Category: Economics & Investing

Our 2009 Predictions, by Roger Wiegand

We think we now have enough data from both the fundamentals and technicals to make some serious forecasts and predictions for 2009. While 2008 was a nasty year when lots of things imploded, they are far from being repaired. Treasury Secretary Paulson told us this week there are no more surprises, which tells me we haven’t even discovered but a small portion of this monster derivative mess. His ripping-off of the taxpayers to the tune of $700 billion is only a warm-up. However, the larger question for traders and investors is what could happen next and when. In the following …


Letter Re: The U.S. Expatriation Exit Tax

Hi JWR, Here’s another one for your readers. I’d heard of this “exit tax” a few months ago and it was completely ignored by the mainstream media (MSM). At first blush, it doesn’t appear to impact most people, i.e. only those over $4 million USD net worth for couples who renounce U.S. citizenship and leave. However, we all know how well the alternative minimum tax (AMT)–the so-called millionaire’s tax–worked out. It was supposed to affect only several hundred tax “scofflaws”, and now because of inflation, millions of citizens are affected. A few years of 50% inflation will put most professional …


The MOAB Expands Yet Again: Five State Governors Seek $1 Trillion from Uncle Sugar

Back in November I reiterated my point that the Mother of All Bailouts (MOAB) would know no limits. One of my specific warnings was: “The States – Some 29 of the 50 states are reporting budget crises. Lo an behold, most of the hardest hit states are those with bloated Nanny State bureaucracies. No surprise there. The states that had the worst fiscal management, of course, will get the biggest share of the taxpayer funds. Those that were fiscally conservative will get nothing.” A recent wire service headline confirmed that prediction: U.S. governors seek $1 trillion federal assistance.The article begins: …


From the SurvivalBlog Archives: Inflation–Past, Present, and Future

It has been said that nothing is inevitable except death and taxes. But personally, I add inflation to that list. Inflation is an insidious hidden form of taxation We’ve been robbed! According to The Inflation Calculator, what cost $100 in 1905 would cost $2052.36 in 2005. The U.S. dollar has lost 95% of its value in that time. (If you were to buy exactly the same products in 2005 and 1905, they would cost you $100 and $4.87 respectively.) The inflation rate jumped considerably in the 1960s and 1970s. It is no coincidence that the U.S. Treasury stopped minting real …


Letter Re: The Best College Degrees for the Next Depression?

James, longer this [economic death spiral] goes on, the more it looks like this is going to be at least a decade before normality returns. So, if you’ve got a teenage kid you’re probably thinking, what kind of career (assuming we don’t totally melt down at a societal level) path he or she should take… I was talking to someone the other day and he told me his kid was studying art. “Oh, I asked, is he any good?” He replied “No, not really.” This family man is spending good money, money that could be put into preparations into a …


Two Letters Re: What Are the Best Magazines for Investment?

Jim Here’s my feeling on what pistol mags to obtain. Obviously, if you have a high capacity handgun, it behooves you to have at least ten mags for it. I actually have 30 Glock Model 19 mags since I already have one and contemplate picking up another that a friend wishes to sell. I’m also trying to pick up Glock 17 mags, even though they stick out the bottom of my G19. I really want a Glock 34 long slide 9mm, and figure that the only way I may be able to get mags for it down the road is …


Letter Re: What Are the Best Magazines for Investment?

Dear JWR: I took your wise advice posted in the blog back in October and stocked up on magazines for all my guns. I ‘ve even bought some mags [for other guns] that I just plan to buy, such as M14 magazines for my eventual super match M1A buy. But what I’m thinking is, I should also do is by even more magazines just “on spec”, knowing that with Obama coming in[to office, that] a ban of some sort is more likely that not. What types/model high capacity magazines would be best to invest in, for the most possible gain? …


Fear and Loathing in America’s Age of ZIRP

You’ve surely heard by now that the Federal Reserve has effectively lowered interest rates to zero. Obviously having learned nothing from the mistakes of Japans’s decades-long recession, Ben Bernanke & Company have instituted their own Zero Interest Rate Policy (ZIRP). By artificially lowering interest rates, many economists predict that the Fed will actually delay economic recovery for many years. ZIRP was a failure for Japan, and I predict that it will be a spectacular failure for the United States. The Fed could, in fact, lower interest rates below zero, to the so-called “Super Zero” range. Such absurdities are not impossible …


Letter Re: My Preparations are Fairly Complete, So What Next?

