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 The Great Unwinding. (See the Economy & Finance section.)


Precious Metals:

Gold At 6-Month Low, But Metal Is Now Oversold

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Peter Hug: Gold Stabilizes But Strong Dollar Remains Obstacle To Higher Prices

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Russia Buys 600,000 oz Of Gold In May After Dumping Half Of US Treasuries In April



Summer Solstice Blues: Dow drops about 200 points on trade worries, extends losing streak to 8 days



Thursday’s Forex Analytical Charts, June 21

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Forex Alchemy: Intraday analysis 21st of June 2018



This $575 Million ICO With Royal Backing Is So Crazy, It Might Be Real

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Crypto Cries Foul In Wake of Tether’s Dollar Token Report


Economy & Finance (The Great Unwinding):

US Fed should slow its plans to shrink balance sheet, says Urjit Patel. JWR’s Comments: The Great Unwinding of the Central Bank balance sheets and higher interest rates will cause huge ripples in financial markets around the world.

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The recent Supreme Court decision South Dakota v. Wayfair, Inc. sent shockwaves through the Internet.  States can now demand sales tax on internet sales transactions, even when a business has no presence in that State. Ouch!  45 States charge sales taxes. This decision will probably create a boom in Internet businesses relocating to those other five States. Guess what? Two of them are in The American Redoubt. (Oregon and Montana.)

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The yields on 10 Year bonds issued by the government of Turkey have been jacked up to nearly 16% in recent weeks.  When any government must  offer rates 10% higher than most others to find willing buyers, then that indicates a serious underlying problem.


Tangibles Investing:

Craftsman knifemaker shines in the morgue and kitchen both

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America’s Most Celebrated Knife Maker Is Just Getting Started



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!


  1. I can’t see any business wanting to relocate to Oregon personally, sales tax or no. The state is as blue as California, with a population and politicians whose policies are openly antagonistic towards businesses in general. The state is noxious.

    Montana, on the other hand, has very real possibilities.

  2. First, Taxation Is Theft accomplished via the threat of the use of force by the government.

    I do not understand your premise that companies with internet sales will move to states that do not collect sales tax. My understanding of the ruling is that now these companies will be forced to collect and remit taxes based on the destination of the sales. For example, your Montana based company would now be required to collect a remit taxes to the appropriate Texas authorities when selling to my Houston address.

    Is my understanding of the implications incorrect?

  3. JSW, The way I understand it is that if I have a biz in NC and you buy something via the intertubes from me then you will pay NC sales taxes (more accurately, I may now be forced to collect the tax from you by NC state law) as though you were at a physical store in NC. But you bring up an interesting question. Let us know what you find please.

    The commerce clause has been shredded already and is now officially good nothing but toilet paper. Not surprised at all the SCOTUS has gone full Lincoln by allowing interstate tariffs. And before you say these will not be used as a tariff, prove it!

    1. Fred, my read of the news stories is that South Dakota wanted to tax internet businesses in other states that sold to people resident in South Dakota, and the Supremes agreed. I think they made a serious mistake from a business point of view, since internet businesses will now potentially need to collect sales taxes for thousands of states, cities and towns, rather than for the state where the business sits. The Court decision leaves small businesses potentially open for taxation by both their home state and others, which, in combination with the accounting required to pay taxes all over the country, will drive prices higher.

    2. Fred, sales taxes ARE tariffs. They are a tax, tariff, on commerce. Always remember, and never forget, we the people pay all taxes, all of them. Even the taxes that employers pay in our names, social security and medicare, are in actually taxes we pay. They are just a hidden tax that does not show up on your pay check stub. You still pay them just the same.

      Old Paratrooper is absolutely correct. The states that have a sales tax also charge a “use” tax. Supposedly if you buy a tangible good outside of your state, you are supposed to remit the “use” tax to your state government. The “use” tax usually is the same rate as your state sales tax. As example, if I buy a lawn tractor in Ohio and bring it back to Michigan, not only do I pay the sales tax in Ohio, I’m supposed to pay the “use” tax in Michigan. No body actually does it, but you are considered a tax cheat if you don’t. The “use” tax is now to be collected on internet sales, upfront. I’m just waiting for the next SCOTUS decision that allows for taxation where the product you buy online is not only taxed in the state where you live, but also taxed in the state where the seller is located, and then again in the state where the product is located if not the same location as the seller.

