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 shift in interest toward rural real estate. (See the Tangibles Investing section.)

Precious Metals:

Gold Versus Fiat Currencies

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What Caused The New York Vs. London Gold Price Spread And Why It Persists

Economy & Finance:

CNN reports: Americans are hoarding cash: Savings rate hits its highest level since 1981

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Week 6 of the Collapse of the U.S. Labor Market

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Video: 2020 HYPER-BUBBLE – Will it Meltdown, or Meltup? Mike Maloney

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Here is one of the articles that Maloney mentioned: SUVs Get Parked in the Sea, Revealing Scope of U.S. Auto Market Glut

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European Banks Reveal Scale & Complexity of Crisis. Shares Hammered Back to 1987 Level

Commodities:

At Wolf Street: The LNG Market Is “Imploding”

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OilPrice News reports: The Wave Of Shale Well Closures Has Finally Begun

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ANALYSIS-Here’s why you can’t find frozen fries, while U.S. farmers are sitting on tons of potatoes. (Thanks to Sean B., for the link.)

Equities:

I’m posting several articles today about the stock markets. The big sell-off in February and March should have served as a stern warning. But a lot of foolish contrapreneurs are now piling back into the market. Please look at this dispassionately, folks: Stocks are still substantially over-valued. And stocks are going up despite the biggest economic disaster since 1929. Wall Street is now fully disconnected from reality.  I can see that a stock market collapse–something far worse than February-March 2020– is coming soon. Take advantage of these current rally days to reduce your portfolios. I suggest keeping only a few blue chip stocks that are truly recession proof. Take the time to read and ponder the following articles. If you want to know what The Smart Money is doing, then watch Warren Buffett.  He is rarely wrong.

Brace For A Monday Massacre: Buffett Liquidates All Airline Holdings As Berkshire Sees Another Leg Lower

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Could US Stock Markets Crash in May after Rising in April?

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10 S&P 500 Stocks That Are Still Overvalued By Discounted Cash Flow

Forex & Cryptos:

GBP to USD Rate: Dollar Strength Reflects Market Jitters

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“The Dam Has Burst”: Why David Einhorn Thinks The Coronavirus Shock Will Lead To Soaring Inflation

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Swiss franc surging too quickly a major risk for Switzerland’s economy, economist says

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This Volume Trend Suggests Bitcoin is About to See Massive Volatility

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Bitcoin Miners Usually Create 6 Blocks per Hour. They Just Banged Out 16

Tangibles Investing:

Jewelers, pawn shops see uptick as furloughs, layoffs mount. JWR’s Comments: This is just the beginning of a trend that will accelerate if we continue to slide into the recession that I’m expecting. I recommend that SurvivalBlog readers keep some cash on the sidelines, and be read to pounce on some top quality compact tangibles and perhaps some fully restored classic cars, when things get near the bottom.

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Demand for rural homes shows ‘profound, psychological change’ due to coronavirus, Redfin CEO says. The article includes this quote:

“We have seen that people are more interested in that house at the foot of the mountains by the lake,” Glenn Kelman said on CNBC’s “Closing Bell.” “Rural demand is much stronger right now than urban demand, and that’s a flip from where it’s been for the longest time, where everybody wanted to live in the city. We’ll see how it comes back, but there seems to be a profound, psychological change among consumers who are looking for houses.”

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!




21 Comments

  1. Liz Peek: Coronavirus and China – 4 ways US can start to avenge deaths of hundreds of thousands
    By Liz Peek
    (2020, May 4)
    Fox News
    https://www.foxnews.com/opinion/coronavirus-china-4-ways-avenge-deaths-liz-peek

    We first need to bring critical manufacturing back to the U.S.

    Second, we need to strictly limit access to our universities and labs by Chinese students and scientists.

    Third, we must close down Chinese acquisitions of U.S. properties and companies.

    Fourth, we need an aggressive public relations campaign that will penetrate Beijing’s suffocating lockdown of news and social media in the country and undermine President Xi Jinping’s authority.

    1. A good roster of suggestions which will also help to restore a much healthier U.S. economy which… 1) lacks its once great manufacturing sector, 2) must protect information related science and technology which creates serious potential risk to our national security, 3) should preserve American ownership of American companies, and 4) should examine closely and expose the degree to which American media is being funded and run by the CCP, and remove those threats to what should be an honest and independent American media.

      There will be a rough patch, and some displacement while the American economy is retooled, but this is critical to our future as a nation. It’s critical to our very survival.

