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 [1]. Today, I’ll describe the risk of a fourth major crisis for 2020: A banking and derivatives market collapse. (See the Derivatives section.)
Precious Metals:
First off, the latest from South African metals analyst Hub Moolman: Gold New All-Time Highs and Beyond [2]
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83 Tons Of Fake Gold Bars: Gold Market Rocked By Massive China Counterfeiting Scandal [3]. JWR’s Comment: Which is worse, morally? The Chinese stacking fake gold, or the U.S. Treasury claiming a fake tally for hundreds of tons of gold that no longer resides in the Fort Knox vaults?
Economy & Finance:
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US Bankruptcies Busting Out to Match 2009 Peak Mean Trouble for Stock Market [5]
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Fed Reveals Bond Purchases Including AT&T, UnitedHealth, Walmart [6]. JWR’s Comment: On the macro scale of the markets, these are quite trivial bond purchases. (Millions, rather than Billions.) What is troubling is that the mechanism is now in place for much larger purchases, in some future crisis.
Commodities:
H.L. sent us this: USDA Crop Report Shocker Sends Corn Futures Surging [7]
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COVID Impact – 1.5 Billion Pound Potato Mountain Trapped In Supply Chain [8]
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Visualizing Thirty Years of Crude Oil Prices [9]
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Huge Debt Payments at Worst Time for Canadian Oil Drille [10]rs
Derivatives:
Frank Partnoy, writing in The Atlantic: The Looming Bank Collapse [11]. This article begins:
“After months of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there’s another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed.”
JWR’s Comment: I consider a banking crisis fairly likely, even though bank deposits are presently at an all-time high. The trigger will be counterparty risk in the derivatives called Mortgage-Backed Securities (MBS). Note that this happened before, on a smaller scale, in 2008 [12].
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At Wolf Street: Mall and Hotel Loans Are Blowing up Commercial Mortgage-Backed Securitie [13]s
Forex & Cryptos:
At Yahoo Finance: Covid-19 Isn’t Killing Cash. People Are Hoarding More of It [14]
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Where’s the beef? Lebanon’s currency crash puts desperation on the menu [15]
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Another from H.L.: US Mint Ups Coin Production To Circumvent Shortage [16]
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What Death Spiral? Bitcoin Hash Rate Surges to Fresh All-Time High [17]
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Venezuelan Authorities Seize Over 300 Bitcoin Mining Machines [18]
Tangibles Investing:
The June, 2020 tally: A new record for U.S. gun sales [19]. (3.9 million background checks!) An excerpt:
“The National Instant Criminal Background Check System conducted 3.9 million checks in June, an increase of 70 percent over June 2019. Last month’s numbers broke the previous record of 2.7 million checks set in March.
Already this year, the FBI has recorded [20] 19 million background checks in the system, more than were recorded during first 14 years of the system, which has been operating since 1998. Only six months into 2020, the surge in checks is already nearing last year’s record of 28 million background checks.” [21]
If sales continue apace, then I’d estimate there will be about 38 million gun sales for the year 2020. To put that in perspective, that is about 1.5 times the population of Australia or just under the current population of California — in one year! Or, to picture it another way, that is eight new guns for every “net” new citizen born or immigrated this year. Any leftist politician who believes that it is possible to disarm the American populace is suffering from severe delusions.
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The Hill reports on the accelerating suburban and rural relocation rush: Americans leave large cities for suburban areas and rural towns [22]. (Thanks to J.L. for the link.)
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos [23] page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR [1]. (Either via e-mail of via our Contact form [24].) 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 items from local news outlets that are missed by the news wire services are especially appreciated. And it need not be only about commodities and precious metals. Thanks!
Comments Disabled To "Economics & Investing For Preppers"
#1 Comment By Matt in Oklahoma On July 10, 2020 @ 10:42 am
In ref: Gun Purchases
While politicians might not be able to disarm you I find the majority of those I’m working with, seeing at the range, training etc are seriously lacking in ammunition, magazines and spare parts. While many here may own more than a few mags I’m betting the average is under 6 because of the lack of them with others.
It seems that the budget for ammo goes elsewhere to toys and nonsense when ammo can’t be found and range time is not happening due to the lack or the virus. It should be still spent wisely in parts, mags upgraded holsters, lights etc.
