Category: Economics & Investing

Dollar Destruction Averaging

I recently got a letter from a financial planner who derided my occasional “Buy at this dip” recommendations and suggested dollar cost averaging when investing in precious metals. I replied: “While I agree that dollar cost averaging is the right approach in most markets and for institutional investors, it is not necessarily the correct approach in the current secular bull market in silver for small investors and for those who are hedging against the dollar with small sums.  The vast majority of my readers had less than $10,000 to invest in 2005, and they work for wages.  So they haven’t …


Economics and Investing:

It is very clear that we are approaching a national debt crisis. This chart from the St. Louis Fed illustrates America’s tale of woe. Once interest rates start to rise–and inevitably they must and will–then the whole charade will abruptly end. We will suffer a debt crisis far more horrendous than what we witnessed in 2008. No nation can survive a sustained debt level greater than 100% of GDP for and extended time without a crisis. Some interesting reading over at The Daily Bell: Chris Becker’s Austrian Perspective on South Africa, Gold and the Ludwig von Mises Institute Jim Rogers: …


Economics and Investing:

Supply Policies Prevent Hydropower from Fulfilling its Potential Treasury Auction Bids Drop To Weakest Since 2009 As Yields Rise   Items from The Economatrix: As Demand In The Global Economy Weakens, American Multi-Nationals Feel The Pain John Galt: The End of Global Banking or Worse? Cash Is Tight:  Six More US Muni Bond Sales Postponed


What is Money When the System Collapses?, by Mac Slavo

What is money? Economist Mike Shedlock defines money through the eyes of Austrian economist Murray N. Rothbard as “a commodity used as a medium of exchange.” “Like all commodities, it has an existing stock, it faces demands by people to buy and hold it. Like all commodities, its price in terms of other goods is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. People buy money by selling their goods and services for it, just as they sell money when they buy goods and services.” What is …


Economics and Investing:

Reader M.M. liked this piece at Zero Hedge: The Biggest Ponzi Scheme in the History of the World Jerry E. sent a link to an interview with Max Keiser, where he posits an overnight five to six percent jump in interest rates, and talks about the Edward Snowden situation. Andre D. spotted this: Italy could need EU rescue within six months, warns Mediobanca Jim Rogers: “This Is Too Insane–And I’m Afraid We’re All Going To Suffer For The Rest Of This Decade“ Items from The Economatrix: Ben Bernanke’s Real Message For Gold Investors, Translated By John Williams Dr. Paul Craig …


Economics and Investing:

Whenever Margin Debt Goes Over 2.25% of GDP the Stock Market Always Crashes. (Thanks to Jim W. for the link.) Physical Gold Market In Disconnect As Premiums Hit Record Items from The Economatrix: Food, Guns, Gold: “The Record Is Rather Clear On The Side Of Commodity Money” Doomsday Poll:  87% Risk Of Stock Crash By End Of Year Housing Recovery to End Soon


Letter Re: What is Behind the Dip in Precious Metals Prices?

James, Could you or someone you trust please explain why spot silver has dipped below $20 per Troy ounce? Those of us who don’t have the experience or ability to ferret this knowledge out for ourselves would be grateful. In addition, a forecast for how long this dip might last, would be greatly appreciated. – D.W.N. JWR Replies: The short answer to your question is that Ben Bernanke spoke and the markets panicked. All that it took to spook the markets was an indication that Quantitative Easing monetization might end in the next year, and suddenly everyone realized that the FREE …


Economics and Investing:

History Shows Gold May Drop to as Low as $900 An Oz.—And Still Remain in a Bull Market The new “modest budget” indie movie Alongside Night is now in early release. The film is based on Agorist-Libertarian activist J. Neil Schulman’s novel of the same name. It seems that some gold and silver coins deserve “best supporting” awards. Jim W. sent this: Fed Faces ‘Treacherous’ Path in Exiting its QE. Here is a quote: “Exiting too fast will crash the real economy, while exiting too slowly will create a huge bubble and then crash the financial system.” Get Ready for …


Economics and Investing:

