Funstuff: Home Beer Making

"We hereby proclaim and decree, by Authority of our Province, that henceforth in the Duchy of Bavaria, in the country as well as in the cities and marketplaces, the following rules apply to the sale of beer:

From Michaelmas to Georgi, the price for one Mass or one Kopf, is not to exceed one Pfennig Munich value, and from Georgi to Michaelmas, the Mass shall not be sold for more than two Pfennig of the same value, the Kopf not more than three Heller. If this not be adhered to, the punishment stated below shall be administered.

Should any person brew, or otherwise have, other beer than March beer, it is not to be sold any higher than one Pfennig per Mass. Furthermore, we wish to emphasize that in future in all cities, markets and in the country, the only ingredients used for the brewing of beer must be Barley, Hops and Water. Whosoever knowingly disregards or transgresses upon this ordinance, shall be punished by the Court authorities' confiscating such barrels of beer, without fail...” 

(Translation Excerpt from the German Beer Purity Decree 1516,  the oldest recorded consumer protection law in the world; enforced in its original form until 1993)

I was in a conference earlier this year in Dublin. One of our social events included visiting the Guinness brewery. I had a vision there that some day I will be able to brew such high quality beer myself. After some earlier trials, this post describes how this vision came true (ok just kidding, I just wanted to try it out).

In the previous article here, Philipp and I provided directions for brewing Ginger Beer. The challenge a year ago was to brew stuff wit just relying on ingredients readily available from the grocery store. Although, this yielded a nice refreshing drink the battle against LCBO monopoly pricing was far from over. Ginger beer is ok, but this time we went pro and did original Irish Stout.

Before we go into the fun part lets survey a bit of the advanced technique. In a nutshell what you need for beer brewing is malt (grains: barley, rye, wheat...), hops, water, yeast, time, and most importantly the right temperature. The last one sounds subtle but from my perspective the fermentation temperature is the most distinctive property of the beers. Since you won’t necessarily have access to a well-tempered cellar or temperature-regulated room, this will ultimately limit what you can brew at home. Out in the professional field it boils down, to lager beer which is fermented at very cool temperatures and top-fermented beers like German wheat beer, British Pale Ale, Irish stout (the last one is subject to debate for historic reasons, but the old-school stout process was top-fermenting). In essence Lager ferments at about 10-12C and the others in the range of 18-22C. So first thing to do before you happily throw money at brewing equipment is to find a spot that matches either one of those temperature ranges in your house. That spot should not encounter any significant temperature shifts (i.e. no bathroom) and be relatively shady.

Equipment

In order to gear up from ginger beer to professional level, you need to invest in some equipment. Here is what we got.

●        Brewers best brewing kit (got it for 60 US$ on a shopping spree down south), this one comes

○        6 gal fermenting bucket + airlock

○        6 gal bottling bucket + spigot

○        Hygrometer

○        Thermometer

○        Stirrer

○        No-rinse disinfection solvent

○        6ft Hose with clamp

○        Crown-cap-press

○        5.5 gal carboy (not needed)

○        Auto-siphon (not needed)

●        Electronic scale (was on sale for 10$ in Canadian Tire)

●        Large stock pot (you may already have one of those)

Consumables

●        Malt extract kit (note we are avoiding the mashing process by buying the extract directly, if you want to be hardcore, you can mash the malt yourself)
I got the malt kit from Ireland as a souvenir from Dublin (~15 EUR)

●        15g Coopers yeast. This stuff allegedly works over a wide band of temperatures and ferments almost anything (~2$)

●        320g corn sugar (dextrose). This will be needed for the carbonation.(2$)

●        2 oz (50g) hops (~3$)
If you buy hops the beer guy will show you numerous different brands of hops. I just told him to be creative and affordable.

●        50 - 60 empty beer bottles (got it by asking nerdy questions at BBQ parties)

●        50 - 60 oxygen-barrier crown caps (~3 US$ = got 144 it with the kit)

This will make about 5 US gallon (~18-20l) worth of beer.

Approach

The approach entails the following steps.

●        First everything needs to be cleaned and disinfected.

●        Second you need to prepare the beer worth.

●        Third you have to have the beer fermented.

●        Fourth you bottle the beer for carbonation.

●        Fifth, you wait...

●        Finally, you enjoy your fully carbonated beer.

1. Cleaning and Disinfection

The key to a successful brew is cleanliness. Make sure that all of your equipment is properly cleaned and disinfected. Brewers yeast is very slow fermenting; that said, any organic contamination of your brew will grow faster than the yeast, especially contamination from animal or human hair, mould spore etc. Make sure everything is pristine and clean, before progressing further. Here you see my roommate Ivan disinfecting the fermenter.

2. Preparing the Beer Worth

As you have noticed the malt extract kit comes in a can. The malt extract has a consistency that comes close to syrup. The best way to get it out of the can is to heat the can up first in a water bath.

