Economics & Investing For Preppers

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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 some new taxes and California’s proposed extra-territorial tax. (See the Taxation section.)

Economy & Finance:

Dire Straits For European Banks? Banks Paying Near Zero On Deposits, Now Charging Fees

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Top 10 Economic Predictions for 2021

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Allan Stone of the leftist Washington Post: The craziest, creepiest year for financial markets I’ve seen in half a century

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At Wolf Street: Another Piece of the Puzzle of Plunging Credit Card Balances

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Bloomberg: Get Ready for the Great U.S. Inflation Mirage of 2021

Continue reading“Economics & Investing For Preppers”

The Editors’ Quote of the Day:

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“A settled plan to deprive the people of all the benefits, blessings, and ends of the contract, to subvert the fundamentals of the constitution, to deprive them of all share in making and executing laws, will justify a revolution.” – John Adams

Preparedness Notes for Sunday — January 3, 2021

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On this day, in 1521, Martin Luther– the father of the reformation and founder of Protestantism– was officially excommunicated by Pope Leo X from the Roman Catholic Church.

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SurvivalBlog Writing Contest

Today we present another entry for Round 92 of the SurvivalBlog non-fiction writing contest. The prizes for this round include:

First Prize:

  1. The photovoltaic power specialists at Quantum Harvest LLC  are providing a store-wide 10% off coupon. Depending on the model chosen, this could be worth more than $2000.
  2. A Gunsite Academy Three Day Course Certificate. This can be used for any of their one, two, or three-day course (a $1,095 value),
  3. A course certificate from onPoint Tactical for the prize winner’s choice of three-day civilian courses, excluding those restricted for military or government teams. Three-day onPoint courses normally cost $795,
  4. DRD Tactical is providing a 5.56 NATO QD Billet upper. These have hammer forged, chrome-lined barrels and a hard case, to go with your own AR lower. It will allow any standard AR-type rifle to have a quick change barrel. This can be assembled in less than one minute without the use of any tools. It also provides a compact carry capability in a hard case or in 3-day pack (a $1,100 value),
  5. Two cases of Mountain House freeze-dried assorted entrees in #10 cans, courtesy of Ready Made Resources (a $350 value),
  6. A $250 gift certificate good for any product from Sunflower Ammo,
  7. American Gunsmithing Institute (AGI) is providing a $300 certificate good towards any of their DVD training courses.

Second Prize:

  1. A Front Sight Lifetime Diamond Membership, providing lifetime free training at any Front Sight Nevada course, with no limit on repeating classes. This prize is courtesy of a SurvivalBlog reader who prefers to be anonymous.
  2. A Glock form factor SIRT laser training pistol and a SIRT AR-15/M4 Laser Training Bolt, courtesy of Next Level Training, that have a combined retail value of $589,
  3. Two 1,000-foot spools of full mil-spec U.S.-made 750 paracord (in-stock colors only) from www.TOUGHGRID.com (a $240 value).
  4. Naturally Cozy is donating a “Prepper Pack” Menstrual Kit.  This kit contains 18 pads and it comes vacuum-sealed for long term storage or slips easily into a bugout bag.  The value of this kit is $220.
  5. An assortment of products along with a one-hour consultation on health and wellness from Pruitt’s Tree Resin (a $265 value).

Third Prize:

  1. Three sets each of made-in-USA regular and wide-mouth reusable canning lids. (This is a total of 300 lids and 600 gaskets.) This prize is courtesy of Harvest Guard (a $270 value)
  2. A Royal Berkey water filter, courtesy of Directive 21 (a $275 value),
  3. Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security, LLC,
  4. A transferable $150 purchase credit from Elk Creek Company, toward the purchase of any pre-1899 antique gun. There is no paperwork required for delivery of pre-1899 guns into most states, making them the last bastion of firearms purchasing privacy!

Round 92 ends on January 31, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and that articles on practical “how-to” skills for survival have an advantage in the judging.

Foraging Before TEOTWAWKI, by Just A Dad

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This article describes how foraging can provide many of the things we need.

In today’s world, the idea of foraging for one’s existence is deemed beneath most of us. In fact, I personally have encountered many individuals who believed themselves to be so far above me that they had already decided what laws I was breaking, what wrongs I was committing and gone so far in some cases as to call law enforcement to stop me from foraging from discarded trash. And before anyone gets any ideas, the individuals who got upset, were a mixture of backgrounds. One notable individual recently was driving a truck with a Trump 2020 flag attached, and another called the police and tried to get them to take my child while flaunting their “United – Never Defeated” shirt. It always amazes me to see how ridiculous people can be.

Edible Plants

Foraging and gleaning are age-old traditions that kept humanity alive and allowed us to thrive as a species. For myself, the tradition was adopted from my parents before me. They taught me how to seek out ripe berries, wild onions, tubers, and how to clean small game so as to use all the available meat. More importantly, my Ozark-bred parents helped me understand that while we rarely asked for help, we could in fact subsist quite easily on the fruits of our own labor. And labor it is, foraging.

