That dreaded phrase: ''The system is fundamentally sound'' [Archive]

07-20-08, 09:41 PM

http://www.itulip.com/images/bridgeout.jpgThat dreaded phrase: ''The system is fundamentally sound''

Just over two years ago we issued this advisory to our readers:Turbulence in markets unnerves Bank and Fed officials (http://business.timesonline.co.uk/article/0,,9063-2222719,00.html)
June 13, 2006 (Times Online)

Concern is growing over the present instability of financial markets among senior officials at the Bank of England and the US Federal Reserve.

The Bank of England’s Governor meanwhile sounded a warning last night that markets and the global economy may be set for a period of greater turbulence triggered by rising interest rates around the world.

AntiSpin: "Period of turbulence" is not the signal to run for serious cover. When central banks seek to assure us that "the system is fundamentally sound" that means that the system is most certainly not sound, and that the wheels are about to come off. Watch for phrase "the system is fundamentally sound."
Protesting too much is a time honored tradition of US Treasury secretaries in such periods, and the phrase "fundamentally sound" comes up on each occasion when, after a year or so of debt deflation and systemic breakdown, the system becomes most certainly fundamentally unsound.
"Traders, talking over the Morgan meeting, failed to remember any previous occasion on which a stock market conference had been called while a trading session was still in progress. They did recall, however, that in 1907, with call money at 125%. Secretary of the Treasury Cortelyou conferred with J. P. Morgan, put $25,000,000 of Government funds into Manhattan banks, halted the Panic. They remembered too the Northern Pacific crash of 1901. when, after Northern Pacific stock had gone overnight from $150 to $1,000 a share, the House of Morgan, representing the late great James J. Hill and the House of Kuhn, Loeb, representing the late great Edward H. Harriman, compromised at $150 a share, saved from ruin many a short. Then there was the U. S.-England war scare of 1895 when, with money at 80%, J. P. Morgan offered money at 6%, averted a threatened crash. Thus bankers have for a long time recognized their responsibilities as panic-preventers, and when the glass house of speculation has cracked and splintered, it has most often been the strong House of Morgan that has assumed the responsibility of fame and brought order out of confusion." - Bankers v. Panic, TIME Magazine, Nov. 4, 1929 (http://www.time.com/time/magazine/article/0,9171,787517-1,00.html)
Tonight, reading the century old script, Treasury Secretary Henry Paulson asserts:Paulson braces public for months of tough times (http://biz.yahoo.com/ap/080720/paulson_economy.html)
Sunday July 20, 2008 (AP)

Treasury chief braces people for months of tough times ahead, says US banking system is sound

Treasury Secretary Henry Paulson sought to reassure an anxious public Sunday that the banking system is sound, while also bracing people for more troubled times ahead.

"I think it's going to be months that we're working our way through this period -- clearly months," he said.

Paulson said the number of troubled banks will increase as they struggle to cope with big losses on bad mortgages. The government this month took over IndyMac after a run led it to become the largest regulated thrift to fail.

"Of course the list is going to grow longer given the stresses we have in the marketplace, given the housing correction. But again, it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation," he said in broadcast interviews.

Paulson used appearances on the Sunday talk shows to tell people that deposits up to $100,000 are fully insured. He said no one has lost a single penny on an insured deposit in the 75 years that the Federal Deposit Insurance Corporation has operated.

"We're going through a challenging time with our economy. This is a tough time. The three big issues we're facing right now are, first, the housing correction which is at the heart of the slowdown; secondly, turmoil of the capital markets; and thirdly, the high oil prices, which are going to prolong the slowdown," he said.

"But remember, our economy has got very strong long-term fundamentals, solid fundamentals. And you know, your policy-makers here, regulators, we're being very vigilant."Banker's reputations suffer for bad calls, and I suspect Hank's will as well."Al Wiggin has never been known as a hard banker like President William Chapman Potter of Guaranty Trust Co., but he saw to it that his bank was ready for the 1929 stockmarket crash. Last week, in acknowledging Mr. Wiggin's letter, the executive committee revealed that in October 1929, Chase had less than $1,000,000 in brokers' loans. In the week of the panic, while frightened outside lenders were scrambling to call their Stock Exchange loans, Chase expanded its loans $373,000,000. It was National City Bank's Charles Edwin Mitchell, a rampant bull, who became the popular scapegoat of the Crash with his insistence that conditions were fundamentally sound." - Wigging Out, TIME Magazine, Jan 2, 1933 (http://www.time.com/time/magazine/article/0,9171,847148,00.html)
Ultimately, politics decides the outcome.Tireman Harvey Firestone: "Business is good all over the country. But is it going to keep on? Are we fundamentally sound? I don't know. I can't subscribe to some of the principles being put into effect."

Banker Claude Ashbrook of Miami declared that President Roosevelt's promise to keep the U. S. out of the war was worthless, "like all his other promises."

Frank Bornn, Brooklyn distiller, predicted that "unless the Government does something drastic about it," bootleggers would force legitimate liquor concerns to the wall. "Just another example of how the Roosevelt Administration has fallen down on the job," said Mr. Bornn.

President George A. Hughes of Chicago's Edison General Electric Appliance Co., which just electrified the White House kitchen, reported business 100% better, denied that the New Deal was in any way responsible, predicted a Roosevelt defeat in the 1936 campaign.

Republican George H. Moses, onetime New Hampshire Senator, tartly remarked that the country was "going to hell in a hack," that the "sons of the wild jackass are multiplying like jack-rabbits," that "this country cannot continue to exist half Roosevelt, half Frankfurter." - Millionaires' Talk, TIME Magazine, Oct. 14, 1935 (http://www.time.com/time/magazine/article/0,9171,755163-2,00.html)
Of our more modern banks we are not assured that they are any better than previous over-leveraged and poorly structured systems.
...ex-Fed Chairman Paul Volcker had this to say: "Simply stated, the bright new financial system, for all its talented participants, for all its rich rewards, has failed the test of the marketplace," Volcker said during a speech Tuesday to the Economic Club of New York. "What has plainly been at risk is a disorderly unraveling of the mutual trust among respected market participants upon which any strong and efficient financial system must rest." San Francisco Chronicle, April 13, 2008
The system is fundamentally unsound. Today, as ever before, sons of wild jackasses are coming out to offer scripted reassurances. They are multiplying like jack-rabbits. If you are counting on them to save the day and prevent both the loss of your money, and of its purchasing power, I recommend you put aside at least a few month's cash just in case they prove to be as incompetent and full of shit as in previous instances.

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GRG55

07-20-08, 11:13 PM

That dreaded phrase: ''The system is fundamentally sound''

Well at least they've stopped blathering on about how everything is "contained" and "well anchored". Gentle Ben actually used the word "crisis" this week. That's progress...:rolleyes:

Chief Tomahawk

07-20-08, 11:44 PM

I just covered my shorts last week. Oil was finally coming down & letting go of it's stranglehold of the stock market/U.S. economy.

Now Hank, our 3rd Treasury Secteray in fours years or so, says "all is well." Uh huh. Why were the two previous Treasury secretaries let go? They ran around for the longest time saying "we believe in a strong dollar." Wait, Hank's been reading from the script too. Oh sh*t!

I sense a day coming up where Jim Cramer goes through every emotion in one appearance, and the clip of it gets 1,000,000 views on You Tube within one day. Then we'll know that all is indeed NOT well....

Do those circa 1950 backyard bombshelters protect from financial crises?

Oh what the hell: bring back Disco!

krakknisse

07-21-08, 01:30 AM

If you are counting on them to save the day and prevent both the loss of your money, and of its purchasing power, I recommend you put aside at least a few month's cash just in case they prove to be as incompetent and full of shit as in previous instances.

Over in this thread on "RBS issues global stock and credit crash alert" (http://itulip.com/forums/showthread.php?p=38614#post38614) a month ago on I wrote:
When is the time to withdraw actual paper cash from your friendly neighbourhood bank? I'm sort of waiting for EJ to put "CRASH - GO GET YOUR CASH" in 72-point letters on the ITulip front page.

Thanks, EJ! When a level headed guy such as you speaks, it is time to listen. "ITulip: The Fear & Greed Anti-serum (TM)". May I invite you to speculate, pontificate, predict or otherwise enlighten your trans-Atlantic friends as to when the proverbial financial fecal matter will hit the impeller over here? Does your call only hold for US banks?

MLM

07-21-08, 02:39 AM

Thanks for helping connect the dots a little Eric. My first take on Paulson's TV appearances this weekend was that they were simply to help sell the Fanny/Freddy bailout that's apparently starting to take shape in Congress.

But if I add the "no short" list to this latest data point, and ponder a bit, I come to a different conclusion.

They are busy circling the wagons because the major shitstorm is about to make landfall.

Chris Coles

07-21-08, 09:23 AM

The video on your front page shows a man unable to clearly enunciate and with his voice stuttering. I find that VERY scary. But turn to your video above and notice that they have gone back and, presumably at his request, faded his voice when he tells us how many banks were going bust during the savings and loan crisis.

He does make one admission that at least gives us an idea that he has at last the courage to admit to what is wrong. No, not about housing, but about leverage, he admits leverage is an issue.

About 20 times too late and at least 10 years too late, but at least someone has brought that issue to the front of his mind.

Perhaps at last he is reading iTulip?

Chris Coles

07-21-08, 09:41 AM

This turned up today in The Times London and, if you go look you will see that it seems I got the chance to make a comment too. But most noteworthy is this from the text:

Despite spending months consulting with mortgage industry experts, including banks, building societies and other specialist lenders, Sir James is expected to tell the Chancellor that “no clear consensus” has emerged on how best to tackle the problems in the wholesale funding markets.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article4368999.ece?&EMC-Bltn=PLZCA9

July 21, 2008

'Gold standard' plan for mortgage securities

Siobhan Kennedy

Plans to introduce a “gold standard” for mortgage securities are to be considered this week. The Treasury will look at the proposals as part of an interim report to be submitted to Alistair Darling tomorrow.

krakknisse

07-21-08, 11:20 AM

Am I the only one finding it very ironic that they use the phrase "gold standard" metaphorically in these times?

nathanhulick

07-21-08, 12:40 PM

Am I the only one finding it very ironic that they use the phrase "gold standard" metaphorically in these times?

I thought that was pretty funny as well. Of course, without having even read how it works, I can surmise that their "gold standard" involves absolutely no gold whatsoever.

oddlots

07-21-08, 01:34 PM

If you think the "gold standard" line was ironic what about this blindingly obvious irony:

"... the Federal Reserve said Fannie and Freddie could get financing at its discount window, a privilege previously available only to banks. The absurdity of this situation was highlighted by the way the discount window works. The Fed does not just accept any old assets as collateral; it wants assets that are “safe”. As well as Treasury bonds, it is willing to accept paper issued by “government-sponsored enterprises” (GSEs). But the two most prominent GSEs are Fannie Mae and Freddie Mac. In theory, therefore, the two companies could issue their own debt and exchange it for loans from the government—the equivalent of having access to the printing press..."

From the Economist via Ritholtz...

http://www.economist.com/finance/displaystory.cfm?story_id=11751139

Mega

07-21-08, 01:38 PM

"I recommend you put aside at least a few month's cash just in case they prove to be as incompetent and full of shit as in previous instances."

Rather Strong stuff Eric....."Full of Shit" !

Are you saying:-

"Mega, go to bank & get out a months worth of cash & stash"?

Mike

jtabeb

07-21-08, 01:44 PM

sn1p3r

07-21-08, 03:42 PM

I did just that when IndyMac failed...no use in having an emergency fund that you can't get to....

BTW they had a slight moment of panic and I only took out 7k...my teller had to vouch for me being a "regular" otherwise I think I probably would have had to fill out paperwork :mad:

Crazy Times!

*T*

07-21-08, 04:18 PM

Mike, speak english dude.

I have exactly the same question as Mega, not sure what wasn't clear about his question but here it is again:

When you say have a few months of cash on hand, do you mean literally wads of notes under the mattress or do you mean cash deposit in a bank...

That much cash is a lot to have lying around.

Mega

07-21-08, 05:39 PM

You know, am a fool..........a nobhead...left school with very little.....but as far back as 2003 i smelt trouble, by 2005 i was banging my head on the wall............"Why don't they see it!?"

I am NOT willing to believe that the Brightest & best of American goverment/Fed/Banking DID NOT SEE THIS COMING!

The Dogs in the streets KNEW !

The phase "Looting" keeps coming into my head!
Mike

LargoWinch

07-21-08, 06:09 PM

Or maybe they planned this all along to obtain more power? More of the world's assets?

Maybe "your best friend" will save us?

http://static.technorati.com/asset/img/c/6/8/7/c687f3dcb3e587a7093306afa64ef2e6.jpg
ahhh that sweet, comforting smile...

ASH

07-21-08, 06:30 PM

If you are counting on them to save the day and prevent both the loss of your money, and of its purchasing power, I recommend you put aside at least a few month's cash just in case they prove to be as incompetent and full of shit as in previous instances.

I apologize for a "me too" post...

When a level headed guy such as you speaks, it is time to listen.

... but, seriously?

I mean, this is pretty close to an Alas, Babylon (http://www.amazon.com/Alas-Babylon/dp/0553115022/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1216686304&sr=8-2) message for banking. Given EJ's credibility, I cannot but take this seriously.