Also $40 in airsoft goes a long ways in your backyard as well. It doesn’t have to be the exact copy of your pistol because at the end of the day a gun is a gun and it’s just excuses for misses.
#2 Comment By Onesharc On July 10, 2020 @ 12:05 pm
I agree with Matt. Finding ammo now is expensive. With gun shows being canceled and postponed, gun stores are usually low or not available for ammo in quantity. Recently found a web site FWIW for ammo. Have not used it. [25]
Would recommend that you shop around and book mark several ammo web sites.
#3 Comment By Chris On July 10, 2020 @ 2:58 pm
I use ammoseek quite often. It even has a shipping + handling rating on each selection. That is important to me because what looks like a good deal can evaporate if shipping costs are too high.
#4 Comment By Chris On July 10, 2020 @ 7:03 pm
Field & Stream/Dicks Sporting Goods in my area had Remington 9mm for $12.99 per box of 50 yesterday. I would not be surprised if it’s all gone now. I bought a 1000 rounds. Probably should’ve got more.
#5 Comment By Mickey d On July 11, 2020 @ 5:23 am
Sportsman’s guide is also a good source and has free shipping on orders over $50.00 when you are a member even for ammo.
#6 Comment By Joe On July 10, 2020 @ 1:30 pm
The recent activities of the Federal Reserve are an excellent example of why the framers of the constitution prohibited the formation of such a crooked outfit. Bankers running the country’s money supply: what could possibly go wrong? Do not worry that banks will go bust, only the common man will suffer, the Federal Reserve Bankers always protect their own unless they want some low hanging fruit at a bargain price, ie. Lehman Brothers. The last criminal banking issues of 2007-2008 as well as Wells Fargo’s continuing malfeasance are prime examples of banks out of control backed by the Federal Reserve. Purchasing bad bonds from failing companies with “our money/credit” is criminal activity and should be investigated. Devaluing our currency can be laid at their feet also. There will be a day of reckoning for these criminals, I only hope it happens before they take us all down with them.
#7 Comment By ThoDan On July 10, 2020 @ 3:15 pm
They forbid that un which text of the constitution?
#8 Comment By Joe On July 10, 2020 @ 4:27 pm
Article 1 sections 8 and 9 are clear as to who may borrow public money.
#9 Comment By ThoDan On July 10, 2020 @ 5:54 pm
I read there nothing, that forbids an National Bank
#10 Comment By James Wesley Rawles On July 10, 2020 @ 7:37 pm
To clarify: Our Constitution has the 10th Amendment, which limits the power and scope of the Federal government. If a power/role is not enumerated in the Constitution, then it is reserved to the States, and to The People. There is nothing about a National Bank in the Constitution.
#11 Comment By ThoDan On July 10, 2020 @ 11:25 pm
Thank You
#12 Comment By St. Funogas On July 10, 2020 @ 5:40 pm
“Permit me to issue and control the money of a nation, and I care not who makes its laws!”
— Mayer Amschel Rothschild
#13 Comment By Andy in AL On July 10, 2020 @ 2:33 pm
I have noticed that for the past few years that sales of chickens and gardening supplies has really boomed. One local store used to keep a few bags of chicken feed on the shelves but now they have several pallets sitting out and people buy them all the time. This tells me that people are worried about the food supply and are doing all they can to become their OWN food supply. The big media outlets and most folks in DC are ignorant or just ignoring such trends among the populace. Thankfully Survivalblog has been doing a valuable service for many years.
#14 Comment By Matt in Oklahoma On July 10, 2020 @ 3:32 pm
Chickens and rabbits have BOOMED!
#15 Comment By Telesilla of Argos On July 11, 2020 @ 1:29 am
The same is true in our area… Even though there are some who continue to disregard the risk signals, many are worried — and taking action to protect their households (food and other supplies, defense capabilities, etc).
#16 Comment By Tom in Oregon On July 10, 2020 @ 3:53 pm
Re: firearm purchases.
I was in my lgs a few weeks back and I was #920 or so in the background queue.
That took 2 business days to clear.
Yesterday, they were up to 4,000 and change in the queue.
The employee told me it’s taking around 10 days now to clear.
A friend of a friend has a few MSR’s for sale at a great price, so I’m picking up a couple.
(Humming the song to ‘final jeopardy’ as I type this.)
