Plan B.

In every task there is an essential tool. It is often refereed to as plan B. It has been decades sense plan B and even C, D, and even E have been so important, maybe as important as feeding your family.

many of us were taken by surprise by the fall of metal, weather it be tin or gold. Let me say this is not as uncommon as most believe. I personalty believe it is not over yet.



Alternate plans can soften the fall. There is a point at which scrapping of any kind becomes mute.

Back up plans can be as simple as another skill, or something related such as learning ebay /craigs list. If you don't have a backup plan now is the time.

I measure the economy on small business equipment purchases. If business is good, places will purchase new trucks/vans, or new computers, or something....

Right now, a lot of local businesses are actually purchasing trucks older than the ones already in their fleet. I see a lot of 90s trucks, and even a fair amount of 80s trucks. With computers, they're having me keep the old ones as long as they can, and are buying refurbished when they can.

That's a very bad sign. That shows that money is very tight, and they're not expecting it to get any better. For scrap, since no new products are being purchased, steel isn't needed. Now, there aren't no new products, but since there is less demand, less steel is needed, lowering the value. A commodity is worth exactly what somebody will pay for it. Since steel isn't really needed, nobody will pay much for it. That trickles all the way down, from the steel mill, to the large yards, to the feeder yards. By the time that it comes to us, the guy with a pickup truck, there isn't much room left.

I always love to learn new things. If I never use it, it's still a skill. I'm studying up for a CDL, even though I doubt I'll ever use it. But, it's something to learn on the weekends, and gives me another option should the need arise. If the times get tough, I'll be more than willing to hop on the tractor for a neighbor, or work in town, or whatever is available. It's always a good idea to diversify. When the times are tough, it's essential.

Originally Posted by dsroten

My view of pricing was always much more simplistic. Scrap prices and fuel prices are tied at the hip. When diesel hit nearly 5 bucks a gallon I was getting 14 a hundred for scrap cars. As fuel crept down so did scrap. The higher fuel costs are, the more it costs to mine and refine new ore, so the more the foundries will pay for scrap. There are of course all kinds of economic factors that determine the prices you'll receive, but the one that anybody can monitor with little effort is fuel. This is course merely my subjective opinion.

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Scrap prices are pretty simple. The world is in the economic dumpster and stopped building.

If scrap prices were tied to fuel prices food and shipping prices would have droppped along with scrap prices.

There is a money war going on to determine the world reserve (trade) currency. eastern block (Russia/China) against the western block thus the appearance of the "Brick" banking system and the Asian central bank system both developed in the last 5 years. When China decides the U.S market becomes irrelevant the SWHTF.

More then 2/3s of the worlds potential consumers are in the Asian sector of the World. China is spending Trillions of our trade dollars to modernize Africa central and south America, "for what reason"? to make them consumer nations, and to eliminate U.S. buying power and world currency domination. one of the very few threats to China's world economic domination.

Western nations are 5 or 10 year planners, eastern nations are 100 year planners.

Originally Posted by olddude

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Scrap prices are pretty simple. The world is in the economic dumpster and stopped building.

If scrap prices were tied to fuel prices food and shipping prices would have droppped along with scrap prices.

There is a money war going on to determine the world reserve (trade) currency. eastern block (Russia/China) against the western block thus the appearance of the "Brick" banking system and the Asian central bank system both developed in the last 5 years. When China decides the U.S market becomes irrelevant the SWHTF.

More then 2/3s of the worlds potential consumers are in the Asian sector of the World. China is spending Trillions of our trade dollars to modernize Africa central and south America, "for what reason"? to make them consumer nations, and to eliminate U.S. buying power and world currency domination. one of the very few threats to China's world economic domination.

Western nations are 5 or 10 year planners, eastern nations are 100 year planners.

This is pretty much spot on. It doesn't matter if your LOCAL market is booming.....everyone forgets that this is a WORLD economy that drives things derived from "scrap". Manufacturing is down globally as is demand (because of faltering economies across the board). MOST scrap ends up overseas at the manufacturing centers. They have put more restrictions on imports (China especially) and China in particular is "focusing on internal recycling rather than importing"...ie they are manipulating this market just like they have the currency market for some time now...they have a plan to usurp he US $$ as the de facto currency for world trade (seriously, this has been shown OVER AND OVER the last several years and you can read this or hear about it in any number of news outlets).

