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 effects of the upcoming Bitcoin Halving. (See the Forex & Cryptos section.)

Precious Metals:

Is The Comex On The Cusp Of Defaulting?

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Peter Schiff: Priced In Gold, The Dow Is In A 20 Year Bear Market

Economy & Finance:

I found this linked at Whatfinger.com: Coronavirus stimulus phase 4 could exceed $1 trillion and include negative payroll tax

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Charles Hugh Smith: The Crash Has Only Just Begun

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We Cannot “Reopen” America

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An essay by Gary Christenson of The Deviant Investor: Consequences, Crashes and Coronavirus

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At Wolf Street: Housing Market under COVID-19: Regular Folks Retreat, Foreign Investors Blocked, Large US Investors Gone, iBuyers Frozen

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How the Unicorn Blowup & Oil Bust Bleed into Commercial Mortgage-Backed Securities

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US weekly jobless claims hit 3.84 million, topping 30 million over the last 6 weeks

Commodities:

“We Are Moving Into The End-Game”: 27 Tankers Anchored Off California, Hundreds Off Singapore As Oil Industry Shuts Down

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At Breitbart: Coronavirus Continues Toll on Oil Industry: Largest North Dakota Producer Shutting Down Operations

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Cattle Spot and Futures Markets: Feeder Flash 4/28: Packers Doubling Their Money. (Thanks to Reader A.K. for the link.)

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OilPrice News reports: Saudi Supertankers Stranded As Oil Price War Backfires

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The Critical Metal Trump Is Desperate To Secure

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Kyle Bass: “The Saudis Are Sending Us A 50 Million Barrel Oil Bomb”

Forex & Cryptos:

They’ve decided to hold rates at historic lows: FOMC Press Conference April 29, 2020

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The US Will Sell $4 Trillion In Debt This Year, A 300% Increase: This Is What It Will Look Like. JWR’s Comment: I expect this flurry of new U.S. Treasuries sales to create more than just ripples, on the Forex market. And that is even if the Central Banks agree to quietly buy much of each other’s new debt, to paper over the inherent problem.

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Dollar Price Outlook: USD Reversal Threatens Deeper April Correction

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At Jameson Lopp’s blog: The Memes Make the Bitcoin

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Total Cryptocurrency Market Cap Adds $20 Billion In Less Than 24 Hours.  Here is a quote:

“The hype surrounding Bitcoin’s upcoming halving in just two weeks may have pre-emptively sparked a new bull market, as the latest rally has added over $20 billion and counting to the overall total cryptocurrency market cap.

Bitcoin has been on a strong, upward trajectory after bouncing from the lows around $4,000 last month. The Black Thursday crash send Bitcoin tumbling and crushed the hopes for a pre-halving rally.”

JWR’s Comments:  Note that the Bitcoin is just 10 days away. If that fizzles, then I expect to see a sell-off. As I’ve mentioned before, I believe that the effects of this Halving are already Baked Into The Cake.

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!




26 Comments

  1. I really enjoyed the article about America can’t reopen.

    At the beginning of this when the market was bouncing around at first and corona was secretly on its way to the USA I took a trip out of state I stayed with family they had cable.

    The whole time I was there I was watching the stock market News. My wife asked why I was watching it so much since I have no money in the market.

    I responded “that’s right I don’t. But I have learned from 2007 that my work is intimately tied to the market (construction) so I’m nervous ”

    In fact one of the main reasons I have moved to a big city (the biggest in the nation) was the recession. The big city offers much quicker recovery in the long term. But in the short term I might have to resort to a tent.

    But that is most of America right now isn’t it?

    Funny thing is nobody has really prepared for this kind of long slow slide or the fact that they might need to survive in a full on welfare America state of being.

    Which is the most likely outcome. The gov’ment might likely have to step in and take over or at least heavily subsidise most “essential” bidnesses. The humanitarian out cry for food and public assistance will make it so. And thier regulations will keep it so.

