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 Mother of All Bailouts (MOAB).
Precious Metals:
Bank of America: Gold set to hit $3,000 within 18 months
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Over at Kitco: Gold prices up as bulls continue to flex their muscles
Economy & Finance:
Brandon Smith: Pandemic And Economic Collapse: The Next 60 Days
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Peter sent us this: 3 million Americans are not paying their mortgages right now
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At Wolf Street: How Far Will the U.S. Economy Plunge During Lockdown?
Commodities:
H.L. sent us this: Oil Tankers Surround California With Nowhere to Unload
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Nick Cunningham of OilPrice News reports: The Worst Is Yet To Come For Oil Prices
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OIL CRISIS DEEPENS: What I’m Doing – Mike Maloney
Derivatives:
JP Morgan records $950 million derivatives mark down from market turmoil. “Loss due to derivatives mark down contributed to 3% decline in total net revenues at JP Morgan.” JWR’s Comment: I expect even wider swings and much greater counterparty risk, in the next few months. Mark my words: There could soon be “blow-ups” in both commodities derivatives and credit derivatives. There is also a smaller chance of a currency derivatives crisis. The derivatives crises will cause some major banking and trading firms to go bankrupt, or will require huge taxpayer-funded bailouts. Since the U.S. government is beholden to the banksters, I predict bailouts, rather than than bankruptcies. With multi-trillion dollar bailouts and “stimulus” becoming the norm, the current deflationary pressures will revert to inflation. This whipsaw effect will be devastating–causing millions of Americans to lose both their jobs and their mortgaged homes.
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March in review: Swap Markets see Record Trading Volumes in response to COVID-19 Market Turmoil
The Mother of All Bailouts (MOAB):
In March, the Federal Reserve announced huge a multi-trillion Quantitative Easing plan (QE4), including stock purchases, to stimulate the economy. Then there were two stimulus (bailout) bills passed by congress, totalling more than $2 trillion. Those were followed most recently by another $483 billion in spending–with only six senators on the Senate floor. And economists are now saying that trillions more in bailouts will be required, in the months to come. All of this new debt will be highly inflationary. Here are some articles that sum up this orgy of spending:
Coronavirus: Trump signs into law largest bailout in US history
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Here is more evidence that we are now in Deep Schumer: With Only 6 Members Participating, Senate Passed $483-Billion Spending Bill by ‘Unanimous Consent’
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Zero Interest, Limitless Repo and QE4: The Federal Reserve’s Market Operations Explained
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At Zero Hedge: BOJ To Launch Unlimited QE, Double Corporate Bond Purchases
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Another diatribe, in the Los Angeles Times: Opinion: Coronavirus is going to create the mother of all housing crises if we don’t bail out renters soon
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Coronavirus mortgage bailout: ‘There is going to be complete chaos,’ says industry CEO
Tangibles Investing:
When the stock market tanks, investors buy collectibles – but which types?
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Top 5 Alternative Investments to Watch in 2020
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!
With all this “Free Money” being thrown around if your not quickly preparing for a hyperinflation destroying the value of the money in your bank accounts and pension plans your going to get hurt badly. Like those 70’s retirees that had to choose between paying for their food OR their Medicine Or their rents-taxes.
Aka Cat food for dinner again?
When that happened my father was injured and on Government assistance and those paper food stamps did little to pay the rent-electricity and such. Cold water showers was my biggest memory along with growing store bought potatoes in red clay. More than a few meals WAS those grown potatoes.
There is no situation so bad that the Government cannot make it worse with stupid laws. They can try to control prices like they did in the 70’s when you couldn’t FIND any of the controlled price items BECAUSE the Manufacturers-grocery stores could not afford to sell it at that price. Instant USSR store situation.
The Government is likely to try to enforce a ban on cash due to COVID19 hazards-black marketing etc. But really they NEED those Taxes they are not getting from cash transactions AND the Control they grasp for over Americans.
Anything you can create to support your home and family like rabbits and a garden will give you options. Even a little barter material when you need that truck muffler fixed and have not enough digital “money” for it.
If you can pre-pay (And get a receipt) your taxes a year ahead, if you can buy your animal feeds (and store them properly) a year ahead you’ll have more options than the ones scrambling with too much month left after the “Stimulus Checks” run out.
All this “Free Money” especially with the Democrats trying to Ride COVID19 aid to PAY for their promises of super pensions to their faithful voting Unions in Illinois and such WILL make our 20 dollar bill into the street food napkin used in Venezuela called the “Strong Bolivar”.
I hope and pray I am wrong but what I am seeing daily (like the 6 people voting “Unanimous Consent” to Billions to be thrown away above this article) looks a LOT like what my Grandmother told me about escaping post WW1 Weimar Germany with but their clothes and a few gold coins sewn into the garments.
