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 ongoing coinage shortage that has closed the window of opportunity to stockpiles full bankers’ boxes of nickels. (See the Tangibles Investing section.)

Precious Metals:

Gold, Silver, and Platinum resumed their bull run this week. A recent headline: Gold Futures Surge Above $2,050; Silver Nears $27Update, as of Thursday Evening, courtesy of a blog reader:  Silver was $29.38 per ounce and gold was at $2,070.80 per ounce. I expect silver to outshine the other metals. The silver-to-gold ratio was around 100-to-1 when I started sounding the alarm about ratio trading. The ratio is now at 70.73-to-1. It will likely get back below 50-to-1 fairly soon.  We could see a spot silver price of $40 per Troy ounce as early as October, 2020. But of course the market manipulators could attempt to drive down the price of silver again. It is noteworthy that COMEX silver is a notoriously “thin” market”, so it doesn’t take a tremendous number of short contracts to depress the futures and spot prices. Plan (and invest), accordingly.

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Futures Jump, Gold Soars As Dollar Destruction Accelerates

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Hub Moolman:  This Inflation-Adjusted Silver Chart Tells An Interesting Story.

Economy & Finance:

The Census Bureau’s Grim Take on the Employment Shock During the Pandemic: Not Improving Yet

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Coming banking collapse will make financial misery caused by coronavirus even worse

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Why’s the ECB Buying the Debt of So Many Non-EU Companies?

Commodities:

At Seeking Alpha: Copper rallies on demand hopes, sliding inventories; Freeport hits YTD high

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Oil prices hit five-month highs after big drop in U.S. crude stocks

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At OilPrice News: What Will The Post-Pandemic Shale Patch Look Like?

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At Wolf Street: US Crude Oil Production Plunged Most Ever, Natural Gas Followed: The Great American Oil & Gas Bust, Phase 2

Derivatives:

How Big Is the Derivatives Market?

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Currency Derivatives (a primer)

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Dollar Bears Set Currency on Course for Worst July in a Decade

Forex & Cryptos:

The U.S. dollar is on pace for its worst month in a decade—Here’s what traders are saying

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The Swiss Franc (CHF) is looking strong. When I last checked, it took $1.0948 USD to buy 1 CHF. I hope that folks have heeded my advice, and hedged into CHF back in late 2019. It was then that the CHF and USD were still trading at or near parity.

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Lebanon’s HyperinflationJWR’s Comment:  And then came the dockside ANFO fertilizer explosion. We can anticipate a major humanitarian crisis in Lebanon in late 2020 and early 2021. Please pray for the people who live there.

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Fitch Revises United States Credit Outlook To “Negative”

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Not surprisingly, the USD cost of a Bitcoin is higher.  ($11,682, when I last checked. But I’m still primarily a silver investor. I only dabble in cryptos.)

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Dark-Web Vendor and Pharmacist Charged With Trafficking Drugs Worth $270M in Bitcoin

Tangibles Investing:

July Breaks Gun Sales Record. “Gun company’s earnings triple, CEO says sales ‘like nothing we’ve seen before.'”

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America’s Coin Shortage Is Getting Worse.  (Your window of opportunity to stockpile nickels in full bankers’ boxes is now firmly closed.)

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Average Age of Cars & Trucks on the Road Sets Record, Will Jump During Pandemic as New-Vehicle Sales Plunge to 1970s Level.

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 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!




56 Comments

  1. nickels mmm
    Aged Truck- Yeah I’m at 204,000 on my Chevy truck and still kicking. My panties don’t fall off every time there’s a commercial with a new fangled whatchamacallit out on the market and I’m well beyond impressing anyone that would matter. I’ve got plans to upgrade in the spring, upon retirement, but have little intentions of letting this one go when I do.
    For all the negative the market is still climbing and I’m still making money there. Nothing compared to last year but up is up.
    I tell ya the temptation to sell an AR is strong because of how much is being offered but I’ve been telling folks unless you NEED the money I wouldn’t. I’m still kicking myself for not buying a crate of SKSs at $79 back in the day.

