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 risks of another economic depression. (See the Derivatives section.)
Precious Metals:
Video Interview: Why gold will hit $2,000 within two years according to Nolan Watson
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Gold, silver prices rally as storm clouds on horizon
Economy & Finance:
Buckle Up, Folks! Global M&A Plunges To 3-Year Low Amid Recession Threat
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China Will Rein in Hong Kong Through Its Economy. JWR’s Comment: And if that doesn’t work, they’ll deport the international press and start busting skulls.
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Recession or Slowdown? Why You Should Care About the Difference
Derivatives:
Ol Remus at his Yer Ol’ Woodpile Report weekly blog pointed me to this from George Ure at Urban Survival: The Calm Before the Witch Trial – Sunday Calculus. Here is an excerpt:
“President Trump is reprising the mistakes of Herbert Hoover. And, we’ve been pretty sure for a few months that Elizabeth Warren will reprise Franklin Delano Roosevelt as the Newer Dealer. And she will be pressed by a socialist mob (as was Roosevelt) and like him, she will likely have to face war with China in the 2024 period, just as Roosevelt did.
That means, Warren (or whoever) (or Trump in round 2) will have to really focus on defense.
Our plan is to buy defense stocks after a crash. War is the traditgional economic medicine and the “death industries” do well before the sh*t starts to fly.
What’s different today is the out-of-phase echo of Teapot Dome, which happened well before Hoover’s time. And yet, just at we have Hoovervilles, there are people calling out Trumpvilles in places like Seattle. Not enough free lunch yet.
Core problem of Modern Times is “the Middle is Gone.” What I mean is, you either take the dole OR you work 100-hours a week. The 40-hour week middle is still there – on average. But have you looked for a 40-hour week job, lately? Most come with 20+ additional hours if you want to keep the job.”
and, later in the essay:
“…we likely have a ton of beliefs about the solidity and robustness of the global interconnected economies with hyper-complex derivatives overhanging, that are just waiting to fail when put to a ‘real, uncontrolled stress test in real time.’
And should any one of those assumptions fail, it won’t be like a single bank (think Deutsche) going down. Nor would be be a region going bust (thing the European Union). It will be (replaying 1929) where the whole world implodes.”
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“It’s Time To Start Hedging Election Risk”: This Is How One Bank Is Doing It
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Forex & Cryptos:
At Zero Hedge: As Dollar Reaches Record High, Trump Slams “Clueless, Pathetic” Fed
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The Banking Industry Cashes in on the Crypto Craze
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Top German Bank Predicts Bitcoin to Hit $90,000 After Halving, Calling It ‘Ultrahard Money’
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!
Re: The articles from Kitco.
I am starting to find that site, and goldsilver.com, to be more of a sales and marketing ploy than really plausible prognosticators of future PM demand and prices. Of course PMs will go up – eventually. Kitco has been predicting huge price increases for years now and all their drum-beating has not made it happen. Obviously the people running the show have an agenda which totally ignores what the gold bugs wish would happen.
In much the same way that bitcoin is going to be worth $90,000. I think cryptos are never going to be “worth” squat. They may COST more and more, but who of us is really going to be investing in things we can’t see or trust to be there if the lights go out. Investing in cryptocurrencies is speculation, more wishful thinking. 21st Century Tulip Bulbs.
So true!
I always have a good chuckle when reading the predictions of silver and gold pushers. They spend 99% of their time yelling from the rooftops about the downward manipulation of prices through the use of options contracts, yet when the price goes up, it’s as if the Almighty himself has reached down to right the wrongs, completely ignoring the fact that it’s those same options that have caused the price to rise. The traders make money on the way up and down and don’t actually care about price.
Does it really matter what silver cost today in US dollar? In 1960 you could buy a gallon of gas for a silver quarter. Today you can also buy a gallon of gas with the value of a silver quarter. That trend will still be there 20 – 30 years down the road at what ever the cost of silver hits.
Kitco WOULD be right… if J.P. Morgan and the other banksters, weren’t shoveling “paper silver & gold (ETF’s)” out the door, as fast as they can reload the copiers. ONLY when that House of Photocopiers collapses, will we ever know the REAL value of metallic gold & silver in the 21st century…
Hedging primary elections? Look at long term options(leaps) for evidence of moves to protect. The only real protection is PM’s,foreign bank accts.,second passport and residence and crypto currencies.
