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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Aubie Baltin
MArch 22, 2011
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Inflation is here and it is going to get a lot worse

Consider the following B.S. Washington has been feeding you: From the end of 2000 through the end of 2010, the fraudulent Consumer Price Index shows prices have risen 29.9% for an average annual increase of about 2.99%. But WHAT ARE THE REAL INFLATION RATES?
Taking just a few examples:

  • The typical cost of homeowner's insurance and real estate taxes, two basic costs of owning a home — have increased an average of 92.5%.
  • The cost of energy; averaging the price gains for heating oil, natural gas, and electricity — have soared 87.67%.
  • The cost of a gallon of gas for your car has jumped 118%. 
  • Medicare Part B premiums have rocketed 143% higher.
  • And some of the very basic food items we buy on a regular basis — potatoes, eggs, beef, bread — they too have soared, rising more than 64% during the same period.


Overall, prices have increased 88% since 2000 — a rate of inflation that's three times greater than what the Government is telling you. To make matters worse, the pundits in Washington continue to claim that inflation is "not a problem" and that it will be "easy to deal with" if and when it comes.

If Inflation is not about rising prices, what is it about? The fundamental problem is that the essence of inflation is not a general rise in prices as such, but an increase in the supply of money at a faster rate than the increase in GDP, which in turns sets in motion a general increase in the prices of goods and services. In the past, in times of crisis such as is now occurring in the Middle East, the Dollar has always strengthened as investors take “a flight to safety." This time around, the Dollar has not only failed to rally, but has broken down to new lows. What gives? Has the dollar lost its safe-haven status, but more importantly, is the Dollar about to lose its reserve currency status? The rest of the world has definitely stopped buying Bernanke's snake oil — they’re actually dumping dollars (Treasuries)!  China’s holdings of Treasuries are now down to below $850 billion from a high of over $1.5 Trillion. And one dupe after another (Clinton, Schumer, Geithner, Bernanke and Obama) are taking turns calling China names. Who would have thunk it? As a result, the Euro is flying against the Dollar which is bad news for the buck — and worse news for Americans' cost of living — but it couldn't be better news for anyone who owns Gold and Silver. Over the past month, Dollar weakness has propelled both Gold and Silver to new highs, as investors seek safe havens from crumbling paper currency.

The fundamentals are worsening for the dollar: With each passing day, federal debt and deficits grow by leaps and bounds as Bernanke dumps more newly created greenbacks into the system. The long-term fundamentals for the Precious Metals are growing more bullish; as every day, global demand grows and supplies shrink — the “perfect storm,” for PM investors like us! More importantly, the Federal Government’s sporting a $14 trillion debt and a $1.6 trillion budget deficit can only come up with $4 billion worth of spending cuts. We sh
ould be splitting our guts laughing, except it is not funny.

While we think hyperinflation – defined as the total destruction in the value of a country’s currency – is for now a low probability event, a lot more monetary (creation) inflation most definitely is not. When you have a government that refuses to change its borrow and spend policies, combined with a central bank chaired by a man who thinks that loose fiscal and monetary policies are a risk free, no cost solution for a sick economy, you have a recipe for hyperinflation. For quite some time now, I have been warning you that both the
US Dollar and the TREASURY BOND Market were headed for a collapse,
as most analysts scoffed at the idea. After all, the Euro is in much
worse shape than the US Dollar is, right?

Recently, the Financial Channel had both Warren Buffett, a Democrat and Obama supporter and Sam Zell on as hour long guests. Both are famous investors with incredible track records and when they speak people listen. Low and behold, both are predicting a bleak future for the Dollar. Mr. Buffett said that the Dollar will become “less important” over time as America’s “dominance” of the world’s economic system diminishes.  Sam Zell went even further and said, “My single biggest financial concern is the loss of the Dollar as the reserve currency. I can’t imagine anything more disastrous to our country. I’m hoping against hope that “ain’t gonna” happen, but we are already seeing things in the markets that are suggesting that confidence in the Dollar is falling out of bed.