    1. Best way to trade the silver/gold ratio is when there is a large spread in the ratio (like when it was 100:1) sell some gold to buy silver. As of right now that ship has sailed.

  2. “The Census Bureau’s Grim Take on the Employment Shock During the Pandemic: Not Improving Yet”

    “Coming banking collapse will make financial misery caused by coronavirus even worse”

    The problem with the economy is that the average American is over-paid and under-worked. People exist to serve the market, not the other way around.

    Instead of expecting a handout from the government – because Socialism has killed 100 million people – Americans need to re-train themselves and acquire new skills. For example, the unemployed retail worker or truck driver can learn to code in order to become a productive member of society.

    And capitalism has created opportunities that didn’t exist even 20 years ago. For example, people can now become podcasters. Joe Rogan just signed a $100 million deal with Spotify for his podcast.

    Why aren’t more people doing the same? Because they’re lazy, that’s why. They have forgotten that the American Dream is to work harder.

    If we just get government out of the way and let the corporations and uber wealthy like Jeff Bezos and Mark Zuckerberg do whatever they want, everyone would be able to buy a cow, use the leather to make some boots, and pull themselves up by their own bootstraps.

  3. I don’t get the coin shortage. If coins were not being minted I could see an issue. Maybe people are holding on to their change? But still I don’t quite get it. And the quarters put into the laundry machines could be kept by the laundry mat operators to reuse. I know a pain to do but better than not having any at all.

    1. Have you seen the signs; “Exact change, or debit only?” Can we spell “war on cash,” boys and girls? Businesses know that most people will not have “exact change,” and will use debit/credit. “Exact change” gets them around that pesky “This note is legal tender for all debts public and private” legalese. What TPTB want is for cash to go away. It’s as simple as that.

  4. The coin shortage has not made sense to me.

    Often, when a country goes through a currency devaluation (I.e., trade in all your old currency, for 10% value of new currency) the coins are left unaffected. Perhaps the coins disappearing are those in the know preparing for such a devaluation?

  5. I’m not to concerned with the price of silver going up. It will more than likely come back down. In April 2011 it was $46.35. As for the change shortage maybe the self checkouts are adding to the shortage. I know when I self checkout I never put in change but if there is a cashier I will get rid of my change.

  6. Lebanon explosion smells like a terrorist’s attack to me. Ammonium nitrate is not an explosive, it is an oxidizer and very stable. As JWR mentions this must be an ANFO explosion. ANFO is made by mixing ammonia nitrate with a 3-4 % addition of diesel fuel. It is very stateable and barely burns if just ignited. It requires a heavy detonation to set it off. It looks like some terrorist’s took advantage of a large quantity of ammonia nitrate added some diesel and made a large bomb. What they didn’t do was mix in enough diesel to set off the complete 3000 plus tons of ammonia nitrate. If the had there would be no Beirut left to talk about. This is a tragedy that could have been prevented. Find out which Government officials were out of town and start asking questions.

    1. Joe:

      See:
      “At high enough temperatures, however, ammonium nitrate can violently decompose on its own. This process creates gases including nitrogen oxides and water vapour. It is this rapid release of gases that causes an explosion.

      Ammonium nitrate decomposition can be set off if an explosion occurs where it’s stored, if there is an intense fire nearby. The latter is what happened in the 2015 Tianjin explosion, which killed 173 people after flammable chemicals and ammonium nitrate were stored together at a chemicals factory in eastern China.” (Reference: https://www.scientificamerican.com/article/what-is-ammonium-nitrate-the-chemical-that-exploded-in-beirut/

      I suspect something similar happened in Lebanon. It has been reported that AN fertilizer had been stored for 5+ years–plenty of time for contamination.

      1. You are correct sir. From what I have seen and heard, on the docks there was a huge store of ammonium nitrate/anfo confiscated from a Russian ship many years ago and had been kept in storage there in excess of 6 years. Why stored there instead of moving to a secure location ??? (consider this is Lebanon after all). All the videos I have seen indicate 2 distinct explosions, the second obviously being set off by the first. So your summation in all probability was the stored nitrate/anfo was the second and caused the majority of damage.

