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 the perennial interest in gold investing. (See the Precious Metals section.)

Precious Metals:

To start out today’s column, blog reader H.L. sent us this: Central Bank Issues Stunning Warning: “If The Entire System Collapses, Gold Will Be Needed To Start Over”

Here’s a quote:

“An article published by the De Nederlandsche Bank (DNB), or Dutch Central Bank, has shocked many with its claim that “if the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.”

While gloomy predictions of a monetary reset are hardly new, they have traditionally been relegated to the fringe of mainstream financial thought – after all, as Mario Draghi stated on several occasions in recent years, the mere contemplation of a “doomsday scenario” is enough to create the self-fulfilling prophecy which materializes it. As such, it is stunning to see a mainstream financial institution open up about the superior value of limited supply, non-fiat, sound money assets. It is also hypocritical given the diametrically opposed Keynesian practices regularly engaged in by central banks and official institutions worldwide: after all, just a few months back, the IMF published a paper bashing Germany’s adoption of the gold standard in the 1870s as the catalyst for instability in the global monetary system.”

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Peter Schiff: “Gold Is Going To Be Money Again” Because Of Gigantic Global Debt Time Bomb

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At The Motley Fool: A Foolish Take: The Best Way to Invest in Gold. JWR’s Comment:  As a survivalist, I must warn folks that all  “paper” promises (vault storage, gold mining stocks, futures, metals ETFs, and so forth) are no substitute for tangible precious metals that are in your personal possession. Tangibles Trump Intangibles!

Economy & Finance:

At Zero Hedge: The Return Of Hyperinflation In Zimbabwe. JWR’s Comment:  Hardly unexpected!

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Wolf Richter: How the Crybabies on Wall Street Try to Force the Fed into QE-4

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Just Weeks After the Collapse of Thomas Cook, Spain Launches First Bailout of its Huge Tourism Industry

Commodities:

EIA Sharply Cuts Oil Price Forecast

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Hydrogen: Is This The Next $170 Billion Energy Industry In The US?

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USDA: World Agricultural Supply and Demand Estimates

Derivatives:

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Forex & Cryptos:

Opinion: Why the U.S. dollar will continue to reign supreme.

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Video: Terrorism and Crypto : Evidence from Ex-CIA Analyst

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Libra Association Members Are Being Threatened By US Politicians

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Could Bitcoin Collapse By 25% to $6,000? GBTC Premium Implies So

Tangibles Investing:

If you have a hankering for one of the now quite popular 9mm AR pistols that accept standard double column Glock 17/18/19 magazines, then pay attention: Palmetto State Armory (PSA) has their PX9 Glock lower with SBA3 brace and and EPT trigger on sale for just  $229.99.  Once you are at the PSA web site, enter “5165449975” in their search box. This sale may last just another day or two, so don’t hesitate. They also have their PA-9 Gen4 10.5″ 9mm 1/10 Nitride 12″ Slanted M-Lok Railed Upper with BCG & charging handle on sale for $329.99. (Search on  stock number “5165450304“.) That comes with their “Flash Can” blast forwarder, but the rail is big enough to alternately accommodate many 9mm suppressors. So, for $560, you can get a complete 9mm AR pistol with a proper adjustable SBA3 arm brace for $30 less than their “starter” version they sell which only comes with an uncomfortable Shockwave “blade” brace!

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It’s Time To Start Worrying About The Housing Market Again

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UBS Global Real Estate Bubble Index 2019. JWR’s Comment: The bubble in residential real estate appears to be popping. If you own any residential rental properties, then the time to get out was yesterday.

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!




16 Comments

  1. Re: real estate market. I’ve been avidly following the state of the real estate market given that I’m currently house-hunting. There are things happening in it that I find intriguing such as the huge glut of unsold NYC luxury condos(yet they’re still building tons more). The over-valuation of real estate in some major cities worldwide, covered well in the referenced articles above, is also food for thought. Of course there is a difference between luxury condos in Vancouver, NYC or Munich and rural homes in the US but still the market is interconnected in some way.

    While I know that many of the factors that precipitated the last housing bust such as no-doc loans, interest only loans, balloon mortgages etc have been ended here in the US, I’m still concerned. Home prices in many locales have risen so high that they are unaffordable to many. The uptick in asking prices in just the past few years is staggering in many locales. I’m also seeing the effects of a dearth of lower-cost homes in my region of New England. People are making offers that give up any right to have a home or septic inspection in order to beat out other offers. Others have been able to sell homes recently that were on the market for years and weren’t selling as they were a pretty lousy home/value. Homes in undesirable locales such as steep roads with major traffic are selling quickly. All of this makes me wonder if we aren’t in a RE bubble.

