio at current prices is at the lowest it's been all year (38.48). This means it takes a little less than 39 ounces of silver to purchase an ounce of gold.

On June 7, 2010, nine months ago, the ratio was 70. In other words, if you'd traded 2 ounces of gold then, it would have bought 140 ounces of silver. Today, you could trade that silver back into roughly 3.5 ounces of gold, a 75% gain in only 9 months. Zero leverage in two investments considered to be sterile, producing a true 75% return... after all, you started with only 2 1-ounce coins... now, you have 3 1-ounce coins and a half-ounce coin.

Chicks Ahoy

We have nineteen chicks hatched thus far. Five more are pecking away at their shells. One didn't make it. We just pulled the hatched chicks from the incubator and moved them into the brooder. My sister's eggs are the slowest-hatching. Only one of her eight has hatched, and three are currently trying to get out of their shells.

The black copper marans are easy to sex when they're only a couple days old. The hens have a distinct spot on top of the head, while the roos don't. Of the black copper maran chicks, we have three roos and four hens.

The rest of the chicks are all half black copper maran and half something else... an assortment of hens other breeds produced the eggs: cuckoo maran, welsummers, australorps, buff orpington, and one high-strung leghorn. These should all be decent egg-producers in a few months.

Hatchery update

We have at least four chicks pecking their way out of their shells now, and one black copper maran that has completely hatched. I haven't been this jazzed since the birth of our youngest child. My oldest daughter is giddy, and can't stop giggling. Definitely worth doing... if you haven't hatched out chicks, do it!

Hatchery update

The chicks have been incubating now for 9 full days. The kids and I decided to pull the infertile eggs and those with chicks that have died. We found 9 that were infertile, and 3 that had died. I threw away most of them, but kept one that had a 3-4 day old embryo for an impromptu science class some time later this week.

Of the remaining eggs, the majority had very obvious live chicks inside, swimming around, doing somersaults, etc. We really can't tell if any of my wife's eggs are doing well or not; the shell is too dark. Seven of my sister's eggs have live chicks in them; we couldn't tell with her eighth.

We're half way through the process now. It's strange to think that in just two weeks, we'll have a flock of chicks that were just eggs two weeks ago.

My entrepreneurial kids

My wife and I were talking the other night about getting new chickens this year. We usually buy chicks from the local hatchery and raise them from a few days old. However, last year, we had quite a bad experience with the owner of the hatchery, and we've been talking about how to get new chicks some other way this year. It suddenly occurred to us that, since we have a rooster and a bunch of hens, we almost certainly have some fertile eggs; we could just hatch our own. It was quite an eye-opener to realize that we can actually produce not just eggs, but our own chickens. So, I started looking at incubators, and it turns out there are a lot of choices out there, but they're all expensive, and a lot of them are relatively low quality styrofoam deals. If we were going to strike out on our own, we didn't necessarily want it to be a more costly endeavor than simply patronizing the local hatchery.

It turns out that my next door neighbors had acquired an incubator from a friend of theirs, and had never used it. I went over one night and the husband and I dug it out and fired it up and all seemed to be in order. I brought it home and went about calibrating the thermostat and working out how to get the humidity high enough, which is quite a chore here; the wind blows a lot here, which makes for a very dry climate during the winter. Anyway, the incubator looks like some sort of kit built from extension service plans (similar concept to the wooden one here), and appears to be as much as 20-30 years old; I didn't have high hopes, but I persevered, and sure enough, we were able to get the temperature and humidity in the correct ranges for incubating eggs.

45 eggs ready to go into the incubator

By this time, the two oldest kids had hatched (get it?) a business plan: they would purchase fertile eggs, incubate them, then sell the chicks. We have a black copper maran rooster, so all of our hatched chicks would be half black copper maran. My wife got the notion that she wanted some pure black copper marans, so she started poking around on craigslist and found a family that sells fertilized eggs, both pure black copper maran, and black copper maran cross. She bought eight black copper maran eggs, and the kids bought a dozen more crossbreed eggs. My sister decided she wanted to hatch out some of her eggs to, so, within a week, we had 45 eggs ready to be incubated. The incubator we're using looks like it could easily hold 250 eggs, but since this was to be our first attempt, we decided to keep the numbers down, so as to minimize our losses (the pure maran eggs were $5 each, and we eat almost all of the eggs our own chickens produce).

