Category: Economics & Investing

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 …

Jonas sent this: GLD ETF Warning, Tungsten-Filled Fake Gold Bars GG flagged this: China: Loose US Policy, Weak USD Creating Speculation From Pamela E.: Arrogant Fed hasn’t learned a thing Items from The Economatrix: White House Aims to Cut Deficit with Unspent TARP Money AIG May Tap Credit Line as Commercial Paper Expires Japan Derivative Market Unraveling If You Thought the Housing Meltdown was Bad… The Midnight Food Line at Wal-Mart. There are American families who aren’t eating at the end of the month and are literally hitting Wal-Mart at midnight, as soon as their food stamp benefits hit their …

GG mentioned this in The Wall Street Journal: Widest-ever October budget deficit (more than all of 2006) More Friday Follies, with the link also courtesy of GG: Bank failure toll reaches 123; Regulators close two Florida banks and on in California, costing the FDIC $986.4 million. Gold will stay above $1,000 an ounce forever, says Swiss Dr. Doom. (Thanks to Laura H for the link.) Items from The Economatrix: Drop in US Energy Use Drags Stocks Lower Jobless Claims Fall, But Hiring Gains Seem Far Off Buffett, Gates Tell Students Worst is Behind Us. Gee, Happy Days are Here Again. …

Ben M. mentioned a recent Wall Street Journal article: World Tries to Buck Up Dollar B.B. sent us the link to a television segment with Peter Schiff, in which he suggested gold might rise to $5,000 per ounce. “There is not top [for gold], because there is no foreseeable bottom for the dollar.” GG suggested this: China facing risk of debt-fueled crash Items from The Economatrix: Single US Banking Regulator Proposed Financial Crisis Made in West Hits East Hardest Dollar Falls to 15-Month Low Despite US Support UK: BofE Government Dampens Recovery Outlook NY State: We’ll Be Broke Before Christmas …

Reader O.J.W. spotted this: Why the price of gold is rising Ryan mentioned this: Report: 10 states face looming budget disasters Jason H. and “Oxy” were the first of dozen readers to mention this article: Peak Gold? Barrick shuts hedge book as world gold supply runs out Items from The Economatrix: Fed Officials Warn Weak Recovery Won’t Spur Jobs Why Gold is Shining Brighter Gold Bars Selling Like Hotcakes at Harrod’s Gold Hits New Record, Now Eyes US $1200 Jim Willie: Ultimate Conditions for Recovery Failure Written into “Too Big” Policy Job Openings Remain Close to Record Lows FDIC Boss: …

FDIC Disowns Geithner Embarrassment. (Thanks to “Word” for the link.) Morris suggested an editorial about the coming collapse in commercial real estate by Doug Hornig of Casey Research: De Nile is not just a river in Egypt G.S. liked this: The gun that beat inflation; Commentary: How the Colt Peacemaker outshone gold. [JWR Adds: And you can’t shoot a burglar with a Krugerrand. Well, maybe you could with a Wrist Rocket, but that would take some explaining, in court.] Items from The Economatrix: Fed: GMAC to Receive More Bailout Money Sprint Plans to Cut Up to 2,500 Jobs Economists Seek …

Flaw in US Data Overstates Growth, Productivity. (Thanks to Garth for the link.) Jonathan H. sent this from The Wall Street Journal: Three Decades of Subsidized Risk K.T. sent this: CNBC – Dollar Will be Utterly Destroyed, Global Currency, New World Order Bobbie-Sue spotted this interview: Peter Schiff: The Government Chose Wrong. Here comes inflation! Items from The Economatrix: Dollar Down Again as G-20 Backs On-Going Stimulus Stock Volatility Sign of Aging Bull? UK: Zombies Lurking On Every High Street Credit Card Firms Hurry to Raise Rates Now Ex-CitiGroup Boss Becomes A Glass-Steagall Convert BoE Says Financiers are Fueling an …

Raymond sent this New York Times piece: Inside The Global Frenzy For Gold Several readers sent this: Gold price hits record high as dollar wanes. JWR’s advice: Wait until the next profit-taking dip in precious metals, but then invest in silver, not gold. (I anticipate that silver may dip to as low as $12 per ounce, a proportionately much deeper drop, than gold. Watch the silver-to-gold price ratio closely! In the long term, the value of silver will gain versus gold, since silver is being consumed–and not reclaimed–from industrial use. (Nearly all gold is reclaimed, but an incredible amount of …

Reader Chad S. sent this: No risk of hyperinflation, says Bernanke. (I feel so much safer now, knowing that he’s grounding the helicopters.) Also from Chad: The Truth about Hyperinflation and Price Controls. Items from The Economatrix: Ahead of the Bell: Consumer Credit Mortgage Rate Falls Below 5% GM to Axe 10,000 in Germany Analysis: 10% Jobless is Obama’s New World. Sadly, 18-22% is more realistic. See the data at ShadowStats.com. Unemployment Rate Rises Above 10%. “The 10.2 percent unemployment rate does not include people without jobs who have stopped looking for work or those who have settled for part-time …