      In actually the three liberal members who voted against this decision were the correct ones. There argument was that it is not up to SCOTUS to make this call, it is or should be in the hands of congress. I think it was the three women justices. Unfortunately sometimes the “conservatives” on the court get it all wrong.

  4. “Russia buys 600,000ozs of gold…”

    Alternate headline: “Russian buys 5.7%(roughly 19 tons out of 328) of total yearly domestic production to subsidize failing miners”

    Best comment on the gold/silver conundrum from the posting of this article on ZeroHedge:
    “Think about what you are believing. Do you really think any commodity can possibly be put on sale for decades without depleting the supply? Another way to look at it is, if selling it at fire-sale prices for decades can’t deplete the supply, then it was never really a bargain. After all, things are put on sale to get rid of inventory.”

    Grandparents-if you had invested $100,000 in Netflix(NFLX) ONE year ago (up 170% in just 52 weeks), you could have paid, IN FULL, for 4 years of an engineering degree for your grandkid without ever touching your original investment…Talk about being the hero!

    Yes, I know, I know…”but when the collapse comes…”

    1. Hmmm. I always thought that supply essentially came out of the ground. Sometimes it is cost effective to dig for it. Sometimes not. That which changes for money between individuals doesn’t exactly disappear. It merely changes hands at a certain price. Demand causes it to go up or down but not disappear. And this is the history of most commodities over time.

      The same will happen to both gold and silver. And what’s a fire-sale price? It’s a lower price than what you bought it! Which means nothing to the overall supply. I’ve been on both sides of the equation. Timing is everything when you buy and sell something.

      I thought differently when I was younger but now I believe that is best to think of it as
      something to access when things go south (short of the end of the world) held in
      small units to exchange for other things when the crisis arrives and will get you through

      I read that Texas has now opened its coin and bullion holding site (sorry I forgot the name) and it’s open to anyone from anywhere. They eventually hope to have something akin to a debit card that you can use for purchases and will draw on your holdings there.
      Others may wish to look into it. Everything under the mattress only goes so far.

      My understanding of the sales tax is mixed. Wanted to order something from single
      small business and emailed if he would be charging sales tax (he was in Nevada) and
      he said no. If I had ordered it my tax would have been the Nevada sales tax and the state of Nevada would collect the tax for Nevada only not California where I live.

      I get the same info on line when I look at national gun sites. They all seem to have been clear that you would be taxed only if you lived in state from which it was being sold. I
      love no tax. On the other hand it never seemed fair to those conducting business offline with one hand tied behind their back. IMHO

      1. You are correct, supply does indeed come from the ground. Which is why Russia only bought 5% of their annual domestic production ($750 million for 18.75 tons) with the proceeds from the sale of $40+ billion in Treasuries. They know there is plenty left in the ground. If supply were a problem, I imagine they would have bought all 328 metric tons of domestic plus whatever they could buy, beg, borrow, or steal from around the world.
        The article, like many written by gold hucksters, attempts to imply that a relatively small purchase (for a country), should be seen as something earth-shattering, to sell the gold that they overpaid for. A small loss shared with a “greater fool” is better than a big loss enjoyed alone.

        The context of the full comment I quoted was that until physical supply goes to zero, we will never know what the true price of gold or silver is. The author states that it may actually be over-valued (price up-rigging) based solely on the fact that years of cheap prices have failed to strain supplies. Beware the salesman that sells his “limited supply” at a discount. Chances are there is plenty more where that came from.

        And yes, everyone should have a small amount of gold and silver on the .01% chance things go terribly sideways.

        1. To really understand the value and the problems of gold and silver you have to buy it (best if you buy a lot of it) and hold it until it is worth so much that you would be a fool not to sell it. That could be 20-30 years. You will question your decision everyday of those 20-30 years. But then one day an event will change everything overnight and your $20,000 investment is worth $100,000 and your world changes overnight.

