Category: Economics & Investing

Dear Mr. Fuld: It’s The End of the World As We Know It

The recent news headlines about the investment banking crisis have answered the question that I often get from readers: “Why do you spend so much time talking about economics?” In my estimation, an economic crisis is the most likely trigger for a societal collapse, in the short term. The Lehman Brothers debacle is just a microcosmic preview of the global credit collapse. It is also a good illustration of the derivatives risk that I’ve been warning about for many years. How many times do I have to say this? The entire credit system is broken and it will be a …


A Quantum Leap Toward Socialism, by Michael Pento

Unfortunately, we Americans now realize that the decision by Ben Bernanke to slash the Fed Funds rate to 2% (a three hundred twenty five basis point reduction) was just the opening act in this Republican administration’s socialism play. At the time some wondered why the government didn’t just allow home prices fall to historical averages rather than seeking to lower the value of the U.S. dollar and send inflation to a 17-year high. Now we have learned just this past weekend that the Department of the Treasury has come up with a plan for conservatorship of the GSEs, enacting the …


Letter Re: Just In Time Greenback Cash Supply for American Banks

Mr. Rawles, I worked for Loomis/Fargo as an armed security technician. That means I was a member of an armored car crew. We serviced nearly the whole quarter of a certain state [un-named–not my current state of residence]. This included a major US Air Force base. Once a week we made runs to the area banks to deliver cash. Usually our load [included] 1 to 2 tons of coins. Cold cash totals were in the 1 to 3 million area each week and sometimes up to 5M seasonally. Very often we would arrive at a bank and the tellers would …


Letter Re: Advice on Gauging the Safety of Individual American Banks

James: Howdy, I haven’t been able to write or e-mail much these last few months as I have just moved from Detroit, Michigan, to Montana. Having just completed this relocation, and unfortunately not having been able to complete my prep for the move as well as I would have liked, I was wondering if you had any info on banks here? I am living about 70 miles west of Missoula, Montana. Thanks in advance. – Warhawke JWR Replies: Well, congratulations on your move and cue the Merle Haggard music! I don’t know much specifically about the state-chartered banks up in …


The Lehman Brothers Debacle Illustrates the Extent of the Global Credit Collapse

You probably saw yesterday’s headline in The Wall Street Journal: Lehman Races to Find a Buyer. Well, well. The once mighty Lehman Brothers Holdings firm had a market capitalization of $47 Billion last year. But when I last looked, it was down to a paltry $2.58 billion. The company is now definitely on the ropes. It is likely that the Mother of All Bailouts (MOAB) is going to grow even larger. There will probably be an announcement made this weekend of a “private” takeover of Lehman–possibly including an overseas “white knight”–but down in the fine print we will learn that …


Letter Re: Controlling Your Inner Gun Nut–Balanced Preparations are a Must

Hello Jim, Like many readers I have always been somewhat of a gun nut. Back when I was young and single I spent a lot of money on guns and ammo including items I didn’t really need that have since accumulated over time. I was single and had money to spend. Fast forward to the present with wife and kids and money is tight. There is not much left for prepping. So I decided to take stock of what I really need for my core battery of weapons/ammo and sell the rest and use the proceeds for prepping. Here are …


Four Letters Re: What Will We Eat as the Oil Runs Out?, by Richard Heinberg

Jim: What scares me [in Heinberg’s article] is the use of words like “policy,” “regulations,” “controls,” “comprehensive plan,” etc. At the least, this is government control of the economy. At the worst, of our personal lives. (Population control.) He may have some technical points, but he is a bad sociologist. And a bad economist. A free economy may not be the most efficient, but it works very well when the social side is considered. There are all ready farmers of multi thousand acre places on the Great Plains, both US and Canada that are growing a few hundred acres of …


Stock Market Suckers, by Vox Day

Suckers! Many conservatives are aquiver with excitement that George Delano is daring to brave the third rail of American politics, the much-beloved welfare program set up by his philosophical predecessor, FDR. It is true, of course, that Social Security is nothing but a government-run Ponzi scheme, that there is no trust fund, that as an investment it is a complete rip-off, that it rewards white women at the expense of black men and that it is an outrageous violation of the Constitution of the United States of America. But this does not mean that the Bush administration’s plan to allow …