Learn about the edibles in your specific area. A hint: these tend to vary quite a bit, sometimes drastically, over just short distance or a difference in ekevation. Understanding what is edible, what is tasty, and what is simply filling is important. There are plants that offer medicinal benefits to varying degrees. Meanwhile, other plants can poison you slowly, or almost instantly. And there are plants that can be both poisonous and healthy depending on how they are prepared. Where I reside at this time we have a rather high alkaline content in the soil, this translates into high alkalinity in the plant life as well. Limits and balance are your friends when eating, regardless of what you eat.

Some foraged plants require a good amount of soaking and others require boiling. Still more require drying, and others must be either young or old. In all, our plant life, while less abundant in many ways; compared to other locations is still a solid source of fiber and vitamin intake for the family. Our local animal life consists of rabbits, ground squirrels, javelina, deer, sheep, antelope, bobcat, mountain lion, black bear, elk, turkey, and a few dozen species of snakes and small birds. To be fair I rarely hunt small birds, generally using a shotgun for dove or quail can be tedious when cleaning. I prefer instead to use live traps we build for this very purpose.

Unlike the intelligent crows, ravens, jays, magpies, and the rest of the Corvidae family, dove and quail are quite easy to lure and trap with regularity. Just 3 or 4 are enough to supplement a meal with solid protein servings. The traps are simple tubes of chicken wire, with a small funnel inside them to prevent the escape of the trapped creatures. Spreading a bit of grain or other tasty leftover treats around the trap with a large amount inside ensures they pour in with ease and regularity. To build up a good trapping area I scatter grain with a closed trap, leave it like this for a few days to build up the message that it is a solid spot to get fat. Birds are notorious for telling their entire world about your bounty they now believe they own. Make sure you tour around during their feeding so they become accustomed to seeing you. When I open the trap, I allow a few to get in, and shut it up. I bring another closed trap with me and swap them out. For a few minutes or sometimes a few hours the birds will leave the area, but they always come back. Needless to say, consult our state’s fish and game laws before hunting or trapping. Continue reading“Foraging Before TEOTWAWKI, by Just A Dad”

The Editors’ Quote of the Day:

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“Then said Jesus unto them again, Verily, verily, I say unto you, I am the door of the sheep.

All that ever came before me are thieves and robbers: but the sheep did not hear them.

I am the door: by me if any man enter in, he shall be saved, and shall go in and out, and find pasture.

The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly.

I am the good shepherd: the good shepherd giveth his life for the sheep.

But he that is an hireling, and not the shepherd, whose own the sheep are not, seeth the wolf coming, and leaveth the sheep, and fleeth: and the wolf catcheth them, and scattereth the sheep.

The hireling fleeth, because he is an hireling, and careth not for the sheep.

I am the good shepherd, and know my sheep, and am known of mine.

As the Father knoweth me, even so know I the Father: and I lay down my life for the sheep.

And other sheep I have, which are not of this fold: them also I must bring, and they shall hear my voice; and there shall be one fold, and one shepherd.

Therefore doth my Father love me, because I lay down my life, that I might take it again.

No man taketh it from me, but I lay it down of myself. I have power to lay it down, and I have power to take it again. This commandment have I received of my Father.

There was a division therefore again among the Jews for these sayings.

And many of them said, He hath a devil, and is mad; why hear ye him?

Others said, These are not the words of him that hath a devil. Can a devil open the eyes of the blind?

And it was at Jerusalem the feast of the dedication, and it was winter.

And Jesus walked in the temple in Solomon’s porch.

Then came the Jews round about him, and said unto him, How long dost thou make us to doubt? If thou be the Christ, tell us plainly.

Jesus answered them, I told you, and ye believed not: the works that I do in my Father’s name, they bear witness of me.

But ye believe not, because ye are not of my sheep, as I said unto you.

My sheep hear my voice, and I know them, and they follow me:

And I give unto them eternal life; and they shall never perish, neither shall any man pluck them out of my hand.

My Father, which gave them me, is greater than all; and no man is able to pluck them out of my Father’s hand.

 I and my Father are one.

 Then the Jews took up stones again to stone him.

Jesus answered them, Many good works have I shewed you from my Father; for which of those works do ye stone me?

The Jews answered him, saying, For a good work we stone thee not; but for blasphemy; and because that thou, being a man, makest thyself God.

Jesus answered them, Is it not written in your law, I said, Ye are gods?

If he called them gods, unto whom the word of God came, and the scripture cannot be broken;

Say ye of him, whom the Father hath sanctified, and sent into the world, Thou blasphemest; because I said, I am the Son of God?

If I do not the works of my Father, believe me not.

