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. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at the recent huge swings in beef market prices. (See the Commodities section.)
Precious Metals:
New PayPal Policy: No PayPal Buyer and Seller Protections for Gold Purchases
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Silver prices have made their highs for the year – ABN AMRO
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The Potential Looming Catalyst for Silver No One Sees Coming
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Gold simmering a break above $1750 – TDS
Economy & Finance:
Homebuyer mortgage demand spikes to 11-year high, as rates hit another record low
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BOE Path to Negative Rates Is Lit by the Experiences of Others
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The US Treasury Will “Pump” Another $1-Trillion Into Economy This Month
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At Wolf Street: This Better Be the Bottom for the Goods-Based Sector in the US
Commodities:
E.E. sent us this: BEEF readers reeling from ‘COVID Crash’. The article begins:
“What a difference a year makes. A year ago, BEEF readers were looking forward to better prices, better times and bigger herds. Just 12 short months and a little bitty virus later, the outlook is decidedly different.
That’s the bottom line from BEEF’s annual State of the Industry survey. In the up and down world of the beef business, 2020 will very likely be remembered as the ‘COVID Crash.'”
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OilPrice News reports: Oil Markets May Not Fully Recover Until 2022
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U.S. Is The Surprising Winner In China’s LNG Market
Derivatives:
Just for perspective on the notional size of the derivatives markets, take a look at this: Comparing The World’s Money and Markets
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Video interview with the ISDA’s Scott O’Malia: What’s Next for Derivatives Markets?
Forex & Cryptos:
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Chinese Officials Say Bitcoin Doesn’t Make the Top 10 Cryptocurrencies. JWR’s Comment: But of course, consider the source — since China has announced planes to soon release a sovereign (state controlled and monitored) crypto currency.
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Crypto Rating – Top Cryptocurrencies 2020
Tangibles Investing:
COVID refugees bring mini-boom to some Wyoming real estate markets
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Wealthy Havens Lure Homebuyers in ‘Mad Rush’ From San Francisco
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Economist predicts density decline as COVID causes folks to exit urban cores
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 only about commodities and precious metals. Thanks!
What is PayPal’s motive or reasoning for not allowing gold transactions? A governmental command? Social Justice pressure?
I don’t think it bans you from buying physical gold it will not be covered under the buyer protection plan.
It won’t be included in the “seller” protection plan. Thats kind of a big deal.
Yup.
So when you get that gold plated lead “coin” from that brand new seller, you have no recourse.
Who uses PayPal? I know that up here they are rabidly anti-gun. When it first came out some guys used it at gun shows, and PayPal froze their accounts. Had to go through a lengthy legal process to get their money back for using PayPal to sell legal goods.
This really extends to an important conversation about what is or not protected with regard to transactions. People may be surprised to discover what’s written into the fine print.
What is Paypal?
Before buying gold, especially gold coins do your research.
Start with SurvivalBlog advice. Here is JWR’s advice from May 21, 2006. (Still good advice) … “Letter Re: Content of Gold Bullion Coins and Numismatic Gold Coins”
“JWR Replies: Thanks for that advice. I generally prefer bullion coins rather than fractional gold coins such as Sovereigns and $20 gold pieces. The latter sell for numismatic premiums, which is disadvantageous. And because they have fractional weights, determining their value on any given day is more difficult. For the same reason they will probably be less accepted in post-collapse barter transactions. (Although as I’ve stated repeatedly, silver is best for barter coinage because gold is too compact a form of wealth!)
Readers are warned: If you buy gold bars or ingots, buy only serialized bars and have them assayed. Beware of faked gold coins. This is typically done with Chinese Pandas that are sans a milled rim. Any coin with a milled edge is hard to fake, since that is where the “mold line” of a cast fake would be. (A mold line can be easily polished off of a coin with a smooth rim, but it is far more difficult to do on a milled edge.) My general advice is to buy widely recognized gold bullion coins such as U.S. Gold Eagles, Canadian Maple Leafs, South African Krugerrands, or Australian Kookaburras.
