Category: Economics & Investing

A news item flagged by GG: IMF: Banks Still Hiding Half of Their Actual Losses; $1.5 trillion in bad debt on bank balance sheets, and losses on these bad loans still threaten the solvency of many institutions. From El Jefe Jeff E.: One in Four Borrowers Is Underwater Also from Jeff E.: FDIC Reports 552 ‘Problem Banks’ As of Sept. 30, 2009 Items from The Economatrix: IMF Warns Second Bailout Would Threaten Democracy Wave of Debt Payments Facing US Cities Wall Street Pummels US Cities Over Billions in Fees on Investments Gone Bad More Bankruptcy Cases Filed Rates on 30-Year …

GG sent this: A Mad Rush as Gold Bugs Get the Boot FAF sent this from Fox News: Economic Growth Revised Down in 3rd Quarter From El Jefe Jeff E.: Stocks, Oil Drop After U.S. Consumer Spending Trails Forecasts Items from The Economatrix: Crude Prices Sink Down Near $76 Reports on Consumer Confidence, GDP Tug at Stocks Banks Earn $2.8 Billion in 3Q, Insurance in Red Reports on GDP and Consumers Signal Modest Rebound Fed Under Fire as Public Anger Mounts Goldman Sachs and US Demise Wall Street Plays Hardball Restaurants Brace for a Sour Season as Consumers Lose Appetite …

GG flagged this: The Debt Bomb: Uncle Sam on teaser rate Randy F. sent this: Payback Time – Wave of Debt Payments Facing U.S. Government Items from The Economatrix: Stocks Climb on Report Showing Jump in Home Sales Late Payments on Credit Cards Drop in 3Q IMF Chief: Global Economy Still Fragile AP Survey: Debt Stress Turns Shoppers into Scrooges Gas Prices Fall to Begin Busy Travel Week Bets Rise on Rich Country Derivative Defaults Gold Hits New High Among Rising Political Tension Couples Turn to “Shift-Parenting” to Stay Afloat End of the Checkbook: Bankers Drawing Plans, Could End by …

More than a dozen readers mentioned this London Telegraph article: Société Générale tells clients how to prepare for ‘global collapse’. Gee, folks must be catching on… Beepaw sent this: Bloomberg news: U.S. Housing Recovery Delayed to 2010 as Market Wanes. BeePaw’s comment: “It is remarkable that the [same] pundits who failed to see the crisis at all are now able to pinpoint its recovery. I don’t believe the markets will recover in 2010. Or 2011. Or 2012.” Peter D, suggested the latest installment of some speculative fiction from John Galt: “I Have Been to the Fields of Gettysburg” (The Day …

Dear Jim, You mentioned that someone with a Gold IRA might want to take the [warehoused gold] out and hold it in physical form after they turn 59-1/2 and are able to withdraw it without penalty. I see the merit in that, but I am a tax accountant and want to warn you about the tax implications. When you take money out of an IRA, it is taxed as ordinary income, even if you escape the penalty. You can very well get shoved into higher tax brackets than you’d otherwise ever pay. Because, as you know, so much of the …

From regular content contributor GG: Barron’s: Collapse in Treasury note yields suggests economic distress Chad sent us this: More fixed-rate home loans going into foreclosure Also from Chad: Latest bank fee is for paying credit cards off on time. Items from The Economatrix: Gary North: Gov’t Debt Default: How (Not If) Will It Happen The Critical Unraveling Of US Society What Has Government Done To The Dollar Commercial Real Estate Reality Check John Galta: American Hangover (Day the Dollar Died, Part II) Americans Save More But Earn Less As Rates Fall Central Bankers Blowing Bubbles In Global Stock Markets Financial …

Flavio liked this interview with Robert Kiyosaki, where Bob is blunt about who really call the shots in the US, and he reiterates his advice to buy silver. GG flagged this: World economy setting itself up for a bigger bust, says Marc Faber El Jefe Jeff E. sent us a piece about the 124th US bank failure in 2009: Florida regulators close bank Items from The Economatrix: Karl Denninger Says Watch This: Glenn Beck and the Dollar Carry. Even if you don’t agree with Glenn Beck, watch it, it’s important The New Yorker: How The Tax Code Encourages Debt Downbeat …

