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 further examine the economic impact of the Wuhan Flu pandemic. (See the Tangibles Investing section.)
Precious Metals:
How silver’s 50% rally in 2020 has transformed the industry
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Another rush to cash? Analysts are cautiously watching stocks, gold price
Economy & Finance:
Coronavirus: Hit to global economy ‘will be less than expected’ in 2020. Here is a quote:
“The damage to the global economy this year will be less than previously expected, but still “unprecedented”, a leading international body says.
The Organisation for Economic Cooperation and Development now predicts a decline of 4.5% in 2020, versus the 6% drop forecast in June.
It means it no longer expects the UK to have the deepest contraction of the major G20 economies this year.
But the 10.1% drop would still make Britain one of the hardest hit.”
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At Wolf Street: Who Bought the $3.3 Trillion Piled on the Incredibly Spiking US National Debt Since March?
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At Zero Hedge: Yelp Reveals 60% Of Business Closures Are Now Permanent. Here is how the article opens:
“The virus pandemic shock is generating deep economic scarring, the likes of which many have never seen before. The virus-induced downturn has led the economy into a “liquidity trap,” in which interest rates will likely reside on the zero lower bound until 2023, and monetary policy could have trouble stimulating the real economy besides artificially inflating asset prices. As Washington pumps fiscal injection after fiscal injection into the real economy, creating unstable artificial growth, the latest lapse of fiscal support, now 46 days, has sent the economy into another slump.
For more color on the deep economic scarring, not just a deterioration in the labor market, we turn our attention to a Yelp report published Wednesday that revealed as of Aug. 31, 163,735 businesses have closed on the platform, a 23% increase since mid-July.
Yelp pointed out an increase of permanent business closures over the past six months, now reaching 97,966, or about 60% of closed businesses will never reopen their doors again.”
Commodities:
The other reason why China is increasing base metal demand
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OilPrice News reports: What BP Got Wrong About Global Oil Demand
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Soybean Futures Hit 27-Month High On Increased Chinese Demand
Forex & Cryptos:
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Sound as a Pound? Bank of England eyes sub-zero rates in face of virus, Brexit
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“Bitcoin to 10x over 10 years makes a lot of sense” | Bloomberg analyst explains. The interview described: “Commodity strategist at Bloomberg Intelligence Mike McGlone breaks down the factors that will keep Bitcoin appreciating in the foreseeable future”
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Philippine central bank embraces digital tokens
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Tangibles Investing:
US Housing Market Forecast 2020 & 2021: Crash or Boom?
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NPR: Zoom Towns And The New Housing Market For The Two Americas
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!
Precious metals: we’re seeing a correction in pricing that is causing pain for people that bought near the top. It is very rare for a stock or commodity to go up in a straight line; price corrections or pullbacks are a healthy event. If the prices bottom (they haven’t yet, IMO) and then consolidate over a period of weeks then perhaps we’ll see a new floor under prices for silver and gold. I would not be surprised to see silver drop below $20 and gold below $1700. The market will settle now that panic has worn off a little and routine demand becomes common again. Then we’ll see exactly how Fed policies are influencing prices.
Third quarter earnings may spike demand for another round of stimulus, and that could be a catalyst for silver and gold to go higher again. At this time additional stimulus in the form of direct payments to people is looking like it may not happen.
My bottom line lesson learned in buying gold and silver over the past 12 years is never assume there won’t be a pullback, and be prepared to wait for it. Then wait a little longer for premiums to drop to more reasonable levels. Sometimes you’ll miss the train waiting for lower prices, but more often than not you’ll get another chance a few months later.
The most important reason for buying precious metals is not short-term gain but rather the opportunity to protect your wealth in a crisis. Stocks, bonds, and real estate may drop in value or be unsaleable, but the metals won’t. You’ll be able to sell them off and protect yourself, your family, and your lifestyle. This means buying the dips along the way, and not worrying about current prices. It also means thinking about how you’d sell your metals when the time comes. I strongly suggest forming a relationship with a local dealer and buying primarily — or entirely — from them. The resulting trust will hopefully make them a willing buyer when the time comes.
