Category: Economics & Investing

The U.S. Economy: A Distinctly Chill Wind

Do you detect a change in the weather, this Fall? You probably noticed that on Friday (November 2nd) the spot price of gold spiked to close at $806 per ounce, and silver at $14.53. (Both were 28 year highs. Yup, I told you so.) You also probably saw this article: Fed pumps [another] $41 Billion into US financial system. It is now obvious that Helicopter Ben and his Federal Reserve Board of Governors are in full scale panic mode. I should also mention that the very next day after the announcement of this huge injection of liquidity, the New York …


Letter Re: The Falling Dollar–Sheltering Your Assets in Steel and Alloy Tangibles

Jim, I really appreciate your web site and your wisdom. I agree with your evaluation of the need or the wisdom in storing magazines. You recommend original factory or military surplus. My question is what would you advise as far as AK mags go? Any thought on the polymer mags would also be appreciated. Thanks, – Andy JWR Replies: For steel AK magazines, I recommend buying any of the magazines made in the former Soviet Bloc that have a full length standing metal rib on the back. Virtually all of those are quite robust and reliable, regardless of the country …


The Falling Dollar–Sheltering Your Assets in Steel and Alloy Tangibles

In a recent e-mail, SurvivalBlog reader Mike the Blacksmith mentioned two articles that confirm what I’ve been saying for several years–that the US Dollar is headed for further significant collapse in foreign exchange: Jim Rogers quits dollar after declaring US recession, and IMF chief warns dollar may suffer ‘abrupt fall’. The latter article is frightening. It is noteworthy that since the first month that SurvivalBlog went live (in August of Aught Five) I have been warning readers to minimize their exposure to dollar-denominated assets. Instead, invest in tangibles, tangibles, tangibles! Other than silver, and productive rural land that could be …


Letter Re: Gold is Going Up, But is Now a Good Time to Buy?

Jim, I am going to become a 10 Cent Challenge subscriber before the end of the month because the information provided in SurvivalBlog is invaluable and has forever changed my way of thinking! I have been a reader for about a half year and have seen the topic of gold come up several times. Gold is apparently at a 28 year high and the desire to get invested from my personal standpoint is high but my question is do you see gold leveling out or continuing its upward trend? The other part of the equation is I am young father …


The Game, by Oliver Velasquez

In the past 25 years interest rates have fallen from as high as 15% to as low as 1.25%. During this time our economy has gone through different cycles, everything from stagflation, recession, to historic bull markets, and real estate booms. Today, in my opinion, we are living one recession away from a massive depression which can be credited to the Federal Reserve’s monetary policy. Historically, it’s never been a good sign to have both gold prices and the stock market trade at such peak levels like we have today. During the past ten years we have gone through a …


Letter Re: Advice on Private Party Gun Purchases

Mr. Rawles: We have a few guns that were passed down from my father, father-in-law, and grandparents. But after reading SurvivalBlog, I’ve determined that its wise to buying a few more, ahem, “capable” defensive guns. (Like an M1A and a scoped Remington 700 Sendero or maybe a Remington 700 PSS .308.) I would rather not buy them from a [Federally licensed] dealer, so I can avoid that whole paperwork trail. My difficulty here is that I live out in cow country where guns shows are infrequent. And the few we do have, have a poor assortment of guns to choose …


Letter Re: Advice on Retirement Plans and Precious Metals IRAs

Helo Jim, Just a note to let you know what a great job your doing with the blog. I have a question that as far as I know you have not addressed. Most of my individual retirement account (IRA) money is in a 403b at work. [A 403(b) is a tax deferred retirement plan for the employees of nonprofit organizations.] I had wanted to roll this over into a precious metals IRA. However I am not allowed to do this until I leave my current job. Is there anything you would advise that I can do to protect my 403b …


Are Your Neighbors Contrapreneurs?

