Category: Economics & Investing

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 …

I found some very interesting commentary recently posted at Gold-Eagle.com about the true (inflation-adjusted) value of precious metals, by Adam Hamilton. See: http://www.gold-eagle.com/gold_digest_05/hamilton011306.html

Don’t miss the recent letters about Zimbabwe from Cathy Buckle on her Africa’s Tears site. See: http://africantears.netfirms.com/ (In the left hand bar, click on December 2005 and January 2006 Archives.) It is sad to see a once prosperous nation slide into an economic shambles due to an incompetent and utterly corrupt communist government. Key infrastructures are crumbling, crop production is steadily declining, and the currency is still suffering from hyperinflation. Mugabe and his henchmen need to be handed one-way tickets to somewhere!

When doing some recent web research, I ran across three very interesting commentaries posted by the fine folks at at Gold-Eagle.com. The first was by Peter Degraaf.  See: http://www.gold-eagle.com/editorials_05/degraaf010806.html The second was by Emanuel Balarie on The Real Estate Bubble. See: http://www.gold-eagle.com/editorials_05/balarie011006.html The third was by Kevin DeMeritt, the president of Lear Financial, titled: “Greater Fools, Stocks, Real Estate and Gold.”See: http://www.gold-eagle.com/editorials_05/demeritt010906.html

I often get e-mails from readers stating that are leery about investing in precious metals.  They complain that the markets are “too volatile.”  In the short term the metals markets– particularly for silver and platinum–are indeed quite volatile. (Witness yesterday’s 28 cent dip.) But it is important to step back and look at the big picture. Forget the daily fluctuations. Instead, look at the 120 day moving averages (DMAs). Next, study the 5 year and 10 year charts at Kitco.com.  Back in the late 1990s, investors were piling into the NASDAQ, gobbling up high technology stocks in a speculative frenzy …

Dr. Gary North writes in the latest issue of his REALITY CHECK e-newsletter: “If you get confused about money, the Federal Reserve System, and all this fractional reserve banking stuff, I have a solution. It’s the best 45-minute documentary on the Federal Reserve System that I have seen. The good news: it’s free. Google is launching a new service. You can post videos on line for free. This means you incur no bandwidth expenses. This is a deal! To see how well this works, click here: http://snipurl.com/fedvideo“ OBTW, if you do not yet subscribe to Gary North’s REALITY CHECK e-newsletter, …