I’m personally a fan of keeping it simple and only buying American Eagles, Maple Leafs, or Kuggerands, with most purchases being Eagles. Remember to buy some fractional Eagles too, such as 1/10, 1/4, and 1/2 Eagles. This makes your stash a little more flexible when it’s time to sell.
How do you know it’s time to sell? When everything else has lost value, when there’s blood in the streets (literally), riots in the cities, and long lines outside your coin dealer, it’s time to sell. Precious metals spike way up during a crisis and then spike back down again, so you want to catch the spike at or near the top.
All this is my opinion only, YMMV.
When blood is in the streets might be time to sell SOME if you really need it. ALL fiat currencies have gone to zero throughout history. The US debt is impossible to pay off, and so the dollar will be inflated to zero. Unless you really need the cash, I would highly recommend keeping most of your metals until a replacement currency is issued. Cashing in those metals to obtain dollars of rapidly declining value would be like getting out of a lifeboat to get back on the Titanic.
I concur. I’d only trade precious metals into another tangible–or in the very short term cash and then use that to buy another tangible. I’ll be postng a short fetaure article about tangibles investing in SurvivalBlog, next week.
We should save our money to buy some of Mountain House $99.00 freeze dried chicken.
Ron: Absolutely!
Check Costco.com for sales on Mountain House products. Not too long ago, I purchased cases of Mountain House freeze dried chicken for around $190 delivered for six #10 cans.
Further comment: I know some dealers and sometimes hang out in their shop for a while. They are constantly getting calls from people competitively pricing gold or silver, or people coming in to get prices. The “lookey lou’s” are really irritating. You will need that dealer far more than he or she needs you. Here’s a better way: look at spot prices and see what premium over spot the dealer typically charges. If it’s not outrageous, if it’s in line with what others charge, that’s OK — they have to stay in business, you know. Pay them a fair price, buy from them consistently, be polite, learn from them, and make them your friends. Now you have potential buyers who know you and have some loyalty to you, which will be worth gold (pun intended) later on.
All I see from this is a continuing unbalanced (precarious) situation. House sales are brisk, mostly outside the cities, but rentals are abysmal. The stock market is hitting all time highs, but it’s very narrow, with what – five companies accounting for 39% of the DOW trading/increase. The government claiming that unemployment is back down around 10%, but the numbers show 30 million people collecting some form of unemployment insurance – That might be 10% of the population, but it’s not 10% of the workforce. Yelp says 60% of business closures are now permanent. New York predicts that 83% of restaurants in the city may never reopen. L.A. claims 50% of their store fronts are now empty.
When does the realization happen? When does the general population -Joe Publc – finally realize that the government can’t save them? That the government can’t fix this? That the government, at all levels, is simply delaying, delaying, delaying, hoping a miracle will come along? That’s the day that worries me.
This is exactly right. The shutdown and other limitations was a terrible mistake. We, not just the U.S. but most of the world’s governments, made a terrible mistake and have intentionally destroyed a large sector of our economies. The shutdown/quarantine will slow the inevitable but not stop it or reverse it. The masks and social distancing is phony and intended to provide the impression of “doing something”. Arresting people in public, outdoors, who do not have a mask on is incredibly abusive and unconstitutional. While at the same time our police standby and watch rioters and looters destroy cities and businesses, attack citizens and raise general hell. The world has turned stupid and if you point this out you are punished. I know it’s an election year and the left needs to riot to scare out their base but geez it seems worse this year than past left wing pre-election ‘celebrations’.
re:
‘work from home’
I read fast, at least a hundred times faster than people speak… and with greater retention.
(This’s the reason I avoid pod-casts; I do other activities until their transcripts are available.)
Columns in today’s Blog discuss censorship and “…limited by restrictions…” and censors/sensors, and ‘Zoom’ income producers using TheWorldWideWeb.
