Category: Economics & Investing

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colonial empires and the upsurge of student radicalism in the sixties, the notion of “barbarians at the gates” became outdated.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 …


The Time Has Come to Cache Some Cash

Looking at the escalating global credit collapse it now appears to be precipitating global economic depression. I can foresee conditions in the United States getting far worse in the months to come. There is now a fairly high likelihood of a general banking panic, with a large number of bank failures. The next few years will most likely be marked by significant deflation, followed by a tremendous surge of consumer price inflation. (Much of the $7.7 Trillion in bailout money that Uncle Sugar has promised will be created via highly inflationary monetization.) As the Mother of All Bailouts (MOAB) grows, …


Letter Re: The Year Gift that Cards May Spell “Gotcha”

James, I stumbled over this, earlier this week, and I feel it may be of interest to you and your readers. Certainly, this warning needs to be passed around to as many as possible, here in the US. Many retail stores are planning on declaring bankruptcy after the holiday buying season is over. Many more are planning on closing down stores, once the holiday sales have emptied inventory. This means trouble for one of our newest ‘gift choices’, the Gift Card. Gift cards are not actual money. They are treated as “Unsecured Loans” from the purchaser, to the company who …


Letter Re: Determining the Best Pistol Ammo to Store for Barter

Mr. Rawles; The Old Yooper’s statistics on range brass may be somewhat skewed in favor of automatic pistol cartridges because revolvers do not [involuntarily] eject spent rounds. Few cops are ‘gun guys’ but anyone who reloads saves their brass. This is easier to do if you don’t have to chase them, so a higher percentage of auto pistol cartridges are left behind. This having been said, I don’t think anyone will go far wrong stockpiling 9mm, . 40 S&W, and .45 ACP–both live rounds and spent brass. The pocket pistol cartridges are less attractive to reloaders, but I would not …


Letter Re: Is the US Residential Real Estate Market Nearing the Bottom?

Hello Mr. Rawles: Seeing that houses are pretty much dirt cheap right now, would it be a good decision to buy one? what would happen to our debts (including the mortgage) when/if the Amero comes? would they disappear like they claim the American debt will? I hear radio advertisements about the IRS giving you up to [a] $7,500 [interest-free loan] on your 2008 taxes if you buy a house in 2008. So, again, would it be a good idea? would the Dollar amount be converted into Ameros? Thanks in advance for your response. As always, congratulations on and thank you …


The MOAB Keeps Growing, and Growing

Last Winter, when I first started writing about the Mother of All Bailouts (MOAB), I predicted that the cost of the bailout would grow inexorably. Sadly, I was all too right. In fact, the scope of the MOAB is now much larger than I had predicted, early in 2008. The latest tally thusfar is an almost incomprehensible $4.28 trillion US Dollars. But wait, it gets worse. In addition to bailing out bankers and insurance companies, more and more entities from outside the financial sector are lining up to the Federal trough. The TARP bailout set a dangerous precedent. There is …


Letter Re: Finding Abandoned Properties, Post-TEOTWAWKI?

Dear Mr. Rawles, I recently became a fan of your blog and wanted to commend you for your work in educating the masses. While I don’t have a retreat, I’m using a different strategy and hope for your input. I live in western Maryland. Historically we are fairly disaster-proof from natural disasters enjoy all four seasons. My plan is to prepare (as best we can here) and after a disaster, claim a better vacant property. Two other thoughts: I recently purchased David Blume’s book “Alcohol Can Be a Gas” and intend to fuel my own flex fuel vehicles and have …


Letter Re: UCLA’s Eye-Opening Colloquium on the Worldwide Financial and Economic Crisis

Hi Jim, I’m responding to Tuesday’s article Letter Re: UCLA’s Eye-Opening Colloquium on the Worldwide Financial and Economic Crisis in which the general cause of the crisis was ascribed to too much economic freedom. The following articles make the opposite case, that it was actually caused by government interference in the markets: The Government Did It The Myth that Laissez Faire Is Responsible for Our Financial Crisis Alan Greenspan vs. Ayn Rand and Freedom Stable Money is the Key to Recovery As pointed out in the article Stable Money is the Key to Recovery, “…some three-quarters of the massive derivatives …