CM Dutch,
You are right about the actual value of precious metals. In 1912 you could buy a higher end Ford car for 800 silver dollars or 40 gold double eagles. Today you can’t buy the higher end Ford car for 800 silver dollars. However, you can buy that higher end Ford car or maybe even a Lincoln for those same 40 gold double eagles. Some things still equate to what silver bought way back when, some things equate to what gold bought. There has been a separation between the two. The difference between the past and now is the Federal Reserve and their meddling in the value of money.
We used to have a stable economy, BTF (before the fed). There were always spikes up and down, but it always worked itself out and remained stable and consistent because the value of money did not change. Recessions and depressions were of very short duration and the markets sorted themselves out in short order. There was little to no inflation. The free market actually worked. ATF (after the fed), inflation was built into the system. The value of money only started to change when 1933 came and gold was removed from circulation. It still stayed relatively stable until 1965 and there was almost no silver in circulation. So the precious metals held inflation in check for the most part. Now inflation is a permanent part of the system, built in, and the value, purchasing power, of money is less every year than the year before. Can we say rigged game? It is rigged against us.
I’m with Ron Paul. End the FED, stabilize our money basing it on a basket of precious metals, then let the free market actually work it’s magic.
[ caution == downer alert ]
Let’s start at the beginning:
Fiat currency has zero value.
The statement “…the value of money started to change…” gives the impression printed papers hold value. If paper money has some imaginary intrinsic value, my local gun shop owners would gladly accept Venezuela government promises or Zimbabwe government promises as easily as Bitcoin promises. Clearly, to the gun shop owners, the value of firearms and components exceeds some arbitrary ‘value’ the bankers assign to fiat currency by changing the number they print on it.
As one commenter here mentioned, the bankers operating the ‘photo-copier’ machines are cranking-out paper money 24/7/365. Their hope somebody will accept that paper is based on ThePerpetualGrowth theory… inside a closed system! For one example, according to engineers, we passed Peak Oil in the 1950s; fracking is propped-up by the bankers loaning fiat currency to frackers… and we are witnessing that decline hourly.
Without oil, our factory-farms collapse.
Without oil, our fishing industries collapse.
Without oil, our militaries collapse.
Without oil, transportation returns to horses and walking.
Inside a closed system, this contraction is inevitable.
But! but! but! what about TheMainStreamMeadia pronouncements of immense oil fields ‘discovered’ off Brazil! All the new shale extraction methods developed by Canadians and Russkies!
You are kidding, right? Distrust TheMainStreamMeadia on all other stories, but believe them on this? Nope.
The Energy-Return-On-Investment is shrinking.
Producing burnable oil products is rapidly approaching 1:1; it costs as much to produce it as consumers are able to pay for it.
Without profit, growth collapses.
Without growth, bankers cannot collect interest on loans.
Without loans, bankers have no reason to exist.
To re-cap:
The bankers assign an imaginary made-up ‘value’ to scraps of paper by slightly modifying the inked numbers printed on the paper.
Bankers are not in business to make friends.
Indeed, bankers do not trust bankers.
For a current example, look into the over-night “Re-Po” lending rates bankers use.
The bankers understand the ’embarrassment’ of being the last doofus holding promises from other bankers.
Similar to stocks and bonds, fiat currency merely establishes an actionable interest in durable tangible goods in your possession. Examples are farm-land, tools, domesticated animals, food, meds, and the security to protect your possessions.
The last example is your time, the amount of hours you can invest in producing something to trade for food, meds, security.
Your time is your most valuable possession.
Your second most valuable possession is your ability to produce viable off-spring… a child with skills and experience.
For years of simple explanations advocating moving out of being the last doofus holding paper money, read:
* BisonPrepper James M Dakin.
His ‘hermitage’ advice mirrors Remus of WoodPileReport… avoid crowds.
You own something as long as you can hold it in your hands.
Or you could be the last doofus proudly owning a vault of fiat currency.
Ask a banker for her / his choice.
But don’t expect an honest answer. Because bankers.
Thank you for your comments. Wonderfully said!
Gold and silver are tangibles that have held value and purchasing power over the many years.
The prices fluctuate at the whim of the markets traders, for reasons even they don’t understand and can’t explain.
When the SHTF arrives I sure don’t want to be holding dollars.PMs are under valued currently.If you can buy consider fractionals.
If you don’t it hold it,you don’t own it.