    1. “…While I know that many of the factors that precipitated the last housing bust such as no-doc loans, interest only loans, balloon mortgages etc have been ended here in the US…”

      SPOILER ALERT….NOT TRUE!

      While it is happening less, it by no means has ended here in the good old U. S. of A.

      There is a sh*t storm coming and no one has an umbrella or the requisite footwear for the impending deluge.

      1. Undoubtedly their will be another recession. Could it be a “crash”? Sure, it could be. Will it be caused by the supposed “housing bubble”? Probably not. It will of course affect housing and the value of houses just as it would affect almost everything else. But generally when a “bubble” bursts it isn’t the same bubble that burst last time. It is a similar situation to the military always preparing for war the way the last war was fought.

        Sooner or later our debt (probably not the rest of the world’s debt) will bite us where the sun don’t shine. Prepare for it; by PM’s, pay down debt, store food and necessities. But most likely the next economic downturn will be no worse than the last one or the one before that, etc. It will likely be a buying/investment opportunity and not TEOTWAWKI.

        1. I’m not expecting a TEOTWAWKI event with the coming (already started) economic crash. The RE bubble is just one of several bubbles that has formed this time around and they will pop in near unison. I expect this go round to be worse than 2008 but not nearly as bad as the following one.

          1. I just don’t see the conditions there for a real estate bubble to burst. In general once a bubble bursts it is dealt with and the underlying problems go away or become far less serious. Usually the next bubble is not the same as the last bubble. Often once the economy tanks the indicators are similar, that is housing values may well go down, especially if the next recession is worse than the 2008 recession. Honestly, I expect the next recession will be minor lasting the typical 12-18 months or so and no where near as serious as the 2008 crash. Not to say we can’t have “the big one” especially since “the big one” is virtually impossible to predict with any accuracy.

            I think that the next big serious recession/crash will be the result of the left getting back power and implementing any or most of the policies we see them advocating in an effort to become president. If our government takes a serious turn to the left THAT is when I would expect the big one. AND even then it won’t be a real estate bubble bursting it will be a debt/tax issue.

            I am hoping that the next recession does lower home prices substantially because it will be a buying opportunity. (don’t misinterpret; I’m not hoping for a recession I simply recognize that they are cyclical and will occur regardless of my wishes and therefore I am planning to take advantage of any opportunities that present themselves).

  2. I find I am totally ignorant on this, so have to ask….

    Why would I want an AR patterned rifle over a Glock 17/18/19? I mean, why not just use an actual pistol, not a rifle body contored into pistol format?

    I’ve never understood the popularity to AR patterned rifles beyond the parts compatsbility? Surely a “designed for pistol” will perform that role better – why would I want to trade off things a Glock (or beretta, or s&w, or sig, or…) does very well, for AR style pistol?
    Not knocking the idea, just don’t see any advantages to it?

    1. I have found that I can shoot a pistol caliber carbine or AR pistol (with a 8″ to 12″ barrel) much more accurately than I can a pistol. Better accuracy means fewer wasted rounds. They are just so much more stable, and they have a longer sighting radius. They also have much more velocity than achieved with a 4″ or 5″ barrel pistol. And they are less noisy. So, all-in-all they are much more useful for shooting pests around our garden and our chicken coop. These are mainly skunks and raccoons. By the way, I must mention that I do not consider these guns adequate fof self defense against man-sized opponents, or bears. That is what 12 gauge shotguns or .308 (or larger ) rifles are for!

      Oh, and pistol caliber carbines make good transitional trainers, for kids. They bridge the gap between shooting .22 rimfires and shooting rifle calibers.

      1. I just read “If You Survive” by George Wilson. This excellent WWII combat autobiography reinforced a lesson I learned long ago in our military studies. ‘Burp guns’ used by the Wehrmacht were in 9mm, if I recall, and were noted for their deadly cumulative impact of multiple bullet strikes.

        While the PSA AR pistols are not automatic weapons (they are ‘fully semi-automatic’-hah!), the stick mags enable proficient shooters to deliver multiple strikes on an attacker at near engagements with a little less concern about ammo conservation. Carrying three or more stick mags of 33 rounds is no mean capability, and is not a heavy load to carry like 99 rounds of my AR10 is.

        In wooded, urban, suburban, indoor/house clearing close engagements I can definitely see a role for these.

