Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today, I’m posting an update on investing in binary triggers. (See the Tangibles Investing section, near the end of this column.)
Precious Metals:
First up, there is this from Peter Hug: Gold Price Fighting Stronger Dollar
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American Eagle Gold, Silver Coin Demand on Track for 10-Year Lows. JWR’s Comment: My Inner Contrarian is whispering: “Jim: When others are shunning physical, then buy physical.”
Stocks:
Mark O’Byrne: Next Wall Street Crash Looms? Lessons On Anniversary Of 1987 Crash. After another 200 point jump on Monday, one must ask: how high is up? This mania cannot carry on much longer without a sharp correction
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European shares flat as banks weigh, Spain lags again
Commodities:
U.S. Midwest oil refiners boost output, cut region’s dependence on Gulf Coast
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Noble Group Warns of Loss Topping $1 Billion
Forex:
Dollar hits three-month high vs yen after Abe party’s win
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The NZD, AUD and CAD – Currency Strength and Weakness for Monday 23rd October 2017
Cryptocurrency:
Prince Alwaleed says bitcoin will implode: ‘Enron in the making’
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Number Of Bitcoin Miners In Venezuela Swells To 100,000
Troubling Trends:
Million dollar bracket in the works for GOP tax plan
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Macron’s Call to Federalize Europe
Tangibles Investing (Binary Triggers):
Those of you who took my cue and bought a few extra binary triggers are now in a good position. You probably won’t lose any money. When I first issued my alert, you could buy a Franklin Armory BFS-III binary trigger for $387. In fact, you can still get them at that price from a few sellers like OpticsPlanet.com, but only if you are willing to place a backorder for three to seven weeks. But finding one “in captivity” is a whole ‘nother matter. Presently the few sellers with them in stock are finding eager buyers, at $500+ each at gun shows, and at online auction sites. It is now apparent that the congressional bills are not being fast-tracked. And the ATF decided to “punt” on the issue, handing any decision-making back to Congress. Hmmm… As of this writing, H.R. 3999 still has just 25 co-sponsors. But it is now in its second committee, where it might get stalled. So now it appears that we’ve reached a Binary Decision Day. Here is your binary choice:
A.) You decide to sell. If you now feel confident that the ban bills now before Congress will die in Committee, then this is a good time to take your profit. Keep only the triggers you need for your own ARs, and sell the rest for a nice profit.
or,
B.) You decide to “hold.” What if another guy goes Postal/Amok/Prozac/Allahu Ahkbar with an AR in the next few weeks? Then our “All Things are Negotiable” President will probably sign a ban bill. And if that is is a ban with a Grandfather Clause enacted, then the frozen pool of grandfathered binary triggers could be selling for $2,500+ apiece, at this time next year. If enacted without a Grandfather Clause (far less likely), then you could lose you entire investment.
I warned you that this investment would be a gamble. Your sell/hold decision today will be a test of what sort of gambler you are. Again, this is not an investment for widows and orphans. It is for someone with some extra cash, and willing to risk it all. – JWR
Provisos:
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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 particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
I sat in traffic the other day listening to a L.A. Talk radio station financial goon extolling the virtues of silver and gold ETFs and vehemently advising a woman calling in to forget buying and holding physical.
He said, of course, that having your tangibles in hand invited theft.
The irony.
Even my wife, who has been buying gold since she was a hospital nutritionist in Kuwait just after we evicted the Iraqis, laughed out loud at that.
I bought 6 binaries @ $400 Cash back upon JWR’s initial posting. I have 3 AR’s. 3 of them are being kept in the vault for installation. The other 3 are in a safe place. I think there’s more to this than monetary profit. Worse comes to worse, I have spare triggers stashed with no paper trail well hidden.
No gadget makes up for lack of marksmanship. I see no advantage in having them. Imho the gear hounds seek this stuff to fill a void in their skills. As an investment, buy gold or silver its a sure thing.
Greg
In this case, it is not about being a gear hound but in investing long term in what one may reasonably predict to be a scarce product. It is called taking advantage of the law of supply and demand. If I told you that tomorrow scissors would be banned, illegal to produce, and the only manner in which one may procure them is to purchase them from a private party henceforth, would you be smart to purchase a few pairs of scissors, given that thousands of years of irrefutable data dictate that scarcity in ANY market drives prices up?
Or would you simply denigrate those who purchase said scissors as being too unskilled to cut paper evenly with razor blades?
JWR has written about this but it’s worth repeating: In a crisis, precious metals will increase in value to a considerable extent. Gold will become so valuable that a 1 oz coin could be almost unusable for daily purchases. This is why buyer should spend a little more for less than 1 oz coins or bars: I recommend 1/10, 1/4, and 1/2 oz gold US eagle coins.
Silver coins can help fill the void. I recommend 1 oz silver US eagles. Junk silver, which is pre-1965 US coins, could be even more useful for daily purchases.
Remember that it will take a while for organized trading in these items to develop. It’s a good idea to have enough cash to get by for 3-6 months, in the case of a temporary crisis with closed banks and nonfunctional credit cards. I wouldn’t worry about mortgages, rent, or car payments since so many people will be affected that the government would probably work with lenders to temporarily suspend repayments.
As with all other situations, OPSEC will be crucial. Do not go around offering gold and silver as payment before you know that people are willing to accept it. You will gain a reputation and unwanted attention very quickly.
Barter– I’m ambivalent about ammo and alcohol, since I would be giving someone the opportunity to get drunk and shoot me. OTC meds, antibiotics, tampons, prophylactics, cigarettes (until stale), cans of food, clean water — there are lots of things that will be valuable and not give someone the capacity to hurt you. OPSEC here too — don’t walk around with a lot of stuff, and look as dirty and desperate as everyone else.