Another column discusses moving from one part of California to a different part of California.
Based on my experience with a lot of folks leaving the geographic boundaries of California, most seem to intent on fabricating a brand new version of the California cities they left… after they left because of confiscatory taxes and oppressive criminals/bureaucrats.
(I like writing ‘left’:
* ‘she left…’,
* ‘he never left…’,
* ‘the mostly-peaceful protesters left…’,
* ‘after they came for the income producers, there was nobody left…’)
Irregardless of your reasons for living in your choice of home area, I see dragging your old problems toward your established neighbors as counter-productive.
Ask around.
Your established neighbors might offer an opinion about your reasons you left.
*****
We live and work on a farm.
We have a ‘side hustle’ of fussing with fire-wood.
We have another ‘side hustle’ of mechanical repairs, chain-saws and boat motors to bulldozers and aircraft.
We also like fussing with mules, back-country packing and dragging logs, those sorts of activities.
And we raise and get trained by herding dogs, Heelers and Border Collies.
In the ‘tangibles heavy’ skills/experience segment of the income-producing market, I am pretty sure this carries vastly more value than TheWorldWideWeb equivalent of pushing papers from one desk-rider to another desk-rider.
I use the word ‘value’ to represent something I can eat… and relationships I build and maintain and trust.
If any of you desk-riders have a different opinion, I would enjoy hearing about your ‘tangibles heavy’ income production!
I totally agree with you. (I also read faster than I can listen).
Points of view are dependent upon experience.
I dreamed my whole life of living on a farm.
My grandfather grew up on a farm and when I was a little girl, I told him about my dream. He laughed and said to me, “Anyone who wants to live on a farm, has never lived on one!” He said it was hard, hard work, and dirty. I was undeterred.
I have yet to have my own small farm, but I still plan to have one.
And yes, dirt is tangible!!
I love your posts, by the way.
re:
“I love your posts, by the way.”
Sara Sue, you have excellent taste!
@ Large Marge, I recently had a conversation with a contractor from Bozeman Mt who stated the the two yrs leading up to this last summer, construction jobs ( new housing ) had been busy, but this year has been crazy. People moving into bozeman from the west coast, washington, oregon and and california with the people from california being the worst, both in their ideas and the way they think and want. My grand daughter’s husband said the same thing about people from california in and around Bend Oregon.
I asked this question the other day, but I didn’t get a response at all. So, given that there may be more people on today with a basis in economics, and I don’t mind being irritating, I’ll pose it again.
Not being versed in economics, my basic understanding in the simplest terms is that there is an economic triangle. One point is money being printed (debt), the second point is interest rates, and the third is inflation. I was always under the impression that you can really only control/manipulate two corners of the triangle at any time. Right now we are printing money/creating debt at a record rate. We have been told that they are going to hold interest rates around 0% until 2023. Does this not mean that inflation should occur, or can they control that as well? Am I missing something. It just doesn’t make any logical sense to me.
I would appreciate anybody’s insight into this. And if possible, keep it kind of basic – I’m not that smart.
Thanks
All of it is controlled by the Federal Reserve, Central Bankers, Politicians, and the extremely wealthy. That is the way I see it. The trick, that I’ve learned, is to watch, read, learn so that you can anticipate which way the wind will blow.
Being the Suspicious Cat, I keep an eye on as much as I can and try to be more savvy in my decision making. I also have extremely conservative views when it comes to money, so I don’t do the stock market and I don’t do precious metals investing. In real estate buy low, sell high; keep as low a debt profile as possible, be resourceful, etc. That way, no matter what happens with inflation, the national debt, or interest rates, I can remain mostly unaffected. My goal is to become “recession/job proof” if that is possible.
My humble opinions only, but probably really good old fashioned principles.