  3. Re: Central Bank Issues Stunning Warning

    The article mentions Keynes. Forbes did an article about Keynes investing methods when he managed the Harvard endowment. Keynes invested the endowment heavily in gold mining companies and other gold instruments. Can’t remember if he invested in a lot of physical gold or not.

    It should also be noted that Keynes economic stimulus theory has never been implemented fully. No I am not saying we have not spent enough like guys like Krugman say. Keynes stated that you went into deficit spending during bad times but that you paid off debt in good times. The politicians have never done the second part.

    Now it remains an open question, at least in my mind, whether Keynes was an astute enough observer of human behavior (or political behavior) to know that the paying back part of the theory would never be implemented by politicians.

  4. Banks saying that gold will be needed for a restart? I cannot figure out what this means. Are they going to issue their own gold currency? Are they going to flood the market with alleged gold backed paper? Are they going to be the only ones with actual money? How are they going to survive a derivatives default or their other phony banking scheme? How about cryptos, a hand full of electrons that can come and go with the press of a hacker’s keys; right, go ahead and believe they are secure as the tooth fairy. The whole article supposes that there will not be a complete meltdown of society and they will be able to control things, history does not bare this out. The arrogance of the bankers thinking they can control the uncontrollable is astounding. How many bankers will stand in front of their vaults defending their gold from the armed mobs that have had their lives ruined? So many questions and only speculation for answers. As JWR says: “stock up on the 3 B’s and tangibles” while you can if you want to save your family from the wolves of wall street and inept bankers that are gambling with your money and will surely cause the inevitable collapse.

  5. 1) America’s Founding Fathers designed the USA based upon the ancient Roman Republic — and we have followed a similar course: creation of a global empire that has greatly enriched a small elite while dumping poverty and huge debt onto the soldiers and workers. With a resulting massive debasement of the currency to cover that fact.

    2) For several centuries, Rome’s emperors continually debased the denarius:

    https://en.wikipedia.org/wiki/Denarius#/media/File:Fineness_of_early_Roman_Imperial_silver_coins.png

    3) By 250 AD the denarius was almost all copper, was worthless and Rome almost collapsed during the Crisis of the Third Century.

    https://en.wikipedia.org/wiki/Crisis_of_the_Third_Century

    To forestall that, Constantine the Great adopted Christianity and the solid gold solidus with which to pay the army.

    https://en.wikipedia.org/wiki/Solidus_(coin)

    https://en.wikipedia.org/wiki/Constantine_the_Great

    3) Even that could not forestall the collapse of the Empire in western Europe to foreign immigrants — due to the Emperors’ disarming of Roman civilians over 400 years earlier. There were NO defenses within the Empire once the Germans broke through the military line at the Rhine. The rich wheat fields, vineyards and olive groves of North Africa , Sicily and Italy laid there for the taking. Along with a major part of Imperial taxes. The military collapse had been aided by the Emperors’ policy of recruiting foreigners into the Roman Army and training them.

    However, the eastern part of the Empire continued for another 1000 years, although a major part (Egypt, Levant,etc) was lost to the rise of militant Islam circa 650 AD.

  6. Re Joe’s comment “How many bankers will stand in front of their vaults defending their gold from the armed mobs that have had their lives ruined?”

    1) You need to read the article from the Dutch central bank. The money quotes:

    “DNB holds more than 600 tonnes of gold. Part of it is stored at DNB’s head office in Amsterdam, but most of it is stored in other countries: the United States, Canada and the United Kingdom.”

    “DNB’s banknote operations and gold vaults will be relocated from Amsterdam to Zeist. A new Cash Centre is being built in Camp New Amsterdam, a Ministry of Defence site in Zeist”

    When the SHTF you definitely don’t want to pay the military in debased currency.
    Remember Constantine the Great and his solid gold solidus.

    And if the mobs break through and the elites have to evacuate to a foreign refuge, they don’t want to lug several tons on gold through the “Nothing to Declare” lane
    at the entry port.

  7. In 1933 my grandfather had to hide his wealth in the form of gold due to FDRs taking the gold in ,,he used the gold in the under ground economy , I remember his unhappiness when gold became legal again ,the average Joe is better off with silver in small sizes (10th ,1/4,1/2 ,1 oz rounds) I know of a place that only trades with silver in Idaho ,don’t even ask to use paper ,gold and silver are the real thing ,
    Tea and chocolate

  8. Keep it simple folks. Have a monthly budget for prep items and get it it done because when everyone is in line for food, water, gold, silver, ect you will have already done the work and the preps and will look at the situation from a less than desperate view.

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