Category: Economics & Investing

Some effects of bad monetary policy: The war on baby boomers. (Thanks to C. Matt for the link.) V.T.P. sent this: France is selling bonds at a negative interest rate Roubini: My ‘Perfect Storm’ Scenario Ii Unfolding Now. (Kudos to C.D.V. for sending this link.) Items from The Economatrix: As Foreclosures Ramp Up, New Roadblocks Ahead There Will Never Be Enough Jobs in America Again Government Overpaid $14 Billion in Unemployment Benefits US Economy:  Things Could Get Much Worse

James Wesley: I understand saving gold and silver for preservation of wealth but I’m not sure of copper pennies or nickel five cent pieces. Gold and silver have been used for thousands of years as stored wealth but I’m not sure I could convince anyone to take pennies and nickels that are made with industrial metals. The copper value of the coin may be greater than the value marked on the coin but who is going to have a desire to gather up copper and nickel over silver or gold? Thanks for the great blog and the help. – Mark …

Several readers have written to ask about the recent slump in precious metals. This can be attributed to the ongoing sovereign debt and derivatives crisis in Europe, where there are wholesale liquidations of everything. Folks are scrambling to raise cash to settle CDO contracts and to meet margin calls. The crisis will keep the price of metals down until perhaps October. It doesn’t mean that the bull market in metals is over. Far from it! Just look at this as a good buying opportunity. Like a Hollywood set, housing inventory looks to be low only because that is what is …

Cordelia Hebblethwaite of the BBC asks: The US penny: Should it be scrapped? [JWR’s Comment: The real solution is to admit the chronic inflation since 1933 and revalue the Dollar, by dropping a zero. Gasoline and milk would both then sell for around 33 cents a gallon, and a bottle of sodapop would again sell for a dime. This move would restore realism to the values of our pocket change. I also predict that it would spur a short term economic revival, since everything would seem inexpensive.] Items from The Economatrix: Signs We Are Approaching a Zombie Economy Exposure of …

Reader Ian R. sent this: Japan to go broke by October? Standoff threatens to ‘collapse’ budget Some fascinating reading: Monetary Laws. Items from The Economatrix: A Crash Warning Has Been Issued for the Economy:  Buy Gold and Silver IMF to Cut Growth Outlook as Global Economy Weakens Jobs Selloff Erases Wall Street’s Gains for the Week Dismal Hiring Shows Economy Stuck in Low Gear

Pierre M. sent me something to file under: Why Am I Not Surprised?: Report: Countrywide won influence with discounts More and more young adults leave Idaho’s family-run farms Items from The Economatrix: Could Gold Hit $6,000?  Analysts Think So. Home Sales Show Bernanke’s Low Rates Are Gaining Traction What’s Behind The LIBOR Scandal?

I highly recommend this interview: Chris Duane on Coast to Coast AM. Thankfully, the recording is minus the lengthy commercial breaks. Duane (of Silver Bullet & Silver Shield) says that the collapse of the U.S. Dollar is a “100% mathematical certainty.” Duane also points out the risk posed by the 27 million Americans on prescribed antidepressants. He predicts that there will widespread psychotic breaks if there is a disruption of pharmaceutical supplies. Despite this gent’s odd demeanor, his words ring true: No independence. (Thanks to K.H. for the link.) Sue C. sent this: Brent higher, U.S. crude pares losses after …

Jim W. sent this from Chris Pulplava: Massive Japanese Debt Monetization Is Coming, Yen to be Devalued G.G. flagged this: Financial ‘Armageddon’ Will Happen Despite EU Deal: Rogers Also from G.G.: There Has Been A Stunning Collapse In Vending Machine Revenue K.P. sent this: 77% of JP Morgan’s Net Income Comes from Government Subsidies Heatwave threatens US grain harvest. (Thanks to K.A.F. for the link.) Items from The Economatrix: Euro Compromises Likely To Unravel Manufacturing In U.S. Unexpectedly Contracted In June Hiding Inflation Results In Perma-Recession, The Next Great Keynesian Failure Here Are The New Taxes You Are Going To …

