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 the recent run on guns, nationwide. (See the Tangibles Investing section.)

Precious Metals:

I noticed that spot silver rebounded a bit on Friday, to $12.33 per Troy Ounce. I still consider silver a strong “buy”. That is IF you can find any physical silver for sale. Most dealers have completely sold out!  Is your local coin shop sold out? Then phone around to your local pawn shops. Perhaps they still have some…

o  o  o

Rhodium has continued its nosedive–with the spot market now down around $2,500 per ounce.  I hope that folks bought some when I suggested it in February of 2016 (at $670/oz.), and sold some when I suggested it in February of 2020 (at $10,000 per ounce.) If you did, then you owe me a dinner!  A really nice dinner.

o  o  o

Jim Rickards: economic freeze is here, get gold, silver if you can and get ready

Economy & Finance:

The U.S. Congress is now poised to pass a $2 trillion emergency funding legislative package. Meanwhile, the Federal Reserve has committed to $4 trillion in a new round(s) of Quantitative Easing (QE). In the long run, both of these moves will be wildly inflationary. But for now they are just trying to staunch teh stock market bleeding, and deflation.  Get ready to be whipsawed by deflation and then inflation, folks. This will not end well! – JWR

o  o  o

I was asked by a reader about the DJIA rally on Friday morning (March 20, 2020.) My reply: It is amazing how high a dead cat can bounce.  Then, sure enough, the Dow dropped 913 points, before the closing bell.  We can expect continuing volatility, in the next few weeks. The Bear has arrived.   Treat any  rallies that you see as Bear Trap rallies.  Sell off most of your remaining equities, during these rallies.  The only exceptions might be a very few depression proof blue chip stocks. Oh, and shares of the makers of hospital ventilators! – JWR

o  o  o

At Zero Hedge: The Crash Of 2020 Is Now Worse Than The Great Depression.  The piece begins:

“Back in December, someone in China made bat soup (at least according to the officially accepted narrative that doesn’t get you banned on Facebook, Twitter, etc), and the rest is history: in the next three months, the global equity market has lost $24 trillion in value, more than the $22 trillion in US GDP. And here is a staggering chart from BofA putting the crash of 2020 in its historic context: in the past month, the US stock market has crashed faster than both the Great Depression and Black Monday, and in terms of the total drawdown, the crash of 2020 is now worse than 1929 and is fast approaching 1987.

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European Banks Face Financial Crisis 2, Shares Hit 1988 Lows

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Also at Wolf Street: After Blowing $4.5 Trillion on Share Buybacks, Airlines, Boeing, Many Other Culprits Want Taxpayer & Fed Bailouts of their Shareholders

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Distressed debt doubles in a week in the US

Commodities:

Michael S. sent us this: April Could Be Worst Month Ever For Oil

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Arthur Berman at OilPrice News asks: Is Saudi Arabia To Blame For The Looming Economic Recession?

Derivatives:

At Risk.net: Exchange shutdowns could trigger derivatives unwinds

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Virus volatility a shot in the arm for China’s dormant derivatives market

Forex & Cryptos:

It is interesting to see that the USD/CHF pair is back almost to parity.

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The US Dollar has been rapidly losing ground against the British Pound since March 9th.

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Bitcoin’s 85% Bounce Shows Crypto Is Fundamentally Alive and Well

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Woman Arrested for Stealing $480,000 From Crypto Exchange She Co-Founded

Tangibles Investing:

A run on guns: Folks who bought guns during the past three years when they were plentiful, prices were low, and the selection was almost unlimited are now doubtless patting themselves on the back. But the folks who are looking for guns now?  They can pretty well forget it. Unless perhaps they are looking for bolt action rifles. Oh, and most gun shows are being cancelled, all across the country. That just leaves a few classified ads and venues like GunBroker.com. But I expect prices there to start galloping, shortly.

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!




18 Comments

  1. I have been looking for physical silver since it took a nose dive. I haven’t been able to find it in stock online, without ridiculous premiums, I’ve seen the premiums as high as the spot prices! One of my local pawn shops in the next town over had several different pieces of bullion a few weeks ago but told me he pulled them into the back because he was losing too much money at current prices.

    1. My local coin shop’s website says they have silver for sale, but does not say how high the premium is. Personally, I do not care. If the price+ the premium is less than say, $20 per oz, I am buying. It will still be a bargain later on. I don’t mind if they make a large profit as long as I am happy with the total price.
      On another subject, in this post, Eaton Rapids Joe has some interesting news. –
      http://eatonrapidsjoe.blogspot.com/2020/03/decoding-political-language.html

      1. People panicking. Every day for the past two weeks people are flocking to gun stores and buying everything. Shelves cleaned out. My favorite shop is messaging us that they’ll buy our guns and ammo from us. I checked Saturday, it’s true.

        I’ve been preparing my supply line for this. I’m taking a spare shotgun in today to see if I can double my money.

        1. Yes. Made a $200 profit on a pump shotgun today. I’m paying off a big renovation on our home water system which I includes the hand pump that can pressure up our whole house system.

          Also today, more out of area fugees loading up cars and pickups at Costco. Employees said it was another madhouse this morning.

  2. Re: firearms and ammunition scarcity,

    What? Not everyone has a wife who sees the wisdom in putting back some of the other ‘precious metals’ as well, like Aluminum, Steel, Brass, and Lead? 😉

    Her first loves are gold and silver, of course. But she’s a fan of ‘non-denominational’ metals, also…!

