Letter Re: One Way to Visualize Inflation and Dollar Devaluation

Sir, Let’s look at a way to visualize inflation. Let’s say you had a $1,000 bill in 1900. At that time, this would be the equivalent of letting the government safeguard [about] 50 ounces of gold for you. In 1933, Franklin D Roosevelt devalued the dollar, and as a result gold’s price rose from $20/ounce to $35/ounce. Equivalently, you could also say the 50 ounces of gold the government held for you now became 28.57 ounces of gold. The government stole 21.43 ounces of gold from you overnight! In 1971, Richard Nixon ended the Bretton-Woods gold standard for good, and by 1974, gold had risen to $200/ounce. You now had 5 ounces of gold. Thus, between 1971 and 1974, the government stole 16.43 ounces of gold from you. In 1999, gold bottomed out at $250/ounce. You now had 4 ounces. With gold nearing $1,000/ounce today, you are down to 1 ounce. Over the last 10 years, the government has stolen roughly 3 ounces of what little gold you have left. Now instead of paper money, visualize that you did indeed have 50 ounces of gold in your safe in 1900 and that year after year the government broke into your … Continue reading

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Letter Re: Thoughts on Accumulating Silver

Mr. Rawles, I would first like you to know your family is in my thoughts and prayers. Thank you and your family for opening our eyes to what is happening all around us and for helping to prepare us for what could happen. To borrow a phrase, “The sleeper has awakened”. On to my topic. I am what may be described as a prepper and after reading many of the countless articles by investors on the accumulation of silver, I began to take your advice as well as their advice and have been purchasing silver whenever the budget allows. With a family with two small boys (2 and 4) and both my wife and I working, it is hard to justify the expense of obtaining silver or gold for that matter. My point is this, I was purchasing Silver Eagles and after reading many posts on SurvivalBlog, I have turned to buying pre-1965 silver coins as “junk silver”. The going rate right now on auction web sites is 10 or more times face value of the coins. I cannot afford to buy even a quarter bag of silver at a time let alone the half bag ($500) recommended. I work … Continue reading

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Letter Re: Distance Traveling by Waterways

Jim, Thanks for your work. I have been a faithful reader for quite a while (and a 10-Cent Challenge subscriber). After reading LDM in Colorado’s post, I had to e-mail and correct a few problems. While I know little of white water rafting, I do know about Personal Flotation Devices (PFDs). I was a Coast Guard Boarding Officer for many years, and I would like to correct some of his terminology. Unfortunately, some of his comments could place someone in danger. The rating system for PFDs is based on capabilities. Specifically, Type I: Provides 22 lbs of buoyancy and turns most unconscious victims face up in the water. The old “Mae West” PFDs referred to are not rated PFDs and do not meet the requirements for any type of PFD. Type II: 15.5 lbs of buoyancy turns some unconscious victims up in the water. These provide less buoyancy than Type Is, but they are less bulky and easier to work in. Type III: 15.5 lbs of buoyancy but does not make any effort to upright an unconscious victim. They are easier to wear than either type Is or IIs. Type IV: Throwable PFDs such as life rings and seat cushions. … Continue reading

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Economics and Investing:

I found this linked over at the Total Investor blog: After the fall; The collapse in world trade has stopped, but there is no sign of a recovery Thanks to Rebecca S. for this news link: Weak Treasury Auctions Raise Worries About US Debt Burden Reader Greg C. suggested this: Adrian Douglas: CFTC Conceals the Real Problem, the Infinite Dollar Items from The Economatrix: Weak US 5-Year Debt Auction Raises Worries Bernanke on the Record (video) The Hole in Our Universe (The Mogambo Guru) Commentary by John Browne: Dead Banks Walking Fed Report Suggests Recession May be Bottoming Out. [In related news: Pigs seen flying over Chicago] Big Banks Cashing in on Rash of Smaller Bank Failures Copper Peaking as Inventories Signal Market Top Detroit Area Jobless Rate Tops 17%

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Notes from JWR:

We have received more than 120 kind e-mails in the past 24 hours, in response to The Memsahib’s “Bucket List” post on Wednesday. Thank you so much for your prayers and words of encouragement. This verse sums up the sentiment: “Let the righteous rejoice in the LORD and take refuge in him; let all the upright in heart praise Him!” – Psalm 64:10 We feel tremendously uplifted by your prayers. And for those that have asked: We are not seeking any funds for medical expenses. Instead, please send gifts to our favorite charity: Compassion International.

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Here Comes Winter!, by Peter H.

My brother wrote me recently to ask what we do to prepare for our winters here in the inland Pacific Northwest. He lives in a warmer climate but has been reading about the global cooling underway. For the last two years our area has been colder longer and this last winter we had the most snow in over 100 years. Remembering that Boy Scout slogan, “Be prepared,” prudent people are already looking ahead for the winter soon to come. Here are my odds and ends to get your thinking processes going: Dress to Save Your Life Our heaviest coats are rarely used, unless the temps get below about 20. Important that they shed snow (slick, synthetic outside layer). Whether its actually snowing, or snow falls on you from the trees, or you get snow on you from scraping the car or the roof of your house you’re going to get snow on you. Knit caps keep your head comfortable. If you are working outdoors and wear a really heavy fur Russian-type hat your head will probably sweat. Our winters aren’t usually very cold, so something moderate is all we need. I keep my cap, gloves, Gargoyles (folding ear muffs), Yaktrax … Continue reading

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Economics and Investing:

GG spotted this piece by Axel Merk: Credit Crunch Part Deux Is the mainstream media catching a clue? Surviving the ‘End of Civilization’ 2050; Six rules for investing in the worse-case scenario. (thanks to Craig M. for the link.) Curtis sent us a link to a great video segment by Marty Weiss. Items from The Economatrix: Dollar Falls to 2009 Low as Economic View Reduces Safety Demand China Warns US on Budget Deficit Unemployment in June: Map of the Worst Hit Cities Housing Recovery: Sell Now or Your Capital Will Forever Be Trapped Fiscal Drops in the Bucket Deficit (The Mogambo Guru) Fed Chair Takes Hit on Own Investments “Cash For Clunkers” Bashed Motorcycle Crashes Rise as Riders Seek Cheaper Rides

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Odds ‘n Sods:

Ebola in Pigs New Health Threat    o o o New on the market: Stay Alert caffeine chewing gum. (Obviously, this is something only for short-term emergency situations–like staying awake during the second half of a non-stop 800 -mile G.O.O.D. evacuation drive.)    o o o North Korea Warns of “Unimaginably Deadly Blows” to US    o o o Greg W. mentioned the soon-to-be-released Enertia electric motorcycle. $12,000 is a lot of money for a cycle with such limited range and speed. But it might be appropriate for short trips for someone that already has a large photovoltaic power system.

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