But if I do, though ye believe not me, believe the works: that ye may know, and believe, that the Father is in me, and I in him.

 Therefore they sought again to take him: but he escaped out of their hand,

And went away again beyond Jordan into the place where John at first baptized; and there he abode.

And many resorted unto him, and said, John did no miracle: but all things that John spake of this man were true.

And many believed on him there.” – John 10: 7-42 (KJV)

Preparedness Notes for Saturday — January 2, 2021

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January 2nd, 1776 is the anniversary of the Grand Union Flag — first revolutionary flag to be displayed.

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Also on this date in 1936, the first night vision electron tube was revealed in St. Louis, Missouri.

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SurvivalBlog Writing Contest

Today we present another entry for Round 92 of the SurvivalBlog non-fiction writing contest. The prizes for this round include:

First Prize:

  1. The photovoltaic power specialists at Quantum Harvest LLC  are providing a store-wide 10% off coupon. Depending on the model chosen, this could be worth more than $2000.
  2. A Gunsite Academy Three Day Course Certificate. This can be used for any of their one, two, or three-day course (a $1,095 value),
  3. A course certificate from onPoint Tactical for the prize winner’s choice of three-day civilian courses, excluding those restricted for military or government teams. Three-day onPoint courses normally cost $795,
  4. DRD Tactical is providing a 5.56 NATO QD Billet upper. These have hammer forged, chrome-lined barrels and a hard case, to go with your own AR lower. It will allow any standard AR-type rifle to have a quick change barrel. This can be assembled in less than one minute without the use of any tools. It also provides a compact carry capability in a hard case or in 3-day pack (a $1,100 value),
  5. Two cases of Mountain House freeze-dried assorted entrees in #10 cans, courtesy of Ready Made Resources (a $350 value),
  6. A $250 gift certificate good for any product from Sunflower Ammo,
  7. American Gunsmithing Institute (AGI) is providing a $300 certificate good towards any of their DVD training courses.

Second Prize:

  1. A Front Sight Lifetime Diamond Membership, providing lifetime free training at any Front Sight Nevada course, with no limit on repeating classes. This prize is courtesy of a SurvivalBlog reader who prefers to be anonymous.
  2. A Glock form factor SIRT laser training pistol and a SIRT AR-15/M4 Laser Training Bolt, courtesy of Next Level Training, that have a combined retail value of $589,
  3. Two 1,000-foot spools of full mil-spec U.S.-made 750 paracord (in-stock colors only) from www.TOUGHGRID.com (a $240 value).
  4. Naturally Cozy is donating a “Prepper Pack” Menstrual Kit.  This kit contains 18 pads and it comes vacuum-sealed for long term storage or slips easily into a bugout bag.  The value of this kit is $220.
  5. An assortment of products along with a one-hour consultation on health and wellness from Pruitt’s Tree Resin (a $265 value).

Third Prize:

  1. Three sets each of made-in-USA regular and wide-mouth reusable canning lids. (This is a total of 300 lids and 600 gaskets.) This prize is courtesy of Harvest Guard (a $270 value)
  2. A Royal Berkey water filter, courtesy of Directive 21 (a $275 value),
  3. Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security, LLC,
  4. A transferable $150 purchase credit from Elk Creek Company, toward the purchase of any pre-1899 antique gun. There is no paperwork required for delivery of pre-1899 guns into most states, making them the last bastion of firearms purchasing privacy!

Round 92 ends on January 31st, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and that articles on practical “how-to” skills for survival have an advantage in the judging.

What Would You Do?, by SaraSue

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introductory Disclaimer: Eight years ago I suffered a brain injury.  Prior to that I was a professional in high tech, and had handsomely-paid writing and teaching gigs.  I have several degrees, and held at least a dozen technical certifications in a wide variety of technologies.  Most of what I knew was forgotten, lost, in that moment my brain almost died.  My writing and teaching skills flew out the window.  It’s taken a long time to regain even social skills as I still struggle to string my thoughts together in a coherent way, and command my body to function.  All that to say, I wish, with this short article to engender a discussion around “What Would You Do”, and would ask that you go easy on my lost writing skills.  I love this community, so here we go…

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What would you do if you woke up on inauguration day 2021 and much to your despair, your candidate for President didn’t win?  Would your life be over?  Would it change the way you live in regards to work, where you live, your level of self-sufficiency?  I have thought long and hard about these questions.

I will say now, that Trump is my President and I believe God has used to him to save us, America, from a widespread Communist/Marxist influence.  I do not worship him in any way, shape or form.  But, I do see how instrumental he has been in attempting to restore the American way of life.  He has committed himself to restoring power to We the People.  For that, I am grateful.  Things were going in the worst possible direction in our country and someone, Trump, stepped in and yanked the reigns on so many levels.  I had hope that America could be restored: freedom of speech, freedom of religion, freedom to keep and bear arms, freedom to raise our children how we see fit, freedom from the globalist influences, freedom to work in whatever capacity we so chose, etc.

