Category: Economics & Investing

On August 12th the newspaper headlines had some exceptionally bad news: Four European Nations to Curtail Short-Selling. This is an ill-advised panic move, following some massive losses on the European stock markets. (The French CAC 40 index is down 18.2 percent thusfar in August. Meanwhile, the DAX was down 15% in just a week.) Banning short selling does not bode well for the free market, nor for any meaningful stock pricing numbers that we can rely on. As the nascent global credit crisis deepens, we can expect more monkeying with the markets, on both sides of the Atlantic. For example, …

At The Daily Bell: Richard Maybury and Rick Rule on Why More War Is Likely, the Future of the US Dollar and Why Neither of Them Vote Another from The Daily Bell: Thomas Jacob on the New Swiss Gold Franc, Why the EU Is a Bad Idea and Why an IMF Managed Currency Would Be Tragic Arnaud de Borchgrave: Black swans galore: As U.S. superpower status fades, ‘Arab Spring’ gives way to global chaos. (Thanks to J.B.G. for the link.) Michael W. sent this: Tracking the money from stocks to gold.   Items from The Economatrix: Shoppers Lift Economy But …

G.G. sent this: Bank in Kansas Becomes 64th Failure This Year Also from G.G.: Analysis: Fed low-rate promise seen as opening salvo for QE3 Carlos in the U.P. spotted an excellent article by Karl Denninger explaining how the fundamental issues in our economy such as derivatives and too much leverage are kept from coming to the light of day: Dispelling Popular Delusions: TARP And Balance Sheets J.B.G. suggested this news clip that illustrates the innate yet well-founded anxiety about the near future: Texans grab their guns as economy stalls Items from The Economatrix: Beijing Downgrades US Treasury From A+ To …

G.G. sent this: Deficit Averaged $110 Billion Per Month So Far in 2011. So, what’s a shortfall of $3,600,000,000 per day, among friends? It all sounds a little like Wimpy. Given the demographic trends of our aging population, the projected GDP, the prevailing inflation rate, and the law of compounding interest, it is nigh on impossible for our children and grandchildren to ever pay off this crushing debt. Did Soros Win 10/1 Return On S&P’s US Credit Rating Downgrade? France & Britain AAA-ratings Under Scrutiny More shrugging: Fed Up: A Texas Bank Is Calling It Quits An interesting 15 minute …

Predictably, they slammed on the brakes at the COMEX: CME Group Hikes Margin Requirements For Comex Gold Futures. But since the physical market for gold is so strong, this move against futures trading will probably cause only a brief drop in the price of gold. The bull will resume his charge. (Thanks to Eli for the link.) Dennis C. mentioned this editorial: Falling Bank Stocks Offer a Too-Big-to-Fail Wakeup Call John R. kindly sent a whole raft of links: Jim Rogers: Bernanke, Geithner Leading Us Into Fiscal Armageddon (Henry J. Reske and Kathleen Walter)    The Best Looking Horse in …

The shorts must be screaming, about now: Gold shoots past record $1,800 an ounce. When I last checked, the silver-to-gold ratio was at 45.4-to-1. Again, if you have the vault space, this is a great time to ratio trade out of your 1 ounce gold coins, and into silver bullion coins. (Such as pre-1965 American “junk” silver.) Michael W. sent this: A National Debt of $14 Trillion? Try $211 Trillion More of The Mother of All Bailouts (MOAB)?: Government considers turning foreclosures into rentals G.G. sent this: Ron Paul: “Gold Is Not A Bubble” From K.A.F.: Economic Uncertainty Leading to …

The global markets are in such flux that the spot price of gold has risen above the spot price of platinum. These are indeed unusual times! A headline that we saw coming: Fed forced to consider fresh stimulus. (Only in the mind of Ben Bernanke is “more spending” the solution to a crisis created by overspending .) Steve K. suggested a video that is well worth watching: Jim Sinclair interviewed by James Turk. (Jim Sinclair is usually quite terse in his writings, so it is great to hear him speak at greater length.) Can you spell “Plunge Protection Team”? Stocks …

Monday’s headline at the The Drudge Report proclaimed: BARACKALYPSE NOW. On Monday, following a losing week, stocks on the Dow dropped another 631 points. The spot price of gold jumped 3% to touch an all-time intra-day high of $1,720 per ounce, and then $1,723 in after-hours trading. And since silver is considered more of an industrial metal than gold, it drifted downward to just $38.65 per ounce. These atypical disparate moves in silver and gold brought the silver-to-gold ratio to a whopping 44-to-1. In my opinion, this is now a great time to ratio trade out of gold and into …

I couldn’t help but notice that the spot price of gold jumped $30 per ounce at the opening bell in Asia on Monday morning. (Which was Sunday evening, Rawles Ranch time.) Get ready for a very scary ride in all of the markets this week! Reader J.D.D. sent this: World Financial Officials Hold Emergency Call to Discuss U.S. Credit Downgrade[JWR’s Comment: “Call in the tailors for an emergency meeting!” cries Les Empereur Sans Culottes.] Four links from G.G.: Two bank closures on August 5th bring total for 2011 to 63 banks. (One of them was inside the American Redoubt.) Marc …

G.G. sent this: Average Length Of Unemployment Surges To New All Time Record 40.4 Weeks Also from G.G.: Food stamp use rises to record 45.8 million Sam Kirtley: US Yield Curve Flattening to Prompt Fed Easing and $1,800 Gold Items from The Economatrix: Can’t Get No Relief:  Economic News Sours Investors Services Firms Expand At Slowest Pace in 17 Months Unemployment Rose In Nearly All US Cities Going Nowhere:  Economy Struggles To Find Footing Oil Below $92 On Concern About Economy, Demand Two Year Treasury Yield Drops To Record Low EU Urges Bailout Changes As Stocks, Euro Tumble Euro Faces …

Glenn Beck puts the Federal debt cap deal in prepper terms. An American Suicide US borrowing tops 100% of GDP: Treasury tom in Buffalo spotted this: Royal Bank of Scotland posts £794m loss after Greece hit Avoid Disaster, Get Out of U.S. Assets: Peter Schiff (Thanks to G.G. for the link.) Open letter to the London G20 Summit: Last chance before global geopolitical dislocation Items from The Economatrix: Debt Ceiling Agreement To Trigger Hyperinflation Credit-rating Agencies Still Threaten US Debt Recovery US Manufacturing Woes May Be Just Beginning 10 Signs The Double-dip Recession Has Begun

Mr. Rawles, Thanks for the blog and your books.  I have given several copies of “How to Survive the End of the World as We Know It” away as gifts. I consider it a network fishing lure of sorts, to find like-minded people. To the point: Another set of dominoes to fall, if the US credit rating is reduced from AAA many pensions will not be able to hold US Treasury bonds, as their bylaws or rules state that they must hold AAA paper.  Unless they find a loophole or change their rules it will be a cascade spiral down. …

Thursday’s headlines were full of deep drama economic news, including a market crash in Italy that looked like La fine del mondo come lo conosciamomeowner. Concurrently, the recent drop in silver has widened the silver-to-gold ratio 42.4-to-1. (Meaning: The cost of one ounce of gold currently equals just over 42 ounces of silver.) So this a great time to go to your local coin shop and perform a ratio trade: Ask them to swap your 1-ounce gold coins into bullion silver coins. (For readers in the U.S., pre-1965 mint date 90% silver Quarters are recommended.) Even though you’ll have to …