Category: Economics & Investing

Reader Tom C. wrote to mention an inflation data point: He noticed that half gallon bottles of lamp oil selling at Wal-Mart just jumped from $4.97 to $5.97 in one week–about a 20 percent increase. Morgan Stanley borrowed the most in financial crisis. ($107.3 billion in one month, with no public disclosure!) Gil Morales and Chris Kacher QE3: Top 8 Reasons Gold Goes Higher. (Thanks to Steve H. for the link.) US Government Asset Seizures On The Rise. (A tip of the hat to Stephen M. for the link.) Over at Fierce Finance: Layoff misery on Wall Street just getting …

G.G. sent this: Marc Faber readies for hyperinflation, dollar’s demise and civil unrest Frequent content contributor John R. sent this: A banking system built on lies and deception–Hiding commercial real estate losses by laundering bad loans through the Federal Reserve. Trillions of dollars in bailouts were made while banks told the public all was well. Items from The Economatrix: Chinese Think Tank Implies America May Be Falsifying Its Accounting, Says US on Its Way to Default Gold Soars to Record Near $1,900 on Economic Woes $5,000 Gold, $200 Silver Predicted The Great Collapse Has Officially Begun Moody’s Downgrades Japan’s Debt …

Be prepared for more of the roller coaster rider in the precious metals markets. If spot gold closes over $1,950, we can expect the COMEX governors to slap the futures market with substantially higher margin requirements. This may cause a temporary sell-off that will be a great buying opportunity. (The manipulators can depress the futures market in the short term, but the physical market is so strong that the precious metals bull will eventually renew its charge in the long term.) It appears that the window of opportunity for stockpiling nickels will soon be closing: Mint awards firm contract to …

G.G. sent us this “must read” article: Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans G.G. also flagged this item: Despite Economy, Ohio, U.S. Gun Sales Defy Gravity Also from G.G.: Social Security disability on verge of insolvency Loyal content contributor RBS sent this: Shoppers will see higher prices for back-to-school shopping, but stores aim to disguise them RBS sent this: The economic worries of a regular American consumer Will Hugo Chavez Touch Off an Epic Short Squeeze in Gold? Some interesting reading: Outlook: Gold, Stocks, Volatility, Euro & Bonds All US Mint Numismatic Gold Coin Sales Suspended. …

Getting ready for a wave of coal-plant shutdowns. (Thanks to KAF for the link.) Pierre M. suggested this: Trouble in Paradise Strength of Swiss Franc Roils Saint-Tropez and Other Cities Across Europe John R. kindly sent us a raft of links: The Root Causes of the Global Financial Crisis (Bob Chapman)   Bernanke’s last resort: Start dancing? (Paul R. La Monica)   Plosser calls Fed’s low rate pledge “inappropriate”     Europe’s banks could break us all Bill Fleckenstein The Bailout Isn’t Working Bank of America is the canary in the coal mine U.S. Treasury Hidden Trickery in Mortgage Backed Security Recoveries …

File under No Great Surprise Department: China May Stop Buying Treasurys as Growth Slows: Roach Reader Chris D. suggested: Honest Work for Honest Silver Pay U.S. closes 3 more banks, 68 so far in 2011. (One with 1.7 billion in deposits!) Investors: Threat of Stagflation Looms as Prices Rise Despite Bad Economy Items from The Economatrix: Moody’s Lowers US Economic Outlook Through 2012 Analyst:  “Not To Own Gold Is To Trust Governments” Economists See Growing Risk Of Global Recession Here We Go Again:  Another Big Down Day For Dow Gold Hits Latest Record High, Near $1,830 Behind The Selloff:  Stocks …

James C. chimed in with this: Obama Agriculture Secretary: Food Stamps Create Jobs. JWR’s Comment: Oh, yes, and graffiti creates spray paint and spray paint creates teenage angst, and… Items from The Economatrix: Thinking The Unthinkable:  Sell US Treasuries Moody’s Lowers Economic Growth Outlook Former Obama Whitehouse Economist: Unemployment Won’t Drop Below 8% Before End of 2012 US Economy Has Young Americans Downsizing Their Dreams

RJK sent this: End Game Approaching in Europe: No Way Out But Debt Restructuring Back to the Future: Gold, JPY, DAX, Paulson – CRASH? Report: Crop losses in Texas top $5 billion. (Thanks to Michael W. for the link.) How to Dig Yourself Out of Credit Card Debt Thanks to Chris S. for spotting this: President Hugo Chavez announced Wednesday he is nationalizing Venezuela’s gold mining industry and intends to bring home $11 billion in gold reserves currently held in U.S. and European banks. Items from The Economatrix: A Big Bounce, Ounce By Ounce, and Gold Takes Off Core Wholesale …

John Embry interview with James Turk at Gold Rush 2011. David Morgan: $75 Silver Price Looming K.A.F. sent this: Employees Bid Farewell to Corporate America. A few of them are wisely heading to the hinterboonies. Also from K.A.F.: Biden to sell US debt deal during trip to China, Japan It is all about revenue: New York City bridge tolls will be bumped up to as much as $7 per crossing. Items from The Economatrix: The Beginning of the Endgame U.S. Economy’s Wild Ride is Far From Over World Bank Chief:  Global Economy in “New Danger Zone” A Reason for the …

Swiss Ponder Battle Over Runaway Franc. K.A.F. suggested this at Zero Hedge: If the Market Crashes, Who Owns Enough Stock to Even Care? Items from The Economatrix: US Homebuilders Remain Pessimistic in August How 2011 is a Repeat Of 2008, Only Bigger, Longer, and Uncut By Bailouts World Economic System Ready to Crash US Downgrade:  World is Calling Even Louder For a New Global Currency

You might noticed that on Monday (August 15, 2011), the spot price of gold was fairly flat, but that spot silver was up substantially. Just as I predicted last week, it appears that Mr. Market has belatedly realized that silver needs to catch up to the recent advance in gold prices. To get back to a 40-to-1 ratio, silver would have to advance to $43.41 per ounce. In the long run, a ratio of 20-to-1 or perhaps even 16-to-1 is realistic. So again, if you have enough secure storage space, then buy silver rather than gold. If you want to …

Reader R.P.B. recommended this: World Debt Guide: Owe Dear (an interactive graphic showing sovereign debt versus GDP.) Truckergirl sent this: 10 Signs That Economic Riots And Civil Unrest Inside The United States Are Now More Likely Than Ever. Lorimer Wilson posted his analysis on the silver-to-gold price ratio and potential tops. Daily Bell Briefs: SEC Goes After S&P / World Bank to the Rescue? / Death & Democracy in the Middle East / States to Embrace Online Gambling. Some commentary from Tam (of the always entertaining View From The Porch blog): When everybody’s a millionaire… Mr. M. sent this: Food …