While that happens prepare the hops, you need about two ounces (~54 g) to get the bitterness of a stout. If you Google for hops and recipes you will find all sorts of advanced recommendations.

In the old days the whole point of hops was not only taste but also disinfection. The hops that were left in the fermentation absorbed and killed various germs. If you Google up old beer recipes from the middle ages in Germany they always left the hops in during the fermentation. This stuff was actually engraved into law in 1512 in Germany and used until 1993 (until replaced by a more relaxed beer order).

Warm up about 1.5 gal (~4l) of water and add the malt extract to it. Bring the whole thing to a simmer. Here it is essential that you have some spare capacity in your pot. As this stuff comes closer to a boil it will foam a lot because of the high sugar content. Stir it continuously so that the worth does not stick to the bottom of the pot. This is good exercise as you will be doing it for the next 60 minutes. We overestimated the pots capacity and in the end had to do this game with two pots. After the 60 minutes add the hops into the worth and continue another 30 minutes.

When this is done it is time to mix everything together. Fill the cleaned, disinfected, rinsed fermentation bucket to about ½ of its capacity with cold water. Note there is some debate towards this procedure. In the old days usually the whole worth was cooked in order to kill any germs that you could have picked up with the water. These days the water quality should be sufficient to mix it up with the worth.

Now add the worth. We poured the worth slowly into the fermentation bucket. Amateurs or professionals these days are usually told to carefully siphon the worth out of the pot into the fermenter not to pick up too much hops or residuals at the bottom of the pot. We on the contrary side wanted to have all this stuff in the fermenter, as the hops also has a germ-killing function and should therefore be included. People who keep the hops in nylon bags or siphon off the worth will tell you that without the hops you may have a crisper taste of the beer.... well if you are doing Irish-style Stout like us, it got to be bitter as hell :D.

Top up the fermenter with more water to come close to the desired quantity (in our case 5.5 gal).

Now wait until the temperature is about room temperature (~25C max).

A walk-in fridge certainly helps with that.

3. Fermentation

When the beer is at room temperature it is essential to record the so called gravity of the beer. This measure will allow you to later assess the alcohol content of the beer. To do so, immerse the hydrometer into the worth and spin it. The spinning is supposed to avoid any distortion from floating particles (i.e. hops) or carbonation (after the fermentation). Our worth had about a gravity of 1.05. This task should be familiar to anyone (like me) who worked on cars before, it is essentially the same measuring process as assessing the water content of brake fluid or anti-freeze.

After that (assuming the beer is at room temperature), add the yeast. I purchased coopers and according to my beer store guy 15 g would be sufficient for one batch.

No close everything up, add the airlock and leave it in the previously determined temperate spot for 1-1.5 weeks for fermentation.

4. Using the Idle Time During the Fermentation

Instead of wasting idle time, get busy on getting the right amount of bottles for bottling the beer. Cleaning the bottles, removing the labels and disinfecting the caps can take a substantially long period. I did everything on the day of bottling and it took me hours to get them ready.

Most of the bottles I used were dirty and have been sitting in the box for a while. That means that a lot of other stuff already contaminated them. If they were in contact with any mould spores the mould has already grown into substantial size. Make a hot bath of steaming water and soak the bottles there for at least an hour or so, to loosen the dirt and the labels. Here is an example of a cleaned and a dirty bottle. You see the yellow mould has already grown to substantial size in the bottom. If this gets in contact with your brew, your brew will be screwed. That said the best way to inspect the bottles after cleaning is to look at the bottom and see if there are any residuals left.

The second stage of the cleaning process after soaking is removing the labels. Those labels may also be contaminated and can easily stain your disinfection solution. Most brewers use water-based glue for the labels, while others use water-proof glue. For example Rickards labels are easy to remove after soaking, Sobeys Gracie labels were a real pain to remove.

The third stage is a throughout cleansing of the inside of the soaked bottles after removing the labels. Use a bottle brush for that. In order to make sure that the bottom is throughout cleaned rotate the bottle by 360 degrees while brushing intensely. Hours later all of my 58 bottles were cleaned.

5. Bottling the Beer

Now after 1-1.5 weeks of waiting open up the fermenter and enjoy the smell of fresh beer. After this period all the foam that is usually created during the first few days of the fermentation should already have disappeared. If you still see large patches of foam, it may be an indication that you still have to wait for a few days. In any case you should measure the gravity of your brew to assess the alcohol content. 

My beer measured 1.01 after one week. Referring to the table below, you can easily calculate the alcohol content from the initial gravity.

Gravity	Potential Alcohol Scale
1.000	0.00
1.005	0.72
1.010	1.44
1.015	2.15
1.020	2.84
1.025	3.53
1.030	4.22
1.040	9.98
1.045	6.24
1.050	6.90

alcPct [vol %] = PotAlc(initial) - PotAlc(finished)

6.9 (1.05) - 1.44 (1.01) = 5.46 vol %

Note follow the directions of your hygrometer. Some hygrometers are temperature adjusted for about 20C and therefore have gravity readings below 1.0, like mine. In that case they come with a custom gravity and potential alcohol mapping. According to my hydrometer table the content should actually be closer to 4.3 vol %. If you buy a hydrometer or your kit contains one always use its specific table.