Ironically, this is also exactly what Bank runs, inflation, and other desperate memes in the Internet age (http://www.itulip.com/forums/showthread.php?p=40714#post40714) is about. By following EJ's advice, does that mean I am part of the leading edge of a run on the banks? (Better by far than being on the trailing edge, I guess.)

07-21-08, 07:36 PM

I apologize for a "me too" post...

... but, seriously?

I mean, this is pretty close to an Alas, Babylon (http://www.amazon.com/Alas-Babylon/dp/0553115022/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1216686304&sr=8-2) message for banking. Given EJ's credibility, I cannot but take this seriously.

Ironically, this is also exactly what Bank runs, inflation, and other desperate memes in the Internet age (http://www.itulip.com/forums/showthread.php?p=40714#post40714) is about. By following EJ's advice, does that mean I am part of the leading edge of a run on the banks? (Better by far than being on the trailing edge, I guess.)

I am not suggesting that anyone here run to the bank, withdraw all of their money and bury it in the back yard. I am asking readers to consider the pattern of behavior of the leadership and institutions of our financial system and ask, "Do I trust them?" And of not, "What shall I do?"

Anyone who has ever been in the position to hire and manage others knows that patterns of behavior are what matter in assessing the likely future behavior a person. The same holds true for institutions, especially those dominated by an individual as the Fed was under Alan Greenspan; even the Bernanke Fed with its group think is probably primarily directed by an individual, but not Bernanke.

Uneducated and ill informed men and women make bad decisions all the time. But brilliant, well educated, and well intentioned individuals can get together and, under circumstances of ideology born of political and economy convenience, make catastrophically bad decisions, too. Then, after the consequences of their catastrophic errors emerge, they come up with creative explanations for their group error and market the hell out of it.

I reach back a mere two years in this piece for the antecedent of this warning, but have been a student of these leaders and these institutions for a decade, and of scholars who have been students of theirs far longer than I. If you have been here for only two years, but especially if you have been here for the full ten – and bless you – I ask you to ask yourself, given the record, the pattern of behavior of understating risks – to the housing market, to the economy, to the dollar, to the financial system, to the banking system – only to be proven by the passage of time to consistently misunderstand or perhaps misrepresent the situation, why believe what they say? And if you do not believe them, then who and what should you believe, and what should you do?

Let me say this:

It is easy to give leaders too much credit.

It is easier to expect a benign outcome than a tragic one.

It is easier to hope that nothing unseemly will occur.

We are all quite busy, flat out paying the economic rent as it turns out, with no time to worry about whether the mechanics of the economy and financial system are doing their jobs.

I am telling you that there is precious little evidence that they have, and for the most mundane of reasons: they are paid not to. Not in the sense of a bribe but in the fact of executing on a set of collective false beliefs that fed on itself.

Things may in the end work out, but not due to the intelligence of leaders or the power of great institutions. The institutions are dysfunctional, the leaders confused but paddling very hard – the phrase Paulson used is "we're being very vigilant." But make no mistake, if things work out it will be due primarily to luck.

All I am asking you to do is not count on their luck.

What you do is a judgment call that depends on your circumstances. Most of you are already sufficiently skeptical of authorities that you are not still waiting around for someone to tell you, as we did in 2001, that the dollar is going to fall and the purchasing power of your hard earned income is going to be cut in half.

What is new here is that I am starting to suspect that with this pronouncement by Paulson that the crisis is about to enter a new phase, and that a prudent person acts on the facts before them, established by an enduring pattern of behavior, reinforced by historical precedent, and to me that means taking measures to ensure that those we love are not endangered by the mistakes of anyone betraying the public trust.

sn1p3r

07-21-08, 08:35 PM

I have exactly the same question as Mega, not sure what wasn't clear about his question but here it is again:

When you say have a few months of cash on hand, do you mean literally wads of notes under the mattress or do you mean cash deposit in a bank...

That much cash is a lot to have lying around.

...put it in the safe next to your physical gold :D

ASH

07-21-08, 09:54 PM

I am not suggesting that anyone here run to the bank, withdraw all of their money and bury it in the back yard. I am asking readers to consider the pattern of behavior of the leadership and institutions of our financial system and ask, "Do I trust them?" And if not, "What shall I do?"

Thank you, EJ, for the calibration. It turns out that you meant exactly what I took you to mean. However, I felt the subjective impact of what you said on this topic more strongly than other of your risk management warnings, because it concerns risk in an area I haven't previously encountered. I just barely remember the S&L failures of the late 80's (I was 12 in 1987), and for some reason risk in this area is harder to get my mind around than risk associated with mispriced assets -- even when the two are linked! In that sense, my post "Seriously?" amounts to a written word doubletake.

Withdrawing a few months' worth of cash is indeed different than closing out one's account (for some people, at least). Other than the threat of theft, there's no particular downside to taking such a limited precaution, and it's less likely to cause the banking institution a problem than if one closed their account. Nevertheless, it does occur to me that if enough people take even this limited step, others will observe, and there is the potential for a panic to develop. This is not a criticism of your advice, but rather a regurgitation of iTulip's recent observations. And that said, as with any other panic, it's better to be early than late.

ronin

07-22-08, 01:19 AM

Additional bank examiners looking at Fannie Mae & Freddie Mac.

posted in the middle of the night.
http://online.wsj.com/article/SB121669734816172991.html?mod=hps_us_whats_news

"Fannie, Freddie Books Under Scrutiny

By JAMES R. HAGERTY
July 21, 2008 11:39 p.m.

Bank examiners from the Federal Reserve and the Office of the Comptroller of the Currency are looking at the books of mortgage investors Fannie Mae and Freddie Mac, a person familiar with the situation said.
The examiners are working with the two companies' main regulator, the Office of Federal Housing Enterprise Oversight, or Ofheo, this person said. This joint effort to assess the financial condition of the two government-sponsored companies was first reported by the New York Times Web site late Monday. ..."

Nothing that I can find tonight on the govt. site.
http://www.ofheo.gov/newsroom.aspx

RebbePete

07-22-08, 05:10 AM

To read normally reserved EJ writing something like this makes me sit up and take notice. :eek:

About two years ago, I did withdraw enough cash to tide me through a couple of months, and put it in the household safe, just in case. I wouldn't take out any more than that right now, just in case we do enter a hyperinflationary death spiral.

My "meltdown insurance" is physical silver and gold (for the hyperinflationary possibility) and physical Federal Reserve Notes (for the deflationary collapse/bank holiday possibility). I have realized that, either way, I'm going to lose some money, but the goal here is to not get wiped out, and have some seed capital to rebuild once "the event" passes.
Luke Skywalker: "I'm not scared."
Yoda: "You will be. You will be!"

From Star Wars, The Empire Strikes Back
- Pete

fourthirtysix

07-22-08, 08:30 AM

In lieu of the news "Wachovia has $8.9B loss, cuts 6,350 jobs, dividend" http://news.yahoo.com/s/ap/20080722/ap_on_bi_ge/earns_wachovia

Are there any sites that provide the overall condition of the major banks?

How about the financial condition of brokerages? Merrill, Schwab, etc..?

If you hold securities (GLD, FNM, T, etc), how safe are those assets if the underlying institution holding them for you has trouble?

c1ue

07-22-08, 08:42 AM

metalman

07-22-08, 08:58 AM

Sith Lord to EJ:

Come to the dark side. Everything is going exactly as I had planned. Can't you feel the anger coursing through your veins as your supposed leaders continue to fail abysmally?

If you only knew the power of the dark side.

:o

let me sum it up... they're idiots. they've blown it. all they can do now is try to keep everyone calm as they try to patch it up and hope they get lucky.

never hurts to have a bit of cash around... keep a small amount in the top drawer of your dresser along with a nice watch so if you get burgled they find something quickly and get out of your house instead of getting pissed off and smashing everything... keep some for bribes to the local gas station owner, the grocery story man, the heating oil guy, etc. can't cut your way in line in a shitstorm with a friggin credit card. maybe doesn't happen for a year, or it happens next week, or never... and if it does it'll pass, but it's stupid to trust these assholes after they've lied and lied and lied... it's a kind of arrogance to think 'it can't happen here'. why can't it? happened here before and many other places. it isn't expensive to keep a few grand around. what's it earn in the bank, a 2% a year? to save why that leave yourself when the storm comes with nothing but indignation and your weenie in your hand?

jtabeb

07-22-08, 10:27 AM

let me sum it up... they're idiots. they've blown it. all they can do now is try to keep everyone calm as they try to patch it up and hope they get lucky.

never hurts to have a bit of cash around... keep a small amount in the top drawer of your dresser along with a nice watch so if you get burgled they find something quickly and get out of your house instead of getting pissed off and smashing everything... keep some for bribes to the local gas station owner, the grocery story man, the heating oil guy, etc. can't cut your way in line in a shitstorm with a friggin credit card. maybe doesn't happen for a year, or it happens next week, or never... and if it does it'll pass, but it's stupid to trust these assholes after they've lied and lied and lied... it's a kind of arrogance to think 'it can't happen here'. why can't it? happened here before and many other places. it isn't expensive to keep a few grand around. what's it earn in the bank, a 2% a year? to save why that leave yourself when the storm comes with nothing but indignation and your weenie in your hand?

Don't hold cash, hold coins! US regular change, same effect, much better protection.

Oh and everyone go get one of these. Very nice, I have one, it's perfect.

http://www.msarinc.com/stg556_sporting.html

metalman

07-22-08, 10:42 AM

Don't hold cash, hold coins! US regular change, same effect, much better protection.

Oh and everyone go get one of these. Very nice, I have one, it's perfect.

http://www.msarinc.com/stg556_sporting.html

spoken like a true guns, gold, and guts guy.

sorry dude but that's bad advice based on sentimentality. no one wants coins in a crisis. 90% of the population does not know what they are and most of the remaining 10% either don't trust in a crisis they are not fake... lots of fakery and fraud in desperate times. the ave. joe is used to the paper of the realm which gets scarce in a crisis. (note to deflationists... that does NOT mean prices fall. just ask the folks in zimbabwe lined up at the bank for scarce cash while inflation is at 1mm%) coins are illiquid in the best of times and get more so in a crisis. even in hyperinflations no one wants coins in exchange for things. coins are for wealth storage, not trade/exchange because no one trusts them or the price. that's the reality.

Lukester

07-22-08, 11:02 AM

... while inflation is at 1mm% ... coins are illiquid in the best of times and get more so in a crisis. even in hyperinflations no one wants coins in exchange for things ... that's the reality.

Can't say I agree with this conclusion. Hyperinflation or very high inflation doesn't make gold coins a coveted asset? Methinks not. There may be some slight awkwardness initially to find places to convert them into paper cash, but I seriously doubt a "cottage industry" in gold conversion does not spring up in a hurry - everywhere - that will willingly convert them into the local trash money. Especially very small fractional gold coins.

Mega

07-22-08, 11:14 AM

"pieces of 8"

Always wonder what that ment as a child, but no one knew..........till i gooled it.........a gold coin split into 8 parts..............theres your answer Luke.
Mike

jtabeb

07-22-08, 12:07 PM

Can't say I agree with this conclusion. Hyperinflation or very high inflation doesn't make gold coins a coveted asset? Methinks not. There may be some slight awkwardness initially to find places to convert them into paper cash, but I seriously doubt a "cottage industry" in gold conversion does not spring up in a hurry - everywhere - that will willingly convert them into the local trash money. Especially very small fractional gold coins.

Good points above, but I was really talking about nickles dimes and quarters, no kidding. Take the same amount of cash and put it into local usa coinage. Use that to buy stuff (and save your gold and silver to smuggle yourself across a boarder someday).

I've got several thousand in a fairly heavy piggy bank of sorts. I think "coin" cash will keep its value far longer than "paper" cash, and that was the point I was trying to make.

tombat1913

07-22-08, 01:03 PM

There are currently 102 members and 1596 guests viewing this thread. This is by far the most exciting Tuesday morning I've had in awhile, thanks for the great thread Mr. Janzen.

Well for those of us who really do have money buried in the backyard I suppose we'll file this under "bearish information" and go about our normal business.

Do we have a "really bearish information" thread yet? :)

FRED

07-22-08, 01:39 PM

Good points above, but I was really talking about nickles dimes and quarters, no kidding. Take the same amount of cash and put it into local usa coinage. Use that to buy stuff (and save your gold and silver to smuggle yourself across a boarder someday).

I've got several thousand in a fairly heavy piggy bank of sorts. I think "coin" cash will keep its value far longer than "paper" cash, and that was the point I was trying to make.

This is the best site I could find for first hand experience of a person who has lived through an economic crisis.

SURVIVAL AFTER ECONOMIC MELTDOWN - AN ARGENTINEAN EXAMPLE (http://www.backpackfever.com/2008/01/21/survival-after-economic-meltdown/) As you might have figured out, I live in Buenos Aires, Argentina. This is located, precisely, at the other end of the American continent, as the small map above points out.

I was born here, though all my grandparents emigrated from Spain during the civil war, and I lived for a few years in USA as a kid. I picked up my English there and I also attended bilingual schools all my life.

Argentina, though a Latin American country, used to be one of the best, if not the best, countries in Latin America. Our standard of living was similar to the one in USA. Our population is mostly Catholic and it’s about 90% white, descendant from Europeans. The rest is either mestizo (mixed blood, Native American and European) or Native American.