    2. The ammonium nitrate was stored in close proximity to a grain elevator for 6 years. Grain dust gets everywhere! That’s your fuel. Next door there was a warehouse of fireworks that had a fire. No doubt a rocket or shell crossed over. If it was a salute shell, it would be filled with flash powder which is aluminum powder and potassium permanganate. If that shot over and broke open, you’d have a crappy version of tannerite to start the detonation. The red cloud is definitely proof that the material went up “as is” and wasn’t completely mixed with a fuel. Some tannerite explosions on YouTube look red due to incomplete mixing of the binaries.

  7. Was President Trump giving us all a warning about a heightened level of danger ahead?

    “So I have a lot of enemies out there. This may be the last time you’ll see me for awhile.”

    https://www.citizenfreepress.com/breaking/trump-ive-been-called-a-socialist-for-the-first-time/

    Reports also coming in about TikTok…

    https://www.foxbusiness.com/technology/tiktok-shocked-executive-order-sue#&_intcmp=hp1r_10,hp1r

    Remain steady. Be safe. Stay well everyone!

  8. Last week my banker voluntarily commented that he has seen no evidence of a coin shortage. That they (the bank) receives large coin shipments often, and he does not understand where the coin shortage idea is being generated.

    1. Ditto in my areas. I have specifically asked at the hardware store, local grocery store and dollar store and they all say the same, no trouble getting coins.

      One factor could be that the mints were shut down for a time this year due to the virus. The mint website says, “In 2000, the U.S. Mint produced approximately 28 billion coins for general circulation.” The figures are probably the same for most years. What happens to all the coins in circulation so that 28 billion have to be replaced each year? They’re not all pennies (which get lost and tossed) so something happens, and they must be replaced every year, so if the mints were shut down for awhile this year then they wouldn’t be able to produce the 28 billion, creating shortages in some areas.

      https://www.treasury.gov/resource-center/faqs/Coins/Pages/edu_faq_coins_production.aspx

    2. I work for a farm supply store retailer and we are limited to one roll of quarters, dimes, and nickels a day. They also give us 2 rolls of pennies daily as well. Not much for three cash registers every day. Definite shortage in my area of Michigan.

  9. I take note of this: Copper rallies on demand hopes, sliding inventories; Freeport hits YTD high.

    To me that means, as JWR has often said, buy nickels. Face value, unlike silver coins. Later he says bankers will not sell us nickels [by the box]. I reckon I’ll test that statement next week.

    Carry on in grace

  10. The coin shortage could be Grisham’s Law playing out in real time. Grisham’s Law boils down to, “bad money drives out good.” All the junk silver, nickels, and older pennies are no longer circulating because the populace is holding on to them. Just my thoughts

  11. Hmm, coin shortage ? the only coins that I pay any attention to are pennies made before 1981 ( I recently found a penny dated or minted in 1932, fair shape , but a keeper ), other wise all my change goes into a can beside the bed and gets taken to a coin shop every 3 to 6 mo for exchange for something else. On a side note unrelated to this article, it seems that every so often when I read certain articles concerning conservative views on yahoo, I get shut off from reading other websites. Ex, just finished reading an article about the NRA, then tried to go to another site concerning aircraft and was told that it was unavailable. this has happened more times than I care to count or remember. In other words: What the heck is going on ? I’m surprised that yahoo let me come to this website>

    1. Alfie… This is a curious (and concerning) thing especially in light of so many forms of censorship.

      A couple of questions… Are you using Windows? Also… Are you using Edge as a browser?

      A couple of suggestions… If you’re not already using Firefox or Brave as a browser, you might consider installing either of these. Additionally, and for your protection, be sure you are using a VPN (virtual private network). You might check the free version of ProtonVPN )protonvpn.com) or the low-cost NordVPN option (nordvpn.com). These encrypt your internet activity for your security.