Once you decide to bottle, move the worth from the fermenter into a bottling bucket and save a bit for the carbonation (described later). By any means do not pour the worth into the bottling bucket, instead siphon it into the second bucket. You want to place the siphon in the middle height of the fermenter, so that you do not scoop up any floating particles from the top, nor bitter hops that sunk to the bottom.

Take about a gallon (~2.8l) from it and put it into a stock pot again. The big issue we have with our home brew process is that it is a non-pressurized fermentation. The beer does not really contain a lot of carbon-dioxide anymore to pour a good bloom. The trick we are going to apply is to keep the fermentation going for a little longer after the beer is bottled. To do that bring this worth sample to a simmer and add the corn sugar (dextrose). Be careful the sugar provides ideal condensation particles for the remaining carbon-dioxide; it will generate a lot of foam while you pour it into the worth. There are actually tables how much sugar to add based on the measured gravity. When I got the initial utilities, I just followed the ball-park estimate of my brewer’s supplies guy to add about 300g for 6 gal (24l). 

Afterwards let it cool down to room-temperature, or add cold water.

Although the bottling bucket comes with a spigot, the ideal way to get the worth into the bottles is to use a siphon and a clamp again. I got about 10-15 bottles ready on a table and then siphoned the worth from the bucket into the bottles. As you also pick up lots of stuff during the initial transfer from the fermenter into the bottling bucket, it is best to siphon the beer for the bottling from the middle of the fermenting bucket as well. 

Also don’t be greedy and bottle everything the stuff at the bottom will be very bitter. My roommate wanted to try my brew and actually tasted from the bottom. He now thinks that I did a very bitter and strong brew :) and was potentially surprised the next time he headed into a washroom.

The capping process is straightforward. Just add the raw crown caps and cap them down with the capping press. In order to fully assess the quality of the closure, shake each bottle and hold it under water for a few seconds. If any bubbles come up the seal is not tight enough.

5 Waiting for the Carbonation

I decided to leave the capped bottles out in room-temperature for a little while to get the carbonation going. After 2 days all the bottles went into the walk-in fridge for 2-3 weeks. In an ideal case, you would store the beer right after capping at about 8-12C in a nice beer cellar. A fridge may be too cold and room temperature is too hot. From my ginger beer experiments, I remembered that you could mock that storage profile by leaving it out at room-temperature first and then store it cold. Pros will tell you that you should store it cold (8-12C) right away for it to clear. Since we are doing ultra-dark Irish Stout we can make an exception here.

Conclusion & Future Work

I have not tasted the fully carbonated beer yet but I took some scoops of the young uncarbonated beer. It just tastes awesome and comes really close to Irish Guinness. My vision that I had in the Guinness brewery to brew it myself one day certainly came true. The beer-brewing-process is linear and straightforward. As long as you pay attention not much can go wrong. According to friends who practiced brewing for quite a while in Canada already, if you add up all the ingredients you push your home production cost down to about at 30 - 40 cents (CAD) a bottle, which is certainly cheaper than buying anything from LCBO. In addition you are the master of your own brew, which means you establish the quality standard for it. In North America it is not uncommon for professional breweries to add plenty of preservatives and even replace corn sugar with dextrose to brew beer. Ironically, the poor quality of North American beer created a large and elaborate and professional crowd of home brewers here, especially on the US and Canadian West-Coast.

After seeing and tasting the success of this operation my landlord and several friends encouraged me to step it up to wine as well. After discussing with some local Japanese folks (landlady and her dad) and Chinese friends, I realized that the process towards Japanese Sake and Yellow Rice wine is actually simple and close to beer brewing. For the sake of purity and simplicity, I will probably be following the Japanese approach for simplicity.

The most ROFL moment I had throughout the time was my landlady coming into the kitchen: “What are you doing here, this looks like a ‘meth-lab’...”, which actually sparked the discussion about the upcoming Sake project.

Last but not least, drink responsibly and do not drink and drive. Although, I’m from Germany my beer consumption is at most 1 bottle a day after dinner. If you practice sports or engaging mental activities, you can easily feel how even modest alcoholic beverages can affect your focus and concentration.
See beer as a delicate dessert or side dish to savoury dishes, not as a cheap drink that goes with anything. It was not too long ago, when beer brewing was only the privilege and well-kept secret of monks in Germany. Actually they financed their operation by selling beer and wine, as explained in the previous Werner comedy. Remember beer is precious and should not be subject to abuse.