Now, with the 2020 election in a “contested” status and the “press” scattering all kinds of false stories across the Internet and over the airwaves, it’s hard to know what is really going on.  I’m following a number of lawsuits and feel as if our lives are hanging by a thread.  To me, it’s freedom or communism.  Patriots vs Traitors.  With that said…Continue reading“What Would You Do?, by SaraSue”

Editors’ Prepping Progress

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To be prepared for a crisis, every Prepper must establish goals and make long-term and short-term plans. In this column, the SurvivalBlog editors review their week’s prep activities and planned prep activities for the coming week. These range from healthcare and gear purchases to gardening, ranch improvements, bug out bag fine-tuning, and food storage. This is something akin to our Retreat Owner Profiles, but written incrementally and in detail, throughout the year. Note that as an Amazon Associate I earn from qualifying purchases. We always welcome you to share your own successes and wisdom in the Comments. Let’s keep busy and be ready!

Jim Reports:

I’m presently en route back to the Rawles Ranch from a lengthy out of state trip, so I’m leaving today’s column up to my amazing, wonderful, lovely, patient, and talented wife Avalanche Lily. (Can you tell that I miss her?)

 

Avalanche Lily Reports:

Dear Readers,

We have had mild winter temperatures and clouds this week.  In the middle of the week we had another snowstorm.

At the very end of last week we experienced a six-inch snowfall, On Sunday, I plowed for the first time this year.  I have to say that I now am very comfortable with the job. We have a standard transmission pick-up truck and all of the transitional moves are now automatic and smooth on my part.  Yeah!  That is so cool.  Now I can officially add to my repertoire of acquired skills, snow plow lady.  😉 I plowed a second time for a four inch snowfall that we had in the middle of the week.

During the past two weeks, I have gotten back into weight lifting.  My arm muscles have recently lost quite a bit of mass from not doing too much physically during the past three months. It’s amazing how quick one loses their prime when not maintaining it. To counteract this, I am now lifting eight pound weights in about four different ways with repetitions of thirty or more, several times a day.  Plus the daily mucking out of the cow shed and shoveling.  I’m glad the snow has finally arrived and the presence of the wolves have forced the use of the shed, thus the mucking out, to be more active again.  I’m not into being a big muscled bound woman by any means, but when I found it difficult recently to lift a fifty pound box of Jim’s ammo, I knew it was time to work out and lift weights, again.

Not much else in the prep department.  Just maintaining that which God has given us.

End of week wolf update:  The wolves have appeared to have moved on.  The horses and cows are no longer staring off into the distance around the ranch. I have been walking around the ranch again with just the Glock, and haven’t see any tracks….

Continue reading“Editors’ Prepping Progress”

The Editors’ Quote of the Day:

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“Better is a dry morsel, and quietness therewith, than an house full of sacrifices with strife.

A wise servant shall have rule over a son that causeth shame, and shall have part of the inheritance among the brethren.

The fining pot is for silver, and the furnace for gold: but the Lord trieth the hearts.

A wicked doer giveth heed to false lips; and a liar giveth ear to a naughty tongue.

Whoso mocketh the poor reproacheth his Maker: and he that is glad at calamities shall not be unpunished.

Children’s children are the crown of old men; and the glory of children are their fathers.

Excellent speech becometh not a fool: much less do lying lips a prince.

A gift is as a precious stone in the eyes of him that hath it: whithersoever it turneth, it prospereth.

He that covereth a transgression seeketh love; but he that repeateth a matter separateth very friends.

A reproof entereth more into a wise man than an hundred stripes into a fool.

An evil man seeketh only rebellion: therefore a cruel messenger shall be sent against him.

Let a bear robbed of her whelps meet a man, rather than a fool in his folly.

Whoso rewardeth evil for good, evil shall not depart from his house.

The beginning of strife is as when one letteth out water: therefore leave off contention, before it be meddled with.

He that justifieth the wicked, and he that condemneth the just, even they both are abomination to the Lord.

Wherefore is there a price in the hand of a fool to get wisdom, seeing he hath no heart to it?

A friend loveth at all times, and a brother is born for adversity.

A man void of understanding striketh hands, and becometh surety in the presence of his friend.

He loveth transgression that loveth strife: and he that exalteth his gate seeketh destruction.

He that hath a froward heart findeth no good: and he that hath a perverse tongue falleth into mischief.

He that begetteth a fool doeth it to his sorrow: and the father of a fool hath no joy.

A merry heart doeth good like a medicine: but a broken spirit drieth the bones.” – Proverbs 17: 1-22 (KJV)

Preparedness Notes for Friday — January 1, 2021

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Today is the birthday of Jacob Snider (January 1, 1811 – August 18, 1866). He was an American mechanical engineer and inventor. He invented and patented a method of converting existing muzzle-loading rifles into breech-loading rifles, notably the Snider-Enfield. (Pictured.)

