Category: Economics & Investing

Yikes! CBS Advertising Net Income Plunges 96% (Thanks to frequent content contributor F.G. for the link.) Tom G. mentioned this piece by Karl Denninger: Blatant Monetization Uncovered: Federal Reserve bought back half of the seven-year issue this week. I ‘ve warned you that monetization (and inflation) are coming. This is just the begriming! Reader Karl in PDX asks: Do you remember in the 1990 [gangster] film Goodfellas, by Martin Scorsese, when one of the robbery team goes out and buys a pink Cadillac for his wife with the proceeds? Robert DeNiro’s character has to step in. “Now, what did I …

Susan Z. recommended this piece by Bob Chapman: And All the Kings’ Horses and All the King’s Men… GG mentioned Mish Shedlock’s latest piece: Weekly Unemployment Claims Portend Disaster Also from GG: Federal tax revenues plummeting. I can foresee the reinstitution of pre-Kennedy-era marginal tax rates (more than 50%) in the next few years. This is just one more good reason to invest in tangibles. They’ll heavily tax interest income, but you don’t pay taxes on tangibles until you sell them. Several items from frequent content contributor Karen H.: Cathay Pacific to Park Six Passenger Planes After 27% Sales Slump …

Sir, I have accumulated ‘some’ pre-1965 silver. Not the $1,000 face value per family member as seems to be the benchmark but I do have a bit over $1,400 face value and a few gold coins (about two ounces of gold, in combined weight) for my family. Someone told me that even post-1964 dimes and quarters (and of course pennies and nickels for their real metal value) would have ‘some’ value if the dollar went bust. I do not understand how this can be but I have been saving coins nonetheless. My question is am I better to take the …

Most of you have noticed the recent price action in silver and gold. Typically, the precious metals go through “Summer Doldrums” each year, with light trading and moderated prices. But not this year! One can only ask: if the market this strong in August, then how will it be in November, as the US Dollar Index (USDI) continues to slide? I hope that you took my advice and bought silver when it was recently under $12.50 per ounce. In my estimation even at $14.50 per ounce, silver is still a bargain. As I’ve often written, buy on the dips. BusinessWeek …

“John Smith” sent this: Bailout Banks Buying Treasuries Help Keep Rates Low. John’s comment: “This article illustrates how the Fed has cleverly ‘deputized’ banks to do its dirty work. Through a combination of very cheap funding (due to Fed policies) and lack of other attractive places to deploy money, banks have been encouraged to buy huge amounts of longer-term treasuries, effectively doing the Fed’s Quantitative Easing for it. So Quantitative Easing is alive and well, even if the Fed is just playing the role of central planner, not buyer in chief. That’s some slick sleight of hand by Chairman Ben. …

Eugene in Anaheim sent this: New Cash Steered to Clunkers Thanks to Karen H. for this: America’s Recession ‘Safe Zone’ Shrinking From The Daily Bell: Bob Chapman on gold, silver, a bank holiday and the monetary elite Regulators shut down banks in five states; Regulators close banks in Fla., NJ, Ohio, Okla., Ill.; 69 US bank failures this year Items from The Economatrix: Weiss: Urgent Financial and Economic Crisis Investment Strategy Update “It’s only fair to acknowledge that the economic depression I foresaw in my book and in my reports is unfolding more slowly than I had expected. … the …

James: I want to warn readers about selling sterling and coin silver and other “scrap” [precious] metal silverware and jewelry. Most of the buyers out there are not reputable, and only pay a small fraction of the real “melt” value. You’ll get the best prices by selling directly to the silver foundry-type operations. To make sure that you get paid properly, first weigh your pieces on an accurate scale. Wikipedia says: “Sterling silver is an alloy of silver containing 92.5% by weight of silver and 7.5% by weight of other metals, usually copper. The sterling silver standard has a minimum …

From reader G.M.H.: Recession Worse than Prior Estimates, Revisions Show Sven sent this: Card Companies Ready to Settle Up Items from The Economatrix: Middle Class Suicide The Collapse of Commercial Property: Towers of Debt Gold Will Hit $1,000 Again The Future Made Simple (The Mogambo Guru) Goodbye Bland Affluence Job Levels Won’t Rebound in California Until 2013 Unpaid Property Taxes Hit Localities Disney Earnings Drop 26% on Weaker Theme Park, Media Results Oil Slips Below $67 as Euro Stocks Falter

Mister Rawles: We know having a supply of junk silver is a good idea, and we’re working slowly toward that goal. What would you suggest for those that have inherited sterling flatware or serving pieces? Not many people seem to use them anymore, we sure don’t, but it’s hard to sell them for cash in today’s economic climate. Do they have any value as trade items in a SHTF scenario? What would you suggest doing with these old family items that don’t hold sentimental value for us? Thanks! – Susan W. JWR Replies: Unless they have sentimental value, I recommend …

Jim, CRW points out that: If you had $1,000 in 1900, you could have bought 50 ounces of gold with it, yet today, a thousand bucks will buy only about one ounce of gold Clearly, gold has held its value better than numbers on paper. Fine, but that’s a fairly useless observation. Consider: gold doesn’t hold its value as well as other things. The overall consumer price index has increased by a factor of only about 32:1 during the same time; that is, gold has failed to hold its value relative to consumer products, primarily because refined gold was already …

Sent by Chris H.: In this recession, older white males see jobs fade From GG: Doctor Doom: The Road Ahead for the Global Economy – Roubini says debt monetization will continue Also from GG: Insiders are selling at highest rate since top of market Items from The Economatrix: Obama Says GDP to Show Contraction, Job Losses Durable Goods Orders Tumbled in June Profit Reports Push Dow to Best July in 20 Years

Sir, Let’s look at a way to visualize inflation. Let’s say you had a $1,000 bill in 1900. At that time, this would be the equivalent of letting the government safeguard [about] 50 ounces of gold for you. In 1933, Franklin D Roosevelt devalued the dollar, and as a result gold’s price rose from $20/ounce to $35/ounce. Equivalently, you could also say the 50 ounces of gold the government held for you now became 28.57 ounces of gold. The government stole 21.43 ounces of gold from you overnight! In 1971, Richard Nixon ended the Bretton-Woods gold standard for good, and …