Useful References

●        Hydrometer usage http://en.wikipedia.org/wiki/Hydrometer

●        Brix Scale http://en.wikipedia.org/wiki/Brix

●        Earlier Ginger Beer post http://survivalengineer.blogspot.com/2010/02/funstuff-fighting-lcbo-and-beerstore-by.html

The Real Survival Series – Cut Off and Isolated – Part Two

The Real Survival Series – Cut Off and Isolated – Part 2

(link to part 1)

“Sipping his sake and eating his "Disaster Sushi Set," a local construction planning company president reminds me and my colleague that modern Japanese descend from samurai warriors and kamikaze pilots who were willing, without complaint, to meet their fate.”
(Steve Herman from Koriyama, Japan, March 16, 2011)

(Cover: Horst von Dach - Der Totale Widerstand - Kleinkriegsanleitung fuer Jedermann
"Total resistance - Guerillia Warfare for Everyone")

This is the second sequel of the survival series. I was inspired by requests and catastrophic events in Japan to write a bit about this subject. After talking about essential supplies you should have at home to sustain the unexpected for a little while. The description below assumes that you are several days into a disaster and there is no foreseeable aid coming in. Under these assumptions your emergency supply (see my previous post) will already be close to depletion and you have to organize in a group to sustain. Note it makes no sense at all and it would probably be counterproductive to put resources to the described activities below, if aid is coming in the near future or local authorities already put evacuation plans in place.

After watching the news today the major concern about 5 days after the earthquake and tsunami seems to be to supply remote villages and cut off areas given the very poor condition of public infrastructure. Unfortunately, traditional survival literature that explains you what to buy to go on an Amazon rainforest trip or adventure trip to the Thorngaard Mountains does not really cover what to do in such a situation. Assuming your small village or town is cut off, the local authorities collapsed or were simply not allocated in the first place, you need to figure out what to do.

Since the early 1950s Switzerland did prepare their population for the event that neutrality could be put at risk by a cold war escalation. It was the understanding of many officers, including Hans von Dach, that in the event of a foreign occupation the Swiss forces would be swiftly defeated or dispersed by a much larger force (Americans or Russians at the time) and it is the duty of everyone in that country to resist to the last breath. Most of that scare was motivated by the events of WWII. As he pointed it out: “You should not surrender to communists; and you actually can not surrender to fascists”.

Back from these past days remain several manuals how to organize civil resistance and guerrilla warfare units. His very early books from the 1950s have been translated into English and were allegedly unsuccessfully used by Iraqi insurgents. From my perspective, had they actually used the more modern German publications, these efforts may have been much more successful (but that is just my personal opinion).

Ignoring all the tactical information and the nasty details how warfare in such an environment works, it still contains valuable lessons how you can organize a small group of people that are determined for a common goal. In this case it is primarily the survival of the group and secondary to keep peoples occupied. The anxiety and the shock resulting from a disaster that you see in Japan right now could turn your mind into a daemons workshop; especially if there is uncertainty about when aid will arrive. I will make major adaptations and supplement some of the ideas by Major von Dach, since we have a peaceful application in mind.

Composition and organisation of your group

(photo credit)

Depending on who you get stranded or cut off with you may actually end up having a number of very useful talents. Assuming your village/group has about 40-70 people. Anything beyond a hundred people becomes hardly manageable because you will incur major inefficiencies in distributing supplies and keeping track of the current state of the group. An option in an urban setting or for a larger group is the sub organization into different groups. In a more populated such a group could be formed by an established community (your church, your bowling buddies, your local karate club, families that have children in the same class, etc.). And actually that is where things already deviate from a guerrilla warfare scenario.

1. In a traditional guerrilla warfare setting you would set up staff, core services, mobile several detachments and a strict command chain to ensure readiness and efficiency.
2. Implicitly part of that deal is that you voluntarily give up basic human rights (i.e. freedom of expression, democratic voting…) for the better cause of your country.
3. The group will mainly consist of volunteers and not of people who got mixed up by the same fate.
4. If a natural disaster hits, people will already have many of their own problems and imposing such a structure is rather counterproductive or even impossible.
5. Most of the people will actually be idle during non-fighting periods and perform simple chores or training. Such activities are not needed or even counterproductive when it comes to preserving supplies in a disaster situation.
6. The driving factors in guerrilla warfare are agility, deception and cover; when a disaster hits you should be more concerned about sustainability and conserving resources than being agile.

Therefore the setup and (democratic) organization of your group will largely depend on the group itself. You should strive to set up a credible leadership and a set of core services while maintaining the rights and needs of every individual of your group and applicable law.

Leadership

Be careful about establishing leadership. Choose someone (or a group of people) who has a sense of authority, that is respected, that can inspire people. The tasks encompass to organize the group, resolve conflicts, council individuals on their problems and provide technical support. The last point should be empathized. Leverage existing authorities such as remaining police forces and firefighters. Disaster situations are less about big leadership decisions and more about achieving the most with simple practical means, such that core services are provided by and for the group.

