Thursday, April 18, 2013

Raised Bed

We put in a raised bed a couple of weekends ago, and then planted some herb starts in it last weekend.

The purpose of this garden is for kitchen herbs and salad greens and it is about 15' from our back door. We're going to have three garden areas - the main one further back in our yard and about 600 square feet - the small kitchen garden of about 30 square feet - and another garden for vine plants like pumpkins, cucumbers, squash, and watermelons of about 250 square feet. We're also going to try growing some corn and sunflowers in rows in a different area.

For the raised bed kitchen garden we used cedar 1x10 planks -dimensions 8.5' by 3.5'. I connected the corners with little metal corner brackets, and then just bounded some 20 inch 1x2 pine into the ground to hold in the middles of the long planks.

For the soil, I started with cardboard to kill the grass, then a layer of wood mulch, wood chips, and chicken droppings, a layer of old horse poop, a layer of soil that had been below the horse poop and compost area, and then an area of soil we dug out of our yard.

Here are some pics:

Cardboard and chicken wood chips down.

After layer of wood mulch is down

After the horse poop and soil are down - layer of wood chips around the sides of the bed for later use. Bed is basically complete.

It rained a lot the week after I built this, so I wound up putting down another load of soil since it had already settled. We then planted some herbs in the soil. However, it has been so rainy and cold, I don't have a lot of hope for these herbs. We'll replant some more starts if they die over the next few days.

Buckeye Cockerels and Pullets

We think we've got mostly pullets although we aren't sure if we are using the right signs to make a determination. We think we've got 18 hens and 7 cockerels, although that would be a pretty lucky straight run. We think the hens have bigger bushier tails and wing feathers - there are about 7 of the little ones who have noticeably smaller tails - almost no tail at all really. The only thing that is a little confusing to us is that about 4 of 7 of what we think are the cockerels are noticeably smaller than the rest of the birds. There is one small tail who is also quite large and we're pretty confident its a rooster.

Without further ado, here are the latest pictures:

We think the chick with its head down in the feed is a rooster, and the one to his left is a hen.

This is kind of a cool picture - the hen/pullet with her eye closed has a worm that I just stuck in there. The chicken to her left is trying to steal it. The worms caused quite a ruckus that lasted for about 10 minutes.
Decent picture of one of the pullets - notice how developed her wing and tail feathers are getting!
Another picture of a hen.
A hen taking flight off the cinder block.
And finally, the chick in the middle we think is a cockerel, the one on the right is a hen.

It is surprisingly difficult to get a good picture of a chicken, particularly now that they have a roosting house (which I made out of a big dog house). The large cockerel in particular didn't want to be photographed at all. 
It is pretty cool how fast the chickens are growing now - the weather is still a little too cold and windy to let them outside.

Wednesday, April 17, 2013

Silver hits $22

Silver has quickly moved to $22 which I think is an excellent place to increase exposure to this versatile metal. It has been about 2 years since it peaked at $50, and has had ample time now to correct and shake out weak hands and short term speculators.

While I've marked the $21.30-$24 zone as an excellent area for buying back exposure to silver, now that we are here I have to admit it seems a bit frightening. In spite of that, I'm planning to add exposure. The bottom line is to buy low and sell high, and the fact that many people are negative on silver does not change the validity of this strategy. One should never sell because everybody else is selling nor buy because everybody else is buying but all too often we can let this primal psychological power influence us into making a poor decision.

The main influence on this price of silver is its relationship to gold and quantities of money, and that hasn't changed much in the past few weeks.

Is it possible that silver drops to $15 or even $5? Yes. Is it probable? no, not at all - just as it was possible silver would go straight from $100 from $50 but wasn't probable.

People are spooked because China looks weak and the global economy in general looks like it is slowing down - but is that justification for silver dropping more than 25% in the past 6 weeks or so? Not fact if things are really that bearish, then the place to be negative at this point is the S&P 500 or another American stock index.

More likely in my mind is that this weakness is temporary and that commodities will bounce starting tomorrow or the next few trading days.

Just my opinion...

Executive Summary:

I'm writing this on Friday, April 12th 2013, and gold and silver have just broken to new 12+ month low prices. I've been looking at the $21.50-$24 range for silver and the $1250-$1385 range for gold for quite some time now as a good place to buy. Since these markets can move fast when they want to, I expect the low in PMs could come as early as the next few weeks. I also have elevated my risk of catastrophic developed market bond market carnage to 20% in the next 6 months.

I'm not making any buying or selling recommendations here, and everyone must make their own investing decisions. Also, the most important aspects of financial prep are getting rid of debt and having a diverse array of investments from emergency preps such as cash to a diversified portfolio that can weather any storm. That being said, I am looking personally at the next days/weeks/months as a good place to buy some precious metals, and expect markets to get quite volatile for reasons I explain below.

