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 Tesla’s “Battery Day”. It is scheduled for tomorrow: Tuesday, September 22, 2020. (See the Commodities Investing section.)
Monday morning update: Silver took a big 9% dip this morning, to $24.42 per Troy ounce when I last checked. So this is a good time to buy! By the way, a phone call to New York confirmed the following: The word on the street is that stocks got hammered so hard yesterday that brokers are liquidating commodiites to raise cash, in order to meet their margin calls. That is an ugly suituation. But again, it provides a short-term buying opportunity for those with cash.
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Economy & Finance:
Charles Hugh Smith: This Is How It Ends: All That Is Solid Melts Into Air
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At Seeking Alpha: Wells Fargo boosts targets for GDP, stocks and oil
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At Wolf Street: What’s to Be Done Now with All These Zombie Companies?
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And over at Zero Hedge: FOMC Signals Rates Unchanged Through At Least 2023 Despite GDP Forecast Upgrade. JWR’s Comment: Do the buffoons at the Fed honestly believe that if they continue forcing rates artificially low, year after year, that it won’t lead to malinvestment, distortions in the bond market, and the eventual destruction of the U.S. Dollar?
Tesla’s “Battery Day” is scheduled for tomorrow: Tuesday, September 22, 2020. There is some good market analysis over at Seeking Alpha: Tesla Battery Day: Out With The Cobalt, In With The Manganese. Here is an excerpt:
“It’s no secret that Tesla (TSLA) is aggressively valued. It has ballooned to more than a $300 billion market cap and neared half a trillion at its highs. It’s forward P/E is over 100, more than 10 times higher than mature vehicle manufacturers like Ford (F) or General Motors (GM). In order to maintain that kind of valuation, Tesla has to meet sky-high expectations of a society-changing electric vehicle technology that can be produced profitably while being affordable for consumers. It has been on this path so far, but there are still more challenges to overcome.
One major roadblock for Tesla and electric vehicles in general is their high cost relative to gas-powered combustion engine vehicles. In order to truly dominate the vehicle market, the company has to find a way to reduce the sticker price of its cars. One of the most obvious ways to do so is to reduce the cost of the battery. I believe that Tesla is on this path and will be announcing a cobalt-free battery at its much anticipated Battery Day coming up on September 22. My guess is that the cobalt will be replaced by less costly materials such as an increase in nickel content to at least 90% and introduction of manganese.” [Emphasis added.]
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OilPrice News reports: China’s Oil Demand Recovery May Be More Impressive Than Thought
Forex & Cryptos:
Ray Dalio Warns of Threat to Dollar as Reserve Currency. Here is a snippet:
“Dalio said in July that investors should favor stocks and gold over bonds and cash because the latter offer a negative rate of return and central banks will print more money. Bridgewater has been moving into gold and inflation-linked bonds in its All Weather portfolio, diversifying the countries it invests in and finding more stocks with stable cash flow.”
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An observation of the real estate market: For many years economists have used the term The Velocity of Money. That term describes a measure of the number of times that a Dollar is used to purchase goods and services within a given time period. That is one measure of the “heating” of the national economy. I’d like to coin a new term, in corollary: The Velocity of Real Estate. Presently, we are seeing real estate listings turn over very quickly, nationwide. This is obviously a precursor to much higher prices. And, unlike the deflation for prices of technology, the super-heated real estate market is a signal for the advent of general price inflation. One thing that is driving the Velocity of Real Estate is conservative urbanites fleeing the liberal cities and suburbs–and they’re largely moving to much more rural regions. The wise ones are now leaving in huge numbers. To make all that happen, then a lot of real estate has to change hands.
If, by chance, you are subdividing or for some other reason selling a piece of rural property, my advice is this: Put your “dream price” on it. In today’s super-heated market, you will probably have some one who comes along that is willing to to pay that dream price, or close to it. – JWR
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A good analysis, on video: 2020 Ammo Shortage: How It Got Bad So Fast
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Rock Island Auction Company is now making digital editions of their heavily-illustrated catalogs available free of charge. When you pair these with their realized price sheets, they make a valuable reference on the current market for antique guns.
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!