Category: Economics & Investing

Some recent data on the income decline in America illustrates that we are indeed in the early stages of an economic depression. There is an ocean of red ink that needs to dry out. And that might take two or three decades, folks. Diana was the first of several readers to mention this: Vatican urges economic reforms, condemns collective greed Mark L. pointed me to a new piece by Ambrose Evans-Pritchard that has some positive comments on investing in America. Yes, Things are so fouled up in European financial circles that they even make the U.S. look relatively safe and …

Mr. Rawles, Regarding the letter “Sorting Canadian Pennies“, I wanted to correct some errors for those Canadian nickel collectors out there.  The nickel from 1922 onwards to 1982 was made from – you guessed it – nickel (99.9% Nickel to be exact; with the exception of some years in the 1940s and 1950s when they were made of a either copper-zinc alloy (tombac) or chrome plated steel.  This was because nickel was in short supply for the various war efforts. The Canadian nickel’s composition changed in 1982 to the cupronickel composition used presently in the US (75% copper, 25% zinc); …

Top hedge fund manager: Decade of doom ahead. “Ray Dalio, founder of the largest hedge fund in the world (Bridgewater Associates), said the world debt is so large it will take 10 years to de-leverage it — and “there are no more tools in the tool kit” to postpone the inevitable reckoning.” JWR’s Comment: I think two decades might be more accurate. Ben S. sent this: Purdue expert: Cost to grow crops to surge in 2012 Fed’s Yellen: QE3 May Be Warranted. JWR’s Comment: Of course they’ll do it. Free money is more addictive than crack cocaine. Over at Fierce …

SurvivalBlog’s G.G. sent this: Monster Prediction From BofA: Another US Debt Downgrade Is Coming In Just A Few Weeks Bob G. mentioned a great Graphic of the European Debt Crisis Savings Experiment: Bagging the Best Deals on Groceries Items from The Economatrix: Berlin Experts Fear Euro Break-up From Bail-out Escalation EU Bank Failures Will Crash Wall Street US “Misery Index” Rises To Highest Since 1983 Merkel Takes Aim at Italy With Demand That Euro Members Live Within Means

John Mauldin asks: Can Hyperinflation Happen in the US? Clarke and Dawe explain quantitative easing. (Thanks to “The Other D.F.” for the link.) G.G. flagged this: Banks closed in Florid, Georgia; 83 have failed in 2011 Items from The Economatrix: Stocks Rise Sharply On Solid Corporate Earnings First Half of 2012:  Decimation of Western Banks The Coming Derivatives Crisis that Could Destroy the Entire Global Financial System Does One “Super-Corporation” Run The Global Economy?

G.G. flagged this: First look at US pay data, it’s awful Brian H. mentioned: Denninger’s timeline for collapse. The Ranks of the Underemployed Continue to Grow. Would You Do Your Banking at the Post Office? Dylan Ratigan gets his ranty Wookie Suit on, on MSNBC Paul H. sent this: FOREX: Dollar slumps to record low versus Yen Items from The Economatrix: Fed Survey Suggests Hazy Outlook for Economy Consumers Paid More for Food, Gas in September Oil Prices Little Changed on Government Supply Reports The Student Loan Bubble Exceeds All Credit Cards The Age of Bank Failures

Andrew K. sent us this: The Most Important Decision Bernanke Will Ever Make Over at ETF Daily: History Says Silver Could Become The Next 10-Bagger Investment; Here’s Why Largest Rare Earths Producer Halts Output. Eric N. sent a link to an interview with mainstream investment guru (and prepper) Robert Kiyosaki Items from The Economatrix: Budget Cuts Claim Hundreds of Thousands of City, County Jobs This is No Normal Recession:  Are We Ready for $100 Oil? Gold Signals The End Gold and Economic Decline Alternative Misery Index Drives Gold Demand

Cities Where Homes Will Not Sell EW.B. sent this article about a Nevada town: End of Empire: Tough economy closes mining town. (JWR’s Comment: This illustrates the importance of avoiding relocating to towns that are depended on a single employer.) HOLY BAILOUT – Federal Reserve Now Backstopping $75 Trillion Of Bank Of America’s Derivatives Trades. (Thanks to Steve S. for the link.) John R. flagged this: WOLF: Liberalism’s unwashed last stand–The hippie-critical new faces of the Democratic Party On a similar note, The Daily Bell‘s editors ask: Elite Control of OWS Protests Increasingly Obvious? Items from The Economatrix: The Global …

