Economics & Investing For Preppers

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Here are the latest news 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 SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at the price of gold, vis-a-vis the Hong Kong protests. (See the Precious Metals section.)

Precious Metals:

Gold Prices Plunge Right On Cue As China Golden Week Begins. JWR’s Comment:  But watch gold soar, once the Chinese PLA and PAP crack down on the Hong Kong protestors. I predict that will get ugly there on a Tiananmen Square scale, sometime soon. I suspect that the PLA will probably wait until there is a major international distraction elsewhere, and then let slip their dogs of war.

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Hub Moolman: Silver and the Yield Curve Inversion

Economy & Finance:

At Wolf Street: Fed Admits Failure of ‘Plan A’ to Control Money Market Rates, Shifts Back to Repos (which was ‘Plan A’ till 2008)

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H.L. sent us this: Banks Just Changed the Rules of the Negative Rate Game for Danes. A pericope:

Denmark is about to become a test case for what happens when banks start charging a lot of customers to store their money.

That’s because one of the country’s biggest banking groups just changed the rules of the game, by removing the floodgate that had shielded most retail depositors. Until Friday, only people with roughly $1 million in surplus cash at their banks were facing a negative rate. Now, the threshold has been reduced to just over $100,000, with no guarantee it won’t go lower.

Other banks have hinted they’ll follow and economists say the development marks a major shift in how monetary policy will be felt across the economy.

Denmark’s latest response to negative interest rates has made it an even more interesting case study for the European Central Bank. Jan Storup Nielsen, a senior analyst at Nordea, reckons that many hitherto unknown consequences of negative rates will finally play out in the real world.

‘So far, it’s just been a lot of theories about what will happen, but now we get a chance to see it in real life,” Nielsen said. “For the rest of Europe and the ECB this is perfect, because they can let Denmark learn all the consequences and then see what they should decide.'”

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Repo Madness Day 8: NY Fed Pumps $110 Billion of Cash into Market

Commodities:

I see that the market price of nickel was up again on Thursday, to $17,780.  That is below its peak in early September, but still quite strong.  Unless the price reverts to below $14,000, I expect that the U.S. Mint will either drop the cupronickel 5-cent coin from circulation, or replace it with another metal. They simply can’t go on forever, minting nickels at a cost of 8 cents apiece and putting them into circulation at 5 cents apiece. Governments enjoy seigniorage — but reverse seigniorage costs them!

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Goldman Sachs Sees Opportunity In The Shale Crisis

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LNG Investments Hit Record In 2019

Stocks:

There Goes The Second Tech Bubble: 2019 Set To Be The Worst Year For IPOs In History

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Over at Seeking Alpha: Netflix Has A 60% Problem

Tangibles Investing:

I’ve recently been diversifying my gun collection into more pre-1899 production cartridge guns from the 1890s. These include:

  • A Swiss Model 1896/11 rifle.  (Chambered in 7.5 x55 Swiss.)
  • A Colt Lightning saddlering carbine made in 1884 or 1885. (.44-40)
  • A M1896 U.S. Krag Cavalry Carbine. (.30-40 Krag.)
  • A 1944 dated Finnish Sako M39 Mosin-Nagant that was built on a 1895-dated hexagonal receiver. (7.62x54r)
  • A Mauser Model 1891 made by the Ludwig Loewe company. (7.65x53mm Argentine Mauser.)

Note: I plan to post a feature-length article early next year, with my detailed recommendations for pre-1899 antique gun investing. I consider these great investments, especially if a Federal ban on private party sales ban on modern (1899 and later) guns is enacted. Speaking of which: Please repeatedly contact both of your U.S. Senators and President DJT and tell them “NO, NO, NO Universal Background Checks!”

Provisos:

SurvivalBlog and its Editors are not paid investment counselors or advisers. 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 closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News from local news outlets that is missed by the news wire services is especially appreciated. And it need not be just about commodities and precious metals. Thanks!


4 Comments

  1. Fortunately for the EU, Denmark is not a part of the EU as is GB, but only in a limited way. The Danish Crown (Kroner) is still in circulation. The Danes have a proclivity for being a bit independent, thank goodness. Even their immigration policies remain conservative relative to the rest of Europe, yet this tiny country cannot insulate itself enough from the economic and social problems of Europe.

    Denmark still has a population of less than 6 million. So Denmark is the perfect place to see how negative rates will play on an economy. The ill effects would have a small impact on the EU. Yet could the EU help out tiny Denmark? Perhaps temporarily. With ties to Deutsche Bank and their massive derivatives debt, the National Bank of Denmark, Den Danske Bank, could not escape the mayhem ahead. I would advise Danes to buy a boat, and a vacation home on their biggest island Bornholm. Old farms there, are now at rock bottom prices, particularly in Klemsker. It is the perfect redoubt for Danes. And for the Swedes, Goteborg. But the Baltic is rarely an easy sail. Move now.

  2. Tech IPO’s, one has to wonder why anyone would buy stock in a company that has a record of losses for all it’s previous years on the say so that they will become profitable. Valuing a losing company for billions of dollars is a joke. The profit and loss ratios are often upside down and going nowhere. Companies like Uber, Tesla etc. are mired in debt and never going to get out of it, beware of investing in proven losers the great Uber debacle was just made worse by California eliminating the ability of companies to hire independent contracts and requiring them to be considered employees. I know that the legislators thought that they would be generating more tax revenue but with the normal short sighted democratic knee jerk reactions they have opened them selves up to new ever increasing demands on their social welfare programs. ie. Uber will have to raise the costs of rides to cover these new expenses, most likely causing a decrease in volume, increasing costs and more red ink on the balance sheet. This will result in more costs to the state to provide welfare assistance to the independent contractors that are no longer working. It will also increase the costs to the state directly as it will throw all the people that are independent contractors that they use on their direct payroll, Adjunct professors at the junior colleges ( over 70 %) will now have to go on the payroll with all the normal benefits packages.
    Keep in mind that the only real winners of these IPO’s are the management and the early financial partners will be able to divest themselves of their worthless stock options and be rewarded for creating a worthless company, The Brookland bridge seems like a better investment.

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