And, speaking of gun designers, this is also the birthday of John Cantius Garand (January 1, 1888 – February 16, 1974) was born in St. Rémi, Quebec. John Garand designed one of America’s best-known battle rifles, the M1 Garand. General Patton praised Garand’s design, writing to Chief of Ordnance Lt. Gen. Levin H. Campbell, Jr., (January 26, 1945): “The M1 rifle is the most deadly rifle in the world.”

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We wish all of our readers a joyful, prosperous, and peaceful  New Year, with renewed liberty for our nation!

 

Universal Background Checks and Your Privacy

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The prospect of the duo of Joe Biden and Kamala Harris being sworn-in on January 20th does not bode well for American gun owners. Nor does the U.S. Senate runoff election in Georgia on January 5th, 2021. If the two Democrat candidates prevail, then, with Kamala Harris available to break any tie votes, the entire Democrat agenda could be ramrodded through Congress.  (Per the Constitution, as Vice President, Harris would also be the titular President of The Senate.) Democrat control of the Senate is a frightening prospect. In addition to new immigration, tax, student loan payoff, and post-post-post-post facto slavery reparation legislation, the Democrats will surely do their best to enact a raft of anti-gun ownership laws. They are almost too many to list. In a video from TGC News, Jon Patton summarized Biden’s Anti-Gun Plans.

Sneaky, Snaky Words

The new administration’s top two gun-grabbing priorities will almost certainly be an “assault” rifle/magazine ban and what they relentlessly and euphemistically call Universal Background Checks (UBC). The latter should more accurately be called a private party sales ban. That is what it would really accomplish: an end to firearms purchasing privacy, for sales of used guns between two citizens of the same state.

One of the things that I’ve noticed about statists and globalists is that they spend a lot of time devising subtle and devious terminology.  Their goal is to make truly sinister plans sound innocuous and oftentimes downright warm and fuzzy.  The phrase “Universal Background Checks” just about pegs the Warm and Fuzzy Meter. Given what it really means, I have to give credit to the gun grabbers for their clever terminology. These minions of The Serpent really have their Propaganda Terminology Teams working with precision. Just pause and consider each of these now widely-adopted terms and phrases:

  • “Earth Friendly”
  • “Spending Cuts”
  • “Black Lives Matter”
  • “Assault Weapons Ban”
  • “Undocumented Immigrants”
  • “Affordable Care”
  • “Carbon Neutral”
  • “Universal Background Checks”

These are all sneaky and snaky propaganda terms that were designed to conceal the real intent of the leftists. The mass media and corporate hacks repeat these weasel-worded phrases endlessly like mantras until they become ubiquitous and proliferate throughout popular culture. Just a few days ago, I received a package tracking e-mail from UPS, and it had a green “CARBON NEUTRAL SHIPMENT” banner across the top of the page. Seeing that phrase adopted by UPS made me feel vaguely ill. This is nothing more than virtue signaling — to gain the approval of leftists. All very subtle, and all too sinister.

H.R. 8 — a UBC bill — was passed in the Democrat-dominated U.S. House, in 2019. But thankfully its Senate equivalent bill failed.  Apparently, a majority of the Senators had the wisdom to see through the Democrat smokescreen of “Universal Background Checks”.  They could see that it was really just Universal Shackles, for Americans.Continue reading“Universal Background Checks and Your Privacy”

December 2020 in Precious Metals, by Steven Cochran

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Welcome to SurvivalBlog’s Precious Metals Month in Review, authored by Steven Cochran of Gainesville Coins, where we take a look at “the month that was” in precious metals. Each month, we cover gold’s performance, and the factors that affected gold prices.

What Did Gold Do in December?

First, some end-of-year numbers.
Gold set several new all-time highs in 2020, capped by an intraday peak of $2,081.80 an ounce. Gold prices gained 24% for the year, recording the largest annual return in ten years. Spot silver rose 47.6%, also a ten-year high. Precious metals were helped in part by the US dollar weakening in the last part of the year. The DXY dollar index lost 7% in 2020.
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Despite starting the month on the back foot, gold made healthy gains. Spot gold started at a five-month low of $1,776.20, and closed on December 30th at $1,894.30 – a gain of $118 for the month.
This sets up a run to break important resistance at $1,900 to start the new year.

Conflicting factors made sure that neither bulls nor bears had a big advantage this month. The bulls had central bank money printing, a weaker dollar, and a new, more contagious COVID mutation on their side. The bears had near-daily all-time highs in the stock market, rising bond yields, and the UK and EU finally reaching a Brexit agreement.