    A modern applicable set of examples is the anti homestead laws which vary state by state

    Can’t rv or tent camp on your own property (time limit etc)
    Can’t put up wind power generation
    Must get feasible studies to do many things like ponds, septic, large solar arrays,etc.
    Land must be properly zoned and in some cases inspected for its use.
    Ungodly costs for permits with unrealistic time frames.

    Not to mention your taxes are controlled by a gov’ment entity so it’s not out of the realm of possibility that they could go up 4 fold or higher.

    Virus origins not withstanding what most people worry about has already happened.

    Think of the old USA like the natives and the new USA (described above) has just joined the railroad east and west. It’s a done deal. The USA doesn’t lose and never fails to get what it wants. . .
    And it wants this it wants this so badly and it’s been given every tool it needs freely by the population for generation (if your reading this you have been alive through it your whole life)

    And that’s about it sorry for the ramble.

    1. You’re mistaken preppy Boyscout. The America can’t be reopened is liberal tripe written by a prolific anti freedom, anti capitalist, anti everything most survival blog readers likely believe in. I’m surprised a blog of this stature doesn’t have better quality control measures in place to prevent garbage like that from making it onto its pages. And it’s not garbage because it’s liberal; it’s garbage because it is patently agenda-driven and borderline masturbatory fantasy on the part of the author. Go read it again. Seriously. It is part and parcel of the left’s desire to see all businesses fail, to see all Americans viewing government as their savior, and to see all of us on the federal dole. Patriots have a duty to reject that nonsense out of hand, collectively and individually, and to rebuke those who spread it. I’m fairly disappointed in whoever at sb green-lit this drivel.

      1. Cole, Thank you for believing we can reopen America. It will be God-fearing folks and patriots who will be the first to be out there to open up our country, maybe in part because we believe that God alone knows the number of our days. Furthermore, God’s children still have a job to do — be witnesses of His grace. We will be out there willing to help others, and we will be studying and educating ourselves on what the MSM doesn’t want us to figure out. When doctors telling the truth get censored, then you know for a fact those doing the censoring are attempting to hide the truth. God bless those doctors and others who are trying to get the truth out. Some of the other “news” out there simply defies logic.

    2. >>Not to mention your taxes are controlled by a gov’ment entity so it’s not out of the realm of possibility that they could go up 4 fold or higher.<<
      Really. Your tax bracket must be a lot lower than mine, and I am far from the high range. To me, a 4-fold increase – a quadrupling – of my taxes means that I would be a slave laborer. Not happenin'. Period. End of story. I have an exit plan that goes into effect long before that point, and it ain't suicide.

  2. Re: You cannot reopen America

    We will see but it will not be because of the virus if we don’t. It will be because of government propaganda attempting to induce fear into the populace.

    An example. Now that the virus is clearly on the down swing we double down on masks. When on the upswing we said they were useless. Now there is probably a fair amount of inertia involved in this but it is also a very visible propaganda statement that is still being argued on the scientific side.

    I know of very few people who go out and look at the epidemiology curves on their states websites which are on a hard downswing most places. As a society we have an aversion to math. Which is why those who do not have this aversion, like engineers, actuaries, Wall Street quantitative traders, bankers etc. so easily take everyone’s money. This is being taken advantage of massively right now. Real math is replaced by visual symbols like the increased mask wearing. IMO the mask wearing is symbolic propaganda aimed at keeping this nation shut down and afraid and under attempted totalitarian control for as long as possible if not forever. And it is a vicious cycle. As more people put on more masks it applies social pressure on those who don’t leading many of those to put on masks and perpetuating the cycle. Numbers be damned because nobody looks at the numbers for themselves.

    If we can break out of the unreasonable fear cycle we can reopen. But there are forces highly motivated to perpetuate this fear cycle. And with their new found knowledge of how to manage this fear cycle they are probably planning others as we speak for when they have played this one out as far as it will go.