Our cultural level used to be quite high. This is a country that has survived many tragic events, such as civil wars, dictatorships, and the war against UK. But the one of the greatest recent crisis was in December 2001 when our economy, which used to be pegged to the US dollar, collapsed, and our paper money lost 66% of it’s value to the US dollar.

Banks closed their doors, keeping the people’s money, rioting and looting spread all over the country like a forest fire. The citizenship protested and concentrated in front of the government house asking for the president’s resignation. The president did resign, and so did 5 other presidents in the period of one week.

Today, almost 6 years later, we are still suffering the consequences of what happened. Some believe that we are doing a little bit better, some think that we are still sinking and we haven’t seen the worst of it yet. Me? I think that things didn’t get better, but that people got “used” to living like this so they try to convince themselves that we are doing ok.

Buenos Aires is one of the largest cities in America, one of the top 5 largest cities in the continent.

I will be writing articles on urban survival, things I do or learned that help me in keeping my family safe.

Please forgive any grammar mistakes you may find, I’ll do my best to keep them to a minimum.

I hope you find my articles useful and thought provoking, and that they help you to better understand what world would be like, if you ever have to deal with circumstances similar to mine.
Sample 1:
When it comes to security things get even more complicated. Forget about shooting those that mean you harm from 300 yards away with your MBR. Leave that notion to armchair commandos and 12 year old kids that pretend to be grown ups on the internet.

Some facts:

1) Those that want to harm you/steal from you don’t come with a pirate flag waving over their heads.

2) Neither do they start shooting at you 200 yards away.

3) They won’t come riding loud bikes or dressed with their orange, convict just escaped from prison jump suits, so that you can identify them the better. Nor do they all wear chains around their necks and leather jackets. If I had a dollar for each time a person that got robbed told me “They looked like NORMAL people, dressed better than we are”, honestly, I would have enough money for a nice gun. There are exceptions, but don’t expect them to dress like in the movies.

4) A man with a wife and two or three kids can’t set up a watch. I don’t care if you are SEAL, SWAT or John Freaking Rambo, no 6th sense is going to tell you that there is a guy pointing a gun at your back when you are trying to fix the water pump that just broke, or carrying a big heavy bag of dried beans you bought that morning.Sample 2:GOLD!!

Someone hit me in the head please because I messed up about the gold issue. Everyone wants to buy gold! “I buy gold. Pay cash” signs are everywhere, even on TV! I can’t believe I’m that silly! I just didn’t relate it to what I read here because they deal with junk gold, like jewelry, either stolen or sold because they needed the money, not the gold coins that you guys talk about. No one pays for the true value of the stuff, so big "WARNING!" sign for people that are buying gold coins: since it is impossible to determine the true mineral percentage of gold, small shops and dealers will pay for it as regular jewelry gold. What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewelry. They should be less expensive than gold coins, and if the SHTF bad, you’ll not be loosing money, selling premium quality gold coins for the price of junk gold. If I could travel back in time, I’d buy a small bag worth of gold rings.

Small time thieves will snatch gold chains right out of your neck and sell them at these small dealers found everywhere. This is VERY common at train stations, subways and other crowded areas.

So, my advice, if you are preparing for a small economical crisis, gold coins make sense. You will keep the value of the stuff and be able to sell it for its actual cost to gold dealers or maybe other survivalists that know the true value of the item. In my case, gold coins would have been an excellent investment, saving me from loosing money when the local economy crashed. Even though things are bad, I can go to a bank down town and get paid for what a gold coin is truly worth, same goes for pure silver. But where I live, in my local are small time dealers will only pay you the value of junk gold, no matter what kind of gold you have. So, I’d have to say that if TSHTF bad, gold jewelry is a better trade item than gold coins. Forgive me for not talking about this before, but I didn’t realize this until today, when I visited my local market warehouse and saw a “Buy Gold” sign.
Not easy to read, but there it is: first hand, practical, and credible.

LargoWinch

07-22-08, 01:46 PM

Pete, why the Fed Notes for a "couple of months" in a safe?

It is my understanding that Gold performs well at both end of the spectrum: deflation and inflation.

metalman

07-22-08, 01:47 PM

Pete, why the Fed Notes for a "couple of months" in a safe?

It is my understanding that Gold performs well at both end of the spectrum: deflation and inflation.

what idiot or idiots told you that?

LargoWinch

07-22-08, 02:01 PM

It is from: Dr. Stephen Leeb : The Complete Investor...

Since he is a "Dr." I figured he should know better than me. You know "Dr.", it sounds menacing ... almost like Grrr.

Give me some time and I will pull out the article from the archive...

Update: See TCI Archive October 2007 article "Gold, Glorious Gold: Massive Gains in the Metal's Future".

[...And if we perceive a growing risk of sharply higher inflation—or of deflation, for that matter—we’ll recommend higher levels.] (italics mine).

During the Depression, there was a gold mine stock that did extremely well and we all know about the 70s. So both Deflation and Inflation no?

metalman

07-22-08, 02:21 PM

It is from: Dr. Stephen Leeb : Complete Investor...

Since he is a "Dr." I figured he should know better than me... You know "Dr.", sounds menacing almost!

Give me some time and I will pull out the article from the archive...

let me save you the trouble... gold goes to shit in a deflation.

http://www.kitco.com/LFgif/au1999.gifhttp://www.kitco.com/LFgif/au2001.gif

during the last disinflation, gold fell from 320 top of tech bubble to 255 bottom after the crash before the printing presses and dollar depreciation kicked in.

the dollar strengthened because us credit quality improved...

http://images.huffingtonpost.com/2007-07-21-OverallDollarIndex450.png

that's a 20% drop or from 950 to 760 if it happened over the next couple of years.

but... this time the property markets are crashing. bank credit is drying up and usa credit quality is plunging. does leeb say the dollar is going to strengthen? that is the only way we get a deflation.

outright deflation is ridiculous. against what? no gold standard. the dollar is deflating against euros, gold, food, etc. zero instances in history of an indebted country's currency appreciating in a credit crisis. none. not one.

mesyn191

07-22-08, 04:04 PM

Don't hold cash, hold coins! US regular change, same effect, much better protection.

I read the whole series of posts by that Argentinian guy a couple of years ago and bought a bunch of junk stirling silver rounds to get dough from the local pawns if things get bad enough, as others have said you won't get the proper value from locals who are willing to buy. I reeeeaaaally hope things don't get that bad though, if you read the rest of that Argy's posts he goes into detail just how bad it got, basically he planned on leaving his country last I heard...

Oh and everyone go get one of these. Very nice, I have one, it's perfect.

http://www.msarinc.com/stg556_sporting.html

Thats a nice gun and all but very expensive and difficult to accquire depending on local laws. The Argy guy touched on this stuff too. He recommended some sort of moderate sized concealable pistol in what ever caliber that was most easily available, a cheap and simple bolt action rifle as a back up in your home like a K98K, and if possible a semi auto center fire rifle or assault rifle too. Main thing was they had to be CHEAP and RELIABLE and be chambered in something that was easy to find, so he recommended a AK74 or AKM variant for home defense though said a AR15/M16 variant was fine too just too expensive for him.

Ultimately though he said the best way to be prepared for a major economic collapse/disaster was to have lots of money overseas and easy fast access to transportation in and out of the country.

metalman

07-22-08, 04:07 PM

Ultimately though he said the best way to be prepared for a major economic collapse/disaster was to have lots of money overseas and easy fast access to transportation in and out of the country.

bingo. argentina was already 1/2 3rd world country before the 2001 collapse. the usa has a loooooong way to go to even get to pre-collapse stage. in the mean time, plenty of time to get ready to go elsewhere why hang around to get shot and infected with viruses? **** that.

LargoWinch

07-22-08, 04:15 PM

Metal, I think both you and Leeb are right.

However, can you please provide more information regarding the following comment you made:

... gold goes to shit in a deflation. During the last disinflation...

I am confused by your explanation, because you seem to refer to both disinflation and deflation and its impact on Gold as the same. Am I missing something?

I was under the impression that during deflation, gold and even fiat money would gain in value compared to virtually all other assets (I agree here with you that there is absolutely no chance of deflation occuring under the current fiat system, but that is another topic altogether).

During disinflation, I entirely agree with you: Gold would indeed be a bad investment.

It is my understanding that disinflation is a reduction in the growth rate of inflation (inflation remaining however positive), which is different than deflation (contraction of the supply of money).

As such, I also agree with Leeb that during deflation, Gold would be a fantastic investment (again no chance of this occuring, but lets discuss it anyway).

Case in point: Looking back at the last deflation in the US, we all know that starting March 5, 1933 gold was outlawed. As such, the best proxy is "Homestake Mining Co." (currently ABX or Barrick Gold) and during that period, the stock soared (see link below - Flash required).

<?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" /><v:stroke joinstyle="miter"></v:stroke><v:formulas><v:f eqn="if lineDrawn pixelLineWidth 0"></v:f><v:f eqn="sum @0 1 0"></v:f><v:f eqn="sum 0 0 @1"></v:f><v:f eqn="prod @2 1 2"></v:f><v:f eqn="prod @3 21600 pixelWidth"></v:f><v:f eqn="prod @3 21600 pixelHeight"></v:f><v:f eqn="sum @0 0 1"></v:f><v:f eqn="prod @6 1 2"></v:f><v:f eqn="prod @7 21600 pixelWidth"></v:f><v:f eqn="sum @8 21600 0"></v:f><v:f eqn="prod @7 21600 pixelHeight"></v:f><v:f eqn="sum @10 21600 0">http://www.thelongwaveanalyst.ca/flash_pres.html</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">In Summary, I agree with both you and Leeb:</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">a) Disinflation: Bad for Gold</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">b) Deflation: Good for Gold</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">We need to be careful not to confuse Disinflation and Deflation however.</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas><V:p

Chris Coles

07-22-08, 04:32 PM

Back in the early 1980's I was told a story about someone who by then was a well known wealthy individual, (I will not risk how or where for obvious reasons), who, it turned out was available to fly an aircraft into Germany at the height of the great inflation they endured in the 1930's. The aircraft was stuffed with US Dollars to buy property for a friend who died between takeoff and landing. (Not while on the aircraft). to cut a long story short, he went on to buy the property and made his fortune.

The main point to take away is not to hoard the local currency. A very good example today is Zimbabwe where, if you stuffed a years cash in the pillow, by the end of the first year it would be worthless. Perhaps it would be better to keep safe a stock of a well known, but recognised as stable, currency from another region which could be exchanged based on public knowledge of the rate which in todays world will be easy to find.

As for gold coins, surely the best would be the South African Krugerrand which is very much a 99.99% pure 1oz coin. As it has absolutely no other alloy, it looks like the business, where many other coins of lesser quality can look not much different to cheap gold jewelry.

Personally, I would recommend difficult to find but easy to store long term - food. You cannot eat gold or jewelry or cash and as such, the one thing you would be able to exchange for anything you might need would be the likes of good quality tinned meat. Easy to store, carry in small quantities, and certain to be able to trade for absolutely anything if things get really bad.

metalman

07-22-08, 04:35 PM

Metal, I think both you and Leeb are right.

However, can you please provide more information regarding the following comment you made:

I am confused by your explanation, because you seem to refer to both disinflation and deflation and its impact on Gold as the same. Am I missing something?

I was under the impression that during deflation, gold and even fiat money would gain in value compared to virtually all other assets (I agree here with you that there is absolutely no chance of deflation occuring under the current fiat system, but that is another topic altogether).

During disinflation, I entirely agree with you: Gold would indeed be a bad investment.

It is my understanding that disinflation is a reduction in the growth rate of inflation (inflation remaining however positive), which is different than deflation (contraction of the supply of money).

As such, I also agree with Leeb that during deflation, Gold would be a fantastic investment (again no chance of this occuring, but lets discuss it anyway).

Case in point: Looking back at the last deflation in the US, we all know that starting March 5, 1933 gold was outlawed. As such, the best proxy is "Homestake Mining Co." (currently ABX or Barrick Gold) and during that period, the stock soared (see link below - Flash required).

<v:stroke joinstyle="miter"></v:stroke><v:formulas><v:f eqn="if lineDrawn pixelLineWidth 0"></v:f><v:f eqn="sum @0 1 0"></v:f><v:f eqn="sum 0 0 @1"></v:f><v:f eqn="prod @2 1 2"></v:f><v:f eqn="prod @3 21600 pixelWidth"></v:f><v:f eqn="prod @3 21600 pixelHeight"></v:f><v:f eqn="sum @0 0 1"></v:f><v:f eqn="prod @6 1 2"></v:f><v:f eqn="prod @7 21600 pixelWidth"></v:f><v:f eqn="sum @8 21600 0"></v:f><v:f eqn="prod @7 21600 pixelHeight"></v:f><v:f eqn="sum @10 21600 0">http://www.thelongwaveanalyst.ca/flash_pres.html</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">In Summary, I agree with both you and Leeb:</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">a) Disinflation: Bad for Gold</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">b) Deflation: Good for Gold</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0">We need to be careful not to confuse Disinflation and Deflation however.</v:f></v:formulas>
<v:formulas><v:f eqn="sum @10 21600 0"></v:f></v:formulas><v>:p

no. this is what mush, leeb, and other deflationist goofballs say instead of making the more concise statement... 'i was wrong'

disinflation = negative rate of inflation. eg 2.5% to 1.2%

deflation = negative inflation rate. eg -3%

this is right out of econ 101. no debate here. none. they will debate it but at some point you have to stop at a chair is a chair and a dog is a dog, and not a chair is a table when you eat off of it and a dog is a cat when you step on its foot and it yelps like one.

disinflation is bad for gold because the purchasing power of money is rising.

