Category: Economics & Investing

Dear Jim: With all of the prevailing concerns about the USG economy and the specter of a hyper-inflated or collapsed USG dollar, many people are seeking to invest in the precious metals like silver and gold. But, unfortunately, many of us have previously invested in dollar-denominated IRA‘s, 401(k) and other pension plans. As you know, if a person withdraws money from these plans he must pay all applicable taxes PLUS a 10% penalty which makes this a prohibitive thing to do. Therefore do you have any suggestions on what to do with existing retirement funds? Are there any precious metal-backed …

Sir: I stumbled across your blog a few months ago and have enjoyed reading it ever since. Your readers would enjoy this link about hyperinflation in Serbia and Zimbabwe.  See: http://www.zimbabwesituation.com/feb17_2006.html#Z5.   – Greg

Back in the late 1990s, I corresponded via e-mail with a gentleman from Indonesia who had read the short “Triple Ought” draft edition of my novel Patriots. One of his letters in particular (from October of 1998) had some interesting insights and a valuable perspective on what it is like to live through a period of hyperinflation. (This was back during the time of wholesale inflation of the Indonesian Rupiah.) He started his letter by responding to my request for a sample of the Indonesian paper currency for my collection. To explain: I collect fiat paper currencies that have been …

Dear Jim: I just finished reading an article from the Gold Anti-Trust Action (GATA) group which quotes a Treasury Department official as saying “The U.S. Government has the authority to prohibit the private possession of gold and silver coin and bullion by U.S. citizens during wartime and declared emergencies…” I have also learned that the USG also considers “junk” pre-’64 silver coins to be bullion and therefore subject to confiscation when the situation arises. In talking with our good friends at Swiss America it appears that, currently, only coins minted before 1933 and having a numismatic grade of MS64 or …

Jim, Why [do you] recommend [serialized] 100 ounce silver bars when 90% silver coins are selling at spot and the bars are at spot plus $.30 (this is from www.cmi-gold-silver.com in Phoenix)? It seems like silver coins would be the better choice because they are cheaper and more versatile than 100 ounce bars. – Springmtnd JWR Replies: If you can buy circulated pre-1965 U.S. silver coinage at spot, that is fantastic. Even after the recent dip, most dealers currently charge around 7 times face value ($7,000 per $1,000 face value bag.) As a point of reference, a $1,000 bag with …

The big 48 cent “profit taking” drop in the spot price of silver yesterday represents a great buying opportunity. For those of you that felt that you “missed the boat” this dip is your chance to buy some silver before the bull resumes his charge. For those of you that already have a pile of silver, don’t let short term volatility like this spook you. We are in the opening stages of secular bull market in precious metals that may last a full decade. The long term charts at Kitco.com should convince you.Quit hesitating and Buy! (Yes, I mean you …

James: Regarding your reply to Jerry T., who was interested in purchasing junk silver… For those of us who can’t afford (or don’t wish to purchase) $1,000 bags, there is an alternative: eBay. Search for “silver dime roll” (or a similar search phrase for other denominations) and you’ll find tons of them for sale. To simplify the bidding process, use eSnipe (www.esnipe.com). The usual caveats of buying on eBay apply: always check the seller’s feedbacks [number and ratio of positives], and things that sound to good to be true usually are, etc. However, I’ve done a number of silver transactions …

Dear Jim, I really enjoy your Blog. On Friday the 3rd of February you wrote: “I recommend that you first buy one $1,000 face value bag of circulated (“junk”) pre-1965 dimes or quarters for each family member as your designated “barter” silver.” How do you go about acquiring the junk silver? My local coin store guy just talks about grading…I can’t seem to get him on a silver to trade concept. Do any of your advertisers deal in that type of silver? Can you recommend any other types of trade goods? Beads and sea shells are probably out even when …

Dear Jim: I noticed in your SurvivalBlog post of January 27 that you mentioned that you have invested in 100 oz. Englehard silver bars. 1.) Do you recommend this type of purchase in today’s silver market? [JWR’s replies are in-line.] Even at $10 per ounce, silver is still a relative bargain.  (It certainly when you consider the real value of the U.S. Dollar–which is essentially nothing.) I recommend that you first buy one $1,000 face value bag of circulated (“junk”) pre-1965 dimes or quarters for each family member as your designated “barter” silver.  Those coins could presumably be used for …

You may have noticed that the spot price of silver jumped another 20 cents yesterday. Take a few minutes to read these two interesting analyses that recently ran at Gold-Eagle.com:  http://www.gold-eagle.com/editorials_05/stein012706.html and, http://www.gold-eagle.com/editorials_05/murphy012806.html In the latter article, it is noted that the silver 60 date lease rates just went into an upright spike. This is a clear sign that alarm bells have sounded at the COMEX and they are trying desperately to suppress the galloping spot and futures silver prices. (Some futures contracts are presently pushing $12 an ounce!) But unless the COMEX does a repeat of its 1979-1980 shenanigans …

Jim, I am a professional financial planner and portfolio manager and I share your feeling that the price of silver is going up. However, I do not believe that the Silver Exchange Traded Fund (ETF) will be approved in the near future. The problem is that there is not enough physical silver readily available to be able to fund it at any reasonable level. In other words, approval of the ETF would be way too disruptive to the market at the current time and I think the regulators realize this. I got the impression from reading your post today that …

Yesterday on SurvivalBlog (27 Jan.06) , I posted my take on the Iran situation and correlated it to the precious metals market–and silver in particular. Since then I’ve had two different readers e-mail to ask why I’m so sure about an imminent jump in the price of silver.  Here is some useful background: World silver inventories have fallen to less than 600 million ounces–far below the 1.4 billion ounces that was on hand in 1991. The silver market is incredibly thin compared to the gold market. That is one reason that silver prices trend to be more volatile that gold …

The following are some excerpts from some commentary by Eric Roseman that was included in a recent issue of  The Sovereign Society’s Offshore A-Letter: When the rate of return for short term investments exceeds that of long term investments (the yield curve “inverts”), it is generally a sign of bad economic times ahead. Over the last two years, investors have barely kept pace with inflation in benchmark intermediate term US Treasury bonds. After enjoying a massive rally since 2000, bond yields hit a 40 year low in 2003 at 3.3%. Despite thirteen Federal Reserve rate hikes since June 2004, bond …