      There was an interesting article about deglobalization in ZH. It references the suffering that will come with economic decoupling. This is a likely consequence even though it should not deter us from working forward through this process.

      https://www.zerohedge.com/geopolitical/china-faces-economic-reckoning-covid-19-turns-world-against-globalisation

      1. Yep. Steve Bannon stated on Fox News last week that “we”, “need to help the Chinese people overthrow their ‘regime’ government”, or something to that effect. War with China, and likely Russia, NK, Iran, and a few others is the goal. They aren’t good governments, but they are all resistant to globalization, which is a problem for the power brokers. WWIII, anyone-? Sigh… Someone commented recently calling this a “pLandemic”, and likely rightly so. I’ve studied homeland security and emergency management for years and practiced much of it for longer, and this is all part of the plan, control. We’ll see I suppose, yes? Meanwhile, follow Christ and prepare as best you can.

    2. And if I may add a part B to your third part……B. Confiscate all Chinese property in America. This would not only include real estate but any other tangible property. The proceeds of the sales would go to the families of those who had suffered a death due to the corona virus.

    3. Believing ‘the chinese are evil’ puts you downrange of the next hoax by the government agents and TheMainStreamMedia.

      The two worst lies:
      “We’re from the government, we’re here to help.”
      and
      “The only news fit to print.”

      My suggestion?
      Unplug televisionprogramming.
      Avoid newsprogramming.
      Invest some time sitting on the porch tossing tennis-balls to the dogs.

  2. Our family gets sticker shock every time we go to buy shampoo because we have such a huge stock of it that we only buy it every few years. Usually, I have to change brands because that company has gone out of business. That is the basis of investing money.
    A few ideas of things to sink small money into:
    25 pound (or bigger) boxes of screws of different lengths. (Contractor packs)
    25 pound (or bigger) boxes of fence staples.
    25 pound (or bigger) boxes of nails of various weights and sizes.
    Barbed wire.
    Net wire.
    Hardware cloth.
    Fence posts.
    Roofing metal.
    Lumber.
    We are fixing to buy a grain bin that will hold 18 tons of feed.
    Of course you will also need the knowledge of how to use all of the above, but that only comes with time and experience. You will also need the tools that go along with it. All an investment that will pay off big time.

    1. Anon, +1 on the accumulation of fencing and construction materials.

      Our family has already done some of this, and will put by more as we come into Spring where we find ourselves undertaking yet another…..fencing project 🙂

  3. The theme of articles in this blog post (i.e. cash hoarding, labor market collapse, etc.) along with Jim’s consistent warnings are the evidence I look for to know what’s currently happening and what’s about to happen.

    How is this all going to play out? I think Mike Maloney is both right and prescient.
    https://www.youtube.com/watch?v=P4_1pwsm5LY&feature=youtu.be&t=1212

    “First the threat of deflation (Great Recession 2008), followed by a helicopter drop, followed by big inflation (QE 1 2008-2010, QE 2 2010-2011, QE 3 2012-2013), followed by real deflation (2020 – you are here), and then followed by hyperinflation (QE Infinity, 2020-2022).”
    – Michael Maloney, “Guide To Investing in Gold & Silver”, p 197; dates added by me

    1. That is very on point.

      https://youtu.be/4AC6RSau7r8

      This is a video that covers a bit about how that is possible and how the money for inflation and hyper inflation is made.

      Don’t be fooled by its published date this video has been around since the creation of this blog circa 2005. This is its second version of it. It’s created redid the visuals about 10 years ago.

      And don’t forget Mr. Russo’s film .

      https://youtu.be/tYgToC11NVE

  4. On the topic of the rush to the hills and supply chains etc.

    It is going to be hilarious when if the supply chain fails rather than just flounders.

    I forsee an eventuality where the gov’ment will require properties over a certain acreage to product either plant produce (from an approved list) or livestock (from an approved list) using approved methods. Complete with all USDA etc inspections and viability tests.

    I mean the gov’ment has already pressed automotive manufacturers into making ventilators, and set production quotas and time frames for companies like 3m.

    And they used legislation from generations ago to do it.

    Refusal to comply will be met with public shame, the raising of property taxes, the filing of criminal charges (which activate seizure laws) and the lands taken will be either given or leased to more pliable willing participants.

    I further more see that real estate assets will be taken using the above processes and given or sold to more willing participants.

    Just using imminent domain and that war time production laws this is Infact achievable.

    I mean honestly the gov’ment might already have enough power to just grab and own the farmland.

    If you want to know who the workers will be …
    Inmates (already happening on for profit farms)
    Those on public assistance (already done via volunteer work while on public assistance)

    In this game of freedom and control we have been focused on the short game of chess whilst the infamous “they” or “big brother” have been playing a multigenerational slow game of go.

    I’m not saying it’s going to happen but the deck is stacked the cards are marked and they’ve been palming the best cards so should they choose to do so they can.

    And after years of programming via entertainment , news propaganda, and indeed morality programming and some strategic hardships on people it will be met with a thunderous and deafening roar of approval and cheers.

  5. I really really hate the derogatory term “cash hoarding” since to me that is saving for the future. I always have paid myself first and will continue. That’s just common sense.

