Jim’s Mailbox

Posted at 2:56 PM (CST) by & filed under Jim's Mailbox.

Phil,

Jim recommends a maximum exposure to precious metals and their related items of one-third of your liquid net worth. As you know he regards using margin on such items as being the equivalent of having a financial death wish. A combination of both the physical metal and shares is best with your physical metal being your bedrock. Whilst we do not recommend particular stocks the ‘country risk’ that a particular share is a very important factor in terms of stock selection. Clearly you should carefully consider the stability, both politically and economically, of the country in which the company in question operates. In the coming ‘Great Leveling’ one will be best served by investing in those stocks that have mineable ounces in stable countries outside of the Western financial system. The other factor is that when owning stocks you should do so in certificate form so that your relationship is directly with the company in question. Certificate ownership gives you absolute protection from a variety of risks including broker/dealer counter-party risk and the risk of ‘bail in’.

In terms of precious metals Jim’s advice is to have it stored outside of the Western system in allocated storage and to regard your holdings as savings whereas your fiat currency is only for transactions. The GOTS advice Jim is offering is key in order to survive the financial mayhem that is about to occur.

Jim advises that retirement accounts face the prospect of nationalization, accordingly he feels people should exit those accounts whilst they can otherwise their investments may well be replaced with worthless sovereign paper. This year we saw the IMF openly discussing such actions along with a wealth tax and other extreme measures. The penalties you face in terms of an early exit from a retirement account will look small in comparison to what could happen in the event of a nationalization. The view that retirement accounts are advisable due to their taxation advantages is based on the premise that governments will not simply alter the tax regulations in a desperate effort to use citizen’s funds to bail out a broken system. Just because a retirement account has tax breaks associated with it today does not guarantee those same breaks will be there in the future.

Lastly, the view that Canadian banks are somehow stronger and immune from the ‘bail in’ is simply fanciful. The Canadian government’s intention to green light the use of the ‘bail in’ is right there in black and white on pages 144 and 145 of "Economic Action Plan 2013” (http://www.budget.gc.ca/2013/doc/plan/budget2013-eng.pdf) which the Harper government submitted to the House of Commons. That new budget actually proposed "to implement a ‘bail-in’ regime for systemically important banks" in Canada. "Economic Action Plan 2013" was submitted on March 21st, which means that this "bail-in regime" was likely being planned long before the crisis in Cyprus ever erupted. 

If that is not enough one should go to the a joint report done by the Bank of England and the Federal Deposit Insurance Corporation of the United States discussing bail-in as the absolute method to be used from this point forward. That report can be found at http://www.fdic.gov/about/srac/2012/gsifi.pdf.

Jim’s advice is that the ‘bail in’ will initially affect those banks that took TARP funding and those that were involved in the ‘bail out’. The following report highlights the Canadian banks that were involved in the ‘bail out’

http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2012/04/Big%20Banks%20Big%20Secret.pdf

Jim suggests that you should seek to bank with smaller, local banks that were not involved in the ‘bail outs’ otherwise you risk becoming a victim of the ‘bail in’. You should note that as a depositor you are an unsecured creditor by legal definition and precedent.

Regards,

Peter Mickelberg
Communications Consultant
www.jsmineset.com

 

Jim,

As E selling increases, block and mortar lose money and close. Property taxes are hit hard because of their high valuations. As mortgage rates rise, housing construction and related businesses go under (IE my moving and storage). My taxes were doubled and that was the final blow. A 40 year old company I started with one truck. I had over 50 employees at one time. I will close in January.

As the military is down sized, so will all the towns that they feed. Black swan eggs are hatching in many places.

That distant dark cloud may be swans.

Stay well my friend,
CIGA Ed

 

Dear Jim,

This story here is the widespread dissemination of this "story" encouraging viewers to spend more money:

Conan Shows Us That Main Stream Media Is Scripted

Description: A funny yet somewhat scary segment from Conan’s show where dozens of news anchors are caught in the act of "reporting" the exact same story, the exact same way…

http://www.ebaumsworld.com/video/watch/83754317/

CIGA Jamie