G.G. flagged this: The Austerity Myth: Federal Spending Up 5% This Year Greece Faces ‘Hellish Week’ as Debt Crisis Tests Nation. (Thanks to Alice C. for the link.) Also from Alice: Berlin tempers summit hopes, banks under pressure Items from The Economatrix: 10 Essential Fiscal Charts Demonstrating America’s Disastrous Condition Wall Street Lower As Banks Drag On Germany, Earnings Lowe’s Closes Stores, Lays Off 1,950 Workers

Some Words of Advice From Kyle Bass (paraphrased): “Buy guns. Buy gold. Buy nickels.” Inevitability of a Crash Goes Mainstream. Reader S.B. in Japan me sent a link to this: A Greater Depression is coming. S.B.’s comment: “Until fairly recently, much of the talk of truly serious economic problems has been in far from mainstream sources. The mainstream media has talked a bit about further recession, but I haven’t seen a single article that clearly stated that it’s coming and there’s nothing we can do about it. That is until I saw this today, linked from The Wall Street Journal‘s web …

Hi Jim: I just finished the article titled “Sorting Canadian Pennies” and had one more thought regarding the comments on nickels.  What everyone is predicting will happen to the US nickel has already taken place here in Canada.  The current US nickel is 25% nickel and 75% Copper making the 5 cent coin already worth around 6 cents. That is a great investment if you ask me!  The Canadian nickel on the other hand, has already been badly debased, valued at around 4 Cents. This happened in 1982.  However, Canadian nickels that are pre-1982 [but post-1954] are 99% nickel! This makes them …

K.A.F. flagged this: UBS, RBS Ratings Lowered as Fitch Says More Than a Dozen Banks May Follow Greg F. sent this: Reconsidering the Housing Crisis George Maniere: Precious Metals Investing: Will Gold And Silver Continue Their Run Up? Items from The Economatrix: Business Inventories And Sales Rose In August Oil Prices Rise Near $87As Recession Fears Ease Foreigners Dump $74B In Treasurys In 6 Consecutive Weeks; Biggest Sequential Outflow In History Big Trouble Brewing

Mr. Rawles, I had a moment of inspiration today and after looking up melt value of Canadian coins on Coinflation and giving thought to your article about storing U.S. nickels.  I decided to try an experiment sorting Canadian coins, specifically nickels and pennies.  Note that these melt values are when Copper spot price is listed at $3.246/lbs – a two year low in October 2011.  Personally, with the currency printing going around world wide, I think it’s reasonable to assume these prices are going to skyrocket in the near future. I went to a Canadian bank and bought several roles …

Ian Gordon: Hedging With Gold Against Imminent Economic Collapse State may expedite Florida foreclosures B.B. sent a link to the latest Jim Rogers CNBC Interview. Also from B.B.: Gold is not in a Bubble: It’s on its way to $10,000 an ounce Yet another from B.B.: Foreigners Dump $74 Billion In Treasurys In 6 Consecutive Weeks: Biggest Sequential Outflow In History Items from The Economatrix: Stocks Rise On Gain In Retail Sales; Google Jumps California Revenues Down By $705M The Depression:  If Only Things Were That Good Retail Sales Rose Strongly In September On Autos  

Chuck McAlvany: The Atomic Bomb that is About to Explode at the Federal Reserve Days of Reckoning Are Here: Accumulate Precious Metals and Hard Assets Zero Hedge: It Begins: Harrisburg Files For Bankruptcy Protection G.G. flagged this: Banks turn to demolition of foreclosed properties to ease housing-market pressures Items from The Economatrix: Buckle Up:  America Is Getting Very Angry And The Protests Are Going To Become Much More Frightening Millions Could Lose Unemployment Benefits In 2012 Wall Street Sees “No Exit” From Woes Roubini:  Double-dip Recession A Foregone Conclusion