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 some big Forex moves. (See the Forex & Cryptos section.)
Precious Metals:
Gold futures log largest weekly loss in more than 8 years. Here is a snippet that confirms my observations:
“It seems that investors have been selling gold in order to cover losses elsewhere,” said Caroline Bain, chief commodities economist at Capital Economics, in a Friday research note. “Ample liquidity in the gold market means that the sale of gold holdings is a relatively quick and seamless way to raise cash in times of need.”:
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Recession fears weigh on silver, palladium prices – analysts
Economy & Finance:
So, here’s one aspect of the Plunge Protection, that I predicted: A 0% Interest Rate: Fed takes emergency steps to slash rates and ease bank rules
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The Baltic Dry Index does not look good. Global shipping is reaching a low ebb.
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At Zero Hedge: The Last Time This Happened Was October 1929…
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$50 Trillion in Question as U.S. Treasury Liquidity Dries Up
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At Wolf Street: Historic Volatility Tells Me This Stock Market is in the Middle of an Equally Historic Crash
Commodities:
At Business Insider: GOLDMAN SACHS: Oil could plunge another 43% as price war breaks out between global powers
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OilPrice News reports: New Solid-State Battery Tech Promises 500-Mile Range EV
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Forex & Cryptos:
I couldn’t help but notice that as of Friday, the Canadian Peso slipped another 1/4 percent, to 0.7166. By Saturday, it had bounced back a bit, to 0.7243, but that is still quite weak, compared to recent history of the USD/CAD pair. With an exchange rate like this, I may have to take another shopping trip in Canada this summer, to prowl some antique stores. I’ll be looking for old gun leather and wooden pistol cases. Those should make some good inventory, for Elk Creek Company.
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The GBP/EUR pair saw a slip of 1.85% on Friday. That is a big move for a major pair, in just one trading day. It is odd to see Forex moves are now driven not just by fiscal policy, monetary policy, and trade policy but also by public health policy. Wow!
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The recent BTC pllunge and YouTube ban on videos about cryptos, explained.
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Veteran Trader Warns XRP’s 96% Crash from $3 High Isn’t Over Yet
Tangibles Investing:
I’ve noticed that pre-1899 cartridge guns are starting to increase in price. I attribute this to the advent of so-called “Universal Background Checks”, at the State level. Some 21 states and the District of Columbia have expanded the Federal (“Brady”) background check requirement to include private party sales. But nearly all of those state laws have exempted pre-1899 guns. (Some states have a few minor variations.)
Buying inventory for my Elk Creek Company business is difficult, because the few nice shootable pre-1899 guns are “getting bid up”. For instance, just six months ago, I was able to buy Webley Mark I .45 ACP conversion revolvers for $700 to $1,100. But now they’ve jumped to $1,200 to $1,500, on average. When I return from my travels in early April, I will only have about 90 antique guns available. I had been hoping to have about 120 in stock by now, but I simply cannot keep up with the bidding. It is becoming a very tight and pricey market.
My greatest concern is that a Federal (nationwide) Universal Background Check law will be enacted. This will probably come after some Prozac-driven mass shooting, wherein the killer is identified as someone who bought their gun at a gun show, without going through an FFL. Once teh private partyy sales of modern guns all require checks nearly everyone in the shooting community will wake up to the significance of pre-1899s, and their prices will double, overnight. And I’ll of course be forced to double my listed prices, to match.
Face it: Pre-1899 guns are the last bastion of gun buying privacy. Their supply is finite. And as production of modern guns continues, their relative scarcity can only increase. More and more states banning private party sales of modern guns, will only accelerate the prices increases of pre-1899 cartridge guns from a canter to a gallop.
Please mark your calendar for April 7th. That is when I will be re-activating the automated ordering system for Elk Creek Company.
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Many stocks are now toast, but at least land doesn’t just go “poof”, overnight. Here is a new listing over at SurvivalRealty.com: 70 Beautiful Acres in Montana! World Class Fishing!
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!
This what usually happens. For those not into the markets, yet hold gold or silver, margin calls force the sale of assets outside the ‘margin’ account to maintain a required percentage of value, as collateral on a loan from the broker, to purchase additional stock that they did not use cash to pay for. The broker must protect themselves, and requires the client to deposit additional funds to replace the value lost due to the decline of the value of the stock purchased with ‘margin'( a loan). The client is at the mercy of the market. When the decline is rapid, and the client does not deposit additional funds within a few days, the broker can sell at his discretion, other stocks or assets in the client’s portfolio, assets not in the margin account, to cover the margin call. The client has a few days to find the cash, perhaps from the sale of gold, and deposit the funds with the broker, or the broker can force the sale of remaining stocks at current depressed prices, to eliminate the brokerage’s risk in a declining market. This means as the market falls, more assets, such as gold will likely be sold to cover additional margin calls. The price of gold and silver may continue to fall as a result of the massive decline in the stock markets. It may also fall under additional downward pressure as short sellers of gold and silver , sell into the decline, and hope to cover, or buy back their short sale, at a very low price, and profit when they close the short.
