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. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at natural gas production (and waste.) The photo at the top of this column is a satellite photo montage of the lights of North America, at night. The swarm of dots seen in western North Dakota are not city lights. That is actually light created by extensive natural gas flaring. (See the Commodities section.)

Precious Metals:

Germans Rush to Buy Gold as Draft Bill Threatens to Restrict Purchases

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A fascinating piece by Lyn Alden, over at Gold-Eagle: Gold Price Forecast: A Weaker Dollar Is The Easiest Path To $2,000 Gold

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Antonius Aquinas: The Ethics of a Gold Standard

Economy & Finance:

My wife (Avalanche Lily) suggested this: 2020 FINANCIAL CRISIS — Has it started? The $500 Billion Dollar Question

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At Zero Hedge: The New Colonization: China Is Building Enormous Self-Sustaining Chinese Cities All Over The African Continent

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2020 FINANCIAL CRISIS — Has it started? The $500 Billion Dollar Question

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Ed Yardeni Warns 20% Pullback Could Strike Early 2020

Commodities (Natural Gas Flaring):

At Wolf Street: Dallas Fed Outlines Somber Oil & Gas Industry, “Flaring” of Natural Gas Comes into Focus. Here is an excerpt:

“This time, there were additional questions, including on the reasons for “flaring” of natural gas in the Permian Basin. Natural gas is so abundant in the hydrocarbon mix produced at these wells (“associated” natural gas), and natural-gas pipeline takeaway capacity is so insufficient, that the surge in production led to the collapse of the price of natural gas in the area, reportedly dropping below zero on occasion. And it led to a record amount of natural gas getting flared in 2019.

Flaring large amounts of gas is a waste of natural resources, a source of air pollution, and a big financial drag for the already struggling oil-and-gas companies, investors, and banks.

To get a better handle on this, the Dallas Fed asked what the executives thought “the main reasons for the increase” in flaring in 2019 were (multiple choice, with the option to “check all that apply”):

  • 73%: insufficient pipeline take-away capacity for gas
  • 49%: lack of gathering and processing capacity for gas
  • 45%: processing and transportation fees for gas that exceed the value of the gas
  • 15%: temporary outages/issues with gas infrastructure”

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OilPrice News reports: Is The Shale Boom Running On Fumes? JWR’s Comments:  No, it is burning off those valuable fumes! I assert that shale oil drillers should be given tax incentives to capture more of the (currently wasted) natural gas. That would result in a huge long-term surplus of natural gas that could be piped long distance and even exported as LNG.

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H.L. sent us this: China’s Imports of US Soy Soar to 20 Month High as Food Inflation Explodes

Forex & Cryptos:

Reader G.P. forwarded this:  Venezuela’s currency: Worth more as craft paper than as money

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A British Pound forecast for 2020.

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Tyler Durden: A Farewell To Paper Money?

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Cryptocurrency Influencers Speak Out On YouTube Deleting Crypto-Related Content

Tangibles Investing:

An often overlooked (and undervalued) niche in the antique gun world is Remington Rolling Block rifles. The folks at Midway put together an excellent 8-minute video primer, showing the basic Remington Rolling Block variations.  As with all other antique guns, condition is crucial. (That is, unless you are just looking for a practical shooter.) Remington Rolling Block rifles were issued all the way up to World War I–by the French army. They can be surprisingly practical rifles. It has been rightfully called “The best single shot rifle ever made.”

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There are also some nice replica rolling blocks, but they often sell for more than the originals. And keep in mind that that most of the originals are pre-1899 production and hence Federally exempt from paperwork when sold across state lines.  The only replicas that enjoy that exemption are the few that are chambered for obsolete cartridges. So those would only be of interest to folks who handload.

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This echoes what I’ve already warned: “Tail-End Of A Big Bull Market” – Wine, Diamonds, Classic Cars Are Now Money-Losing Investments For Ultra-Rich 

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 only about commodities and precious metals. Thanks!