The Core Services

Note that not the entire group is needed to provide these services. It is actually rather a minority who acts on behalf of the group. That said these services should be tailored to the specific situation and be populated by experts in your group. Some fundamental services can also be carried out in rotation to assure fairness.

Supplies:

Goal: assure and improve food, water, equipment, and combustibles supply

Examples: Anyone who is willing and physically fit.

Medical:

Goal: provide aid and medical care, care for elderly that need attention

Examples: local medical staff (nurse, doctor, midwive…), people with first-aid experience

Communications:

Goal: Monitor news, establish contact with aid forces

Examples: HAM radio hobbyist, postman, people with working (cell-) phones, CB or GMRS radios, computer geek with working satellite communications link

Engineering:

Goal: Provide and restore very basic infrastructure for the other services to function.

Examples: carpenters, construction worker, electrician, (car-) mechanic, engineer

Equipment

• Shelter: Depending on the disaster homes may still be in-tact such that available space can be shared. In severe cases, such right now in Japan, it may be useful to organize tents or establish other forms of shelter. If no other form of shelter is usable tents can be ‘required’, be donated from local camping stores or be established from the ruins (more in future posts).
• Pots, Pans, Cutlery, Food containers may be readily available, and should be shared by individuals if needed.
• Same applies for blankets, coats, warm undergarments in winter-scenarios that we now for example see in Japan.
• Any form of radio equipment or media should be made available at a central spot. To conserve energy, battery-operated equipment should be shared by the entire group. For example von Dach suggests having two radios per detachment (80-100 people). One radio that is mains operated for places where power is available and one that is battery operated otherwise.
• For minor repairs or other needed equipment by the individuals that can be shared see my previous post.

Food supply

In a nutshell you have to live with what you have or what you can organize.

• You can organize it from local farms, food processing companies, shops and depots.
• By any means respect applicable law and avoid looting. Conflicts should be avoided by paying for the supplies.
• In severe cases scavenging foods in durable containers from the ruins may be an option.
• Hunting and fishing may only marginally improve the food supply and are just stated for completeness.
• Note since the arrival of aid is uncertain, save food in durable containers and ration available supplies.
• Do not ‘require’ or take existing supplies food from individuals. This is a quick recipe for your group to dissolve fairly quickly. In extreme cases, individuals will eventually start sharing or other arrangements can be found.

Engineering

Depending on the disaster, shelter as well as public infrastructure may be severely damaged. The composition and tasks will largely vary with the situation that you encounter.

• The core services, especially the medical one may need electricity. In subsequent articles I will write how you can provide such basic necessities.
• Severely damaged shelter will need to be temporarily repaired.
• Basic means of transportation (for example to get medical attention for the elderly or injured) need to be established
• The infrastructure needs to be cleared to get aid workers in, obtain external supplies and facilitate the evacuation process (e.g., helicopter landing zone).
• Maintaining equipment that is used by the other services.

Medical

Also this service will largely vary by the situation. In general there are the following tasks:

• Make them transportable for further care on-site.
• Locate and provide first aid for injured.
• Collocate the injured to focus the attention of the medical staff and reduce their overhead. Existing facilities should be used. If not this effort should be supported by the engineering service that provides the basic infrastructure and restores the needed shelter.

Communications

The key objectives of communications are

·       establishing contact with aid forces,

·       reporting on the condition of the group,

·       coordinate supplies in cut off areas (i.e., air drops),

·       Receive and distribute news to inform the group and keep the moral up.

Special topics

Basic Weather Rules

(photo credit)

This is a collection of symptoms by von Dach and my flight school manual that allow crude nice weather predictions. Given that your infrastructure and possibly shelter is destroyed, you will be much more vulnerable to weather changes. Since the description leaves lots of room for interpretation, develop an eye for them over time.

If you search on the web you will find numerous website that elaborate on simple farmer rules and other forms of crude weather predictions. You do not have to be a meteorologist but mastering a few basics is always handy.

Signs for improving weather conditions include:

• Evening fog,
• Dispersed piled clouds moving into the wind direction,
• High-altitude cirrus clouds under which piled clouds move with a faster velocity.

Nice weather signs

• sunset afterglow,
• high-flying swallows and croaking frogs,
• early morning fog that disappears on sunrise,
• massive dew in the evening and the first-half of the night is a clear sign that there is no rain the next day,
• a few large piled clouds indicate good and dry weather. Note in warm weather they can also be light indicators for thunderstorms.

Bad weather:

Indicators for bad weather are usually animals. Birds or fish chasing for insects that move lower in anticipation of rain. Mountain goats or -sheep also sense rain quite accurately and move lower. Other indicators according to Nehberg include,

• red sky in the morning,
• glowing moon and twinkling stars,
• absence of morning dew in the summer,
• clear views (i.e., clear day),
• mix of different cloud types,
• sudden wind changes by more than 45 degrees,
• raising fog from mountains,
• surprisingly far sound propagation.