The American newspapers are presently full of stories about declining suburban home values and the galloping foreclosure rates, mainly in the coastal markets. (The erstwhile “hot” real estate markets have turned bitter cold.) As more and more foreclosures get dumped onto an already over-saturated “buyers market”, there is a strong likelihood that prices will spiral downward. Anyone that bought a “spec” house is now trying to get rid of it, even if means taking a loss. The downward pressure on house prices is likely to continue for several years in the coastal areas, and in few inland markets like Phoenix …


From the SurvivalBlog Archives: Dumping of US Dollar Could Trigger “Economic September 11” (Posted August 29, 2005)

I very rarely post lengthy excerpts from other sources. However, I am essentially forced to in this case. You see, this prematurely archived article was posted at The Australian newspaper web site for just a few hours, earlier today. (Actually late afternoon on the 28th in the U.S., due to the time difference and being on the other side of the International Date Line). It was briefly on their “The World” page–one of their main pages. But it now shows up only in their archives. No explanation was given why it has mysteriously disappeared from their “The World” page. It …


Meltdown from Modern Financial Alchemy, by Thomas Tan

Nowadays after all the 3rd quarter write-off announcements from many banks, sub-prime has been mentioned less on television and newspapers. The market has returned to the old high and some more. Is this credit crunch crisis over? What might be coming next? The sub-prime is only the 1st layer of the onion being peeled; there is much worse danger yet to be revealed. It is amazing to see the high growth in all kinds of fixed income products during last 10 years called SIVs (structured investment vehicles) such as RMBSs (residential mortgage backed securities), CDOs (collateralized debt obligations), ABS (asset …


Two Recent Incidents Illustrate that the U.S. Treasury Wants to Have it Both Ways With “Legal Tender”

Consider the case of a lad that tried using some $1 US Mint Presidential series proof coins as spending money at a restaurant. And now consider the hung jury in the tax evasion trial of a building contractor that paid his employees in US Eagle one ounce (“$50”) gold coins, at their face value. So if I understand these stories correctly, the U.S. Treasury wants us to accept their “legal tender” coins at face value, when the face value is more than the metal value of a coin, but they’d happily see us thrown in jail when when use a …


Letter Re: Silver as an Inflation Hedge

Hi Jim, First of all please pardon my English but this language is hard to learn, especially being from Cuba. Let’s talk about silver. As a survivalist one of my tools is silver and at this time I am using that survivalist tool. At this time my cost per gallon of gasoline is of $1.21 and the reason for that is that I pre-paid for my gasoline for the next two years in one oz silver rounds. Back in 1972 I paid $4.90 per ounce for my silver and in 1980 I sold it for $63.65 per ounce. I started …


Letter Re: Why Physical Gold Versus Gold Stocks?

Mr. Editor: Why on earth do you place such a strong emphasis on gold “in hand” as opposed to gold [mining] stocks? From what I’ve read, gold may soon double or triple [in price], but gold mining stocks like Barrick and Newmont are set to go up 5x to 7x. I think that you’ll be missing the boat as this bull market in [precious] metals continues. I feel sorry for you, pal. – Pete in Tampa JWR Replies: I recommend buying (and personally holding) physical gold rather than gold stocks for three reasons: safety, safety, and safety: The first “safety” …


U.S. Foreclosure Numbers are Up–Some Retreat Property Possibilities?

There has been a lot of news in recent weeks about real estate foreclosures in the US. Foreclosure.com (one of SurvivalBlog’s Affiliate advertisers) just published the following US residential real estate foreclosure statistics: National Highlights: * Foreclosure activity increased 36 percent from July * Foreclosure activity increased 115 percent from August 2006 * REO (“Real Estate Owned”)s increased 59% month over month, the biggest increase of any of the three foreclosure categories (Default, Auction, REO) State and Metropolitan Statistical Area (MSA) Highlights: * Nevada, California and Florida posted the top three state foreclosure rates * The states with the most …


Hedge Funds–A Disaster Story that Could Unfold in Quarterly Episodes

One of the consequences of the collapse of the credit bubble and the subprime lending fiasco in particular is with hedge funds. There is a substantial risk of uncontrollable instability in hedge funds that could potentially be disastrous for investors. This instability will likely be seen in waves of bad news that will come roughly once a quarter. First, let me provide a bit of background: 1.) Most hedge funds have rules that allow only quarterly redemptions (“cashing out”) by by their investors. (A few hedge funds even have only one annual redemption “window.”) Typically, the redemption requests must be …