Category: Economics & Investing

Letter Re: Huge Price Hikes by Dow Chemical are an Ominous Inflation Indicator

Jim, In the news today, Dow Chemical is announcing a 25% price increase, following a 20% increase three weeks ago. Since they produce the feedstock chemicals for almost every industry on earth, this should be a great indicator of what’s coming. – ZBM JWR Replies: Ay carumba! Dow produces a huge variety of chemicals and compounds that go into everything from fertilizers to plastics. This is an alarming indicator of consumer price increases in the near future. When paired with fuel price jumps, this becomes downright frightening for near-future food prices at the consumer level. At this point, precious metals …


Letter Re: Economic Impact of Increasing Gas Prices and Declining Real Estate Prices

Mr Rawles: I sent you a link awhile back about the old timer from Wall Street who is still working in the industry and lived through the first Depression – he was greatly worried about what was coming. I agreed with your assessment that he was wrong about staying in stocks. My own former husband is a Wall Streeter who has moved much of his money out of the country now. He manages part of my own retirement portfolio and has been saying that what’s coming is going to be horrific to bear. His grandparents arrived in the US at …


Two Letters Re: Tomorrow’s Headlines? — A Nationwide Banking Panic

Hi James, First, thanks for sharing Mike [“Mish”} Shedlock’s recent article with the SurvivalBlog.com community. Like you, I’ve grown to trust his observations and analysis and I read his work as often as I read yours – daily. I wanted to add a couple of comments, which will strengthen both Mish’s and your viewpoints concerning your observations on the potential for a nationwide banking panic. First – is that [as mentioned,] the FDIC is preparing for this crisis right now, by hiring back some retirees, with specific experience in dealing with bank failures, as they are expecting a large number …


Two Trillion Dollar Reduction In Credit Card Lines Coming Up, by Mish Shedlock

Credit is drying up everywhere. Banks are now concerned (finally), about rising credit card debt. They have every reason to be. The bankruptcy reform act of 2005, which encouraged such reckless lending is now blowing up in lenders’ faces. Banks and credit card companies wrote that bill. They got everything they wanted. It goes to show you two things: 1.) Be careful of what you ask, you might get it. 2.) Greed kills. Furthermore, I expect many of the debt slave provisions of the bill to be undone after Obama is elected. That will increase defaults. Even if an unwinding …


Tomorrow’s Headlines? — A Nationwide Banking Panic

Since September of 2007, I’ve been warning SurvivalBlog readers about the potential for bank failures and bank runs in the US, spawned by the unfolding global credit collapse. I am now raising my warning to multiple red flags. There are certainly some ominous signs. These include: New banking scrutiny–especially for investment banks. Plunging bank reserves. A few more bank failures this year than in a typical year. A record increase in “bank owned” (foreclosed) houses. New FDIC rules on assessing risks at major banks.To be ready for bank runs, the FDIC has even re-hired some former employees from its division …


Letter Re: Update on Storage Food Shortages

Dear SurvivalBlog Readers: As you may know Mountain House has curtailed all shipment of their freeze dried foods in cans throughout the U.S. until at least October of this year. I repeat, the supply from Mountain House has been cut and I fully believe that when their food in #10 cans is available again, it will be at much higher prices. We still have a large supply of Mountain House Freeze Dried foods in our warehouse. It appears that we have one of the largest remaining supplies in the country as some of our biggest competitors are referring their customers …


Letter Re: Numerous New Economic Crash Warnings

Hi Jim, Within the last couple of days I have noticed that multiple economic and financial institutions have started to issue global financial crash alerts. For instance: – Morgan Stanley warns of a ‘catastrophic event’. The point of maximum stress could occur in coming months if the European Central Bank (ECB) starts to raise rates and the Fed backs away from expected tightening. The rates differential “could trigger a ‘catastrophic’ event”. – The Global Europe Anticipation (LEAP/E2020) team is now convinced that this period will consist for the whole world in a major plunge into the heart of the phase …