Buy whatever variety of gold coin is at present the most widely recognized gold coin in your country. Here in the U.S., that means the U.S. Gold Eagle or the Krugerrand–not $20 Double Eagle gold pieces. (I’m no expert, but I suspect that in England that would mean the gold Sovereign. In France the “Rooster” gold franc. In Switzerland, the “Vrenelli” gold franc.)
The bottom line: Buy only from reputable dealers, never buy gold Pandas, and if it is a bullion coin, only buy coins with milled edges!”
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As I understand, Tungsten is commonly used to counterfeit gold. [It has something to do with ‘Mass’ ‘Atomic Weight on the Periodic Table’ or something like that.] The dimension for a specific weight of Tungsten is similar (quite close) to a comparable sized piece of gold.
Just a quick comment on your last two lines about Tungsten:
“Gold has a density of 19.3 g/cm3, almost identical to that of tungsten at 19.25 g/cm3; as such, tungsten has been used in counterfeiting of gold bars, …”
The above quote came from the following link about the periodic table of the elements.
https://www.ptable.com/
You can click on “W” for Tungsten or “Au” for Gold as those are the IUPAC short names for those two elements.
Interesting article about supply of coins. https://www.usatoday.com/story/money/2020/06/20/coronavirus-shortage-coin-supply-pennies-nickels-dimes-quarters/3230828001/?fbclid=IwAR1WgCLEL6Y8EgVYcFF5h8Z09fb9cYhHEFdkfw0HbdtZOQMyXbpgS2EKPe4
The article from BEEF Magazine was interesting with regard to the anecdotal survey-style reporting about changes ranchers are making within the industry. Stocking supplies should there be shortages coming. Making essential purchases only. Reorganizing to decentralize and sell direct-to-market (or off-farm).
Also interesting were the remarks about time to raise cattle. As much has our society has become acclimated to “Just In Time” provisions, the luxury and convenience of this does not reflect the realities associated with processes that require time simply by virtue of their nature. Raising calves to market ready stock is a great example of this. Any interruption — weather events, crop failures related to feed, disease among the animals themselves, or pandemic conditions affecting people — can create a much longer term set of supply chain problems.
This same line of thought (and understanding) should be applied to other concerns. Rare earth mineral mining is an example. When companies in the U.S. essentially abandoned this work (and the country failed to recognize the importance of maintaining the infrastructure related to it), we created a problem for ourselves not widely understood at the time. Today we understand how important it is to have capacity in this regard, and are working in that direction, but find ourselves facing a long timeline to recovery (and great financial expense).
As a country, we need to be much more aware, forward looking, and prepared.
T OF A,,,,,as a “Rich” “cattle baron”HA HA I at times reflect that when all the counting is done that I might make more money picking up bottles and cans along the road for recycling, and have a lot less grief and get better sleep, we still have not sold last year’s calf crop , but then it’s only money HA HA again
The market report today showed that box beef prices went down some more to 203$ from a high of 473 last month ,good for you the consumer bad for the beef producer,two years ago live wt ran around $144hw , we are now looking at 95 to 93 hw
How long can you last when it cost you $135hw??
For some the check won’t cover what’s due on the bank note let alone the taxes
Not hard to see what comes next,,,,
I hear the GATES FOUNDATION is buying ranches for natural areas ,
A strong coffee day ,like cowboy coffee,you know melt the spoon stuff
Hello Oldhomesteader!
Thanks so very much for sharing your insights based on real world experience as a rancher. I am really interested to hear your thoughts about what changes to the world of cattle ranching would make the markets healthier for everyone. Anything you would like to share… I am interested and all ears!