      Hope this helps!

      1. I’ve had great success with the Opera browser too ever since I left Mozilla Firefox behind years ago… (after their Brandon Eich debacle)

        Yes, the free version of ProtonVPN seems to be alright and serviceable.
        I believe 3 countries are available for free (USA, Netherlands, Japan).
        When I switch to a paid VPN, it will be with ExpressVPN or Proton.

        And switch to Proton Mail if you haven’t already, folks…
        I’ve been transitioning over from Yahoo Mail.

  12. I have a large amount of coins that I have saved for quite a few years. I have never sorted any of them. My kids would have a fun time being involved with the sorting. That should make for an entertaining weekend for us. I will need to look up which ones are worth saving. I would guess there are quite a few worth holding on to.

        1. And war nickels 35percent silver. every so often they are in rolls of nickels. Any coin has some intrinsic value though. A nickel and penny (even the current ones) are close to face value.

        2. The 1964 Kennedy half is 90 percent. And don’t forget I believe since 1992 the the Mint issued Silver as well as clad proofs. So they can be in the mix as well. Some have no clue of value and break them up and use as coin. I have come across clad proof halves in rolls of half dollar coins

  13. The press is on to eliminate cash by any means necessary. A few points to ponder good folks. As long as paper currency and coin are still legal tender, anytime you pay in cash, the recipient is required by law to give you change in return.
    Suspect it’s a ploy by different entities to gain many more income dollars by simply saying they don’t have change, or rounding up and they’ll donate it to charity. How about you round down and I’ll donate to my charity! The lint in my pocket get’s lonely and needs company.
    Once they are successful in mandating every transaction electronic or digital you are broke every time the grid goes down, hence zero purchases of anything. Not a good idea.
    If successful at turning every transaction digital, means gov has/will ultimately control of ALL your financial transactions. Not much will change at first but sooner than you can blink this will become the scenario:
    You will be allowed to only have so much available to you each day.
    You will be allowed to spend only so much on groceries, according to the size of your family.
    You will be allowed so much and to whom you can pay for housing, for transportation, education, clothing, and the list is practically infinite. You will never be allowed to buy any sort of firearm, ammo, defensive weapon etc.
    IE: And this it the key point, once you give control of the means to purchase what you want, when you want, and from whom you want, and from where you want, you are giving ultimate control of your life to gov and TPTB. Anytime you want to do anything NOT APPROVED BY GOV, it will simply be – FUNDS NOT AVAILABLE!!!
    Welcome to the “Brave New World”…. The “fundamentally changed America”, Obama was so adamant about implementing.

  14. Given Joe Biden’s clear cognitive deterioration… What happens if he is elected, but doesn’t quite make it from here to the inauguration? Seems there are several possibilities. I think it unlikely that he will win the general election, but I wouldn’t put much past the Marxist Left which has taken over the party of Democrats.

    Here’s a link with thoughts about this…

    https://www.vpr.org/post/ask-bob-what-happens-if-joe-biden-or-donald-trump-dies#stream/0

    This is all in addition to the matter that the people around Joe Biden should be assisting him with supportive care, and not putting him before the public as a twisted Manchurian form of presidential candidate. I consider this to be elder abuse.

    We are living through very difficult and dangerous times. I pray that President Donald J. Trump wins reelection so overwhelmingly that there is no question about his victory. I also pray every day for President Trump’s safety. DJT’s cryptic (or maybe not so cryptic) remarks while at Whirlpool were a concern (not that it’s any great surprise that he has many enemies).

    https://www.whitehouse.gov/briefings-statements/remarks-president-trump-whirlpool-corporation-manufacturing-plant/

    Tucker Carlson interviewed Jason Hill yesterday of DePaul University. Professor Hill talked about nihilism and the rise of the anti-Christ.

