Economics & Investing For Preppers

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 investing in light sabers. (See the Tangibles Investing section at the end of this column.)

 

Precious Metals:

Gold Still To React To U.S. Dollar Weakness, Watch For A Move Higher — Analysts

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A good market fundamentals article by Stefan Gleason, that dates back to late 2018: A Tale of Two Metals: One WAY More Valuable Than Gold, The Other Historically Undervalued

Economy & Finance:

Alan Greenspan says economy will start to fade ‘very dramatically’ because of entitlement burden.  A quote:

“Economic growth won’t last as the U.S. labors under the burden of growing entitlement programs and weakness around the world, former Federal Reserve Chairman Alan Greenspan told CNBC.

The long-time central bank chief repeated his warnings about the weight that Social Security, Medicare and other programs are having on what have been otherwise solid gains over the past few years.

‘I think the real problem is over the long run, we’ve got this significant continued drain coming from entitlements, which are basically draining capital investment dollar for dollar,’ he told CNBC’s Sara Eisen during a Squawk on the Street interview.

‘Without any major change in entitlements, entitlements are going to rise. Why? Because the population is aging. There’s no way to reverse that, and the politics of it are awful, as you well know,’ Greenspan added.

While he said the economy looks ‘reasonably good’ in the short run, he expects that over the longer term, growth ‘fades very dramatically.'”

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Goldman “Recalibrates” Fed Forecast: No More Rate Hikes Before 2020 Election

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$2,198,468,000,000: Federal Spending Hit 10-Year High Through March; Taxes Hit 5-Year Low

Commodities:

Next, at Zero Hedge: Volatility Dead Ahead In The Oil Market As Gamma Goes Vertical

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Prepare for $80 oil this summer as ‘wounded bulls’ rise, RBC warns

 

Cryptos:

Coinbase Launches Crypto Visa Debit Card for UK and EU Customers

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Bitcoin Trader Ordered to Forfeit $800K Gained via Unlicensed Exchange. JWR’s Comments: Governments are all about information, revenue, and control. Since private cryptocurrencies offer them none of those, we can count on severe regulation with selective prosecutions in the years to come. Governments won’t be content until private cryptos are fully quashed and they’ve instituted their own blockchain-based electronic currency (or currencies) with total transparency for taxing officials, with a small percentage off the top. Thus, they will have their information, revenue,  and control. 

Tangibles Investing (Light Sabers):

You should invest in Light Sabers. No, this is not a jest, my dear readers. I’m serious. You see, you can find original vintage photographic Graflex Flash Handles at thrift stores and garage sales, if you are lucky. So, for perhaps $20 to $50 you can get yourself 80% of a fairly authentic and very collectible $1,400 light saber.  And, BTW, light sabers will probably figure very prominently in the next Star Wars movie.  Buying movie props in advance of a film release is almost always wise investing.

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The price of the now scarce discontinued Neccos candy wafers has stabilized at above $140 per case of 24 rolls. I first recommended stocking up on these back in May of 2018, when a case of 24 rolls could still be had for under $30, postage paid. By the way, the shelf life of Necco candy can be measured in decades if sealed in an airtight container and stored in a proverbial “cool, dry place.” I can see these candies being a quite sought-after barter item, if normal commerce in sweets is ever disrupted.

 

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!




15 Comments

  1. Sure seems like the economy is heading over a cliff. I have been buying 10 carat gold rings from my local “Wally World” on a suggestion of a Prepper book I just finished reading. Seems that when the SHTF they are a good trading/bribe item. Price $98

    Have a Blessed God Friday to all.

  2. The book you read suggested that if stopped at a roadblock, you could take a ring from your finger and use it as a bribe. This would keep the potential vandals from going through your vehicle and taking everything (and then potentially killing you anyway).
    There are some situations where this might work, but if there isn’t a lot of traffic, you’re toast anyway and will have to give them your stuff or fight your way out. IMHO, all bad choices. Stealth and an early departure is the best way to avoid this. Having a few rings for emergency barter is a worthwhile protection, but (again IMHO) I wouldn’t overdo the purchases. Remember, most prepper writers have never gone through a TEOTWAWKI situation. They are speculating, based on assumptions that they often never make clear.

    As far as the economy “heading over a cliff,” people have been saying that for more than 50 years. Doesn’t mean it won’t happen, but the powers that be (PTB) can delay it longer than you can imagine. I believe in the “rolling blackout” approach — temporary local breakdowns of the social fabric, popping up here and there. Possible gangs of mutant zombie bikers (or lawyers, depending on where you live). Large population shifts as people flee zones dominated by people whose beliefs they detest. Limited areas of martial law.

