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 gun auction realized prices. (See the Tangibles Investing section.)
Precious Metals:
Citi: Gold to Hit $1,400 on China, Central Bank Buying
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Russia Dumps U.S. Dollars And Buys Gold As “Safety Metal”. A pericope:
“Vladimir Putin’s quest to break Russia’s reliance on the U.S. dollar has set off a literal gold rush. Within the span of a decade, the country quadrupled its bullion reserves, and 2018 marked the most ambitious year yet.
And the pace is keeping up so far this year. Data from the central bank show that holdings rose by 1 million ounces in February, the most since November.
The data shows that Russia is making rapid progress in its effort to diversify away from American assets. Analysts, who have coined the term de-dollarization, speculate about the global economic impacts if more countries adopt a similar philosophy and what it could mean for the dollar’s desirability compared with other assets, such as gold or the Chinese yuan.
French President Emmanuel Macron said in an interview with CNN in November that European corporations and entities are too dependent on the U.S. currency, calling it “an issue of sovereignty.” Last year, Poland and Hungary surprised analysts by making the first substantial gold purchases by a European Union nation in more than a decade.”
Economy & Finance:
At Wolf Street: Market is Delusional: This is Not a Rate-Cut Economy
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In San Francisco, making a living from your billionaire neighbor’s trash
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From Wolf Richter: A Simon Property Group Mall Generates Largest Loss Ever for Retail CMBS
Stocks:
At Seeking Alpha: Is The Last Call Bell About To Toll For Tesla?
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Market Outlook: Stock Market Is Almost At All-Time Highs, What’s Next. JWR’s Comment: Buckle up!
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What Would Stocks Do in “a World Without Buybacks,” Goldman Asks
Commodities:
Uninsured Farmers Face Existential Crisis As Floods Destroy 100s Of Millions Of Dollars In Crops. “We’re not done. There is what amounts to a wall of water that will cross the state of Missouri, by way of the Missouri River, and meet a rapidly rising Mississippi River,”
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China-South Sudan Oil Deal Raises Red Flags
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Oil Prices Spike On Libyan Violence
Taxes:
The Real Problem with the Blue-State Model. It’s not just high taxes; it’s lousy services, too.
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Few Americans think they’re getting a Trump tax cut: NBC/WSJ poll. But in reality, 80% will benefit!
Tangibles Investing:
While the prices for many collectibles have declined in recent years, most guns have not. In the gun auction world, the realized prices for some rare guns have been phenomenal. For example:
RIA: Past Auction Sales of Rare Firearms Last Five Years.
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Rifle made by Pocatello craftsmen sells for record $260,000
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Cased Colt Walker Shatters World Record at Auction. Here is how the article begins:
“All 250+ padded chairs on the Rock Island Auction floor were filled by 9 a.m. on April 13, 2018, and most of the people in them held bidding cards. Normally, the first morning of a three-day firearms auction gets underway sluggishly, with major trademark makes/models hammering in the low four digits at the 100-per-hour rate. The auction “heavyweights” then start appearing during the late morning/early afternoon. This Friday the 13th was intentionally set up to have a different edge, and everyone in the room could sense it given the pre-auction exuberant chatter—not the normal coffee-induced idle chit chat.
The reason? Lot #60—the finest known, well-documented, and historic-cased Colt Civilian Walker revolver, known as “The Danish Sea Captain Walker,” Serial No. 1022, with original bill of sale “From the Inventor” Samuel Colt. With a pre-auction estimate of $800,000 to $1.3 million, and four auction pages dedicated to the description and provenance, this item went on the auction block at 10:30. Many of the people on the floor were convinced they might witness a world record being set for a single gun sold at auction.”
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Meanwhile, folks are finding some bargains at some of the smaller auction houses.
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 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!
If you’re planning to buy gold over the next year or two, accelerate your purchases and git er done in the next six months or so. Basel III is the new international monetary agreement that has just been fully implemented (March 29). Under this agreement, structured by the Bank for International Settlements (BIS), central banks (governments) can now value their gold at full market value as a reserve asset. Previously, 50% was the value they had to use. This is a major move towards gold as money, and it is the reason the Russians and the Chinese have been buying gold as fast as they could dump US dollars. The days of the dollar as the world’s reserve currency are now officially numbered.
The price of gold has been held down so that the big players could accumulate it at the lower prices. Now they have an interest in starting to let the price go up. Nothing terribly dramatic, say $1,800 by the end of this year. (I’m not promising, just thinking on paper.) This means our cost of acquisition may well rise dramatically. Thus, buy now!
If you’re a stock investor, look at royalty companies. They’re more conservative, sometimes pay dividends, and will probably spike upwards when this news is better understood by the public and the dummies at the news networks.
Doc,
What is a royalty company?
Another royalty company example is BPT. We no longer hold it, but they get paid for pumping oil through their pipeline, and part of the revenue then is paid to shareholders quarterly as royalties. For several decades, it was a steady cash income to our portfolios.
A royalty company will pay a mine owner an up front fee for the right to sell a small percentage of the mine’s output. Some royalty companies take ownership shares of miners, others do not. Because royalty companies are not exposed to the capital requirements of the miners, and because they often pay dividends, they are usually considered a conservative way to invest in precious metals. Note that a couple of the royalty companies invest in base metals as well as precious metals. These stocks tend to be much less volatile than mining stocks.