Category: Economics & Investing

Pearl wrote me to mention: “We homeschool and therefore I stock up on supplies when they go on clearance after public school children have started. I still have boxes of Papermate pens left over but couldn’t resist picking up a couple packages when I noticed they were on sale. When I got home I compared the clearance tags… Last year, I purchased boxes of 12 Papermate pens for $.35. This was 30% off the original price of $.50. This year, I purchased packages of 10 Papermate pens (no box) for $.70. These were also 30% off the original price of …

May I recommend the article titled The Correlation Curse by Howard Hill? Mr. Hill explains in very simple terms why, during a meltdown itself, it is critical to not be in debt. His thesis is simple – during a collapse, the primary asset at the center of the collapse simply cannot be sold so people begin selling everything else to cover their debts. This includes gold, silver and precious metals and is precisely why precious metals will ultimately fall when the final collapse comes. Now the good point is that precious metals will rapidly regain their value on the other …

G.G. sent this from Forbes: Bernanke Out Of Bullets But Not Bombs: Federal Reserve’s ability to buy assets and spark inflation is unlimited. Ambrose Evans-Pritchard reports: Société Générale tells clients how to prepare for ‘global collapse’ G.G. mentioned this guest article posted over at Zero Hedge: A Termite-Riddled House: Treasury Bonds Buried down in the fine print of the New York Times we read that the FDIC is $15.2 billion in the hole. But gee, who’s counting, and who cares, when Uncle Sugar can create unlimited money out of thin air? The Daily Bell asks: Bank Run 2011? (Thanks to …

More about the inflation riots in Mozambique How Hyperinflation Will Happen The Federal Reserve reported that the M2 Money Supply expanded 5.3% in just three months from April 2010 to July 2010. And the M3? Who knows. They stopped compiling that data 2006, after it had become too embarrassing. Meat price surge fuels fears of food inflation News from Bangladesh: Food prices push inflation up again

Oil Should Be Around $10 a Barrel: Analyst. here is a quote: “I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn’t be anywhere near where it is,” Beutel said. Jeff Nelson opines at The Street: U.S. Government Prepares for ‘Crisis’. (Thanks to G.G. for the link.) The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions. Its all about maximizing tax revenue. G.G. suggested this by Martin Hutchinson: Combining the Worst A bellwether event? …

Mozambique Police Fire At Crowds Protesting Prices The National Inflation Association reports: The U.S. Path to Collapse Russian Panic Buying Fuels Food Price Speculation

Gold Rallying to $1,500 as Soros’s Bubble Inflates. (Thanks to B.B. for the link.) From The Daily Bell: WSJ Discovers the Austrians & Boettke – but not the Mises Institute Mort Zuckerman bemoans BHO‘s band of fools: The Most Fiscally Irresponsible Government in U.S. History. (A hat tip to Patrick S. for the link.) Oregon man pleads bankruptcy fraud, hiding gold. Apparently, he failed Cache Construction 101. From K.A.F.: Problem bank list climbs to 829 Items from The Economatrix: Top Economists: The Second Great Depression Has Arrived Struggling Cities Shut Firehouses in Budget Crises Mish: 10 Leading Retailers Close Stores; …

You’ll pay 6 to 7% more this weekend for your steak and hamburger. This one is from Pravda (so my usual jaundiced eye proviso applies) Doomsday Scenario: Food Prices to Shoot Through the Roof. Some more about the CPI hedonics trickery that I mentioned: Chris Martenson on fuzzy numbers. Reader Jim P. mentioned that his local politicos in the Shenandoah Valley are doing away with a decal but keeping the fee! County Decals No More; $20 Fee Will Appear On Personal Property Tax Bills JP Morgan: Food Prices Are Actually Rising, It’s Just That Retailers Haven’t Passed It On… Thanks …

Bernanke: Fed Will Take “Unconventional Measures” If Needed. “…the Fed will consider making another large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare.” (A hat tip to Deborah M. for the link.) Its Official: China is Unloading its Treasury Bonds John Williams of ShadowStats Says Economic Data Will Get Much Worse. Trapper Mike sent this: Ron Paul questions whether there’s gold at Fort Knox, New York Fed. To clarify, part of his concern is that physical gold may indeed be stored there, but that it might actually belong to other …

In 2008, shortly before the currency was effectively abandoned, the inflation rate in Zimbabwe hit a ludicrous inconceivable 897,000,000,000,000,000,000,000 percent per year. (An 89 sextillion percent inflation rate!) So now instead of Zim dollars for practical currency, they are using the South African Rand, the Botswana Pula, the British Pound Sterling and the United States Dollar for most transactions. It will be ironic, if and when the US Dollar begins to inflate. Like us, Zimbabweans may soon feel “stuck”, holding withering US Dollars. OBTW, some bad news from Zimbabwe, that came to us by way of Cathy Buckle’s blog: “Enter …

S.C. flagged this: Policy Options Dwindle as Economic Fears Grow. S.C’s comment: “Wow, even the New York Times gets it!” Chris P. sent this New York Times article: Housing Fades as a Means to Build Wealth. G.G. sent this: S&P Says US Should Act to Protect AAA-Rating. G.G. flagged Part 2 of Gonzalo Lira’s excellent essay: Hyperinflation, Part II: What It Will Look Like My hero, Dr. Walter Williams comments: Avoiding the Looming Disaster of Social Security (Thanks to Don W. for the link.) Sue C. sent this: Economy slows to 1.6 percent as trade gap widens Items from The …

Deflation Delusion Continues as Economies Trend Towards High Inflation Reader Bret F. notes that in August, his local structural steel prices increased as follows: 1” x 1” x 1/8” angle iron from 42 cents per foot to 47 cents per foot, 4” x .237 wall steel pipe increased from $5.26 per foot to $6.26 per foot. A 20% rate hike for Health Insurance in California? Yikes!

A reader asked me clarify what was meant by “exiting the market.” It’s important to know the difference between exiting the stock market and taking distributions from their tax-deferred retirement accounts (IRAs, 401(k) accounts, and so forth.) It is possible in most cases to exit the stock market without taking distributions from those accounts. They can simply change (“re-allocate”) the investments inside those accounts. For example, an employee might re-allocate her 401(k) at work from a stock mutual fund into a money market fund. This is not a taxable event, as long as the money remains in the 401(k) plan. …