7 Comments

  1. With the cost of flare gas being almost zero, why is it not used for generating saleable electricity? Our local landfill has a mega watt system running off the methane from the decomposition of bio mass. Electric lines are a lot cheaper than pipe lines and power can be generated near the well heads. Something is fishy here. Could it be tax laws, power company lobbying , EPA interference?

    1. The cost of creating power lines that would essentially be temporary, when looked on the long enough timeline would be prohibitive. The largest reason however is because of painting the right-of-ways necessary to run those lines would be incredibly difficult and expensive.

  2. Be watchful. Food inflation is likely to remain a very serious concern. In fact, food supply is likely to be a concern for a number of reasons, economic and otherwise. In addition storing up long term storables, it’s a great time to learn to grow from seed. Consider this part of your “means of production” strategy.

  3. “At Zero Hedge: The New Colonization: China Is Building Enormous Self-Sustaining Chinese Cities All Over The African Continent” ~ Wikipedia also has an article about “Africa–China economic relations” which makes for an interesting read. (recommended)
    ****

    President Donald Trump has spoken frequently about the ‘trillions’ of US Dollars being drained out of the USA, by China. +Much of China’s wealth was created by US Dollars & the exploitation of the ‘Chinese economic-slaves’ by the Communist leadership.

    Besides China, our country has been drained of money to pay for the economic well being of many other countries. An example, = NATO countries and their lack of paying for their Treaty obligations is another financial drain on the USA. We provides for much of the defense of other countries; (collectively wealthier than the USA).
    And (NOT LAST or LEAST) = the USA alone pays for 22% of the entire United Nations budget.
    ***************

    The Free Enterprise system can be used to create wealth for everyone. = However, many people (here and overseas) want to actually kill the Goose Laying the Golden Eggs (the USA is the silly goose.)
    ++++ Example: The USA & Israel both are making the ~vast majority~ of medical discoveries, which will improve everyone’s longevity and overall health. (A lot of people think, Medical Miracles ‘sort of’ just happen. = People need to make the Doctors and Scientists march in lockstep, and they’ll continue with their medical miracles.)

    (Millions of people here and overseas are often seen chanting “NO more USA ~ Israel” ~ while waving fists and signs in the air. = That would end most of the life saving medical research, and discoveries.)
    ******

    + The USA is running a deficit in spending, and is Trillions of dollars in debt. (Some people want to cut defense only).
    But, adding up welfare, the money spent on illegal aliens, home grown criminals, our prison-jail systems, and the money ‘given away’ to corrupt foreign governments ( which include Congressional pay-offs), would just about equal the deficit.
    (+There’s the real-grief of all the military people killed and injured in the ‘useless’ and endless wars.)
    **************************************

    What’s the point of my calm rant? = A theory I read on the Internet.

    Trump is engaging in a Machiavellian plan with the assassination of the Number Two gangster in Iran.
    1. The gangster was a Terrorist that harmed many people including Americans.
    2. The gangster planned to harm more people. (Including maybe Gangster #1 = Is he really crying real tears? +All the other Gangsters from #3 and below had to worry too.)

    Maybe, the Real Trump Plan. =
    3. >Trump wants the other countries in the Middle East to become so upset, they will ask for America to get-out of the Middle East and Afghanistan; i.e. leave their countries.

    Trump will then say “Adios~See your later alligator. You’ve been gobbling up trillions of US dollars with the Endless Wars, and then literally pooping on the USA flag and American lives.”
    Many Americans would rejoice if we withdrew from the Endless Wars.

    Trump and the USA will stick with Israel; the USA’s one true friend in the Middle East.

    When the American military-personnel safely returns home, Trump might celebrate with >two scoops of ice cream.
    (It’s possible to find on the Internet, articles by left wingers >enraged about Trump eating >two scoops of ice cream. … The left-wingers do NOT write about the millions of dollars in Foreign-Aid Dollars ‘kicked back’ to the families of our politicians. AN Example of such criminality is the Ukrainian Aid kick-back to the Joe Biden Family.)

    We live in interesting times.

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