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 both the supply and demand sides of the silver market. (See the Precious Metals section.)
The demand side for physical silver is off the charts. But meanwhile, the supply side of the silver market equation is downright grim. Consider these factors and some recent news:
- In the United States, Newmont has temporarily closed some mines.
- In Canada, many mines–in all sectors, not just silver–have been put on hiatus.
- Ditto for mines in Peru.
- Mexico’s Ministry of Health announced that all silver mines in Mexico will be shut down until at least the end of April, because of the Wu Flu pandemic.
- About 30% of silver production worldwide is a by-product of copper, zinc, and lead mining production. But all of those industrial commodities have had depressed prices for many months, and some mines have therefore shut down, or shifted to very limited production.
- Global silver production had already been in a gradual decline, since 2017.
- Silver refining production, particularly in Nevada’s Carlin region is slowing, or in some cases stopping.
Although the official spot and futures prices of silver are still depressed because of fallout from the stock market crash (read: traders liquidating assets, for margin covering), the real world physical market is red hot. Dealers are charging as much as $19 over spot as a premium, for 1-ounce Silver American Eagles.
I expect the spot price of silver to rebound, by the end of June. And, as I’ve mentioned several times, I expect the silver-to-gold price ratio to get back closer to normal. For that reason alone, I prefer buying silver rather than gold. Silver will gain, relative to gold. So, if you can find any silver, then stack it deep!
Economy & Finance:
Reader DSV sent this: “There Are Basically No Sales”: U.S. Auto Industry Enters Total Collapse From Nationwide Lockdown
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Simon Black, over at Zero Hedge: There’s a major sovereign debt crisis looming
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The many weeks of pandemic “self-Isolation” have taught Americans a lot. Among other things, many families have learned that they enjoy homeschooling and enjoy working from home. Also, witnessing the spike in corporate and retail layoffs has also taught people the value of having a second stream of income. Even in the early days of SurvivalBlog, I emphasized the importance of having a home-based business, to provide a second income stream — and possibly your “ticket” to move to a more lightly-populated region.
Please seriously study and pray about different possibilities for starting one or more home-based businesses. I generally shy away from franchise businesses, since those have higher overhead. And with the COVID-19 panic likely to continue in waves for many months to come, you should probably also avoid businesses that require any significant face-to-face contact with customers, clients, or charges. (No daycare for those little vectors!) But this still leaves many options — including a web-based mail order business, freelance writing, web-based tutoring, tele-medicine consulting, Internet forum moderation, software writing, phone tech support/help desk (as a “Native English speaker”), and web page design. You’ve probably noticed that I took some of my own advice and started a web-based antique gun business. I was able to set that up very quickly, using the the e-commerce services of Make Ready Arms. I recommend them, especially if what you’ll be selling is firearms-related. I’ve found that their customer service is very personal and responsive. They are great guys.
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OilPrice News reports: $1 Oil: Saudi Arabia’s Attempt To Crush U.S. Shale
Equities and Forex:
Market reactions to COVID-19: Stocks end the week in decline
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BofA: “QE vs Unemployment” Means Soaring Inflation Will Crush The Dollar, JWR’s Comment: The Bank Of America’s gloomy position on the USD should be tempered by the recognition that all FOREX moves are based on relative strengths of currencies. If foreign governments attempt simliar massive bailouts, then some of the relative strength of their currencies (versus the USD) will disappear. So don’t write off the Dollar, quite yet.
The current nationwide rush to buy ammunition and subsequent shortages look as if they will rival The Great Ammo Drought of 2008-2013. I’ve heard that a lot of calibers are sold out at the disributor level! My advice is simple: Stock up. There will be more profound ammo shortages by June. I predict that the current shortage will soon expand to include .22 rimfire ammo and some reloading components–especially primers. So stack them deep. By the time that prices might subside in a few years, currency inflation will probably be in full swing. Thus, ammo and primers–if properly stored in waterproof mil-spec cans or Tupperware will be better than money in the bank. Common caliber ammunition can be an effective hedge on inflation.
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
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!