Economics & Investing For Preppers

Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on Bitcoin, and its alternatives.

Precious Metals:

The proverbial Elephant in the Room is the silver-to-gold price ratio. When I last checked, it was an insane 81-to-1. That doesn’t match market fundamentals, industrial usage and recovery fundamentals, and certainly not Earth’s crust scarcity fundamentals. To me, this seriously out-of-whack ratio can only indicate a major economic recession or depression is ahead. This is because silver is more of an industrial metal, while gold is still seen as an inflation hedge.

If we start to see the silver-to-gold price ratio narrow before a recession then that is a huge red flashing light that says: World War III. And if we see the silver-to-gold price ratio narrow in the midst of a recession then that would signal either war or an incipient economic recovery.  OBTW, speaking of price ratios, seeing spot platinum priced far below the spot price of gold is another indicator of a recession in the near future. “Good Times” economically are indicated by platinum selling about 20% over the price of gold.

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Video: The Most Gold & Silver You’ve Ever Seen? Mike Maloney

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Take a look at this piece by Jeff Clark at GoldSilver.com: The Potential Big Surprise for 2018, and What It Means for Gold

Stocks:

Stocks tumble in biggest weekly decline since 2016 (“Dow Jones Industrials lost more than 1,400 points in the week…”)  JWR’s Comment:  Is this just another dip triggered by rising interest rates, or is this the beginning of a bear market?  That is the $6 Billion question.  All I know is that I now have zero stock or mutual fund exposure, so I can sleep well at night.

Cryptos (Bitcoin Alternatives):

To begin this section, I’d like to reiterate and clarify my position on investing in cryptocurrencies. I have an inherent  mistrust of any investments that are intangible. I feel much better investing in something like a $20 gold piece or a Colt M1911 that I can hold in my hand. They provide an intrinsic sense of permanence. So all in all, I have about the same level of trust in cryptos as I do fiat currency.  Deep down, I know that they both have a chance of reaching a big fat zero value.

With that said, I should also mention that Cryptos still make up about 5% of my liquid net worth. Since February, 2018, I’ve gifted to my children, tithed, and spent on tangibles about half of my Bitcoin. And I acquired nearly all of that Bitcoin before  1 BTC hit $50 USD. I’m also in the process of diversifying about 12% of my remaining Bitcoin holdings into other “long haul” cryptos, whenever their relative value ratios are favorable. (I’m a “buy low, sell high” guy in nearly every facet of my investments.)

Bottom line:  It would be foolish for anyone to keep more than 20% net worth in cryptos, even during a secular bull market.  And the market is still far from yet being in a perma-bull. It is more like an exuberant bull and a terrified bear both strapped into a roller coaster.

One concern the I have presently is that a lot of Bitcoin millionaires and billionaires have been hedging into stocks for the past couple of years.  But being High Rollers at heart, a lot of them are doing so on margin.  This means that if and when the stock markets tank, a lot of these contrapreneuers will have to meet margin calls. So that in turn means that they will be selling lots of Bitcoin, to raise cash, to cover their positions. Yikes. This could cause a brief collapse in the USD value of BTC.

Now, on to a few headlines:

Cryptos are a True Game-Changer ~ Interview Will Lehr on Reluctant Preppers

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From the fine folks at Alt-Market.com: NSA Has Been Tracking Bitcoin Users Since 2013, New Snowden Documents Reveal

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Next, at CoinDesk: Bitcoin Will Be World’s ‘Single Currency’ Says Twitter CEO

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