Bulls and bears each had one good breakout in December. Bears rode a surging dollar and stock market records on December 9th to send prices down $30 to $1,838 an ounce. The bulls had their breakout in the middle of the month, when gold gained $58 an ounce in a three-day rally. Spot gold ended the rally at $1,886 on Dec 17th.

Factors Affecting Gold This Month

COVID

COVID once again had a large effect on all markets. Investors joyful over news of three new vaccines bet on the economy reopening quickly. But logjams in getting the vaccines distributed as COVID cases hit new record highs dimmed that sunny outlook.

Markets are now coping with news of a new strain of the coronavirus that is 70% more contagious. It first emerged in Britain, but has made its way into several other nations, including the US. This has helped gold prices even as the stock market hits new highs.

STOCK MARKET

The stock market rally has gotten ahead of the “real economy”,trading as if the COVID epidemic has ended. New records were set by the major indices several times during the month. This, despite COVID infections and deaths being at the worst levels seen in the pandemic so far.

The “fear of missing out” (FOMO) on zooming stock prices drained safe havens such as bonds, the US dollar, and gold. The voices of irrational exuberance on the financial TV shows say that yes, the market does look like the dot-com bubble right before it burst. But they say not to worry, because the economy will boom after COVID is defeated.

Margin levels in the stock market rose 9.5% in November, as more people bought more stock on credit. This has brought margin exposure to all-time highs, according to the Financial Industry Regulatory Authority (FINRA). The next drop in the stock market could set off a collapse in prices as cascading margin calls force liquidation of positions at any price.

STIMULUS

The battle in Washington over economic stimulus continued in December. Nancy Pelosi found herself forced to fight for a deal that was much worse than the one she rejected in November. Talks of more stimulus to help small businesses and people who had lost their jobs from COVID helped depress the dollar.

The FED

The Fed did what the Fed does best in December. Print massive amounts of money out of thin air. By buying commercial debt in addition to Treasuries, the Fed has made it easier for big companies to borrow at lower interest rates. This is helping fuel the stock market bubble.

Also, the Fed’s QE to Infinity continues to devalue the dollar, making gold cheaper for foreign buyers. This is especially important in the giant gold market in India, where buyers are very price sensitive.

DOLLAR

Fed money printing, higher deficit spending, and a drop in short-term safe haven demand – all served to weaken the dollar in December. From multi-month highs hit in early December, the DXY dollar index fell to 2-1/2 year lows later in the month. This was a major factor in limiting losses in gold this month.

BITCOIN

Bitcoin prices hitting new highs attracted large numbers of speculators from the gold and silver markets in December. This likely prevented gold prices from regaining the $1,900 mark

Central Banks

The European Central Bank is dealing with the worst numbers of COVID infections and deaths Europe has seen. On December 10th, the ECB announced that it was extending and expanding its bond purchasing program. The central bank is now buying government bonds faster than European governments issue them. This is keeping bond yields negative across the EU.

The Fed hasn’t gone that extreme yet, but continues to reassure the market that it will do whatever it takes to support the economy. The Fed continues to call for increased government stimulus for ordinary people and small businesses. The Fed can’t reach these people to restart the economy. What the Fed can do is keep interest rates near zero, so the government can borrow more money for stimulus projects.

Biden’s pick of Janet Yellen as Treasury Secretary has some people worried that he will try to merge the Treasury Department and the Fed. Since Yellen’s #2 man, Jerome Powell, is now Fed Chairman, it probably wouldn’t be that difficult. It would also allow the Federal government to totally monetize its debt, paving the way for Modern Monetary Theory.
Central Bank Gold Purchases
The December 3rd Central Bank Gold Purchases report covered the month of October. A net 22.8 tonnes of gold was purchased in October, with only one seller of note. Mongolia sold 2.5 tonnes. Central bank buyers were Uzbekistan (8.4t); Turkey (6.9t); the UAE (6.2t); Qatar (2t); and India (1.9t).
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The central bank of Zambia announced that it will start buying gold from domestic mines to diversify national forex reserves. “During periods of market stress – when assets would be losing value – gold would be adding value, thereby shielding the whole portfolio from large losses,” Bank of Zambia Governor Christopher Mvunga said.

The COVID pandemic has hit Zambia hard. It was forced to default on a bond last month, when it couldn’t make the interest payment. Zambia has not held gold in its national reserves since 1995. It was forced to sell all its gold during a currency crisis in the 1990s.
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Uzbekistan has begun selling sealed gold bars with QR codes through its central bank. The hope is that the public will use the government-guaranteed gold bars as A MEDIUM OF EXCHANGE alongside the nation’s regular currency. This is the first nation in the modern age to establish gold as a parallel currency.

Gold ETFs

November marked the first month in 2020 that gold ETFs saw net outflows. Investors pulled out of safe havens of all sorts to rush into the stock market after COVID inoculations started. A cumulative total of 107t ($6.8bn) of gold exited ETFs world-wide. This exodus was the second-largest monthly outflows from gold ETFs on record.

