Category: Economics & Investing

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 …


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

Hi, Yesterday [Friday. November 14, 2008] I attended the Marschak Colloquium on Mathematics in the Behavioral Sciences at UCLA {University of California, Los Angeles] . This thing is attended by lots of UCLA and USC [University of Southern California] economics professors, including many retired faculty members and other local luminaries. (Two seats to my right was author Alvin Toffler of “Future Shock” fame.) The main speakers presented for an hour, and then the whole group asked questions and discussed the topic. Here is the brief abstract that announced the talk: “The current worldwide financial and economic crisis is the greatest …


Letter Re: Where to Find the Funds for Your Preparations

Dear Jim, So many people are struggling to find ways to make ends meet, much less have any extra money to make purchases for their preparedness plan. There are a lot of things people can do within their own means. 1. Make a budget. Income minus expenses. Is there anything left over? You are ahead of the game. If not, now is the time to: 2. Trim the budget. Distinguish needs versus wants. Eliminate anything that is not needed. 3. If after trimming the budget, you still cannot find extra money, get a second job, have a yard sale, etc. …


Letter Re: Should We Currently Emphasize Storage Food or Gun Purchases?

Hello Jim, I’ve finished reading your fine novel “Patriots” several weeks ago, and have passed it on to another like-minded individual. I’ve also been scouring your web site daily for the last several months, and gleaning extremely valuable information not only from you, but the many fine individuals who add excellent links to current events. I have forwarded your link to others, and have it saved as “required reading” daily. A brief background on our family; I had been one of the Y2K aficionados, and had lived on the Big Island for many years. If it were still just my …


Letter Re: More About the Derivatives Bubble

James: It appears [corporate, hedge fund, and bank funds managers] have been playing a modern day Enron game with the OTC (Over The Counter) derivatives market. They have been taking their bad debts, and credit default swaps (CDSs), failed commercial loans, and construction loans and moving them to this unregulated and unlisted market to hide the true size of their toxic debts. Half of the financial monstrosity is projected to be in this “hide the bad debt” game. The [aggregate notional] number is so surreal, it is mind boggling. I may have missed you posting the recent article in The …


Letter Re: Some Changes in American Wholesale Food Distribution

Hi James You’ll recall hat I wrote to you a while back, forewarning of increasing prices for canned tuna, as I am in the import food business. I read Buckskin’s message with interest, as I sell to food distributors, of the type that he is referring to. What many of your readers may or may not know, is that a huge amount of our food products are imported. I don’t have exact figures on it, but there are certain categories of food products that are almost exclusively imported, as they either cannot be produced here at all or cannot be …


Letter Re: Deflation Followed by Mass Inflation?

Dear Jim I agree with Michael that deleveraging, the reduction in credit, means falling price levels in the short run – but not for 4 or 5 years! He wrote: “Credit can be destroyed. If the value of your house goes down by $100,000, then that $100,000 is just gone. It doesn’t exist any more. It is not in the money supply. This is deflationary” Back to basic definitions – inflation is an increase in the money supply, deflation is a decrease in the money supply. Generally inflation leads to rising prices, and deflation to falling prices. The price of …


Five Letters Re: Full Capacity Magazine Price Increases are Already Here

Sir, Be advised, Cabela’s here in Fort Worth, Texas is sold out on all ammo except 22 LR and shotgun shells. A friend who went there today was amazed to find all ammo shelves emptied. The last time I went there (shortly before the election) the place was a mad house. Standing room only, many people turned down on their background checks (or delayed). I considered myself lucky to get in and out of there in an hour. I got my new toy, no problem and plenty of ammo “at sale price”. Cheaper Than Dirt’s prices have doubled or tripled. …


Letter Re: Deflation Possibly Followed by Mass Inflation?

Jim, I believe that we are in for deflation, not inflation. A simple error that most people make when considering this topic is language related: When discussing actions of the Fed they talk about ‘printing’ money. Well, the Fed (actually the Treasury) hardly ‘prints’ any money at all. In Zimbabwe they print money. Lots of money with lots of zeroes. Here, they just increase the number of zeroes in a computer. The difference is profound. When there is a lot of currency floating around then people use it to buy stuff. More currency with higher values means more currency chasing …


Full Capacity Magazine Price Increases are Already Here

Regarding my recommendation to stock up on full capacity magazines, reader David B. noted this in an e-mail yesterday morning: “[The discount mail order dealer] Cheaper Than Dirt [is] already gouging us based on our fear of Obama being elected. Overnight, their price for Mag-Pul [brand AR-15/M16] magazines went from $15.97 each to $29.97 each. Wow. They just lost my business forever.” David’s note intrigued, me, so I just spent some time at the Cheaper Than Dirt (CTD) web site and compared their new prices with their latest hard copy catalog (dated November, 2008). Here is a brief sampling: Glock …


Letter Re: Did Western Civilization Actually Peak Around 1970?

Jim, I wanted to comment on something that was mentioned near the end of the Utah home break-in article: The author hit on the idea that TEOTWAWKI already took place in the late 1960s. Possibly some gifted insight. I’m a member of a regional Peak Oil group. (I originally joined this group a few years ago, in order to learn food-growing skills: You’ve always suggested getting with various groups, in order to learn skills), we’ve begun a spin off group meeting–a ‘meeting of the minds’ so to speak, involving predictive analysis, regarding the collapse of the current civilization. We were …


From The Memsahib: Buyer Beware When Purchasing Livestock

While most of my livestock purchases over the years have been satisfactory, I have found that buying livestock can be full of pitfalls. I will share some of my mistakes in hopes you can learn from them. I have found livestock sellers may not outright lie to buyers but they often do not volunteer important information. So it is very important that you get a detailed book for each type of livestock you plan to purchase and do some research, so you’ll know exactly what questions to ask. Make certain the book has a chapter about choosing healthy stock. The …