They too THOUGHT they could Spend their way out of a situation….
The bottom line is (my opinion)…
For years the laws and incarceration have increased
For years dependence on public assistance have increased
For years our rights have been eroded and eventually removed.
For years our buying power has been lessened while the cost has gone up.
Major policies and imports of cheap foods have hidden this.
Socially encouraged disharmony has hidden that.
If you haven’t already noticed this before the “covid” issues then you are in essence stepping into the ring with Mike Tyson …. After 2 months in the gym. Or to use another analogy ….
Building your boat in waist deep water.
Is there still hope?
Yup.
But you had better learn quick and make your peace with the fact that you will learn first hand every possible definition of the words
Suffering
And
Determination
Amen.
Meanwhile, all these restrictions have accomplished what so far exactly for our health?
https://www.thegatewaypundit.com/2020/04/strange-total-us-deaths-march-2020-actually-15-average-prior-four-years/
My question is, if going into economic lockdown resulted in a 15% reduction in mortality (excluding “COVID” deaths), how could we ever consider ending it? Seems to me that a policy of blanket risk mitigation resulting in the saving of 34,000+ lives in 3 months could be considered reasonable and justified. Keep in mind, there was no pandemic going on in the past 4 years in this country; COVID was not a factor in that number whatsoever. So what sort of deaths have been prevented exactly? How would allowing those deaths be considered an acceptable risk, yet COVID deaths somehow are not acceptable?
“So what sort of deaths have been prevented exactly?”
In Oakland and Macomb counties (Michigan), suicides are now listed as CoVID-19 deaths. This is not an exaggeration or a conspiracy theory, this is actually happening. So suicides are down.
In the UK, heart attacks are being counted as CoVID-19 deaths. So CoVID-19 has cured heart attacks.
Finally, the deaths that have actually been prevented are the deaths by medical malpractice. There are roughly 500,000 deaths annually due to medical malpractice, mostly in hospitals. So, since people are avoiding hospitals for fear of catching CoVID-19, this virus is actually saving lives.
From JWR’s Comments: “Mark my words: There could soon be “blow-ups” in both commodities derivatives and credit derivatives.”
It’s our view that JWR is right. There is good reason to be seriously concerned. We won’t know the outcome until we’re in the “after the fact” phase of events unfolding. …and there is always the possibility of a “near miss”. In sharing the guidelines we use to govern our own choices… Be prudent. Be wise. Remain aware. Exercise caution.
We are reminded of the winter coats from which the sleeves were cut in order to destroy unsold product after the disaster of 2008. It was certainly the right of the owners of those products to do so, but it was also a disturbing reading of where we were (and certainly are now) as a culture and civilization.
With regard to the food chain (ZH article linked below)… A study of the regulatory environment involving the food supply would probably yield a lot of information. There are most assuredly challenges (prohibitions and liabilities) associated with the transfer of food from suppliers to those in need — and these in addition to financial considerations. In addition to other ways in which the Trump administration is attempting to course correct for the country, an assessment of and action plan within this arena would be extraordinarily important. Streamline regulation so that it remains safety focused while not otherwise creating — or exacerbating — inefficiencies or unnecessary hurdles.
https://www.zerohedge.com/health/cracking-americas-food-supply-chain-serious-problem
Remain steady. Be safe. Stay well everyone!
I’ve been waiting to see if Trump (and Sonny) will de-regulate the food industry on a massive scale. It would be a huge shift, but I can see it making a big positive difference, and helping everyone out.
I think it is useful to understand what is happening with the economy, the supply chain, the weather, and to understand potential various future scenarios. In this article noted above, https://wolfstreet.com/2020/04/21/how-far-will-u-s-economy-gdp-plunge-during-lockdowns/, there is useful information regarding how the economy has SHIFTED. One example, ecommerce is booming. I’ve lived through a few market shifts and economic dumpster fires. There’s always a workaround or a solution if a person is willing to think about alternatives. I’ve known people who got stuck and lived poorly the rest of their lives because they refused to reinvent themselves to meet the market demands. Those persons decided they could only do certain things and not others, thereby limiting their own success. I’m not saying everyone should go and figure out how to be an online retailer. What I’m saying is, to study the demands and needs of the community or region, do the research to understand how those markets work, see if you can match up your own skill sets with any of the available demand. I’ve done this maybe half a dozen times in my life, completely switching careers by leveraging a previously developed skill. I honestly don’t think anyone is stuck, and while I have tremendous empathy for those plagued by physical and mental disabilities, it’s still possible to “do something with your life” that will provide for your family. Not preaching at anyone, just trying to encourage some creative thinking rather than abject fear.
