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 land investing. (See the Tangibles Investing section.)

Precious Metals:

Radomski (a chartist) posted this analysis: Gold Price Forecast: Tops, Reversals And Timing

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South Africa: Gold has finally climbed out of its 25-month black hole

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Platinum (PL) Price Forecast, “PL” to USD price prediction: Buy or sell Platinum?

Economy & Finance:

Seeking Alpha reports: December U.S. mutual fund, ETF flows hit 12-month high

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At Zero Hedge: The Fed “Just Let The Cat Out Of The Bag”, Admits Being Forced To Fuel Asset Bubble. A snippet:

A long-time and favorite parlor game has been debating when, and if, the Fed “put” would kick in on any market upsets. It was even acceptable to try to argue whether one existed or not. Although that might have just been an attempt at being provocative. Now the presumption among investors, institutional and retail alike, is that it is fully in force. Maybe more so than ever. Fully enhanced by policies that are not changing anytime soon.”

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At Wolf Street: US Freight Shipments Plunge at Fastest Rate since 2009, Hit 2011 Level: This is Getting Surprisingly Ugly

Commodities:

The Commodities Feed: Wuhan worries

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OilPrice News reports: Phase 1 Trade Deal Won’t Spark An Oil Export Boom

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The U.S. Natural Gas Boom Is On Its Last Legs

Equities:

At Wolf Street: After Blowing $43 Billion on Share-Buybacks in 6 Years, Boeing Scrambles to Borrow $10 Billion, on Top of a $9.5 Billion Credit Line in Oct, to Fund its 737 MAX Fiasco. Here is a pericope:

The first thing to know about Boeing’s mad scramble to line up “$10 billion or more” in new funding via a loan from a consortium of banks, on top of the $9.5 billion credit-line it obtained in October last year – efforts to somehow get through its cash-flow nightmare caused by the 737 MAX fiasco – is that the company blew, wasted, and incinerated $43.4 billion to buy back its own shares since June 2013, having become a master of financial engineering instead of aircraft engineering.

If Boeing had focused on its business – such as designing a new plane instead of doctoring an ancient design to save money and time – and if it hadn’t blown $43 billion on share-buybacks but had invested this money in a new design, those two crashes wouldn’t have occurred, and it wouldn’t have to beg for cash now.”

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Alphabet, Google’s parent company, hits trillion-dollar market cap for first time

Forex & Cryptos:

Pound To Euro Exchange Rate Smashes January Best As BoE Rate Cut Odds Down To 50%

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ForexLive Asia FX news wrap: Coronavirus the focus again

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Who’s Accumulating Bitcoin? 784,000 Addresses Now Hold 1+BTC

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Ethereum Highly Bullish Despite Setbacks; Here’s What Could Propel It To $200

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India Central Bank Says It Hasn’t Banned Crypto

Tangibles Investing:

Land O’Lakes CEO calls for investment in rural America

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The Three Main Types of Land Investors — An Intro to Land Investing

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!




15 Comments

  1. Zero Hedge.

    “A long-time and favorite parlor game has been debating when, and if, the Fed “put” would kick in on any market upsets”.

    Monetization of the markets signals an acceleration of collapse of the dollar. If the recent 6.23 trillion didn’t raise eye brows, then there is no limit, so why not print right up to the end, and in amounts that are both ridiculous and eventually meaningless? All the while, we can claim that the economy is doing good, because the indicator for the ignorant, the stock market, continues to rage on, and to heretofore unknown astronomical, and unjustifiable heights. And so what if Trump beats the sham impeachment that conceals a coup attempt, and is reelected based upon artificially pumped up markets and resulting economy. Sequestered by the Deep State, Trump is mostly powerless now, and cities will burn if he survives and is reelected, or is not. Leave the cities while you can.

  2. So very much is currently in a holding pattern now due to the Wuhan Virus and the potential for a pandemic. If there is a sudden rise in the number of countries infected or a jump in the death toll then the corresponding shockwaves could decimate global markets and kickoff the coming global recession. Should the virus mutate and become more lethal or the R-naught increases to 3 or 4 the situation would become far worse. Any investments in any markets should be closely monitored and an exit strategy should be in place to sell if you feel it is prudent to retreat and get on the sidelines. If a full blown pandemic were to occur then you would not want to be in the market and you would need access to your money to be able to ride out the impending problems from a safe, fixed location.

    1. BGF: Can you explain to a dullard like me the meaning of”R-naught to 3 or 4. I’m not being
      critical in any way,it’s just that sometimes my comments set off alarms in the office of
      the civility monitor.

