The ever fantastic economics blog The Big Picture has reprinted an interesting letter from John Mauldin, the best-selling US investment writer, in which he details the odd things going on in the markets.

Like most private investors I can’t pretend to understand all of it, but it does reinforce that these times really are as unusual as they feel.

In my view, the apparent breakdown in orderly pricing means it’s either the opportunity of a century, or the storm-before-the-storm. Mauldin writes:

There are things in today’s markets that are simply astounding. They should not exist, yet they do. Why should US bills trade at negative interest? How can oil be trading at all-time highs in terms of spreads over the next year? Bank debt and bonds are trading at discounts not to be believed. Want some free money? I show you a trade that gives you (almost) just that. Fed funds at zero? Are we starting to push on a string?

I’ll pick out a few highlights showing how strangely various markets are priced.

On US treasuries:

In the last few weeks we have seen 30- and 90-day US Treasury bills trade every now and then at a rate of negative interest. That means someone is willing to pay for the privilege of having their cash in US Treasuries. This simply should not be. Why would anyone want to do this? Is this a sign the system is broken? Are we that scared?

My assumption is it does reflect extreme risk aversion; I’ve written before even longer term treasuries are offering crazy low yields.

On corporate bonds:

The corporate bond market is assuming an Armageddon Scenario. Barclays Capital writes that one would have to assume that US GDP will contract by 15% to make sense of the current bond spreads.

On oil futures:

When oil was at $147, the spread was an average of $3.25, or about 2.5%. You can buy January 09 crude futures at a stunning 34.5% lower than January 2010. That means if you could find a place to store that oil, you could lock in a guaranteed 34% profit, less the cost of storage. Sounds like easy money. This is just something that shouldn’t be.

Buying oil futures is a specialist way to invest in oil, let alone buying the oil itself, but the takeaway is simple enough – another apparent case of market breakdown.

On the Federal Reserve’s battle with the credit crunch:

We are getting to ready to run a grand experiment on many theories in the world of economics. Will Ben and Hank get it precisely right? And what is precisely right? Does the avoidance of a second Great Depression mean success? Will anyone be grateful? We all have seen pictures of Paulson looking so very tired and worn. I actually feel sorry for him. Who would want that job?

In this post, I’ll outline three methods I’ve successfully used to stop me spending money on stuff I didn’t really need.

Warning: All three methods are a bit unusual!

1. Reserve it on Amazon

Nearly everything is cheaper to buy online. If I’m out shopping and I see something I like, I try to:

1. Postpone the purchase until I check the price at home
2. Look it up on Amazon
3. If I still want it and it’s cheaper online, I add it to my shopping basket or my Amazon wishlist
4. I then logout of Amazon – without going through the checkout, and so without buying anything

If after a few days I’m still thinking about the product, I’ll log back into Amazon, load up my basket, and consider buying the product again. If I decide I really do want it, I’ll buy it.

This method has stopped me buying all kinds of stuff, especially books, CDs, DVDs and video games. I think I originally came across the idea via one of the personal finance blogs, but I don’t remember which.

I think it works for several reasons:

• It enforces a ‘cooling off’ period before you spend any money
• It is connected with buying cheaper online, which I can’t resist
• The buying-without-really-buying trick probably satisfies my hunter-gatherer instincts

Often I’ll check over the basket a few days later and think, “Nice product, but I don’t really need it”. Sometimes I wonder why I added a product at all.

2. Buy it for a friend

This one also works by satisfying the hunter-gatherer urge.

I often come across great products when on a rare ‘real-world’ shopping trip.

However: I hate clutter as much as the next frugal saver, and I’d rather most of my spare cash was invested in my future financial freedom.

So sometimes instead of buying it for myself, I’ll run through a list of family members and close friends.

• Do any of my family or friends have birthdays coming up?
• Would the product keep until Christmas?
• Have I showed a friend I’m thinking about them, recently?

If the product is a great fit for someone close and it’ll keep, I’ll consider buying it as a future gift.

Again, this method works best for small items like books or for kitchen equipment, which is my personal Achilles’ Heel.

It also ticks off spending that I’d make anyway, such as buying a family member a birthday present.

I can’t personally use this trick for high-end TVs or leather jackets, but your mileage (and bank balance!) may vary.

3. If you’re going to buy something, buy two of them

My fellow money bloggers might have something to say about my first two tips, but the third is sure to provoke some disagreement.

• When I’m considering a purchase, I think about buying two

This might sound odd, but the method makes me ask just how desirable the product really is.

Do I really need this t-shirt? Do I really need these new shoes?

Often the answer is no, and so I buy none at all.

But sometimes I do buy two of the same thing. Truly great shoes are hard to find, for example. If I buy two pairs, I can keep one for parties or promenading, and wear the other ones to death. I’d rather have two pairs of great shoes then one great pair, and one mediocre pair.

This tip obviously works best for clothes – you don’t need two iPods, or two laptops! In a sense it also complements my first two methods, which are more effective ways to control your spending on impulse buys rather than clothing.

I hope you found at least one of these tips useful.