Founders (3 page)

As the news of the inflation and the rioting in the big cities reached a crescendo, Joshua drove out to the Monroe ranch and ran to the front porch. He knocked forcefully on the door. His knock was answered by Kelly’s father, Jim Monroe. Joshua said
agitatedly, “I’m here to propose to her again, and this time I won’t take ‘maybe later’ for an answer!”

Jim grinned and said, “Good for you, Josh. That’s the right attitude. I’ll let her know that you’re here.”

It was a moment that Terry Layton would never forget: Her favorite morning talk radio host on WLS-AM was reading newspaper and Internet headlines. The host paused, audibly took a deep breath, and said, “This is it, folks. Inflation has gone triple digit and there’s no end in sight. This is the final destruction of the United States dollar. We can kiss it goodbye.”

They called it the Crunch. It was a credit collapse and economic depression that made the Great Depression of the 1930s seem small by comparison. The global credit market had come unglued. All around the world, markets were in free fall. Credit had dried up. Cities, counties, states, and even national governments were in default. Consumer prices soared. Interest rates skyrocketed. The price of precious metals soared. Bonds collapsed. Derivatives contracts cratered, leaving counterparties for trillions of dollars in contracts twisting in the wind. Television news commentators droned on and on about “hopes for a recovery.” Corporations of all sizes announced huge layoffs.

Terry’s husband, Ken, was worried. All the things that his friends Tom Kennedy and Todd Gray had been warning them about for so many years were coming true. When Ken walked through the waiting room at the shop, all the customers were transfixed, staring at the big HD television. CNN was reporting that the economy was crumbling, inflation was out of control, and now there were riots in cities all over the country. Ken got a cup of water at the water cooler. He lingered by the television for a
minute. He caught one of the news analysts saying, “. . . so this is where all that monetizing of the debt—the Quantitative Easing—has brought us, to the point of irreversible hyperinflation. Ron Paul was right after all. This is like some enormous boulder rolling downhill, picking up speed, and nothing can stop it now.” Ken shook his head in disgust, and headed back out to the bay in the shop to continue installing an RCD heavy-duty suspension kit on a 2012 Jeep Wrangler Unlimited Rubicon.

Ken was the assistant manager at Chet’s Crawlers and Haulers, which specialized in four-wheel drive vehicle modifications and repairs. It was one of the largest such specialty shops in the Midwest. Ironically, many of the shop’s customers were yuppies who rarely, if ever, drove off-road. They just wanted to make their trucks
look
tough.

Three years earlier, Ken had been invited to join a fledgling group of Chicago “preppers” who were planning to buy a survival retreat property in Idaho. Ken was recruited by Tom “T.K.” Kennedy, a bachelor in Ken and Terry’s Young Adults group at church. Ken had been of interest to T.K. because he was an automobile mechanic. Since they both liked to shoot and were interested in outdoor activities, both Ken and Terry were enthusiastic about joining the unnamed group. It was dubbed simply “The Group.” Ken of course became the group’s vehicle and generator mechanic, while Terry served as a logistician, coordinating group buys—mostly of long-term storage foods. The Laytons’ home garage was often heaped with boxes before each group buy was broken up and taken home by the members. After Todd and his wife, Mary, bought their ranch near Bovill, Idaho, more than half of the group’s supplies were tucked away in the Grays’ basement, carefully labeled with the members’ names and purchase dates.

Although he had the requisite academic prowess, Ken had shown no interest in pursuing college when he graduated from high school. Instead, he started working full-time as an automobile
mechanic. Ken enjoyed the satisfaction of turning wrenches. By the time he’d joined the group, Ken had changed jobs twice. He had also earned several ASE certifications and was about to become the assistant manager at Chet’s shop.

Ken enjoyed the pace of working at the shop, which was more relaxed than at the general auto repair shops where he had worked before. He also liked having a short commute from home—just nine minutes on average, all on surface streets. It was close enough that he even went home to be with his wife for one or two lunch hours each week, or on special occasions she would join him for lunch at a nearby restaurant.

The Laytons’ small two-story house was on South Campbell Avenue in Chicago, northeast of Douglas Park. It was an older neighborhood where houses were affordable, but the crime rate was high. Their house had been built in the 1930s and remodeled in the 1970s. They bought it in 2008, just before the peak of the housing market. When the Crunch came, Ken joked that with the rapid inflation they’d soon be able to pay off the $157,000 balance remaining on their mortgage. But this didn’t happen because his income didn’t increase rapidly enough to match the inflation. Inevitably, the hyperinflation was short-lived.

Since they owed more on the house than what they had paid on the principal, there was no way that they could sell it and move to Idaho, as they had hoped to do. Their only viable solution was “jingle mail”—abandoning their house to the bank, by mailing the bank the house keys with an explanatory note. Feeling overwhelmed by the prospect of moving out west without a job waiting for him, Ken stayed, and prayed.

The Laytons attended St. John Cantius Parish church in Chicago, three miles from their home. The trip to church was a straight shot up West Ogden Boulevard that took less than ten minutes. They had chosen to worship there because they celebrated Mass in
Latin. The church’s brochure and website read: “St. John Cantius Parish is also privileged to offer daily the Holy Sacrifice of the Mass in the Extraordinary Form of the Roman Rite, commonly referred to as the Tridentine Latin Mass.”

The Latin Mass meant a lot to Ken because that was his parents’ preference, and he had grown up hearing it. His parents were part of what was then a “renegade” church—back when the Latin Mass was banned. Terry was also raised Catholic, but had never attended a Latin Mass until just before she married Ken. She grew to love it. They decided that when they had children, they would give them a classical homeschooling, and include Latin in their curriculum.

