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 Tesla’s “Battery Day”. It is scheduled for tomorrow: Tuesday, September 22, 2020. (See the Commodities Investing section.)
Precious Metals:
Monday morning update: Silver took a big 9% dip this morning, to $24.42 per Troy ounce when I last checked. So this is a good time to buy! By the way, a phone call to New York confirmed the following: The word on the street is that stocks got hammered so hard yesterday that brokers are liquidating commodiites to raise cash, in order to meet their margin calls. That is an ugly suituation. But again, it provides a short-term buying opportunity for those with cash.
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Interview: Reality matters; why all-time high gold price was not ‘real’
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Gold Miners Forecast: Major Breakout Underway
Economy & Finance:
Charles Hugh Smith: This Is How It Ends: All That Is Solid Melts Into Air
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At Seeking Alpha: Wells Fargo boosts targets for GDP, stocks and oil
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At Wolf Street: What’s to Be Done Now with All These Zombie Companies?
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And over at Zero Hedge: FOMC Signals Rates Unchanged Through At Least 2023 Despite GDP Forecast Upgrade. JWR’s Comment: Do the buffoons at the Fed honestly believe that if they continue forcing rates artificially low, year after year, that it won’t lead to malinvestment, distortions in the bond market, and the eventual destruction of the U.S. Dollar?
Commodities:
Tesla’s “Battery Day” is scheduled for tomorrow: Tuesday, September 22, 2020. There is some good market analysis over at Seeking Alpha: Tesla Battery Day: Out With The Cobalt, In With The Manganese. Here is an excerpt:
“It’s no secret that Tesla (TSLA) is aggressively valued. It has ballooned to more than a $300 billion market cap and neared half a trillion at its highs. It’s forward P/E is over 100, more than 10 times higher than mature vehicle manufacturers like Ford (F) or General Motors (GM). In order to maintain that kind of valuation, Tesla has to meet sky-high expectations of a society-changing electric vehicle technology that can be produced profitably while being affordable for consumers. It has been on this path so far, but there are still more challenges to overcome.
One major roadblock for Tesla and electric vehicles in general is their high cost relative to gas-powered combustion engine vehicles. In order to truly dominate the vehicle market, the company has to find a way to reduce the sticker price of its cars. One of the most obvious ways to do so is to reduce the cost of the battery. I believe that Tesla is on this path and will be announcing a cobalt-free battery at its much anticipated Battery Day coming up on September 22. My guess is that the cobalt will be replaced by less costly materials such as an increase in nickel content to at least 90% and introduction of manganese.” [Emphasis added.]
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Current State of Electric Vehicle Battery Technology
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OilPrice News reports: China’s Oil Demand Recovery May Be More Impressive Than Thought
Forex & Cryptos:
Ray Dalio Warns of Threat to Dollar as Reserve Currency. Here is a snippet:
“Dalio said in July that investors should favor stocks and gold over bonds and cash because the latter offer a negative rate of return and central banks will print more money. Bridgewater has been moving into gold and inflation-linked bonds in its All Weather portfolio, diversifying the countries it invests in and finding more stocks with stable cash flow.”
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EU to throw London lifeline with extension to coveted clearing
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Australia central bank to maintain ‘highly accommodative settings’ – minutes
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There are a lot of new crypto offerings scheduled for October. Most of these are token-related. One new token-based payments utility system that has been mentioned looks promising: Mobile Pay.
Tangibles Investing:
An observation of the real estate market: For many years economists have used the term The Velocity of Money. That term describes a measure of the number of times that a Dollar is used to purchase goods and services within a given time period. That is one measure of the “heating” of the national economy. I’d like to coin a new term, in corollary: The Velocity of Real Estate. Presently, we are seeing real estate listings turn over very quickly, nationwide. This is obviously a precursor to much higher prices. And, unlike the deflation for prices of technology, the super-heated real estate market is a signal for the advent of general price inflation. One thing that is driving the Velocity of Real Estate is conservative urbanites fleeing the liberal cities and suburbs–and they’re largely moving to much more rural regions. The wise ones are now leaving in huge numbers. To make all that happen, then a lot of real estate has to change hands.
If, by chance, you are subdividing or for some other reason selling a piece of rural property, my advice is this: Put your “dream price” on it. In today’s super-heated market, you will probably have some one who comes along that is willing to to pay that dream price, or close to it. – JWR
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A good analysis, on video: 2020 Ammo Shortage: How It Got Bad So Fast
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Rock Island Auction Company is now making digital editions of their heavily-illustrated catalogs available free of charge. When you pair these with their realized price sheets, they make a valuable reference on the current market for antique guns.
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 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!
Velocity of real estate! We live 60 miles east of Dallas and the term applies here. Old cow pastures are being bought up and sub divided, some have a small stock tank and are being marketed as waterfront! Wealthy Dallasites who now work from home or are close to retirement are moving in.
Sadly, my hay man is selling his field, he said he is getting too old to work that hard.
“JWR’s Comment: Do the buffoons at the Fed honestly believe that if they continue forcing rates artificially low, year after year, that it won’t lead to malinvestment, distortions in the bond market, and the eventual destruction of the U.S. Dollar?”