    1. JBH, Re: You cannot reopen America

      You imply that other powers are manipulating the fear and the current assessment of risk isn’t accurate. I disagree on the legitimate risks and why many are fearful. The medical experts who study disease transmission say we need at least 14 days of declining case counts before restrictions should be lifted. This stems from how long it takes to recover from the virus, virus incubation periods, virus contagious periods, how widespread the virus is in the community, …. I read that no state has achieved this. You point out that cases are on a downswing, but fail to consider what caused the downswing, draconian restrictions on human interaction. Remove the restrictions, the virus is still in the community, and past pandemics suggest the virus will start spreading again if we go back to normal. Over the long term we need to find ways to loosen the restrictions and do business with less human physical interaction but we aren’t there yet. The vaccine is one way, redesigning business interactions will help some, keeping the physical distancing even in open businesses will help, masks, and I’m sure there are other ways.

      Sidebar on the masks. Early on experts said don’t wear masks because the medical community needs them. Maybe they believed community transmission was low so the the risk of encountering the virus was minimal. I didn’t believe them. Healthcare professionals work in an environment with more coronavirus particles per cubic feet of air increasing the number of virus particles they encounter and the probability that some will infect them. The masks reduce the number of particles they breath in increasing the probability their bodies will be able to destroy the particles that manage to enter their bodies. This is why the medical community wants and needs the masks. If the masks work for the healthcare workers that means they do slow down the virus, they do capture the virus in the mask material and protect the mask wearer, me. The filtering capability of the masks has been measured in labs, there are tests to prove their capabilities, ways to quantitatively measure particle flow through the masks. I will be wearing a mask if near people, for my protection and theirs, because the mask reduces the number of virus particles that enter my lungs, not because of fear, programming, propaganda, or because someone tells me to.

      The virus kills at least 5 times, other suggest 9 times or more people than the flu across all age ranges, its very unpleasant to catch, and its causing serious damage to some of those that survive, damage that appears to be permanent for some. Deaths and damage are worse for higher risk people. This is based on numbers. I did some rough math and determined at least 30 percent of the population fits the high risk groups. Don’t expect the high risk 30% to go out, be around people without physical distancing and spend money until community spread is negligible and we aren’t close to that. I assess community spread by number of new cases from testing and people hospitalized with virus and right now most of the country isn’t testing enough people to even know the rates of community spread. Even the number of new cases is suspect until we can test more people. Numbers matter. When I see someone not wearing a mask I deem them an infection risk for me, I deem them a person who doesn’t care if they catch the virus or spread it to me, I keep more than a 6′ distance, and I avoid that business going forward. That person may be a real risk, they may not be a real risk, but I have no way of knowing so I must assume they are. It’s the same reason we always treat a gun as if it was loaded. In addition to the 30% there will be a portion of the 70% who have regular interactions with the 30% and they will take precautions and avoid people so they don’t spread the virus among the 30%. This increases the number of people staying home and avoiding close human interaction, be it in stores, sporting events, restaurants, travel, planes, etc.

      Open or closed is not the ultimate problem. It must be safe to go out and people must feel safe going out or they won’t be going. Why do people prep? To be prepared and feel safe Why do people move the Redoubt? To feel safe. Why do people want to carry guns even when the risk of actually needing one is minuscule in most daily activities. They want to feel safe and protected. I’m 60 and never needed a gun for self protection, nor do I know anyone who has been in a situation where a gun could have been used to exit a dangerous situation. Probably 1/3 of the US would say the same. I own guns because this could change and I can visualize situations when the risks would be different, but I don’t even want a CC permit. Fear is a very strong emotion and motivator and is regularly used to manipulate people. The problem here is that the virus is a real risk. The fear is legitimate for maybe 100,000,000 people in the US and it should be for even more people, there is no fear cycle. Don’t dismiss this fear. I want the economy and life to restart as much as anyone, but solutions need to remove and mitigate the risks of the virus so the fear will diminish. Those 100M spend a lot of money in the economy. Try to argue with an ardent gun owner about how they really don’t need to carry a gun and think how ineffective the discussion is. The same applies with respect to this coronavirus. Propaganda won’t work, discussions won’t work, the risks must go down.