Nehberg recommends the use of a barometer in mountain regions. The limited far sight and the formation of mountain chains make even short-term weather predictions difficult.

Supplemental Emergency Food

(photo credit)

If your emergency supply is depleted, you have to sustain on what nearby fields and forests can offer. Elaborate hunts or trips into forests for berry collection are counterproductive for your assumed group size. In addition, these supplemental foods are not a sustainable source of food but may bridge severe shortages until aid arrives. Moreover in urban areas your choices may be even more confined to scavenging. The recipes below are a collection of Major von Dach.

Basic sources

Vegetables, fruits, potatoes, berries, mushrooms, herbs, deer, birds, fish, frogs, snails, etc…

Soups

Most of the above sources can be prepared as soup. Preferably use cereals. Squish the corn, add water, and, if possible salt and cook it.

Potatoes

Roast in open fire or cook in water.

Substitute bread

Cereals that aren’t ripe yet can be used to create a substitute for bread. Squish and grind the corn, mix it with water to form dough. Add salt when possible. Put it flat on a steel plate or put it around a branch and bake it over the open fire.

Substitute coffee

Use ripe barley corn or alternatively acorns. Roast them on a steel plate over open fire until they are dark brown to black. Grind them to powder and infuse them in hot water.

Herbs to be used as supplemental spices

Von Dach has an elaborate collection on herbs that could be used to replace traditional spices. However that list is confined to the central-European vegetation and might be of little use elsewhere.

Various interesting hints:

• The soft inside of tree-bark can be eaten raw. Cut off the soft skin that directly surrounds the hard wood. It can be eaten raw or cooked as soup.
• The inside bark of willow-, birch-, pine- trees can be dried, ground to powder and used as flour.
• You can eat sweet corn even if it is not ripe yet. The best way to do so is to roast it on the open fire.
• Various kinds of nuts can also be eaten if they are not ripe yet.
• Fruits that are not ripe yet can be cut in small pieces, cooked soft and eaten. Drink the cooking water warm as juice replacement.

Preparing Meat:

Soak it in cold water then the water can later be used as strong soup. Same applies to bones.

Fish:

Cut the fish open starting from the tail to the front. Peel the guts out with a finger. To prepare:

• Roast: Keep the head, eyes etc on. Add some salt and fry it on open fire.
• Cook: Take the eyes out, put in water and let it sit for some time.

Basic Field Well

In case water supply becomes a problem, there is no freshwater nearby to purify, consider building a small field well. For areas like deserts or below-freezing point temperatures this is not an option. I’ll write about these scenarios on future.

For this well:

• Dig a trench to reach a bit beneath the ground water level
• Take a barrel and remove the bottom
• Put about 30 cm of gravel/large stones and sand as filter layer into the bottom of the well.

The water should be purified as follows:

• Filter the water through a clean cloth
• Boil the filtered water for at least 1 minute
• Always use clean containers. When cleaning containers for storage also clean the caps and the thread.

“Kosovo” Generator

This story is based on a circulating rumour in the battle engineering company that I did my service in more than a decade ago. According to that story, a local car mechanic and machinist went off and built this generator from scrap car and bike parts to supply electricity to surgeons in the local hospital during the Kosovo war in 1999. They successfully deployed that generator in the river of the town while being under constant threat to get shot by enemy forces.

In a nutshell they joined two bike frames together in a rather simplistic wood construction. The tires from the back wheels were removed.

They cut off either side of the inside wheel hangers of the two frames and connected the outer wheels with the gears facing outwards to the frame. Panels of wood were fasted into the spikes of both rims to build something that is like a waterwheel of a mill. Note that the width (i.e. the spacing between the two bike wheels) determines the torque that the mill can generate. The alternator can be driven by a belt and the alternator and the needed battery can be enclosed in a simple wood construction. A schematic is shown in the following picture.

Above the waterwheel, where usually the rack of the bike sits they fastened a panel with an automotive alternator and a car battery sitting on top. A belt was used to connect one side of the rim to the alternator and to generate power.

Note that alternators require a relatively high RPM that is unlikely to be achieved by the ratio of the rim to the alternator. You can account for that by adding resistors in the circuit. If it is properly hooked up, the generator should output around 13.8V to 14V which is enough to charge the connected battery. Note that the design of the alternator mandates that a battery needs to be connected for it to work. Alternators compared to traditional generators do not have magnets, such that the magnetic field needed for the power generation is initially supplied by the connected battery. Hobbyists picked up that idea as well and the circuit is well described here.

Summary & References

These were some thoughts on how you could organize a small to medium-sized group to survive hardening circumstances, when you are cut off from any outside aid. Note that these lessons here are not useful or even counterproductive if aid is on the way. Look at the previous series of my blog posts how to survive short periods of privations.

In future posts I’ll probably blog a bit more on selected topics of survival.