</v>deflation is horrific for gold because the money supply is imploding and the purchasing power of money is exploding.

if you expect deflation... SELL YOUR GOLD NOW!

end of story. that is all.
<v>

</v>

mesyn191

07-22-08, 04:44 PM

bingo. argentina was already 1/2 3rd world country before the 2001 collapse. the usa has a loooooong way to go to even get to pre-collapse stage. in the mean time, plenty of time to get ready to go elsewhere why hang around to get shot and infected with viruses? **** that.
How far do you think we'll have to fall? AFAIK rural and suburb midwestern/rust belt cites and towns are already fairly depressed, its just the big cities on the coasts that are still living it up (relatively speaking that is...) at least it seems that way to me. I don't want to live out in the middle of nowhere nor do I have any arm chair fantasies of taking on all comers in the wilderness, but it does seem to me that moving temporarily at least from the major pop. centers would be a great way to avoid anything truly ugly as that was where most of the violence and disorder was during the Arg. Financial Crisis...

Maybe I'm stupid but I'd rather not have to leave the country... D:

LargoWinch

07-22-08, 05:30 PM

As for gold coins, surely the best would be the South African Krugerrand which is very much a 99.99% pure 1oz coin. As it has absolutely no other alloy, ...

Mr. Shadow Fed, I believe this is not completely accurate.

I understand that the SA Krugerrand lost a lot of shine precisely due to the fact that they are not 99.99% pure (24K), but only 91.67% or 22K pure.

This allowed other gold coins such as the Canadian Maple Leaf (crowd cheering ;)), Chinese Panda and Australian Kangaroo to overtake the gold bullion coin market. Later the US Mint issued the Buffalo which is also 99.99% pure (unlike the American Eagle ones).

LargoWinch

07-22-08, 05:35 PM

Metal thanks for this.

I need to think about this a bit more and may get back to you on this post :)

This is surely due to the fact that we are no longer on the gold standard.

I have a hard time to believe that Leeb would miss something like that...but again, what you say make some sense.

Lets just say that I am confused for now! and again thanks for the comments.

Lukester

07-22-08, 06:00 PM

no. this is what mush, leeb, and other deflationist goofballs say </V>

Metalman - isn't it great when we can recite iTulip 101 and sound like gurus? :D You are of course right on the point. Leeb is getting his definitions a little woolly with that statement.

However, I do note you reference Leeb as "another deflationist (goofball)" - my suggestion is to be cautious about sweeping statements about other analysts besides the iTulip guys (we know Leeb gets your hackles up as he's been [cough cough] the topic of some "controversial" threads here before). However your comment suggests you've perhaps not actually read him? If you had, you'd know in the space of just a few sentences he's been an inflationist since at the very latest year 2001.

I think it's best when iTulip's astute calls make their way into our recognition quietly and by proof of the unfolding events, without too much overt boosterism and fanfare, don't you? That's what actually makes the more striking impression. Meanwhile, EJ a while back referred to Jim Puplava as a "deflationista". When it was noted that Puplava is a well known "inflationista" instead, he was quick to acknowledge it. How about you? Meantime your point on the sloppy definitions which Leeb has indulged on this point are certainly well taken.

Andreuccio

07-22-08, 08:16 PM

Mr. Shadow Fed, I believe this is not completely accurate.

I understand that the SA Krugerrand lost a lot of shine precisely due to the fact that they are not 99.99% pure (24K), but only 91.67% or 22K pure.

This allowed other gold coins such as the Canadian Maple Leaf (crowd cheering ;)), Chinese Panda and Australian Kangaroo to overtake the gold bullion coin market. Later the US Mint issued the Buffalo which is also 99.99% pure (unlike the American Eagle ones).

No expert, but I remember reading there are advantages to an alloy. I think they're stronger and more resistant to wear than the pure stuff.

LargoWinch

07-22-08, 08:20 PM

True indeed as we all know from the cartoons, gold is a "soft" metal (got a friend to bite one of my J&M gold bar with great results earlier this year).

From experience however, please note that gold buyers will pay below spot for Krugerrands because they are not pure (see kitco.com for live "buy" prices).

Andreuccio

07-22-08, 08:28 PM

metalman

07-22-08, 08:34 PM

True indeed as we all know from the cartoons, gold is a "soft" metal.

From experience however, please note that gold buyers will pay below spot for Krugerrands because they are not pure.

nonsense. right now...

<table border="1" bordercolor="#333333" cellpadding="2" cellspacing="0" width="100%"><tbody><tr align="center" bgcolor="#330000"><td width="28%">Coin</td> <td width="12%">Weight</td> <td width="25%">Buy</td> <td width="25%">Sell</td></tr></tbody></table>
<table border="1" bordercolor="#333333" cellpadding="2" cellspacing="0" width="100%"><tbody><tr align="center"><td width="28%">Krugerrand (http://javascript%3Cb%3E%3C/b%3E:;)</td><td width="12%">1.0 oz </td> <td width="25%">$942.91 (live) </td><td width="25%">$956.91 (live) </td></tr></tbody></table>
<table border="1" bordercolor="#333333" cellpadding="2" cellspacing="0" width="100%"><tbody><tr align="center"><td width="28%">Canadian Maple .9999
(http://javascript%3Cb%3E%3C/b%3E:;)</td><td width="12%">1.0 oz </td> <td width="25%">$950.91 (live) </td><td width="25%">$971.91 (live) </td></tr></tbody></table>
<table border="1" bordercolor="#333333" cellpadding="2" cellspacing="0" width="100%"><tbody><tr align="center"><td width="28%">Austrian 100 Corona (http://javascript%3Cb%3E%3C/b%3E:;)</td><td width="12%">.98 oz </td> <td width="25%">$910.37 (live) </td><td width="25%">$938.24 (live) </td></tr></tbody></table>
<table border="1" bordercolor="#333333" cellpadding="2" cellspacing="0" width="100%"><tbody><tr align="center"><td width="28%">U.S. Gold Eagle (http://javascript%3Cb%3E%3C/b%3E:;)</td><td width="12%">1.0 oz </td> <td width="25%">$962.91 (live) </td><td width="25%">$982.91 (live) </td></tr></tbody></table>
<table border="1" bordercolor="#333333" cellpadding="2" cellspacing="0" width="100%"><tbody><tr align="center"><td width="28%">Panda (http://javascript%3Cb%3E%3C/b%3E:;)</td><td width="12%">1.0 oz </td> <td width="25%">$928.95 (live) </td><td width="25%">$985.83 (live) </td></tr></tbody></table>
all have the same gold in 'em.. 1 oz. except the corona... .98 oz.

anyone who pays more because the 1 oz. is mixed with something else is an idiot. who cares, right?

krugarands are cheapest because everyone knows the the gold in them was dug up by slave labor. bad marketing and worse karma.

maples are so soft you can chew 'em like gumballs. pandas, too. but they're in plastic wrappers so you can't. smart those chinese! why are maples a discount to pandas? racism, my best guess.

why usa eagles always the highest premium? flags waving, crosses flying... you know.

net it out... long racism and nationalism, short slavery. buy usa eagles!

LargoWinch

07-22-08, 09:33 PM

NOT nonsense, who is your dealer? Why the wild spreads in prices among the pieces?

<TABLE cellSpacing=0 cellPadding=1 width=600 border=0><TBODY><TR bgColor=#660033><TD><TABLE cellSpacing=0 cellPadding=2 width="100%" border=1><TBODY><TR><TD class=top colSpan=5>Bullion Prices - per unit

</TD></TR><TR align=middle bgColor=#dfd5b5><TD align=left>Product

</TD><TD>Gold

</TD><TD>Silver

</TD><TD>Platinum

</TD><TD>Palladium

</TD></TR><TR align=middle bgColor=#ffffff><TD>Kitco Anniversary Silver Coin - limited edition

</TD><TD>-

</TD><TD>17.96

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>Kitco ChipGold 1gr

</TD><TD>30.47

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>Kitco ChipGold 5 gr

</TD><TD>152.36

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>Kitco ChipGold 10 gr

</TD><TD>304.72

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>Kitco ChipGold 20 gr

</TD><TD>609.45

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>50 gr Bar

</TD><TD>1,518.00

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>500 gr Bar

</TD><TD>15,179.99

</TD><TD>286.30

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 gr Bar

</TD><TD>30.36

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1 oz Australian Nugget

</TD><TD>944.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Vienna Philharmonic

</TD><TD>945.30

</TD><TD>17.81

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>400 oz Bar

</TD><TD>377,720.00

</TD><TD>7,124.00

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Chinese Panda

</TD><TD>942.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1 oz Bar

</TD><TD>945.30

</TD><TD>17.81

</TD><TD>1,773.00

</TD><TD>391.00

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Eagle (Ship to Canada) (http://javascript<b></b>:NewWindow('https://online.kitco.com/sellprice/coins/ship_to_ca01.html','ShipToCanada','top=50,left=200 ,width=450,height=640,channelmode=0,dependant=1,fu llscreen=0,resizable=no,toolbar=no,status=0,scroll bars=yes,location=0,menubar=0,directories=0'))

</TD><TD>935.30

</TD><TD>17.81

</TD><TD>1,773.00

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1 oz Eagle (Ship to USA)

</TD><TD>945.30

</TD><TD>17.81

</TD><TD>1,773.00

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Maple .999

</TD><TD>943.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1 oz Maple .9999

</TD><TD>945.30

</TD><TD>17.81

</TD><TD>1,773.00

</TD><TD>381.00

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Maple .99999

</TD><TD>947.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1 oz Mountie

</TD><TD>944.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Krugerrand (Ship to Canada) (http://javascript<b></b>:NewWindow('https://online.kitco.com/sellprice/coins/ship_to_ca01.html','ShipToCanada','top=50,left=200 ,width=450,height=640,channelmode=0,dependant=1,fu llscreen=0,resizable=no,toolbar=no,status=0,scroll bars=yes,location=0,menubar=0,directories=0'))

</TD><TD>933.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1 oz Krugerrand (Ship to USA)

</TD><TD>943.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1 oz Coin

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD><TD>381.00

</TD></TR><TR align=middle bgColor=#ffffff><TD>1/10 oz Eagle (Ship to Canada) (http://javascript<b></b>:NewWindow('https://online.kitco.com/sellprice/coins/ship_to_ca01.html','ShipToCanada','top=50,left=200 ,width=450,height=640,channelmode=0,dependant=1,fu llscreen=0,resizable=no,toolbar=no,status=0,scroll bars=yes,location=0,menubar=0,directories=0'))

</TD><TD>93.43

</TD><TD>-

</TD><TD>177.30

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1/10 oz Eagle (Ship to USA)

</TD><TD>94.43

</TD><TD>-

</TD><TD>177.30

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1/10 oz Maple

</TD><TD>94.43

</TD><TD>-

</TD><TD>177.30

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1/2 oz Bar

</TD><TD>472.15

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1/2 oz Eagle (Ship to Canada) (http://javascript<b></b>:NewWindow('https://online.kitco.com/sellprice/coins/ship_to_ca01.html','ShipToCanada','top=50,left=200 ,width=450,height=640,channelmode=0,dependant=1,fu llscreen=0,resizable=no,toolbar=no,status=0,scroll bars=yes,location=0,menubar=0,directories=0'))

</TD><TD>467.15

</TD><TD>-

</TD><TD>886.50

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1/2 oz Eagle (Ship to USA)

</TD><TD>472.15

</TD><TD>-

</TD><TD>886.50

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1/2 oz Maple

</TD><TD>472.15

</TD><TD>-

</TD><TD>886.50

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1/20 oz Maple

</TD><TD>46.12

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1/4 oz Bar

</TD><TD>236.08

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1/4 oz Eagle (Ship to Canada) (http://javascript<b></b>:NewWindow('https://online.kitco.com/sellprice/coins/ship_to_ca01.html','ShipToCanada','top=50,left=200 ,width=450,height=640,channelmode=0,dependant=1,fu llscreen=0,resizable=no,toolbar=no,status=0,scroll bars=yes,location=0,menubar=0,directories=0'))

</TD><TD>233.57

</TD><TD>-

</TD><TD>443.25

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1/4 oz Eagle (Ship to USA)

</TD><TD>236.07

</TD><TD>-

</TD><TD>443.25

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1/4 oz Maple

</TD><TD>236.08

</TD><TD>-

</TD><TD>443.25

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>10 gr Bar

</TD><TD>303.60

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>10 oz Bar

</TD><TD>9,433.00

</TD><TD>178.10

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>100 gr Bar

</TD><TD>3,036.00

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>100 oz Bar

</TD><TD>94,330.00

</TD><TD>1,796.00

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>1000 gr Bar

</TD><TD>30,327.97

</TD><TD>572.60

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>1000 oz. Bar

</TD><TD>-

</TD><TD>17,810.00

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>2 oz Bar

</TD><TD>1,888.60

</TD><TD>35.62

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>20 gr Bar

</TD><TD>607.20

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>5 gr Bar

</TD><TD>151.80

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>5 oz Bar

</TD><TD>4,721.50

</TD><TD>89.05

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#ffffff><TD>50 oz Bar

</TD><TD>-

</TD><TD>890.50

</TD><TD>-

</TD><TD>-

</TD></TR><TR align=middle bgColor=#dfd5b5><TD>Gold Buffalo 1 oz

</TD><TD>945.30

</TD><TD>-

</TD><TD>-

</TD><TD>-

</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>

Your quote:
"krugarands are cheapest because everyone knows the the gold in them was dug up by slave labor. bad marketing and worse karma."