North American and European gold ETFs both saw outflows of 2.9%. This amounted to 62t ($3.7bn) in North America, and 43t ($2.9bn) in Europe. Asia only saw 0.4t of outflows, while the “Other” category saw 2t of outflows.

One notable event was that iShares Gold Trust saw *inflows* of 0.8t ($57mn). In comparison, the SPDR Gold Trust, the world’s largest gold ETF, saw 62.9t ($3.7bn) of outflows for the month. This accounted for nearly all the outflows from North American gold ETFs.

In related news, Goldman Sachs has purchased the Perth Mint’s physical gold-backed ETF. Goldman has renamed the fund the Goldman Sachs Physical Gold ETF, and has removed the option to redeem your ETF shares for real physical gold. I’m sure this is a blow to many shareholders, as it was the only major gold ETF to allow redemption. The sale to Goldman also removes the guarantee of the ETF by the government of Western Australia.
Dollar and Forex
Dollar weakness was the forex theme for December. The dollar hit successive 2-1/2 year lows in the latter part of the month, to end below 90 on the DXY dollar index. The weaker dollar has helped cushion downward pressure on gold prices as stocks hit record highs.

A Brexit agreement finally being reached boosted both the pound and the euro. Commodities-based currencies like the Canadian and Australian dollars have also strengthened against the US dollar as global economic prospects brighten.

Other headwinds for the dollar included the final passage of a stimulus bill by Congress, the Fed continuing to print money at the fastest rate in history, and the approval and rollout of COVID vaccines. As global economic forecasts improve, the dollar has lost much of its short-term safe haven demand.

On The Retail Front

US MINT SALES FOR 2020

The US Mint had its best year for precious metals since 2016. 2020 American Silver Eagle sales broke the 30 million oz barrier, double the 14.9 million ASEs sold in 2019.

US gold bullion coin sales for 2020 blew the previous three years out of the water. Total American Gold Eagle sales for all sizes in 2020 totaled 844,000 oz. Combined with the 242,000 Gold Buffalo coins sold, the US Mint sold a total of 1,086,000 ounces of gold bullion in 2020. This compares to a mere 213,500 sold in 2019.

DECEMBER US BULLION SALES
American Silver Eagles = 751,000
American Gold Eagles = 49,500
American Gold Buffaloes = 10,500

2020 ANNUAL US BULLION SALES
American Silver Eagle = 30,089,500
American Gold Eagle = 844,000
American Gold Buffalo = 242,000
Total Gold Bullion 2020 = 1,086,000

Note that the US Mint ran out of 2020 Silver Eagles on December 9th, limiting sales.
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The Royal Canadian Mint released its third quarter 2020 bullion sales results, which show equally impressive gains. 300,000 oz of silver was sold 3Q20 compared to 96,300 the year prior. 8.2 million oz of silver was sold in the third quarter, compared to 6.6 million oz over the same period last year.
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Perth Mint gold bullion sales in November more than doubled over the previous month, to 84,158 oz. November silver bullion sales were impacted by reduced capacity, due to factory maintenance. This resulted in a slightly lower silver production of 1,119,269 oz, compared to October.
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ASIA

Asian jewelry sales picked up in November. Economic recovery in China, and a good Dhanteras and fall wedding season in India boosted demand. Gold imports into China through Hong Kong rose by more than 80% in November. Gold demand throughout Asia picked up in December, as jewelers begin production ahead of the Chinese New Year.

Market Buzz

Credit Suisse considers the August weakness in gold prices a correction in a bull market, but warns that this weakness may persist. $1,966 is seen as a huge wall of resistance that blocks further runs at new records. They say a break below $1,819 will negate the whole rally, setting off a deeper correction.
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Commerzbank continues standing by their rosy precious metals price predictions. They still see gold hitting $2,300 an ounce by next December, and expect silver prices to rise by 30%. This would put silver at $32 an ounce.
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TD Securities expects silver to outperform gold in 2021, hitting $30 an ounce. They note that 60% of silver demand is industrial. They expect demand to rise with the push toward solar power.
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Lawrie Williams is just as upbeat on gold and silver. He predicts $2,150 gold in six months, and $2,225 by the end of 2021. He sees silver at $31 in six months, and $32.25 by the end of next year.
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Jim Rogers warns that a stock bubble has already formed in some sectors, noting “I’ve seen this movie before.” He recommends iron ore, copper, silver, and gold as good plays going forward. He says that as soon as the correction in precious metals prices is over, “I will buy more gold. I will especially buy silver because silver is down 50% or 60% from its all-time high.”
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Silver investor Thomas Kaplan says that gold and silver were already in a bull market before COVID hit. He expects silver to follow gold for a while, then zoom past it.
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As COVID is brought under control in Latin America, silver and copper mines should resume full production. Silver is a major by-product of copper mining. As China’s economy continues to recover, more copper will be mined. This will help ease a looming silver shortage.
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The fight between the UAE and the London Bullion Market Association over alleged “blood gold” and money laundering continues. The UAE has launched its own Good Delivery standards. For its part, the LBMA obtained guarantees from the top 10 major gold markets to support the Association’s conflict gold and anti-money laundering rules. This could prevent the UAE from moving gold in international markets.