Well said. The days when a person could do one thing their entire career are over. Times change, and we have to change with them.
The first thing to do is cut overhead, and make big changes as needed. I too have reinvented myself multiple times, however there is a point that an economy will become depressed, or a situation occurs that one’s best efforts are barely adequate. Adapting now to a third world economy that is in our future while there is time to maneuver, is a strategy I took. Because I did this early, my expenses are extremely low. In other words, anticipate the future, and find ways to tighten the belt, or do without. In my case, I have many skills, yet my body has failed me, and it is all I can do to continue to prepare for an even more difficult time when no man can work. If I can do it on an extreme low budget, any one can if their priorities are correct. Getting right with God is number one. Sin separates us from God. Repent. He will provide. I have learn to live by faith as I have learned that my body is not reliable. He is faithful. My body is not. After 5 years of extreme conditions, He has provided and I am in a better position that I had thought possible. I did not get this done by myself. I have already lived, and continue to live in a future that most here are striving to prepare for, and I am still learning. Make the big changes, and perhaps painful and scary changes now while it is easier to do so. It would much more difficult latter.
100% agree with you on all counts. I remember, when I was at my absolute worst physically, that I said out loud “all I have to do now is walk with Jesus” cuz I had nothin’. I am stunned that I’m in such a good place now. I didn’t think it was possible. I remember staring at the scripture, “Be still and know that I am God”, and half laughing and half crying because I couldn’t hardly move anyway, thinking God has a sense of humor. He is soooo faithful. I’m happy for you! Thank you for sharing.
Tunnel Rabbit!
Many thanks for your story of Faith and perseverance, and for the excellent point about the importance — at some points in life — of making big changes. Our impression is that many readers here at the SB have either endured seismic life shifts or engaged these directly by choice. We have done both in our own lives, and the foundation on which we stand now — on earth and in Faith — is much, much stronger for all of it.
Remain steady. Be safe. Stay well everyone!
And although collectively we have lots of life experience, we are yet relatively affluent, and most have never done without as compared to those in the Third World. I have friends and neighbors who consider themselves to be preppers, who still live the good life, yet will not be able to feed or protect their family for more than a year or two. Gold and silver may not be enough, nor will it grow food. Their problem can become my problem. And we not only face hard economic times, but face the prospect of violence few have had to face. I still can not get them to take the threat seriously. They do not have the mindset. I would hope they could talk tactics and gardening. They can do neither.
It is time to get our priorities straight, and make smart decisions as the clock is ticking down.
1) Brandon Smith is not a scientist.
2) Wall Street Journal has an article on how people who are scientists are working with Trump’s people and billionaires to mount a Manhattan Project pursuing multiple approachs in parallel to defeat this threat. Not clear if they will be successful but the WSJ has their plan and schedule.
https://www.wsj.com/articles/the-secret-group-of-scientists-and-billionaires-pushing-trump-on-a-covid-19-plan-11587998993
The plan:
https://s.wsj.net/public/resources/documents/Scientists_to_Stop_COVID19_2020_04_23_FINAL.pdf
3) One issue is whether vaccine production is a matter of production bottlenecks resulting from profit-loss considerations —which could be dispelled with government investment. Every year there is a debate over what version of a flu vaccine to make because a choice has to be made and stuck with over the ensuing 5 months because Big Pharma is sized to only make one version of the vaccine.
https://en.wikipedia.org/wiki/2009_swine_flu_pandemic_vaccine#Production_timelines
Be careful about getting pulled into this temporary market melt up. We need to see what Q2 reports look like (and they are due in middle to late July) just as enhanced unemployment benefits run out for people. I fully expect executives to announce “rightsizing” their workforce to the new reality of greatly reduced consumer spending, limited credit or greatly increased qualification requirements for bigger purchases and continued supply line interruptions. Even if we are able to avoid a second great depression, I don’t see how this ends without a lot of economic pain and suffering over the next 2-3 years. I like gold and silver (although silver has not moved much and premiums are way to high vs. stagnant paper spot prices), but I also like investing in sideline businesses that make money in bad economies. Please do what you can to shore up your finances. Above all pray for God’s mercy and favor in your employment
Remember – He often moves on our behalf when things look their bleakest and we need to lean on Him for hope. Pray, trust and let Him do his thing.
Food is the key. The real long term crisis hasn’t started yet. We all know that when we get
hungry enough people will do bad things.The taste of any antique can’t be improved by
ketchup.
The number one tangible to invest in is food,food,and more food.
Gold and silver,while hard to find are a bargain even at current prices.
To repeat myself— the real crisis hasn’t started yet!!
That’s my gut level feeling too. ugh. I ordered lots more seeds too.
I sure do agree. Seems canned/packaged food might be the way to go as it is more “mobile”.