On a fun family note. My Great Grandfather who came to America as a young man began his life here working for a foundry, but returned to his love of horses and mules after relocating to the Great Plains, and later became a cattle rancher. In fact, he and 20-some-odd others traveled to a new area (across state lines to another part of the Great Plains) where they homesteaded land for this very purpose. It was among his great life adventures, and filled with tremendous hard work and sacrifice. There was a lot of hardship too in those times. Although I have never known a ranching life myself, I have a deep respect and appreciation for all those who are ranchers — and thought it would be nice to share this with you!
re:
[cattle] herd values from this economic lock-down
Why are TheMalignantOverlords* crashing the global economy?
What are they gaining?
The last time I owned a television set was sometime last century.
I have zero interest in televisionprogramming.
I realize I miss a lot of programming without that influence.
Accordingly, I hope to hear theories from ‘the better informed’.
Here is my theory:
— “This economic lock-down is culling the global human population.” —
Without statues, without heritage and culture, after the initiative and drive to improve and explore is bred-out of our species…
…the herd is easier to manage.
I hope to hear your theory!
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* the term ‘Malignant Overlords’ is from SeaGypsyPhilosopher Ray Jason.
The one world government crowd/communists/anarchists/depopulation crowd are definitely trying to use the China Virus to attain their goals. Not the least of which is to take away our liberties. We CAN’T go to church, work, sporting events, restaurants, the movies, school, and in many states, we have a LOCKDOWN. And when we go to public places such as the grocery store, we must wear a mask and play follow-the-leader (6 feet apart) on one way aisles. Look at the states with the highest death tolls from the Kung Flu and see which party their governors belong to. These are not coincidences. Are they ?
Marge: My theory is that when aliens fly past earth and see what is happening they lock their doors.
Yes LM, it is all about globalization. I believe we are at or very close to the end times as prophesied in the Bible. One world government, one world religion and the mask of the beast coming soon.
“Mask of the Beast”- you have hit the nail on the head.
You are correct, Marge. And if you notice the economic shutdown has targeted small business for enforced poverty while enriching the box stores, the big restaurant chains, and leaving certain businesses open while shutting down small local businesses. Restaurants (mostly chains) that have a drive thru were OK. Mom and Pop diners, cafes, etc. were forced to only allow take out. Many of them will be closing up soon, along with many other ‘non-essential’ businesses. Meanwhile, the cruise-ship industry, the airlines, and other huge corporations are being bailed out. And not being mentioned, the largest banks will be getting most of the bailout money. And the money is being debased so badly that even the government thinks it is so CHEAP that they can give it away- to us lowly taxpayers. Maybe that way we will not notice the vast changes being dictated to us that take away our freedom.
Tangible Investing: Good for the folks that have the means and ability to move out of the inner city cesspools. I think that most of us would do the same thing if we were in their shoes.
This migration may be of benefit to everyone involved from a financial and economic standpoint. Sure some of them will bring social and political agenda that will not work.
When people see how we live it will be a wow moment for them.
Notice that I said “may.”
Derivatives.
Been looking at this stuff for years. Names of numbers, and numbers followed by a long trail of zeros do not represent the global debt as well as does the graphics used by this website. Don’t miss this site recommend by JWR today:
“Just for perspective on the notional size of the derivatives markets, take a look at this: Comparing The World’s Money and Markets”.
https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/
Using BEEF magazine to explain the beef crisis is like trying to get N.C.B.A to help out the cow-calf producer. The have the big four packers in their back pockets , right along with Trump and Sonny! The packers in the us have control of 80% of all the beef slaughtered . Europe’s big packers only control 36% of total slaughter. There was very little interuption in their meat supply chain . Before covid the packers were enjoying margins aroun $600 per head . Margins during Covid was reported at around $1400 dollars a head while producers prices have nosed dived. Trump opened up imports from Namibia during the covid crises as well as signing Canada- New Mexico deal that opened the gate to more imports. Over 20 countries import cattle to the U.S. and we can’t get Country of Origin reinstated. Cow calf and feedlots have been losing money for several years before covid. There is a constant and sustained effort by our own govt. as well as so called beef organizations to close down beef production in the U.S.