As a result, the UAE government announced a tightening of gold import laws as well as restricting cash transactions for large gold shipments.
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The Canadian government has blocked the sale of a large gold mine in the Arctic to a Chinese government-owned company, citing national security concerns.
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If you’re worried about Peak Gold, part of the solution may be to grind up old computers and other electronics. Studies show that computer motherboards can have from 10x to 100x the amount of precious metals than mined ore. It’s still not something you want to do in your garage, though. It is estimated that it would take one ton of mobile phones to yield 3.5 kg of silver, and 340 grams of gold.
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Looking Ahead To Next Month

The major factors that will affect gold in early 2021 will include:
• Progress in eliminating COVID.
• Dollar strength (or weakness).
• How much of Biden’s agenda the Republican Senate can block.
• The Fed possibly abandoning QE to control rising inflation.
• The continued record highs in Bitcoin pulling speculators away from gold.
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Our treasure story this month takes us to Brussels, Belgium. On December 24, two sewer workers blew out a clogged drain, only to see two gold kilobars come shooting out the pipe!

They promptly notified police of the Christmas miracle. If the owner of the gold cannot be found, AND if the gold was not stolen, the two sewer workers will split 50% of the value of the 2 kilograms of gold.

This column is intended for educational purposes only. It is not intended as investment advice.

Economics & Investing For Preppers

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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, a more in-depth look at Bitcoin and other cryptocurrencies.

Cryptos:

When I last checked, Bitcoin had been bouncing around over $22,000 USD per BTC for more than a week. It topped at $24,500 on Christmas Day. I should note that historically Bitcoin tops out each December, in most years. So I expect to see a substantial BTC correction, in January, 2021.

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This Historically Accurate Bitcoin Fractal Now Calls for a Correction to $17,500

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The Prospects for Bitcoin in 2021

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$500M in Bitcoin leaves Coinbase as institutions buy more than miners sell

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This was posted back in November: Bitcoin Price Prediction | Will Bitcoin Rise Once Again?

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At Forbes:  2021 Will See An Authoritative Global Registry For Digital Currencies

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ECB warns the future of money is at stake as Facebook preps January crypto launch

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Understanding China’s Digital Yuan. This primer article begins:

“Among the world’s biggest economies, China has become the frontrunner in developing a Central Bank Digital Currency (CBDC). The Asian giant completed a trial of the DC/EP, as its digital currency is known, in September and is currently rolling it out on major e-commerce platforms within the country. Here is a brief primer on the digital currency.

What Is DC/EP?

The Digital Currency Electronic Payment (DC/EP) is a digital version of the yuan – China’s national currency. The DC/EP is backed by yuan deposits held by China’s central bank and has been under development for slightly more than five years. Under the current arrangement, banks are required to convert a part of their yuan holdings into digital form and distribute them to businesses and citizens via mobile technology.”

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Facebook’s launch of the Libra cryptocurrency may have to push back a little further as the Libra Association awaits a go-ahead from the Swiss market watchdogs

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Lebanon will launch its own digital currency in 2021: report

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Blockchain trends in 2021: Expect the unexpected. A snippet:

“China will make the fastest progress  

From  a regional perspective China is leading the global blockchain game and will continue this role in 2021. Blockchain is taking China to the level, which is well beyond the present reach of other global market players. China’s “new infrastructure” national initiative, its state-backed Blockchain Based Service Network, is aimed to make blockchain an integral part of the country’s digital infrastructure. China’s further ambition is to provide a global public infrastructure via this Network. Beyond that, while other countries or regions like Europe are thinking to launch their own Digital currency, China is almost ready to issue their Crypto yuan.”

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TechBuzz China podcast: Episode 78: China’s Digital Currency Electronic Payment (DCEP) Dreams

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!

The Editors’ Quote of the Day:

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“The time is now near at hand which must probably determine whether Americans are to be freemen or slaves; whether they are to have any property they can call their own; whether their houses and farms are to be pillaged and destroyed, and themselves consigned to a state of wretchedness from which no human efforts will deliver them. The fate of unborn millions will now depend, under God, on the courage and conduct of this army. Our cruel and unrelenting enemy leaves us only the choice of brave resistance, or the most abject submission. We have, therefore to resolve to conquer or die.” – General George Washington — Address to the Continental Army, before the Battle of Long Island – August 27, 1776