They are playing to WIN...and we are allowing it to happen. All markets are cyclical too...metals had a HUGE run for quite some time...it has to pull back eventually and then it will climb again. Precious metals are directly affected by stocks...stock market UP, precious metals down....BECAUSE it is driven by the INVESTOR $$$$, not other real factors such as manufacturing. It is opportunity cost, more money in stocks, means less in precious metals, hence prices fall.

I do not claim to know markets...far fomr it...but that is basic economic theory....the currency manipulation is far far more complex. I guess business school served me well somewhat LOL

I can only add that I truly hope we are totally wrong. But before you call us crazy remember the definition. Doing the same thing over and over the same way and expecting a different result. The very thing our government has been doing for over 50 years.

I have some input here that should give you some on the ground validations to your questions, at least it did to me. I toured Europe by car (thousands upon thousands of miles in 18 days) in lieu of going home to my wife at the near end of my combat tour. I had been stabbed and thus went on leave for a few weeks. This was in October 2008.

Here is what I noticed: Spain was a literal disaster area. Trash service was minimally functional, landscaping was not happening and even the beaches and things were full of garbage. Spain was experiencing a internal market implosion of labor vs wards of the state. At that time unemployment was estimated at 28%, it is worse now.

Greece functionally seemed just fine, people were eating, laughing and carrying on as per usual. It however became pretty obvious there were alot of people out of work for an entirely different reason. They wanted more for less. Greece for the last 400 years has been a textiles and fishing nation. Many attempts at skilled labor, factories even Peugot tried to get a factory going. The biggest issue for them is education, a fundamental difference between them and Spain.

This same situation is playing out in the United States. We have 45 million unskilled workers and maybe 10 million of them have managed to keep the same job for a year. The quality is so far down it's becoming desperate for the trades. Employers all have the same grief. "We want to pay you...if you'd actually show up." They also suffer in skilled trades, everyone thinks college=easy money, 20 somethings the world over were told this is true. It could not be further from the truth. They are neither skilled nor smart. Nobody wants an employee that generates problems, they want problem solvers, this is not the case with our working age college graduates as a whole.

Ethics are another problem, drug use, thievery, attitude problems, laziness, attendance. Recognize this stuff? It's everywhere, and because it's so pervasive it's reduced even smaller businesses to outsource their labor involved processes to countries who can get it done and meet their targets. I don't really want to beat the corporate drum here but as much as I'd like to justify bringing jobs back to America...is that even feasible with two or three generations of functionally retarded people who without the aid of their smartphone cannot solve simple every day problems? Can't read a map, can't multiply, can't show up on time...can't check or change the oil in their car. Can't can't can't. But that's the actual problem. Mike Rowe is ABSOLUTELY correct in that skilled trades are the ONLY way to recovery in this country, because farming out our children to the most expensive babysitters in the world (universities) in hopes that knowledge sticks is laughable. You know it's bad when you seek out a patent lawyer and the first thing he does is check GOOGLE...I'm sorry I didn't seek you out so you could regurgitate an answer from the internet.

We want change, well...have to BE that change, it's the only choice, and no choice at all.

Originally Posted by armygreywolf

I have some input here that should give you some on the ground validations to your questions, at least it did to me. I toured Europe by car (thousands upon thousands of miles in 18 days) in lieu of going home to my wife at the near end of my combat tour. I had been stabbed and thus went on leave for a few weeks. This was in October 2008.

Here is what I noticed: Spain was a literal disaster area. Trash service was minimally functional, landscaping was not happening and even the beaches and things were full of garbage. Spain was experiencing a internal market implosion of labor vs wards of the state. At that time unemployment was estimated at 28%, it is worse now.

Greece functionally seemed just fine, people were eating, laughing and carrying on as per usual. It however became pretty obvious there were alot of people out of work for an entirely different reason. They wanted more for less. Greece for the last 400 years has been a textiles and fishing nation. Many attempts at skilled labor, factories even Peugot tried to get a factory going. The biggest issue for them is education, a fundamental difference between them and Spain.

