It IS Coming...

Some of my friends are also landlords, but on a much larger scale than myself. They are facing losses much larger than I am, as they simply cannot raise their rental fees enough to cover the rising cost of winter heating this year. People's wages have not increased on a par with fuel costs. Tenants are leaving their rentals and moving in with family or friends to combine incomes and try to survive... for the moment. I have only three rentals and sets of tenants. One set has just left, thus I am about to sample the "market" and find out what is out there at this time. What I am hearing from other, bigger landlords is very, very bad. Many have units that have been empty for months.

I have learned to be very picky... I have a five page application form that requests everything from your SSN to your credit and criminal history. I tell them right up front that if they leave one space blank, they can just drop it into the nearest "round file" and save me the effort. I didn't include "unnecessary" information requests. I "interview" no less than twenty sets of prospects per open unit, and I would rather leave a rental empty and continue to search than install a nightmare. Yes... experienced, that's me. One of my most noteworthy horror shows still has 14 years time to serve in the Federal Penitentiary.

Consequently, I generally have tenants that stay with me for several years, live and pursue an honorable life and create little to no problems. I also have an excellent speaking relationship with them. It is business, for sure, but I include a human element and make every effort to be a good landlord, delivering the same "fair shake" that they, like me, have been determined to be seeking. It is a tried and proven methodology for me. That is necessary because it is also a sideline to my primary form of self employment.

So I sat each down a few days back as they paid their monthly due, and we had a serious heart to heart discussion. I explained that I have full oil tanks for heating this winter, but that the quantity I now store is insufficient to go the whole winter. In fact, I typically average 1000 to 1200 gallons consumption per season. Historically, I always pre-buy my oil, paying cash in the month of July. Two years ago, it cost $1.81 per gallon for #2 fuel oil. Last year, it was $2.61 per gallon. I raised rent exactly enough to break even on this expense last year, and carefully showed them the math so they would be on the same page. I make every effort to be fair and be conscientious of their limited incomes.

This year, I cannot pre-buy one drop of oil... NO oil comapny thus far is offering any "package deals" to date. (...and I have no place else to store what I could buy now.) I understand and certainly don't fault the suppliers for that. How could they do anything else? The forecast SUCKS! The Demorats (including our two illustrious failure Senators, Snowe and Collins) still refuse to drop drill bits in our offshore waters, ANWR, Colorado and numerous other confirmed resource locations. Predictably, the speculators continue to expect the price of oil go up based on a relatively fragile, but somewhat constant, supply vs. an ever upward spiraling of demand. It is a logical and excellent bet that the price will continue to increase given current circumstances. What speculator would not invest in that good bet?

Today's "low" price is $4.51 per gallon and ranges all the way up to $4.93. Tomorrow will be based upon what is going to happen. How much more unstable can things become? Perhaps the answer is "a LOT more".

John Bolton has recently stated that Israel "will have to" attack Iran due to estimates of it completing and possessing nukes sometime in 2009. Iran has recently taken delivery of Russian TOR-MI missiles. None of these concerns are fresh or new, but they have come to startling maturity. Iran has also made statements that if Israel hits them, they will "close" the Strait of Hormuz, only 21 miles wide at its' narrowest point, and strangle the route exiting the Persian Gulf for an estimated 27% of the world's oil exportation.

A lot of this information is not new. For example, you may wish to read this eye opening article from Newsmax that dates back more than two years. Here is a critical paragraph:

"Revolutionary Guards missile units have identified "more than 100 targets, including Saudi oil production and oil export centers," the defector said. "They have more than 45 to 50 Shahab-3 and Shahab-4 missiles ready for shooting" against those targets and against Israel, he added."

When I sat down with my tenants individually a few days back, I explained that I knew they could not afford a hike in rent that would save me from losing money due to higher fuel costs. My alternative is to throw them out after they reject the higher rent, and seek new tenants that can. If I don't find replacements before winter, (people tend to stay put once the snow starts and not move unless they have zero choices otherwise) where am I then? How much money does that apartment generate with no one in it? Do I want to be forced into selecting questionable tenants? Do I just drain the water from the pipes and leave them empty and cold? (Insurance companies raise rates for long term empty apartments when they get wind of it. Taxes are still due, and they went up +48% two years ago!)

The short answer is that you either raise rent equivalent to what they can afford or you may have to skip raising it at all. Most of the bigger landlords that I know are choosing to lose the money due to increased expense and try to survive. They are already losing tenants vs. their capacity and trying not to lose any more.

Do you see the fragility that is forming?

What is your estimate or "best guess" about how high the cost of a barrel of oil will become if Iran even moderately interferes with oil traffic in the S.O.H.? Mine is $200 or more. This is based upon the impact historically of much lesser constricting, percentage-wise, changes in oil supply vs. demand. We have never seen anything approaching a +25% loss of oil supply, worldwide.

I believe the repercussions of an attack on Iran could double the price of gasoline at the pump in a matter of days, not weeks. That would paralyze society, especially if it occurs during the winter. It would virtually stop delivery of food to grocery shelves. What small town, with a budget that is already commonly in the red, plows its' highways after a big snowstorm with gasoline and diesel expenses of that magnitude? How does business function and continue? What happens to communications, electrical grids, police and fire resources? How long might it go on without relief? How desperate do cold, hungry people quickly become? Where do they go? What happens if banks close and people have no access to their moneys? No cell phone service or ATM's?

