Category: Economics & Investing

Letter Re: Rampant Inflation in Steel Products

Dear Jim, According to the Federal government, the consumer price index (all items less food and energy) rose just 2.4% since May, 2007. If that’s the case, then I wonder why the [modular steel] cattle panels down at the local farm supply went from $12.99 on May 20, to $18.99 on June 12, and are priced at $27.99 today. That’s a whopping 125% price increase in just 60 days. Call me curious, – Dutch in Wyoming JWR Replies: I hope that SurvivalBlog readers took the advice that I posted back on May 19th. It bears repeating: “Of immediate concern is …


Banks Are Suffering From Their Own Stupidity, by The Mogambo Guru

The first half of the year is over, and now all those brokerage accounts and retirement accounts will be sending out statements to hapless account holders, and it is bad news in spades. This is why (I assume) the Plunge Protection Team (composed of the Federal Reserve, the Treasury and bank insiders) tried to drive the stock markets up on Monday, June 30 – to make those account statements look not quite as bad, and, hopefully, prevent people from dumping all of their stock and bond holdings in a desperate attempt to save something before the whole idiotic, fiat-currency, unlimited-fractional-banking …


Letter Re: Learning from the Price of Canned Tuna

Hi Jim, A while back on the blog you had a letter from a reader regarding the price increases that are coming down the pike (pun intended) for tuna. I was in a Wal-Mart the other day, and it looks like those increases are coming sooner rather than later. Two weeks ago, I purchased a bunch of Wal-Mart house brand tuna packed in oil, 6 ounce cans, for $0.53 per can. Yesterday, I was in Wal-Mart again, and the same product is now $0.74 per can. That is a price increase of 39% in a fortnight! I’m happy to say …


Two Letters Re: Amassing Copper Pennies–By the Ton!

Dear Jim: I enjoy and appreciate your site. I am concerned about the gentlemen [TRK, who stated in a recently-posted e-mail that he is] amassing tons of copper pennies. I understand his desire to hedge against inflation, but it seems risky to do so with a $60,000 investment in copper pennies. I didn’t want to see your readers get wiped out by following his bad advice. Let’s remember, you can’t fill your belly with pennies, nor can you bandage your wounds with them. While pennies are certainly tangible, preparedness is all about useful tangibles. Beans, bullets, Band-Aids. Preparedness is first …


Letter Re: Amassing Copper Pennies–By the Ton!

Jim, I read a recent blog of yours that was posted on “Gold is Money” regarding hoarding of 5 cent “nickels”. The penny is a much better deal (currently at just about 2.5 times their face value) and [as you’ve mentioned in SurvivalBlog, Ryedale has developed and sells a machine for under $500 that sorts by metal composition. [It sorts] 300 coins per minute. I have been amassing copper pennies for a little over one year now. Here is a summary of my plan that I’ve posted on the”Gold is Money” forums: I’ve got five tons of 95% copper and …


Letter Re: The Handwriting is on the Wall for the Big Three Auto Makers

Mr. Rawles, Anyone who is paying attention would have seen the mess that America’s “Big Three” auto makers are in. A smart Peak Oil [market] player would have shorted them a while ago. But consider this little fun fact – As of this last Friday, the market capitalization of General Motors (GM) was just over $5 billion. That’s all. Toyota has about 25 times that. So are several other healthy auto makers and they all know that times are tough yet GM expects sales to pick up later this year? But consider that $5 billion. It’s cheap yet no one …


Letter Re: California’s House Prices Plummet to Surprising Depths

Hi Jim, We’ve been good about our refinancing. As the house appreciated, we took a little here and there on two re-fi[nancing]s, to pay off most of our credit debt, and to start a business. At this time a couple of years ago, the house was worth $440,000, conservatively. In January, $351,000. Just last night, using a very good evaluation tool called Zillow.com, we were surprised to find that in the last six months, the house’s value dropped [still further,] to just over $250,000. That was a shock. Almost [a] $190,000 [on-paper loss] in less than two years, in an …