This same situation is playing out in the United States. We have 45 million unskilled workers and maybe 10 million of them have managed to keep the same job for a year. The quality is so far down it's becoming desperate for the trades. Employers all have the same grief. "We want to pay you...if you'd actually show up." They also suffer in skilled trades, everyone thinks college=easy money, 20 somethings the world over were told this is true. It could not be further from the truth. They are neither skilled nor smart. Nobody wants an employee that generates problems, they want problem solvers, this is not the case with our working age college graduates as a whole.

Ethics are another problem, drug use, thievery, attitude problems, laziness, attendance. Recognize this stuff? It's everywhere, and because it's so pervasive it's reduced even smaller businesses to outsource their labor involved processes to countries who can get it done and meet their targets. I don't really want to beat the corporate drum here but as much as I'd like to justify bringing jobs back to America...is that even feasible with two or three generations of functionally retarded people who without the aid of their smartphone cannot solve simple every day problems? Can't read a map, can't multiply, can't show up on time...can't check or change the oil in their car. Can't can't can't. But that's the actual problem. Mike Rowe is ABSOLUTELY correct in that skilled trades are the ONLY way to recovery in this country, because farming out our children to the most expensive babysitters in the world (universities) in hopes that knowledge sticks is laughable. You know it's bad when you seek out a patent lawyer and the first thing he does is check GOOGLE...I'm sorry I didn't seek you out so you could regurgitate an answer from the internet.

We want change, well...have to BE that change, it's the only choice, and no choice at all.

Very very good analogy !

Olddude's "brick" is actually BRIC (Brazil, Russia, India, China)
https://en.wikipedia.org/wiki/BRIC

I know its more than just oil but oil is a good indicator of economic activity and here's a map that shows really the clash of national economies (The EIA had a better map earlier that showed that only the U.S. and China were using more than 10 million barrels a day, Japan was in 3rd at around 4 million). Still get part of the same feeling with this map.
International - U.S. Energy Information Administration (EIA)

AGW- Nice "field work" observations in Europe during your tour. Great observations about the American work force. My friend in my bedroom town works in a place that finishes out specialized vehicles (don't say anymore because people might be able to track it down). Let's just say its not assembly plant work and each finished unit has a certain amount of customization to it. He's been there between 15-20 years and has seen increasing levels of turnover (this company runs ads--or at least they've done so within the last year--on late night cable channels trying to recruit workers). What my friend says is that a majority of the new people don't last long because of two reasons, 1) they get tried of working regular hours. When this place is busy with contracts its not uncommon to work 6 days a week, or 2) they simply don't have the skills to make and fit pieces into these vehicles (how many times does the company tolerate someone wrecking expensive pieces of s.s. or holding up/stopping production because pieces don't all work together). And this is in a basiclly middle-class metro were most people have finished high school. The talent pool is shrinking...

I took a few minutes to dig up our current labor force statistics. These are all available with the Bureau of Labor Statistics and the DOL, online.

Lets start with the basics, From ages 16 through 62 only 62.9% of this country works at all, even part time. That means of the not yet retired, but old enough to work populations more than a third of them don't work at all.

Of this 62.9%, 6.2% of them are currently unemployed seeking employment (This is the figure used commonly to reference unemployment rates).

If you want to get right down to it, that's 9 million people and change currently seeking employment.

6.1 million working people are below the prevailing minimum wage. Roughly 4% of the working population isn't even making federal minimum wage, these are mostly your food service industry workers.

The average education level of a AT minimum prevailing wage worker is 13.5 years, meaning they have graduated high school and have had some college.

7.7 million people have multiple jobs. Of these, almost half are recorded as unskilled labor.

The highest unemployment rate coincides directly with the highest skill levels. Doctors, Dentists and Lawyers all clock in with the highest rates among unemployment by job category.

The reality is even further proffered as follows.

42% of this country reports no individual income at all. Less than 20% of these no income individuals are married, more than half have at least one child.

To make up for this 42% of America with no money to speak of it breaks down as follows:

(I had to drag this up from the Social Security Administration website, and their reporting mechanisms are through the IRS)

12 million people receive SSI. That is, income derived from non-retirement age prerequisites, such as disability. Interesting statistic, DOJ reports that in 2014 they prosecuted more than 250,000 cases of defrauding Social Security.