Unlike most young Catholic couples, the Laytons consciously delayed having children, using the church-approved rhythm and symptothermal method. They wanted to be more financially secure and have a good supply of storage food before starting a family. They followed the lead of Todd and Mary Gray, their survivalist group’s leaders, who had declared that they wouldn’t have kids until after they had their “beans, bullets, and Band-Aids together.”

For their own vehicles, Ken painstakingly restored a 1968 Ford Bronco and a 1967 Ford Mustang. Both vehicles had 302-cubic-inch engines—both rebuilt with .030 oversize pistons, hard piston seats, oversize Clevite bearings, advanced cam shafts, synthetic suspension parts, new radiators, and new exhaust systems from the manifolds back. Since these restorations replaced all of the major engine and driveline components, they were nearly “Zero Time” rebuilds—creating the equivalent of new vehicles with “zero time on the meter.” Ken also replaced the Bronco’s original steering-column-mounted gear shifter with a Hurst brand floor shifter—which he preferred.

The goal in restoring a late 1960s vehicle was to end up with an extremely reliable vehicle that was easy to work on. Unlike the
modern monstrosities that had been coming out of Detroit since the 1980s—with umpteen electronic components and a huge array of sensors, emission control tubes, and mostly plastic parts—the old Fords were old-school designs with plenty of sturdy steel, and a minimum of frippery. Opening the hood, the owner could immediately recognize the alternator, master cylinder, water pump, and power steering pump. Getting access to them for replacement was a breeze.

Another advantage of starting with the older vehicles was that they had traditional “distributor, points, and plugs” ignition systems. This made them virtually invulnerable to the effect of nuclear electromagnetic pulse (EMP), or its natural equivalent, caused by solar flares. Todd Gray’s philosophy was that the members of his group should make themselves ready for any and
all
eventualities.

One advantage of having Ken as a member of the group was that he had access to the garage at Chet’s after normal working hours. Although he volunteered to do most of the restoration work himself, at cost, he insisted that each group member be there and assist him during the most important phases of the work. This way, Ken reasoned, every group member would know how their vehicles were put together, how they worked, and, hopefully, how to handle most minor repairs.

The vehicle restoration process that Ken insisted on turned out to be relatively expensive and time-consuming. He started by pulling the engine and transmission from each vehicle and farming them out to other shops to be completely rebuilt. Next he would make minor body repairs, sand out the bodies, and put on a flat paint finish, usually in an earth tone. They used standard glossy car paint with a special flattener added. This gave much better rust protection than regular flat paint. At roughly the same time, he would either rebuild or replace the carburetor. Next, when the engine and transmission came back, he would reinstall them, replacing all of their auxiliary equipment, aside from carburetors,
with brand-new components. This included radiators, starters, alternators, fuel pumps, water pumps, batteries, voltage regulators, starter solenoids, hoses, and belts.

Next, Ken would rework the vehicle’s suspension, usually modifying it for tougher off-road use, and do an alignment and brake job, sometimes involving replacing the master cylinder. In most cases, the vehicle’s existing wiring harnesses did not need to be replaced. By the time he was done, Ken had in effect built a whole new vehicle that would be good for at least ten years of strenuous use.

“These derivatives are the root of the credit crunch. Why? Unlike all other property paper, derivatives are not required by law to be recorded, continually tracked and tied to the assets they represent. Nobody knows precisely how many there are, where they are, and who is finally accountable for them. Thus, there is widespread fear that potential borrowers and recipients of capital with too many nonperforming derivatives will be unable to repay their loans. As trust in property paper breaks down it sets off a chain reaction, paralyzing credit and investment, which shrinks transactions and leads to a catastrophic drop in employment and in the value of everyone’s property.”

—Peruvian economist Hernando de Soto Polar

Packing up was a nightmare. Even though Ken and Terry had prepositioned the majority of their storage food and field gear in Idaho, fitting everything that they wanted to bring in their Bronco and the Mustang was impossible. This cost them valuable time in prioritizing and repacking.

Their goal was to get to Todd and Mary Gray’s ranch in Idaho as soon as possible. But Ken and Terry still spent too much time in front of the television, transfixed by the news updates on the unfolding economic collapse.

Terry shook her head and said, “I sure hope the government will take some steps—some measures that’ll work. They’ve got to be able to put things back in order.”

Ken shook his head. “I really doubt that. The inflation is totally out of control, and the economy is cratering. It’s like what happened in Zimbabwe, only worse. The only way out of this is to hit the reset button and start from scratch, with a new currency. It’s game over.”

Terry frowned, and then Ken continued: “Look, we did our best to warn our families. We promised all the members of the group that we’d get out there to Todd’s ranch in a disaster. And they were nice enough to let us store our extra food and gear there. We’re committed. If we stick around here our life expectancy is going to drop to nil. So let’s
go
, without any regrets.”

Terry blinked twice, and then nodded in assent.

After the power went out, they spent the rest of the day packing up their Bronco and Mustang. But after they’d loaded the heaviest items, Ken noticed that the rear end of the Bronco was sagging. With no grid power, he couldn’t even use his air compressor to raise the adjustable gas shocks. He had to use a hand pump instead. This turned a two-minute job into a forty-minute one.

By 10 p.m. they had the two vehicles loaded. They changed their clothes, donning British army surplus camouflage fatigues. These disruptive pattern material (DPM) clothes were sturdy and blended in a wide variety of foliage. They were the standard uniform for their Idaho retreat group. Much of their storage food and extra equipment was already in Idaho, at Todd and Mary’s retreat. But even the small amount that they had at the house was a challenge to shoehorn into the two vehicles.