Florida at the Precipice of Depression, by Mike Morgan, J.D., CRS, GRI

I was going to call this “Banks March Us Into Depression,” or maybe more fitting is . . . “Complete Collapse of US Banking System.” Folks, that is what we are looking at. I don’t see any way around it. What we’re seeing here in Florida, is your crystal ball. And what happens here, is coming to a town near you . . . soon. This past week I didn’t write anything, because what I am seeing unravel is disturbing to the point I had to question what I was seeing and hearing. So I decided to take as much …


Two Letters Re: Request for Investing Advice

Hello Jim, First off, thanks for an excellent book/resource in your novel “Patriots”. I read it in the last week and it has had a profound effect on me. I also felt the writing was quite good, being entertaining and educational at the same time. Thanks for it! After reading your book (and listening to my brother, who has been talking about TEOTWAWKI for some time now), I did finally do some things to prepare in the last week, but I wonder what the next step is for me. First off, I invested about $80 to make some shelving in …


Letter Re: Physical Gold Versus Electronic Gold

Mr Rawles, The letter from the gent who recommends investing in synthetic gold startled me. Prior to the Great Depression my family was very wealthy. My great-great grandfather, was an assemblyman from New York State who [had] moved to the backwoods of Pennsylvania and built what was at one time the largest tannery on the east coast. The family also owned a large hotel, at least two other tanneries, a general store and a gristmill. When his son took over the reins of the family wealth he invested the bulk of it in silver stock. When the stock market crashed …


Letter Re: Physical Gold Versus Electronic Gold

Dear Mr. Rawles: You are clearly (and presciently) on the record as recommending the purchase of precious metals, ahead of the current inflationary cycle. Congratulations on that excellent macro call. But I believe you also recommend holding the physical commodity rather than synthetic ownership through an exchange traded fund/note. This makes less sense to me. As an economic hedge against fiat currency deflation, synthetic gold has lower transaction costs since you don’t have to pay for the transport of the gold, the retail broker markup, or the non-gold coinage aspects of value that are embedded into Krugerrand, Maple Leaf, and …


Lady Liberty Liberty Has a Hollow Core

The best known symbol of the United States is the Statue of Liberty. It was a gift from the people of France, with a framework designed by Gustave Eiffel. (Yes, the same gent that designed the Eiffel Tower.) Eiffel’s Liberty statue armature design was clever, and made the statue an amazingly lightweight for a structure that towers 151 feet tall. Rather than a traditional solid masonry statue, Lady Liberty is built on a hollow framework to which copper sheets are attached. I have recently come to realize that the Statue of Liberty is a fitting symbol for the United States …


Letter Re: The Supply of Battle Rifle Parts Kits in the US is Drying Up

Jim: In a recent post, you wrote: I recommend HK91 clones because they are presently less expensive than M1As, and their spares are much less expensive. An M14 parts kit (everything but the receiver) is around $750, if you can find one. But you can buy a G3 part kit for under $250.” Please tell me where I can buy $250 G3 parts kits. They have all dried up. $400 to $500 if you can find one. I’m needing a couple. Thanks, – Craig W JWR Replies: The last gun show that I attended (late last year) had a table …


Choosing an HK91 Clone Versus the M1A for a Primary Battle Rifle

Hello Mr. Rawles. My Father bought me your novel “Patriots” and I read it and it really inspired me and woke me up to becoming more of a survivalist. I live in the country just about 50 miles out side of Chicago (pretty much the worst place to be if the SHTF, well even if it doesn’t, it still sucks, LOL), but never mind that we have other places to go, thank God. I have always been around guns. I have been shooting probably since I could walk. Anyway, I am wondering why in your book you chose to [show …


Triage In Financial Markets, by Darryl Robert Schoon

Global financial markets are in extreme triage following the credit contraction of August 2007. It is believed central bankers are trying to restore markets to help the economy. In truth, they are like life insurance companies fighting to keep a wealthy patient alive so the high premiums will continue to be paid and the large death payout will be postponed. It has been only nine months since credit markets unexpectedly froze in August 2007. The central bankers who were surprised by the summer 2007 credit contraction now hope the danger has passed. But they are about to be surprised again …