Here are the latest 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 JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on investing in Rhodium.
Precious Metals (Rhodium):
Rhodium is a metal that is substantially more rare than platinum. Back in February of 2016, I recommended investing in rhodium, because it had declined to just to $670 per Troy ounce, in defiance of price fundamentals. But what a difference we’ve seen, in 23 months! When I last checked at Kitco, rhodium had risen to $1,570. That is not a bad return on investment! The restoration of the price of rhodium to its historic norms vis-a-vis the other precious metals is instructive. Watch the long term norms and trends. Buy in the bargain basement. Sell when things are clearly over-priced. (By the way, I won’t consider rhodium truly overpriced until it gets above $4,000 per Troy ounce again.)
When a commodity price bucks a trend, it usually returns to the trend within a year or two. The old saying in the commodities pits is: “The trend is your friend.” Just keep in mind that rhodium has seen some huge price swings since 2000, so it should just be a small part of your portfolio. There are of course some exceptions to relying on measured long term price trends. For example, the advent of hybrid cars and pure electric cars is creating new paradigms in the metals markets. New battery technologies will create new demands for particular metals. And it is presently difficult to predict which battery technology will eventually predominate. Clearly, some trends gradually morph, over time.
Here is another example: The ratio of silver to gold found in the earth’s crust is essentially a constant–around 18-to-one. But what is available above ground is another matter. The amount of silver industrially recovered (recycled) from the electronics industry is trivial compared to the standard practice recovery of gold, in all industries. So in the long term, a lot of silver is ending up in landfills. By the year 2100, I anticipate that the price ratio of silver to gold will decline to around 15-to-one. Even by the year 2040, it should be below 40-to-one. It is presently a whopping 78-to-one. So I’m primarily investing in silver, not gold.
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The S.S. Central America Hoard, Round 2: Gold treasure recovered from 1857 shipwreck to make debut. (Thanks to Gregg P. for the link.)
Stocks:
The old saying on Wall Street is: As goes January, so goes the rest of the year.” This is known as The January Barometer. But some analysts say that is a myth. But if holds true for 2018, then based on the January 26th market closing figures, then it could be quite a year in Bubble Land. As I’ve noted before: Be sure to have stop loss orders in place, because when a bubble this big pops, it will do so quickly! A Bank of America analysts has warned that the U.S. is presently on the cusp of a recession. Major market sell-offs inevitably follow. Be ready for this!
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Economy and Finance:
Next, at MarketWatch: Trouble ahead? What four recession indicators say about the economy
Tangibles Investing:
This article is a bit dated, but still instructive: Investing in Stamps: The Facts and the Fiction
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. So 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 particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
“By the year 2100, I anticipate that the price ratio of silver to gold will decline to around 15-to-one. So I’m primarily investing in silver, not gold.”
Is this date correct? That’s 82 years in the future, my grand kids might enjoy my treasure chest I leave them I suppose.
I have just expanded my post with further clarification, as follows:
The ratio of silver to gold found in the earth’s crust is essentially a constant–around 18-to-one. But what is available above ground is another matter. The amount of silver industrially recovered (recycled) from the electronics industry is trivial compared to the standard practice recovery of gold, in all industries. So in the long term, a lot of silver is ending up in landfills. By the year 2100, I anticipate that the price ratio of silver to gold will decline to around 15-to-one. Even by the year 2040, it should be below 40-to-one. It is presently a whopping 78-to-one. So I’m primarily investing in silver, not gold.
PM markets are heavily manipulated,prices are below extraction costs and don’t reflect the energy expended or the usefulness of the product. Silver has over 40,000 uses and above ground supplies are falling with limited resupply. Ratios will adjust from market forces or be forced(crimimal prosecution for manipulation or fiat crisis) the time frame could be much shorter than 80 years.