Mr. Bolton has stated that Israel will wait until after the election in November, because "they don't wish to influence the outcome". Here, I absolutely part company with his opinion.

Reasoning? I think Israel certainly DOES wish to influence the outcome of the election... and not in a direction that would place Obama in charge. Yes, there are many misty eyed mush brains who support him, but I do not believe that they comprise the bulk of his voting block right now. I also think that faced with a nation wide disaster of the degree that I suggest above, even before winter, that the American population will reject his transparent, vague assurances of a rosy future in numbers great enough to give the victory to McCain. We are Israel's strongest, longest ally... period. They NEED us to be reliably at their side and strong in what they are about to confront. That ain't spelled 'O-b-a-m-a', folks... and they know that.

Iran has an estimated 40 to 50 nuke sites that we and Israel have identified. They are deeply embedded in the ground and heavily fortified. There well may be more that we don't know about yet. These facts exemplify the fact that we are already drastically tardy in confronting this eminent threat. But that does not remove that threat, it only hastens the speed at which we must finally take action. And yes, it may already be too late to be effective, but that does not justify continuing to bury our heads in the sand (or the orifice which the liberals most commonly occupy).

We may well find unusual allies, albeit perhaps silent, in some of the neighboring Arab countries. You don't think so? Who of them bemoaned Israel's strike last September at the Syrian nuke facility that our old buddy Kim Jong Illness helped them build? No one... not a one. They well understand the maniacal threat in Iran as it is directly in their own back yards!

It is not a pretty picture... but it hasn't been for a long, long while now. The procrastination to act and the endless re-characterizing of Iran's "intentions" has only exacerbated the coming showdown. If an attack by Israel goes poorly, with massive (promised, remember...) Iranian retaliation on Israel and key oil supply locations in Saudi, etc., it could quickly escalate to Israel being forced to use the nuclear card.

I implore those of you I have come to so highly respect and admire... Prepare.

Store extra gasoline in several five gallon cans. Date and rotate them out every month, putting the oldest one in your vehicle of choice and refilling to return to secure storage.

Buy a generator (or two). I suggest small, low watt models with low fuel consumption ratings. Target running the absolute essentials to live. For me, that is two large freezers and a very small, low draw heat circulation pump for my external wood fired boiler.

Store as much fresh, drinkable water as you can. We have a well with an electric pump that is large and high amperage draw... too much to be practically run with a generator. But effective, hand operated pumps can still be purchased.

Extra propane containers for an outside grill can offer a very efficient source of simple, essential cooking.

Buy and store canned goods in a dry, cool location. Lots of them. We bought a large cache initially, and then built it up a bit at a time each week with our normal food shopping.

A reliable radio, preferably two, with battery capability and plenty of charged (but re-chargeable, for any time that you can recharge them with household or generator current) batteries.

Improve your door and window locks... You well may have to keep people OUT.

Guns. A minimum of three, with as much ammunition as you can accumulate. A pump shotgun, with buckshot at the ready, is an exceptional tool for inside the home defense. A concealable handgun with defense grade ammunition of .38 caliber or larger. And don't forget the simple .22 caliber rimfire rifle! It is relatively quiet, accurate, cheap to buy ammunition for and excellent for doing proper execution on a variety of small game.

CASH on hand. Enough to allow you to buy super high priced fuel or anything else you might absolutely NEED to live on your own. The banks may very well be closed for biz for an undetermined period of time.

Now when you get finished calling me a "survivalist", a "paranoid" or any other number of derogatory labels, I invite you to honestly ask yourself how inconvenient these simple steps might be if NOTHING I am alluding to takes place. I will risk amusing you and provoking your laughter. I guarantee you I will not laugh at you if you choose to remain unprepared and I am correct about our near future. I also, sadly, will not be able to help you.

Your canned goods won't spoil. Your water will remain drinkable. Your cash will not rot. Your generator will still sit there at the ready, but not be run. Your guns will do the same. Are you really too busy to take these very simple steps to be prepared if things get swiftly bad? Would you rather sit around miserably hungry, cold and at the mercy of the elements and watch your family suffer to an otherwise possibly avoidable end?

My wife is from the Philippines and witnessed the fall of Marcos, the chaos and turmoil that followed, Martial Law imposition, closed banks, and marauding mobs of hungry, destitute people. Los Angeles residents lived through, firsthand, how quickly their elite society came tumbling into the streets after the Rodney King verdict. They experienced what it was like to be abandoned by the police who refused to enter their neighborhoods to protect them. If Mr. Bolton is correct and the Israeli attack comes in the early part of winter, the complications could make the LA riots look like an afternoon on the playground.

I have thought about writing this for a long time now. I regret that I have come to the point where I feel it necessary. Skyrocketing fuel costs supplied by sworn enemies cannot continue to go unresolved and ignored. Radical "change", far divorced from that which Mr. Obama would attempt to cajole you with... is coming. Heed the warnings and prepare. The happy songs and hand holdings are not viable defense. Neither are tears or apathy... that's how we got here. Act and utilize the closing window of time.