References:

• Ruediger Nehberg
• Hans von Dach
• Total Resistance Book
• Watermill Battery Charger
• Steve Herrmans Article

Surviving Financial Illiteracy – The Very Basics

“Did you just call me massive, naked and short? How rude!”

As part of the real survival series, I decided to write a bit about investing. I’m currently graduate student in Waterloo and generally considered frugal and sometimes on the edge of greedy. Being in the university it sometimes strikes me that the overwhelming majority of students here spend everything they have or, actually, do not have. Many of the undergraduates rely on a system of student loans and to many it actually does not occur very soon that they have to pay a significant chunk of it back.

I have been leading a study group for the past four months for the first level CFA examination that is coming up this December and want to blog a bit about saving and investing. Starting from various basic concepts about what money and inflation are down to different investments, saving vehicles and their (Canadian-) tax implications.

These are not recommendations but more of an experience report. I do not assume any liability for financial loss or any other loss that may be related to reading this article.

What is Money

(personal collection of several Silver coins)

Money, simply put, is any object or record that is generally accepted as payment for goods and services. Based on that principle it is accepted as medium of exchange, a unit of account, store of value and standard of deferred repayment.

Back in the old days scarce commodities were used to fulfill this option. People used anything from sea shells, barley, up to precious metals.

Over the years people moved to representative money, standardizing the unit size of the commodities used for exchange. Examples are various gold and silver coins that emerged over the centuries, for example the German Thaler that was first minted in 1518.

Today things are a little bit different. Common to all the previous examples is a very important property. All those items had a significant intrinsic value. What we have today is fiat money or so called paper money. Instead of having a significant intrinsic value it is a guarantee. Traditionally it was a guarantee to convert the paper into some physical commodity, but nowadays it is not. Instead governments govern laws on how this fiat money is used, replaced and traded. Fiat money is accepted as legal tender, making it unlawful not to accept money as payment for goods, services and repayment of debts. Therefore, it is actually a little more than “worthless paper” or “worthless electronic records”.

This concept of money also strongly ties into the concept of fiscal or monetary policy. Today most if not all countries have their money supply and rules associated with it controlled by some sort of central banking system. This system is responsible for:

·       creating and destroying money

·       and handing and taking that money to and from the government.

In almost all countries that money is only loaned to the government with interest. Therefore, setting…:

·       this interest rate,

·       the amount loaned and repaid,

·       and reserve requirements,

also become part of that system.

It should be noted that those policies are usually influenced by macroeconomic indicators and are highly influential on inflation and taxation. The core objective of such a system is to ensure price stability. Making sure you pay the same unit of money for your daily items that you paid yesterday, the day before, a week ago and so on. Unfortunately, most of these systems have a poor track record at doing just that.

Inflation, Why Debt = Money, and How Money is Destroyed

Having introduced the central banking system, one may be quick to jump to the conclusion that this central banking system is the only source cause of inflation. It is true that printing a couple billion dollars directly constitutes to inflation, but the general effect is actually worse and it’s a bit more complicated. That has to do with how banks operate.

For hundreds of years banks operated on the principle of fractional reserve banking. In a nutshell it means that banks can loan out more money than they actually have deposited in their accounts. The controlling parameter controlling is referred to as the reserve ratio or reserve requirement and is also controlled by the central banking system.

So what does this have to do with inflation, one may ask. Let’s say the reserve requirement is 20%. That means a bank can loan out five times the amount of deposits to borrowers. Those deposits usually come from some money supplied by the central banking system and mainly from savings of the clients of the bank. Consider the following example.

Chang is a good guy and wants to buy an apartment from a local property developer, Bao. Chang goes to his local branch of dragon bank. For the sake of the example let’s assume the dragon bank, has 500.000 RMB in deposits. That means according to the reserve requirement 20%, the bank could loan out up to 2.500.000 RMB.

Chang is a good credit guy looks at a nice apartment in a red-hot Chinese property market, taking out a loan of 2.000.000 RMB out of his bank and down-paying about 500.000 RMB for a 2.500.000 RMB apartment.

He takes that cash and gives it to Bao, who now has 2.500.000 RMB in cash.

Now, for the sake of the example, let’s assume Bao has no accounts pending (i.e. the entire project was paid off) and is a savvy girl, who puts that money into her bank account of the dragon bank instead of investing it in new properties.

Wait what just happened?... Well, let’s look at the dragon bank again. Bankster Mei-Ching goes through her accounts. Previously she had 500.000 RMB in deposits and no loans. After giving the money to Chang, she had 500.000 RMB in deposits and 2.500.000 RMB in loans (earning a nice little chunk of interest on that one now). She is a lot happier now than before.

After Bao visted Mei-Ching to deposit her 2.500.000 RMB, Mei-Ching now has 3.000.000 RMB in deposit and 2.000.000 RMB in loans. That means Mei-Ching could loan out up to 13.000.000 RMB. Considering, the red-hot property market and the many other property virgins like Chang this is probably just going to happen, making Mei-Ching very happy.