Letter Re: Economic Gloom and Doom is Justified

Jim, Ironically, just a day after I wrote an e-mail chiding you [for giving too much attention to economic gloom and doom in SurvivalBlog], I had a meeting with one of our clients that has been a very successful Wall Street trader. He gave me a laundry list of banks that he expects to fail before the end of the year and predicted a complete collapse of the financial sector. Worse [for us], since we are in Michigan, he said that some of the Big Three auto makers are in serious trouble. When I asked him where he saw the …


Letter Re: Advice on Getting Started in Precious Metals Investing

Jim, Your reader TheOtherRyan wrote asking about how to get started in precious metals investing, especially the challenge of purchasing only a small amount each month. First, Ryan is wise to realize that you want to buy in small amounts, and not wait until a big “buy,” which might be at an unlucky price spike. Investors call the process of buying a little each month with a disciplined approach “averaging in.” It means you’re buying more on the months when the price is low than when the price is high, lowering your average total cost. Unfortunately, it can be difficult …


Two Letters Re: The Five Minute Bank Run

Dear Mr. Rawles, Read the letter from W.D. in Texas with great interest. I have been a recent visitor to your blog and read the postings on the banking system with great interest – and shared them with immediate family. As a Florida resident, even though in the less vulnerable northeastern part of the state, it is prudent to be ready for adverse weather as the ATMs and banks could be closed in an emergency. Good luck trying to get cash at that point in time. I strongly suspect that most people nationwide have about as much cash on hand …


Letter Re: The Five Minute Bank Run

Dear Mr. Rawles: I wanted to tell you a personal experience I just had at the bank that scares me to death. If you think a bank can last a few days during a bank run, then you will be very surprised by my story. I wanted to withdraw $10,000 from a JP Morgan Chase Bank branch in a local Houston [, Texas] suburb. Chase is the second largest bank in the US and Houston is the fourth largest city in the US. I went in and said: “Can I please have my money?” The teller disappeared for 10 minutes …


Letter Re: The US Tax Giveaway Economic Stimulus Charade

Mr. Rawles, On June 27, 2008 the following Associated Press headline was on Yahoo Finance: After-tax incomes and spending show big gains. “The millions of economic stimulus payments gave a massive jolt to household finanances (sic) in May, sending after-tax incomes up by the largest amount in 33 years.” Q: Does borrowing money from the next two generations, while saddling our grandkids with principal and interest repayment obligations to foreign countries really now count as “after tax income”? A: Not to regular SurvivalBlog readers. Regards, – Kevin A. JWR Replies: Those with the Big Government mindset would answer: “Oh, but …


Letter Re: Advice on Getting Started in Precious Metals Investing

Dear Jim, I would like to build up a moderate sized collection of precious metals as a hedge against inflation and also in case of an Argentina like economic melt down. I do not have a whole lot of cash to spend and want small denominations so silver is what I am looking for. I got into the links section and found Eastern Numismatics but from there it got confusing. Different coins had different values which makes sense but I just want to get some “junk silver” so the difference between x coin and z coin is of no concern …


Letter Re: The US Stock Market–A Net Loss for Investors Since 1999

Mr. Rawles, In all the discussion about the [US] supreme court [Second Amendment] ruling, today’s stock market plunge may have been overlooked. The Dow Jones Industrial Average closed at 11453.42. That’s just over half a point gain to date for the millennium. On December 10, 1999, (8-1/2 years ago) the Dow closed at 11452.86. In the years since then, our country has grown by tens of millions of people, and the most optimistic estimates of inflation average 2-to-3% annually. But the market is up only 0.005%. As [the pop music singer] Prince might say, “Party like it’s 1929.” – Robert …


Letter Re: An Economic Observation on the Prices of Silver and Gasoline Versus Fiat Dollars

Jim, I hope all is well with you and yours! I am pleased to note that I have made faithful followers of your blog of many of my friends. The more the merrier! The blog has been an incredible source for enlightenment and inspiration. I now advise everyone that I can prove that since 1964 and based upon the 1964 monetary system, the gallon price of gas at the pumps and the relative price of consumer goods have not increased in cost or value. Only the Federal Reserve note has lost buying power. In my humble and simple observation, cost …