      1. R-naught or R-0 is the reproductive rate of the virus. It represents the number of people that an infected person will then in turn infect. The R-naught for the common flu is .9 and the Spanish Flu was 2 and unfortunately this virus is at 2 as well. The higher the number then the more people will be infected by each person who contracts the virus. Also, the faster it will generally spread. If the virus were to mutate in such a way as to become more contagious and the R-naught were to increase to 3 or 4 then this situation becoming a pandemic would be far, far more likely. That being said it is also possible that any mutation could lead to a less contagious form of the virus, which of course would be great. The problem is that it is literally beyond our control and simply a matter of luck now. Good or bad, we’ll have to wait and see.

    2. Corona virus(Wuhan) is a complete farce and just “doom porn”,compared to normal flu it doesn’t even show up(600 cases low fatality). The real threat is bureaucrats on steroids.

  3. A pandemic requires high transmissibility and a deadly pathogen. If the disease kills too soon then it’s transmissibility is reduced. This can also be true if it’s symptoms are too obvious (or terrible) because people will avoid contact. Measles is highly transmissible but not fatal to most people. It would be a pandemic but one that most people would survive. Most of the really deadly diseases kill too quickly and the symptoms are too obvious to allow them to become a true pandemic. However even those diseases could go pandemic if the politics interferes with common sense health rules. Simple flu is highly transmissible and has an R-naught much higher than 3-4 but usually the flu is not deadly enough to become a true pandemic. Smallpox is a good example of a true pandemic disease. But given todays health care would not be as bad as it was in the 1700’s. It is too treatable with even common knowledge and health care. Another factor is the ability for someone to become infected with a highly transmissible deadly disease but not themselves succumb to it. They could carry that infection to many people and even to other countries.

    1. Good points, Emu.
      I worry about this one not due to the normal factors, but due to the economic factors.
      What if this is just enough to push china into a manufacturing decline…
      and the ripple from there….
      and then JWR’s economic scenarios unfold from there.

      JWR – perhaps you could post a refresher for us all on Bug-In requirements for those in cities, suburbs, and rural. Self-Imposed quarantine and such.

      God bless you all.

      1. China suffering a manufacturing decline is great for the economy. The divorce from Chinese supply chains has already started and anything that pushes it further and quicker will promote higher levels of growth elsewhere around the world. The new supply lines will then have to buy and build new manufacturing equipment and facilities creating many new jobs. However, this round of development is being spread across many countries which will make our manufacturing better protected from future events like this. It will also use less slave labor which is better for everyone.

  4. Ref:Tangibles Investing.
    This not the time to put money into any big ticket item most especially land.
    The prices in all sectors of the real estate market are ridiculously over valued.

    When the monetary/financial reset arrives it will be a buyers market with bargains to
    be had.If you have gold and silver you will be well positioned to take advantage of the
    fire sales.
    Take a close look at all areas of the economy.If it doesn’t frighten you it should.

    I hope that I haven’t ruffled any feathers. As Dennis Miller would say at the end of his
    rants “that’s just my opinion, I could be wrong”.

  5. From what I have seen from the CDC — assuming they are being truthful — and online sources currently this has an R-nought of about 2 — more or less like flu or ebola and a death rate of about 2%. Is that really the case? I have no idea, but I certainly don’t trust the Chinese govt (or ours) on this issue. In any event even with a low infection rate of the world population — even 1 or 2 percent — the bodies will start piling up fast. And leaked video from China showing crowded hospitals, etc. makes me think they don’t have a handle on this.

    With 11 million under quarantine I sort of wonder what happens in three to five days when, presumably, they run out of food and, probably, the electric/water workers start not showing up for work. An object lesson for why we do what we do folks. This was bound to happen eventually.

  6. every year between january and march transportation slows down. companies aquire other business and other companies lose business and crumble. it is the business cycle… there is no blood bath. i have been managing in operations for 25 years and can viably claim witness to it. what people need to understand is the delicacy of getting merchandise from point A to point B and the disruption of something like Wuhan happening in Pennsylvania. if there was a quarantine for the state of PA the eastern board would be rocked. Amazon, food distribution and commodity distribution is almost condensed in Central Pennsylvania. Shut it down on the transportation side and the entire east coast hiccups

  7. Re: Shipping

    The article stated that the Cass shipping index is a money measure. It does not state whether it normalizes for number of loads. If it does not the figures may be distorted.

    At the end of 2017 electronic logs were mandated for virtually all long haul trucks. For those not familiar with trucking, it was common practice for truckers to keep two sets of logs. One for the State Patrol that showed them abiding by the mandatory rest periods and one for the company that they got paid on. I only ever met one trucker prior to electronic logs that abided by mandatory rest periods. The rest, including my father, kept two sets of logs and employed whatever means they were willing to, including amphetamines for some, to sleep as little as possible and get as many miles in as possible every day because you typically get paid by the mile or load.

    The effects where I work were pretty dramatic. We ship large equipment coast to coast on occasion. Our cost for a coast to coast shipment almost doubled as did the promised arrival time.

    Back to the Cass shipping index. The massive jump in 2018 coincided with mandatory electronic logs. I would like to see something regarding number of loads if that index only reflects money.

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