Yes, food is the key. I’ll have to feed people who refuse to sacrifice now. A hungry neighbor can be a threat or an asset. In some cases I would be charitable, or I might trade food or garden seed for things I cannot afford today, such as an ATV or something else. I would seek to make a trade, so that they have some food. The trade may not be in my favor, but those who have some thing of value that they could have sold and purchased food as they were advised to do, yet did not, should not be given food for free. A person or family could only do this sort of thing if they had more food that they could eat, and needed the help to protect what they got. At the end of the day, It is not what you got, but what you can keep. One may have to go hungry in order to employ others to protect themselves. Get enough to avoid going hungry. Most do not have enough food.
An excellent point… Food is key, and most people do not have enough of it in their pantries. Just check out the news reports people lining up in their cars, sometimes for miles, to receive emergency food supplies from charitable food pantries. …and this could become more difficult (and maybe dangerous) should conditions deteriorate further with regard to the supply lines. We think it’s wise to prepare to the best of one’s ability, and to the greatest extent possible. Stock the pantry. Stash seeds. Expand the garden.
Remain steady. Be safe. Stay well everyone!
Hello everyone,
Today I was able to order an extra freezer to add to my preps. With all of the meat plant closures I thought this was an absolute necessity.
I will have it next week but Home Depot is cleaned out completely and I was lucky to get this as their lead times on most of the freezers is going into September or later. I also placed an additional order for meat and chicken to fill this extra freezer.
I am also anxiously awaiting my Freeze Dryer that I ordered, I should receive that in the next couple weeks. (I ordered the last week of March from Harvest Right & they had 8 weeks lead time then, I don’t know if you can even get one now). Also, I ended up getting the medium sized one because they were not even offering the small one at that time. I also purchased extra parts and filters rather than the new oil free pump that they now offer.
I know that not everyone can afford this kind of expensive piece of equipment but for me this is an investment, and now in light of everything that is going on, I feel even better about this purchase.
Trust me, I am so frugal (my husband says I am cheap) so this was a huge deal for me to spend this kind of money but now we have another way to preserve food.
Also, not sure what’s going on with Amazon but they have informed me that I am again not getting a bunch of “Essential “ items that I order every month so I’m not in love with them anymore. This is the second month in a row. Good thing that I’ve been stocking for a long time. They are probably catering to the toilet paper club instead of loyal long time customers. I might cancel them permanently, we will see.
Just letting you all know.
Stay safe & have a Rockin great day
I was thinking of canceling my Prime membership too. Even before the crunch, I wasn’t getting “prime” delivery. Also, it’s really hard to find quality products, made in the USA, on Amazon. I’ve been ordering from a variety of places lately. Let us know how the freeze drying goes. Oh, and on the freezer… lol… one of my daughters called and said THANK YOU FOR THE FREEZER MOM! That big freezer has been sitting in her garage, plugged in and empty, for years now. When I would visit, I would cook up a storm and freeze meals for her family. But, she didn’t think it was a necessity. Now, she gets it. My girls aren’t up for canning just yet, but they’re interested. A freezer is not that great when you lose power. They started making sourdough bread though! Woohoo! Baby steps.
RKRGRL68 and SaraSue, I know you are ladies (at least I think from your writings), but try getting a hunting license. If you bag a deer or moose or bear, you’ll have enough meat for a year or two all for the price of the license–$50 annual. If you’re not spot on or keen with gutting and cutting up your game, then have your husbands/brothers or some type of “manly” men that could help you.
I’d love to be able to hunt, but I’m not physically able to do so. Most of my neighbors hunt and they aren’t adverse to bartering. I also like to support the local farmers and ranchers, grow/raise what I can, and avoid the grocery stores as much as possible. But, thank you for the suggestion.
Congratulations on your freezer! That was great news, and we’re sure seeing it filled will be wonderfully reassuring!
Our local Walmart is cleaned out of fresh-ish beef products like ground beef and most steaks. They have boxes of burgers left, a few lonely looking steaks that didn’t look very appealing and some stew beef. There was 10-15 lbs of organic ground beef left (higher prices). This has been going on for three days now. I plan to get up early tomorrow and stop by before work. A few other grocery stores have more in stock but at significantly higher prices. Also cleaned out were soups, certain kinds of pasta, a few varieties of canned vegetables, rice, dry beans and chicken breasts. I’m not ready to call it a trend yet until this goes on for seven days or more. Freezers – multiweek wait but sometimes people aren’t picking up what they ordered and you might find one if you call around every day. I am placing a decent sized order at the meat market for delivery but after that I’ll stock up in small quantities when it’s available. There is a time to buy a lot when stuff is readily available and then there is a time to make sure others have some too.