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 investing in Pre-1965 Silver Coins. (See the Tangibles Investing section, near the end of this column.)
Precious Metals:
Clive Maund: ‘The Most Bullish Set Up for Silver that I Have Ever Seen’ (Thanks to H.L. for the link.)
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Precious Metals Weekly Report – April 09 2018 : Motilal Oswal
Forex:
China Is Studying Yuan Devaluation as a Tool in Trade Spat
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What Next for Pakistan After a Second Currency Devaluation?
Economy & Finance:
We Understand The Chinese Government Has Halted Purchases Of US Treasuries”: SGH. JWR’s Comments: Think this through, folks: This change could be the tipping point ending stable, artificially low interest rates. The People’s Republic of China has been the single largest foreign buyer of U.S. Treasury paper. Once the You’re-a-Peons realize that they can hold out for a higher yield from the U.S. Treasury, then they’ll get it. And that could start a very ugly sequence of events: 1.) A stairstepping of interest rates, leading to… 2.) A dampering down of our economy, leading to… 3.) Spiking interest rates, leading to.. 4.) The U.S. National Debt becoming unserviceable– at least without more monetization (QE), leading to.. 5.) A full-blown credit crisis, leading to… 6.) Wholesale Monetization (“QE to Infinity”) , leading to… 7.) A Dollar crisis, leading to… 8.) Mass inflation, leading to… 9.) A Dollar collapse, leading to… 10.) Something like a novel I once wrote.
Watch U.S. Treasuries yields very closely, folks. Those will be the barometer of the entire global economic weather system, for the next couple of years.
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U.S. inflation expectations flat after gains: NY Fed
Where Politics and Economics Meet:
Dick’s Has Trouble Filling Shelf Space As Sales Sag
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The number of Delta Air Lines passengers who bought tickets with NRA discount: 13
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Citigroup Issues Gun-Control Rules for Its Clients and Business Partners
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And here is a company with more scruples that didn’t change course to match the political breezes: Wells Fargo resists pressure to stop offering banking services to NRA, gun makers
JWR’s Comment: I strongly recommend that SurvivalBlog readers boycott Dick’s Sporting Goods, CitiBank, and Delta Airlines. Shame on them! In contrast, Well’s Fargo deserves applause for showing some backbone.
Tangibles Investing (Pre-1965 Silver):
Up until 1964, the U.S. Mint produced circulating 90% silver dimes, quarters, and half dollars. Sometimes mistakenly called “Pre-’64”, these coins are actually Pre-1965 silver coins. Although you will occasionally find a silver half dollar, most of these coins have been hoarded by the American citizenry, in accordance with Gresham’s Law. (“Bad money drives out good.”)
I still prefer circulated pre-1965 silver coins for barter for three reasons: 1.) Because they have generally-recognized value by the American populace, 2.) They have a fairly low markup, and 3.) They have a very low likelihood of ever being counterfeited.
Most local coin shops will have pre-1965 silver on hand. They generally consider well-worn circulated coins to have little or no collector value. Hence their derisive name “Junk Silver”. As non-cellectible coins, they sell essentially at their bullion or “melt” value. That is the way to buy them.
Compare prices before you buy. It f you buy locally, it is best phone several shops, and ask: “What percentage above spot are you charging for pre-1965 circulated silver?”
If you have the choice between dimes, quarters, and halves, then I recommend that you buy quarters. That way you avoid the heavy wear (read: loss of weight) often seen with dimes. And you will also avoid any confusion with 1965 or later mint date half dollars, which were composed of only 40% silver.
What Are The Coins Worth?
The melt value of these coins change daily, closely following the spot silver market.
Here is some data that you should print out and keep in your reference binder. Most of what you need to do to calculate coin melt values is simply shift decimal places…
90% .50/.25/.10 bags ($1,000 face value) contain approximately 715 Troy ounces of silver.
So at today’s spot price (in early April 2018):
$16.53 spot x 715 ounces = $11,881.95 for a full $1,000 bag (Or just think of it as 11.8 x face value.)
You can find detailed coin specifications at Coinflation.com. (These are useful if you’d rather calculate coin values by the gram.)
The Handy Formulas
And here are some handy conversion formulas:
Grams to pennyweights, multiply grams by .643
Pennyweights to grams, multiply pennyweights by 1.555
Grams to troy ounces, multiply grams by 0.32
Troy ounces to grams, multiply troy ounces by 31.103
Pennyweights to troy ounces, divide pennyweights by 20
Troy ounces to pennyweights, multiply troy ounces by 20
Grains to grams, multiply grains by .0648
Grams to grains, multiply grams by 15.432
Pennyweights to grains, multiply pennyweights by 24
Avoirdupois ounces to troy ounces, multiply avoirdupois ounces by .912
Troy ounces to avoirdupois ounces, multiply troy ounces by 1.097
Avoirdupois ounces to grams, multiply avoirdupois ounces by 28.35
Grams to Avoirdupois ounces, multiply grams by .035
Note that $1,000 face value bags of 40% silver half dollars (with 1965 to 1970 mint dates) contain approximately 296 Troy ounces of silver.