Firstly, very funny :)

Secondly, that is what I am talking about and the real issue of this. Ks are not the best bullion, something that is 99.999% or 24K pure is the best.

It is my understanding that the local pure bullion coin is usually the best: i.e. Maple Leafs if you are in Canada / Buffalos if you are in the US / Pandas for China etc.

World Traveler

07-22-08, 11:08 PM

I went to the site to read about living through the Argentinian economic crisis. I've seen the news reels of people smashing at bank doors in late 2001...what always impressed me was the age of so many of the rioters/demonstrators, they were in their 40's, 50's, and 60's. Usually outbreaks of social unrest are the the domain of the the young, things have to be very bad to get the older folks out in the streets.

His tales of how to survive the severe personal danger, shortages, and stress in a collapsed society are horrific to say the least.

I'm hoping we don't have a repeat of that lawlessness in the U.S., I honestly don't think we will. We have a much stronger law and order ethic in the U.S. and our police forces are fairly honest.

My gut feel is that we have a repeat at a national level of what happened in Houston in the 1980's, since so many of the up-to-now characteristics and outcomes are the same. Failing banks, significant job losses, massive foreclosures, bankruptcy auctions, "see-thru" shopping centers, etc.

Houston in mid to late '80's was just a depressing place to be. But the city and its people still functioned. Laws were obeyed, lots of people still had jobs, road repair and infrastructure were maintained. Life went on, but economically and business-wise, at a much more subdued level.

MLM

07-23-08, 02:04 AM

Spent some time reading through this guy's blog last night (http://www.ferfal.blogspot.com/). Along with a lot of practical advice based on lots of time reflecting on his situation, he notes that things went to hell more or less overnight. What set everything off was a currency devaluation. Everybody woke up one morning and could no longer afford to live. Well worth skimming through, even if you aren't considering the possibility of things in the U.S. really going to hell.

RebbePete

07-23-08, 05:17 AM

Don't hold cash, hold coins! US regular change, same effect, much better protection.

Oh and everyone go get one of these. Very nice, I have one, it's perfect.

http://www.msarinc.com/stg556_sporting.html

Now, that's a gun. :cool:

Anyway, why hold coins? I refer to the current crop of US coins as "fiat coinage" since it doesn't have any precious metal content. It's also harder to store - I can hide a grand easily between the pages of a book on a shelf, but 4,000 quarters are a bit dicier.

- Pete

RebbePete

07-23-08, 08:27 AM

How far do you think we'll have to fall? AFAIK rural and suburb midwestern/rust belt cites and towns are already fairly depressed, its just the big cities on the coasts that are still living it up (relatively speaking that is...) at least it seems that way to me. I don't want to live out in the middle of nowhere nor do I have any arm chair fantasies of taking on all comers in the wilderness, but it does seem to me that moving temporarily at least from the major pop. centers would be a great way to avoid anything truly ugly as that was where most of the violence and disorder was during the Arg. Financial Crisis...

Maybe I'm stupid but I'd rather not have to leave the country... D:

With the whole world on the fiat system, and with economies so intertwined, what country would you choose anyway? If things came unglued totally, I'd rather find a nice little US town in the middle of nowhere that has a farming community nearby.

- Pete

Lukester

07-23-08, 08:55 AM

Just as an addendum to the post above, I chanced upon a video interview with Martin Hennecke of TYCHE group who also refers routinely to gold as a hedge / protection in both inflationary and deflationary crises. Evidently this idea has some broad circulation - so we should not conclude that EJ's definition / clarification of this distinction is subscribed to without equivocation by a variety of other's interpretations. I am not making any assertion, just noting the opposite view seems to enjoy broad circulation. When you look for it, you can find this reference in many different analysts comments - I believe for example even in Marc Faber's.

The reference noted above is within a Squawk Box interview with Martin Hennecke, directly after minute # 4.00:

http://www.cnbc.com/id/15840232?video=777001969&play=1

Who are Martin Hennecke and the TYCHE GROUP? - Bio :

http://www.tyche-group.com/en/service_per_front.php

Metalman - isn't it great when we can recite iTulip 101 and sound like gurus? :D You are of course right on the point. Leeb is getting his definitions a little woolly with that statement. ... Meantime your point on the sloppy definitions which Leeb has indulged on this point are certainly well taken.

sn1p3r

07-23-08, 09:10 AM

Any chance that this is a supply/market issue and not people buying with their politics?

raja

07-23-08, 09:26 AM

What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewelry. They should be less expensive than gold coins, and if the SHTF bad, you’ll not be loosing money, selling premium quality gold coins for the price of junk gold. If I could travel back in time, I’d buy a small bag worth of gold rings.

Small time thieves will snatch gold chains right out of your neck and sell them at these small dealers found everywhere. This is VERY common at train stations, subways and other crowded areas.

So, my advice, if you are preparing for a small economical crisis, gold coins make sense. You will keep the value of the stuff and be able to sell it for its actual cost to gold dealers or maybe other survivalists that know the true value of the item. In my case, gold coins would have been an excellent investment, saving me from loosing money when the local economy crashed. Even though things are bad, I can go to a bank down town and get paid for what a gold coin is truly worth, same goes for pure silver.
This guy doesn't make sense . . . .
On the one hand, he says to buy plenty of jewelry because you can only get junk gold prices for gold coins at the local dealers. But at the same time he say he can go down to the bank and get the full value of gold coins.
So, in this real-world example, things are working just fine with gold coins.

If things got a lot worse, gold things would still be fine, IMHO . . . .

After a BIG economic meltdown, if it it was accompanied by hyperinflation, who would accept dollars? If it were a deflationary event, people might accept dollars, but they might be more inclined to take gold . . . I would. Who's going to trust anything connected with the government?

However, most here believe that inflation or hyperinflation are a much higher probability than deflation, so . . . .

Let's say you had some surplus you wanted to sell. If you could trade for something of equal value, that would be fine. But what about if the guy who wanted to buy didn't have something you needed? That's how money got invented. If not immediately, soon after people would be trading all kinds of things, and especially gold and silver.

Gold coins are recognizable as coins because of the fluted edges and the designs. I have printed off some web pages that describe how to tell if a coin is fake, and I am saving those in case I ever need to convince a wary seller.

As to the value of coins, I'd divide them into "eights" as Mega said, then it would be a case of haggling over their worth. I would probably argue the case for a valuation at what gold could buy just prior to the SHTF event. Today, that would be the equivalent of $125.
Of course, one wouldn't buy a small item like a cabbage for that, but there are possibilities for creative dealing, e.g., one might strike up a deal for 2 months worth of cabbage for a "piece of eight".

So my conclusion is that gold coins would work just fine in any scenario . . . .
And, it would also be convenient to have some silver coins on hand for small items . . . .

LargoWinch

07-23-08, 09:42 AM

Raja, I think the author mentionned that gold coins are not ideal in a remote location because he cannot sell them for their full value.

He did say however that he can go to a town, and get full value there. Travel is required however and I guess it is somewhat dangerous.

The idea of cutting gold coins in eights is awesome (thanks for the idea :) ). But how? One of those lock cutter? Silver eagles would also prove very usefull indeed for the smaller stuff.

The problem I see with the junk gold, is that in the event of no major meltdown, you will stand to lose quite a bit of money. Meanwhile, gold bullion coins/bars even in the best environment, will always remain a solid investment i.e. you can get your money back if there is no SHTF situation.

I do believe - and hopefully this is the majority - that the current economic situation will not result in the MadMax scenario... A good dose of inflation is bad, but the world and our societies will not stop functionning.

After all, people went through the Depression and the high-inflation period of the 70s without anything close to the kind of troubles being described by the author.

babbittd

07-23-08, 12:26 PM

This guy doesn't make sense . . . .
On the one hand, he says to buy plenty of jewelry because you can only get junk gold prices for gold coins at the local dealers. But at the same time he say he can go down to the bank and get the full value of gold coins.
So, in this real-world example, things are working just fine with gold coins.

It makes sense. It sounds as if he is factoring in travel time, or cost, or danger to the closest city with a bank. That could be applied to folks that live in rural hill or mountain areas in the U.S., away from the closest town or city.

But where I live, in my local are small time dealers

Verrocchio

07-24-08, 08:42 PM

''The system is fundamentally sound''

http://www.portfolio.com/images/site/editorial/magazine/2008/04/zimbabwe-zim-currency-slide.jpg

I'm sure this is the same phrase used by Zimbabwe President Mugabe, shortly before his government began printing the 10 million dollar note pictured above! They have since printed a 100 billion dollar note. How much would this largest of large bills buy? Not even lunch, only about two loaves of bread. (http://www.neatorama.com/2008/07/23/zimbabwean-crisis-z100-billion-note-wont-even-buy-you-lunch/)

metalman

07-24-08, 09:25 PM

http://www.portfolio.com/images/site/editorial/magazine/2008/04/zimbabwe-zim-currency-slide.jpg

I'm sure this is the same phrase used by Zimbabwe President Mugabe, shortly before his government began printing the 10 million dollar note pictured above! They have since printed a 100 billion dollar note. How much would this largest of large bills buy? Not even lunch, only ab out two loaves of bread. (http://www.neatorama.com/2008/07/23/zimbabwean-crisis-z100-billion-note-wont-even-buy-you-lunch/)

$10 000 000 dollars? i'm rich!!!

we're all billionaires! :D :eek:

Andreuccio

07-24-08, 10:52 PM

$10 000 000 dollars? i'm rich!!!

we're all billionaires! :D :eek:

What I don't get is why people will take one of the 10 billion dollar notes for anything. They know it's going to be worthless by the next day. Why give up two perfectly good loaves of bread for a piece of paper with lots of zeros?

I know the same could be said in theory for dollars, or any other fiat currency, but at least with dollars there's the collective illusion that it holds value. As long as all of us say a loaf of bread is worth about a dollar, it still works. The fact that the dollar will only be worth 90 cents in a year is outweighed by the convenience of common currency.

But when everybody knows the game, and it's spiraling out of control so fast, there's no more illusion. Why bother?

Jim Nickerson

07-24-08, 11:09 PM

Andreuccio

07-24-08, 11:38 PM

What is the alternative?

We are in the same boat and have been for decades.

No riots, so far, in Zimbabwe; none, so far, in America.

Barter.

I did a google search on "zimbabwe inflation rate". 2nd hit: BBC news from 7/16/2008

Zimbabwe's annual rate of inflation has surged to 2200000%

Why bother taking the paper? I'm too tired to do the math, but it probably loses half it's value within the hour. It becomes an inconvenience to accept it. If you don't trade it fast, it loses value, like a hot potato. Might as well keep the two loaves of bread and try to trade those.

With US dollars, a dollar's worth 90 cents after a year. I agree that it's corrosive, but it's nothing compared to Zimbabwe.

metalman

07-24-08, 11:58 PM

What I don't get is why people will take one of the 10 billion dollar notes for anything. They know it's going to be worthless by the next day. Why give up two perfectly good loaves of bread for a piece of paper with lots of zeros?

I know the same could be said in theory for dollars, or any other fiat currency, but at least with dollars there's the collective illusion that it holds value. As long as all of us say a loaf of bread is worth about a dollar, it still works. The fact that the dollar will only be worth 90 cents in a year is outweighed by the convenience of common currency.

But when everybody knows the game, and it's spiraling out of control so fast, there's no more illusion. Why bother?

you've answered your own question. the paper is for buying commonly purchased items like loaves of bread that don't keep any better than the money does. what does it say that all of this paper is still used? that there is nothing better... what else are you going to use? barter a marble or an old bic pen to buy a loaf of bread? folks run out of things to use and can't negotiate the value of 1000 items in exchange for others all day long. you need a new unit... like a cigarette or a candy bar or something else scarce.

liters of vodka were popular in russia as barter money during their crisis.

here in the usa? i dunno. if it ever got post soviet russia bad maybe cans of bud? oh, wait. that's belgian money now.

Chris Coles

07-25-08, 09:14 AM

Mr. Shadow Fed, I believe this is not completely accurate.

I understand that the SA Krugerrand lost a lot of shine precisely due to the fact that they are not 99.99% pure (24K), but only 91.67% or 22K pure.

This allowed other gold coins such as the Canadian Maple Leaf (crowd cheering ;)), Chinese Panda and Australian Kangaroo to overtake the gold bullion coin market. Later the US Mint issued the Buffalo which is also 99.99% pure (unlike the American Eagle ones).

I must apologise, I was working from memory. Thanks for bringing me up to speed.

phirang

07-25-08, 09:26 AM

metalman

07-26-08, 10:39 AM

As First National and Other Bank Failures Surge, Should You Make a Run for Your Money? (http://www.associatedcontent.com/article/907635/as_first_national_and_other_bank_failures.html)

Seven Banks Have Failed This Year. What You Need to Know - and Do - Now

First National Bank of Nevada and First Heritage Bank were shut down Friday. They have various operations in Nevada, Arizona (http://www.associatedcontent.com/theme/319/arizona.html) and California. With bad news also coming out about IndyMac as well as a total of at least seven banks failing this year, many are feeling nervous, especially with predictions that bank failures may be set to soar this year.

another strong forecast... (http://www.itulip.com/forums/showthread.php?t=887)

Verrocchio

07-26-08, 07:28 PM

if it ever got post soviet russia bad maybe cans of bud? oh, wait. that's belgian money now.