    On a different note, I went to a local large pawn shop and the most notable thing was their pistol display showed only six handguns of dubious quality, the normal 15 to 20 were missing. The long guns instead of a solid rank fifteen feet long, had gaps, large gaps. They had been hit hard with people who had never owned a gun, coming in and buying. Things could get ‘spicy’ at this rate, since this is just the start of some severe social and economic turmoil.

  6. CNN Report: I wouldn’t trust CNN to tell us what day of the week it is.!! How about their political BS about people saving during the Reagan era?They take lies and falsehoods to an
    art form.

  7. I’d like to extend my sincere gratitude to Mr. Rawles on behalf of my family. Because we’ve been following his advice on tangibles for the last decade+, we are currently in a position that is envied by many. A well stocked pantry, self employment, a producing homestead, reduced debt, homeschooled children, a well rounded supply of firearms, ammo, PMs, tools, and other supplies. These things take years of effort to achieve, but without the sage advice of JWR- I shudder to imagine where we’d be right now. Keep up the great work, thank you Sir!

    Regards

  8. All those folks looking to relocate out of the big city now are going to discover that it is even harder to get by without all the resources at your fingertips. If it ain’t in the big city right now, it surely ain’t gonna be out in the boonies. Not unless you can make it yourself, which new homeowners coming from the big cities are unable/unwilling to do for themselves. I expect a big migration back into town in 7 or 8 months.

    While you are buying up all that barbed wire, I recommend getting a pile of dirt delivered and a few hundred sandbags. Fencing makes a poor bullet stop. Were it my head, I’d also be looking for an inexpensive supplier of T-Wall, Hescos, Bollards, and gabion cribbing (or at least some good sized rip-rap). Barricades work both ways, but an experienced defender also knows which side to hide the claymore on.

    Those cases of cigs and little booze bottles just keep appreciating in value.

    1. My home town had 2 – 3 thousand people growing up (in the winter when the “snow birds” arrived)

      It was small only took 30 minutes to cross one side to the other … On crutches with a hip cast.

      Later I moved to a huge metropolis and have been laughing hearing the city folk talk about going to the “country” where life is “slower simpler and easier”

      And I laugh… I laugh so heartily. Sure that’s true I tell them if by that you mean “more complicated faster and much more difficult” but with a slower talking and walking speed.

      Truth is that country life image is about as real as a happy Hollywood marriage.

      I full expect the city folk to just throw thier toys down and stomp back to thier room quickly once the paranoia of covid is done.

      1. We see this in our area too… Many come. Few last!

        When we arrived here, we came from a huge metropolitan area. Both my husband and I grew up with a lot more exposure to smaller communities, but we had lived all of our adult lives in a major American city.

        We’ve been here so many years now that we consider ourselves locals (and so do our neighbors). We can’t imagine living in a big city ever again, or even living off a paved road. When we travel into the city, it seems strangely alien to us now.

        In all this time, we have seen many come to the area, but few really stay. Life is different in a rural setting, and only a few are really either design for it or prepared to make any adjustments.

        A great example is the quiet… For all those of us who appreciate true quiet (the “be still and know” kind of quiet), we can’t imagine being in another environment. …but for those who have lived surrounded by the noise of modern city life, adjustment to the quiet can be quite difficult.

        We did laugh heartily with Bobby Fisherisk! From Bobby’s post: “Sure that’s true I tell them if by that you mean “more complicated faster and much more difficult” but with a slower talking and walking speed.” This was really very, very funny. …and also true!

  9. Can I get this off my chest?
    First of all, thank you JWR for a wonderful site and all the contributors for sharing so much knowledge over the years.
    What I want to say is, the first step towards preparedness for probably almost everyone, should be FINANCIAL Preparedness. In almost all disasters of any sort, the first and most likely problem is a loss of income for some period of time. People need to get out of debt and have an emergency fund. Then start saving, investing, buying and building preps. So many people are on food lines almost immediately and it’s heartbreaking. Loss of a job should not be devastating immediately, if it is, you’re carrying too much debt and have no savings. There was a fascinating article yesterday about a guy in NJ who lost his compound and tremendous stockpiles of everything he’d built up for 20 years because his wife had a serious medical issue which wiped him out financially. I thought it very poignant given the current situation. If you’re drowning in credit cards, car payments, student loans and such, don’t go buying guns and beans and things on credit. Clear that first, so you can truly prepare. The Bible is full of wisdom on managing money, starting with “The Borrower is Slave to the Lender”, and “In the house of the wise are stores of choice food and oil, but a fool consumes everything he has”….Forgive me paraphrasing there a bit. God Bless you all and be safe

    1. Mike,

      This is exactly what my family is focusing on: getting out of debt. Since committing to this, we have been blessed and have been able to pay off a lot fast. We are determined and should be–apart from our mortgage–should be debt free by the end of the year…and then going to hit that mortgage hard.

      Very blessed to have a very secure job. Actually got a raise in all this chaos. Seeking to be a good steward of it.

      Done working for a lender!

      Thanks you Mike!
      Steve

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