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 pre-1899 cartridge guns. (See the Tangibles Investing section.)

Precious Metals:

Silver To Push To $22 An Ounce, Drive Gold Higher – Bloomberg Intelligence

JWR’s Comments: When the silver market starts to catch up to gold (normalizing the silver-to-gold ratio), I can see that things will get really exciting. I recommend that you hold on to all of your silver until the silver-to-gold ratio is under 75-to-1. In fact, if you have the chance, this is a good juncture to swap some of your gold for silver. Then, after the ratio reverts, swap back out.

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Gold Price’s Next Target Could Be $1,600 Says Peter Hug

Economy & Finance:

At Zero Hedge: Midwest Farm Loan Repayment Issues Hit Highest Level Since 1999

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Wolf Street reports: Freight Shipments Suffer Steepest Drops since Financial Crisis, Overcapacity Balloons

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At IWB: China is in worse shape than the US in this trade war, possibly cause or start of the next global meltdown

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The yield curve inversion panic, explained

Derivatives:

Swaps data: Fed’s change of tack on rates fuels volume rise

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CME-LCH basis collapses amid rates downturn

Stocks:

Friday’s headline: Dow plummets more than 600 points after Trump orders US manufacturers to leave China

Tangibles Investing (Pre-1899 Guns):

I must reiterate the importance of the Senate re-convening on September 9th, 2019. The Republican Senators have caved in and are VERY likely to rapidly enact a so-called “Universal Background Check” law. This is essentially a ban on the intrastate sale of used guns between private parties. I can see that this will do several things:

1.) It will destroy local gun shows, as we now know them. They’ll all become like California gun shows, that is: A great place to buy targets, shooting glasses, and jerky. But not much else. Modern guns will all become  priced at or near brick and mortar gun store retail, and all sales of modern guns will go on 4473 forms. No more gun show privacy or bargains!

2.) In the short term–that is in the brief window between the passage of the law and its effective date–it will send the priced of used (private party) black rifles into the stratosphere. I believe that the price of just a typical AR will jump to $1,200 and top quality AR-15s and all AR-10s will be $2,000+ plus.  But this window of opportunity will probably be for only two or three months. After the private party transfer ban goes into effect, the prices of papered ARs will normalize.

3.) During that same short term window of opportunity, be ready to transfer most of your guns and stripped lower receivers to your kids, grand-kids, nieces, and nephews with dated, detailed “in-family” CYA transfer letters–not through a licensed dealer. Depending on the wording of the new law, this may be your only opportunity to legally do so, with no Form 4473 and background check requirement.  Your progeny need s to be able to prove that they became legal owners of those guns before the Universal Checks law was in effect.

3.)  It will drive the prices of FFL paperwork exempt pre-1899 cartridge guns permanently higher, with an initial jump of 20% and an eventual premium of nearly 100%. Thus, a typical Winchester Model 1894 made in 1899 or later will still sell for around $1,000. But an otherwise identical one made in 1898 will be closer to $2,000.  Most people will not catch on to this until after the new pricing reality is built in to the market.  Don’t be one of those folks who find themselves asking:  “What the heck happened?”  Be proactive: Buy your pre-1899 cartridge guns now, before the prices jump.

4.) It will greatly increase interest in 80% complete receivers. But eventually the congresscritters will call that a “loophole”, and ban them.

5.) It will create a huge “at home” black market in “Pre-Background Check” secondary-market and tertiary-market modern guns. Surely, there will be a lot of back-dated receipts created! And the folks who are willing to part with any of the un-papered modern guns in their collection without going through the FFL paperwork will surely charge a hefty premium. (Unless they are going to close friends or relatives.) And who would blame them for high premiums, given the risks?

6.) Congress will see the rapidly-emerging black market, and call that a failing or a loophole in the Federal Universal Background Check law. So then they’ll claim that they are “forced” to enact a European-style registration scheme for all modern guns. Count on it. Inevitably, Universal Background Checks require registration!

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 from local news outlets that is missed by the news wire services is especially appreciated. And it need not be just about commodities and precious metals. Thanks!