(Belgian money) one of your better comments, M-Man! :D

c1ue

07-27-08, 11:18 AM

Unlike Russia, Zimbabwe, and Argentina, the US CAN AND WILL meaningfully improve its trade deficit, by hook or by crook(ahem ahem).

I'm a broken record now, but watch US Steel's earnings on Tuesday for indicators.

It will be interesting to see how US Steel's product may be more competitive, but at the same time their energy costs will have significantly increased.

From the overall trade deficit perspective - as of May 2008 the gap is still there, and net imports are growing plenty fast enough to keep up with putative net exports.

In fact, it would probably be interesting to graph the net export/import numbers in the past 3 years with the dollar index.

FRED

07-27-08, 06:39 PM

It will be interesting to see how US Steel's product may be more competitive, but at the same time their energy costs will have significantly increased.

From the overall trade deficit perspective - as of May 2008 the gap is still there, and net imports are growing plenty fast enough to keep up with putative net exports.

In fact, it would probably be interesting to graph the net export/import numbers in the past 3 years with the dollar index.

New features: custom graphs for iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032) subscribers:

http://www.itulip.com/images/importexportdollar2001-2008.gif

The general rule in economic policy is that currency depreciation works to boost exports short term, but the impact wears off because inflation begins to reduce the competitiveness of exporters, and rising import prices reduce purchasing power. So you get flat export growth and crashing imports, per the chart above.

metalman

07-28-08, 07:04 PM

New features: custom graphs for iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032) subscribers:

http://www.itulip.com/images/importexportdollar2001-2008.gif

The general rule in economic policy is that currency depreciation works to boost exports short term, but the impact wears off because inflation begins to reduce the competitiveness of exporters, and rising import prices reduce purchasing power. So you get flat export growth and crashing imports, per the chart above.

very interesting. combined with bart's latest Financial crisis tracking (http://itulip.com/forums/showthread.php?t=4662) i'd say we're in for a shitstorm.

07-29-08, 12:38 PM

Also, can someone explain to me why Merrill didn't immediately get investigated by the SEC after posting a huge writedown for next quarter one week after a quarter of $9 billion in writedowns? Is this info they didn't have last week?

tombat1913

07-29-08, 03:04 PM

Hot Damn!
X is about 15% up today

Andreuccio

07-30-08, 12:25 PM

I recommend you put aside at least a few month's cash just in case they prove to be as incompetent and full of shit as in previous instances.

I've been looking into the details of doing this. That's a significant amount of cash.

If we're doing this out of concern that banks will fail and close, safety deposit boxes probably aren't the best option. (I understand there are other reasons why people might avoid them for cash and gold, as well.)

I'm not crazy about the idea of keeping that much cash (or gold) around the house, though, either. I called my insurance guy and cash and gold at home is pretty much uninsurable, at least through him. (Even insuring something like jewlery seems pretty expensive, at about 2.5%/year.)

I'd get a safe, of course, if I decided to keep a large amount of cash, but there are lots of issues with that, too. The quality ones are pretty heavy, several hundred pounds for a small one. Since I live on the second floor, getting it upstairs and positioning it will be a problem. Also, in order for it to be truly secure, it should be bolted into concrete, from what I understand. That's not going to happen on the second floor. Only the garage is an option in that case. But since the garage itself isn't that secure ...:(

On a separate note, there's the question of what denominations to get. Hundreds would seem to be the first choice for storing cash: easily circulated but taking less space than smaller denominations. But if we're talking about some kind of system collapse, will it be easy to get change for smaller transactions? Would it be better to have a variety of denominations?

Has anybody else though about these issues? Any ideas for solutions, or basis for decisions?

tombat1913

07-30-08, 01:25 PM

LargoWinch

07-30-08, 01:55 PM

Has anybody else though about these issues? Any ideas for solutions, or basis for decisions?

Depending on the amount you have invested physical, a few coins in a peanut butter jar would do. The fake pringles cans are also good, but you can do that yourself easily without buying them while enjoying the product...

For a larger investment, you need something more secure. Imagine if the brigands are actullay hungry after stealing your tv... Or that your wife "forgets" about the $12K peanut butter jar and dump it with the trash...

As such, I would suggest you to invest in a good safe (fire/theft protection - don't pay for water protection as you can use "ziploc" bag or similar if needed) and hide it on the 2nd floor of your place. Yeah its heavy, but hey, that is part of the protection (see below).

Anyway, here is my trick: 1000oz Silver bars! Simple huh? All you need is about $10K-$15K of silver to make the whole thing like 500lbs+! Note that each 1000oz bar is roughly equal to 70lbs. No need to bolt it on the floor (although always better). This way, your gold and other small items are safe as well.

With enough physical silver and provided you bought a good safe, the bad guys would need a crane to steal it. Unfortunately for them, that type of operation usually tends to draw attention...

Make sure the safe is also hidden and be creative: fake desk, corner of a wall, aquarium holder etc.

One last thing regarding safes at home: DO NOT have it delivered. Pick it up yourself and pay cash for it at the store.

On top of that, an alarm system and/or big dog would increase the overall security of your assets.

Andreuccio

07-30-08, 02:34 PM

Depending on the amount you have invested physical, a few coins in a peanut butter jar would do. The fake pringles cans are also good, but you can do that yourself easily without buying them while enjoying the product...

For a larger investment, you need something more secure. Imagine if the brigands are actullay hungry after stealing your tv... Or that your wife "forgets" about the $12K peanut butter jar and dump it with the trash...

As such, I would suggest you to invest in a good safe (fire/theft protection - don't pay for water protection as you can use "ziploc" bag or similar if needed) and hide it on the 2nd floor of your place. Yeah its heavy, but hey, that is part of the protection (see below).

Anyway, here is my trick: 1000oz Silver bars! Simple huh? All you need is about $10K-$15K of silver to make the whole thing like 500lbs+! Note that each 1000oz bar is roughly equal to 70lbs. No need to bolt it on the floor (although always better). This way, your gold and other small items are safe as well.

With enough physical silver and provided you bought a good safe, the bad guys would need a crane to steal it. Unfortunately for them, that type of operation usually tends to draw attention...

Make sure the safe is also hidden and be creative: fake desk, corner of a wall, aquarium holder etc.

One last thing regarding safes at home: DO NOT have it delivered. Pick it up yourself and pay cash for it at the store.

On top of that, an alarm system and/or big dog would increase the overall security of your assets.

I like the idea of hiding it. I'll have to think about how to do that, given space limitations.

As to weight, one of the safe guys I talked to had similar suggestions. Either rolls of quarters or actual weights in the bottom of the safe can really beef it up. (He didn't mention buying 15K worth of silver.)

The bigger issue with weight is the initial weight of the safe. Safes in the manageable range (up to about 300lbs) really aren't much more than glorified lockboxes. The steel on the sides is usually 12 gauge, which can be cut through or gone through with a sledge hammer pretty easily. To get something really sturdy, you need a lot more steel, which adds considerably to the weight. I haven't done much moving for many years, but I'd bet trying to move 700 lbs up stairs with a couple of friends is asking for trouble.

But now we're back to another point you made: DO NOT have it delivered.

Andreuccio

07-30-08, 02:42 PM

Andreuccio,
Just a thought: Buy gold coins, cut them into eigths, water soluble paint them different colors and throw them in a jar with a bunch of marbles. It will look like game pieces to anybody else.

or

http://cgi.ebay.com/Pringles-Can-Diversion-Safe-Hide-your-Money-Valuables_W0QQitemZ170243470355QQihZ007QQcategoryZ 102542QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

http://cgi.ebay.com/Diversion-Safe-Working-Wall-Clock-Hide-Jewelry-Money_W0QQitemZ200241420472QQihZ010QQcategoryZ1218 36QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

Interesting ideas, but I have some reservations. First, for the amounts of cash and prizes we're talking about I'm hesitant to use one of those diversionary safes. It'd be okay for keeping a few hundred, but I think there's too much chance for error when we're in the thousands.

As to altering coins, I'm very wary. One of the advantages of buying something like Eagles or Krugerrands is that they're pretty liquid now (you can sell them to any coin dealer for a small spread under current cost), and in the event of a breakdown they're easily recognizable to many, making them (hopefully) liquid in that situation as well. Start cutting them up and they'll be much more of a hassle to unload whatever the circumstances.

c1ue

07-30-08, 03:07 PM

Andreuccio

07-30-08, 03:45 PM

The problem with safes is a $50 metal detector will find them in about 5 minutes.

So creativity in hiding them only protects you from the stupid criminals.

The ones who are coming after you because they know you have a stock of PMs...

Yeah, nothing's fool proof. If someone actually knows you have PM's, you need much stronger security. You're probably in quite a bit of physical danger, as well, especially in the event of system breakdown.

Just have to weigh out all these issues.

LargoWinch

07-30-08, 09:03 PM

Yup, c1ue, you are so right and I never thought of that: metal detector. Do you have a second job or what?

Anyway, I guess one has to assess the risk of gold being stolen at home vs. "stolen"... sorry confiscated by one's government.

I think the later (confiscation) is very small and the former quite a bit more hassle to execute (safe at home), but more likely. My point is that gold would need to be much much higher than $2,500/oz to be seized by your government in my view. More like the fiat bonar valued at the price of Bounce (or less) and gold at like $25,000/oz.

I would recommend to spread things around. I mean fake peanut butter jar, physical bullion in a safe at the bank, GLD in a 401(k) or wearing it like a rapper :cool: etc.

This way if gold skyrocket and SHTF then you can retrieve some and that should be plenty to make you rich. If S does not HTF then you can access all your gold and you can resell it at a later time.

sadsack

07-30-08, 10:17 PM

metalman

07-30-08, 11:53 PM

BrianL

07-31-08, 01:11 AM

Chris Coles

07-31-08, 01:27 AM

Surely the better answer is to create a stash in a friendly country that has a sound banking system. What nearly everyone has forgotten is the banking mess is not spread throughout the planet, it is localised to the Anglo Saxon nations. There are a lot of countries that have stable governments with stable banking systems and sound economies. No, I am not advocating telling fibs to the local tax authorities. Simply that if the SHTF you have options. Again, yes, at the point of collapse you might not have easy access, but you would have the certainty that it would be there in all circumstances.

*T*

07-31-08, 03:20 AM

A friend of mine is a jeweler who recently got burgled. They took cash, aftershave, crap like that, and ignored the hundreds of pounds worth of sheet gold lying on the living room table. I think this is fairly typical of what to expect from your typical burglar.

Just sayin'...

Andreuccio

07-31-08, 09:08 AM

I'm new around here, so I'm still at the :eek: phase at the talk of squirreling away several months of cash/gold buried in the back yard. I understand the comparision to talk of the housing market crashing in the past, but this seems like an entirely different magnitude of problem.

If we hit the point where the goverment as going house to house and confiscating wealth (or society breaks down across the US and we have wide spread chaos) what is you end game in storing wealth at home? Escape to a desert island? Or are we at the point of 'all I need to do is survive longer than my neighbors and I'll it through to a recovery'?

Or is the real lesson here that the next bubble will be in safes, hedged by sledgehammers and molotovs?

Between lurking and actually being a member, I've been here a little under two years. That's not much in geological time, but one thing I've noticed during that period is that EJ has an uncanny ability to be right. So when he says "I recommend you put aside at least a few month's cash", (which I assume he means outside of the banking system, since the article is about the fragility of that system), to my mind it's prudent to listen and start taking steps to do it. If I'm going to do it, better do it right. No sense setting aside tens of thousands of dollars to avoid the next depression only to have it ripped off by a crackhead who likes Pringles.

It might be that nothing will happen, and that all these preparations will be for nothing. Even a year ago I probably wouldn't have bothered. But a year ago EJ might not have made the suggestion, either. One thing's for sure: you can lose a lot of money betting against the guy.

metalman

07-31-08, 10:01 AM

Between lurking and actually being a member, I've been here a little under two years. That's not much in geological time, but one thing I've noticed during that period is that EJ has an uncanny ability to be right. So when he says "I recommend you put aside at least a few month's cash", (which I assume he means outside of the banking system, since the article is about the fragility of that system), to my mind it's prudent to listen and start taking steps to do it. If I'm going to do it, better do it right. No sense setting aside tens of thousands of dollars to avoid the next depression only to have it ripped off by a crackhead who likes Pringles.