          Here is the thing. Those who are opposed to owning PM’s will harp on it everyday that the economy holds together and they will cherry pick good stocks to compare with PMs. It’s fun, like when you were 8 years old and made fun of your sister (or brother). But most of what the nay sayers tell you is useless. Just remember that you don’t want to spend money you need to live on PMs, that you may need to hold it for longer than it takes to raise a family and most importantly when it becomes very valuable it will be like winning the lottery. You can pay off the mortgage, buy a motorhome and travel, take interesting vacations.

          1. Anon,
            I understand the theory and appreciate your opinion but you are speaking of a hypothetical situation, granted a fantastical story if it comes true, but for now, just that, a fantasy. “Hey honey, I spent $20k on silver bullion that may be worth $100k at some time in the future if the entire global economy crashes” or “Hey honey, the $20k we spent on that property in 2012 just sold for $92k”.
            I’m retired at 47 because of real estate and stocks my father forced me to buy when I was fresh out of high school in 1988. Had I purchased silver or even gold the outcome would have been totally different.
            I get it..”If” the economy crashes, “when” the dollar collapses maybe PM’s will have some value. But I’m not going to tie up capital that could be making me money now based on some dream that the world is going to implode in the next 18 months.
            I appreciate your advice and I do hold a small amount of gold and silver just in case. I know better than to say it will never happen, I just believe that you and I will be long gone from this place when it does.

  5. OldParatrooper,
    Thanks. This will likely, then, drive millions of small garage businesses out of biz. This is an awful development. The state I’m in has no income tax and most revenue is from sales. Thus municipalities, as you state, have their own add on sales tax rate. I can pay 3 different sales tax rates on the same item across the street and around the corner. How on earth, once municipalities demand their cut, can a garage biz afford the accounting time or fees to a pro?

    It’s the slow communism of gradually making everything the same. Go to any town. Same 30 branded stores and 10 branded restaurants on every corner. I shop and eat local mostly because this modernity is 1) ugly and 2) the product is mediocre. I fear this will happen to our interwebs stores. Ugh. The future is a controlled and moderated bore of sameness. Sad.

    1. I guess you don’t understand. Yes! I really did spend $20k on silver (actually a lot more) and it was worth $100k (actually a lot more) a few years later. YES it really works. You just need to know it can take a long time. I am poised to do it again. Your argument is legitimate in that PMs are not for everyone. BUT when I was a child my parents had a large box of stock shares that my grandfather had owned which became worthless after 1929. So stocks aren’t for everyone either. Everything has it’s risks.

  6. Oh, and, I suppose these small biz’s are now to collect taxes for their locality AND the shipped to address? Is this taxation without representation? Sure thing it is, dear slaves.

    1. In Georgia, there are many sales tax exempt classes, for resale ( one business to another), for government agencies, and interstate commerce ( sales to out of state buyers). So I would only have to collect sales tax from the buyer for their state under the new opinion. One of the biggest problems will be collecting the correct amount depending on which county or city someone lives in. It is already an issue here if I sell something to someone in another county, I have to collect their added tax rate and file it on the form. I only have to remit the state amount to the state and the individual counties amount all on one form. I don’t even want to think about trying to find out what to collect in another state, it’s enough trouble here as it is.

      1. Something just occurred to me reading your comment. Do you smell a national sales tax packaged as ‘the solution’ by congress? Nothing dot guv does is in a vacuum. Only a fool would still believe that. Hmm?

        1. Hello Fred,

          That may well be the outcome, but I don’t see the states giving up their income that they control from sales taxes and other sources like income tax, etc. So we may well wind up paying more than one tax.
          This is the case in some of the ” more civilized” countries such as Canada and the UK.
          Canada has about three layers of taxes on items sold, and the second layer tax is charged on the item after the first layer is added, and so on. That is one reason things cost twice as much there as here.