    Over the past 6 months to a year, our family took advantage of almost historically low prices on tactical firearms and ammunition. Got a manufacturer to cut us an extra ‘deal’ on some spec’d tactical rifles, and realized some great rebates on ammunition, too.

    Having been making inroads into a ‘community group’, we’ve put away enough of those items for a number of our neighbors who may find themselves in need.

    Which will also help our own level of security, here. [We plan to be quite discriminating in this, as you can imagine, and also have other plans in place]

    We’re just both thankful that we were inspired to, and had the resources to do so.

    And so we watch the cycle begin, again…

  3. Don’t know how many here pay any attention to the mainstream press, but the front page of today’s USA Today online has this article. I was pleasantly shocked that Coronavirus is showing prepping in a positive light, & maybe this will counter some of the doomsday preppers that made us look bad or extremists or a bit crazy. One family member who has passively tolerated my prepping, told me today that I’ve been wise to prep. Here’s the USA Today column:
    https://www.usatoday.com/story/tech/reviewedcom/2020/03/20/8-items-preppers-recommend-emergency-like-coronavirus-crisis/2887673001/

  4. Dear JWR:

    I’m glad you arrived home safely, and thanks again for being such a valuable resource for each of us preppers.

    I think many of us are really seeing the wisdom of your admonitions to invest in tangible items (rather than “virtual” or paper-based assets). I’m wondering if you have any thoughts about price trends in the Real Estate markets over the next 12 – 18 months?

    I’m guessing that real estate will take somewhat of a hit, but that rural, retreat and farm properties will fare better than city and suburban homes. However, that’s only a personal hunch, so I’d really be interested in hearing your perspective.

    Thanks again, and God bless!
    Cliff (in Oregon)

  5. Just curious. A while back someone was talking about the stock market being grossly over
    valued and that coupled with a crushing debt burden our economy could be in trouble even
    without a black swan event.They also mentioned that in their opinion precious metals were a good hedge in case of hyper inflation or a recession or even a depression.

    It was just one persons thoughts and opinion. Maybe they had a crystal ball to see the future but I doubt it. I’m very grateful that I heeded the information and acted accordingly.

  6. Lead is another precious metal. I can cast silver bullets, but that does get expensive after awhile. Even reloading components for common caliber ammunition are disappearing. The supply was thin, and going away fast. It is now slim pick’ens. If you do not have enough loaded ammo, buy the components, and dies that are still available, and find someone who can reload for your rifle, if you can’t do it. Make sure they will develop load for rifle that will be accurate, and not over the pressure limits for *your* rifle. If you’d rather do it yourself, there are plenty of videos on the topic. It is not hard.

    It was cheaper to buy it in bulk before this crisis, but at least you can still make ammo. It is entirely possible to barter for this service as well. Today, I traded uncommon caliber bullets for common caliber loaded ammunition I needed more of. We are both avid reloaders, and happen to need what the other had. Having a versatile powders also helps. H335, H322, and Varget are popular for 5.56, but it would be better to have IMR 4064 that is best with 77 grain OTM bullets, but will work good with 55 grain bullets as well, and be good for most cartriges up to and beyond .30-06. It is also easy find a published load for IMR 4895, IMR 3031, and IMR 4064 for most rifles, and other rifle you may already have. These powders will work well in 5.56. If I had to choose one, it would be IMR 4895. If I could not find any of these powders, then an under appreciated powder that will likely be left on the shelf will be IMR 4320. It is also good in 5.56 to .30-06. However data will be harder to find. Check on line sources. Publications during the last decade usually do not include IMR 4320.

      1. Red Dot is good for 9mm, 12ga, and safe to use in reduced .30-06 rifle loads. Unique can do it all too, yet I cannot recommend reduce charges unless you really know what you are doing. Even with Trailboss, open up the flash holes, otherwise the cartridge shoulder gets set back and next time you will may have excessive head space. SR4759 is designed for reduced charges for .30-06 as one time military training aid. It retains suitably higher pressures whilst reducing recoil, and can be used to duplicate .30-30 loads. Reduced loads are useful. One can made the .30-06 and other cartridges do any job. Using Barry’s Plated bullets, at 9 cents each, and a couple of cents worth of Trailboss or Red Dot, can turn the .30-06 into something that hits harder than .22 Magnum, or is almost on par with a .32-20. I can supply neighbors who only have a .308, or other with inexpensive low recoil ammunition for pest control. This is a virtually overlooked bartering item. I wouldn’t not wish to get hit with 150 grain flat nose, or 110 grain RN plated hard cast .30 caliber bullet running at 1,600 fps either. One can also make low cost, lead free, and devastating hunting loads in 12 ga. from empty shells. Reloading is good for fun and profit.

  7. On anything including Rhodium or other rare or precious metals, it is not the current price, but if you will dedicate the effort to pay attention and buy and sell when prudent and not panic nor become greedy.

    Platinum is rarer and more useful than gold at less than half the price. Palladium is near gold’s price.

    Look, study history, and what the use case is. And realize stores of value will not feed, clothe, or shelter you. You must give them away in exchange to do so.

  8. Oil price vs gas price has become unbalanced, even with falling crude oil price(WTI/Brent) the price of gasoline(RBOB) has fallen much further. With crude falling from $50/bbl to $20/bbl the price of wholesale gas(no transport or taxes) has dropped from $2/gal to $.48/gal or less than the cost of input. Prepare for gas to drop dramatically(locally went from $1.99 to $1.29 overnight) but will not be sustained as refineries will shut down instead of working at a loss (has happened before with a claim of breakdown and get insurance to pay for failed deliveries). When these price disruptions occur cycle through stored fuel and replenish.

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