I do believe that the destruction of the US Dollar is Intended… Look for a digital currency to be offered as a replacement. It may not be called a “Dollar”, but rather some other term which will not carry the onus of a deliberately failed currency.
Got trade goods?
I am by no means an economist – heck half the articles on here are way over my head. Please correct me if I’m wrong, but I was always lead to believe that there was an economic triangle, in which you could only ever really control 2 sides. Money (the amount being printed/created), interest rates and inflation.
Given that the government is creating debt (printing money) at an unprecedented level, and they’ve announced that they are intending to hold interest rates at, or close to 0% until 2023, does that not mean that inflation will be free to occur? I really do not believe that they can artificially control/manipulate all three of the corners.
Somebody smarter than me, please jump in here and explain to me how they can’t wind up destroying the dollar with their machinations. And please keep it in layman’s terms.
God only created economists to make the weather forecasters look good…
Jet Fuel Is Now So Cheap It’s Being Blended for Use by Ships
Elizabeth Low and Ann Koh
Mon, September 21, 2020
https://www.yahoo.com/finance/news/jet-fuel-now-cheap-being-210000851.html
The same nagging voice in the back of my mind, that told me to buy guns and ammo last year, is now telling me to buy fuel… PSA had great deals that I just couldn’t resist…
I have only used 22 gals in the past seven months, while working remotely from home, fuel is plentiful, and I have no viable storage capability.
But, still, I have this urge to store fuel in mass quantities…
Am I picking up some kind of unconscious signs of coming shortages, or price hikes? Or is it just that it is such a good deal right now, compared to past years…
A problem with storing fuels is there are usually all kinds of federal, state, and local regulations to follow such as containment in case of a leak. Depending how much you want to store I believe most regulations are null and void if you invest in pickup truck mounted tanks. Most are rated for diesel only but there are also DOT approved tanks for gasoline transfer. Since they are mobile they are probably not considered storage. Both can be found in the 100gal range.
Remember the advice in JWR’s books. Buy large underground tanks be sure these have hidden or concealed pumps.
Also – for smaller storage you can bury 55 gallon drums, and place inside of them 30 gallon drums full of fuel – tightly sealed. Bury for temp stability. Keep airtight to prevent fuel from degrading and water accumulation. Consider addint stabil for longer term storage.
I will add that I have seen some nice 15 gallon drums for sale locally, used, priced only 10 dollars…. tight sealing bungs. That’s a man-portable size and weight – and could be loaded onto a truck full if needed. Both for water, and fuel.
God bless.
Anyone here know how to safely drain a propane tank and use it to hold diesel?
Thanks and God bless.
If you know it’s empty unscrew the valve and fill the tank full of water. After you have drained the water it should be safe to take a torch to it. Then you can cut a hole in it and weld on a 2 or 21/2 inch pie to be used as a filler inlet. Use a threaded pipe so that you can use a screw on cap. You will also need the same thing but smaller diameter as a vent. That worked well for a guy I know.
Thanks!
Modern chain saws require a minimum octane level. The best way to preserve fuel for chain saws is to get Avgas and store it in 5 gallon jerry cans, or other metal 1 gallons cans that have a very tight sealing lid. Don’t have the time to prove all the reasons why. Another good option if you can afford it, is to purchase a product like Trufuel from any of the big box stores. They advertise a shelf life of 5 years. I prefer the Avgas option, because I know what I am dealing with. Avgas is currently the purest form of gasoline that also has the highest octane rating, and therefore has a much longer shelf life than petrol intended for automobiles. The third option is storing high octane non ethanol premium gas in metal cans. Plastic breathes oxygen, and will degrade the fuel faster. A tight sealing cap or lid prevents the benzine, that is necessary to start a motor, from escaping. Light fuels such as benzine can be replaced by bubbling propane into the old gas. If the propane is being absorbed, the small bubbles will not reach the surface. Once saturated with propane, the bubbles will reach the surface. Store it underground in a place that is similar to a root cellar that is temperature stable and has a low humidity. Coating the metal can with paint, tar, or an light or heavy oil will preserve the metal.
Speaking of economics and investing: I just invested in some .30 carbine at PSA. That’s 1080 rounds in ammo cans for $389 plus taxes and shipping. Promised myself I’d get a case when it became available. Even .30 carbine is hard to come by. Just check their Daily Deals section. Still in stock as of 5:30 PM eastern time.
I´m very impressed how skilled Wolf Street paints half of the picture about germany and ignores the other!
The bankruptcy rules´ve been “slackened” for businesses during the virus and most german bussinesses are middle class or small
I prefer using PRI-G for gas, eliminate all air space in the container, seal with gasketed bung using a bung wrench.
Refresh with PRI-G annually. I’m using 15 and 20 gallon plastic barrels from car wash places. Annual re-treating with PRI-G is cheaper than metal can purchases.
I’m using 2 year old fuel now for gardening. I’m using up my containers now, preparing to get all new high octane before prices explode. Fully agree now is the time.
God Bless
Question- How long can I store kerosine treated with STABIL? Thanx, good info here.