If you were to derive a simple and possibly not as accurate statistic about Food Stamps based on overall working age population you could say 18 million working age, not disabled people draw Food Stamps.

If you were to take all this intelligence on labor statistics you could say that 2/3rds of us work for 1/3rd of us. Now, that is a bit misleading, because your wife might be a stay at home mom, this is understandable but it nonetheless is part of a statistic. The things we are truly interested in are this...

A little over 40% of the living population in America works at all. less that 15% of the population is considered "in retirement" having been of correct age but with reported income. That means, for all intent, nearly 50% of this country doesn't work. When you apply this generalization to other countries...we are awfully lazy.

What I gathered from all this, we spend an awful lot of money on social programs for no returns on the investment at all. now, I'd rather we not have a war on poverty instead I think we should really go after education, and skills, and maybe start teaching etiquette in high school again...

I think we could fairly say that a lot of the problems revolve around " entitlements". There's a certain worldview (left of center) that states:

A: All people have certain inalienable human rights. ie: The right to access the healthcare system.

If you live in our society you're "entitled" to receive a number benefits from the government as long as you meet certain criteria. The cost is NOT a consideration ! This is the morally right thing.

B: The world is not even. That's not right. It's the correct role of government to level the playing field by harvesting the fruit of the labor of those producing something & re-distribute it to those who have less.

While this may ultimately be the right thing they just aren't factoring in the economic impact. Economics knows nothing of right & wrong. It only knows numbers. If the numbers are good the system works. If the numbers DON'T add up the system is bound to collapse in upon itself.

Greece is heavily socialized. They've been racking up a huge debt to keep their entitlement programs afloat but the time has come to pay the piper. They can't keep refinancing their debt anymore.

Spain's version of Social Security is going bankrupt because there aren't enough working people paying into the system.

You see it all over Europe where the worldview is that the purpose of the government is to provide for you from " Cradle to Grave".

We have it here in the states as well. We recently took on a huge entitlement obligation with Obamacare. Our projected debt is now something like 17 trillion before we reach a balanced budget ?

This really isn't a political or moral issue. It's strictly economic. Unless something majikal happens this can only turn out one way.

Originally Posted by Scrappah

I think we could fairly say that a lot of the problems revolve around " entitlements". There's a certain worldview (left of center) that states:

A: All people have certain inalienable human rights. ie: The right to access the healthcare system.

If you live in our society you're "entitled" to receive a number benefits from the government as long as you meet certain criteria. The cost is NOT a consideration ! This is the morally right thing.

B: The world is not even. That's not right. It's the correct role of government to level the playing field by harvesting the fruit of the labor of those producing something & re-distribute it to those who have less.

While this may ultimately be the right thing they just aren't factoring in the economic impact. Economics knows nothing of right & wrong. It only knows numbers. If the numbers are good the system works. If the numbers DON'T add up the system is bound to collapse in upon itself.

Greece is heavily socialized. They've been racking up a huge debt to keep their entitlement programs afloat but the time has come to pay the piper. They can't keep refinancing their debt anymore.

Spain's version of Social Security is going bankrupt because there aren't enough working people paying into the system.

You see it all over Europe where the worldview is that the purpose of the government is to provide for you from " Cradle to Grave".

We have it here in the states as well. We recently took on a huge entitlement obligation with Obamacare. Our projected debt is now something like 17 trillion before we reach a balanced budget ?

This really isn't a political or moral issue. It's strictly economic. Unless something majikal happens this can only turn out one way.

Good analogy. The Primary problem is, where is the interest in solving the problem. This thread has half a dozen posters out of 20,000 around the world.

I know this is a scrap metal forum not a political one but politics has a direct effect on each scrapper ie. prices and ability to put food on the table. To many individuals in this country and around the world just turn off their tv or computer when its time to go to the mail box for their check.

Countries with the made in (made in China) label have always lead the world. look back at history and follow the standing of that country in the pecking order have always ruled the world. with out that label we are dependent on the countries who's name is on that label. UK, Germany, The U.S. Japan ect. all were at the peak of influence when their label was a representation
of their ability to produce products.

Our job as scrappers is to provide some of the material to produce those products and there in lies the direct correlation to scrapping and politics.