Category: Economics & Investing

The Great Debate–Puru Saxena Explains the Fed’s Interest Rate Hikes

Don’t miss the article titled The Great Debate by Puru Saxena which recently ran in The Daily Reckoning. In it, Saxena refutes the widespread belief is that the Federal Reserve is currently increasing interest-rates to “control” inflation. Here is an excerpt from his excellent article: “The grim reality is that the modern day central banking IS inflation…and the quicker we get used to this idea, the better. The deflation scare is nothing more than a decoy, which the central banks use in order to continue with their money-printing (inflationary) program. Still not convinced? Then, consider the greatest fabrication, the Japanese …


Letter from G.F.L. –Reply to L.C., Re: On Gold, Silver, and Barter

Mr. Rawles: The following response is not intended to be insulting, but I fear it must inevitably come across as such. L.C.’s ignorance is so astonishing in its breadth and depth that I do not know how else to address it. I therefore apologize from the outset for what follows, but understand that this is all intended in the sincere hope of increasing understanding and not some sort of “I know more than you do” contest.  L.C. wrote: “I was moderately concerned for the first time reading your blog this past week in regards to the post on Gold and …


Clarification on Pre-1965 Silver Coins

There was an interesting thread of conversation over on The FALFiles Forums about the U.S. 90% silver coinage that was minted up to 1964. The thread began: > Talk about coincidence, I was given two silver quarters im my change from a local McDonalds [the] day > before yesterday. I knew there was something good in all that change as soon as she dropped > it into my hand by the distinct difference in sound the old coins made, the cashier never batted an eye. >I got one 1965 quarter in very good shape and one 1942 quarter that looks …


Letter Re: Onset of “The Crunch”

This is a question that should be of general interest. In your novel Patriots, “The Crunch” was beginning at 16% inflation. With the latest inflation figures annualized at 14.4%, how do we stand on The Crunch index? Will people really believe it is possible, even after it happens? The people I know are incredibly naive and trusting in all-powerful government.- Ron Y. JWR Replies: I think that inflation would have to jump into triple digits in order to precipitate any sort of full scale economic collapse. IMO, it is far more likely that a dollar crisis initiated by nervous foreign …



The Precious Metals Bull Continues His Charge

I have a good friend with whom I chat on the phone quite regularly. I have been bugging him to hedge into metals for the past three years. When the spot price was $4.35 an ounce with the dealer’s commission a 100 ounce Engelhard bar was about $500. At that time, I suggested that my friend buy at least buy one or two $1,000 face value bags of pre-1965 “junk” silver coinage–just in case. He waffled. Then, when silver was $4.80 an ounce, I was practically begging him to buy.  Even though he was sitting on substantial dollar-denominated liquid assets, he …


The Silver and Gold Price Spikes

Silver closed at $8.07 per ounce on Thursday, and gold closed at $485.70. Pardon me for rubbing it in a bit, but I told you so. (See my August 6, 2005 post.) Since $8 is a psychological barrier, there will likely be some profit taking for the next few COMEX market days, so if you missed the boat, you may be able to buy on the dip. But then get ready for the bull to resume his charge. I am still convinced that the metals are just a few years into a long term “secular” bull market. NewsMax reports Gold …


Odds ‘n Sods: Walter Williams on Understanding Inflation

Noted economist Walter Williams (who sometimes substitutes as the host for Rush Limbaugh’s talk radio show) just wrote a concise little piece on understanding inflation. See: http://www.townhall.com/opinion/columns/walterwilliams/2005/11/16/175724.html Williams is one of my heroes because he is a true conservative and he doesn’t mince words.


The Dreaded Pin Prick–Approaching a Housing Bubble Near You

There are starting to be some clear indicators that the U.S. housing market bubble has reached its apex, though there are some that disagree. The signs of irrational exuberance are all to apparent. Witness, for example, the mad bidding wars for Miami condominiums that are being pre-sold, long before the ground has been broken at the construction sites.  The housing markets have already headed south in much of the rest of the English speaking world.(Prices are already dropping in Australia and England.) But not yet in the United States. Today’s housing market is the embodiment of “The Greater Fool Theory“, …


Letter Re: On Gold, Silver, and Barter

James: First of all, I want to say thank you for putting so much effort in to an active blog on this subject. I try to read daily, and I always play catch-up once a week. I know it takes a TON of work to keep something like this alive and post as much each day as you do, so again, thanks. I was moderately concerned for the first time reading your blog this past week in regards to the post on Gold and Silver Barter. In there you referred to the American public as having “been robbed”. My concern …


Letter Re: Investing in Tangibles vs. an IRA Account

Hi Jim, I have been a big fan of yours for several years since I read your book [Patriots]! I was very excited to find your blog (via Claire Wolfe’s blog) and have been reading it and recommending it since day four. My husband and I have been busy socking money away into retirement accounts to prepare for the future but after listening to your interview with Geri Guidetti we decided to take the money we were putting away in Roth IRAs and spend it instead on survival preparations. There are several reasons for this decision: 1) Roth IRA money …


Pandemics–Winners and Losers

I have been studying the implications of a possible Asian Avian Flu pandemic.  In a “worst case” scenario, what would be the long term effects on the economic infrastructure in the event of a 20%, 30%, or 40% de-population of the planet? The only historic parallel that comes immediately to mind is the “Black Death” plague pandemic in Europe. The resultant de-population caused massive labor shortages in subsequent decades. And that of course was in a non-technological and largely agrarian society. What happens to a highly technological, highly interdependent society with extremely long chains of supply? What are the full …


Two Letter Re: “Trade Dollars” a.k.a. One Ounce Silver Rounds

Jim: I just purchased ten Canadian silver dollars. The ones I bought were from 1990. They contain 1 ounce of 99.99 silver.They cost me $11 each including shipping. I bought them for making colloidal silver in bad times. They are the purest silver coins I have seen yet. – C.R.Z. Mr. Rawles: What do you think of silver “rounds.” That is, those ounces of silver sized like a silver dollar, but not minted as a negotiable coin of the realm. They may commemorate Christmas of a certain year or have some other decorative design. Many times these can be found …


Letter Re: Silver and Barter

Mr. Rawles: Okay, say TEOTWAWKI happens. You have some silver coins and want to buy something. How does the person you buy whatever from know what it is actually worth since it is constantly changing. If you buy something for $2.00 do you hand the person 20 silver dimes? Or does the shop owner have to find out what silver is worth that day and weigh what you hand him. Also I’ve read the government is going to confiscate all gold including collectors old gold. I live in Minnesota west of the Mississippi about 50 miles on a lowly 10 …


Letter Re: “German Silver” and Silver Purity

Jim: German-silver is a Brass – or in the family of brass thereof anyway just like bronze – don’t catch me out with too much details as an expert will tell me how far off I am on that statement! Regardless, “German silver” has NO silver at all, it is to varying degrees of composition depending on its intent etc, basically: copper, from 50% to 61.6%; zinc, from 19% to 17.2%; nickel, from 30% to 21.1%. Developed by the way by the German scientist Geitner. There is a related alloy called Tuetenag (see the German connection???…which is very “gold” looking …