      1. The simple truth is that masks work, even the basic ones given away from the little dogooders down the street. Anything is better than nothing. We’ve mocked the Asians for years because of their mask-wearing in public, now we know why it is done – respiratory diseases are easily transmitted in close proximity with infected people.
        Most of us who are working in healthcare don’t have the financial resources to survive a 3-7 week ICU stay, we know our employer will put a lien on our estate if we succumb or bankrupt us if we survive. With an 80/20 insurance plan, 20% of several million dollars is more than we are worth.
        Uncle Sugar can’t fix this, heck, the evidence is that our taxes were used to CREATE this! All we can do at this point is to try to stay uninfected as long as possible, and that means social distancing (I, by the way, have perfected this over the last 5+ decades), wearing masks in public and excellent personal hygiene. For the future there has to be TIGHT control of government research grants and yes, strict common sense laws written in blood regarding tampering with pathogens. In the words of Jeff Golblum’s character in “Jurassic Park” – just because you CAN do something doesn’t mean you SHOULD do it.

  3. “We cannot reopen America”.

    I don’t usually read Thebulwark because of their never Trumper views. But the author is right on with this report. I want us to reopen, we need to reopen, it may already be too late. But when we do reopen I, as a 77 YO with health problems is going to remain quarantined and I suspect many others will too. I won’t eat at restaurants or get my hair cut. I won’t push a cart around Walmart or go shopping for clothes or anything at all. I can’t, I would expect that when (not if) I get Covid-19 it will kill me. I actually used to go to Las Vegas twice a year, I will not go again. There are a lot of people like me. Everything has changed. I want the young and healthy to get back to normal and hope it happens soon but I will never get back to normal because it is a death sentence for me.

    1. One Guy: Well put. For people in our age group with the underlying medical conditions
      every minute of life is precious.I don’t think that some of the younger generation
      think about us or even care.

    2. One guy. I’m with you. I won’t be going out. My mom normally spends 6-8 weeks a year traveling and she’s cancelled all her trips or they have been cancelled for her. Old people have a lot of money and that money isn’t going to be sloshing around the economy on leisure activities.

    3. My state Washington has had declining case counts for greater than 14 days. Same with deaths.

      My state has 91-92% of all deaths in the 60 or above age group. Only 1% in the 20-40 age group. No deaths under 20.

      This is all public information on the Washington State department of health website.

      Sweden has had similar results as far as death per millions as the US without a lockdown. Their population is older than the US. 40.9 years median vs 38.2 median.

      This is easily viewable on Worldometer and a simple Google search.

      You have restated all the talking points of those inciting fear. I recommend researching raw numbers from health departments and comparing them to the talking points. They do not match and have not matched since the beginning of this. But nobody looks at the raw numbers critically so the lies continue.

      1. JBH, I’m glad to hear new cases are dropping in WA, though when I checked it looked like your new cases were level over the last two weeks with significant beta. It’s logical that that cases should be dropping though, since the virus hit WA early compared to other states and WA implemented fairly tight preventative measures, did they not?

        I suspect your state demographic mortality data is similar to the rest of the country. At the Country level, that over 60 and health problems is over 30% of population count.