Silver breakout

Silver broke through resistance around $31 yesterday and kept right on going today, almost hitting $33 before pulling back to $32.42. This represents a 7.5% gain in one week. Silver miners are doing even better, particularly some of the junior stocks: Canadian Zinc is up 27.7% and U. S. Silver is up 22.1%.

Where it goes from here is anyone's guess, but now that it's broken through, it's going to have to find a new high. Some of the silver bulls are predicting $35, $45, $50, or even $75 silver by the end of the year. They've been wrong before. On the other hand, they've been right before. I fondly recall buying silver at around $4 just ten years ago with PFD money. In another decade, will we fondly reminisce about the "good old days" when we could buy it for a paltry $35?

Charts from kitco.com.

Nowhere Road - Copperline Hills

I was rethinking my post the other day on investing and realized copper is perhaps another metal one might want to invest in to ride out the Hard Times ahead. Unlike gold and silver, copper doesn't have to be a sterile investment. Certain forms of copper can produce a pretty high return on your initial investment.



These nice country boys mention Colonel Vaughn Wilson, whose stills can be ordered at Copper Moonshine Stills. Not that I would ever recommend buying such a thing, unless you want the BATFE to kick in your door with a SWAT team on the mere suspicion that you might not be paying your fair share of federal liquor taxes... after all, that is the only reason distilling is illegal; it's a holdover from Prohibition.

What am I thinking?

Just got off the phone with a buddy who's a beekeeper. I had expressed an interest in beekeeping last fall and he's keeping me honest. So I guess, come April, I'll be setting up my first hive. We'll see where it goes from there. That'll be about the time our two goats kid as well. And I will need to start gathering wood in the spring. This is going to be an interesting year.

In which I opine on the superiority of stocks...

First off, let me state that my philosophy of saving is quite abnormal. I don't believe in amassing a large fortune. If fortunes are given, one must carefully consider what the Scriptures and the Fathers say about wealth: how difficult it is for the wealthy to enter the kingdom of heaven (the Master); that one's excess belongs to the poor (Chrysostom); and that riches are fleeting (James). That said, one must manage one's wealth carefully, as it is a gift of God. My first responsibility is to my family, and in order to provide for them, saving is a necessity... living paycheck-to-paycheck won't pay for a roof replacement, and going into debt (aka slavery) for the same should be my last option. In addition, in my case, I must manage my children's money for them while they are still young. Therefore, it behooves me to carefully consider what constitutes a good investment versus a bad investment.

There are a number of things one can do with one's money. Here is my opinion of each.

Gold ETFs

I meant to mention this after my post the other day about GLD and SLV in my IRA. For the record, I don't recommend buying paper silver or gold with investment money. You're better off investing in mining companies or even a mining company fund (GDX, for instance), or buying physical gold and silver from your local precious metals dealer. However, in an IRA or 401(k), where your money is essentially being held hostage in exchange for some dubious tax benefits, holding precious metals ETFs can be a method of inflation-proofing and diversifying your portfolio.

So, two questions arise: which precious metals and which funds?

First IRA swap

The gold/silver ratio dropped below 50 today. It dipped down this far a few weeks ago, but only momentarily, and I missed the opportunity to trade below 50. This time, it looks like it might actually hang out down there. I traded a quarter of my SLV for GLD. I considered IAU instead, since Soros went that route and their expense ratio is lower, but ended up just sticking with GLD. Maybe when and if the ratio breaks through the next resistance (~45), I'll move a chunk of SLV into IAU.

This is an interesting experiment: to see if a sterile, inflation-proof investment can actually produce a return through arbitrage. Next trade will be either a third of my SLV to GLD if the ratio goes under 45, or a quarter of my GLD to SLV if it goes over 60.