          On the note that nothing is done in a vacuum, a few years ago the constant complaints ( mostly from northerners who moved here) about paying ad volorem taxes on automobiles every year resulted in a new system that collects more money every year by collecting a huge tax up front at the time of sale. This applies to every vehicle every time it’s sold, even if it was repossessed and resold. This really hurts the buy here pay here lots as they have to pay that tax, even if the buyer only keeps the car a month or two before they have to go get it back.

          This also bit my mother when she transferred the titles from my fathers name to hers so she could sell them after his death.

          In summary, yes, the gov’t will find a way to use anything to their advantage either more power or more money or both.

          As a business owner I am of two thoughts about online sales. One is they are killing my parts business, but I can get over it as parts were never a big part of my profits anyway. Two is that I buy things online that are obsolete and can’t be found through my regular channels, so it helps there, but not enough to offset the other losses.

          On another note, the form I fill out to remit my sales tax collections has a section for me to pay the sales tax for items I bought out of state for personal use. In the future, anyone, business or not may get one of these forms. It won’t be enforceable unless the state has knowledge of what you bought or even that packages were delivered. the upside to that will be millions of new jobs ( nationwide) for “inspectors” or ” investigators” to keep up with it. At the current rate of the increased surveillance state, this may not be too far fetched.

  7. Well D.D., in my observation the collapse is here… the US dollar.

    I look at the things I normally purchase and compare their price to a year ago. Except for the fire sale in guns and ammo, most of the rest is 12 to 15% above where it was last June. Fresh food, restaurant meals, stuff at Walmart, property all are there.

    Russia is dumping dollars, as are many other countries. Silver and gold are not keeping up to the dollar devaluation.

    1. I agree Wheatley. I just left Kroger and shopping for steaks was like shopping in a diamond store. Funny, since the beef cattle farmers tell me prices are very low.

      I do have some gold and silver but I’m no longer a buyer unless silver goes sub-$10 and gold goes sub-$1000. I sold 600 ounces of silver last fall when spot briefly hit $18.26. Most of what I sold had been bought when spot was around $14.

      In my opinion, if silver ever goes to $100oz, a loaf of bread will be $12.50 and the riots will have already begun.

      1. “if silver ever goes to $100oz, a loaf of bread will be $12.50 and the riots will have already begun.”

        Probably not. In the late 70’s silver was $50 an ounce. Given the value of a dollar and inflation since then that is like silver at $200 today. No riots, bread was under a buck, most people who didn’t own silver were unaware of what was going on.

        My best guess on the next crisis that will affect PMs is that the left must crash the economy to win the next few elections. They are running out of time for this year (but could still pull it off). So sometime between now and 2020 they will cause a crash.

  8. One of the companies I worked for went out of business because of sales taxes. They were required to have separate bank accounts for each taxable entity: each city, county and state; they were subject to audits at any time by those separate units. It reached a point where the business came last. When they finally liquidated, they had demands for nonexistent tax proceeds for several months after there was no business.

  9. Charging sales tax on internet sales will do less for states than they think and could be a drag on their economy. All it does is shut out little guys. The loss of local income will more than offset any gains from sales taxes.

    Nor will it do anything for brick and mortar stores. When I buy online (which is often), it is not about taxes or price. It is about time and ease. Even if I could avoid a sales tax, I would not waste hours and gas doing so.

    America and all of the developed world has a spending problem, nothing is going to fix that short of a complete currency collapse and reset. That is why some people are buying real assets and taking some of their wealth out of the game. If your “All Hat and No Cattle”, don’t worry about it!

    The market can remain irrational longer than you can remain solvent.

  10. Admittedly ignorant on investments and recently got inheritance money. Any experienced PM investors with opinions of $10K to $50K investment via insured purchases from reputable companies such as Rosland Capital, Augusta Precious Metals, Leer Capital, APMEX, JM Bullion, Silver Gold Bull, and/or other reputable company to recommend?

    Concerned of buying from local coin shops etc as I don’t want to be a potential robbery target if local word got out. Also, I prefer to have on hand shipped insured to my anonymous PO box for keeping in home/office safe opposed to portfolio paper or stored in bank safety deposit box. Recommendations appreciated.

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