        I’ve been reading about Sweden and other countries too. Some acted early and with significant restrictions, other countries were slower, and each country has had variations in their restrictions. Each represents an experiment that others can learn from. Earlier restrictions and tighter restrictions have generally reduced the number of cases and total deaths, though at a cost. For Sweden, per the National Review, “Adjusted per capita, Sweden has a death rate more than six times higher than Norway and Finland.” Sweden also has more deaths per capita than all but 8 to 10 countries in the world, depending on the date of your data set. It’s doing worse than the US which is only a couple spots below Sweden. Other countries are making the US look bad at slowing the virus. Though Sweden isn’t doing so well on the coronavirus metrics, it might be considered a success if you consider economic activity. It’s still early in the pandemic so we’ll have to wait to see how Sweden’ strategy pans out. I would also look at more than deaths to evaluate policies, like hit to their economies, unemployment, etc. It’s possible that restrictions could have more or less severe economic impacts while still providing preventative benefits. If comparing countries you also have to look at their restrictions. Sweden doesn’t have that many mandatory restrictions, but they do have recommended guidelines that would slow the spread of the virus. A country with a strong sense of national community and responsibility might follow recommended guidelines enough to slow the spread of the virus, while in a country like the US where so many are “I can do what I want”, survival of the fittest, winner take all, individualism, and cutthroat capitalism recommended guidelines might do little. Culture must be considered too.

        You want me to look at raw data which I like in theory. The raw data on hospitalizations and ICU beds should be fairly good, easy to count, though hospitalizations represent what the virus was doing in the community 3-10 days ago, so it’s a lagging indicator. The raw data on testing is not so good for a long list of reasons. There are delays delays between when sample was gathered and when test results were available. For example, some tests can have results back in an hour but some can take days meaning test results on a given day could represent tested virus activity 0-4 days ago. Different labs in the same state can take different lengths of time to process samples. Then are people tested based on symptoms or known exposure further skewing applicability of results? With a 3-10 day incubation period testing based on symptoms will always will be an average of the past. How is the criteria, who we test, and how many people we test changing over time, as this could affect the measured new case rate. Since people can be asymptomatic just testing people showing symptoms fails to capture all the contagious people spreading the virus in the community. Different states are using different tests which could affect false negatives. There also isn’t enough testing yet to even test everyone showing symptoms or who contact tracing might indicate is a candidate for testing. This will under count total cases and new cases but also increase mortality rates. Garbage in = garbage out. Problems with testing and the nature of the virus significantly reduce the usefulness of today’s testing data. Testing has to improve before I will fully trust numbers. Community testing (random sampling) to assess how widespread the virus is in community needs to happen before I will feel comfortable. These concerns are not talking points, they are simple science, experimental methods, and math. Just looking at raw data isn’t enough. You have to look at how the data was collected, nature of the virus, test conditions and methods to evaluate if the data is representative and the results repeatable. There are millions of people across the country who share my concerns and fears, though most probably don’t think about everything I mentioned.
        You also recommend looking at the health department data. If by that you mean county by county data, I would agree that the conditions in one county are not necessarily the same in other counties in a given state, though there are still the potential data problems I discussed above. Tailoring restrictions to conditions in a geographic area could make more sense than a complete state shut down. But you also have to look at travel through those low infection counties. Let’s say you have a county with few infections and minimal economic travel through the county. It’s lower risk than a county with a low infection rate but a high commuters who travel to a city full of infections. The transmission rate of the virus is high so it can spread quickly and we are a very mobile society between jobs and leisure meaning the virus may not be someplace today but it could be all over the county not practicing preventative measures in a couple weeks.