    https://www.youtube.com/watch?v=9dmc1db5KeU&feature=emb_title

    1. I still think that there is an obvious answer to the dilemma the Democrats are facing.
      The Clintonistas and the Bernie Bros have lost the current round for control of the party but still represent a lot of votes that may or may not show up in November. Obama is firmly in control and Biden is widely seen as his proxy but is failing to generate the necessary momentum. Biden needs a black woman with unimpeachable progressive bona fides who can unite the party and turn out the votes for a Democratic wave election like 2007.
      Gee, I wonder who that could be?
      I have said for 3 months that Michelle Obama is the obvious choice, once Kamela Harris went down in flames during the primary.
      If Biden serves two years and one day, then Michelle can finish out his term and is still eligible to run for two more four year terms of her own. Obamas back in the White House for 10 years…I don’t think they can resist.
      We will see if I’m right.

          1. I have no clue. So much about this upcoming election is so very different in many, many ways. Biden clearly has some issues with his mental capacity and how the democrats and family are allowing this is completely unreal.

      1. An increasing number of voices are suggesting this — that Michelle Obama may be the VP choice. This could happen — and the delay in the Biden announcement is fueling a tremendous amount of speculation. The current pool of VP candidates is terribly problematic for Joey-B and deeply troubling for all of us. I do not believe for a moment that he will win, but stranger things have happened!

        1. I think that a financial market disaster is baked into the cake at this point sometime in late September or early October.
          Dems are dreaming of another fear stampede like 2007.
          I could easily be wrong. But regardless of the results of 2020 election, nothing changes. If not now, then 2024. And the next time they control all the handles of power… that will be it. Look at CA if you want to see the future of our demographic driven politics.

    2. Hi T of A,

      If he were to actually win the presidency, I suspect that Biden will have the 25th amendment imposed against him. This would happen, probably within the first 3 months of his administration. He is clearly mentally challenged. That does not mean that he is not the president. It just means he would be on hold until he gets better. Fat chance. I’m in agreement with Chris W that Michelle Obama will eventually be the VP nominee. I don’t know if we will know for sure, even after the Democrats virtual convention. If they wait long enough to declare him completely incompetent to be president, his VP could conceivably serve as president for 12 full years.

      That being said, we have a hope. Recent polling is showing that Americans of African ancestry are starting to wake up to the real racism in America, that of the Democrat party. The polls are showing that somewhere between 30% and 40% are favoring Trump. Further, Americans of Hispanic ancestry are polling at 25% in favor of Trump. If the Republicans can get even 30% of American-Africans and 25% of American-Hispanics, the Democrats really can’t win. The election fraud that would be required would send Democrat governors and bureaucrats to Federal prison for decades to come. These are serious crimes, just as knowingly and fraudulently running Biden for president is also a crime. Those who vote for Biden are actually voting for his VP candidate, but for president, not VP.

      As for Biden and those around him, I agree with you that this is elder abuse. Biden is clearly deteriorating rapidly. He’s not even as coherent today as he was 9 months ago. He is literally not able to coordinate his thoughts with his ability to speak. Have you noticed how often he utters literal gibberish? My mother-in-law had Alzheimer’s. I have had experience in trying to communicate with someone with that kind of dementia. Thoughts are scrambled (as with Biden), there are obvious anger issues (as with Biden), stories from the past are radically exaggerated if not completely fabricated (also as with Biden), the grasp on reality rapidly declines (again as with Biden). On the story issue, Biden has been at odds with reality and the truth for decades. That is why these folks think they can pass off his candidacy as legitimate.

  15. I wonder if Biden will end up the nominee. I feel bad for him and can’t believe his family is allowing him to run. He clearly has some type of issue. It’s actually pretty sad. I agree with him on NOTHING. Just a sad situation

    1. It’s very sad, indeed. In fact, it’s abusive that Democrats are putting Joe forth as the nominee of their party. It’s outrageous that his family does not intervene to stop any of this. Joe Biden needs supportive care.

  16. Joe, also look up the 1947 Texas City explosion. It happened in the Port of Texas City and started a chain reaction. Ammonium nitrate was involved. Over 500 hundred dead and over 5,000 injured.

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