However, once these forced sales gold and silver slow, the price will be very attractive, and buyers will step in and hopefully will cause a short squeeze in gold and silver, and the price will quickly return, and exceed recent levels. In fact this situation may kick off a bull market for gold and silver.
I am a penniless old man living in the woods, and have zero credentials. Please do construe any of the above as investment advice. It is YOYO time!
In response to:
“It seems that investors have been selling gold in order to cover losses elsewhere,” said Caroline Bain, chief commodities economist at Capital Economics, in a Friday research note. “Ample liquidity in the gold market means that the sale of gold holdings is a relatively quick and seamless way to raise cash in times of need.”:
Won’t lower interest rates decrease investment in infrastructure? Why would I lend money, build new factories, houses, etc if my money makes so little. Why would I save money. Seems like we are rewarding grasshoppers instead of ants.
This is what we’ve been up against my entire adult life. Saving money is the dumbest thing you can do. They want to force you into risky investments to help support their stock market.
They make fun of Goldbugs because you can’t eat it and it doesn’t pay dividends—yet they buy stocks with price earnings ratios around 100! Essentially, their only chance at increasing in value is price appreciation…., just like gold.
The problem is, when it’s time to retire, you have to sell the stocks because there are no dividends to live off of.
If I’m going to have to sell something to live off of the capital, I’d just as soon own something liquid and stable and somewhat protective against inflation.
We may be getting the reset needed to vindicate the virtuous ant.
I was thinking more like your local bank or credit union. You know, the people who loan to their communities.
I see. I think you’re right. Generally, it is lack of capital that leads to lack of investment —. Which is to say that if you don’t have “some skin in the game”, the banks generally got wanna help. That is very rational on their part. However, since ‘08 especially, the amount of down money required by the regulators has dwindled to nearly nothing in an effort to stimulate the economy and loosen the purse strings of the banks.
The problem is how do you save down money if it doesn’t pay you some interest to save it?
I’ve been following precious metals since I was 13 and I have never in my life seen a one-day bloodbath like we are seeing this morning. In the wee hours in the European markets, the gold to silver ratio hit 1:124. I hope everyone had the foresight to sell their Rhodium when Jim mentioned it a few weeks back at near the peak, it’s being hammered ruthlessly, and platinum is half the price of gold now. Wow. As I’ve been mentioning, we’re going to see a repeat of 2008/9 so hang onto your hats. I bet a pecan pie the Dow sets a top three down record today. Silver is setting up for another great short-term investment opportunity like it did during the 2008/9 meltdown when you could double your money and then sell out at 5x in 2011.
Agree- IF you can find a dealer to sell it! Our LCS has gone ‘no bid’ meaning they are not selling at these prices. (I’m guessing they are buying hand over fist tho’). If you’ve got available cash, and can find PM’s available to buy, get ready and be prepared to ‘back up the truck’ – to buy some more!
A comment about the Baltic Dry Index….
To get a good perspective of where global shipping is look under the bottom, left hand side of the graph. There are the characters 1y, 5y, 10y, 25y, and ALL. These indicate the graph in years. Click on ALL and see just how low shipping is in comparison to the past.
I read an article yesterday (don’t remember where) that talked about the paper-physical silver market had decoupled, and a quick look at online sellers confirmed it to me.
The cheapest price I could find on a silver eagle (random dates) was $20 with a 10 PLUS day delay in shipment. The sites that said “in stock” were $22.50 for cash today, up from $20.50 yesterday.
The US mint is already sold out of 2020 eagles for the year, I’m going to check out my local dealer today for fun and see what he’s up to. I don’t recall ever seeing a $8-10 premium on silver, and as the miniscule silver coin market gets gobbled up like the toilet paper market, lets see where this goes.
Jim: Expect prices to keep increasing on antique firearms. Although our laws are a little different, I have been watching the prices on those spike here in Canada. A couple years ago a Webley Mk1 with shaved cylinder to shoot .45 ACP was running at about $17-$1800. Today you wont find one under about $2500. Nice WG’s are over $3K.
I recently found out about the wisdom of buying pre-1933 gold coins. Look it up,very interesting.
From Patriot Nurse: https://www.youtube.com/watch?v=cN4C2HKAWas
For those of you who haven’t stocked up on needed ammo beware of the same scammers
that have did it before and remember who they are, like (LOWER THAN DIRT) company
A box of white box 9mm normally 10-13 dollars for 50 is now 399.00 for 500 rounds.
That’s 40 dollars for a box of 50
I’ve read that America will need a response equal to that to World War II.
I’d say America will need Americans equal to those who responded to World War II.