I don’t believe that the damage to the global economy is being truly reported. I think the devastation is far worse than any of the “experts” are willing or allowed to admit. Take the two articles above; one says things aren’t as bad as anticipated and the other says sixty percent of businesses are closed permanently. There are a lot more vacant commercial spaces everywhere I go.
It often takes time for the full effects of economic damage to become apparent. Some effects can be seen right away, but not all of them to be sure. Recovery is, in many ways, the same. In order to recover, economic capacity and confidence will both be required. Given all that is happening, and the nature of the problems we face, achieving a substantially improved environment in which recovery is likely (strong and well-founded) is going to be steep climb. It’s not impossible, but there will be challenges. Related to this, some areas will see recovery more quickly than others (and some areas may simply never recover, or not recover for a very, very long time).
My understanding ultimately about tangibles self survivability, especially gold and silver is that it gold and silver is Gods money created by God before the foundations of the earth especially before the establishment of human rule, governance, and economy. An epoch is on the horizon established by the prophecy that: “The generation that sees the Fig Tree blossom, will not pass away until the coming of The LORD.” That time is upon us! The Book of Revelation Chapter 13 verses 11-18 describes a beast rising from the earth. Verses 16, 17, 18 describes a beast economic system. If one wants to avoid the “mark” one must have an alternative method or rate of exchange necessary to “buy or sell”. Therefore gold and silver, or be able to provide a very marketable service or skill in demand.
Prayers for retired Senator Ron Paul… He has been such a strong voice for sound financial systems, policies and practices. His is a familiar name, and message, in the SB community.
https://www.citizenfreepress.com/breaking/breaking-ron-paul-suffers-stroke-live-on-air-developing/
We are so very concerned for him, and for his family even as we trust he is getting the best care possible.
All the more reason we should decouple from China…
https://jrnyquist.blog/2020/09/24/the-mystery-of-chinas-military-doctrine/#more-3827
…which must include the redevelopment of broad-based manufacturing in the U.S.
…and we should complete the wall at the southern border.
…and we should secure our ports of entry (passenger and trade).
…and we should govern very closely the acceptance of students into our advanced educational programs.
…and we should take seriously our immigration policy.
First time replying. I have a small percentage in metals, and a large percentage in stocks (dividend payers). There are many suggestions on how much to have in stocks, bonds, metals, etc. (in percentages), that it is quite confusing. With everything going on I am almost at the point of liquidating all my stocks and converting the funds in to metals over time. If possible, a survey of what others here are doing (percentage wise), would not only give me help, but might help others here. You just can’t get that kind of information from a financial planner or a book because there is no such person or book available to help the serious prepper. I hope this is not to far out of line.
Nighthawk, I’m no expert by any means on investment. From what I’m hearing and seeing by very savvy successful investors is to get out of cash and stocks and bonds and into tangibles. It is reported that Warren Buffet has sold airline and bank stocks and bought Barrick Gold mine stocks with certified gold reserves in the ground. Warren Buffet has always badmouthed precious metals and advised against them. Every recognized investment guru and economist is warning about generally overvalued stocks and a diluting of the US dollar due to unbelievable over printing of fiat paper money. They only thing left is tangibles of land, income producing real estate, precious metals, tools, guns, ammo, booze, long term storage food, water storage and production, acquiring marketable skills and services, and like things. I’m personally putting cash into silver right now because I think it will outperform even gold. This all is daunting as opposed to calling a broker and investing in the stock market for us all.
Oly, thanks for the reply. I see you wrote income producing real estate. I’m not to familiar with but with real estate prices as high as they are, I might want to wait till they pull back. Would there be anything else that you would suggest to produce income?
I would highly recommend reading martin armstrong blog https://www.armstrongeconomics.com/blog/ I have been following him for over 10 years and his blog is free to the public. It is the best 10 min read I do each morning and will spool you up the quickest with what is going on around the world. This will give you the big picture, keep you informed and save you lots time. There is way too much happening in the world today for the average person to keep up with. From there you can drill down to your favorite web-sites, which includes this one to help stay prepare.