Category: Economics & Investing

Letter Re: Greenspan, Gold, and the Safe Store of Value

Dear Mr. Rawles, Regarding the use of gold as a store of value, it’s important to realize that gold often functions as a fiat currency. It does have intrinsic value for jewelry, electronics, rust-proofing, and some chemistry applications but the vast majority of its value comes from the shared expectation that people will accept it as being valuable in the future. The only difference from fiat dollars is that it’s harder – but not impossible – to increase or decrease the gold monetary supply, and that supply isn’t controlled by any government. In a disaster situation things get even worse, …


Letter Re: Greenspan, Gold, and the Safe Store of Value

James, While I am sure that this has been covered here before, it demands review. I was searching for information on a “safe store of value” and I came across the following. On or about 1966, Alan Greenspan wrote a lucid note entitled, “Gold and Economic Freedom.” Greenspan’s essay ends with, “This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in …


Letter Re: Why Food Prices are Soaring

Jim I enjoy your books (have bought two for others as gifts) and blog site. I came across this article [from Canada] describing another unintended consequence of the extreme liquidity the Fed is using to prop up our housing market/economy- high food prices. Aside from the new ‘miracle’ fuel – ethanol – our government policies are eroding our purchasing power in every sector of our lives. Here is an excerpt from the article: “After steamrolling through a laundry list of base metals, then oil and gas, the global commodity boom is finally hitting us in the gut: at the supermarket …


Letter Re: Advice on Buying Silver Dollars for Barter

Jim, In a recent SurvivalBlog post, you mentioned buying pre-1965 silver coins of the dime, quarter and half dollar type. What about silver dollars? My family and I are buying junk silver and including the silver Peace and Morgan dollars in our purchases. Should we concentrate on the smaller denominations? – Bill in KS JWR Replies: Unfortunately, the premium on silver dollars is considerably higher than on the smaller denomination coins. When four quarters ($1) would cost you $11 (11 times face value) a 1921 Morgan (the most common date) silver dollar in well-worn condition will cost you at least …


Letter Re: 1/20th Ounce Canadian Maple Leaf Gold Coins

Jim, I know your a fan of silver, but I noted that Canada is producing 1/20 oz gold bullion coins and it seems to be in .999 fine along with all their other Maple Leaf production this year. These are smaller than a US Dime, the 1/10 oz is about the same size as the US Dime. I do business (buy and sell) with these guys but also occasionally buy form a place for cash in the Financial District of SF for cash of course with no paper trail, they give me pretty good price over spot. Cordially, – Tim …


Gold and Silver: An Ounce in the Hand is Worth 77 Million Ounces “On Account”

The recent seizure of eGold’s gold bullion holdings by the U.S. Government may have some more far-reaching unintended consequences. I predict that it might trigger some panic selling of holdings at the various “virtual” precious metals institutions. And it might even spill over to the fairly new gold and silver ETFs. This situation also illustrates a key point that I often emphasize with my consulting clients: There is no substitute for personally holding your precious metals in tangible form. Don’t trust any individual outside of your immediate family or any institution to hold your precious metals for you–not even in …


Poll Results: Why are You Preparing to Survive?

Here is the first round of responses to this question: Those who are well educated enough to see a societal collapse of some sort or another in the making fall into two groups, the merrymakers and the preparers. The merrymakers don’t see life worth living post-SHTF, so they live it up now. We on SurvivalBlog are the preparers and have chosen to survive, but why? Our children? To rebuild civilization? Because the collapse will only be temporary? Because we can and we’re stubborn with a stronger than normal will to survive? The following is just the first batch of responses. …


Letter Re: Keeping Preparedness in Perspective

JWR I often have discussions with my friends and business associates concerning world events and how they will affect our future and I have also read countless statements from others with similar opinions. I have noticed that many people seem to be narrowly focused on only one aspect of possible future events and are not putting the whole picture into perspective. Many are unable to take the actions that are necessary to deal with the probable coming changes. I would like to offer some of my observations and hopefully contribute something that would help others to move in the right …


