Category: Economics & Investing

Letter Re: Should We Currently Emphasize Storage Food or Gun Purchases?

Hello Jim, I’ve finished reading your fine novel “Patriots” several weeks ago, and have passed it on to another like-minded individual. I’ve also been scouring your web site daily for the last several months, and gleaning extremely valuable information not only from you, but the many fine individuals who add excellent links to current events. I have forwarded your link to others, and have it saved as “required reading” daily. A brief background on our family; I had been one of the Y2K aficionados, and had lived on the Big Island for many years. If it were still just my …


Letter Re: More About the Derivatives Bubble

James: It appears [corporate, hedge fund, and bank funds managers] have been playing a modern day Enron game with the OTC (Over The Counter) derivatives market. They have been taking their bad debts, and credit default swaps (CDSs), failed commercial loans, and construction loans and moving them to this unregulated and unlisted market to hide the true size of their toxic debts. Half of the financial monstrosity is projected to be in this “hide the bad debt” game. The [aggregate notional] number is so surreal, it is mind boggling. I may have missed you posting the recent article in The …


Letter Re: Some Changes in American Wholesale Food Distribution

Hi James You’ll recall hat I wrote to you a while back, forewarning of increasing prices for canned tuna, as I am in the import food business. I read Buckskin’s message with interest, as I sell to food distributors, of the type that he is referring to. What many of your readers may or may not know, is that a huge amount of our food products are imported. I don’t have exact figures on it, but there are certain categories of food products that are almost exclusively imported, as they either cannot be produced here at all or cannot be …


Letter Re: Deflation Followed by Mass Inflation?

Dear Jim I agree with Michael that deleveraging, the reduction in credit, means falling price levels in the short run – but not for 4 or 5 years! He wrote: “Credit can be destroyed. If the value of your house goes down by $100,000, then that $100,000 is just gone. It doesn’t exist any more. It is not in the money supply. This is deflationary” Back to basic definitions – inflation is an increase in the money supply, deflation is a decrease in the money supply. Generally inflation leads to rising prices, and deflation to falling prices. The price of …


Five Letters Re: Full Capacity Magazine Price Increases are Already Here

Sir, Be advised, Cabela’s here in Fort Worth, Texas is sold out on all ammo except 22 LR and shotgun shells. A friend who went there today was amazed to find all ammo shelves emptied. The last time I went there (shortly before the election) the place was a mad house. Standing room only, many people turned down on their background checks (or delayed). I considered myself lucky to get in and out of there in an hour. I got my new toy, no problem and plenty of ammo “at sale price”. Cheaper Than Dirt’s prices have doubled or tripled. …


Letter Re: Deflation Possibly Followed by Mass Inflation?

Jim, I believe that we are in for deflation, not inflation. A simple error that most people make when considering this topic is language related: When discussing actions of the Fed they talk about ‘printing’ money. Well, the Fed (actually the Treasury) hardly ‘prints’ any money at all. In Zimbabwe they print money. Lots of money with lots of zeroes. Here, they just increase the number of zeroes in a computer. The difference is profound. When there is a lot of currency floating around then people use it to buy stuff. More currency with higher values means more currency chasing …


Full Capacity Magazine Price Increases are Already Here

Regarding my recommendation to stock up on full capacity magazines, reader David B. noted this in an e-mail yesterday morning: “[The discount mail order dealer] Cheaper Than Dirt [is] already gouging us based on our fear of Obama being elected. Overnight, their price for Mag-Pul [brand AR-15/M16] magazines went from $15.97 each to $29.97 each. Wow. They just lost my business forever.” David’s note intrigued, me, so I just spent some time at the Cheaper Than Dirt (CTD) web site and compared their new prices with their latest hard copy catalog (dated November, 2008). Here is a brief sampling: Glock …


Letter Re: Did Western Civilization Actually Peak Around 1970?

