We have a balloon frame 1911 house with a walk out basement. There is a 3 foot foundation wall and then 6 feet of frame wall before the 1st floor. 2X6 framing and we can see the back of the exterior siding.

We want to know what to do to properly insulate the basement so that the main floor will be warmer and to prevent condensation forming in the walls. We get a lot of moisture here in the Pacific Northwest and usually not lower than 32 degrees. It's a damp cold though

Any thoughts would be welcome.
chilly feets