  4. I read a couple of the articles, and scanned a few more. I still think Vegas is going to open soon, mid-May or 1st of June. (I lived in Nevada for ten years so I understand the hospitality sector dynamic). Most of Nevada’s economy is hospitality, so it’s important for them to get back on their feet. Although one article suggested that even a 30% decrease in normal activity would be devastating to the industry, I don’t think so. They’ve been through it (2008-2009 crash). There is an enormous pent up demand for “recreation” and a lot of that activity comes from southern California. My theory on California, is COVID hit them hard in Dec/Jan/Feb before the shutdown and did not take the devastating toll people feared. Most folks in California are chomping at the bit to get back to work and get on with their lives. The problem with the “western states pact” for getting back to work, is those states have Democrat governors and they have a vested interest in making sure the economy doesn’t rebound too quickly because it’s an election year and Trump has promised that we will rebound “like never before”. My opinion remains that the pandemic is more of a plandemic for political control, not to belittle the real effect it’s had on immunocompromised/elderly people. Regarding bitcoin, I don’t touch it. Regarding real estate, I’m waiting to hear back from a friend in the industry. And I’ll do a little digging on “construction starts” because that is generally a bellweather for the economy. While many focus on gold/silver/central banking, I usually focus on what’s happening on the ground to regular folks. If I hear anything interesting, I’ll pass it along. I do become fearful, sometimes, of what might happen to my “cash in the bank” and remind myself that I need to have more “cash on hand”. I honestly think we have an incredibly astute business man in the White House with extremely talented finance people at the helm. Doesn’t guarantee anything, but gives me hope that we will be able to pull out of this. My two cents.

    1. SaraSue, I agree with you on Vegas. Never lived there but I visit at least once a year, sometimes 2 or 3 times a year. No, I don’t gamble at all but there isn’t a lot to do where I live and I enjoy so many restaurants, shows, and music in a relatively small area. I had a trip booked for June and merely rescheduled for July to make sure things are up and running. I don’t believe people will be as afraid as some may believe, as evidenced by the house parties, beach goers, protesters, etc gathering together. I think most people under the age of 60 or 65 will return pretty much to business as usual. I’m not writing off the potential seriousness of Covid if you acquire it, I have two friends currently positive. One has been in ICU and is now home and the other reports feeling like they have a cold. But Nevadians and Americans as a whole are a tough and determined crowd and if not hindered by overreaching government we will prevail. I’ve never bought into bitcoin either, but am sitting on cash waiting to see what some property prices do. It may soon be a good time to make some purchases and I am much more comfortable with real estate than the stock market.

  5. Restaurants can reopen but many will fail. Such a slim profit margin even when they are FULL. Watch it happen. You don’t have to be an expert to see it coming. I live in the country but am near a city of about 50,000. There is a large number of restaurants there. I know a few owners of these restaurants. They know its coming. They’ll fall like dominos. Sad

  6. An observation from today (Idaho here) – I had to take my car in to get the tires looked at and I was surprised at how many Idahoans were out and on the road. It’s been like a ghost town here. I drove by formerly shuttered shops, who had large American flags out, and big OPEN signs posted. No tourists around as of yet since the Governor has made it clear that if you travel in from out of state for an “essential” reason, you must self-quarantine for 14 days. I saw maybe two people wearing masks. Even our little post office had a few people in it. Most people were being respectful of “distancing” but getting on with their lives. It’s good to see some life out there again!

    Here’s a chart from CDC on covid deaths vs influenza vs pneumonia. Very insightful.
    https://www.cdc.gov/nchs/data/health_policy/Provisional-Death-Counts-COVID-19-Pneumonia-and-Influenza.pdf

        1. President Trump has started taking the steps to disentangle the US from UN clutches. Most of us citizens (here) realize that the UN has been a tool of the globalists to dismantle the USA piece by piece. We are a threat to the world because of our ability to face challenges as a nation and come out stronger. The UN wants submissive people but it needs a cooperative US government to finance its goal.

          I am not saying that there are not good people serving the world through UN programs, just not the ones who create policy.

          I keep thinking about their Agendas, particularly with regards to depopulation and moving people from rural areas to centralized cities – kinda makes a sick kind of sense if they are also playing with pathogens.

  7. If they are not testing everyone that is sick How are they getting an R O number ?
    The wife has had over a dozen people in the office that she is all most 100% sure has or had it She does not have any test kits Has to send them to the hospital and if the people do not look like death warmed over they do not test them

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