“A right delayed, is a right denied”
#17 Comment By Vickie On July 10, 2020 @ 4:21 pm
Ref: Corn Report Shocker. In the good old days( last year) most of the major grocery stores
had case lot sales usually twice a year. I spoke to a Albertsons manager yesterday and he
indicated that those sales will never happen again.
If you live in an area that has a Super One Store the prices on canned corn,green beans,
pork n beans,and diced tomatoes are still at case lot prices (.48-.50 per can). The product
is store brand and grown and processed in the USA.
When the bottom falls out whatever you have on that day may be all that you have for a very
long time.
#18 Comment By Anonymous On July 10, 2020 @ 9:44 pm
“When the bottom falls out whatever you have on that day may be all that you have for a very long time”
don’t forget to keep up with your vehicle tires ….
as for food, during the last panic the toilet paper and rice and water disappeared right away, but it was another two weeks before the pasta disappeared, then another two weeks before the spam and tuna and canned goods disappeared. and during the entire crisis the baking goods aisle was always full except for the bisquik – all the cake and brownie mix was there, along with all the cooking oil and olive oil. asked someone about that and they said this generation simply doesn’t bake anything and doesn’t know how. so unless people have learned their lesson then there’s likely to be quite a bit on the shelves for some time.
#19 Comment By ThoDan On July 10, 2020 @ 11:32 pm
As if you could use olive oil only for baking and if it would be such a good idea to bake brownies in a lockdown or quarantine.
Normal flour did disappear from the shelves
#20 Comment By Telesilla of Argos On July 11, 2020 @ 1:21 am
From your post: “When the bottom falls out whatever you have on that day may be all that you have for a very long time”
A very important thought to consider carefully, and one that should motivate action toward being more solidly prepared than ever before.
#21 Comment By Telesilla of Argos On July 11, 2020 @ 1:24 am
An interesting insight from the Albertson’s manager… In addition to stocking up, we hope everyone will also acquire the means of food production to the extent this is possible, and people are able. Commercially purchased stocks will help build a bridge. Gardens and hen houses (among other options) will help make the development of ongoing and affordable food supplies much more sustainable.
#22 Comment By Once a Marine… On July 10, 2020 @ 4:56 pm
You pose an important question, JWR.
Which is worse, morally? The Chinese stacking fake gold, or the U.S. Treasury claiming a fake tally for hundreds of tons of gold that no longer resides in the Fort Knox vaults?
Of course, we are told in scripture that there is only one who can judge.
To me th situation says to be very careful around investing in stuff you can’t hold in your hands and in trusting any government to be honest.
Carry on in grace
#23 Comment By TWP On July 11, 2020 @ 12:48 am
FYI, the link about the “mountain” of potatoes is failing.
#24 Comment By RED On July 11, 2020 @ 2:26 am
Ice age Farmer
Talks about food shortages
Rural King / Tractor supply still have chicks They have been marking them down to $1.00 My son got 40 more for .50 each
Woman said they never had chicks this long into the year
Sams club has no limit on rice in 25 lb bags at $9.48 each
15 bags will fit in a 55 gallon barrel and you need to 2 barrels a month to feed 15 people under $300 a month
ps. BUY SOME LIVE TRAPS FOR coons we lost 9 chicks the other week and caught 6 coon so far
#25 Comment By howdy On July 11, 2020 @ 3:33 pm
“Sams club has no limit on rice in 25 lb bags at $9.48 each”
I wouldn’t eat it. I grew up in a major rice-producing area, I’ve seen all the dioxin they spray all over those fields. no thanks.
#26 Comment By Red On July 12, 2020 @ 11:48 pm
You can say that about a lot of crops what are the spraying on it
What rice would you buy then ?
What is the cost ?
If you do not grow it yourself they can tell you anything they want
You will never know what was sprayed on it
Thanks for the info
#27 Comment By Paul On July 13, 2020 @ 5:16 am
Chris,
Your heart was in the right place, but be advised that Remington under-loads their 9mm ammo about 180 feet per second compared to Winchester, Fiochi, or Federal. For the money, Winchester White Box 9mm 115 gr is plenty hot.
If I want my girls to get lots of practice handling stoppages, I run them on Remington Yellow Box trash for a while. Failures to feed and stove pipe malfunctions abound. Switching to Winchester, the problems fade away.
Best remedy is switching them to .40 S&W Glocks and all problems disappear. The girls never complain about the “vicious recoil” of the .40 S&W I hear about from a few males.