Dear CPT Rawles, To follow up on the recent thread about cashing out of precious metals ETFs: Long ago, I took your advice and got out of stocks for my IRA and switched to a Gold IRA with Swiss America . It’s done quite well and I was fortunate to read your advice several years ago. [Since then, most stocks went down substantially. Meanwhile gold has appreciated substantially, at least when denominated in US Dollars.] My question and I’m sure I’m not the only one, is this: I will soon be 59-1/2 years old. Should I continue to keep my …

Jesse sent this: Short-Term Economic Boost from Fiscal Stimulus Outweighed by Long-Term Output Loss Also from Jesse: Why the Stock Market Should Crash From reader HPD: Bank Regulators “Reign of Terror” on Small Business Loans Items from The Economatrix: Stimulus Watch: Did the White House downplay errors in rush to take credit for job data? Stronger Dollar, Weak Economic Data Pummels Stocks Dollar Gains as Homeowners, Job Seekers Struggle Weak Jobless Claims, Future Economic Activity Data Foreclosures Hitting More People with Good Credit AOL Offers Buyouts to 2,500 (33% of their workforce) Treasury to Sell Warrants as Three Banks Exit …

Tom B suggested this from WorldNetDaily: $120 Trillion in Derivatives. “They are privatizing the profits and socializing the losses.” Evi recommended this: Glenn Beck comments on a dollar collapse and global government. Items from The Economatrix: Stock Market Falls as Home Construction Slows Where Are Stocks, Economy Headed? Even Pros Disagree Goldman Says “Sorry” and the World Moves On Gold is Getting Frothy US Wants China to Buy Into Its Small Banks Gold at $5,000 an Ounce? Don’t Discount it Speculators Accused of Forcing Up Fuel Prices Core US Deflation Continues to Gather Pace AIG $85 Billion Bailout was Botched, …

Jim, A reader wrote in and was posted with a letter called Converting Precious Metals Exchange Traded Funds (ETF)s to Physical Metals. This is pretty good advice but I would consider one change. I would not invest my IRA or 401k into ETFs or mining stocks as they are too volatile. Like his idea that investing in food companies wouldn’t feed his family like physical food, investing in ETFs and mining stocks guarantee nothing as far as actually getting any money out if things fall apart. Rather, what I recently did was convert them to physical metals. The IRS allows …

GG sent us this editorial by Nouriel Roubini: The worst is yet to come: Unemployed Americans should hunker down for more job losses. Jeff B. spotted: Taxpayers on hook as some bailed-out firms prove frail; With CIT in bankruptcy, U.S. is faulted for investing in weakened companies As Needlenose Ned Ryerson said (repeatedly): “Watch out! The next step’s a doooozy.” (For some background, see: Dollar Falls to 15-Month Low as Fed’s Support Draws Skepticism.) Meanwhile, at the risk of mixing movie metaphors, it’s Hi-Yo Silver, Away! Items from The Economatrix: Stocks Post Modest Gains on Rise in Commodities Factory Production …

Jim, I send this respectfully to those delusioned Exchange Traded Fund (ETF) investors. Just like the people of earth believing the world was flat, it will become common knowledge that ETFs are just a vehicle for investors and not for those who believe in the metal. It is proven in the ETF prospectus that most are backed with the same faith as our Federal Reserve Notes. Both are still good for trading for profit now but when TSHTF at least your dollars can be used as tinder. You will never be shipped a single ounce of precious metal from an …

GG suggested this commentary by Ambrose Evans-Pritchard: China has now become the biggest risk to the world economy Reader “Gravy” sent a link to an interesting animated map on changes in unemployment rates. Mr. D. sent a link to a National Pravda Radio news story: Joshua Kosman, Predicting The Next Credit Crisis. And on a similar note, GG sent this from The New York Post: Book: Spike in PE-owned firm defaults ahead Items from The Economatrix: Irish Government to Pay Immigrants to Go Home Have Prices Already Risen Too Much, Too Soon? Karl Denninger: Better Late Than Never Economists Fear …

Mr. Rawles, I have read your blog with interest for several years now, and I am coming around to your view that using long-term physical holdings in precious metals as a “time machine” to fight inflation is a good strategy. I have some small investments in bullion-backed exchange traded funds (ETFs) that I would like to convert to physical holdings, but I am unsure of the most efficient way to proceed. Of course I could always just sell the shares, head to the coin shop and pay the tax man next spring, but all I really want to do is …