Category: Economics & Investing

Four Letters Re: More Predictions for 2009, by Roger Wiegand

Mr. Rawles- In response to “More predictions for 2009”, reader Jeff K writes, “There has never, ever been hyperinflation with deflating real estate prices.”. This is simply false, and a surprisingly common misperception. Zimbabwe is hardly a ‘red hot’ market for residential (or commercial) real estate, yet that country is an example of extreme hyperinflation. When Turkey went through its period of massive inflation it too suffered declining real estate values. South America, plagued with inflation during much of the past century was also a black hole for real estate investment. Ditto for [much of] Africa. Weimar Germany, a famous …


The New Washington, DC Paradigm Does Not Bode Well for Economic Recovery or Gun Ownership

Wednesday’s news of passage of the “supplementary” TARP II $900 billion stimulus and bailout legislative package in the House of Representatives is noteworthy. The fact that it passed with hardly a whimper is evidence that Congress cannot be trusted to show any fiscal restraint. According to the Wall Street Journal only about 12 cents of every dollar appropriated in that legislation will go for something that can be considered a growth stimulus, yet there was no lengthy or substantive debate on the bill. The floodgates of the Treasury have been opened! The Mother of All Bailouts (MOAB) is now sure …


Two Letters Re: More Predictions for 2009, by Roger Wiegand

Good Morning, Jim! This is a response to “More Predictions for 2009”: We can’t make other peoples’ choices for them, but we can be affected by them. We are our brothers’ keepers, but not their masters. Governments will always do what they always do. You need to be concerned with your “mini government” – your own household. Wherein the adults are the governing body and are also constituents (along with any dependents). I choose to focus on what I can control and not toil and spin about the stuff I can’t control. My predictions for 2009? – My wife and …


More Predictions for 2009, by Roger Wiegand

Our new president was inaugurated and we wish him well for the sake of our nation and others throughout the world. We do not want to be cynical but must be realistic. We think this year will be the worst one of this longer recession-depression cycle and our new leader, we suspect is going to take a merciless pounding from a heap of troubles domestically first and foreign later. Thankfully, the spending of TARP #2 and whatever billions-trillions are added for emphasis, should give us the Obama Market Bounce lasting perhaps 90 days or so. While this economics plan has …


The Big Roller Coaster is Picking Up Speed

The following are few random observation on current events: 1. Economic News 1A. The recent turn for the worse for Great Britain’s economy has sent shock waves around the globe. I expect this bad news continue, and intensify in the months to come, especially once the full implications of the Credit Default Swap (CDS) derivatives fiasco become known. 1B. It is interesting to see that the COMEX spot silver and spot gold markets are breaking out of their doldrums. Apparently, the big investors have come to realize that there are simultaneous credit market-spawned economic problems in North America, Europe and …


Four Letters Re: The Gray Man in the Coming Storm

Jim: “E’s” Gray Man concept is cowardly, standing idly by as evil men corrupt this fine country. The Citizen, on the other hand, works to preserve and protect the liberties that we now enjoy, in opposition to men and women who wish to do those liberties harm. The Citizen knows the power of government is kept in check only by the citizenry-at-large. He (or She) is not afraid to oppose totalitarian policies, because he knows to remain silent will surely result loss of his rights. He understands the Constitution and respects the ideals of the fore-fathers. He knows they didn’t …


Letter Re: The Real Threat is Deflation

Greetings Jim, As always you have such great content on your site – I find myself constantly looking for “tomorrow’s” post today as I end my evening on the West Coast. Regarding the post by David R: ‘The Real Threat Is Deflation’, I’d like to mention a great article over on www.Mises.org called ‘Falling Prices Are The Antidote To Deflation’. Thanks to your guiding me towards studying and understanding the Austrian School of Economics, this web site has become, like yours, one that I seek out with my morning coffee. Another great article recently posted on their web site, and …


Letter Re: The Real Threat is Deflation

Mr. Rawles, I greatly respect your advice and columns on most matters yet I continue to see people like yourself claiming we are facing an inflationary holocaust. People in the inflationary camp point to the size of the Mother of All Bailouts (MOAB) or the rate or printing as if that number alone meant something. You cannot take that number alone, sir, but must measure it against the value of assets that have been destroyed by the deflation going on around you. The total inflationary pulse from Europe, Japan, and the US thus far is approximately $7.5 trillion as best …


Inflation, Taxes, and Self-Sufficiency

I recently received an e-mail from T.F. in Utah, who quipped: “They tell us that inflation is now non-existent. Well, how many years of deflation will it take to get prices back to where they once were? It is noteworthy that the average annual property tax on a house on a city lot now exceeds the entire land purchase price and construction cost of a comparable square footage house, in 1890.” Inflation is indeed insidious. And its has implications that are far-reaching. For example, consider the following: Creeping tax increases one of the reasons that it is now nearly impossible …


Letter Re: CNN to Air I.O.U.S.A. Today and Tomorrow

James, This coming weekend, CNN will broadcast a program called I.O.U.S.A. It’s a documentary about the United States debt – which is out of control, an expose on just how bad our current economic crisis is. Karen and I believe that becoming educated about what is possibly the biggest problem in our lifetimes – is critical. So we write this email to you today hoping you’ll watch this program and get involved. If we sit idly-by and watch from the sidelines as our Federal Government continues to spend our hard earned tax dollars – in an out of control fashion, …


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 …