I agree on purchasing physical gold and silver.
Gold is too expensive for my budget, plus, difficult to manage for small purchases. So I am buying 1 oz .999 Silver Rounds. Yesterday I bought 6 oz for $111.90 ($17.05 spot + $1.60 “handling”). I do this (in untraceable paper cash only) approximately every month. I will tag them and put them away with my other 10+ pounds of silver rounds & junk coins.
I do have a concern about US gold and silver coins. If there is ever a confiscation, especially of gold. Wouldn’t the confiscation price be the face value of the coin? So a $1400 gold Eagle would be bought back for $50. Otherwise there is no point in putting a face value on the coin in the first place. The same goes for silver coin. A $20 silver coin would be bought back for $1. I’d still buy but do it without a paper trail if possible.
Binary trigger groups: good idea, again loose the paper trail if possible.
As for the GOP: what else is new. How about a flat rate income tax at 10%. Add an exemption for each tax payer of record at $30k and $5k per child. So a family of 4 would have no taxes for the first $70k and 10% of everything above that. That would mean even a Warren Buffet would have the same exemptions you do, and the same tax rate. Of course there would have to be a constitutional amendment stating that the rate could never be raised above 10% and that the exemptions could never be lowered below $30k and $5k, even in time of war. Think of these exemptions as the real tangible cost of living. No other deductions and no other exemptions, unless you want to file an itemized cost of living against your income.
Then of course a business tax, also at 10% of everything above the real tangible cost of doing business. This economy and employment would just skyrocket.
But of course this is just my fantasy, the lunatics in congress are just not that intelligent.
I realize I am off topic but your remarks yesterday R/T the Fed Govt getting involved with concealed carry reciprocity needs further study.
My concern is that if the Fed is in any way involved with reciprocity then the Fed in time will issue rules governing the requirements for the issuance of the CCP
thus again usurping the 10th amendment. Just think on the 55mph speed limit laws, seat belt laws, open container laws and now drivers license requirement for a DL to be Federally legal as ID. While some of the above have merit , they still fall within the purview of the individual states without federal pressure being brought to bear to require compliance.
Another area of grave concern is the call by many states for a Con Con. very dangerous and slippery slope. As in the Past CC once the doors of the conclave are closed EVERYTHING is on the table repeat EVERYTHING (think Bill of Rights) regardless of what my have been intended or limited by the individual state governors / legislatures. Better any changes to the constitution be done through the amendments process, one at a time and controllable.
Jay,
A Constitutional Convention (or as Article V calls it, a “…convention for proposing amendments”) may produce proposed amendments that would still have to go through the Constitutionally mandated amendment process. So, for example, if some group of crazies proposed reinstituting slavery, that group would have to convince three quarters of the states to ratify that slavery amendment…not going to happen. BTW, here’s Article V:
The Congress, whenever two thirds of both houses shall deem it necessary, shall propose amendments to this Constitution, or, on the application of the legislatures of two thirds of the several states, shall call a convention for proposing amendments, which, in either case, shall be valid to all intents and purposes, as part of this Constitution, when ratified by the legislatures of three fourths of the several states, or by conventions in three fourths thereof, as the one or the other mode of ratification may be proposed by the Congress; provided that no amendment which may be made prior to the year one thousand eight hundred and eight shall in any manner affect the first and fourth clauses in the ninth section of the first article; and that no state, without its consent, shall be deprived of its equal suffrage in the Senate.
Jay,
Re: your “…area of grave concern is the call by many states for a Con Con.” Don’t buy into the hype.
The Convention of the States project is only working to convene a convention for the purpose of proposing amendments, which is all it would be able to do per Article V. For example, if some nutjobs proposed reinstating slavery via an amendment, then three quarters of the states would have to ratify it…not going to happen. Things like balanced budget amendment, term limits for congress, etc. are some of the more palatable items in my opinion. The part of Article V that says “on the application of the legislatures of two thirds of the several states” was inserted specifically to enable the states to wield power against a potentially overpowering central government.
BTW, here’s Article V:
The Congress, whenever two thirds of both houses shall deem it necessary, shall propose amendments to this Constitution, or, on the application of the legislatures of two thirds of the several states, shall call a convention for proposing amendments, which, in either case, shall be valid to all intents and purposes, as part of this Constitution, when ratified by the legislatures of three fourths of the several states, or by conventions in three fourths thereof, as the one or the other mode of ratification may be proposed by the Congress; provided that no amendment which may be made prior to the year one thousand eight hundred and eight shall in any manner affect the first and fourth clauses in the ninth section of the first article; and that no state, without its consent, shall be deprived of its equal suffrage in the Senate.
I agree with JWR, junk silver is the way to go with metals. It’s a better option in a SHTF situation.
As much as I want to believe that gold/silver will retain and increase value in a true shtf scenario. I am hesitant about investing too much.
I see both having value in the short term, after an event simply because they have always maintained value in the past. However, in a true shtf experience such as a grid down scenario, I think they will quickly lose value in favor of tangibles such as food, ammo, weapons etc.
An event such as that is unprecedented in the US and with the various cultures at each others throats, it becomes more than simple survival. It becomes a survival of the fittest with different peoples very determined to take revenge on real or imagined past aggressions.
In the long run, assuming most survive, a mode of exchange will probably evolve and it could possibly be gold/silver as in the past, but it may just as likely be ammo, vegetable seeds, alcohol, or any other tangible asset that the law of supply and demand deems to have value.