  3. Regarding Light Saber flash handles, the Graflex ones were usually marked “Graflite.” There are other brands also, such as “Heiland Research Corp.” If you find any, they sell well on Ebay. These flash bulb systems were used on press and studio cameras from the 1930’s to the 1960’s. The cameras themselves also may have some value, especially if they have a nice lens.

  4. I am tangibles-heavy (diesel fuel, food, meds, and other critical perishables). A gold trinket in any form would hold no value to me during a crisis. If I can’t eat it, burn it in a motor, wear it, shoot it, it’s nothing. I wouldn’t stoop over to pick one up off the ground.
    Once you submit (place your fate in the hands of armed unknowns, a bribe of any kind is very chancy. They can have your ring, AND YOU, and all your stuff…..anyway. Prior posters hit the nail on the head- early departure is key. Don’t be a refugee!
    A great motion picture, After Armageddon is available on YouTube. Perfect illustration of this topic.
    If you must negotiate, offer their lives in exchange for your passing.

    1. A good friend escaped from Czechoslovakia as the Russians / Communists advanced. He was about 10 years old and recalled specifically how the border guards would not accept cash. He said there were large crowds of people waving fistfuls of currency, but refused. His father bought passage to freedom for himself, his sister, and both parents with a single gold earring. They passed into Austria just as the Iron Curtain was established. They made it to freedom with the clothes on their backs and left all of their worldly possessions behind.

      I buy quality used jewelry from my local coin shop at the melt price.

      I’m not saying that it will happen again, but the 1933 executive order signed by FDR outlawing US citizens from owning gold had three exceptions – dental gold, jewelry, and RARE coins. (We are talking about things like a Roman Aureus – NOT US gold coinage.)

  5. ‘I think the real problem is over the long run, we’ve got this significant continued drain coming from ~>entitlements, which are basically draining capital investment dollar for dollar,’ From the SurvivalBlog Page about a CNBC report.

    Wikipedia = “Most mandatory spending consists of entitlement programs such as Social Security benefits, Medicare, and Medicaid. These programs are called “entitlements” because individuals satisfying given eligibility requirements set by past legislation are entitled to Federal government benefits or services.”

    Many young people [according to polling] believe Socialism can provide a Cornucopia of free-stuff. There is also a larger voting bloc clamoring for free stuff. Many people move legally and illegally to the USA for free-stuff.

    People that work for a living pay, into the Social Security Fund. The employer ~matches that payment too. With a reasonable interest rate, the Social Security check is actually an ~earned amount of money, for most workers. (It’s NOT free-stuff) Social Security is mandatory savings for Retirement.

    SurvivalBlog has numerous articles about how to hopefully provide for a secure future. It would be worthwhile to look through the archives.

    Old time words of advice about work. =
    ‘Give a man a fish; he’ll have fish for one day. Teach a man how to fish; he’ll have fish everyday.’
    Old time words about guns, money, politicians and banks (Federal Reserve). =
    ‘Give a man a gun; he might rob a bank.’ ‘Give a man a bank; he will rob everyone!’

    1. GGHD, I agree entitlements are a continual drain.

      Another reason America is bleeding out both financially and morally is the US military waging never-ending wars. EVERY HOUR $32 MILLION of our wealth and redistribute it for the phony ‘War on Terror’.

      I say ‘morally’ because the US military has become America’s golden calf. Dare to advocate Jesus’ principle of non-aggression and you WILL be mocked, banned and persecuted.

      1. I should start most of my comments with a conclusion, than the point made in an article quoted.
        About entitlements & my Social Security conclusion.
        I say:
        “People that work for a living pay, into the Social Security Fund. The employer ~matches that payment too. With a reasonable interest rate, the Social Security check is actually an ~earned amount of money, for most workers. (It’s NOT free-stuff) Social Security is mandatory savings for Retirement.”

        The US Government pays interest on the money it has to borrow each year. Social Security recipients do NOT receive any investment growth for their dollars held by the government. … There is a ‘inflationary’ increase.
        But, as everyone seems to understand, the government through the PRIVATE banking system (Federal Reserve) controls the inflation rate on money. (Gold seems to create a more stable currency.}

        People should be told, “The prices are NOT going up; the value of our dollars are going down.”

      2. There is a view of Christianity, with Jesus as a Pacifist of sorts. I’m not sure if I understand your comment correctly.

        Thankfully we live in the USA, where people of faith are allowed to be Pacifists without much punishment. Plus, many non-combatants in the US Military, because of their faith have had ~distinguished military careers; including receiving the Medal of Honor, and other medals for Valor in Combat.

