Category: Economics & Investing

Dear Jim: I respectfully disagree that the housing “bubble has popped”. (You had written in Odds ‘n Sods: “Here in the U.S., the unsold house inventory backlog jumped to 565,000 in April. The housing bubble has popped. There are no more bidding wars for houses. Now its price cut after price cut. In the coastal markets, I anticipate a race to the bottom, most likely starting in September of Aught Six.”) Thankfully the air has been coming out very steadily of this overextended price balloon, without the blow-up or popping that could have occurred. As a Wall Street Journal article …

  Dear Jim, Regarding the metal content of gold bullion tokens: Gold Eagles are 22 karat, as are Krugerrands–the respondent in the old mail you quoted had that point wrong, too. (Where he claimed Eagles were less accepted than “pure gold” kruggerands (sic).) British Sovereigns are also 22 karat, with four coins equaling not quite one ounce of gold. Canadian Gold Maple Leafs, PAMP and Credit Suisse bars, and hallmarked bars and coins with .999 or .9999 are as close to pure as one can find. However, since it’s the gold content that is being traded, and that content is …

Mr. Rawles: The other day you mentioned some pretty outlandish predictions for gold and silver from the “gold bugs.” Just what are they saying, and how credible are their claims? I’d also like to hear your own estimation of gold’s potential. Thank You, – Mrs. F. JWR Replies: Some of the claims are indeed outlandish — like Roland Watson, who predicted $10,000 per ounce gold. (See below.) But it isn’t just die-hard gold bugs that are predicting significantly higher precious metals prices by the end of this decade. There are quite a few Wall Street wonks that are talking about …

You may have read in recent years that both Microsoft’s president Bill Gates and Berkshire Hathaway (founded and still led by Warren Buffet) acquired large hoards of physical silver when silver prices neared their low ebb in the late 1990s first few years of this decade. Bill Gates purchased at least $10 million worth, with his “personal investment money.” Meanwhile, Berkshire Hathaway bought 129.7 million ounces. According to published accounts, the latter bought their silver at $4.40 per ounce, in 1997. The recent news on Wall Street is that Berkshire Hathaway has quietly sold off their silver position in the …

Jim, A few weeks back, you covered the issue of pennies being more costly to produce than they are worth. Here is my Quixotic take on the issue: Based on historical precedent, currency/coinage reform is overdue. The half-cent was discontinued in 1857, when it was worth ten cents in today’s inflation adjusted dollars! Source: Historical Statistics of the United States. (USGPO, 1975), Statistical Abstracts of the United States. That means that the smallest monetary unit at the time was worth $0.20 in today’s value. And a $100 bill (gold certificate) in 1863 had a value equal to nearly $2,000. A …

Hello Jim, I am hoping that you can verify something for me about the [U.S. circulated} 90% silver [coin] bags. I just received my order of a $1,000 face [value] bag from The Tulving Company of California. I believe that I saw their name [mentioned] on SurvivalBlog a number of months ago. They have great customer service and the product came faster than they had promised. What I received from them came shipped in a plastic paint pail and inside was a flour sack, cloth bag, full of dimes and the weight printed on the UPS sticker showed 57 pounds. …

Jim: In response to Rosy the Bull, I have to say I’m not so pessimistic. I heard similar dire warnings about how the US economy would collapse at $3 a gallon gas, and it didn’t happen. A great many countries in Europe and Asia, with smaller economies than ours, are paying over $6 a gallon now, which as a percentage of per capita income is five to ten times what we’re paying. As to the comments on nuclear attacks, those are inaccurate. Depleted Uranium is barely radioactive, and its danger is as a colloidal heavy metal toxin. The dangerous radionuclides …

Hey James, Hope you and your family are well. I have read many books on the coming economic collapse and Peak Oil, your opinion and also your readers comments on SurvivalBlog. For quite a bit of it, I agree. However, I doubt we’ll see a true TEOTWAWKI because of a lack of oil or even a complete collapse as some are predicting. One thing people are forgetting is the HUGE (1.5 Trillion barrels or so) of oil deposited in oil shale in the Western United States. At $35 per barrel of oil, it becomes profitable to start producing oil and …

Jim, Just one more note regarding the rising cost of metals, especially copper in the market – I sent an earlier message regarding recycling cartridge brass (which contains copper) instead of stockpiling copper, but now the New York Times notes in a Saturday brief: “Price of a Penny Could Exceed a Cent – What happens if a penny is worth more than one cent? That is an issue the U.S. Mint could soon face if the price of metals keeps rising. The cost of the metal in a penny has climbed to almost one cent. Add in the cost of …

Jim: I think we now have another way to compute the countdown to the collapse of our society as we know it. Several months ago I read on one of the economic web sites, we both visit, that for every penny the price of fuel goes up $1,400,000 per day is sucked out of the consumer economy. With oil at $74 per barrel today and the PENAC people pushing for another Middle East war, this one with Iran, we are looking at oil reaching $125 per barrel or higher as soon as this dumb war starts. This translates to $5.25 …

We asked you this week, dear reader: What will the next Great Depression bring? How will Americans survive in our day-to-day lives? The responses to this not-so-hypothetical query continue to clog up our inbox, which doesn’t surprise us. What does surprise us, however, is how united our readers are on this subject. Not one message lamented on how strong our economy is right now, and how we are fools for even bringing up the possibility of another Great Depression. Each e-mail portrayed how real this idea is to Americans – that something this bad could be right around the corner. …

The New York silver market has been pushed down sharply on profit taking, to around $11.85 per ounce. (It was over $14 per ounce on Thursday, which was a 25 year high.) My advice: Look at this as a short-term buying opportunity. Buy on this dip! The silver bull should resume his charge in May. Even at under $12 per ounce, silver is still quite high compared to just a month ago. OBTW, I recently bumped up my allowance on pre-1965 silver coinage to NINE times face value, for anyone that wants any of my mail order merchandise (or to …