It might be that nothing will happen, and that all these preparations will be for nothing. Even a year ago I probably wouldn't have bothered. But a year ago EJ might not have made the suggestion, either. One thing's for sure: you can lose a lot of money betting against the guy.

never been burgled but several friends have. here's what they tell me. burglars want things they can use right away, that means cash. they do not want things they have to sell... they're not going to get much for it because things are more easily traced today. coins are virtually worthless to a burglar because you have to show id in the usa to sell coins to a dealer, and a fence can't move them.

burglars want to go into your house and out with the cash asap... don't make them hunt for it. leave a few hundred bucks and a nice watch in the top drawer of your bedroom dresser. the burglar with take it and be on his way. if he has to hunt around for something of value AND doesn't find it fast he's gonna get pissed off and start tearing the place up. had a friend come home to find fresh pile of human feces in the middle of his livingroom floor... true fact. turns out the cops told him that it's not uncommon... a big FU calling card from a robber for making him take the risk of arrest and jail for B&E for nothing. same goes for personal robberies. how many times you read the headline 'so and so was knocked over the head or shot for five bucks' well, he got hit because all he had was 5 bucks. carry enough cash so that if you get robbed the robber is rewarded for the risk. he'll leave you alone... it's worth it.

if you got a lot of money and are showy about it you're an idiot because when things get shitty you start to see kidnappings and car jackings and crimes like that. check google news for car jacking (http://news.google.com/nwshp?hl=en&tab=wn&q=car%20jacking) and you see it's getting more frequent. google trends shows car jacking (http://www.google.com/trends?q=car+jacking) shot up last year. lay low. keep a low profile.

c1ue

07-31-08, 10:04 AM

Keep in mind when TSHTF, there are several types of reactions:

1) EEk what to do what to do?!?!? running around in circles. Then eventually figure out that it is time to buy food
2) Oh crap I thought this would never happen, but let's do some quick and dirty mitigation (first ones in the stores after the event buying supplies)
3) No problem I am prepared (but have no gun) - one who understood what was coming but didn't think it through at all
4) No problem, I am prepared and I have a gun - like above, but did think it through 90%
5) No problem, I watched all the preparers and have them in the sights of my gang. This way I will be prepared, spend little money, and have no risk if TSdoesn'tHTF.

I'm actually not entirely kidding.

And no, I'm not a burglar. But I have used metal detectors.

Note that metal detectors don't just show presence, but also relative mass. Your house wires and other crap won't help against these more modern detectors.

Plus if I WERE a level 5 doomster, I'd be scanning the local recorder's offices for places with recent structural upgrades...those heavy safes often require additional structural work and this does legally need to be reported. Also records from safe-selling companies are nice...

tombat1913

07-31-08, 10:15 AM

[quote=Andreuccio;42214]Interesting ideas, but I have some reservations. First, for the amounts of cash and prizes we're talking about I'm hesitant to use one of those diversionary safes. It'd be okay for keeping a few hundred, but I think there's too much chance for error when we're in the thousands.
[quote]

My take on this is that you're going to have to make a decision one way or another about where to keep your money. In the bank, in electrical boxes or in your anal cavity, it's got to be somewhere. The whole point I believe that EJ was trying to disseminate is that the banks aren't necessarily the safest bet, so you need to find some way to hedge against that so you can put food on your family while you're waiting for the FDIC to fix it. There is no absolutely safe bet here, but we may find out soon that keeping a couple ounces of gold in your change jar is safer than a Wells Fargo savings account.

Andreuccio

07-31-08, 10:47 AM

With all this discussion of metal detectors sniffing out PM's, why not try a different tack?

Every light switch in your apartment must, by electrical code, by surrounded by a metal junction box. It would be a simple (although tedious) matter to distribute several thousand dollars in Pt or Au coins/rounds either within the box, or securely affixed behind the box (in case of unexpected electrical maintenance/repair).

If you're feeling especially paranoid, you can dislodge the junction boxes, and affix your hoard to the electrical conduit further up in the wallspace . . .

Other ideas include ziploc-protected storage within your hot water heater, HVAC, etc. . . .

The above precautions should provide sufficient ferrous-metal surrounding camouflage to protect against all but the pipe & wire stripping roving thugs that are soon to overwhelm the increasingly sparse outer suburbs . . .;)

For me, the problem is if I start spreading gold and cash around the house I'll forget where it all is. It'll be there for years. One other thing about that, (and the Pringles can idea): many safes offer some degree of fire protection. Some of the better ones are quite good against fires. In a fire, cash in a junction box is gone.

Also, aren't many junction boxes plastic?

http://www.lowes.com/lowes/lkn?action=productDetail&productId=130898-223-E381D-CAR&lpage=none

http://www.lowes.com/lowes/lkn?action=productDetail&productId=72226-223-B234ADJ&lpage=none

I think the idea of metal detectors is a bit of a red herring. If a professional comes in and has enough time, there really is nothing you can do. Unless you're Fort Knox, you're vulnerable. The best you can do is protect as well as you can against foreseeable threats with a reasonable amount of effort.

Hiding a safe won't protect against the pro with a metal detector, but it might keep the crackhead from finding the safe and beating on it with a sledge hammer, and then trashing your house when he can't get into the safe.

Each defensive item one chooses to add, (alarms, strong doors with good locks, surveillance cameras, a safe, hiding the safe, etc.) all only serve as deterrents.

Andreuccio

07-31-08, 11:16 AM

never been burgled but several friends have. here's what they tell me. burglars want things they can use right away, that means cash. they do not want things they have to sell... they're not going to get much for it because things are more easily traced today. coins are virtually worthless to a burglar because you have to show id in the usa to sell coins to a dealer, and a fence can't move them.

burglars want to go into your house and out with the cash asap... don't make them hunt for it. leave a few hundred bucks and a nice watch in the top drawer of your bedroom dresser. the burglar with take it and be on his way. if he has to hunt around for something of value AND doesn't find it fast he's gonna get pissed off and start tearing the place up. had a friend come home to find fresh pile of human feces in the middle of his livingroom floor... true fact. turns out the cops told him that it's not uncommon... a big FU calling card from a robber for making him take the risk of arrest and jail for B&E for nothing. same goes for personal robberies. how many times you read the headline 'so and so was knocked over the head or shot for five bucks' well, he got hit because all he had was 5 bucks. carry enough cash so that if you get robbed the robber is rewarded for the risk. he'll leave you alone... it's worth it.

if you got a lot of money and are showy about it you're an idiot because when things get shitty you start to see kidnappings and car jackings and crimes like that. check google news for car jacking (http://news.google.com/nwshp?hl=en&tab=wn&q=car%20jacking) and you see it's getting more frequent. google trends shows car jacking (http://www.google.com/trends?q=car+jacking) shot up last year. lay low. keep a low profile.

I've been burgled once. They opened everything and dumped it all on the floor, but no real vandalism. They got most of my wife's jewelry, so I guess they weren't displeased.

I love the idea of leaving a couple of hundred and a watch as a gift for burglars to prevent damage. I'm definitely going to do that.

My question here had to do with EJ's suggestion in the original post to set aside a few months cash outside of the banking system. How do you do that safely? If someone really wants in and knows what they're doing, nothing you do will stop them. Laying low is certainly key, so they won't want in in the first place. But are there other precautions one should take?

In looking at safes, I've found that the lighter, less expensive ones can be gone through easily with basic tools in about 5 minutes. Even a crackhead can swing a sledgehammer. The heavier ones won't keep out a pro forever, but will keep out the crackheads. Problem is getting one in the house without drawing attention.

phirang

07-31-08, 11:32 AM

I've been burgled once. They opened everything and dumped it all on the floor, but no real vandalism. They got most of my wife's jewelry, so I guess they weren't displeased.

I love the idea of leaving a couple of hundred and a watch as a gift for burglars to prevent damage. I'm definitely going to do that.

My question here had to do with EJ's suggestion in the original post to set aside a few months cash outside of the banking system. How do you do that safely? If someone really wants in and knows what they're doing, nothing you do will stop them. Laying low is certainly key, so they won't want in in the first place. But are there other precautions one should take?

In looking at safes, I've found that the lighter, less expensive ones can be gone through easily with basic tools in about 5 minutes. Even a crackhead can swing a sledgehammer. The heavier ones won't keep out a pro forever, but will keep out the crackheads. Problem is getting one in the house without drawing attention.

Why not just make counterfeit dollars to fool the robbers with?

metalman

07-31-08, 01:07 PM

Why not just make counterfeit dollars to fool the robbers with?

don't forget to tell the feds that you don't intend to pass them but to use them to fool robbers :D

all ej is saying is don't count 100% on your bank or the advice of professional liars. that's also what these guys advise... We Prefer A More Secure Financial Institution (http://www.itulip.com/forums/showthread.php?p=42195#post42195)

keep some cash someplace safe. look, if tshtf and you don't have cash, your situation is worse. if you are robbed and you don't have cash your situation is worse. if it gets stolen, who cares? beats the shit out of pissing off an invader... increasing your risk of violence. and as i've said before cash comes in handy for bribes... for stuff you may need. keep a firearm handy when you're in the house, but realize that guns are a huge liability... you have to keep careful track of them at all times. if you have kids, forget it.

don't be paranoid but don't be naive, either.

oh, and watch out for wierdos... :eek:

Man decapitates passenger aboard Greyhound bus in Manitoba (http://www.cbc.ca/canada/story/2008/07/31/greyhound-transcanada.html)

Jim Nickerson

07-31-08, 01:29 PM

don't forget to tell the feds that you don't intend to pass them but to use them to fool robbers :D

all ej is saying is don't count 100% on your bank or the advice of professional liars. that's also what these guys advise... We Prefer A More Secure Financial Institution (http://www.itulip.com/forums/showthread.php?p=42195#post42195)

keep some cash someplace safe. look, if tshtf and you don't have cash, your situation is worse. if you are robbed and you don't have cash your situation is worse. if it gets stolen, who cares? beats the shit out of pissing off an invader... increasing your risk of violence. and as i've said before cash comes in handy for bribes... for stuff you may need. keep a firearm handy when you're in the house, but realize that guns are a huge liability... you have to keep careful track of them at all times. if you have kids, forget it.

don't be paranoid but don't be naive, either.

oh, and watch out for wierdos... :eek:

Man decapitates passenger aboard Greyhound bus in Manitoba (http://www.cbc.ca/canada/story/2008/07/31/greyhound-transcanada.html)

Nice find, metalman, with regard to the cool guy who decapitated his seat mate. What needs to be done is this decapitator should be taken to the US Congress and all the security people called out and turn him loose with the instruction to ask each lawmaker, "Is the system fundamentally sound?" If the lawmaker replies, "Of course, vote for me in November," then this decapitator should do his deed over and over and over until only the final one standing wises up and says, "No, the frucking system is corrupt beyond repair."

metalman

07-31-08, 01:40 PM

Nice find, metalman, with regard to the cool guy who decapitated his seat mate. What needs to be done is this decapitator should be taken to the US Congress and all the security people called out and turn him loose with the instruction to ask each lawmaker, "Is the system fundamentally sound?" If the lawmaker replies, "Of course, vote for me in November," then this decapitator should do his deed over and over and over until only the final one standing wises up and says, "No, the frucking system is corrupt beyond repair."

leave it to you jim to find a constructive way to employ a psychopath :D

Jim Nickerson

07-31-08, 02:03 PM

leave it to you jim to find a constructive way to employ a psychopath :D

Think about it, metalman, what would it take to get the Congress and all lawmakers to become serious about what is going on in this country as it impacts the "average person"? As long as the lawmakers (foxes) are determining who's responsible for guarding the henhouse, they ain't going to change the system. I hate to be negative beyond reasonableness, but nothing will EVER change unless some external force is brought to bear that forces a revised or new system--examples: a decapitator is turned loose in a locked up Congress, bird flu is released on the entire group, anthrax is scattered on them all, a neurtron bomb explodes in Washington, DC, and Nashville, Austin, Santa Fe, Montgomery, Des Moines, etc. x 45 more.

One thing that will not change the system is a voting public.

sadsack

07-31-08, 04:15 PM

For me, the problem is if I start spreading gold and cash around the house I'll forget where it all is. It'll be there for years. One other thing about that, (and the Pringles can idea): many safes offer some degree of fire protection. Some of the better ones are quite good against fires. In a fire, cash in a junction box is gone.

Also, aren't many junction boxes plastic?

You could get some larger diameter silica or ceramic sheathing (some resist temperatures of up to 2300 degrees) and stuff a few tightly rolled "baller wads of cash" in them:

http://www.mcmaster.com

search under part number 87675K25 (http://www.mcmaster.com/itm/find.ASP?tab=find&context=psrchDtlLink&fasttrack=False&searchstring=87675K25)

Andreuccio

07-31-08, 04:30 PM

You could get some larger diameter silica or ceramic sheathing (some resist temperatures of up to 2300 degrees) and stuff a few tightly rolled "baller wads of cash" in them:

http://www.mcmaster.com

search under part number 87675K25 (http://www.mcmaster.com/itm/find.ASP?tab=find&context=psrchDtlLink&fasttrack=False&searchstring=87675K25)

I like it. A very MacGyver type of solution. Put one of these inside a burglary safe. How would you seal off the ends, though? The internal temp shouldn't exceed about 350 degrees, since paper will ignite at about 450, and if it's open on both ends you haven't really solved the problem.

Actually, looking at it, I'm not sure it will work. The problem isn't just keeping flames out. You need to keep the temp of the cash below 350. Therefore, it needs to be airtight. In a typical house fire, temps reach upwards of 1200, and can get as high as 1700.

Maybe an airtight, unbreakable ceramic container, if such a thing is made.

BTW, I want to apologize to EJ and Fred. I didn't mean to hijack the thread. Sorry.

Chris Coles

07-31-08, 05:36 PM

Think about it, metalman, what would it take to get the Congress and all lawmakers to become serious about what is going on in this country as it impacts the "average person"? As long as the lawmakers (foxes) are determining who's responsible for guarding the henhouse, they ain't going to change the system. I hate to be negative beyond reasonableness, but nothing will EVER change unless some external force is brought to bear that forces a revised or new system--examples: a decapitator is turned loose in a locked up Congress, bird flu is released on the entire group, anthrax is scattered on them all, a neurtron bomb explodes in Washington, DC, and Nashville, Austin, Santa Fe, Montgomery, Des Moines, etc. x 45 more.

