Category: Economics & Investing

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 …

I’m frequently asked what is going to happen when the U.S. Treasury’s AAA credit rating is downgraded. First, consider this news article: Moody’s Affirms U.S. Rating, Warns of Downgrade. Here are my predictions, in a nutshell: We can expect continued credit market volatility. The recent debt limit increase did nothing to correct the basic problem. The U. S. government spends more than it takes in, so its residual payments are growing, inexorably. As this insanity continues, at some point U.S. Treasury paper will lose its AAA luster. that will initiate a very ugly chain of events that will play out …

Glenn Beck puts the Federal debt cap deal in prepper terms. SurvivalBlog’s G.G. sent several links: ‘The Bear Market Is Starting’: Marc Faber Europe on Brink of ‘Major Financial Collapse’: Guggenheim CIO Bank run! Greece in panic as it faces change of Homeric proportions Items from The Economatrix: Stocks Now Down For The Year As Economic Concerns Grow Hoarding Of Physical Gold, Voracious Global Demand To Produce Undeliverable Gold Futures, Parabolic Move To $2700-$3000/Oz. Global Manufacturing Collapses To Worst Levels Since Mid-2009, Markets “Shrug It Off” Bachmann:  Debt Limit Deal Means “We Embrace Being Greece”

Ol’ Remus talks economic collapse: We have arrived. He may be right. The debt-limit compromise in congress was a travesty. Tuesday’s drop in the Dow and the jump in gold signal that market senses some big changes in the near future. If the Federal credit rating slips below AAA, interest rates will rise, and there will be a nasty cascade of concommitant events. Buckle up! F.G. flagged this: Metal Detectors Hit the Jackpot J.J.G. sent a link to piece by Ann Barnhardt: We The Stupid. Real estate debacle: More than two years worth of shadow inventory overhang. That Which Is …

Michael Panzner, over at his excellent Financial Armageddon blog presents some graphics with sobering statistics on personal debt in America. Chris G. suggested this photo essay on failed currencies: A Thousand Pictures Is Worth One Word R.J.K. sent: Three Reasons to Stick With Gold & Silver J.B.G. mentioned: Rhode Island’s Central Falls files for bankruptcy An interesting piece by Lorimer Wilson: July Update: Gold & Silver Warrants Index (GSWI) Several links courtesy of regular contributor John R.: When a Cut is Not a Cut (Dr. Ron Paul) Martin W. Armstrong: Uncle Sam – Dead Broke Who Can Take This Country …

Last week, just before everyone’s attention was diverted to a Mall Ninja toting a tarted-up Mini-14 in Norway, news came of $16 Trillion Dollars that was loaned by the Federal Reserve to prop up the banksters–mostly in Europe. This is an aggregate figure on loans over the course of two years, and most of it was paid back, but it is still staggering. Its a good thing that we have experts like Tim Geithner and Ben Bernanke in charge. Otherwise there might be inflation or somethun’… Oh, and meanwhile, the Congresscritters are quibbling about how they can “trim” $1 trillion …

In his latest subscribers-only newsletter, veteran market analyst Porter Stansberry describes a U.S. sovereign debt downgrade as “inevitable”. JWR’s comments: Make your plans with the assumption that there will be a rating downgrade by all of the credit ratings agencies. The current AAA rating for U.S. paper is just a convenient fiction. Obviously a debt downgrade will mean higher interest rates. This will in turn ratchet down the U.S. economy in general and the residential and commercial real estate markets in particular. This will delay any recovery for many years. Plan on a riding through a depression that could last …

Kevin K. sent this: The $1 Billion Armageddon Trade Placed Against The United States. (I suspect it might have been György Soros, et al. Oh, and I heard that Soros just bowed out of hedge fund management, except for his family’s own little $14 billion nestegg.) W.D.V. suggested this: How America Could Collapse It’s not the default, it’s the downgrade. (Thanks to Bill in Colorado for the link.) Muddying the Muddy Waters. Items from The Economatrix: Greece Suffers New Credit Downgrade The Kabuki Theater Of America’s Debt Ceiling The $1 Billion Armageddon Trade Placed Against The U.S. The World According …