Jim W. sent a link to some analysis of the recent jump in the 10 Year Treasury rate: The Nightmare Scenario Gold-Bashing Mythology Hits New Crescendo. (Commentary by Jeff Nielson.) Marc Faber: People With Assets Are All Doomed The News, the Spin, and the Reality of the FOMC Meeting No great surprise: Maryland, Virginia, D.C. escaped government spending cuts. (The D.C. Beltway’s deeply entrenched bureaucratic aristocracy rarely suffers.) Items from The Economatrix: Retirement Shortfall May Top $14 Trillion Peter Schiff:  Fed Is Trying To Ref late A Phony Economy Also from Peter Schiff:  “Vicious” Gold Rally Coming


Mark Levin: Government Is Simulating the Collapse of Our Financial System, the Collapse of Our Society and the Potential for Widespread Violence

Along with Rush Limbaugh and Sean Hannity, leading conservative radio host Mark Levin reaches tens of millions of listeners weekly, and what he talked about recently on his nationally syndicated show has sent shivers down the spines of many of them. A few years ago this was fringe theory, restricted only to the sphere of alternative (conspiracy) news. Warnings of a massive economic collapse, government stockpiling of weaponry, and the idea that Americans could be broadly classified as terrorists and then detained indefinitely or killed often fell upon deaf ears. Today, as more information ‘leaks’ into the mainstream, it is …


Economics and Investing:

Moody’s takes rating actions on nine Hong Kong banks. JWR’s Comment: The timing of this is suspect. Is it a coincidence that Hong Kong just dragged its feet on the rendition of NSA whistleblower Edward Snowden, under the U.S./Hong Kong extradition treaty of 1996? The payback, apparently, is a down rating by an “independent” ratings firm. Venezuela on the Brink of Hyperinflation. (Thanks to Jim W. for the link.) Mortgage Rates on the Rise; Repeat of Lead-Up to 2008? JWR’s Comment: Interest rates are crucial. Once rates rise substantially then it will become impossible to service the Federal debt without …


Economics and Investing:

Some cogent observations by Bob Owens: Where is all the rimfire ammo? The new modest-budget indie movie “Alongside Night” is now in early release. The film is based on Agorist-Libertarian activist J. Neil Schulman’s novel of the same name. It seems that some gold and silver coins deserve “best supporting” awards. G.E.C. suggested: All the Gold in Fort What’s-Its-Name Michael Pento: Market Calls Fed’s Bluff Jim W. liked this piece by Alasdair MacLeod: Gold is being supplied by western governments. Here is a key quote: “From the point of view of the western central banks, as well as the bullion …


Economics and Investing:

PTR Industries (the HK clone maker) Votes With Their Feet: Gun-maker expected to move into Horry County. South Carolina was a good choice. (Thanks to Howard S. for the link.) And on a similar note: Ruger Looking Into Rockingham County North Carolina. (Our thanks to F.G. for that link.) These chaotic gas lines give us a preview of collapse: Egyptians Denounce Fuel Shortage Reader P.P. sent: World economic group calls for global exchange of tax information to fight evasion. A key quote is that the OECD wants data from all corporations and individuals “flowing freely from banks, investment houses and …


Economics and Investing:

Has inflation fueled the two income household trap in the US? How inflation has eroded the purchasing power of the working and middle class. Canada has its own woes, including some mayors with a low regard for the law similar to that exhibited by many members of the Mayors Against Illegal Guns pressure group. B.B. sent: The Tax Man Cometh—For Your Bitcoins Items from The Economatrix: Watch Your Cash: New BAIL-IN Rules Will Force “Failed Bank Losses On Investors” The 50 Best Employers For Boomer Workers Housing Starts In US Rose In May To 914,000 Annual Rate


Economics and Investing:

The stock markets and the precious metals markets all got hammered on Thursday (June 20, 2013), following some comments by Ben Bernanke. Don’t be spooked. Don’t be fooled. The Fed and Treasury Department are essentially locked in to QE to Infinity. They may try to “taper”, but it probably won’t work. Today’s news does nothing to change the market fundamentals. Silver will remain in a bull market for as long as the government continues to grossly over-spend. So when the price of silver gets temporarily pushed down by these rumors, just look at it as another buying opportunity. Over at …