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 prospects for physical silver. (See the Precious Metals section.)
Precious Metals:
Arkansas Ends Sales Taxes On Gold and Silver; Additional States May Soon Follow
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The silver price is breaking out and could drag a reluctant gold market with it – Saxo Bank. A brief excerpt:
“Ole Hansen, head of commodity strategy at Saxo Bank, noted in a report Tuesday that the silver market started the week with its best day since early February as prices pushed to a two-month high above $27 an ounce.
Hansen added that Monday’s price action in silver was a critical technical breakout for the precious metal. While silver is down from Monday’s high, Hansen said that it is still holding above crucial support following its breakout. July silver futures last traded at $26.97 an ounce, relatively unchanged on the day.
Meanwhile, gold prices have fallen from Monday’s nine-week high. June gold futures last traded at $1,787.90 an ounce, down 0.22% on the day.”
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Daan Joubert: Long-Term View Of Gold And Silver
Economy & Finance:
When “The Oracle Of Omaha” talks, people listen: Buffett Warns ‘Very Substantial Inflation’…
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Credit Bubble Bulletin‘s Weekly Commentary: Fed Guessing
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They call it “Shrinkflation”: Costco paper towels: Now with 20 fewer sheets per roll
Commodities:
The Coming Supercycle: Facts and Fantasies About Commodities
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$4.99 gasoline in California. ($5.99 for Premium!) Gas Prices Continue To Climb In SoCal For 9th Day
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“There Is No Shortage?” Train Loads Of Lumber Stacked As Far As The Eye Can See
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The prices of raw materials from food to metals used to make almost everything are skyrocketing
Derivatives:
At Kiplinger: How Might Archegos’ $10 Billion in Losses Affect Your Retirement?. Here is a quote:
“Credit default swaps were at the heart of the financial crisis in 2008 that brought down AIG. The insurance giant AIG had been selling credit default swaps for years, collecting tiny premiums, confident that the mortgage market wouldn’t collapse, and that they’d never have to pay out a claim.
In 2008, the unthinkable happened: Mortgage markets collapsed — and mortgage lenders went to AIG expecting them to make good on their contracts. AIG didn’t have the cash and couldn’t raise it.
In 2021, non-regulated Archegos caused over $10 billion in losses. Archegos was set up as a family office, away from the oversight of the SEC. As such they were allowed to take tremendous bets by using a derivative called a swap, which were bets on stocks using high leverage. Unfortunately, when those stocks went down, massive losses ensued. It is believed that Archegos had $10 billion in assets, yet was allowed to bet on $50 billion to $100 billion of stocks! 5 to 10 times leverage spread out among a number of banks that took losses during March of 2021.
Even Goldman Sachs, which originally wouldn’t do business with Archegos because the founder pleaded guilty to insider trading in 2012, changed their mind and thus was one of the banks that sold stocks in March 2021 to get out of those swap positions with Archegos. It’s estimated that Archegos caused over $10 billion in losses at those banks, not to mention the tremendous drop certain stocks took when the stock selling occurred.”
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Over at Wall Street On Parade: Archegos Unpacked: Equity Derivative Contracts Held by Federally-Insured Banks Have Exploded from $737 Billion to $4.197 Trillion Since the Crash of 2008
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Brown Presses Banks for Answers on Risky Trades and Recent Market Turmoil
Forex & Cryptos:
Dollar weakens broadly on fall in U.S. yields following weak U.S. data
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Currency Wars and The Swiss National Bank
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Digital Dollar Project to launch five U.S. central bank digital currency pilots
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Charlie Munger calls bitcoin ‘disgusting and contrary to the interests of civilization’
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TA: Ethereum Rally Extends Above $3,400, Why Dips Remain Attractive. JWR’s Comment: Technical Analysis (TA) of crypto coins is an abstraction of an abstraction, so caveat emptor.
Tangibles Investing:
Both of these pieces point to investing in real estate as a safe haven:
Five Trends That Will Make 2021 the Year of Tangible Assets
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Safe investments for 2021 [Low-risk options to build wealth]
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 or 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!