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 rise in the price of silver. (See the Precious Metals section.)
Futures silver and spot silver both jumped to near $20 per Troy ounce early this week. You were warned.
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Mike Maloney: Silver Soars – Where To Next? Mike Maloney
Economy & Finance:
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At Zero Hedge: Paper Assets And Promises Often End In Default
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In The Wall Sreet Journal: Surging Copper Prices Signal Optimism About Global Growth
JWR’s Comment: If prices for the base metals rebound, then I expect the more “industrial” precious metals (like platinum, palladium, ruthenium, rhodium, and iridium) will also jump, correspondingly.
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OilPrice News reports: Why The Hydrogen Boom Is Good News For Natural Gas
At Liberty Street Economics: MBS Market Dysfunctions in the Time of COVID-19
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Brookings: What’s the Fed doing in response to the COVID-19 crisis? What more could it do? Here is a key excerpt:
“Securities purchases (QE): The Fed has resumed purchasing massive amounts of securities, a key tool employed during the Great Recession, when the Fed bought trillions of long-term securities. Treasury and mortgage-backed securities markets have become dysfunctional since the outbreak of COVID-19, and the Fed’s actions aim to restore smooth market functioning so that credit can continue to flow. On March 15, the Fed said that it would buy at least $500 billion in Treasury securities and $200 billion in government-guaranteed mortgage-backed securities over “the coming months.” Then on March 23, it made the purchases open-ended, saying it would buy securities “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions.” Market function subsequently improved, and the Fed tapered its purchases through April and May. On June 10, however, the Fed said it would stop tapering and would buy at least $80 billion a month in Treasuries and $40 billion in residential and commercial mortgage-backed securities until further notice. Between mid-March and mid-June, the Fed’s portfolio of securities held outright grew from $3.9 trillion to $6.1 trillion.”
JWR’s Comment: A trillion here, and a trillion there–and pretty soon you’re talking about real money! All joking aside: The MBS derivatives market is still on the precipe of a major crisis that could become a general financial crisis.
Here is the sequence of events:
1.) Spring 2020 COVID Crisis–with empty supermarket shelves: Americans buy more guns and ammo.
2.) Summer 2020 Urban Riots/Arson/Looting: Americans buy more guns and ammo.
3.) Summer 2020 “Second Wave” COVID Crisis: Americans buy more–a lot more–guns and ammo. Even major distributors are reported to be nearly sold out of handguns.
4.) Summer/Fall 2020 anticipation of the Presidential Election (with a risk of a Democrat sweep): Americans will buy even more guns and ammo.
So… I expect shortages to continue. And if Sleepy Joe Biden wins and the Democrats also take control of the U.S. Senate, then I expect absolute chaos in the gun market that will persist for at least four years.
JWR’s Advice: Stock up. If possible in your state, do so without FFL dealer paperwork. Lay in supplies of handguns, battle rifles, long-range precision rifles, magazines, ammunition, night vision gear, body armor, and web gear, in anticipation of higher prices and bartering situations. And remember: Don’t just buy guns. Rather, buy weapons systems, including plenty of magazines and even cleaning kits.
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 items from local news outlets that are missed by the news wire services are especially appreciated. And it need not be only about commodities and precious metals. Thanks!