Over just a few transactions the money that could be loaned by this particular bank increased by a factor of 5.2. Guess what, this is pretty serious inflation and it is not directly related with the government printing money.

Now be honest, did you know that before. After you wiped off your tears take a look at this one. It explains this system in the US in a very funny way.

So now after we illustrated how money inflates, let’s also take a look at an example how money is (or should be) destroyed. Let’s modify our example a bit.

Let’s say the money supply is the same and Chang still buys that apartment for 2.500.000 RMB putting 500.000 down.

Now let’s get a bit more realistic. Bao, the property developer is from a short legacy of very wealthy Chinese. She doesn’t want to go home to daddy without reporting triple-digit growth rates in for daddy’s apartment business.

Instead of depositing the money she got from Chang, she invests it into a set of new properties. Building an apartment, like the one that Chang bought, costs her about 500.000 RMB. So she goes out and builds 5 more apartments.

For the sake of the example, let’s assume that Bao greatly overestimated the demand, and nobody anymore wants to buy apartments anymore for 2.500.000 RMB.

The only people left in town would probably only be able to afford 75.000 RMB for housing. Having no reserves and being rejected by daddy, she has to do just that to survive, leaving her at an overall loss of 125.000 RMB. The math is as follows:

• Bao got 500.000 RMB from daddy to start a property business (initial equity).
• Bao invested 500.000 RMB to build Changs apartment.
• Bao got 2.500.000 RMB from Chang for that apartment.
• Bao invested all of her 2.500.000 RMB to build 5 more apartments.
• Bao had to sell 5 appartments at 75.000 RMB each (daddy doesn’t like Bao anymore!)
• Bao now only has 375.000 RMB.

500.000 RMB in deposits that were used to create 2.500.000 RMB in loans that was foreclosed to 75.000 RMB leaves Mei-Ching with missing 425.000 RMB to honour her obligations to the depositors, oops! If Mei-Ching does not get bailed out, an angry mob of savvy Chinese will soon be after her with torches and pitch-forks.

In total the money that was circulating in our little system, decreased from 1.000.000 RMB (Changs downpayment 500.000 RMB, Mei-Chings bank deposits 500.000 RMB) to 450.000 RMB (Foreclosed property 75.000 RMB, Bao’s equity 375.000 RMB). Note the value for the properties were not accounted for, since we are only talking about money at this point. But lets be assured even factoring in the property values, we have less than what we had before. I piced the China example, not because I’m an Asiaphile but because I particularly noticed these recent developments there…

Ours’ was a very scary example from a bust that actually destroys value and money. Considering the documentary it is actually not that far off the real risks. Usually the central bank would try to “contain” the system and attempt to “stabilize prices”. Following that objective through, they’d have to tweak the policies to make the apartments be priced at 2.500.000 RMB again. Be assured these policies will make several other things a lot more “expensive”, if salaries do not increase at the same time.

Time-Value of Money Calculations

So after we established what money is and, hopefully, believably convinced everyone that the value of money (or seen the other way round: prices) is not constant over time, we should look at some basic terms and concepts.

Interest rates are generally seen as time-value measure of money.

There are several specific concepts that should be mentioned with interest rates in general.

• Required rate of return: is the interest rate that is needed for investors and savers to lend their funds. That is investors need to account primarily for risks, inflation and several other things.
• Discount Rate: If someone borrows at interest X, he has to pay discount X in future.
• Opportunity Cost: If you consume your savings now, while the interest rate of a bond is 5%, these 5% are the opportunity forgone.

Another nasty thing about interest rates for investments is that they are usually quoted in terms that mislead or exploit unsophisticated investors (or, worse, borrowers). Many investments generally state the annual interest rate and compounding intervals. For example, 3% annual interest, compounded semi-annually. Compounding actually results in a higher interest rate than you might think. This can be nicely illustrated by time-lines.

Let’s consider the interest payments as cash-flows (CF_1,…, CF_m) that occur at the certain compounding periods (0,…, m). The effective annual rate can be computed as follows.

• Stated annual rate: r
• Periodic rate: r/m
• Effective annual rate:

This math assumes that the interest rate remains constant over the period of the investment. In practice however, this interest rate may vary and so do cash flows of other investments. Computing these returns over time can be nicely done by working out the returns over the time line. These timelines can also be nicely used to estimate the net-present value of future cash flows. For those, who want to dig deeper into financial calculus, take a look at perpetuities, and annuities. Almost any investment that involves periodic cash flows can be nicely valued with these tools.

Now that I scared you about the non-constant value of money, in future posts I will write a bit more about several investment vehicles.

References

• http://en.wikipedia.org/wiki/Money
• http://en.wikipedia.org/wiki/Thaler
• http://en.wikipedia.org/wiki/Interest_rate
• http://en.wikipedia.org/wiki/Annuity_(finance_theory)
• http://en.wikipedia.org/wiki/Perpetuity