Category: Economics & Investing

The other shoe has finally dropped: China reduces holdings in US debt. Expect more of the same in the months to come. (Thanks to Dave S. for the link.) From GG: Mounting joblessness fuels US housing crisis Noah was the first of several readers to mention this article about the failure of the second largest US bank of the year: Bank Failure #81: Down Goes Guaranty Items from The Economatrix: The Mother of all Bank Runs Unemployment: The Worst Hit States in July US Stocks Rise, Sending S&P to Highest Level in 10 Months Bank Failures in the US Even …

James: I have a question for you. Should a person keep old $20 gold coins, or convert them into 1 oz. gold American Eagles? This would assume coins with no great [numismatic] value, just old coins. Also, what about $5 and $10 gold pieces? Thanking You in Advance ,- Jim A. in Montana JWR Replies: As I’ve mentioned before, the often-mentioned threat of another gold confiscation is overblown, so essentially, “gold bullion is gold bullion.” For buyers here in the US, I recommend American Eagles from the US Mint, because they are widely recognized and accepted. There are also some …

Greg C. sent this bit of mainstream media spin doctoring: AP source: White House projects lower deficit. Greg’s comment: “Another case of “The deficit is growing slower than we originally thought.” They fail to point out its still growing exponentially. They “saved”$250 billion while we will be at $2 trillion in the hole by year’s end. I love their math and outlook on life!” Thanks to Damon for this: Marc Faber “in China there is an investment bubble …the total collapse is ahead of us and probably a world scale war…” Reader Jim P. flagged this: Obama to raise 10-year …

Peter Schiff: Hyperinflation Risk High, Stocks Will Crater (Thanks to “Straycat” for the link.) A interesting piece over at iTulip: Does USA 2009 = Argentina 2001? Part I: Falling economy reaches terminal velocity – Eric Janszen Karen H. notes: Nickel May Gain as Stockpiles Fail to Deter Funds: Chart of Day “Nickel, which surged 17 percent the past month, may advance further as “price momentum” and inflation expectations lure fund managers even as stockpiles of the metal approach a 14-year high, according to Commerzbank AG.” Have you been stocpiling nickels? FG mentioned this survey: L.A. ranks near bottom among big …

From perennial content contributor GG: Germany braces for second wave of credit crunch Neal flagged this: The Week in Charts, Buckle the Heck Up! Greg C. sent us this: Woman’s House Mistakenly Auctioned by Bank Karen H. kindly sent several items: U.K. Has Record July Deficit as Recession Curbs Taxes U.S. Initial Jobless Claims Rose by 15,000 to 576,000 FDIC May Add to Special Fees as Mounting Failures Drain Reserves Swiss to reveal UBS accounts to settle U.S. tax battle “Switzerland has agreed to reveal the names of about 4,450 wealthy American clients of UBS AG to U.S. authorities in …

Thanks to GG for this: Pimco Says Dollar to Fall as It Loses Reserve Status Also from GG: Credit Card Delinquency Wave Reaching Tidal Force Amish see the recession as a challenge and a blessing (Thanks to DD for the link.) Buffett: U.S. Could Become Banana Republic. (Thanks to “Straycat” for that URL.)

James, Thanks for your web site. I find it very informative. And prayers for your missus. I’ve seen recent articles regarding acquiring gold and silver coinage for TEOTWAWKI. My question is this: can gold or silver jewelry substitute adequately for coinage? My thinking is this. In the worst case scenario, there are two kinds of people who will have things to barter – the prepared and the lucky. In dealing with the prepared, a sterling silver ring will be just as valuable as an equal silver weight of pre-1965 dimes. But with the merely lucky? I’m not so sure. In …

“Red Hen” sent this bit of global MOAB expansion news: IMF Governors Formally Approve US$250 Billion General SDR Allocation Courtesy of Steve G.: Credit tightening threatens China’s ‘giant Ponzi scheme’ The Treacherous Path for Housing – 42 Percent of California Mortgages with Negative Equity: $1 Trillion in Mortgages Submerged Underwater in California. $3 Trillion in U.S. Mortgages Underwater and Risking Foreclosure. From DD: Lowe’s Profit Plunges as Consumers Stay Away JS spotted this: The “Zimdollar:” Dead, but still used for bus fare. (It sounds like something out a of a novel: $3,000,000,000,000 for one bus fare, and goats for barter!) …

The dip in silver that you’ve been waiting for has arrived. Take advantage of it. Come November, you’ll be patting yourself on the back for your foresight. Steve G. sent us the latest from Mish Shedlock: As of Friday August 14, 2009, FDIC is Bankrupt. Don’t worry, be happy. Uncle Tim and Uncle Ben have a plan: Just add linen paper and ink! A hilarious interview with The Mogambo Guru (aka Richard Daughty) was posted by The Daily Bell. From Heather H.: Mountain of Debt: Social Security crisis looms. Heather’s comment: “Finally, someone had the guts to call Social Security …

KAF flagged this: Tax Dodgers Scramble for Options Amid U.S. Crackdown [JWR Adds: Given this development, I predict that the offshore banking crowd may soon embrace some heretofore “outlaw” nations. There are lots of folks that are willing to take more risk in exchange for total privacy.] Karen H. forwarded these: Consumer Prices Fall as Shoppers Hold Back With Lobster Prices Low, Things Get Ugly in Maine Recession Chills Sunshine State Tourism Items from The Economatrix: Shifting Sands Bank on Inflation (The Mogambo Guru) Commercial Real Estate, Construction, and Finance Employment: How Commercial Real Estate Will Drag the California Economy …

Farmer John suggested this piece by James Quinn: American Idiots. John’s comment: “This is why the government can do what it wants.” Karen H. kindly sent these items: Regulators Shut Down Colonial BancGroup; Largest U.S. Bank to Fail in 2009. JWR Warns: There are many more bank failures to come! Toxic Loans Topping 5% May Push 150 Banks to Point of No Return Sugar May Advance 80% on Supply Crunch, Coleman says [Have you already stocked up?] U.S. Economy: Consumer Sentiment Falls, Prices Steady Items from The Economatrix: Alabama-based Colonial Bank Fails, Cost is $2.8 Billion BB&T Takes Colonial as …

I wrote the following essay five years ago. Not only are the issues presented below still relevant today, they’re more critical than ever. This is about the end of your financial world as you know it, independent of a terrorist strike Perhaps one of the most alarming observations is that, up until our present generation, Americans were far more aware of the meaning of money and they carried gold and silver coins in their pockets. Today, the people are much too pre-occupied, distracted, or just plain na?Øve, and they don’t possess the outrage about what is happening to their money …

Greg C. flagged this: Retail sales dip unexpectedly, jobless claims rise. Greg’s comment: It is amazing how they still keep trying to spin this [continuing decline] as a “recovery.” Bobbi-Sue sent this Der Spiegel piece: Global Banking Economist Warned of Coming Crisis. Thanks to Heather for sending this: US sugar supplies ‘running out’ US food manufacturers call for an easing of sugar import limits, saying they fear the country may run out of supplies. Items from The Economatrix: The Problem with Sticking it to Your Creditors Panel Warns Smaller Banks Face Whole-Loans Threat “We” Broke The Bank Bleak Sales are …