What Will We Eat as the Oil Runs Out? (Pt. 1), by Richard Heinberg

The first dilemma consists of the direct impacts on agriculture of higher oil prices: increased costs for tractor fuel, agricultural chemicals, and the transport of farm inputs and outputs. The second is an indirect consequence of high oil prices – the increased demand for biofuels, which is resulting in farmland being turned from food production to fuel production, thus making food more costly. The third dilemma consists of the impacts of climate change and extreme weather events caused by fuel-based greenhouse gas emissions. Climate change is the greatest environmental crisis of our time; however, fossil fuel depletion complicates the situation …


Letter Re: How to Store All Those Saved Nickels

Mr. Rawles: I diligently read your “nickels”article and archived follow-ups, but nowhere do you mention which size ammo can it is that cubes rolled nickels for storage most efficiently? I have cleaned out my children’s bank accounts slowly over the last few weeks and am walking into random banks and grocery stores converting the cash into rolled nickels. ”Havin’ a yard sale, don’t ya know.”.Wink. It keeps the Stepford bank weenies from asking unnecessary questions. – Laura C.; Hiding in Plain Sight, Somewhere Deep In The People’s Republic of Northern Virginia JWR Replies: In my experience, the USGI .30 caliber …


Letter Re: Preparing for Pole Shift?

Mr. Rawles, I have been trying to find out more about the consequences of a polar shift, particularly the effects it will have on the Great Lakes Region. I know that no one really knows what will happen, but everything I’ve seen points to something really really bad. If possible could you post what knowledge you may have on the subject on SurvivalBlog? Thank you, – Scott from Michigan JWR Replies: Rapid pole shift is a little more than an unsupported theory, touted mainly by the Art Bell crowd. In my opinion it should be one of the least of …


Letter Re: Health Saving Accounts in the US–Buying Retreat Medical Supplies with Pre-Tax Dollars

Hi Jim – Thanks for your blog. It is well worth the [voluntary] 10 cents a day. Just a quick tip on saving money. Many employers offer flexible spending [“Health Savings”] accounts [(HSAs)] that are funded with pre-tax money. These accounts are usually billed as letting the employee pay for office co-pays, prescription co-pays, etc. tax free. But depending on the program, many other things qualify for purchases through the account. For example, my employer’s program allows most over-the-counter [medical] products. Things like bandages, creams, contact lens solution, foot care products and more are all valid purchases. I’ve been able …


Letter Re: Some Thoughts on Precious Metals Purchasing

Mr. Rawles, Not long ago you mentioned the price of precious metals had fallen. Today the market ended with spot precious metals taking a sharp dive. If any reader does not have at least some silver or gold for when the economy really drops off, now is definitely the time to get them. Kitco is one source. I use the Northwest Territorial Mint for large purchases. For smaller buys, I have used Mint Products, but they are more for the collector, and not bullion speculator. I have been able to amass a large sum of bullion, in the forms of …


Connecting the Dots on Our Fragile Economy, by Craig R. Smith

Recent events in the financial markets have renewed concerns that should be considered by any American who has worked, paid taxes, invested and saved for the future. It is no secret that America is swimming in debt. Currently the U.S national debt is $9.6 trillion. That is $47,000 for every adult or $94,000 for couples. One can only imagine the future burden that will put on taxpayers as the politicians continue to print money to pay off everything from health care to foreclosed mortgages. No level of taxation will support this kind of unbridled spending. We are now spending money …


Letter Re: Buying Storage Food and Precious Metals on a Budget

Jim, Thanks so much for SurvivalBlog. I’ve been lurking there for around six months now, ever since I started to realize the value of being prepared. It’s a daily stop for me, because I know I’ll learn something new nearly every day. I read with interest some of the recent writings about preparedness on a budget and investing in metals. I’ve combined the two. I, like many people, don’t have a lot of money to spend on preparedness (good thing, otherwise I might be a mall ninja). But at the same time, I want to prepare for everything at once. …