Stockton, California: The Bleeding Edge of a Scary Economic Trend G.G. suggested: Doug Casey on the Coming Eurocrash Also from G.G.: 8,733,461: Workers on Federal ‘Disability’ Exceed Population of New York City U.S. Factory Output Drops in May, Second Fall in Three Months From Jeff in Texas, a BBC article: Gold versus paper money: Which should we trust more? Items from The Economatrix: Oil Drops as US Manufacturing Shrinks in June Financial Collapse End Game, Operation Twist Deception, Infinite Quantitative Easing

Derivatives, again: Clawback controversy at JPMorgan J.B.G. sent this: Food inflation fears as US crop prices surge: Worries about world food prices are increasing, stoked by a 10 percent rise in US corn and wheat prices in just a week. Get your storage wheat and corn meal before these price increases work their way down to the retail level! United States of Investment Properties – The role of property investors in the current housing market. JWR’s Comment: There is a word for someone who foolishly invests in a declining market: contrapreneur. Jim Rogers Prediction: America Will Certainly Go Through A …

Sue C. sent this: British farms a better bet than gold Risk of foreclosure looms over 700,000 Californians The financial benefits of food stamps – Record $78 billion worth of food stamps issued in 2011. Select Wal-Mart stores pulled in 25 to 40 percent in revenues from food stamps according to a recent analysis. Lee M. flagged this article: Libor Rate Faces Review Amid Barclays Scandal

Eric Sprott: Silver to Go Supernova, Paper Markets are a Joke! (Thanks to Jim W. for the link.) SGT Report: Watching the Clock: Will a Total Economic Collapse Occur in September-October? AmEx spotted this: Is Gold on the Edge of a Violent Downturn? B.B. suggested this news item: Gun stocks shoot through the roof. Items from The Economatrix: Roubini:  We are Heading for a Global Perfect Storm Slowdown Concern Ebbs on Durable Goods, US Home Sales Rio+20 Economic Reality Check Stockton Teeters on Bankruptcy Edge, But City’s Not Alone

Why A Debt Based Financial System Will Always Fail In The Long Run Paulette recommended a “must read” piece by Jim Willie that relates to derivatives and monetization (a.k.a. “quantitative easing”): Outline on Collapse End Game Tom K. spotted this: Massive Celtic coins hoard found on Jersey. The story disingenuously ends with this statement: “The finders and the landowner have said that they want the hoard to go to the island and be put on display for the people of Jersey to enjoy.” They sound oh-so philanthropic and egalitarian. What the article doesn’t mention is that they don’t have any …

Those pesky derivatives: U.S. Stocks Fall as JPMorgan Tumbles on Trading Report. (A tip of the hat to veteran content contributor Sue C. for the link.) Economy: We Are Living In The Greatest Debt Bubble In The History Of The World Mark T. sent this sad news: Nearly 3 in 10 have no savings for an emergency Study: More Than Half a Trillion Dollars Spent on Welfare – But Poverty Levels Unaffected. (Thanks to Pierre M. for the link.) Items from The Economatrix: Consumer Confidence in US Declines to a Five-month Low Business Bracing For Bad Summer? Home Prices Rise:  …

Mr. Rawles, To follow up on the recent posts about sorting Canadian nickels, I recently stumbled across a web site that has pictures of all Canadian nickels from 1870 until 2005. After sorting close to $100 worth of nickels, I can say the vast majority of non-debased nickels span between around 1960 to 1999.  Of those, most of the pre-1982 nickels are 99% nickel and have a melt value approximately 1.5x it’s face value. All nickels from 1982 to 1999 have a copper-nickel composition similar to that of the US nickel, and a melt value currently very close to the face value. One subtle …