The details:

Price falls in future markets can be exacerbated in two ways: future holders getting margin calls and having to abandon positions, and option hedging from large market participants. The option hedging is especially relevant right now because implied volatility has been so low, that there is a lot of gamma/delta hedging necessary. Delta hedging refers to selling futures to square up an option position so that the option player isn't long or short, and gamma hedging means squaring up an option position so that the option player isn't long or short volatility more than they mean to be.

When banks and other market makers sell options they wind up being short gamma which is the fancy word for volatility. This means that if prices stay more or less the same, they'll make money but if prices start moving quickly in one direction they lose money.

These options market makers don't usually want a directional position meaning they don't want to be long or short most of the time - they just want to be long or short (usually short) volatility. When prices start moving significantly in one direction, the "delta" of the options start to change - which essentially means that by virtue of selling a bunch of options they wind up also being net long if a market starts falling quickly or short in a quickly rising market. Since they don't actually want a directional position, they are forced to sell in quickly falling markets which exacerbates the move. Ultimately, they can get blown out of their position - which means in this case they would be buying puts into the teeth of a quickly falling market.

The fastest part of the fall then comes often just as they are buying puts - in order to find a willing seller (someone willing to take over the risk of selling these options they are trying to unload) they need to pay a huge premium. You can see this because implied volatility spikes in the markets just before the end of a selling wave. Once the big option sellers have unloaded their positions, the pressure from delta hedging is removed and the downward pressure on price stops. At some point you also have bargain hunters moving in to buy on the other side.

Long story short - we're in a liquidation phase right now so prices could move quite quickly down (as they did today) in an essentially forced move in the paper markets...BUT there is also tremendous interest in physical metals, particularly from Asian Central Banks so I would imagine there will be some massive support at some point - and it could get quite difficult to obtain physical metal (just like in 2008).

Just a heads up for everybody out there - don't be surprised if wait times for physical start getting ridiculous. You might consider buying from local sources where you can physically leave the store with the goods. I know the premium you pay tends to be ridiculous at brick and mortar shops but you might save a lot of heartburn - my guess is that well run places will just stop selling (because they won't have it) and dodgier places will continue to sell but with long delays (which is where the heartburn would come in).

Finally, I wouldn't be surprised if all market movements start getting a bit more discontinuous for two reasons related to the bond markets:

first, the Japanese bond market is looking very vulnerable - if JGBs (Japanese government bonds) go belly up then all of the dominoes start to fall.
second, Cyprus has destabilized the Euro-zone banking system and the jig could well be up there as well.

Both of these events have about a 10% chance of creating havoc in the next 6 months, so I'd put about a 20% chance on things getting out of hand before the end of the year. If either of these events occurred I seriously doubt the US could avoid the fallout because in both cases you would have a disaster in developed economy bond markets - and it would inevitably pop our own bloated and obviously untenable debt situation.

Thursday, April 4, 2013

Chicks, Pastures, and Galinstan Thermometer

The chicks are doing well. Their pasty butt has cleared up - we gave them some yogurt mixed in with chick feed and sprinkled some pro-biotics on it and gave them some boiled egg yolk.

They have new wings sprouting out of their shoulders.

One big problem we have run into is that they constantly foul and kick wood chips into their water. Each day it seemed to get worse to the point that their water feeder would be completely clogged with wood chips within 2 hours or so. Well...we came up with a solution - we stuck their waterer on a piece of cardboard - simple but effective! After 4 hours only 1 or 2 wood-chips.
We've ordered a 125 watt heat bulb - the 250 watt bulb is overkill at this point.

Notice the tail feather have started to come in nicely on the females. We think that the females and males are pretty well distinguished at this point, but could be totally wrong. We've read that females get tail and wing feathers sooner, and their is a clear difference between the chicks at this point.

I'm putting up some pictures of our pasture to show how denuded it is. Obviously, I'm not really that upset about the fact that our previous owners were carrying out a frickin' scorched earth policy on the pasture with their 4 horses- means we get to rehab it and have cool before/after pictures :)

In this picture you see gravelly soil in the foreground with nothing growing in it, and some woody weeds growing in the background - don't know what species the weed is.
 You can see the extent to which the grass has been decimated in this photo - there is essentially no grass above the surface here, although I think there still are some root systems going on so there is hope.
 Some strange white spidery fuzz clings to some of the pasture.
 Anybody recognize this plant?
 Again you see the denuded nature of the pasture...very little grass and lots of unknown weeds - this weed has these strange fruits that look like little tomatoes.

Finally, notice the moss growing in this picture. You're not supposed to have moss in a pasture. LOL

I have a video of the pasture but I'm not going to post it because it is shaky as heck and 650 MB..that's big isn't it?

Finally, I bought some Galinstan thermometers that are like the old mercury thermometers...very accurate but take quite a bit of shaking down.