Dear Jim, I have been saving money and selling some of my unnecessary items and toys for a while now and have amassed $42,000. I have plenty of firearms and ammunition, tools, a house that is semi-remote, and a stash of food (which isn’t enough I’m sure). I have paid off my credit cards and only have a house payment left. My job is relatively secure I feel, as I work at a power plant; though once the coal stops moving I wont be needed, I guess. I’m not sure what iI should do with the money I have saved. …


Specialization and Decline, by J. R. Nyquist

Years ago, when the West entered onto a path of decadence, it became fashionable to deny the historical consequences of permissiveness and bad behavior. As the old standards fell away, new standards of “tolerance” and “acceptance” took hold. With the fall of colonial empires and the upsurge of student radicalism in the sixties, the notion of “barbarians at the gates” became outdated. Heaven forbid that anyone should be described as a “barbarian” or as “uncivilized.” The idea that some peoples were more advanced, that some civilizations had more to offer, was no longer an acceptable way to talk. The fall …


Letter Re: A Company Layoff Underscores the Need to Be Well Prepared

Jim, What a surprise my wife and I received at work yesterday. My wife and I work for the same manufacturing company and after two banner years and a huge Christmas bonus the company is reducing everyone to 20 hours a week. The company we work for is a total “team oriented” place to work and if one person gets a bonus we all get a bonus and the same is true when it comes to layoffs. While our company sets and exceeds the world standard for what we do many of the companies we are dealing with are unable …


Call Me Delusional, by Edgar J. Steele

The following is an e-mail I sent three weeks ago to a small group of exceptionally-forgiving friends of mine, in which I pre-announced my hunch that things have changed fundamentally in the precious metals (PM) markets: There are lots of possible reasons: options expiry last week, new administration coming, new econ[omic] team (same as the Clinton econ team, which ran the [Plunge Protection Team] PPT into overdrive), China going into recession, Motor City going BK, a need to devalue the dollar in the face of global recession, shorter hem length, planetary alignment… Fact is, though, it is just a hunch. …


The Coming Great Depression, by Charles Hugh Smith

I have been asked to address the coming Great Depression which is slowly but surely enveloping the globe. The irony of doing so in Thanksgiving week is not lost on me, and I want to preface my commentaries by saying that I do not tackle the subject cavalierly. There will be great suffering, on many levels, and the entire point of analyzing the situation is to lay the groundwork for alleviating the suffering by getting to the root causes of the financial, social and environmental disasters which are unfolding globally. Let’s start with the view of the U.S. from orbit. …


Letter Re: Seeking Advice on Storing Guns and Magazines

Mr. Rawles, I have taken your good advice and purchase a few rifles and a number of full capacity magazines as an investment,. Now how do I store them for the long term? Should I spray them with something first? Please continue to help. – James B. (a “Ten Cent Challenge” participant) JWR Replies: The precautions that you need to take depend a lot on where you live. If you live in a high humidity climate, then you need to be particularly vigilant with your guns, magazines, and other tools. In essence: the higher the humidity, the greater the degree …


Letter Re: Give Your Kids $100 Billion for Christmas: An Economics Lesson

Hi Mr. Rawles, Thanks for SurvivalBlog and for your novel “Patriots“. Both have been real eye-openers. I have several nieces & nephews that I (like many people, I’m sure) take care of on birthdays (and sometimes Christmas) with a card and some money enclosed. This year I thought it might be fun to send them 100 billion dollars along with the card and note. I looked around, and lo and behold, several people are selling Zimbabwean currency on eBay. Prices and denominations vary, and of course it costs millions (trillions?) percent more than it’s actually worth, but we’re still talking …