        I attend a Church that has a view of ‘Just War’ with this understanding:

        “Just War doctrine gives certain conditions for the legitimate exercise of force, all of which must be met:” =

        “1. the damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;

        2. all other means of putting an end to it must have been shown to be impractical or ineffective;

        3. there must be serious prospects of success;

        4. the use of arms must not produce evils and disorders graver than the evil to be eliminated. The power of modern means of destruction weighs very heavily in evaluating this condition” [from Internet]

        To Love God and Love your neighbor as yourself, sometimes means, people ~literally need to “Beat your plowshares into swords and your pruning hooks into spears. Let the weakling say, “I am strong!” [From the book of Joel]

        Trump has put a stop to the ‘End Wars ~ loss of life ~ waste of trillions of dollars for the US Taxpayers’ = at least as it seems possible. … Trump still supports a vibrant Military, taking care of our people in the service, and in their ~retirement.

    1. You signed up for a number that will follow you to the grave. This entitles the government to take your money (by force if necessary). Then the government steals the value of the money they took from you through inflation. When the government gives your money back it doesn’t have the purchasing power it did when they took it from you.

      So, yeah, its an entitlement but not for you. You entitled the government to take it from you and then give it back by participating in the system. Its all legal to do because the government says so.

    2. “Since when is social security an entitlement? Is that not our money?”

      The short answer is yes it’s your money, and no it’s not your money.

      Sorry Deb, Social Security is an entitlement. It is also payment for your previous work, only you are effectively paying yourself. The tax you pay openly, plus the hidden tax that you pay (the employers half) (we the people pay all taxes, period), only makes up about nine years of payments to you when you start collecting. After that it’s just like welfare. Now, if you include a reasonable but nonexistent 3% interest rate on the money you put into the system over roughly 45 years or so, then you would extend the time from nine years to about 18 years. After that it would still be welfare. You are indeed entitled to the payments, but in the end, it is still welfare.

      What I resent is the SS payments to folks who never paid one red cent into the system. That is part of the problem with the imminent demise (bankruptcy) of the Social Security system. It was a bad idea in the first place, FDR and company should have required mandatory savings at a mandatory interest rate. Then the people could have budgeted for their old age, have zero taxes to pay, and if any money was left over when you died it could have been left to your heirs. But they chose the socialist way, government control of your money.

      Medicare is even worse. Again you actually pay both halves of the taxes. The tax is not enough, even over the 45 years or so that you pay for it to cover the cost of the insurance for more than about 5 or six years. Plus you pay $130 per month for Medicare part B (coming out of your social security checks every month), and you pay for your Medicare supplemental insurance and the copays you have depending on who you get that supplement from. That is Medicare part C. Then there is Medicare part D, the prescription drug benefit. You pay anywhere from zero to about $20 per month for that, depending on who you get your part C from, and you have copays on each of your prescriptions. Mine are $14 per prescription, if I get the generics.

      These “entitlements” are getting really expensive, not only for the government, but for the recipients as well.

  6. I was reading a report from Venezuela that was written in the past 2 weeks. Money and jewelry are worthless to those that can’t get out. Food can be found but it is very basic staples and vegetables. Alcohol, tobacco, and sweets command a premium. Batteries and battery operated devices are highly sought after. Apparently clothing as well as laundry is getting to be an issue for some people. Personal hygiene if falling rapidly. And the most prized possession of all—- a weapon to defend yourself. Be vigilant. Avoid crowds and cities.

  7. Some (hopefully educated) guesses: we will have a recession (they’re cyclical and thus occur periodically) maybe late 2020. It could be pushed out another year or two at the most. In a recession tax revenues fall and the deficit goes up. The national debt will go up too. The stock market would fall, at least 20%. The federal government would drop short term interest rates to zero or even take them negative. There would be more quantitative easing (QE). The big unknown would be pensions, from Social Security to state and local workers to union members. Stock market losses would imperil current and future retirees’ benefits. There would be pressure to nationalize all these plans. Federal workers’ pensions would be imperiled as well. Deficits would balloon, which would in turn raise the cost of interest payments each year. There would be calls for a “debt jubilee,” which would be a “one time”(don’t believe it) event to wipe the slate clean and cancel debts. The Federal Reserve or the Treasury might start buying stocks and bonds to keep values up (remember the pension plans). All this is probably 2-5 years out, maybe more. Remember, these are guesses, not predictions!

    Also, please remember the old saying: “God protects fools, drunks, and the United States of America.” Include our nation in your prayers! When push comes to shove, I believe it will be people of faith who have the greatest chance to save our civilization.

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