Letter Re: Stockpiling U.S. Pennies and Nickels

Hi, Jim,. I don’t remember this topic being brought up, so I’ll ask about it. According to www.coinflation.com, the current melt value of a pre-1982 [U.S.] penny (95% copper) is $.02, twice its face value. The melt value of a [U.S.] nickel (75% copper, 25% nickel) is $.09, nearly twice its face value. Melt value is, of course, dependent upon the metals markets, which fluctuate daily. While most metal prices have increased dramatically over the last few years, there’s no guarantee they’ll continue to rise (and prices might even fall), but at this point the long-term trend seems upward. With …


The Big Picture on Gold, Silver, Real Estate, and the U.S. Dollar

I have come to the conclusion that the nascent implosion of the U.S. residential real estate bubble is going to have some far-reaching macroeconomic consequences. We are just starting to see the beginning of the real estate collapse. The adjustable rate mortgage (ARM) reset clock is ticking, and the home foreclosure rate is just starting to spike. I predict that in just three or four months, the housing market collapse will be just as big a news story as the Savings and Loan crisis of the 1980s. There will be plenty of hand wringing and finger pointing. The lenders that …


Letter Re: A Source for Pre-1965 U.S. Silver Coinage

Jim, I love your blog, it’s the only one I read, really. I’m writing to recommend APMEX.com as a source of precious metals, and pre-1965 [U.S.] silver coinage. I took your advice, and the advice of others, and decided to begin a precious metals investing program, starting with pre-’65 coins, and a few 1 oz American Silver Eagles. I searched all over the net looking for a place that would take a small order from a beginner, and found few, They sold large amounts, and there was always a call from a sales rep involved to complete the order process. …


Letter Re: Results of the MURS Radio Barter Experiment

Hi Jim, Regarding the MURS Radio Barter Experiment, I had a very good response from your readers. This experiment was thought up after reading many barter articles on your blog. While this experiment might not be typical of a face-to-face bartering experience, the results were interesting nonetheless. A few offers were under valued, the majority were close enough in value to be considered, and a few were “very well valued”. Here is a sampling of what I was offered: 90% silver coins – all ranges of values were offered including “junk” coins and Silver Dollars Printing material – business cards, …


Letter Re: Stocking Up on AR-15 Lower Receivers?

James, I have been reading SurvivalBlog for a few months now, and I have to say that you are doing a great job! I have taken your Ten Cent Challenge, and look forward to renewing for next year. I have been following [the U.S. Congress] bill H.R. 1022 and your advice to stock up on “assault weapons” and/or high capacity magazines. If one cannot afford multiple weapons would you recommend buying a quantity of [AR-15] lower receivers in the hopes of building them up to full guns at a later date? – Kevin JWR Replies: That is a good idea. …


Pop Goes The Bubble: The New Century Financial Corp. Debacle

The recent news that New Century Financial Corporation, the nation’s second-biggest subprime mortgage lender is about to declare bankruptcy didn’t come as a great surprise to me. I see it as a bellwether event. Lots of other sub-prime lenders are at risk. This is another piece of evidence that the grossly over-inflated real estate bubble, that up until now has been deflating gracefully, is about to absolutely implode. In coastal regions, residential real estate prices were bid up to unsustainable levels, fueled by low interest rates and legions of lenders that were willing to make loans to people that shouldn’t …


Letter Re: More Book Recommendations

Jim, I took some time recently to catch up on some of my backed up reading and have uncovered a couple of books that I would highly recommend to all. The first is The Whiskey Rebellion by William Hogeland.  A historical review of a little covered event very significant in the infancy of our constitutional republic.  The book not only covers the event but provides detail into the character of many of the significant players.  A new light on one Alexander Hamilton emerges.  The book has substantial supporting notes and source cites attached.  Quite enlightening. The second is America’s Bubble …