Jim, I wanted to comment on something that was mentioned near the end of the Utah home break-in article: The author hit on the idea that TEOTWAWKI already took place in the late 1960s. Possibly some gifted insight. I’m a member of a regional Peak Oil group. (I originally joined this group a few years ago, in order to learn food-growing skills: You’ve always suggested getting with various groups, in order to learn skills), we’ve begun a spin off group meeting–a ‘meeting of the minds’ so to speak, involving predictive analysis, regarding the collapse of the current civilization. We were …


From The Memsahib: Buyer Beware When Purchasing Livestock

While most of my livestock purchases over the years have been satisfactory, I have found that buying livestock can be full of pitfalls. I will share some of my mistakes in hopes you can learn from them. I have found livestock sellers may not outright lie to buyers but they often do not volunteer important information. So it is very important that you get a detailed book for each type of livestock you plan to purchase and do some research, so you’ll know exactly what questions to ask. Make certain the book has a chapter about choosing healthy stock. The …


Letter Re: Market Observations From The Trader Blog

Mr. Rawles – Thank you for your recent mention of my site, TheTraderBlog.com. I am a former Lehman Brothers employee, I worked in New York City on the FX trading desk, but left in 2002, so I am glad to have missed all the recent excitement. I publish my blog in an effort to help me reason through my personal trading strategies, and also like to share my opinion about the markets and related events in general. I have not yet figured out how to make any money off of the site, so for now it is just a great …


Letter Re: The Depression of the 1930s–Why No Societal Collapse?

Jim I run a museum that covers, in part, the Great Depression. In a reply to Steve’s letter about how people may react to a “modern” 1930s type depression, you listed a number of economic, social and cultural differences in America in the two time periods. I might add, or expand on, a few. In the 1930s, many more people lived on farms or gardened. Even in many towns and cities, it was common to have a garden and raise a few animals including chickens, rabbits, pigeons. An enormous difference, then and now, is that the garden seeds then were …


Letter Re: The Depression of the 1930s–Why No Societal Collapse?

Hi Jim, I really enjoyed reading your novel “Patriots”. I’ve read a few other books also, like “Lucifer’s Hammer” and I have to admit that they spurred me to buy a 22 LR [rimfire rifle] as a starter. I’ve been doing a lot of thinking of our current situation in this country and it occurs to me that every generation has things going on that is very concerning. But in particular was thinking the Great Depression should have been a good example of things going to h*ll. Yet there was not this great meltdown where people needed to go to …


Letter Re: How to Handle Real Estate Holdings in a Economic Depression

Sir: If the global economy melts down and we experience a “greater depression” or worse. What is the best strategy for real estate that is already owned? I own a primary home and two rental properties in central Virginia but if the SHTF, I’m going to retreat along with numerous family members, to our farm about 25-30 miles from the nearest city. (It has hundreds of acres for growing, and has ample water, etc.) I don’t have substantial equity in any of my three houses and all mortgages 30 year fixed through Bank of America. Is it worth continuing to …


The Financial Crisis Will Soon Abate, But The Real Crisis Will Soon Begin, by Steve Saville

In an essay first published in 1969 and recently re-published, Murray Rothbard summarizes the causes and cures of economic depressions by drawing on the Business Cycle theory developed by the great Austrian economist Ludwig von Mises. Here’s an excerpt from this essay: “Mises, then, pinpoints the blame for the cycle on inflationary bank credit expansion propelled by the intervention of government and its central bank. What does Mises say should be done, say by government, once the depression arrives? What is the governmental role in the cure of depression? In the first place, government must cease inflating as soon as …


Three Letters Re: The Savvy Barterer

Hi Jim: That first paragraph touched a nerve, because it was so truthful for me. My senior year in college everybody went to Ft. Liquordale. I went to Marrakech. Amazing experience. And boy did I get burned on some of the things I bought there. Some by as much as 1,000%. But the learning experience I came away with was priceless. The negotiation skills I learned there have become by far my most valuable business tool. That experience really made me think. On one hobby web site where I have collected much feedback my favorite one of all is “He …