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. So please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
Today Bank of America announced that they will no longer loan money to companies that manufacture ‘assault weapons’ for the civilian market. https://www.bloomberg.com/news/articles/2018-04-10/bofa-will-no-longer-lend-to-some-gunmakers-vice-chairman-says
“China Is Studying Yuan Devaluation as a Tool in Trade Spat”
They did this in 2016 and markets turned negative but recovered rather quickly. Of course in ’16 Wall Street had a fed put and QE 12 (or whatever it was then). That punch bowl has been removed. This time would likely roil markets much more significantly even in this (supposed) strong economy.
China has aspirations about the Yuan being the worlds reserve currency. Despite assurances from our global masters, the ChiComs don’t like us much. This will not go well for the US in the long run.
I understand about boycotting Dicks Citiecorp, and Delta, (and now B of A?) (I see these as no great loss). But you left out almost all of the major car rental organizations. Which include (but probably is not limited to) Avis, Hertz, Enterprise (which is parent to Alamo and Dollar)and Budget. (I would appreciate correction on any of these if I have misspoken.
Interesting thing about Enterprise is the founder is a U.S. Navy vet who served on the Enterprise, so obviously he has taken the oath to “protect and defend from all enemies foreign and domestic” Really sad what we will do for the business model at the expense of our country, culture and freedom
In your cascade of events a key moment is that of rate inversion. When short goes higher than long term rates the record is 7 out of 7 times that a recession was triggered.
Precisely!
More details:
“…an inverted yield curve (where longer-term rates become lower than short-term rates) has a good track record of forecasting recessions. Each of the seven recessions over the past 50 years was preceded by the Fed hiking short-term rates enough to invert the yield curve (as measured by the difference between 10-year and 3-month Treasury securities).”
https://lplresearch.com/2017/06/29/does-a-flattening-yield-curve-mean-were-headed-for-recession/
and:
“An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates. The last two times the yield curve inverted was in the years 2000 and 2006 before each of the last recessions.”
https://www.cnbc.com/2017/06/05/inverted-yield-curve-predicting-coming-recession-commentary.html
I’ll say it again. The stock market and the economy won’t handle 3 percent short term rates, which is the target by 2020. I’m not saying that they should or shouldn’t handle it, or that they can or can’t, they won’t. No amount of ivory tower pin headed academic models or historical analysis can change this.
I agree with Bill Holter that the selling of treasuries by China would be fairly easily absorbed by the US just as they currently buy US debt instruments, i.e. it is not a material weapon against the US. What IS a weapon that has received little comment is that the gold and silver market of COMEX can be bought for pocket change by Russia and China and all they have to do is demand delivery to crash the entire Potemkin system and pave the way to exposure of the paucity of US precious metals holdings and the strength of Russian and Chinese holdings. The implications for the US currency and fiscal structure would be existential. And not a shot fired.
The fed is the second largest buyer of treasuries and it has an unlimited check book through dollar creation. This is not inflationary if sterilized. The fed will buy all of the treasuries it needs t at whatever rate it would like to cap. There is no china bond buying boycot rate spiral. It cannot happen.
Has anyone thought that governments will go cashless if things get tight?
That one action will make silver, gold worthless.
And all dollar assets will be under government control.
Lastly, since I know people quote Scripture, how does the Anti Christ cause all people to have the mark and no one will be able to buy or sell without it in a world that has a collapsed economy?
The future requires a higher tech, not chaos.
I disagree. Gold and silver will be the basis for the underground economy when the Fed goes cashless. Precious metals will always have value. The underground or barter economy always exists. In modern parlance that would be called the “black market”.
In history who creates the conditions for the black market to rise? Always and without failure it is the actions of governments that have created the black market and all the crime and corruption and all the associated deaths and destruction that surround it. Excessive regulation, excessive taxation (think cigarettes in New York, remember Eric Garner), and as always, prohibition. Think, the war on alcohol in the 1920’s, the war on drugs for the last 80 plus years, the increasing war on gun ownership eventually leading to prohibition, and finally the war on cash in the 21st century. Governments do what they do, the results are always the same, history is always ignored, and the powers-that-be just don’t give a s**t.
You forgot they’ve done it before(outlaw pm)and that was when a lot more was circulating.
Charles, would you trade food for silver or gold? Would you trade your weapons or ammo for gold or silver?
If or when Governments go cashless just like when FDR confiscated gold, anyone found with it was punished in the extreme.
Anyway, it’s my belief that if gold hits the $2000 per ounce or the silver it’s $100, than buy tangibles that have multiple purposes. There will be the time to get great value from PM’s but wait to long, you will lose.
And just because Governments go cashless doesn’t mean your money is gone, it just changed forms.
In fact I rarely see people use actual money anyone. The pay via phones or their computers.