One thing that will not change the system is a voting public.

With the greatest of respects Jim, you forget recent history. The one thing that made the difference in Eastern Europe and brought the Cold War to an end, (for example), was a combination of the spoken and written word. The strongest weapon is debate, good old fashioned open debate. The more we tell it as it is, out loud, the more they have to listen. If you instead take the revolutionary road, along the lines you suggest, all you do is give them a chance to call you names and you dilute your argument.

Take EJ and his setting up iTulip. Just look at how many people are now in his debate, world wide. You may find it hard to believe, but I am sure that they are taking a long look at the debate started by EJ and I am equally sure that they must take it on board.

Words are by far the strongest force in all human society. We must use them wisely.

c1ue

07-31-08, 06:18 PM

If you are concerned only about the crackhead thieves, the 1000 ozs of silver blocks are plenty good enough.

Just use them as a base for a bookshelf; 95% of (non professional) people won't have any clue what they are, and a significant portion of the rest won't be able to lift them.

As for not worrying about the professionals - well - they wouldn't bother if the situation wasn't really bad, or your stash really worth it.

After all, the weakest link is probably the store that sold you the coins or bullion.

Hope the owner is someone you trust and/or doesn't have low paid temporary clerk types.

As for the spoken and written word...

I thought it was $20 oil, collective farming, and Star Wars that were the straws that broke the Commies' camel's back?

After all, the protests in the 50's and 60's in Eastern Europe were crushed by tanks.

What stopped the Soviets from going in again? The $100B debt accumulated in buying food after a series of both bad harvests and general food farm productivity growth, and the cold hard fact that more would not be forthcoming unless 'democracy' and 'free trade' were allowed to prevail.

The really sad part about today is that for all of Russia's natural resource wealth, educated population, and strong technology in many areas, so many of the things that the Russian people need/want must be imported as domestic production - already inadequate - was not only not bolstered by 'Democracy' and 'Free Trade', but in fact was ignored in favor of good old fashioned land (and underlying resource) grabs.

Jim Nickerson

07-31-08, 06:31 PM

With the greatest of respects Jim, you forget recent history. The one thing that made the difference in Eastern Europe and brought the Cold War to an end, (for example), was a combination of the spoken and written word. The strongest weapon is debate, good old fashioned open debate. The more we tell it as it is, out loud, the more they have to listen. If you instead take the revolutionary road, along the lines you suggest, all you do is give them a chance to call you names and you dilute your argument.

Take EJ and his setting up iTulip. Just look at how many people are now in his debate, world wide. You may find it hard to believe, but I am sure that they are taking a long look at the debate started by EJ and I am equally sure that they must take it on board.

Words are by far the strongest force in all human society. We must use them wisely.

Chris, I personally am too old to engage in open anarchy, or covert for that matter, but my opinion remains that anything short of violence from some source whether natural or war-like is not going to change our system. I am not against the masses being educated as to what is going on, but EJ's and others' voices or writings are not reaching the masses. When one begins to hear people who have the medias' ear, and when the media gets the balls to promulgate the message, then perhaps some rational evolution of a better system will evolve.

Can you imagine the two current presidential candidates pounding the table saying all the bullshit that exists and has existed with the financial system, social security, medicare, the cost of healthcare, the people that have no health coverage , the cost of higher education, etc. HAS to be addressed. I guess it is possible, though improbable, that I live to see a hundred, but were I to do just that, I think short of something severe and severely disruptive the US political system will continue right down its current path to ruination.

Some of you, hopefully most, will get to see how it works out.

sadsack

07-31-08, 06:47 PM

Can you imagine the two current presidential candidates pounding the table saying all the bullshit that exists and has existed with the financial system, social security, medicare, the cost of healthcare, the people that have no health coverage , the cost of higher education, etc. HAS to be addressed. I guess it is possible, though improbable, that I live to see a hundred, but were I to do just that, I think short of something severe and severely disruptive the US political system will continue right down its current path to ruination.

Some of you, hopefully most, will get to see how it works out.

Echoing your last sentence, any profound change, or change of any real meaning, takes generations (at least two) to supplant the dying paradigms of the previous regime.

Look at how long it took to forget the lessons of the Depression - twoscore (40 years) until "Tricky Dick" dissolved Bretton Woods.

Now, nearly twoscore years after that, the rabid chickens are coming home to roost. It will be another twoscore years until a more viable solution is appreciated in the "hearts and minds" of our American society. . . and it is my fervent hope that these future generations do not neglect Santayana's warning.

raja

07-31-08, 09:09 PM

The really sad part about today is that for all of Russia's natural resource wealth, educated population, and strong technology in many areas, so many of the things that the Russian people need/want must be imported as domestic production - already inadequate - was not only not bolstered by 'Democracy' and 'Free Trade', but in fact was ignored in favor of good old fashioned land (and underlying resource) grabs.
Speaking of the FSU, my Ukrainian wife is from a town of 50,000 in southern Ukraine. I was amazed to hear that her parents never leave their house without someone being there, for fear of burglary. If they both have to be away for some reason, they hire someone trusted to stay at the house. They also have 5 nasty dogs, chained at strategic points around the property.

She says that the burglars are quite sophisticated. They will even gas watchdogs, and have many other techniques to do their dirty work.

After Independence from the Soviet Union in 1991, the banks failed and her parents lost all their savings. Her father now has underground storage containing all types of foods and survival supplies. I understand that the reason most people survived the post-Soviet meltdown was due to the fact that everyone, even city dwellers, had a garden plot in the country or relatives who did some form of farming. My wife is amazed at how unprepared Americans are for a "black day".

As the world financially equalizes, and the US becomes poorer, it is possible that we will face something like what exists in the Ukraine today . . . . :eek:

sadsack

07-31-08, 09:30 PM

Note that metal detectors don't just show presence, but also relative mass. Your house wires and other crap won't help against these more modern detectors

An effective countermeasure is "mu-metal," foils of which effectively block low frequency magnetic fields ( > 100 Hz) - sorry for the Wiki ref:

http://en.wikipedia.org/wiki/Mu-metal

Then again, if you're using UWB scanning equipment (see https://www.llnl.gov/str/September04/Azevedo.html), such a countermeasure will be ineffective . . .

metalman

07-31-08, 09:43 PM

An effective countermeasure is "mu-metal," foils of which effectively block low frequency magnetic fields ( > 100 Hz) - sorry for the Wiki ref:

http://en.wikipedia.org/wiki/Mu-metal

Then again, if you're using UWB scanning equipment (see https://www.llnl.gov/str/September04/Azevedo.html), such a countermeasure will be ineffective . . .

you guys are coo coo. it is not about metal detectors fer christ sake. scenario #1: if bad guys come into your house when you're not there, leave enough $$$ so they go away happy. if they have info that more than that is in your home your problem is scenario #2: they break in while you're there. then it's blam, blam, blam, or run, run, run.

rule #1: don't live near the bad guys. they don't like to travel far to shop.

rule #2: shut up.

rule #3: pay attention. more graffiti in your area? it says 'i'm pissed and shitting in my own nest'. watch out. angry teenagers about? watch out.

rule #4: don't reveal to anyone that you have anything of value in your home.

rule #5: keep your big, fat mouth shut.

sadsack

07-31-08, 10:16 PM

you guys are coo coo. it is not about metal detectors fer christ sake. scenario #1: if bad guys come into your house when you're not there, leave enough $$$ so they go away happy. if they have info that more than that is in your home your problem is scenario #2: they break in while you're there. then it's blam, blam, blam, or run, run, run.

rule #1: don't live near the bad guys. they don't like to travel far to shop.

rule #2: shut up.

rule #3: pay attention. more graffiti in your area? it says 'i'm pissed and shitting in my own nest'. watch out. angry teenagers about? watch out.

rule #4: don't reveal to anyone that you have anything of value in your home.

rule #5: keep your big, fat mouth shut.

Mea culpa - I should have included more "smilies" in my previous responses.

I 100% agree with your points.

Just like grazing animals, the roving bands of thugs scrabbling across the "Mad Max" suburiscape will always first seek the low hanging fruit. Only in the absence therof will they drag their starving carcasses aloft to shake the reluctant tree . . . :);):cool::eek:

*T*

08-01-08, 03:27 AM

So do we prefer USD, EUR or GBP for cash? (I live in the UK).

c1ue

08-01-08, 08:52 AM

rule #1: don't live near the bad guys. they don't like to travel far to shop.

I'm not thinking about Mad Max - after all, gold wasn't very useful there.

I'm thinking about 'Lucifer's Hammer', a novel by Larry Niven & Jerry Pournelle - one of the sci-fi apocalypse type things (and possibly an inspiration for "Armageddon")

The scene in that book is where the documentary reporter who actually documented the oncoming meteor, belatedly starts preparing once "the odds are now hundreds to one. Used to be billions. Then thousands. Now its only hundreds. That's scary."

He uses his war reporter/Scout master experience: buys lots of liquor, pills, guns, spices; makes jerky, fuels up the car, then has his wife and dog shot by a biker gang that had seen him making preparations who then steal his prep.

In Russia - there is now an elaborate etiquette going around regarding business buyouts. This is because of the 'black' cash economy.

Most of these are cash and carry, and after an initial rash of 'robberies' of various participants, the understanding now is if someone gets hit doing a cash movement at a specific time and place, that it is an inside job.

nitroglycol

08-01-08, 08:27 PM

Why not just make counterfeit dollars to fool the robbers with?
I like that idea... as long as the thief or thieves don't remember where they got the money. Some thieves, strangely, take rather poorly to getting busted.

I heard a story (though it should probably stay in the urban legend category until I see confirmation) of someone whose car was stolen. Fortunately, his car had a built-in GPS, and the thieves were quickly apprehended. Unfortunately, the thieves got out on bail, and paid him a visit and beat the crap out of him.

Chris Coles

08-06-08, 03:33 AM

Jim Nickerson

08-06-08, 08:32 AM

Perhaps this will change your mind.

http://www.timesonline.co.uk/tol/comment/obituaries/article4458713.ece?token=null&offset=0&page=1

It escapes me as to exactly which dissident we currently have locked away in the American gulag, or just who is the most popular American dissident who is running free. Perhaps it is Kucinich or Paul, but look how much interest either of them stirred up.

Perhaps over the next several generations someone like Solzhenitsyn will emege, but right now whoever that is is probably listening to his/her iTunes or playing a video game.

The last dissident of any meaning was ML King, and maybe Ross Perot, and I don't discount that another such as King will emerge, I just think it's a long ways off.

Chris Coles

08-06-08, 08:45 AM

It escapes me as to exactly which dissident we currently have locked away in the American gulag, or just who is the most popular American dissident who is running free. Perhaps it is Kucinich or Paul, but look how much interest either of them stirred up.

Perhaps over the next several generations someone like Solzhenitsyn will emege, but right now whoever that is is probably listening to his/her iTunes or playing a video game.

The last dissident of any meaning was ML King, and maybe Ross Perot, and I don't discount that another such as King will emerge, I just think it's a long ways off.

You are correct to point out the lack of American Gulags, but what you do not take account of is the Ocean of indifference to the poor inventor that is all around you today. Today's Gulag is that Ocean of indifference.

LargoWinch

08-06-08, 09:37 AM

So do we prefer USD, EUR or GBP for cash? (I live in the UK).

I prefer Gold for LT hands down.

Short-term, I would advice the Yen or SF.

phirang

08-06-08, 12:04 PM

I prefer Gold for LT hands down.

Short-term, I would advice the Yen or SF.

Short-term: Agree: any low-yield currency will do well as high-yield carry unwinds.

long-term: I think I figured out Soros' gold buy: he called the oil bubble, and knew that the Fed would cut rates again once oil corrected meaningfully, especially given the atrocious economic results forthcoming.

metalman

09-14-08, 07:01 PM

another itulip timing winner!

lakedaemonian

09-15-08, 12:54 PM

Paulson says Americans can remain confident in the soundness, resilience of financial system

WASHINGTON (AP) -- Treasury Secretary Henry Paulson says the American people can remain confident in the "soundness and resilience in the American financial system."

Briefing reporters at the White House, Paulson said he "never once" considered it would be appropriate to put taxpayer money at risk to resolve the problems at Lehman Brothers. The nation's fourth largest investment bank filed for bankruptcy protection earlier Monday.

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Starting Friday, Paulson participated in three tense days of negotiations at the New York Federal Reserve Bank in which he held firm to the position that the federal government would not step in and supply any money to resolve the crisis at Lehman.

Faced with the prospect of no government help in dealing with Lehman's huge losses on its mortgage holdings, other financial firms lost interest in trying to buy the venerable firm. That forced New York-based Lehman to file for bankruptcy protection, making it the largest bankruptcy in history in terms of assets, surpassing the failures at Worldcom and Enron earlier in the decade.

Paulson explained his decision by telling White House reporters he did not "take lightly" any decision to put taxpayer money at risk to prop up a private company.

"Moral hazard is something I don't take lightly," Paulson said, referring to the belief that when the government steps in to rescue a private company it encourages other companies to engage in risky behavior.

"I never once considered that it was appropriate to put taxpayer money on the line in resolving Lehman Brothers," Paulson said.the American people can remain confident in the "soundness and resilience in the American financial system." :eek: