Category: Economics & Investing

Dear Mr. Rawles, Thanks for the great blog, and your “Patriots” novel. Reading your site has become a daily routine for me. One thing that I am finding amusing in today’s investment market is this mythical line in the sand of when we are officially in a Bear market. At present the market seems to be fighting to stay just above this line and almost daily some market pundit states how one average or another has “officially’ entered an intraday Bear Market. Few people know, especially those in the investment market, the origins of the terms Bulls and Bears. In …

Hi James – Nice letter from D.C. today, but for cryin’ out load Jim, please advise him to get his precious metals out of a bank’s safety deposit box. He seems to be able to afford a decent wall safe and the few bucks it might cost to install and camouflage it. When banks fail, they close the safety deposit boxes too – at least for a while. Not a great strategy to be cut off from your contingency funding right when you need it most. Too, get sideways with the IRS, and you will go to bank to see …

Dear Mr. Rawles: You don’t seem to be the type of guy who enjoys saying “I told you so” when you are proven to be right, but I thought I’d at least give you that opportunity. Back in May, I wrote to you singing the praises of synthetic gold ownership via Exchange Traded Funds (ETFs), and opined that “physical gold combines the worst of all worlds.” I’ve since started building my long position in gold (and silver), and I surprised myself by deciding quite early on to hold physical metals rather than to express my long position synthetically. This was …

Mr. Rawles, My wife and I have a Certificate of Deposit (CD) at 5.25% of $425,000 that will be maturing in December. She is all fired-up to travel to Canada in September, and with an interest-only withdrawal using $20, 000 to open bank account using converted US Dollars [(USDs) to another currency] as a hedge against the falling value of the USD. I have a bad feeling about this. From reading your site for several months, I suspect that you would suggest buying tangibles but, I fear that my wife will not agree to spending that kind of money on …

I grew up in the1960s glued to the television, like most other suburban kids. One of the shows that I enjoyed watching was Wild Kingdom, sponsored by Mutual of Omaha. The wise old narrator, Marlin Perkins, went way out in the hinterboonies of South America and Africa to film his documentaries. But I noticed that he was almost always a detached observer. It was usually his young, muscular assistants that were put in harm’s way, but not Perkins himself, who was safe and sound. He often made comments such as: “‘I’ll watch from the safety of the Land Rover, while …

James, This afternoon, The National Australia Bank (biggest in Australia, by assets) let the cat out of the bag: They have decided to just fess up and mark down every US mortgage CDO, SIV, and so forth in their portfolio by 90%. What that means is they are coming flat out and saying that all this re-bundled, repackaged, looks like a bond but it ain’t, US real estate paper that was being carried “Off Balance Sheet” and gumming up the works in banks around the world is worthless and they are making it official. (The loans that they represent will …

We are in a simultaneously deflationary and inflationary situation. The deflationary forces are: 1) We’ve been a credit based society and with less credit available, less purchasing will happen driving down prices. 2) Most people have most of their wealth in their home, their stocks and their banks (Indy Mac anyone?), all decreasing in value thus putting the brakes on discretionary purchasing driving down prices. The inflationary forces are: 1) The rising price of oil raises transportation and manufacturing costs for everything. 2) The increasing population and decreasing supply of commodities (food, metals etc.) increases prices. 3) The Fed cannot …